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Introduction to Organizational Behavior

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ICFAI Center for Management Research


Road # 3, Banjara Hills, Hyderabad 500 034

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ICMR March 2004. All rights reserved.


No part of this publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means electronic, mechanical, photocopying or otherwise without prior permission in writing from ICFAI Center for Management Research.

Ref. No. IOBWB 032K4 04


For any clarification regarding this book, the students may please write to ICMR giving the above reference number, and page number. While every possible care has been taken in typesetting and printing this book, ICMR welcomes suggestions from students for improvement in future editions. Please use the Courseware Feedback Form available at www.icmrindia.org

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Contents
Part A Multiple Choice Questions Part B Caselets Part C Applied Theory 3 31 141

Part D Model Question Papers

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Detailed Contents
Part I: Fundamentals of Organizational Behavior
Chapter 1: Understanding Organizational Behavior Definition of Organizational Behavior Management Roles: Interpersonal Roles; Informational Roles; Decision Roles Management Skills: Technical Skills; Human Skills; Conceptual Skills Generalization about Behavior Consistency Vs Individual Differences Theoretical Framework: Cognitive Framework; Behavioristic Framework; Social Learning Framework; A Model of Organization Behavior Challenges and Opportunities for Organizational Behavior: The Creation of a Global Village; Adapting to Different People; Improving Quality and Productivity; Improving People Skills; Management Control to Empowerment; Stability to Flexibility, Improving Ethical Behavior Environmental Challenges: Globalization Information Technology, Total Quality, and Diversity and Ethics Models of Organizational Behavior: The Autocratic Model; The Custodial Model; The Supportive Model; The Collegial Model. Definitions of Human Relations and Organizational Behavior Historical Development of Human Relations and Organizational Behavior Scientific Management Movement; Research Studies; Other Developments; Interdisciplinary Studies; The Mature Outlook; The Emergence of Human Relations and Organizational Behavior Contributions of Other Disciplines to Human Relations and Organizational Behavior Significance of Human Relations and Organizational Behavior: Development of Skills; Organizational Performance Research Foundations for Organizational Behavior: Hawthorne Studies; Theory X and Theory Y; Theory Z. Chapter 3: Understanding People and Organizations Uniqueness of Human Beings Human Limitations Influence of Internal and External Factors on Human Behavior: Instinct Vs Environment; Personality Vs Environment; Cognition Vs Environment Understanding Behavior: Learning Why Organizations Exist Organizational Tasks: Task Design and Efficiency; Task Design and Motivation The Social Aspect of Organizations. Concept and Nature of Diversity Managing Diversity in Organizations: Creation of Family-Friendly Workplaces; Providing Diversity Training to Employees; Developing Mentoring Programs for Employees Individual and Organizational Approaches to Managing Diversity: Individual Approaches; Organizational Approaches Developing the Multicultural Organization Ethics and Ethical Behavior in Organizations: Sexual Harassment; Pay and Promotion Discrimination; Employee Privacy Issues. Chapter 5: Managing Communication Definition of Communication Historical Background of the Role of Communication: Contributions of Henri Fayol; Contributions of Chester Barnard; The Modern Perspective Importance of Communication The Two-way Communication Process Problems Associated With Two-Way Communication Nonverbal Communication: Body Language and Paralanguage; Understanding Nonverbal Communication Downward Communication: Purposes of Downward Communication Upward Communication: Methods of Making Upward Communication More Effective Lateral Communication Interactive Communication: Role of Interactive Communication; Types of Interactive Communication Barriers to Effective Communication: Filtering; Selective Perception; Defensiveness; Language Communication Technology: Management Information System; Electronic Mail; Telecommuting.

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Chapter 4: Diversity and Ethics

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Chapter 2: Foundations of Human Relations and Organizational Behavior

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Chapter 6: International Organizational Behavior Conditions Affecting Multinational Operations How Culture Influences International OB: Differences in Cultures Managing a Global Workforce: Cultural Adaptation Differences in Managerial Leadership Across Cultures - Cultural Contingencies and Productivity.

Part II: Individual Behavior in Organizations


Chapter 7: Personality and Attitudes Meaning of Personality Personality Determinants: Heredity; Environment; Situation Other Personality Attributes that Influence Organizational Behavior: Locus of Control; Machiavellianism; Self-Esteem; Self-Monitoring; Risk Taking; Type A Personality The Development of Personality and Socialization: Levinsons Theory of Adult Life Stages; Halls Career Stage Model; Argyris Immaturity to Maturity Theory; The Socialization Process Matching Personalities with Jobs Concept of Attitudes: Sources of Attitudes; Types of Attitudes; Functions of Attitudes Attitudes and Consistency Cognitive Dissonance Theory. Chapter 8: Motivation Definitions of Motivation Classification of Motives: Primary Motives; General Motives; Secondary Motives The Content Theories of Motivation: Maslows Hierarchy of Needs; Herzbergs Two-Factor Theory of Motivation; Alderfers ERG Theory The Process Theories of Work Motivation: Vrooms Expectancy Theory of Motivation; The Porter-Lawler Model The Contemporary Theories of Work Motivation: Equity Theory; Attribution Theory; Other Emerging Theories. Chapter 9: Perception Meaning and Significance of Perception Sensation vs Perception Subprocesses of Perception Perceptual Selectivity: External Attention Factors; Internal Set Factors Factors Influencing Perception: The Perceiver; The Target; The Situation Perceptual Organization: Figure-Ground; Perceptual Grouping; Perceptual Constancy; Perceptual Context; Perceptual Defense Social Perception: Attribution; Stereotyping; The Halo Effect Impression Management: The Process of Impression Management; Impression Management Strategies Used by Employees. Chapter 10: Learning Significance of Learning The Theoretical Process of Learning: Behavioristic Theories; Cognitive Theories; Social Learning Theory Principles of Learning: Law of Effect; Meaning of Reinforcement Behavioral Management: Steps in the O.B Mod Process; Application of the O.B. Mod Process.

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Part III: Dynamics of Organizational Behavior


Chapter 11: Leadership Definition of Leadership Traits of Effective Leaders Leadership Behaviors Vs Traits Leadership Skills Leadership Theories: Trait Theories; Behavioral Theories; Contingency Approaches to Leadership. Chapter 12: Empowerment and Participation Empowerment Participation: The Process of Participation; Advantages of Participation; Essential Prerequisites for Successful Participation Programs for Participation: Consultative Management; Suggestion Programs; Programs Emphasizing Quality; Middle-Management Committees; Industrial Democracy; Self-Managing Teams Limitations of Participation.

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Chapter 13: Conflict, Negotiations and Intergroup Behavior Sources of Conflict Classification of Conflict: Intrapersonal Conflict; Interpersonal Conflict; Intergroup Conflict The Conflict Process: Potential Opposition or Incompatibility; Cognition and Personalization; Intentions; Behavior; Outcomes Negotiation: Distributive Bargaining; Integrative Bargaining The Negotiation Process: Preparation and Planning; Defining roles; Clarification and Justification; Bargaining and Problem Solving; Closure and Implementation Issues in the Negotiation Process: Biases in Decision-Making; Personality Traits; Cultural Differences; Third-Party Negotiation Intergroup Relations: Factors that Affect Intergroup Relations; Managing Intergroup Relations. Chapter 14: Foundations of Group Behavior Nature of Groups Various Types of Groups: Formal Groups; Informal Groups Stages of Group Development: The Five-Stage Model; The Punctuated Equilibrium Model Group Structure: Formal Leadership; Roles; Norms; Status; Size; Composition Group Tasks Group Processes. Definition of Work Teams Benefits of Work Teams Difference Between Work Groups and Work Teams: Broad Job Categories; Role of the Supervisor; Reward Systems Types of Work Teams: Problem-Solving Teams; Self-Managed Work Teams; Cross-Functional Teams Team Effectiveness: Essentials for Building Effective Teams; Shaping Individuals into Team Players Teams and Total Quality Management Teams and Workforce Diversity. Chapter 16: Informal Organizations Nature of Informal Organizations Benefits and Problems of Informal Organizations Informal Communication: Essential Features of the Grapevine; Factors Responsible for Grapevine; Patterns of the Grapevine; Management Response to the Grapevine; Difference between a Grapevine and a Rumor Managing Informal Organizations.

Part IV: The Organization System


Chapter 17: Foundations of Organization Structure Definition of Structure Key Elements in Designing an Organization Structure: Work Specialization; Departmentalization; Chain of Command; Span of Control; Centralization/Decentralization; Formalization Types of Organizational Designs: Simple Structure; Bureaucratic Structure; Matrix Structure Organizational Designs and Employee Behavior

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Chapter 18: Decision Making The Nature of Decision Making Decision Rationality Types of Decisions: Programmed Decisions; Non-programmed Decisions; Models of Behavioral Decision Making: Economic Rationality Model; Simon's Bounded Rationality Model; The Judgmental Heuristics and Biases Model; The Social Model Behaviorally Oriented Decision-Making Techniques: Traditional Participative Techniques; Modern Participative Techniques Creativity and Decision Making Group Decision Making: Group Polarization; Groupthink and Group Problem Solving. Chapter 19: Power and Politics Definition and Meaning of Power Distinctions between Power, Authority and Influence Bases of Power: Coercive Power; Reward Power; Legitimate Power; Expert Power; Referent Power The Dependency Factor: Importance; Scarcity; NonSubstitutability; Contingency Approaches to Power: Interdependence and Influencability; Overall Contingency Model for Power Power in Groups: Coalitions Organizational Politics Definition and Nature of Politics; Factors Relating to Political Behavior The Ethics of Power and Politics.

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Chapter 15: Understanding Work Teams

Chapter 20: Organizational Culture Definition of Organizational Culture Characteristics of Organizational Culture Uniformity of Culture: Dominant Culture; Subculture Strong Vs Weak Cultures: Sharedness; Intensity Types of Culture Culture and Formalization Functions of Culture Beginning of Culture in an Organization: Selection; Top Management; Socialization Learning Culture: Stories; Rituals and Ceremonies; Material Symbols; Language Changing Organizational Culture: The Change Process.

Part V: Organizational Change and Organization Development


Chapter 21: Organizational Change Forces of Change Managing Planned Change: First-Order Change; Second-Order Change The Change Process: Problem Recognition; Identifying the Causes of Problems; Implementing the Change; Generating Motivation for Change; Managing the Transition State; Supporting the Change; Evaluating the Change Resistance to Change: Individual Source of Resistance; Organizational Resistance Overcoming Resistance to Change Lewin's Three-Step Model Innovation: Sources of Innovation The Learning Organization: Managing Learning Work Stress and Stress Management: Causes of Stress Strategies to Cope with Stress Individual Strategies to Cope with Stress; Organizational Strategies to Cope with Stress. Definitions and Concepts of Organization Development History of Organization Development: Laboratory Training; Survey Feedback; Action Research; Tavistock Sociotechnical and Socioclinical Approach Nature of Organization Development: Foundations of Organization Development; The OD Process Client-Consultant Relationship. Meaning of OD Interventions Types of OD Interventions: Sensitivity Training; Survey Feedback; Process Consultation Interventions; Team Interventions; Force-field Analysis; Intergroup Team-Building Interventions; Third-Party Peacemaking Interventions; Structural Interventions. Strengths of Organizational Development The Future of OD: Leadership and Values; Knowledge about OD; OD Training; Interdisciplinary Nature of OD; Diffusion of OD Techniques; Integrative Practice; Rediscovering and Recording History Possible Changes in OD Processes and Practice.

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Chapter 24: Future of Organizational Development

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Chapter 23: Organization Development Interventions

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Chapter 22: Fundamentals of Organization Development

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Part A: Multiple Choice Questions

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This section consists of multiple-choice questions that test the students understanding of the basic concepts discussed in the textbook. Answering these questions will help students quickly recollect the theories theyve learnt and apply these to real-life business situations.

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Part A

Key
1.d 11.b 21.b 31.a 41.c 51.a 61.d 71.a 81.b 91.b 101.c 111.b 121.b 131.b 141.c 151.d 161.b 171.b 181.b 2.a 12.d 22.d 32.c 42.a 52.a 62.a 72.c 82.b 92.c 102.b 112.c 122.c 132.b 142.b 152.b 162.a 3.c 13.a 23.d 33.b 43.c 53.b 63.b 73.b 83.d 93.d 103.d 113.c 123.c 4.d 14.d 24.b 34.d 44.b 54.d 64.b 74.a 84.b 94.d 104.b 114.a 124.c 5.c 15.d 25.c 35.c 45.d 55.c 65.a 75.a 85.b 95.d 105.c 115.b 6.d 16.a 26.d 36.b 46.c 56.d 66.b 76.c 86.a 96.c 7.c 17.a 27.a 37.d 47.d 57.a 67.b 77.d 87.a 8.a 18.c 28.b 38.c 48.c 58.b 68.d 78.c 88.d 9.c 19.b 29.a 39.b 49.b 59.c 69.b 79.c 89.c 99.b 109.c 119.c 129.c 139.a 149.a 159.b 169.b 179.b 189.c 199.a 209.b 219.c 229.c 239.b 249.c 10.a 20.c 30.b 40.c 50.c 60.b 70.a 80.a 90.a 100.c 110.b 120.a 130.a 140.d 150.a 160.d 170.a 180.b 190.b 200.b 210.c 220.b 230.d 240.c 250.d

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116.a 126.d 136.c 146.c 156.b 166.b 176.b 186.b 196.b 206.d 216.d 226.d 236.a 246.d

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144.d 154.d 164.b

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173.d 183.a 193.c 203.c 213.a 223.a 233.a 243.c

174.c 184.c 194.c 204.a 214.d 224.a 234.c 244.c

182.b 192.c 202.a 212.a 222.a 232.b 242.b

185.b 195.b 205.b 215.a 225.c 235.a 245.c

191.d 201.c 211.d 221.c 231.c 241.b

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97.b 107.c 117.a 127.c 137.b 147.b 157.b 167.a 177.a 187.c 197.c 207.c 217.b 227.c 237.b 247.a

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98.a 108.d 118.d 128.d 138.c 148.a 158.d 168.b 178.d 188.c 198.c 208.a 218.a 228.a 238.c 248.c

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Part A: Multiple Choice Questions


1. a. b. c. d. 2. a. b. c. d. 3. Which of the following frameworks is used in the development of the overall model of OB? The cognitive framework The behavioristic framework The social learning framework All the above Which of the following frameworks is based on the expectancy, demand and incentive concepts? The cognitive framework The behavioristic framework The social learning framework The supportive framework Which of the following forms the basis for the autocratic model of OB? Obedience Authority Power Dependence on boss 7. a. b. c. d. 8. a. b. c. d. 9. a. b. c. d. Which of the following behavioral scientists proposed the Theory Z? Frederick Herzberg Douglas McGregor William Ouchi F. W. Taylor Which of the following models represents the views of behaviorists? S-R Model R-S Model S-O-R Model A-B-C Model

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a. b. c. d. 4.

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5.

a. b. c. d. 6.

The study of which discipline helps in the micro-level analysis of human relations and OB? Social Psychology Anthropology Psychology Sociology Which of the following plays a major role in enhancing the efficiency of Human Resources in an organization? Increase in motivation. Training and personal development Education All the above

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Motivating people in organizational settings to develop team work that accomplishes individual as well as organizational goals refers to Employee relations Labor relations Interpersonal relations Human relations

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a. b. c. d.

10. Which of the following plays a major role in determining the behavior of individuals as well as overall performance of the organization? a. Attitudes b. Task structure c. Ethnocentrism d. Individualism 11. Associative learning and instrumental learning are the two processes involved in a. Formal learning b. Informal learning c. Haphazard learning d. Social learning 12. Which of the following involves reinforcers and punishers? Social learning Cognitive learning Associative learning Instrumental learning

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Stimulus-organism-response model represents the views of Environmentalists Social scientists Cognitive theorists Behaviorists

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Introduction to Organizational Behavior 13. When members of a group or organization differ from each other in terms of age, gender, ethnicity, and/or education, it is termed _________. a. Diversity b. Culture c. Demographics d. Globalization 14. Which of the following is a reason for emergence of diversity at the workplace? a. b. c. d. Legislation and lawsuits Changing demographics Increasing international business All the above 19. What is the group which informally exchanges the information pertaining to a shared interest known as? a. b. c. d. Grapevine Network Ombudsperson Quality circles

20. Which of the following represents the last stage of the communication process? a. b. c. d. Decoding Encoding Feedback Filtering

c. d.

Age Competency

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Gender

16. An organization that maintains the dominance of one group over the others on the basis of criteria like age, gender etc is a. b. c. d. Exclusionary organization Club organization Compliance organization Multicultural organization

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17. What does the gangplank concept relate to? Horizontal communication system Vertical communication system Cross communication system Upward communication system

a. b. c. d.

18. What is the process of transferring an idea into words, symbols or charts for transmission known as? a. b. c. d. 4 Bridge of meaning Decoding Encoding Feedback

15. Which of the following is not a differentiating characteristic under diversity?

a. b. c. d.

22. Which of the following forms a barrier for cultural adaptation? Cultural distance Power distance Culture shock All the above

23. An individuals response to a culture with dramatic difference in language, country, customs and cultural orientations is termed Ethnocentrism Parochialism Cultural distance Culture shock

24. What is the amount of difference between any two social systems, which may vary from minimal to substantial, referred to as? Culture shock Cultural distance Power distance Ethnocentrism

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21. The prime element responsible for effective relationships in an organization is Environmental factor Human factor Technological factor Cultural factor

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Part A 25. Which of the following processes best describes personality and attitudes? a. Psychoanalytical b. Behavioral c. Cognitive d. Psychological 26. Extroversion, agreeableness, conscientiousness, emotional stability and openness to experience are all traits of a. Psychology b. Attitudes c. Sociology d. Personality 27. What is the attempt made by people to understand themselves known as? a. Self concept b. Self image c. Self awareness d. Self efficiency 28. The degree to which people believe that they are masters of their own fate refers to a. b. c. d. Self-image Locus of control Self-monitoring Self-outside c. d. Daniel Levinson F. J. Roethlisberger

32. Responses to the vocational preference inventory questionnaire were used to develop a. Job profiles b. Behavior profiles c. Personality profiles d. Training programs 33. What is the persistent tendency to feel and behave in a particular way towards some object known as? a. b. c. d. Perception Attitude Personality Locus of control

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34. Which of the following motives is neither learnt nor physiologically based? a. Secondary b. Achievement c. Primary d. General 35. Curiosity, manipulation, activity and affections can be categorized as a. Primary motives b. Secondary motives c. General motives d. Achievement motives 36. What does the Thematic Appreciation Test measure? a. Power drive b. Achievement drive c. Affiliation drive d. Security drive 37. What does the VIE theory emphasize on? a. Effort-performance relationship b. Performance-reward relationship c. Rewards-personal goals relationship d. All of these 38. Which of the following represents the first sub process of perception? a. Registration b. Interpretation 5

29. The following refers to the degree to which an individual is pragmatic, maintains emotional distance and believes that ends justify means a. Machiavellianism b. Locus of control c. Personality d. Valence 30. What is the individuals degree of liking or disliking of himself or herself known as? a. Self image b. Self esteem c. Self concept d. Self-outside 31. Who suggested the socialization strategies? a. Van Mannen b. Chris Argyris

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Introduction to Organizational Behavior c. d. Situation-person interaction Sensation 45. The learning of the association of the cue and the expectation is termed as a. S-R learning b. R-S learning c. S-O-R learning d. S-S learning 46. Which of the following forms an essential ingredient of modeling process? a. Cognitive learning b. Controlled learning c. Observational learning d. Instrumental learning 47. Which of the following are the skills used by leaders? a. Technical b. Conceptual c. Human d. All the above 48. The leaders ability to work effectively with the members of the organization and accomplish team work is termed as a. Conceptual skill b. Technical skill c. Human skill d. Design skill 49. Which of the following is a dimension of leadership found by the University of Michigan studies? a. b. c. d. Development oriented dimension Employee oriented dimension Consideration Critical performance

39. When certain stimuli are below the conscious threshold of a person, it is referred to as a. Perceptual selectivity b. Subliminal perception c. Intensity d. Perceptual set 40. Which of the following provides meaning and value to stimuli, objects, events, situation, and other people in the environment? a. Perceptual selectivity b. Perceptual constancy c. Perceptual context d. Perceptual defense 41. Which of the following occurs when perceptions are formed on the basis of a single trait of an individual? a. b. c. d. Stereotyping Attribution Halo effect Perceptual closure

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a. b. c. d.

Impression management Stereotyping Halo effect Cultural adaptation

43. Which of the following terms refers to a relatively permanent change in behavior that occurs out of experience? a. Personality b. Perceptions c. Learning d. Attitude 44. Classical conditioning is referred to as a. Instrumental conditioning b. Respondent conditioning c. Operant conditioning d. None of the above also

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42. Demotion preventative strategy is a prime strategy associated with

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50. The two dimensional matrix model was developed by a. Robert Katz b. Fred Luthans and Stephen Robbins c. R. R. Blake and J. S. Mouton d. Hershey and Blanchard 51. Leadership-participation model was developed by a. Victor Vroom and Philip Yetton b. Hershey and Blanchard

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Part A c. d. R. R. Blake and J. S. Mouton George Green c. d. Group conflict Inter group conflict

52. The mental and emotional involvement of people in group situations that encourage them to contribute to group goals and share responsibility for them is known as a. b. c. d. Participation Empowerment Motivation Self Managing Teams

58. The situation wherein an increase in pay for one employee would mean just that much amount less for the other is a. Win-win situation b. Zero-sum situation c. Balanced situation d. Lose-lose situation 59. Which of the following statements is not true regarding negotiations? a. Two or more parties are involved in negotiation process b. Distributive bargaining is an approach of negotiation c. Negotiation processes are always smooth d. Talks between managers and union for wages are a form of negotiation 60. a. b. c. d.

53. Which of the following helps in raising the individual perceptions of low levels of self esteem? a. b. c. d. Situation Empowerment Job enrichment Reinforcement

54. The voluntary groups in an organization that are trained in statistical techniques and problem solving skills are known as a. Self management teams b. Work councils c. Middle management committees d. Quality circles

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55. Which of the following is implemented in the form of work councils at lower level and codetermination at higher levels of the organization? a. Middle management committees b. Consultative management c. Industrial democracy d. Suggestion programs 56. Which of these factors form the basis of conflicts? a. b. c. d. Perception Opposition Incompatibility All the above

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57. Threatened self concept, incompatible temperament and failure in communication result in a. Inter personal conflict b. Intra personal conflict

61. Which of the following is not an essential condition for integrative bargaining to be successful? a. Parties who are honest about their concerns b. Sensitivity by both parties to the others needs c. Ability and willingness to trust one another d. If one party gains a certain amount, the other party suffers an equivalent loss 62. Which of the following is not a third party negotiator? a. Mentor b. Mediator c. Conciliator d. Arbitrator 63. Which of the following is the primary source of social identity for employees? 7

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Zero sum situation is also known as Win-win situation Win-lose situation Lose-lose situation Balanced situation

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Introduction to Organizational Behavior a. b. c. d. Social group Work group Cultural group Political group a. b. c. d. Quality circle Work group Work team Cross functional group

64. Which of the following theories suggests that spatial or geographical proximity is cited as the reason why individuals affiliate with each other? a. Balance theory b. Propinquity theory c. Exchange theory d. None of the above 65. Which of the following plays an important role in balance theory? a. Propinquity and interaction b. Rewarded-cost outcome c. Geographical or spatial proximity d. Formalization and task structure 66. A lunch group in an organization is an example of a. Friendship group b. Informal group c. Primary group d. Formal group

70. What is the primary motive of mutual interaction in a work team? a. Perform collectively b. Share information c. Manage stress d. Distribute work among themselves 71. A group of employees who plan and schedule their work, hold collective control over the pace of work, make decisions related to the operations of the task and overcome the problems during implementation comprise a a. Autonomous team/Self-managed team b. Problem solving team c. Cross functional team d. Quality circle 72. Which among the following comprise a group of employees from different functional areas who come together to accomplish a task and resume their normal work once the task is accomplished? a. Self-managed teams b. Problem solving team c. Task force d. Quality circle 73. Which of the following teams consist of employees from the same hierarchical level, but from different work areas? a. Problem-solving team b. Cross-functional team c. Quality circle d. Task force 74. Which of the following studies revealed the importance of informal organization in a work situation? a. Hawthorne studies b. Scandinavian studies c. Ohio State studies d. Behavioristic studies

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67. Performing a task in front of others can usually have a positive or negative impact on ones performance. This is termed as a. Social loafing effect b. Social facilitation effect c. Glass ceiling effect d. Law of effect 68. Which of the following does not result from team building and by having a team-based environment in the organization? a. Enhanced performance b. Employee benefits c. Organizational enhancements d. Increased cost 69. What is a group that interacts primarily to share information and to make decisions to help each other perform within his or her area of responsibility known as?

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Part A 75. Informal communication channel in an organization is widely known as a. Grapevine b. Gossip c. Kinesics d. Group think 76. Which of the following is not a type of communication network in an informal organization? a. b. c. d. Single strand chain Cluster chain Multiple strand chain Probability chain 81. The degree to which power and authority are concentrated at the top most level of the organization is known as a. Formalization b. Centralization c. Unity of command d. Standardization 82. The degree of which jobs in an organization are standardized is known as a. Decentralization b. Formalization c. Centralization d. Work specialization 83. Which of the following is not a phase in the decision-making process? a. Intelligence activity b. Design activity c. Choice activity d. Creative activity 84. What are the three phases of the decision-making process according to Herbert A. Simon? a. Discussion, consensus and application b. Intelligence, design and choice activity c. Searching, identification and solving d. Identification, development and selection 85. The use and preference of elaborate, intricate and complex stimuli and thinking patterns by a person is known as a. Divergent thinking b. Cognitive complexity c. Convergent thinking d. Perceptual selectivity 86. Groups will have a tendency to take very high risks than individuals acting alone. What is this risk taking feature of groups known as? a. b. Group polarization Group think 9

b. c. d.

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a. b. c. d.

Gossip Probability Rumor Intervention

79. The degree to which tasks in an organization are sub-divided into separate jobs is described as a. b. c. d. Departmentalization Decentralization Specialization Differentiation

80. On what basis are the activities grouped in departmentalization? a. b. c. d. Functions Characteristics Time consumption Task structure

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78. Grapevine information communicated without secure standards of evidence is called

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Carries information which is purposely left unsaid by formal systems Faster than most of the formal communication methods Ability to penetrate the tightest securities Carries 100% true information

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77. Which of the following is not a feature of grapevine communication?

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Introduction to Organizational Behavior c. d. Halo effect Divergent thinking c. d. Reward structure Task structure

87. Which group decision making technique attempts to avoid potential pitfalls of group decision making while taking advantage of the positive features of employee participation? a. Nominal group technique b. Delphi technique c. Seeding strategy d. Brainstorming 88. X performs all the tasks assigned to him by his superior, even though the tasks are not a part of his job profile, due to the fear of losing his job. What kind of power is X being subjected to? a. Referent power b. Expert power c. Legitimate power d. Coercive power 89. Which of the following is identical to authority? a. Referent power b. Expert power c. Legitimate power d. Reward power

93. Which of the following factors does not influence the strength of organizational culture? a. Leadership b. Sharedness c. Intensity d. Departmentalization 94. Which of the following is not a function of organizational culture? a. Plays a boundary defining role b. Acts as a control mechanism c. Builds a sense of identity for its people d. Represents a divergence in values, assumptions and ideologies of the members of the organization 95. Who among the following is not responsible for managing change activities in organizations? a. Facilitators b. Consultants c. Change agents d. Wedge drivers 96. Which of the following statements is not true regarding second-order change in an organization? a. This takes place when organizations are to be restructured b. It involves the reframing of assumptions about the organization c. The change is linear and continuous d. It is irreversible in nature 97. Which of the following types of resistance is subtle in nature and does not allow management to have even an inkling of the resistance to its actions by the employees? a. Overt resistance b. Deferred resistance c. Explicit resistance d. Individual resistance 98. Which of the following results in individuals resistance to change?

a. b. c. d.

Referent power Legitimate power Charismatic power Expert power

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91. The extent to which the management considers the impact of its decisions on the people in the organization is termed a. Outcome orientation b. People orientation c. Team orientation d. Performance orientation 92. What is the basis for the intensity of effort put in by an individual to perform a certain task? a. b. Organization structure Team structure

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90. What is the power that is exerted by a charismatic person?

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Part A a. b. c. d. Selective information processing Threat to expertise Group inertia Structural inertia c. To improve awareness and understanding of group and intergroup process To make individuals adapt to the risk culture of the organization

d.

99. Which of the following is not involved in the Lewins three step model? a. Unfreezing b. Manipulation c. Refreezing d. Movement to change 100. What is an organization that has developed continuous capacity to adapt and change known as? a. Developing organization b. Innovative organization c. Learning organization d. Informal organization 101. Which of the following involves increased involvement of employees in organizational processes and decision-making? a. Facilitation b. Action research c. Empowerment d. Process consultation

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102. Which of the following describes how organizational members diagnose situations, solve problems, make decisions, and take appropriate actions in relation to the organizations opportunities and challenges? a. Learning processes b. Problem solving processes c. Decision making process d. Empowerment process

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103. Which of the following is not the basic objective of sensitivity training? a. To increase an individuals understanding, insight, and selfawareness of ones own behavior and its impact on others b. To increase an individuals understanding and sensitivity regarding the behaviors of others

105. Which of the following strategies is based on the assumption that people are rational?

106. Which of the following types of organizational structure is characterized by work specialization and division of labor, abstract rules, hierarchy and impersonality of managers? a. Matrix structure b. Simple structure c. Bureaucratic structure d. Formal structure 107. Which of the following refers to the set of planned activities which are introduced to bring the desired change in organizations? a. Action research b. Action plans c. OD interventions d. Process consultation 108. Which of the following is not a type of OD intervention? a. Diagnostic activities b. Survey feed back activities 11

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104. Which of the following is described as a collaborative client-consultant effort consisting of preliminary diagnosis, data gathering from the client group, data feedback to the client group, data exploration and action planning by the client group and finally, action? a. Organizational survey b. Action research c. Market research d. Process consultation

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Introduction to Organizational Behavior c. d. Team building activities O.B. Mod process a. b. c. d. threatened. Which of the following communication barriers refers to this? Defensiveness Selective perception Filtering Language

109. Which approach to team building is based on a form of psychotherapy and believes that persons function as whole, total organisms? a. Fayols approach b. Edgar Schein approach c. Gestalt approach d. Process consultation 110. Which of the following types of organizational structure is characterized by a wide span of control, centralized authority and a low degree of formalization? a. Bureaucratic structure b. Simple structure c. Matrix structure d. Formal structure 111. Which of the following is an approach or method for intervening in an ongoing system, where the consultant works with individuals and groups to enable them to learn about human and social processes? a. System consultation b. Process consultation c. Structure consultation d. Force field analysis 112. Which of the following is not a decisional role played by managers? a. Entrepreneur b. Disturbance handler c. Discriminator d. Allocator 113. An employees workweek consisting of four days with 10 hour-days instead of five days with 8 hourdays, is an example of a. Job sharing b. Flexitime c. Compressed workweek d. Telecommuting 114. People refuse to have an open mind when they feel that they are being 12

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116. The job satisfiers are referred to as a. Motivators b. Hygiene factors c. Reinforcers d. Internal set factors 117. Which of the following involves any stimulus that stands out against the background, or which is not what people expected, thereby receiving maximum attention? a. Principle of contrast b. Principle of intensity c. Figure ground principle d. Principle of repetition 118. Denial, change in perception, modification and distortion, recognition but refusal to change are all involved in a. Perceptual selectivity b. Perceptual mapping c. Perceptual context d. Perceptual defense 119. Which of the following terms is synonymous with socio-technical teams? a. Work councils b. Quality circles c. Self managing teams d. Committees 120. The realignment of workgroups, altering rules and regulations,

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115. Which of the following attitudes enables employees to adapt to their environment and also helps them protect their ego by justifying their action? a. The adjustment function b. The ego-defensive function c. The value-expressive function d. The knowledge function

Part A increasing interdependence, and making similar structural changes to disrupt the status quo is known as Restructuring Reengineering Realignment Revamp c. d. Delphi technique Role negotiation technique

a. b. c. d.

121. Which of the following exists when there is an exchange of inputs and outputs between two groups? a. Pooled interdependence b. Reciprocal interdependence c. Sequential interdependence d. Adjustment heuristic 122. Which of the following theories is based on the assumption that the interests of the principal and agents are sometimes in conflict? a. Theory of cognitive dissonance b. Exchange theory c. Agency theory d. Control theory

126. What is a senior employee who guides and supports a less experienced employee known as? a. Counselor b. Facilitator c. Trainer d. Mentor 127. Which compensation system necessitates a cut-off performance that must be exceeded for team members to receive a part of the gain (profits)? a. Skill based pay systems b. Team bonus plans systems c. Gain-sharing systems d. Fair pay systems 128. Which of the following is a process of power? a. Compliance b. Identification c. Internalization d. All the above 129. Which process advocates that the target complies with power so as to gain a favorable reaction from the agent? a. Internalization b. Identification c. Compliance d. Contingency 130. Which of the following terms is synonymous with first order change? a. Incremental change b. Fundamental change c. Quantum change d. Rational change 131. When a manager contacts individuals or groups, inside or outside the organization, to get some required information, then he is said to play a a. Leadership role b. Liaison role 13

124. The grapevine pattern of communication in which one person tells everybody else is known as a. Probability b. Cluster c. Gossip d. Single strand 125. What is the technique in which the consultant negotiates between conflicting parties and reaches a settlement where each party agrees to make specific changes in its behavior in return for changes in the behavior of the other party? a. Role analysis technique b. Force field analysis

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123. Which of the following theories proposes that individuals compare their job inputs and outcomes with those of others and then respond so as to eliminate any inequities? a. Theory Z b. Erg theory c. Equity theory d. McClellands theory of needs

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Introduction to Organizational Behavior c. d. Resource allocator role Monitor role 137. Which of the following principles permits a person to have some stability in this changing world? a. Figure ground b. Perceptual constancy c. Perceptual grouping d. Perceptual defense 138. Entitlements, enhancements, obstacle disclosures, and association are all the characteristics of a. Self-presentation b. Demotion-preventative strategy c. Promotion-enhancing strategy d. Personalization 139. Which of the following could be the reason for low self-esteem and selfefficacy among employees? a. An autocratic leader b. An effective reward system c. A stable organization d. A democratic leader 140. Which of the following is not one among the five intentions in the process of conflict resolution? a. Compromising b. Accommodating c. Dominating d. Rationalizing 141. Appointing a critic to purposely argue against the majority positions held by the group is called as a. Smoothing b. Negotiating c. Appointing a devils advocate d. Problem solving 142. The subordinates who report directly to a manager form a a. Task group b. Command group c. Interest group d. Formal group 143. Which of the following theories proposes that when individuals observe behavior, they attempt to determine whether it is internally or externally caused?

132. Which of the following organizations attempts to eliminate the discriminatory practices prevalent in exclusionary and club organizations? a. Multicultural organization b. Compliance organization c. Redefining organization` d. Affirmative action organization 133. What is the term used to refer to the internal conflict and anxiety that occurs when people receive information incompatible with their value systems, prior decisions, or other information they may have? a. Rationalization b. Cognitive dissonance c. Self-revelation d. Feedback 134. Employees who would like to have clear instructions from their superiors are said to have a high level of a. Cultural distance b. Power distance c. Uncertainty avoidance d. Individualism/collectivism 135. Which of the following theories helps to predict the propensity to engage in attitude and behavioral change? a. Theory of Cognitive dissonance b. The Job fit theory c. The adult life stage theory d. Psychoanalytical theory of behavior 136. The comparison of the experience of an employee holding a certain position with those holding a similar position outside ones own organization is referred to as a. Self-inside b. Other-outside c. Self-outside d. Other-inside 14

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Part A a. b. c. d. Attribution theory Control theory Theory Z LMX theory a. b. c. d. Simons bounded rationality model Judgmental heuristics and biases model Social model Economic model

144. Which of the following is a type of rumor? a. Historical b. Explanatory c. Positive rumor d. Wedge drivers 145. The emphasis of scientific management is mostly on a. Division of labor and scientific selection b. Placement and training of workers c. Differential piece rate system d. All the above 146. Which of the following helps predict the amount of adaptation that is needed by an expatriate manager who goes to another country? a. Cultural shock b. Parochialism c. Ethnocentrism d. Cultural distance 147. The labor-management negotiation over wages stands as a best example for

150. The non-evaluative feedback given by others to an individual is the most important feature of a. Coaching and counseling activities b. Third party peacemaking activities c. Process consultation activities d. Structural activities 151. The dimension of the managerial communication model that refers to one who communicates only on a formal basis, that too only when needed is a. Humanistic interactor b. Informal developer c. Formal controller d. Mechanistic isolate 152. Non-verbal communication is also known as a. Kinesics b. Silent language c. Para language d. Gestures 153. Employees who go to a foreign country for job assignment are known as a. Cross cultural entrants b. Immigrants c. Expatriates d. Repatriates 154. Which of the following theories tries to bring about a match between the occupational environment and personality characteristics? a. Adult life stage theory b. Theory Z c. Cognitive dissonance theory d. Job fit theory 155. The way in which people explain the cause of their own behavior is referred to as 15

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Collective bargaining Distributive bargaining Integrative bargaining Conflict resolution

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148. The group whose norms a person accepts is a a. b. c. d. Reference group Peer group Quality circles Expert group

149. Managers, sometimes, tend to accept and get satisfied with a less-thanideal solution to the problem on hand. Which of the following models is based on the above statement?

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Introduction to Organizational Behavior a. b. c. d. Social perception Attribution Stereotyping The Halo effect 162. The desire for friendly and close interpersonal relationship is an a. b. c. d. Affiliation need Esteem need Safety need Self-actualization need

156. The A-B-C analysis is involved in a. Punishment-Positive reinforcement strategy b. Functional analysis of the behavior c. Measurement of behavior d. Reinforcement 157. Which type of leader gives challenging tasks to subordinates, and expects them to show their best performance? a. Supportive leader b. Achievement oriented c. Participative leader d. Directive leader 158. Which of the following is not a part of participative programs? a. Consultative management b. Middle management committees c. Suggestion programs d. Action research

163. Which of the following refers to the shift in attitudes of members of a group towards a more extreme state after having a discussion among themselves? a. b. c. d. Machiavellianism Cognitive complexity Divergent thinking Group polarization

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159. Which of the following forms the basis for the exchange theory? a. Affiliation b. Reward-cost outcomes c. Propinquity d. Control

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160. What stage of a group is characterized by preparations to disband the group? a. Storming b. Performing c. Norming d. Adjourning 161. Leaders who provide inspiration and intellectual stimulation and possess charisma are known as a. Transactional leaders b. Transformational leaders c. Democratic leaders d. Charismatic leaders

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165. Which of the following is not a force of change? People Technology Competition Self-esteem

166. What is the phase of decision making in which the identification, development and analyzing possible courses of action takes place? Intelligence activity Design activity Choice activity Rational activity

167. What are the repetitive sequences of activities that describe and reinforce the key values of an organization known as? Rituals Stories Culture Symbols

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Part A 168. Distorting facts to make them more presentable is known as a. Co-optation b. Manipulation c. Innovation d. Facilitation 169. Interventions are broadly categorized into process interventions and structural interventions. Which of the following statements explains the difference between the two? a. Structural interventions educate the employees about the advantages of collective team work in comparison to individual effort while process interventions bring about a positive change in the behavior. b. Process interventions demonstrate the effect of collaboration through experiments or demonstrations in simulated work environments while structural interventions actually reinforce and sustain collaborative efforts in the workplace. c. Structural interventions demonstrate the effect of collaboration through experiments or demonstrations in simulated work environments while process interventions reinforce and sustain collaborative efforts in the workplace. d. Structural interventions are applied in simulated work environment on a trial basis while process interventions are applied directly in real work environment. Distributive bargaining assumes that there can be no solution that satisfies both parties. ii. The distributive bargaining approach is based on the assumption that there exist one or more solutions to a problem. iii. Distributive bargaining approach leads to win-lose situations. iv. Distributive bargaining leads to winwin situations. a. b. c. d. ii and iv i and iii i and iv ii and iii i.

172. Each party to the conflict will have certain high priority objectives. The party will not agree to any negotiation agreement which does not satisfy these objectives. The agreement that satisfies these objectives is referred to as __________. a. BATNA b. BTNA c. BANA d. BANTA 173. Which of the following statements defines human relations? i. It is a systematic, developing body of knowledge devoted to explain the behavior of individuals in the working organization. ii. It deals with the understanding, prediction and management of human behavior in organizations. iii. It is the study of how people can work effectively in groups in order to satisfy both organizational goals and personal needs. iv. It involves motivating people in organizational settings to develop teamwork which accomplishes individual as well as organizational goals effectively. a. i, ii and iv b. i, ii, iii and iv c. ii, iii and iv d. i, iii and iv 17

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170. Which of the following is a trustbuilding intervention? a. T-group b. Process review c. Data feedback d. Role-linkage 171. There are two negotiating approaches that are generally practiced in organizations distributive bargaining and integrative bargaining. Which of the following statements explain the distributive bargaining approach?

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Introduction to Organizational Behavior 174. Which of the following experiments formed part of the Hawthorne studies? i. Illumination experiments ii. Sound experiments iii. Bank wiring room experiment iv. Relay assembly room experiment a. i, ii, iii and iv b. ii, iii and iv c. i, iii and iv d. i, ii and iv 175. Which of the following steps were taken as a part of illumination experiment in Hawthorne studies? i. Illumination was not changed for the experimental group throughout the course of the experiments. ii. Illumination was not changed for the control group throughout the course of the experiments. iii. Illumination was changed constantly for the experimental group. iv. Researchers modified the intensity of light to determine its effect on employee productivity. a. i, ii and iv b. ii, iii and iv c. i, iii and iv d. i and iv 177. Which of the following results were obtained from relay assembly room experiments? i. When employees were paid according to the number of units they produced, their productivity increased. ii. When two five-minute breaks one in the morning and one in the afternoon, were introduced, the productivity of employees increased. iii. When the duration of the rest pauses was increased to ten minutes, it led to a sharp increase in productivity. iv. When the number of five-minute rest pauses was increased to six, it led to further increase in productivity. v. When the employees were allowed to leave thirty minutes early, it led to decline in their productivity.

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176. Which of the following observations were made during the illumination experiment? a. When the intensity of illumination was reduced for the experimental group, the productivity of the group decreased. b. When the intensity of illumination was reduced for the experimental group, the productivity of the group did not decrease. c. When the illumination was enhanced for the experimental group, its productivity increased but the productivity of the control group decreased. d. The productivity of the control group (which was not subjected to changes in illumination) increased and the productivity of the experimental group decreased.

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178. Which of the following is one of the assumptions of Theory Y? The average person dislikes work and tries to avoid it if he can. People have to be either coerced by punishment or goaded by means of financial rewards to make them work effectively. The average employee prefers to be given directions about his work and shies away from taking greater responsibilities. People can solve their work-related problems by using creativity and imagination.

179. The organizations which blend American and Japanese style of management practices are referred to as _________. Hybrid organizations Type Z organizations Type Y organizations Ideal organizations

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Part A 180. The sum total of ways in which an individual interacts with people and reacts to situations is called a. b. c. d. Attitude Personality Psychology Physiology 184. Which of the following statements describe people with high selfesteem? i. They are confident about their capabilities. ii. They prefer to take challenging jobs. iii. They hardly take a stand which opposes others views. iv. They are not easily influenced by external factors. a. b. c. d. i, ii and iii i and iii i, ii and iv i, ii, iii and iv

181. Which of the following statements are true about highly conscientious people? They are responsible and achievement oriented. ii. They limit the number of goals they set for themselves, devote their time and energy to those goals and often succeed in achieving their goals. iii. They set too many goals for themselves and often fail to achieve any of them. iv. They exhibit mediocre performance in their jobs. i.

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182. If a person fails to get promoted due to his poor rating in the annual performance appraisal, but attributes it to poor managerial assessment of his capabilities, he is considered to have a _________ locus of control. Internal External Agreeable Conscientious

a. b. c. d.

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185. The ability of an individual to adapt his behavior to the demands of the situation is known as _______. a. Self-esteem b. Self-monitoring c. Machiavellianism d. Locus of control 186. Which of the following are the characteristics of type A people? i. They try to be fast in all their activities. ii. They try to make the best use of their leisure time and relax without any feeling of guilt. iii. They emphasize numbers and quantity and measure their success in quantitative terms (e.g. amount of output produced, number of products sold, etc.) iv. They do not consider it necessary to reveal or discuss their achievements unless the situation demands it i and iv i and iii ii and iii i and ii

183. People who attribute their failure to their own actions and attempt to learn new skills and improve their position at the workplace (or society) are considered to have ________ locus of control. a. b. c. d. Internal External Balanced Positive

187. Which of the following are the characteristics of type B people? i. They do not experience a sense of urgency when carrying out tasks. ii. They are always busy and find themselves unable to cope with leisure time. 19

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Introduction to Organizational Behavior iii. They try to be involved in more than one thing at a time. iv. Failure to accomplish tasks within the specified time does not make them impatient. a. b. c. d. i and iii ii and iii i and iv i and ii d. Argyris theory of personality development can only describe the personality of an individual but cannot predict his specific behavior.

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Age-thirty transition Mid-life transition Age-forty transition Late adult transition

190. According to Argyris immaturity to maturity theory, human personality development takes place in the form of a continuum and not in stages. Which of the following statements is not proposed by the theory? a. The development of an individuals personality can be explained in terms of seven dimensions. Every individual must display these seven dimensions in his personality to indicate maturity. Factors such as perception of the individual, his self-concept and ability to adapt and adjust also influence his personality.

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189. Halls career stage model suggests that an individual goes through four stages during his career. Which of the following is not a stage in Halls career stage model? a. Exploration b. Establishment c. Growth d. Decline

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193. Attitudes serve four important functions. Which of the following are the four functions? Adjustment Ego-defensive Affective commitment Value-expressive Knowledge Continuance commitment i, ii, iii, and v i, iii, iv and vi i, ii, iv and v i, ii, iii and vi

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Realistic assembly line worker Investigative news reporter Conventional scientist Artistic musician Enterprising business manager Social counselor

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188. According to Levinsons theory, the development of an individual is not uniform. There are four periods of transition and four periods of stability in the life of an individual. Which of the following is not a period of transition in the life of an individual?

191. In which of the following socialization strategies is a prospective candidate for a top management position rotated through a series of important functional specialty positions before being promoted? a. b. c. d. Informal Individual Variable Sequential

192. According to John Holland, the level of job satisfaction of an individual is high if his personality matches his occupation. Which of the following personality-occupation pairs is unlikely to lead to high job satisfaction?

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Part A 194. Which of the following comparative statements is true? a. b. c. d. Organization Theory is more micro oriented than OB. Organization Development is more macro and less application oriented than OB. Human Resource Management is more macro and application oriented than OB. Human Resource Management is more macro and less application oriented than OB. 198. Which of the following refers to the psychological process of recollecting information and past experiences? a. Social learning framework b. Synchronization c. Cognition d. Social cognition 199. According to the social learning approach, behavior is the result of continuous _______ interaction between cognitive, behavioral and environmental determinants. a. Reciprocal b. Informal c. Non-reciprocal d. Formal

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196. The general manager of an organization called a press conference and announced the launch of a new product by his company. What role is being played by the manager? a. Disseminator b. Spokesperson c. Leader d. Resource allocator

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i. ii. iii. iv. a. b. c. d.

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197. Consider a situation in which a production manager convinces the employees protesting against an increase in workload to put in the extra effort required to achieve the targets set for the year in return for additional leaves and incentives, which he will persuade the management to agree to. Which of the following roles is being played by the production manager? a. Resource allocator b. Liaison c. Negotiator d. Monitor

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200. Which of the following are models of OB? Autocratic Custodial Supportive Collegial i, ii and iii i, ii, iii and iv i, iii and iv i, ii and iv

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Introduction to Organizational Behavior a. b. c. d. Autocratic Collaborative Supportive Custodial 209. Which of the following represents the sequence of subprocesses of perception? a. Stimulus, behavior, registration, feedback, interpretation and consequence b. Stimulus, registration, interpretation, feedback, behavior and consequence c. Behavior, registration, feedback, stimulus, interpretation and consequence d. Behavior, consequence, registration, stimulus, interpretation and feedback 210. If an employee is reprimanded for violating the companys rules, he may then onwards begin to abide by the rules. The behavior of employee is ______. a. Covert b. Incognito c. Overt d. Surreptitious 211. Which of the following subprocesses of perception can be observed? a. Registration b. Interpretation c. Feedback d. Behavior 212. Which of the following perceptual dimensions? a. b. c. d. Selectivity and organization Feedback and interpretation Registration and interpretation Selectivity and interpretation are

204. Which of the following theoretical frameworks is used to study organizational behavior? i. Behavioristic ii. Cognitive iii. Social learning iv. Contingent a. b. c. d. i, ii and iii ii, iii and iv i, iii and iv i, ii, iii and iv

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206. Which of the following is not an external stimulus? a. Mechanical pressure b. Light and sound c. Taste of food d. Thirst 207. Which of the following is not an internal stimulus? a. Thirst b. Pain c. Smell d. Hunger 208. Which of the following processes is used by an individual to refine, modify or completely alter the raw data obtained through their senses? a. Cognitive process b. Registration process c. Behavior process d. Confrontation process

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205. Both internal and external factors influence organizational behavior. The internal causal factors are _______ oriented and the external environment factors are _______ oriented. a. Behavioristically; cognitively b. Cognitively; behavioristically c. Employee; competition d. Employer; competition

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213. Sometimes the stimuli may be so subtle that an individual may not even be conscious that he is exposed to them. This phenomenon is called _________ perception. Subliminal Intuitive Involuntary Submerged

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Part A a. b. c. d. Motivation Personality Learning Novelty 219. According to the principle of _______, a group of stimuli that are physically close to each other are perceived as a single entity. a. Perceptual grouping b. Perceptual organization c. Perceptual proximity d. Perceptual similarity 220. Some research studies have indicated that people resist perceiving information which they believe would disturb their emotions. What kind of perceptual organization is this? a. Perceptual constancy b. Perceptual defense c. Perceptual grouping d. Perceptual context 221. Which of the following is true with regard to the principle of constancy? a. A group of stimuli that are physically close to each other are always perceived as a set of parts belonging together. b. All similar stimuli are perceived as part of a common group. c. The perception of elements like size, shape, color, brightness and location of an object remains constant and does not change from one individual to another. d. A person may sometimes perceive a whole, where it does not exist, and may sometimes, not be able to perceive a whole when it is present. 222. What is the process of interpreting ones own as well as others behavior by relating it to causal factors or attributes known as? a. Attribution b. Assignment c. Ascription d. Feedback 223. Sometimes people arrive at a general impression about an individual on the basis of a single characteristic of that individual. What is this process known as? 23

215. Bright light and strong odor are noticed more quickly than dim light and a faint odor. Which of the following principles is described by this statement? a. Principle of contrast b. Principle of proximity c. Principle of attention d. Principle of closure 216. Which of the following situational factors influence the perception of an individual? a. Time, work setting and interests b. Work setting, social setting and motives c. Time, social setting and interests d. Time, work setting and social setting 217. The factors which influence perception include the perceiver himself, the object or target being perceived, and the situation in which the perception occurs. Which of the following factors in the target influence the perception of an individual? a. b. c. d. Novelty, motion, time and work setting Sound, size, background and proximity Attitudes, motives, interest and experience Situation, social setting, time and expectations

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218. A person may sometimes perceive a whole, when it does not exist, and may sometimes, not be able to perceive a whole when it is present. What is this principle known as? a. Principle of closure b. Principle of continuity c. Principle of proximity d. Principle of similarity

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Introduction to Organizational Behavior a. b. c. d. Halo effect Association Attribution Stereotyping c. d. Conflict Group conflict

224. In some cases, people generalize the characteristics of all the members of a group. What is this perceptual error known as? a. Stereotyping b. Projection c. Halo effect d. Association 225. What is the process by which people try to manage or control the perceptions that other people have about them? a. Perception management b. Halo effect c. Impression management d. Perceptual defense 226. Which of the following is a characteristic of demotionpreventative strategies? a. Entitlements b. Enhancements c. Association d. Disassociation

230. An individual may have conflicting needs or he may have to overcome many barriers to achieve his goals. In the process of achieving his goals, the individual may experience stress and frustration. What type of conflict does this result in? a. Interpersonal conflict b. Personal conflict c. Individual conflict d. Intrapersonal conflict 231. When someone threatens an individuals self-concept, he retaliates and tries to maintain his image and self-respect. What type of conflict does this result in? a. Intergroup conflict b. Internal conflict c. Interpersonal conflict d. Intragroup conflict 232. What type of conflict results when one group in an organization perceives itself being treated inequitably in comparison to other groups in terms of working conditions, rewards and status? a. Internal conflict b. Intergroup conflict c. Interpersonal conflict d. Intragroup conflict 233. Which of the following are stages in the conflict process? i. ii. iii. iv. v. a. b. c. d. Potential opposition Intentions Cognition and personalization Behavior Input i, ii, iii and iv i, ii, iii, iv and v ii, iii and iv i, ii and iv

227. A persons behavior can be attributed to internal factors such as personality traits, motivation or ability. What is this kind of attribution known as? a. Positional b. Situational c. Dispositional d. Personal 228. In _______ attribution, a persons behavior is attributed to external factors. a. Situational b. External c. Positional d. Mechanical 229. What term is used to refer to a disagreement between two or more individuals or groups over an issue of mutual interest? a. Intergroup disagreement b. Individual disagreement

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Part A possibility of a conflict taking place. Which among the following are these conditions? i. Communication ii. Structure iii. Personal variables iv. Personalization a. b. c. d. i and iv ii and iv i, ii and iii i, ii and iv conflict resolution technique being used by the management. Altering the human variable Avoiding Altering the structural variables Authoritative command

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236. In which of the following stages of conflict do individuals decide on the action that is to be taken to deal with the conflict? a. Intentions b. Cognition and personalization c. Behavior d. Outcomes

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235. Following are some generalized statements about the factors that lead to conflict. Which of the given statements is not true? a. The availability of surplus information eliminates the scope for conflict. b. If the roles of individuals/groups are not clearly defined and their responsibilities overlap with those of others, conflicts become inevitable. c. When surplus information is available, people may differ in their opinions regarding which aspects of the information are critical and which are non-critical. d. People who have low self-esteem are more likely to be involved in conflict.

240. Which of the following is not a method for managing conflict? a. Avoidance b. Smoothing c. Convincing d. Bargaining 241. In an organization, which of the following refers to the standard of behavior that every employee has to follow and the quantum and quality of work that every employee has to deliver? a. Organizational culture b. Norms c. Values d. Assumptions 242. Organizational _________ refers to the overall impression an employee has with respect to the physical layout of the workplace, the various interactions among the employees, and the way employees behave with the customers. a. Culture b. Climate c. Structure d. Behavior 243. Within an organization, people tend to identify with others and form social groups on the basis of age, occupational or professional skills, union membership etc. What does this tendency among employees give rise to? a. Organizational culture 25

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237. In which of the following conflict resolution techniques do the conflicting parties meet face-to-face to identify the problem and resolve it through open discussion? a. Smoothing b. Problem-solving c. Compromise d. Expansion of resources 238. In an organization, the management changed the organizational structure and redesigned the jobs to change the nature of interaction between the conflicting parties. Identify the

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239. Which of the following methods are used for managing intergroup relations? i. Integrating departments ii. Task forces iii. Planning iv. Liaison roles a. i, ii and iv b. i, ii, iii and iv c. i, ii and iii d. i, iii and iv

Introduction to Organizational Behavior b. c. d. Dominant culture Subculture Work group employee as an individual with a distinct set of values and principles. 247. Which of the following is not true about an effective organizational change process? a. The organization change process should be gradual, not abrupt. b. It is advisable to invite an external change agent to get a broader perspective of the change strategies. c. A top-down approach has to be adopted while attempting to change the organizational culture. d. The change process must be abrupt and not gradual. 248. Which of the following factors does not help sustain a strong organizational culture? a. Selection procedure b. Support of top management c. Formalization d. Socialization 249. Which of the following factors determine the strength of the organizational culture? i.

244. Which of the following statements is (are) true about subcultures? i. A subculture represents the core values shared by a majority of members in the organization. ii. Subcultures prevent employees from blindly following the prevailing norms and values. iii. The value of organizational culture is significantly lessened in the absence of a subculture since a common interpretation of organizational procedures and practices is not possible. iv. An effective subculture lays the foundation for emerging values and norms and thus helps the organization adapt to the changing needs of its various stakeholders. a. Only i and iv b. Only i and iii c. Only ii and iv d. Only iv 245. The different members of an organization have varying degrees of commitment towards the organizations core values. What is this degree of commitment known as? a. Sharedness of organizational culture b. Assumptions of culture c. Intensity of organizational culture d. Outcome orientation

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246. Which among the following is not true about socialization? a. It is a formal procedure in which newcomers to an organization are introduced to the organizational culture so that they can internalize the values and ideologies of the organization. b. Socialization aims at improving employee productivity and reducing employee turnover. c. Socialization follows a 3-stage process pre-arrival, encounter and metamorphosis stage. d. The encounter stage in the socialization process treats each

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Sharedness of organizational core values ii. Formalization iii. Selection iv. Intensity Only i and ii Only ii and iv Only i and iv Only iii

250. Which of the following is not a function of organizational culture? a. Organizational culture plays a boundary defining role. b. Organizational culture creates a sense of identity among the organizational members. c. Organizational culture enhances the stability of the social system. d. Organizational culture documents the rules and procedures of the organizational system that predict and control employee behavior.

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Part B: Caselets

The caselets in this section are designed to encourage students to apply theoretical concepts to various business situations. Analyzing these cases requires not only theoretical knowledge, but also a comprehensive understanding of the business environment. These cases test the students reasoning and comprehension skills.

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Part B: Caselets
Caselet 1
South Indian Technologies had been the largest computer manufacturing company in the country for almost 15 years. Its collapse in a short span of time came as a jolt to the nations computer industry. Though the company had not been performing up to the mark for the last couple of years, no one quite expected such a downfall. The cofounder of the company and its Managing Director, Anil Karthikeyan (Karthikeyan), stated off the record that the companys inability to change its organizational culture was the main reason behind the debacle. Dr. Krishna Murthy (Murthy), a well-known personality in the Indian PC market, established South Indian Technologies. An engineer by profession, Murthy had gained 20 years of industry experience, working for numerous players in the PC market. His flair for innovation and creativity helped him to become one of the most highly paid professionals in the field. Murthy then decided to start up his own computer manufacturing company with the help of his friend, Karthikeyan. Karthikeyan too was an engineer by profession. However, while Murthy was of the opinion that innovation and creativity must be given the highest criteria, Karthikeyan was more inclined towards making profits. Murthy upheld the core values of innovation and creativity and believed that these values would guide the organization towards the accomplishment of its goals. Employees received encouragement and generous support from the management and their creative talents were nurtured. Every employee at the company was given an equal opportunity to innovate and each of their ideas were given serious consideration by the management. Most of the revenue generated by the company was invested in developing new products. With the passage of time, the core values of the company were absorbed by every member of the organization. This stimulating work culture led South Indian Technologies to become the countrys largest computer manufacturing firm and it stayed so for 15 years. However, the focus on development of employees caused the management to ignore the changes in the external environment. The markets were changing and so were the needs of the customers. South Indian Technologies failed to positively adapt itself to these changes. It continued to invest heavily in the development of new products, which unfortunately failed to attract customers. It encouraged internal competition and kept investing in employee projects without analyzing the competitiveness of the end product. This resulted in a colossal wastage of investment, as many of the products did not gain market acceptance. The profits generated by a few successful products were disproportionate to the investments made in developing newer ones. Karthikeyan tried his best to convince Murthy about the wastage of financial resources and the dire necessity of changing this attitude towards investment, in order to survive. However, the past success of the company blinded Murthy and he was convinced that the existing culture was the right recipe for success. Even the warnings of the companys business managers that it was essential to develop financially successful products failed to convince Murthy and his followers. They were totally against changing the organization culture. In fact, the managers who suggested change were shown the way out. Some of the employees did feel the necessity to change. However they lacked the willingness to change and ignored every signal that indicated the need for change. Karthikeyan made his last attempt to help the company remain dynamic and respond to external market conditions. He prepared a systematic approach to change the

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Introduction to Organizational Behavior organization culture. This was also rejected vehemently by Murthy and his followers. South Indian Technologies could not strike the right balance between being innovative and being economically successful. It could not make the right cultural transition at the right time and finally fell victim to, what Karthikeyan termed the cultural trap. That marked the end of business for a company that had almost ruled the industry for 15 years. Questions for Discussion: 1. The organizational culture at South Indian Technologies had become a handicap to the growth of the company. Discuss the effect of a static organizational culture on a companys development. An organizations culture is, to a great extent, influenced by the values of its founders. Discuss Murthys role in shaping the basic organizational culture at South Indian Technologies. Also discuss the role he should have played in changing the organizational culture of South Indian Technologies.

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Caselet 2
The recent collapse of Cosmo Energy Services Ltd. (Cosmo), one of the nations leading energy producers, led the Ministry of Power to set up a panel, headed by Nirmal Mehta (Mehta), the Minister of State for Power, to probe the companys functioning. Besides producing and marketing electricity and natural gas, Cosmo also marketed several commodities such as coal, plastics, paper and metal. The company also had interests in the field of financial and risk management services in the country. Its customers belonged to the commercial and the industrial sectors. The company experienced a constant growth since its inception in the early 1980s and became the market leader. Cosmo was rated as the top company on the innovation front. It was also the first company to adapt to technological development. The company never faced a dearth of financial resources and hired the best talent in the industry. Every employee was given due recognition and was paid a salary commensurate with the profits generated by his/her services. What then, went wrong? The 300-odd-page report, presented by Mehta, disclosed that ethical deficit was the culprit. The company had failed miserably on the socio-spiritual aspect as well. Not only had the senior management been unethical in its business dealings but it had also failed to maintain a relationship of trust and openness with the employees. The report revealed that the organizational culture at Cosmo Energy Services Ltd. was prone to corruption, greed and deception. Interestingly, the report noted that the founders of Cosmo upheld the values of integrity, honesty and sincerity in all their dealings and treated every individual with respect. The founders also believed in having open channels of communication at all levels of the organization. Cosmo supposedly upheld a vision of establishing a work environment that penalized corruption and encouraged employees to report any violation of this policy. However, within a period of 20 years, Cosmo had deviated from its core values. The CEO of the company was affluent and influential and had immense political support. The report provided evidence that the CEO had influenced the power policy framed by the previous government. Cosmo was backed by political support that quelled whatever doubts about its integrity and credibility were raised in public. The management was involved in illegal activities like fraud and insider trading. The top management satisfied their own interests at the expense of the companys shareholders. The Chief Financial Officer, Raj Agarwal, manipulated the financial statements to inflate the companys profits, during its last financial year. A report submitted by an independent consulting firm rated the company high in terms of its financial performance and recommended investments in the company. This misled the general public and the companys competitors. It was reported that these consultants were also paid immensely to manipulate the accounts of the company and overstate its earnings. 32

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Part B Besides, Cosmos senior management did not have open channels of communication with the employees. Any opposition to the decisions of the top management was ignored or brushed aside. An atmosphere of mistrust and suspicion prevailed throughout the organization. The panels report also revealed that while top executives were earning in millions, lower level employees were losing their pensions and jobs. This was because the employees money was invested in their own companys stock which had plummeted so low that it never recovered. The probe panel concluded that the toxic culture at Cosmo Energy Services Ltd. had led to its collapse and that the people who had to bear the brunt of this were its own employees and the general public who had invested money in it. Cosmo thus stands as an example of corporate failure to develop a strong and ethical culture. Questions for Discussion: 1. 2. Explain the importance of ethics in sustaining a strong organizational culture, using Cosmo Energy Services Ltd. as an example. Cosmo Energy Services Ltd. had adequate financial and technological backup. Despite acquiring the best talent in the industry, it failed to develop its soci0spiritual capital. Discuss how the effective management of this factor would have prevented the companys downfall.

Chandran fondly recollected that We Care was established with a vision of becoming a globally acknowledged health care organization, propelled by constant innovation and development. It aimed to achieve this by attracting and retaining the right talent and focus on product innovation and people development. We Care believed that a global presence could be sustained by being sensitive to the ever changing needs of its customers. The core values of the company include manufacturing high quality products, continuous employee development, and respect for every individual within the organizational framework. While emphasizing high quality performance by employees, the company initiated a variety of people-oriented activities to motivate employees to perform better. The most striking among these initiatives is the involvement and participation of employees in modification and betterment of existing practices in the organization. The organization has an open feedback system. Employees are invited to give their opinions on any issue relating to organizational processes. The feedback, based on various parameters, is used by the company to rate its overall performance. These ratings reflect employee perception on a variety of factors like organizational processes, policies, procedures, quality of work life and, the managerial decision making abilities and its effectiveness. The top management proposed to use this feedback to decide on future courses of action required for better organizational performance. These attempts to generate customer delight and at the same time being sensitive to the needs of employees have resulted in the exceptional performance of We Care in the highly competitive healthcare industry. However, the analysis of the recent annual feedback conducted in the company caused serious concern to Chandran and Verma. Analysis of the feedback highlighted that the company was rated very low on innovation. It was realized that the R&D department was not coming up with new ideas of product development or any revolutionary concepts in the area of healthcare. Chandran called for an immediate meeting of the top management to identify the cause and come up with possible solutions to the 33

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We Care, one of the leading manufacturers of health care products in the country, has to its credit a list of 56 healthcare products in the consumer and pharmaceutical market. Its products cover a range of health care areas like infant care, child care, womens care, toiletries, skin care, etc. Ravi Chandran (Chandran) and Srikanth Verma (Verma) had founded. We Care eighteen years ago and serve as CEO and the Managing Director respectively.

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Introduction to Organizational Behavior problem. Verma suggested that Amit Das Gupta (Gupta), a newly appointed marketing manager, also be invited to attend the meeting. Gupta, a relatively lessexperienced but creative individual, was middle level manager at one of the important branches in the country. Gupta is a management graduate from a premier business school and has proved to be a prudent problem solver. Im sure that despite the little exposure that he has, he can come up with bright ideas to solve the problem on hand, said Verma. Chandran agreed, though he was not quite convinced. The meeting was attended by the Marketing Head, the Personnel Manager, the Head of the R&D department, the Financial Advisor and the new marketing manager, Gupta. The agenda of the meeting is to share the results of the recent annual feedback. The analysis of feedback has highlighted the potential strengths of the company in terms of providing excellent quality of work life. However, there are other crucial areas where our company seems to be lagging, said Chandran. Verma added, Employees have rated the company low on the innovation front. It is very sad to note that the number of patents we had applied for during the last year is considerably lower than that of the previous years. The importance of creativity and innovation for survival in this industry cannot be undermined. Our dismal performance in this crucial aspect may simply put us out of business, continued Chandran. Pay them more, was the suggestion of the Personnel Manager. This invited opposition from the Financial Advisor. Heated arguments were about to begin. However they were interrupted by Gupta, who suggested that a high level committee be formed to study consumer behavior, to better understand the market and to find out how effectively the company was serving the market. Gupta said, The committee will focus on exploring the expectations of target customers and how responsive the company can be to their changing needs. All the members agreed to this suggestion and a small committee, headed by Gupta, was formed. In two months time, the committee reported the findings of its study and briefed the R&D team on the customer expectations. Chandran and Verma held another meeting with the Personnel and the R&D Heads. The outcome of this meeting was discussed during a general meeting with the members of the R&D team. Chandran made it clear that the management was willing to enhance the R&D spend the following year. This was meant to encourage innovation among the members of the organization. The management promised a culture that would encourage employees to come out with their ideas, however weird or absurd they might seem initially. This decision of the company helped employees present their opinions without any inhibitions. Thus We Care introduced a culture that fostered creativity among its employees. It also decided to reward employees whose ideas would bring in considerable revenues for the company. Within a year, the company had more than one reason to celebrate. We Care was rated No.5 in the Best Companies to Work For survey conducted by a well-regarded consultancy in association with a reputed business magazine. Besides the company saw its profits shoot up by 25% as compared to an 8% increase in the previous year. Questions for Discussion: 1. Discuss the importance of innovation as a characteristic of organizational culture. Also discuss how the organizational culture at We Care helped foster innovation among its employees.

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Part B 2. Organizational culture, to a great extent, is influenced by the founding fathers of the organization. Taking the example of We Care, discuss how the culture of an organization is influenced by its founders.

Caselet 4
The new CEO of Symphony Technologies (Symphony), Anish Vaidya (Vaidya), found himself confronted with the most challenging phase of his 26-year-old career in the industry. The liberalization of the Indian economy and the resultant increase in competition from foreign companies had hit the companys sales and revenue badly. The early 1990s saw Symphonys profits plummeting to an all-time low since its establishment about three decades earlier. Established in 1956, Symphony began as a manufacturer of a variety of electrical appliances, and gradually spread its operations into various other industries such as consumer products, power generation, automobiles and insurance. Within four decades, it grew to become a global company serving customers across the world. In his first meeting as CEO of the company, Vaidya invited employees from the middle and top management level to pool their ideas to address a comprehensive list of problems faced by the organization. The meeting brought to the forefront the following areas of concern:

The inability of Symphonys generic products to effectively penetrate the highly competitive market eventually resulted in blocking capital.

Realizing that change management was lacking in the organization, Vaidya, in consultation with his team members introduced the following measures to pull Symphony out of a probable debacle: Areas with new and substantial market potential were explored and strategies to implement them were developed. Vaidya endeavored to change the bureaucratic style of management in the organization to enable easier and faster decision making. This resulted in the formation of a lean and effective organizational structure and helped enhance employee participation, and thereby improve employee productivity. All the subsidiaries and business units that were making losses were shut down so that the company could compete only in those areas in which it had proved and tested competence. This helped it tap the capital that was being invested in units that were not productive. Vaidya also took the difficult decision of cutting down on excess staff, with a view to cutting down on operational costs. Excess but efficient staff were retrained and deployed suitably. 35

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Most important of all, Symphony failed to adapt to the changes in the external environment. Because of this, it not only lost market leadership in various sectors, but also failed to maintain a decent market share in the industry.

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Competition from multinational companies was eating into Symphonys market share as the technology of these companies was far better than that of Symphony.

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Introduction to Organizational Behavior Employees at Symphony were asked to undergo numerous training programs at regular intervals to remain updated with the latest developments in the external environment, so that they could adapt to technological changes and remain competitive.

Initially, there was stiff resistance in the company to the tough measures taken by the new CEO. However, Vaidya was able to gradually persuade the employees to accept the changes and within a short period of time, a sea change was noticed in the organizational processes. These revolutionary changes brought about a dramatic rise in Symphonys profits, and soon, Vaidyas bold decisions made Symphony a market leader in various fields of business. Questions for Discussion: 1. 2. Taking the example of Symphony Technologies, describe the importance of change management in organizations. Briefly outline the role played by the management and employees in bringing about a planned change in Symphony Technologies.

Rahul Mehra (Mehra) was annoyed that the week had begun badly. It was Monday morning and it was time for him to provide his manager, Ashish Gupta (Gupta), with a detailed report on achievement of his weekly targets. Unfortunately, the preceding week too, had been a dull one with not even fifty percent of the targets being met. Mehra worked as a sales representative for the personal loan division of a leading private bank. He had to meet weekly targets to become eligible for the special sales incentives, the only lucrative monetary benefit offered by the company. The bank set the targets for each sales representative in terms of the number of new customers and the total value of sales to be achieved. Gupta was a manager who liked to be in total control of any situation. His micromanaging tendency made him exercise total control over his subordinates in all organizational aspects. (A micromanager is one who does not trust his subordinates and who closely monitors them on the job.) He thought of himself as being very knowledgeable and did not feel he had to seek suggestions from his team members. He believed in issuing instructions to his subordinates and expected them to follow the instructions without questioning. He kept an eye on the performance of his 12member team of sales representatives throughout the twelve-odd hours they spent in office. He expected his team members to keep him informed about their progress on any target on an hourly basis even when they were on the field. The team was responsible for obtaining leads (prospective customers) and eventually converting them into customers. The targets, in terms of the volumes and value of loans were so high that achieving them seemed a difficult task. Mehra went into Guptas room only to be given a strong warning that if the achievement of targets for the week ahead was also below expectations, it would cost him his job. Most of Mehras colleagues too had a similar experience to narrate after they had submitted their weekly report. To make matters worse, Gupta called for an emergency meeting of sales representatives, and announced that all teams must follow a systematic procedure to gather data, making cold calls to potential customers from the leads obtained and then close the deal. No one was permitted to deviate from this style of working. The team was thus forced to follow a traditional way of marketing, which included calling up prospective customers and following up until the deal was finalized. They were not allowed to try out new and innovative ways of marketing their services. The team members were expected to report to Gupta about their performance on a daily basis, unlike the weekly reporting that was followed previously. 36

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Caselet 5

Part B The week that followed, was one in which team members struggled under tremendous pressure. Ultimately, they were unable to meet even the weekly targets. This made Gupta even more frustrated and he again called for a meeting. But what took place at the meeting left him in a state of shock, helplessness and despair. Mehra, along with three others, among the best performers in the organization, quit their jobs. Questions for Discussion: 1. 2. Describe the leadership style that was followed by Ashish Gupta. Also discuss the effects of such leadership on an organization. Outline the concept of micromanagement and bring out its impact on employee behavior in the context of the case.

Caselet 6
Milan Khanna (Khanna), HR manager of the GK Group of Industries, found himself in a pensive mood after studying the annual HR report. The report had serious implications not only for his job but for the company as well. The annual attrition rate had grown by 18% during the preceding year, taking the present employee turnover to a glaring 33%. Most of the talented workforce was leaving the organization for better offers in the industry. Some of them were leaving even when the pay was not as good as that in this company. This was the trend despite the GK Group being considered one of the best pay-masters in the industry. Moreover, during the previous financial year, the company had given liberal incentives in the form of bonuses to its exceptional performers. The GK Group began as a software firm and later diversified its operations into biotechnology and bioinformatics. Its employees were highly talented knowledge workers and were motivated by their jobs and the various opportunities that their job promised to offer. However a review of the exit interviews conducted during the past three years revealed a striking fact about employee motivation Merely increasing the pay and doling out incentives have only a marginal value as there are many other companies to match your offer. The exit interviews also revealed that efficient employees left the organization seeking greater responsibilities, accountability and empowerment. Lack of personal and professional growth opportunities in the organization prompted people to quit and search for greener pastures. The lack of opportunities for learning and growth in the organization, along with little or no attempts towards employee empowerment proved to be some of the prime reasons for the high attrition rate at the GK Group. In the light of these facts, Khanna came up with a new strategy to contain the rate of attrition in the company. His strategy was aimed at understanding the complexity of employee needs and evaluating them. The management charted out a career growth plan for each of its employees for an average period of three years, with the objective of developing the overall personality of every organizational member. The plan also included defining performance benchmarks so as to establish a correlation between expected and actual employee performance. The employees were to be appraised of their performance at the end of every six months in relation to these benchmarks so that they could correct any deviation from the established standards. The strategy proposed by Khanna aimed at creating a win-win situation for both the individual members as well as the organization. Therefore, attempts were made to correlate individual goals and organizational objectives. Recognizing the importance of skill upgradation and employee empowerment, the management decided to promote personality development and learning of employees through well established training facilities. These measures aimed to empower and retain within the organization the human capital and talent, which form the most crucial factors in the success of any knowledge enterprise. 37

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Introduction to Organizational Behavior When the GK Group implemented this strategy in the years that followed, it received wide acceptance and also brought in the desired results of motivating, empowering and retaining the workforce in the organization. Questions for Discussion: 1. Merely increasing the pay and doling out incentives have only a marginal value as there are many other companies to match your offer. Substantiate this statement by describing the various other means of motivating and retaining the workforce in an organization. Discuss the various challenges faced by HR managers in modern organizations and outline the measures they can initiate to cater to the ever-changing needs of employees.

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Caselet 7
Komal Mehta (Mehta), Priya Jain (Jain) and Aishwarya Pandey (Pandey) were childhood friends who were meeting after many years. Among other things, they discussed their experiences in their respective jobs. Mehta was a project leader in a leading software firm and handled an overseas project with a team of 92 people working under her supervision. Jain was the vice president of the marketing division in a medium-sized manufacturing company and spearheaded a team of 56 employees, most of whom were men. Pandey however had not been as fortunate. Despite putting in 3 years of service as a junior scientist, at Kalpa Biosciences (Kalpa), she was granted only one promotion so far, with a very meager hike in her salary. She even considered quitting her job and almost gave up her efforts to carve out a decent career. Mehta and Jain were surprised when they heard this from Pandey, as both of them knew that Pandey was much more intelligent and capable than they were and there could be no reason for her not being able to perform well in her job. There was another reason which explained Pandeys frustration the two male colleagues in favor of whom she was denied a promotion recently, were her juniors. Moreover, her experience and the quality of her work were much better than that of both of them. Pandey attributed the discriminatory treatment towards her by the organization to the glass-ceiling effect, an invisible barrier that obstructs the growth of qualified women to senior managerial positions. Pandey felt that her company discriminated against employees on the basis of gender. It was not just this instance of Pandeys promotion but several other incidents in the organization which made Pandey feel that the management at Kalpa had preconceived notions that female employees were suited only to manage the house and were inefficient as corporate executives. Besides, Pandey found it even more difficult to manage home and office now that her baby was only four-months old. Other women employees at Kalpa also had similar experiences in the organization. This was precisely the reason why not even a single lady member figured on the companys board. In contrast to Pandeys career, Mehta had a relatively smooth and fast career path. Within a couple of years after joining as a software programmer at Softpro, she rose to become a project leader. Within a short period, she was also sent abroad to handle various overseas projects. Softpro provided a very employee-friendly work environment, which was sensitive to employee needs. Having employed a sizeable number of female executives, Softpro provided them with special benefits that offered them flexibility in their jobs. Some of the benefits included child-care centers, flextime options, part-time job option etc. This was indeed a boon for all working mothers in the company. Jain had similar experiences to share. Having graduated from one of the top-rated business schools in the country, Jain started her career as a management trainee in 38

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Part B Anand Manufacturing Company (AMC), a medium-sized manufacturing company. Jain found it smooth sailing for her up the hierarchical ladder and soon became the vice president of the marketing division. AMC did not discriminate against women employees and provided them with equal opportunities for growth and development. The company believed in recruiting individuals on the basis of merit and never denied them opportunities on the basis of gender. The top management at AMC had a considerable number of ladies. In fact, Jain was one of the board members in the company. Thus, in contrast to Softpro and AMC, Kalpa was a typical traditional organization which restricted the growth of its female employees despite their capabilities. Questions for Discussion: 1. 2. Describe the phenomenon that best explains the gender bias at Kalpa. Discuss the reasons behind this attitude of management in organizations. Organizations such as Softpro and AMC are taking initiatives to break the glass ceiling that affects the career growth of female employees adversely. Discuss the measures taken by modern organizations to break the glass ceiling, and thereby reduce the adverse effects of gender bias.

Caselet 8

During its initial years, the organization was small enough to make it possible for its founder, Janardhan Rao, to personally interact with his employees. This allowed the employees to observe and emulate the leadership qualities of their employer. However, with an increase in the number of employees, it became difficult for the chief to address his workforce personally. Therefore, the company set up a leadership development center with the aim of developing leadership qualities among the organizational members. At the center, employees from various operational centers of the company spread across the globe and of different nationalities were imparted training in leadership qualities. They were divided into groups of 400, each group being periodically sent to workshops, where leadership training was imparted to them over four weeks. The workshops revolved around the objective of developing timeless leadership principles that would help the company withstand the tough competition outside and other contingencies. Members of the workshop were also trained in effective decision making. Once they successfully completed their training, these employees were given opportunities to hone their leadership skills in the organization and transfer their knowledge to other organizational members. 39

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The vision of Indigos founders was to make it big in the global business arena and to transform the company from being just a software developing firm to one providing consultancy services to organizations to help them create technologies to meet their strategic goals. Indigo used its leadership center to direct itself in a planned and controlled manner to achieve this objective. The center was used as an avenue to spread knowledge and corporate values throughout the company.

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Indigo Software (Indigo), set up in Hyderabad in the early 1970s, with an initial strength of 150, grew to become the countrys leading software development firm in the year 2000, with around 18,000 employees on its rolls. The companys success can be attributed to the values upheld by its founders. Indigos founders believed that to retain its place in the dynamic business environment, the company had to develop leaders of high quality who kept the global perspective in mind while working in the organization. With this as its aim, the company established the Leadership Learning Institute (LLI) to nurture leadership qualities among its employees across the globe.

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Introduction to Organizational Behavior Thus, with the establishment of the LLI, Indigo attempted to develop leadership from within and address business risks through succession planing keeping a holistic outlook in mind. Questions for Discussion: 1. Modern organizations are developing robust leadership development systems to identify leaders within the organization and hone their skills to be more effective in such roles. Describe the various skills that are necessary to be an effective leader. Indigos founders believed that if the company had to survive in the dynamic business environment, it would have to develop leaders of high quality from within the organization, who had a global perspective. Can leadership be taught in leadership development centers or is it an in-born trait in individuals?

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Caselet 9
It was Monday morning and Aditya Sinha (Sinha) was in the conference room discussing the new employee compensation program for team leaders and call center executives of Pune-based BPO, Excel Networks. Sinha was the HR Manager and managed a 3700 strong team comprising young and ambitious graduates, just out of college. The meeting was attended by HR directors of all the business units of Excel. However, a few members of the HR council disagreed with the new proposal and wanted it to be discussed at another session. Sinha then left for another meeting, this time with new recruits. He briefly addressed the 50-odd group about the basic features and functions of the organization and introduced them to the new financial services project they were supposed to work on. Excel promoted an open and transparent culture that invited employee participation. Quarterly meetings were a must and at these, call center agents openly discussed the pros and cons of the existing organizational system, and put forth the problems they encountered, with the objective of seeking a solution. Employees also suggested better ways of doing their routine jobs and Sinha promptly accepted valid suggestions. Once in a while, Sinha stayed back for the night in the office to oversee the performance of call center agents working on the night shift. He utilized this opportunity to interact with the agents and to solve their problems, if any. Sinha also went to the extent of personally resolving employee grievances in order to make the employees realize how keen he was to help them solve their problem. Excel believed in having open channels of communication. Any important organizational information was directly communicated by the top management to employees at the lowest level in the organization. When the controversial law was passed in the US, placing restrictions on the extent of operations that could be outsourced to developing countries such as India, both Sinha and the CEO, Kunal Aggarwal, personally addressed the employees at Excel and cleared their apprehensions regarding their future in the company, stating that since the law was confined to projects headed by the US government, only a small portion of their business would be affected. This helped allay the employees fears. Excel offered its employees a variety of facilities like transportation and food and thus catered to their basic needs. Other features like an informal work environment, a wellequipped cafeteria, music at the workstation etc., were also provided to ensure fun-atwork. The agents, as Sinha put it, had to deal with a variety of uncomfortable factors like working at late hours, the monotonous nature of the job, difficult and irate customers etc. Any of these factors could demotivate an employee. Therefore, care was taken to ensure complete employee satisfaction, thereby keeping the employee turnover low. While the industry average is 40%, Sinhas efforts have helped keep employee turnover at Excel Networks at a low of 25%. 40

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Part B Questions for Discussion: 1. The attrition rate at Excel Networks was as low as 25%, while the average in the industry was 40%. Discuss the factors that contributed to the low employee turnover at Excel. The open channels of communication at Excel helped allay the apprehensions of its agents regarding their survival in the organization. Bring out the importance and advantages of the open communication channels at Excel.

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Caselet 10
Kalpana Singh (Singh) graduated from one of the top business schools in the country, with high aspirations. Although Singh was aware of how difficult it was for a woman to succeed in the male dominated business environment, she was determined to make a career in management. She soon joined Able Manufacturers at an entry-level position. She began as a marketing executive under Anoop Kapoor (Kapoor), the regional marketing manager. Kapoor, who perceived immense potential in Singh, constantly guided her throughout her career and played the role of a mentor. Singh proved to be a dedicated, hard-working, and determined employee. Though she was transferred to various departments in the organization, she willingly accepted the transfer orders even if it meant relocation. Her enthusiasm to learn new things helped her gain a thorough knowledge of all the operations in the organization. Her career graph progressed slowly but steadily. The intermittent promotions she received on her way up the organizational hierarchy helped her rise to the position of vice-president by the time she was 35. but the journey up was by no means smooth. Singhs male colleagues were jealous of her growth and spread the rumor that it was her good looks that were responsible for her rise. They refused to accept her as a business professional, most of them being of the opinion that women were suited only to take care of the house and not to handle serious business. Some of her superiors did not have confidence in her decision making abilities, merely because they felt women could not make tough decisions. Therefore, even though Singh was given various positions that required her to make crucial decisions, she was seldom given the authority to do so. She also had to face constant interference in her job by her superiors. She had not only to tackle the routine challenges offered by her job, but also to fight against the various prejudices of her colleagues. She had to constantly prove to them that women were capable of making tough decisions and did not succumb to pressure. There were times when Singh felt frustrated and considered quitting the job. However, she was aware that by doing so she would only reinforce the prejudices of her male colleagues. She, therefore, continued in her efforts to be successful despite the fact that she was never given credit for her endeavors. Singh was, however, fortunate that she had the constant support of her mentor, Kapoor, who was with her throughout her tough times and constantly encouraged her to perform well. This dedication towards her profession saw Singh rise above difficulties and emerge out successful at the end. Questions for Discussion: 1. It has always been difficult for a woman to succeed in the male-dominated business environment. Briefly outline the various factors that inhibit the progress of women up the corporate ladder. Discuss the qualities of Kalpana Singh that helped her reach the position of a vice-president despite all the hardships and discrimination she encountered as a woman, in a male-dominated business environment. 41

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Introduction to Organizational Behavior

Caselet 11
Newage Associates (NA), one of the worlds leading consultancy firms, had hit the headlines again. But this time, it was for the wrong reasons. Shobhit Ghosh (Ghosh), the companys marketing head, was accused of sexually harassing his personal secretary and dismissing her from her job for no valid reason. Deepali Loya (Loya), who had worked with Ghosh for quite some time, sued him and the company for sexual harassment and wrongful termination of employment. She claimed that she was subjected to visual and verbal sexual harassment by her boss. Loya also accused the company of wrongful termination of her employment and claimed that she was fired only because she had refused to have a relationship with Ghosh. The news caught the company unawares, as Ghosh was considered one of the most efficient personnel in the top management, widely respected in business circles for his go-getter attitude. He was the one responsible for the constant rise in the companys profits, and was also the highest paid employee in the organization. However, this allegation against him put the companys CEO, Rajneesh Kattar (Kattar), in a spot. Not only was one of the top managers of the company being accused of unethical behavior, but the companys reputation was also being tarnished in the process. He realized the magnitude of loss that would result both in monetary terms and in terms of damage to the companys reputation.

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NA, on the other hand, decided to settle the matter with Loya by means of an out-ofcourt settlement. Loya agreed to give up her claim if the company agreed to pay her compensation for the mental agony caused to her and her family due to Ghoshs behavior and her subsequent termination from employment. The out-of-court settlement cost the company a colossal sum of money, and Ghosh too was paid almost twice that amount for the termination of his employment contract. However, since he had refused to contribute to the compensation amount that was paid to Loya, NA decided to take legal action against Ghosh.

Kattar then called for a meeting which was attended by the top brass of the company. At the meeting, it was decided that the company would take all possible measures to ensure that such a thing would not recur. For this, the company set up a grievance cell which had the responsibility of overseeing the problems faced by women in the workplace. The grievance cell was a part of a redressal mechanism to solve problems of sexual harassment. It also made adequate efforts to educate the employees about the existence and the objectives of such a redressal mechanism. Further, the company made it mandatory for its managers to undergo special courses, which aimed at eliminating problems such as gender bias, sexual harassment and cross-cultural conflicts. Questions for Discussion: 1. Deepali Loya charged Shobhit Ghosh with sexual harassment and also sued the company for wrongful termination of her employment. Define sexual harassment and mention the various aspects of behavior that can be construed as sexual harassment.

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Caselet 12
It was the first meeting that was being convened by Raj Malhotra (Malhotra), the new branch manager of the Tirupur branch of KNB Bank, a growing private sector bank. In comparison to other branches, the Tirupur branch had performed badly ever since its inception seven years ago, and Malhotra being young and enthusiastic, was determined to bring about a dramatic improvement in its performance. The meeting was the first such in the history of the branch as it involved the participation of all the employees of the branch, not just to welcome their new manager, but also to make certain crucial decisions that would result in increasing the sales of the banks products and services. The assistant manager, Abhiram Krishna (Krishna), had made all the arrangements for the meeting which commenced with Malhotra thanking everyone present for the warm welcome he was given on taking charge. After a brief mention of the various charges he had held till then in his career, Malhotra described the banks foray into the insurance sector and pointed out the additional responsibility that every employee of the bank had, to make this diversification a success. Malhotra then emphasized the targets that had to be achieved by the branch for that financial year, both in its regular products as well as in insurance. With the opening up of the insurance sector in India, a majority of the private sector banks began to show keen interest in entering the sector by forming joint ventures with established insurance companies. KNB Bank too entered into a joint venture with Secure Insurance Services, a UK-based insurance company, to sell life insurance products to Indian customers. All the branch offices of KNB Bank were instructed by the corporate office to promote the sale of insurance products along with the regular bank products such as loans, fixed deposits, safety bonds, credit cards and various types of accounts. Malhotra invited suggestions from all employees to improve the branchs performance and achieve the annual target for that year. However, there was very little participation from the employees, despite Malhotra making repeated requests to them to fearlessly voice their opinions. Having received no substantial inputs from his subordinates, Malhotra then presented his plan of action. Of the various measures put forth by Malhotra to enhance sales, was enforcement of sales targets even for employees dealing with routine banking operations such as cash transactions, generation of demand drafts, opening of new accounts and handling of customer queries. Although this was unacceptable to the employees, none of them voiced their objection even when Malhotra asked for their opinion. The meeting then concluded after a few more strategies to develop the branch sales were discussed. The next day, one of the senior employees, Anand Trivedi (Trivedi), approached Krishna, with a document in hand. Krishna, who was busy preparing the monthly reports for the bank, glanced up, and seeing the document in Trivedis hand, asked what it was about. Trivedi replied that it was a representation from the employees. Krishna immediately stopped what he was doing and reached for the document. In their representation, the employees requested the management not to impose sales targets on them. They justified their protest by stating that it would be extremely stressful for them to concentrate both on processing routine transactions and on enhancing sales of the banks products and services. They claimed that of late, the number of transactions had increased tremendously. 43

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Introduction to Organizational Behavior Krishna was visibly irritated after he had read the representation and asked Trivedi why the employees had not opposed the decision during the meeting itself. Trivedi replied that while the meeting was in progress, each employee had thought that he would be the only one to oppose it and had hesitated to voice his opposition for fear of antagonizing the management. It was only after the meeting was over and the employees could discuss the matter with each other that they realized that everyone was equally opposed to the decision. Krishna assured Trivedi that although it was not possible for him to promise anything, he would certainly make all efforts possible to make the management reconsider the action plan. Questions for Discussion: 1. Raj Malhotra encouraged employee participation in the decision-making process of his branch. What is this type of decision-making known as? Also discuss the possible benefits of employee participation in decision-making. During the meeting, all the employees gave their assent to Malhotras proposal for a new action plan. However, soon after the meeting, they forwarded a written appeal asking the management to reconsider the action plan. What, in your opinion, made the employees behave in this manner? What is this phenomenon known as? What are the characteristic features of such a phenomenon?

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Caselet 13

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The first few months at Meridian were a learning experience for both of them. Kapoor and Menon were extremely enthusiastic about their jobs. The company had given them adequate training and reasonable autonomy to perform their job. They soon began handling clients independently. They were involved in getting new clients and were also responsible for maintaining smooth relationships with them. Both of them reported to the regional sales manager, Nitish Bajaj (Bajaj). Of the two, Bajaj was more impressed with Menons performance. Within a couple of months of joining the company, Menon had obtained and closed a deal with a very high profile client. Business with this client was expected to rake in huge profits for the company. In a party organized in the company to celebrate the occasion, Bajaj announced a cash award for Menon in appreciation of her commitment and dedication to the job. This served to reinforce Menons motivation and made her strive even harder to better her performance. After both of them had completed a year of working in the company, the time for their performance review came up. The company had a yearly performance appraisal system which rated employees on the basis of their performance throughout the year. Based on these ratings, the employees were paid hefty performance bonuses that

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Neha Kapoor (Kapoor) and Tina Menon (Menon) were excited about their first job offer from a leading multinational company, Meridian Business Solutions (Meridian). Meridian, a UK-based consultancy, offered business development and improvement solutions to organizations in a wide range of industries. Kapoor and Menon had just passed out from a prestigious business school with a masters degree in business administration. Both were bright students and Menon had been a topper all through in college. As students, Kapoor and Menon had always dreamt of working for a multinational company like Meridian. Their dream finally came true when they received a call from Meridian. Having topped the written test and the personality interview, both were offered the position of business development executives in the company. Their job responsibility was to tap potential clients from the corporate world. This seemed to be an ideal break for them as they were keen on getting a job that offered wide exposure to the business environment. The job was a challenging one that provided adequate opportunities for valuable corporate experience. Besides, the compensation offered was also on a par with the best in the industry.

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Part B served as effective motivators for its employees. However, the yearly performance appraisal brought with it a rather unpleasant surprise for Menon. Menon had hoped to receive a handsome bonus as an outcome of her performance review. She was aware that she would be appraised by Bajaj who had expressed appreciation for her good performance and announced a cash award for her within a few months of her joining the company. Meridian, however, did not have a transparent policy regarding appraisals and remuneration paid to employees. So, the outcome of the appraisal was not immediately known to anyone but the employees themselves. It was only in course of time that details about the rewards could be gathered informally. In Menons case too, it took a while for her to know the outcome of her colleague, Kapoors appraisal. And what she heard shocked her. Kapoor had been given a bonus much higher than what she had been given. It came as a surprise not only to Menon, but to the rest of the employees as well that Kapoor had been rated higher than Menon, since everyone in the company knew that Menon was better at the job than Kapoor. The performance bonus thus, served as a demotivating factor for Menon as she began to feel that she deserved much more than what she had got and that her performance certainly did not call for receiving a lower bonus than Kapoor. Menons demotivation was evident from her subsequent performance on the job. She stopped working as enthusiastically as she did earlier and was content with doing just the bare minimum required for her job. This change in attitude took place as she obviously felt that there was no point working so hard when she wasnt being recognized for doing a good job. On comparing the efforts she had put into the job and the reward she had received, with the efforts put in by Kapoor and the reward given to her, Menon began to perceive an inequity in the way employees were rewarded at Meridian. Since she was being paid less than her expectations, she decided to put in less effort so as to bring about a perceived equity of pay between Kapoor and herself. Consequently, Menons productivity level deteriorated and, in turn, it affected the performance and profitability of the organization. Thus, Menons negative attitude resulted in negative implications for the organization. Also, this frustration at the job made Menon look around for new jobs. 1. The annual performance review had a demotivating effect on Tina Menon. Briefly discuss the motivational theory that best describes Menons response to the appraisal. Based on the equity theory, explain in what other ways Menon could have reacted to the outcome of the performance appraisal?

Caselet 14
It had been only six months since Rajesh Anand (Anand) joined Delta Manufacturers (Delta), a large shoe manufacturing company, as a general manager. At Delta, Anand was responsible for various functions in the company such as accounts, operations, marketing, and human resources. Within six months of taking charge, Anand began to sense trouble brewing in one of the most crucial areas of the company the marketing department. The head of the marketing department, Vishal Nair (Nair), who had been heading the department for four years, enjoyed the support of his team members and they perceived him as an effective leader. However, in recent months, the performance of the marketing department had not been upto the mark and was becoming a cause for concern for Anand. 45

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Introduction to Organizational Behavior The targets which were jointly set by Anand and Nair were not being met on time. And when Anand proposed measures to help Nair improve the performance of his department, Nair felt offended and he refused outright to accept Anands suggestions. This led to frequent conflicts between the two. The problem was also posing a serious threat to the overall performance of the company as the ineffectiveness of the marketing team was affecting its profits. This made Anand seriously consider dismissing Nair. Although it was only fair on his part to give Nair time to prove himself, Anand did not want to take the risk because he felt that Nairs non-productivity during the interim period would cost the company more than it could afford at that point of time. Moreover, Anand was also worried that if Nair failed to perform during the period, it would completely jeopardize his efforts to improve the organizations performance. However, dismissing Nair could pose other problems. Anands lack of knowledge and experience in marketing made him dependent on Nair for the achievement of organizational objectives. Also, since Nair enjoyed the support of the team, removing him could demotivate other members of the team and cause them to turn against him and reject his efforts to improve the productivity of the organization. Further, since performance in marketing could not be measured on a short-term basis, Anand lacked substantive evidence to prove his point that Nairs performance was not up to the expected standards. Though Anand wanted to fire Nair, he could not do so because that would require him to hire a new person in Nairs place, who may not be very effective in holding such a responsible position. Besides, the incumbent would require a lot of time to settle down in the new organizational set-up, and that was again not a viable option. Therefore, the problem he faced was to decide whether to let Nair continue to head the marketing team or to fire him. Questions for Discussion: 1. 2. Discuss the primary problem that Anand and his organization faced. Also discuss the factors that led to the crisis. Dependency on a single resource in an organization is far more prevalent than is generally recognized. Briefly describe how Anand could have solved this problem.

The marketing manager of AMK Enterprises, Roopali Deshmukh (Deshmukh), stepped out of the conference hall in a pensive mood after an important meeting called by the CEO. The meeting was attended by the heads of various departments in the company and was convened to discuss the targets for the coming assessment year. Deshmukh had a formidable sales target to achieve and wondered how she would be able to meet those seemingly impossible goals. This fear was further aggravated by the fact that the productivity levels of employees in the company had been falling. Deshmukh was under tremendous pressure from the management to improve the performance of her team. She also had to deal with the decreasing levels of employee morale in her 24-member team. As a first step, Deshmukh informed her team members about a meeting that she planned to hold the next day. She then drafted a plan of action that she intended to discuss with her team. The next day, Deshmukh began the meeting by informing her team members about the corporate meeting she had attended. She then said, We have a difficult task ahead for this year, and your participation and involvement is essential to achieve the goals. She then invited suggestions from her team members regarding the role to be played by each of them. The meeting then progressed on to setting of individual targets for each team member as, it was felt that this would help in accomplishing the

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Caselet 15

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Part B organizational goals. Specific goals were, therefore, set and agreed upon by all the team members. The team aimed to increase the organizational profits by 18% over the next six months. They sketched out a plan of action to achieve the targets set for the team and decided that they would meet once every two months to monitor their progress. Two months later, the team met again and reviewed their progress. Deshmukh also gave a feedback on the performance of every member of the team. The team then collectively identified the areas of improvement and decided upon the measures they would take to overcome their deficiencies. This continued for the rest of the year. The final review meeting was held just before the yearly corporate meeting attended by the top management. The team was surprised to see that they had achieved their targets. Thus, effective planning and control mechanisms helped the team achieve their shortterm goals, and this in turn, helped in the achievement of the organizational objectives. Besides, the employees were also motivated as the management gave adequate recognition to their involvement and participation in achieving team goals. The target to be achieved by the team was highly challenging. This further motivated the team members as they had better opportunities to prove their problem solving skills. Thus, the outstanding performance of the sales team helped the organization achieve its objectives in the long run. 1. Roopali Deshmukh followed the practice of management by objectives (MBO) while setting goals for her team members. Discuss the various phases of the MBO process that helped her team achieve its goals. Explain briefly the process of MBO and the various advantages of implementing MBO in organizations.

Caselet 16

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Elizabeth Mary (Mary) and Noureen Shah (Shah) had been working as agents for a leading insurance company for two years and had become good friends. Both were satisfied with their jobs and were enthusiastic about achieving their targets. However, they had recently been facing some problems. Shahs new born baby required her time and attention, which she found difficult to spare. Mary too had problems taking care of her ailing mother and found it difficult to strike a balance between her personal and professional lives. Both of them agreed that if they had enough time for their personal lives, they would be able to perform well on the work front as well. While they were both discussing their problems with each other and trying to find a solution to their problems, Shah came up with the idea of job sharing. The option of job sharing would allow both Mary and Shah to share the same job on a flexible work arrangement. They agreed upon complementary work timings so that the entire work was split into two and both would work in their own timings to achieve a common target. They prepared a plan of action covering all the minute details of the job, so that they did not miss out on any aspect of their job responsibilities. They specified all the activities of an insurance agent (handling mails, customer queries etc.) in precise terms and also how these would have to be split up on account of job sharing. Mary and Shah also came up with an evaluation and feedback mechanism that would help them obtain customer feedback and also ensure that their new work arrangement did not negatively impact their achievement of sales targets. The next morning, Mary and Shah presented their new strategy to their manager, Ashutosh Jindal (Jindal). After listening to their proposal, Jindal felt that it would be a viable option for the organization as well to give its approval. He could also visualize other potential benefits to the organization by implementing the concept of job 47

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Introduction to Organizational Behavior sharing. Job sharing could be used as an effective retention tool, which would help prevent a talented and experienced workforce from leaving the organization. Job sharing would also help maintain workforce diversity in the organization by catering to the various needs of different groups of people. It could be used as a motivational technique too as it would help increase employee morale and productivity by creating a balance between the personal and professional lives of organizational members, thereby reducing work related stress. Jindal not only accepted the proposal but also made the option available to other organizational members. Questions for Discussion: 1. Mary and Shah came up with the idea of job sharing to enable them to fulfill their domestic responsibilities as well as their professional duties to their utmost satisfaction. Discuss the prerequisites for implementing the concept of job sharing in organizations. While job sharing has benefits for both employees as well as the employers, there also exist potential problems in implementing this type of alternative work arrangement. Discuss the various benefits and potential pitfalls of job sharing.

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Excel spends around Rs.25 crores every year to meet the training needs of its employees. Numerous long-term and short-term programs are arranged to enable the employees keep themselves updated with the latest knowledge in their field enabling them to meet the intellectual demands of the workplace and the industry. Every employee at Excel is expected to attend 80 hours of training every year. This is in addition to the need-based training programs which they are expected to attend at regular intervals. The development learning center invites technologists, academicians and behavioral researchers to offer quality training programs to the employees who largely benefit from such programs. EDC has taken many initiatives to realize its goal of developing into an organization that is constantly learning and improving in order to be successful in an extremely dynamic business environment. By identifying the learning requirements of its employees, essential to meet organizational ends, EDC provides them with adequate inputs. It does this with the help of reputed training institutions and organizations. EDC establishes short-term and long-term associations with such organizations and helps its employees to develop the competencies required to meet the challenges posed by the ever-changing business environment. It further helps its associates to deal with personal and professional challenges by offering counseling programs. Questions for Discussion: 1. Excel Computer Services is committed towards transforming itself into a learning organization. Discuss the aspects and features that would help Excel attain this goal. Citing the example of Excel Development Center, discuss how organizations can ensure that continuous learning takes place.

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Excel Computer Services, a leading software company, is known for its commitment towards transforming itself into a learning organization. To realize this, it has set up a learning and development center called Excel Development Center (EDC), which provides its employees world-class facilities for continuous learning. EDC aims not just at continuous upgradation of the knowledge and skill sets of its employees in technical areas but also at their all-round development.

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Part B

Caselet 18
Ronit Behl (Behl) was excited about his new assignment. This was Behls first overseas assignment, which required him to work in France for the next three years. There were many contenders for the job but Behls fluency in French and the good rapport he shared with the top management saw him through the selection test. Behl was heading the marketing division of the company in India, and would now be going on deputation as the Managing Director of the French unit. Behl felt that it was a bright opportunity as it would provide him with a wide exposure to the business environment and help him develop competencies that would help him succeed in his career. Behl made all arrangements for the overseas assignment. His wife, who was working in a software firm quit her job, as they felt that three years would be too long a period to stay apart. He also made arrangements for the education of his son. Within a couple of weeks, Behl found himself reporting at the new workplace. He had to lead a team of 56 employees, a majority of whom were French. Behl found the task ahead highly challenging but motivating. His wife managed to get a job in her own domain in the new location. Things had just begun to settle down, when problems started cropping up in Behls office. Behl felt completely cut-off from the operations at India. He had the difficult task of managing a team, that refused to take orders from an expatriate. He found the job mentally exhausting as he could barely manage to meet deadlines. Soon he was slogging for over eighteen hours a day to achieve targets. The lack of support from the Indian unit in times of crisis was making things all the more difficult. His family was disturbed too. The compensation he was receiving was not enough to sustain his family. It was only with the help of his wifes income that Behl was able to supplement the financial inadequacy his family was facing. They managed in this way for a year. However, troubles at home and at the office were increasing constantly and Behl finally sought a transfer back to India. A couple of months later, Behl was recalled to India. Things became worse back at home. The relocation cost him and his family dearly. His wife had a tough time searching for a job again. His son had to repeat a year at school. Things were no better for Behl at the workplace. He had to rejoin his earlier company on a temporary basis till his position was confirmed. He realized that the close relationship he had earlier enjoyed with the top management no longer existed. Besides, his one years stay at France pushed him out of consideration for the annual performance appraisal. His contribution at France was not taken into account at all. Having got used to the French style of management, he experienced a culture shock as he attempted to readjust to the Indian management style. Thus, Behl found himself in a hopeless situation as he failed to meet the requirements of the job even after a year of turmoil and exhaustion. Besides, there was stagnation in his career. It landed him in a financial mess, which took him more than two years to overcome. Questions for Discussion: 1. Expatriates face a number of problems due to their inability to adapt to the culture of the new country. Citing the example of Ronit Behl, briefly discuss the problems faced by expatriates while trying to mold themselves to suit the requirements of the new work environment. If you were in the top management, what measures would you take to ensure a successful cultural adaptation of expatriates? 49

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Caselet 19
Suggestion systems are quite prevalent in modern organizations. Toyota, for example gets fifty suggestions for improvement per employee per year. Around 80% of these suggestions are implemented within the year. Substantial revenue was saved each year with the help of the suggestion provided by Johnny Fontaine (Fontaine), a secretary in the department of justice in the US. Fontaine suggested a novel way of printing brochures and the manner of mailing and circulating them. He also proposed online course registration system for the various courses the department of justice offers. This is expected to pool in large revenues for the department. Not only did Fontaine earn considerable income on the implementation of his suggestion, but he also helped the organization save and earn revenues as well. General Motors (GM) implements suggestion systems in its manufacturing operations. GM workers have even pooled in 44,000 ideas within a day. Employee suggestions helped reduce the manufacturing time at GM by 15%. American Airlines (AA) stands as an outstanding example of employee suggestion programs. This Texas-based airline company earns about $55m a year through its suggestion program, IdeAAs in Flight, out of which it spends $15m on employee development. Another noteworthy example of employee suggestion programs is that of Southwest Airlines. In the year 2000, the escalating costs of jet fuel became a cause of serious concern to its CEO, Herb Kelleher. He then invited suggestions from each of his employees on ways to save at least $5 a day. The overwhelming response of employees saved upto $2m that year. The employees came up with an idea to reduce the cost of heating the aircraft, and this once implemented resulted in significant cost cutting for the company. These examples prove that organizations today are waking up to the fact that employee participation in solving organizational problems can be beneficial. Therefore, they are adopting novel ways of involving employees in the decision making process.

Caselet 20
The higher education wing of Swami Vivekananda Educational Society (SVES) was faced with growing employee-related problems. SVES was a fifteen-year-old public educational institution employing over five hundred full-time employees with twenty thousand students pursuing a variety of courses. The institutions mission was to deliver quality services to its customers (students) and it valued employees as its greatest assets. Within a short time, SVES managed to carve a leading position for itself in the educational industry. However, the higher education division of SVES had been experiencing low employee productivity, thereby leading to reduced profits. Employee turnover was also high in this division. The management perceived that the dismal productivity 50

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Part B level was due to lack of motivation among its employees. The low employee morale also contributed to negative organizational results like a slump in its profitability, which resulted in customers losing confidence in the institution. Concerned about the situation in the institution, the dean of the higher education division invited an external consultant to solve the problem. The consultant, having studied the culture and state of affairs in the institution, came up with the suggestion of implementing the survey feedback methodology to find out the cause for the growing problems at the institution. The purpose of implementing the survey feedback was to study the level of employee satisfaction and morale, the effectiveness of communication within the organization, quality of customer service, etc. The survey comprised a comprehensive questionnaire of fifty-six questions, which covered various employee-related issues. All the members of the institution were expected to fill up the questionnaire. Employees were also given the option of filling the questionnaire through an online system, which would then directly reach their respective supervisors. These questions were supplemented with inputs derived from the personal conversations that the consultant had with a select few organizational members across different levels in the organizational hierarchy. Confidentiality of feedback was assured as it was found that the employees hesitated to express their opinions openly. A good number of employees were not even willing to fill up the questionnaire as they were skeptical about its confidentiality as well as the purpose of such an activity. Therefore, various measures were taken to maintain confidentiality of the responses from the participants. Fifteen days later, the consultant came up with a report based on an analysis of the data collected through the survey. He presented the report to the top management with a brief listing of the various strengths and weaknesses of the institution. The report stated that while a strong commitment to quality, healthy channels of communication within the departments, and positive attitude of the employees were the strengths that the institution could boast of, it was at the same time facing serious problems in employee-related issues. People in the organization felt that they lacked the competency and autonomy to perform to the organizational expectations. A lack of decision-making authority delayed the process of problem solving. Besides, communication across different departments of the organization was perceived to be ineffective. With the concerted efforts of the top management, key employees, and the external consultant, a set of action plans were drafted to overcome these deficiencies. By acting upon these action plans, the institution was successful in solving the various problems identified by the survey feedback methodology and soon, the higher education wing of SVES also began to generate huge profits. Thus effective implementation of survey feedback methodology helped solve employee-related problems at SVES. Questions for Discussion: 1. 2. Citing the example of SVES, discuss the various possible benefits of survey feedback methodology in solving organizational problems. Confidentiality of employee responses was a major area of concern to the management of SVES while implementing the survey feedback technique. Discuss the various measures that organizations deploying this methodology need to take for effectively managing the issues pertaining to confidentiality of employee responses, and other ethical considerations involved during its implementation. 51

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Caselet 21
Harshitha Enterprises (Harshitha) was considered one of the best places to work at. Established seven years ago, Harshitha, a software company, had most of the features of a successful modern organization. Its CEO, Sidharth Roy, was one of the youngest and most successful leaders in the corporate world. Roy developed an organizational culture that focussed on constant development of human talent. Harshitha emphasized all-round development of its human resources by constantly training its employees and helping them adapt to changes in the external environment. Harshitha selected only those employees who had a perfect cultural fit with the organization. It then offered them a comprehensive orientation program to enable them to easily adjust to the new environment. This process also facilitated Harshitha to mold employee behavior in a way that would lead to the achievement of organizational goals. Adequate training and development sessions were held at regular intervals to hone the skills of employees. This not only helped the organization to meet the future demand for skills and talent, but also helped enhance the motivational levels among its employees. Managers were given special training to help them understand the workforce requirements and also to identify the motivating factors of employees. They were expected to know what motivates subordinates so that maximum productivity could be derived together with ensuring them total satisfaction. Employees were rewarded according to their performance and contribution towards achievement of organizational goals. Employees were divided into a number of work teams with different organizational goals. Team work was emphasized and given prime importance. Employees were also encouraged to participate in group decision making processes. Any important decision that would affect the routine work life of employees was taken by the employees themselves. This kind of employee empowerment enhanced their morale and also satisfied their need for belongingness. Harshitha also set up a career guidance cell that dealt with career-related-issues of employees. They were also given the opportunity to pursue higher education. For this, Harshitha had a number of tie-ups with leading educational institutions around the world. There were open channels of communication among the various levels in the organizational hierarchy. The transparency that resulted led to increased employee loyalty and commitment. This also helped the organization make decisions easier and quicker, thereby making the organization more flexible and responsive to the growing competition. Harshitha also formulated a variety of stress relieving programs for its employees. This was done with a view to ensure proper health of its workforce. These stress relievers included tennis courts, gymnasia, cafeteria, adequate breaks during work hours, and various other options such as flextime, telecommuting, job sharing etc., that employees could choose from. Such programs gained wide acceptance from the employees and resulted in reducing absenteeism due to work-related problems. Harshitha also arranged a number of other facilities like day-care centers for children, elderly care centers, etc. Thus, Harshitha was a modern organization, which treated its employees as its most important and valuable assets. It created a work atmosphere that emphasized all-round development of its workforce. It also helped employees strike a balance between work and personal lives. These features of Harshitha Enterprises, helped it gain a competitive advantage over its rivals. 52

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Caselet 22
Nitish Chawla (Chawla), the course coordinator of management studies at Gyan Mandir, was faced with a peculiar problem. Gyan Mandir was one of the reputed deemed universities of the country. Chawlas job responsibilities included development of textbooks, workbooks and case studies for students pursuing both regular as well as distance education courses in the university. He had a twelvemember team of researchers working towards compilation of courseware for management students of Gyan Mandir. His team had the credit of being one of the most respected teams in the entire university. This was because of the timeliness with which his team would perform, laying equal emphasis on the quality of work as well. Chawla was an effective team leader and his team members respected him for the concern he showed towards employee development. He spent a lot of time listening to their queries and issues relating to work and sometimes, their personal lives as well. However Sonal Mehra (Mehra), the new course assistant in his team, has been posing a problem. Ever since Mehra became a member of Chawlas team, issues like low productivity, social loafing, and absenteeism have been cropping up in the department. Surprisingly Mehras individual performance has been good all the while. Sensing the negative consequences of the teams performance, Chawla probed into the cause for the teams deteriorating performance. He made surprise visits to the workplaces of his team members. While doing so, Chawla observed that there were increasing incidents of employees shirking their work. He also felt that their attitude towards their jobs had changed, and this he thought might have resulted in the teams low performance. Casual interactions with senior employees revealed that Mehra constantly disturbed the work of others in the team by engaging them in unproductive conversations, thereby lessening their outputs. The team began spending more time chatting with fellow members which resulted in lowering the level of their performance.

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The next day, Chawla called Mehra into his room and explained the impact of her behavior on the performance of others. He wanted her to spend less time interacting with others during office hours. Observing no change in her behavior even after a week, he finally held up her chances of being promoted. Though Mehra was greatly disappointed she continued to while away time, specially when Chawla was out of the office premises. Though Chawla was aware of her behavior, he did not intend to fire her as she was a great performer. She would complete her work well in advance and the quality of her work was also good and met the expected standards. So he didnt want to let her go. Chawla then decided to consult his mentor, Abhinav Raj (Raj), to seek his advice on how to manage the situation. Raj had been Chawlas manager when Chawla first joined the company. Later he was appointed a member of the board. After both of them had exchanged pleasantries and were seated in Rajs office, Raj asked, Chawla, tell me something. How long do you spend chatting with your colleagues while in office? Chawla immediately understood what Raj was hinting at he himself spent hours in the office discussing various issues with senior colleagues. 53

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Introduction to Organizational Behavior Raj continued, Employees in organizations learn by observing the behavior of others. That is what is happening with Mehra. She is just emulating her boss behavior that is you. When he said this, Raj observed a sheepish smile on Chawlas face. Raj then added quickly, Instead of punishing unfavorable behavior, you should be rewarding positive behavior. Chawla thanked Raj for his advice and headed back to his office. While on his way to his room, he saw Mehra deeply engrossed in her work. He proceeded to her work desk and appreciated her, saying, Im glad that you are concentrating on your work. It is showing in your performance. Mehra was pleasantly surprised and thanked him. Over the following weeks, Chawla could observe a marked difference in Mehras behavior. Employees too saw a change in Chawlas behavior as he reduced the time he spent on discussing non-organizational matters with his colleagues. The teams performance also improved and the entire team seemed to be oriented towards accomplishment of organizational goals. Thus, Chawla served as the role model for his team members and they emulated his behavior. This ultimately led to exceptional performance of the team members during the following months. Questions for Discussion: 1. Abhinav Raj believed that employees learn by observing others in the group. Do you agree with Raj? Discuss the significance of observational learning in shaping employee behavior.

Most of the units of the Aditya Group were performing well, especially the textile business, which was earning huge profits. On 23 December, 2002, the head of the textile designing unit based at Goa, Nikhil Sethi (Sethi), received a letter informing him of his forthcoming transfer and asking him to choose between Calcutta and Jaipur. Sethi, however, wanted to request the headquarters to hold his transfer till the end of the academic year so that his childrens education would not be interrupted. A technical problem that arose in the office fax machine made it impossible for him to fax his request to the headquarters immediately. In the meantime, the head of the textile designing unit based at Hyderabad, Akhil Gulati (Gulati), received his transfer order on 23 December, 2002. Gulati was given a choice between Goa and Chennai. But since Gulati did not want to go to Chennai, he sent a letter the same day accepting a transfer to Goa. He got the relieving letter before Christmas and joined the Goa unit on December 28, 2002. The Goa unit had a long break of three days for Christmas, whereas the other units, including Hyderabad, had only one day. Prior to the Christmas vacation, Sethi had wished his staff a Happy Christmas and announced that there would be a small party in the office on December 28. During this period, Sethi got some sad news from his ancestral home at Lucknow informing him of his grandfathers death. Therefore, he immediately left for Lucknow with his family. Before leaving, he asked his immediate subordinate, Chandar Dayal (Dayal), to follow up the matter regarding his transfer and keep him informed of any developments.

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The Aditya Group, with diversified businesses in industries such as cement, seeds and fertilizers, processed food, business process outsourcing (BPO), newspapers, textiles, and iron and steel manufacturing, operated in various locations across India. Each of these businesses was headed by an able and experienced professional. The CEO of the group, Pavan Chopra, had taken charge of the business from his father and founder of the company, Aditya Chopra.

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Part B When they resumed their duties after the Christmas holidays, the employees were surprised to see a new boss in the office. They tried to come up with reasons for the sudden replacement. Some opined that their unit was making losses. Others believed that Sethi had diverted the companys money for personal use, which led to the losses. They described how the Sethis wore costly clothes during get-togethers, the expensive school in which their children studied, how frequently they threw lavish parties, and so on. Soon, the rumor the previous boss was dismissed for using office money began to spread in the company. The rumor soon reached the other units and also the corporate office. The corporate office ordered an investigation into the matter. When Sethi faxed a letter to Dayal enquiring about his transfer, Dayal informed him of the allegations. On hearing this, Sethi was shocked. He rushed to the corporate office and told to the top brass that he had not misappropriated company funds. In the meanwhile, Gulati, the new head of the Goa unit, reported to the corporate office that all the accounts had been audited and no sign of manipulation of funds was found. It didnt take long for the management at the corporate office to understand what had actually happened. They immediately sent a communique to the various units stating that the allegations against Sethi were not true and that they had arisen as a result of a difference in perception of the employees and a communication gap. 1. The employees of the textile designing unit at Goa believed that their boss was dismissed for taking office money for personal use. What type of perception would you call this? Do you think the management of Aditya Group could have avoided the awkward situation that arose? What steps should the management take to prevent such situations from recurring in the organization?

Navya Products Ltd., a Mumbai-based company manufacturing agro products, was established by Ajay Sinha (Sinha) in 1994. By 2000, the company and its brands were popular throughout India. Sinha believed that it was the hard work and commitment of his management team and employees that led to the success of the company. In order to keep his employees motivated, Sinha offered awards on an annual basis for best manager, best employee, best PR executive and the most productive department. He also gave awards to encourage quality initiatives in the organization. The marketing manager of the company, Ravinder Shah (Shah) won the best PR executive award every year. He maintained a very good relationship with the companys customers. Shah ensured that once the company obtained a contract from a customer for supply of products, the customer continued to source all his requirements from Navya. Shah had joined the company as a marketing trainee when it was established, and none of his clients had ever shifted loyalty to other companies. In 2001, Navya diversified into FMCG and pharma products, and acquired many companies in these industries. The company which started with 30 employees rapidly grew to have a work force of more than 3000 people. The company was restructured to facilitate its growth and achieve better coordination among employees. There was an increase in the levels of hierarchy. Many people who reported directly to Sinha did not do so any more. They had to report to a senior manager, who, in turn, reported to Sinha. With the restructuring of the company, a new person, Arvind Kapoor (Kapoor), was appointed to head the marketing division. Kapoor had earlier worked as marketing manager for a multinational corporation. Previously, Shah reported directly to Sinha, but after the restructuring, he had to report to Kapoor. Sinha gradually expanded the company and established new units in various places across the country and the company soon had branches throughout India. Sinha also had plans to set up offices of the company overseas. He made a beginning by 55

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Introduction to Organizational Behavior exporting agro products to the US and various countries in the Middle East and Europe. He also began searching for strategic partners to venture into international business and held talks with a European company in this regard. These discussions were also attended by Kapoor, and the heads of the production and finance divisions, Sunil Devgun and Rajani Mehta. Prior to the restructuring, Shah and some other colleagues were always invited to attend such strategic discussions. In fact, they believed that they had played a crucial role in the various discussions that led to the recent acquisitions by the company. Now, seeing their role in the company diminishing, Shah and his affected colleagues began to feel neglected and ignored by the company. In 2002, for the first time, Sinha observed that Navya was beginning to lose customers to its competitors. Most of them were customers brought by Shah. He also heard that the reason for the customers shifting their loyalty to other companies was the aggressive manner in which Shah had behaved with them. It also came to light that in the last few months, Shah had not made visits to client organizations to inquire about their requirements. Kapoor also complained to Sinha that Shah was not cooperative and was highly aggressive. There were reports that during management meetings, Kapoor and Shah always held opposing views and had argued loudly. Sinha also heard from some sources that Shah was planning to resign from the company. Questions for Discussion: 1. 2. How do you think the conflict between Arvind Kapoor and Ravinder Shah can be resolved?

Caselet 25

The survey revealed that 80% of its customers were satisfied by the customer service offered by the company. Suppliers gave a high rating to the company for its practice of informing them of its requirements well ahead of time and for being prompt in making payments. However, the survey of shareholders revealed that they were not happy with the dividends declared by Sharp. They believed that the dividends disbursed by the company to its shareholders were not proportionate to the revenue it earned. When the CEO of the company, Rahman Khan, studied the results of the survey, he called for a meeting of the shareholders. At this meeting, he explained that although the company was earning huge revenues, most of it went towards clearing the debts and outstanding expenses of the company. The shareholders were not convinced and demanded that a committee be formed to investigate the matter. The management agreed to the demand of the shareholders and a seven-member committee was formed which consisted of representatives of all the stakeholders of the company. During its investigations, the committee found that Sharp responded promptly to complaints regarding quality of products delivered. Many products delivered by the company were returned because of defects, inferior quality, etc. The company was prompt in making replacements and reimbursing the customer with the charges incurred in returning the product to the company. Replacement costs were very high for the company. The committee suggested that the company should take steps to ensure that things were done right the first time.

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Sharp Enterprise (Sharp), a Mumbai based sportsgoods manufacturing company, adopted the direct marketing model. Sharp delivered sportsgoods to customers throughout India on order. The company was renowned for its superior customer service. In 1990, Sharp wanted to enter the overseas markets. Before stepping into global business, Sharp conducted a survey to assess the level of customer satisfaction among its various stakeholders (customers, suppliers and shareholders).

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Part B Even though customers placed orders with Sharp for sportsgoods well ahead of time, the delay in processing made it difficult for the company to deliver the products on the promised date. In most cases, Sharp used expensive modes of transportation to get the products to the customers on time. The conclusion reached by the committee was that the need for adapting expensive modes of transportation was due to delay in order processing. Feedback by the committee was used as diagnostic information to identify the loopholes in the companys quality management practices. A change program was designed to improve the quality and cost effectiveness of the companys products and services. The feedback suggested that the company had to increase the participation of employees in decision making activities and entrust them with greater responsibilities to improve the quality of work and customer service. In response to the feedback provided by the committee, the company set standards for achieving total quality and defined total quality as the process of involving employees in improving the way work is done in order to maximize customer satisfaction in an efficient and effective way. The HR department facilitated employee involvement in decision making activities and enhanced the quality of service by conducting training programs for employees. Front-line employees were the first to be empowered to take necessary decisions. They were also made responsible and accountable for their actions. All employees were educated on concepts of quality and trained in various techniques of Total Quality Management (TQM). Personnel belonging to the top management were also trained to guide employees and support them in TQM implementation. On completion of the training program, cross-functional teams were formed. The teams held discussions to decide on how to apply what they had learnt in the training program at the workplace. Initially, emphasis was laid on the implementation of TQM in a few departments, and feedback regarding its effectiveness was obtained from the employees and managers of these departments. Based on this feedback, necessary adjustments were made in the TQM process. After the top management observed the desired improvement in the organization, the TQM process was standardized and applied throughout the organization. Further, the top management constantly monitored the progress of TQM. The compensation of managers was linked to an improvement in quality in their respective departments.

Caselet 26
Based in Mumbai, Aizwa Enterprises (Aizwa) is a large conglomerate providing a variety of products and services ranging from FMCG to electronic products. Aizwa also offered IT solutions to global companies. In 1997, Aizwa decided to spin off the IT services arm as an independent business. The IT business was named Yani Services Ltd (Yani). Yani placed special emphasis on communication. The top management communicated the companys mission, goals and strategy clearly to employees. The company also ensured that the behavior of the employees was in alignment with its goals and objectives. Senior managers frequently organized gettogethers of employees from various departments where they discussed important 57

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Introduction to Organizational Behavior issues and shared information pertaining to the company. Employees were also encouraged to interact with the senior management through mail and intranet. Yani had a monthly electronic newsletter that covered the progress made in various departments of the company. Employees were encouraged to give suggestions to improve the functioning of the company. During the first three years, Yani earned huge profits. In 2001, because of the slump in the IT industry, Yanis business suffered. Yani had to lay off hundreds of employees. Most of them had come from the parent company, Aizwa, which had a policy of permanent employment. Communicating the news of the lay off to employees was a difficult task for the management. The management called an emergency meeting for the purpose. The HR manager, Seema Kher, addressed the meeting and explained the reasons that had compelled the company to take this drastic step. Yani announced huge severance benefits for its laid off employees. The employees received a service certificate along with a letter of commendation that described their talents, capabilities, team spirit and other achievements at the workplace. The company offered counseling to employees who took the news badly. Managers contacted other employers and employment agencies and tried to find suitable employment for those losing their jobs. These efforts helped in the successful placement of a majority of the employees in other firms. Yani restructured the organization and took all possible steps to cut costs and overcome the crisis. Because of these measures, Yani was able to make modest profits even during the slump. Gradually, the situation in the IT sector improved and many large corporates approached Yani for software solutions. Yani had to hire more people to meet the demand. Yani gave preference to its ex-employees. Many employees chose to return and the company resumed full-scale operations.

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Caselet 27

Delhi-based Aart Pvt Ltd. (Aart), a leading office equipment manufacturer in India, also exports its equipment to the US, the European countries and to the Middle East. The company conducted a customer survey in the first quarter of 2002 and found that although the customers were satisfied about the quality of its products, they felt that the prices were too high. The CEO of the company, Prakash Tandon (Tandon), immediately held a meeting with the managers of all departments and asked them to suggest ways to cut down the cost of manufacturing without compromising on the quality of output. Of all the suggestions, the one that attracted Tandons attention was the suggestion made by the HR manager, Ashish Agarwal (Agarwal). Agarwal said that shop floor employees who had been involved in the the shop floor operations for many years were more likely than managers to know where there was scope for the company to cut costs. The shop floor employees could observe where materials (resources) were being wasted, which processes involved wastage of time, and so on. Agarwal recommended that Tandon should establish a self-managed team environment in the company. He justified his stance by explaining how successful various companies had been by adopting the concept of self-managed teams, and tried to convince Tandon that such teams would motivate employees, promote a sense of belonging among them and encourage them to use their latent skills to contribute to

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Caselet 28

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Introduction to Organizational Behavior A few days after this incident, Nayak was confronted with yet another problem. She received information from her team members that more and more customers were insisting on talking to the Managing Director (MD) directly. Though the team was able to give them convincing replies to their queries, they still insisted on being put on to the MD. The employees attending the calls had no option but to give in to the customers demand. Nayak was unable to understand why all the customers suddenly wanted to speak to the MD and decided to investigate. She found that one of the companys advertisements in the newspapers read, For all your problems, you can contact our MD 24 hours. Further inquiry revealed that the entire problem had arisen due to confusion caused by letters getting jumbled in the advertisement. Actually it was the DM (Data Manager) that the customers were supposed to contact directly, and not the MD. Customer service executives at Alekya were designated as data managers. Nayak explained the source of the confusion to her employees and asked them to try and convince the customers with their responses and to avoid directing calls to the managing director at all cost. Nayak prepared a detailed report on the matter and filed it in her folder. Meanwhile, Sharma was bombarded by questions from the MD. The MD was furious that so many calls from customers were being forwarded to him. When Sharma emerged from the MDs cabin, he asked all the junior managers to assemble for a meeting in the conference hall. There, Sharma advised them not to forward calls to the MD and asked them to inform the customers that the MD was not available. He asked them to help him find out why there was an increasing demand from the customers to be put on to the MD. At this point, Nayak submitted the report she had prepared. On seeing this, Sharma was furious that she had known the reason all along for the problem but had not considered it worthwhile to keep him informed. After another month had passed, Nayak observed that the performance of one of the employees, Amit Ray, was declining gradually. He looked dull and did not answer calls in his usual pleasant manner. Nayak called him to her cabin and asked him the reason for his poor performance. Ray, at first hesitated but later confided that his fathers health was deteriorating and that he was finding it difficult to spare time for his fathers treatment due to the work load in the company. This was affecting his performance. Nayak assured him that she would talk to the top management and ensure that he was offered flexible work hours or granted some leave. On the same day, Sharma called the junior managers in the company for a meeting to review their progress. He asked Nayak to read out the agenda for the meeting. While doing so, Nayak brought up the matter pertaining to Ray. Sharma became annoyed with her saying that she was giving priority to matters of secondary importance and wasted his precious time. Later, other junior managers told her that such matters should be referred to the HR department. Nayak wondered whether she would ever be able to please her manager by communicating the right message to him at the right time. Questions for Discussion: 1. Anjali Nayak was able to communicate effectively with her team members but failed to communicate in the same way with her manager. What could be the reasons for it? For messages to be transferred from sender to receiver, the receiver should be willing to accept the message. But, in the above case, Kishore Sharma (receiver) either expressed his unwillingness to listen to Nayak (sender) or expressed his anger against the latter. In the long-run, the receivers behavior could become a barrier to communication. Do you think Sharmas behavior is appropriate? Justify your answer.

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Caselet 29
Global Real Estates (Global), a Mumbai-based real estate company, had several franchises across the country. The company facilitated buying and selling of plots in all those localities where its franchises were established. The company had been established in 1920, and it had more than 60 franchises spread across the country by the year 2003. Some franchises were single office organizations organizations. Global provided all its franchises assistance and advertising, and offered training initiated a change program to improve its support profitability of its franchises. while some were multiple office with technical support, business to their sales personnel. Global services and the productivity and

The opinion surveys collected data in three main areas financial performance of the organization (in terms of income, expenses and net profit), productivity (number of units produced and sold, number of customers served) and various management practices (rules and regulations, creating conducive work environment and motivating employees). The responses obtained were presented in the form of colored graphs which enabled easy comparison of the productivity and performance of the franchises. The graphs helped identify the highest performing franchise so that it could be made the benchmark for all other franchises to match their performance against. The section of the questionnaire which contained questions pertaining to managerial practices was designed to test the managerial practices of franchises for effectiveness and consisted of three areas organizational climate, service orientation and fundamental attitudes. Questions on organizational climate tried to evaluate the perceptions of employees about the work environment and the style of management. These questions sought to learn whether employees perceived their peers and superiors as cooperative or not, and also to find out whether the employees felt a sense of pride in working for their organization. Questions on service orientation aimed to understand the extent to which employees at each office were committed to customer service. Questions on fundamental attitudes tried to identify pessimism in employees and help them overcome it. 61

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The executives of Globals operations department and HR department analyzed the data collected from managers and salespeople of all the offices and produced reports pertaining to organization-wide performance. After the senior management of Global reviewed the reports, the changes suggested by them were incorporated in the reports. The final reports were then given as feedback to the head of the unit in case of small organizations, and to the management team in case of large organizations. The managers used these reports in sales meetings. In these meetings, the managers shared the data with salespeople and both worked together to identify the problem areas in sales personnels performance and to come up with measures to improve their performance. The managers encouraged the salespeople to participate actively in the discussions. The salespeople were also required to develop action plans to address the problem areas, and the managers intervened only when the salespeople found the problem too complex to resolve on their own. The reports also helped the franchises recognize their strengths and weaknesses so that they could act upon them.

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As a part of the change program, the head of each office had to submit to the corporate office, a detailed report of operations in his office. Also, individual employees, especially salespeople in each office, were given an opinion survey questionnaire by Global. The questionnaire sought to know the employees opinions regarding the organizations work environment. Each employee had to fill it and submit it directly to the HR department at the corporate office either in person or by mail.

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Introduction to Organizational Behavior Research and analysis at Global indicated that there existed a strong relationship between the attitudes of employees and the performance of the franchise. The research also identified the other behaviors, managerial policies and practices that were directly related to organizational performance. This enabled Global to help its franchises improve the performance of their employees. The management from the corporate office visited each franchise and explained to employees how the changes in market conditions made old beliefs and attitudes obsolete and irrelevant, and they emphasized the need for employees to adopt new beliefs and attitudes. External consultants were hired to help bring about this change in the employees. The feedback offered by Global proved a valuable resource for the managers of the franchises. The managers of these franchises could now concentrate on developing and implementing business plans and enhance the profitability of their franchises. Questions for Discussion: 1. Global initiated a change program to improve its services, and the profitability of its franchises. Is it similar to any of the standard OD interventions used by change agents? Substantiate your answer. One of the objectives of the change program was to obtain a positive change in employee behavior. Explain how such a change can be achieved. What are the advantages of the change program that Global adopted? The change program used by Global was aimed at achieving improvement in employee behavior. In what ways are employees required to cooperate with the change agent in the implementation of such change programs?

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Caselet 30

When Akrurs MD Chaitanya Sarathi (Sarathi) observed this, he lowered the price of the chemicals to attract clients. As a result, sales increased. The production capacity was increased and workers were put on longer shifts to meet the demand. Akrur, however, failed to cut down on manufacturing costs. The margins, therefore, began to fall. Workers pressurized Sarathi to increase their wages. Supervisors and managers were also dissatisfied with their salaries. They were not given any incentives for increasing output and the increment in salary was also nominal. The financial position of the company did not allow Sarathi to increase wages and salaries liberally. Frustrated with the situation, Sarathi approached the HR manager, Jayant Sarkar (Sarkar), to find a solution to his problems. After listening to Sarathis problems, Sarkar suggested to Sarathi that he should empower shopfloor workers, promote teamwork environment in the organization and share profits with employees. Although he hesitated to do so initially, Sarathi later accepted the suggestion after Sarkar explained how these measures could motivate employees to work out innovative solutions for organizational problems. The next day, Sarathi called a meeting and communicated to all the workers, supervisors and managers that the company would promote team culture and share a significant percentage of the profits with employees. Sarkar then explained the role of the employees in successfully implementing the culture and sought their cooperation. The employees were given training to work in teams, and teams began to operate at Akrur. Within a few days of implementing the idea of team culture in the company,

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Akrur Chemicals Ltd. (Akrur), was a leading supplier of chemicals for various drug manufacturers in India. But slowly, the company lost most of its clients to its competitors. Akrur supplied superior quality chemicals but at a premium price, whereas its competitors delivered chemicals of similar quality at very low prices. Therefore, most of Akrurs clients shifted their loyalty to its competitors.

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Part B the top management received reports of arguments taking place between employees and managers. It came to be known that one of the managers, Narayana Murthy, had asked the employees to carry out a particular task in a particular way. The employees refused and performed the task in the way they felt was right. Many other managers faced similar experiences. According to some sources, by performing the tasks in their own style, the employees were able to finish the tasks much quicker. However, the managers were not happy and complained that team culture was leading to indiscipline among the employees. They forecasted that such behavior would be detrimental to the company and requested top management to roll back the implementation of team culture. The introduction of team culture at Akrur led to the elimination of the positions of middle managers and supervisors. Most of the middle managers and supervisors who would have lost their jobs otherwise, were given the role of team leaders or coaches or mentors. They offered training to employees in multiple skills and counseled employees who were stressed due to the increased workload. Most of these team leaders complained to the top management that employees ignored the instructions they gave and instead insisted that team leaders should implement their suggestions. The top management had a tough time resolving these conflicts. The senior managers were so frustrated with the employees grievances that they wanted to give up their experiment with teams. But Sarathi and Sarkar did not give up. They were confident that they would find a solution and implementing the concept of teamwork would result in success for the company. 1. Teams encourage cohesion and coordination among employees. Why do you think, there were conflicts between team members and leaders in Akrur after the introduction of the idea of working in teams? What could Sarathi have done to avoid this situation? Sarathi and Sarkar strongly believed that team work would enhance organizational performance. Do you support their view? If so, what do you think they can do to resolve the organization-wide conflicts that are taking place? If not, explain the reasons.

Caselet 31

Bank of Hyderabad (BOH) was a small bank established in Hyderabad in 1990. The bank slowly established its branches throughout Andhra Pradesh and became the most trusted bank in the private sector. The hard work and management expertise of the founder and CEO of the company, Satyanarayana Murthy (Murthy), was the main reason for BOHs success. BOH grew rapidly and soon spread its branches across India. BOH also entered into the non-banking financial services sector. Murthy wanted BOH to be a one-stop shop for all financial products and services. With the help of its committed staff, BOH performed well in the area of non-banking financial services also, and earned profits. But Murthy wanted BOH to be a leading financial services provider in India, and not just one of the profitable organizations. Therefore, Murthy analyzed the strengths and weaknesses of the company. He noted that BOH was neither a low-cost player nor had it differentiated itself from the other players in terms of customer service. He immediately identified two leading banks in the industry to serve as benchmarks for BOH to follow. While one bank raised funds at the lowest cost, the other understood customers needs and developed customized solutions for them. Murthy directed his managers to strive to outperform these leading banks. Managers were rewarded based on their efforts to improve the performance of the bank. 63

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Introduction to Organizational Behavior Another fact identified by Murthy was that BOH did not offer convenience to customers. In the existing system, if a client had three different requirements from BOH, he had to approach the relevant departments separately. The process was timeconsuming, and there was a danger that the client would take a portion of that business elsewhere. To tackle this problem, Murthy, set up three departments Corporate Clients Group (CCG), Individual Clients Group (ICG) and Non-Performing Assets Group (NPAG). Employees in these groups helped the client to get his job done without having to make several visits to different departments. The employees in NPAG complained that they always dealt with lower-end clients and that this affected their ability to compete with their colleagues in the other departments for performance ratings. As the chances of recovering bad debts were always less, the revenue of NPAG was always lower than that of other departments. The bonus for BOH employees was based on the performance of individual profit center/department rather than the entire organization. This affected the appraisal ratings and career growth prospects of employees in NPAG. While the employees were still struggling with internal problems, Murthy took a major decision. He decided to merge BOH with a small financial services provider, Akhira Finances (Akhira). Murthy faced stiff resistance to his decision from his employees who feared that the merger would result in job losses. But Murthy was confident that the merger would benefit BOH and went ahead with it. Akhira had a much larger staff than BOH. There was also a vast difference in salaries, profiles and designations of the employees of the two banks. Akhira paid uniform salaries to employees in similar positions while BOH paid salaries to employees based on their individual performance and performance of their department. BOH concentrated on urban marketing whereas Akhira was a rural-oriented organization. Murthy had a tough time implementing the merger of the two unequal organizations. However, with support from the HR department and an external consultancy, A22 HR solutions, Murthy completed the merger successfully. Questions for Discussion: 1. 2. What were the various changes initiated by Murthy? Was he right in his decisions and actions in each of these change initiatives? Substantiate your answer. Were the apprehensions of Akhiras employees during the merger justified? What steps can be taken by the management at BOH to overcome employee resistance to change?

Caselet 32

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Aze, a Mumbai-based mail-order company has distribution centers in the four metropolitan cities and booking offices in all the major cities and towns of India. It takes orders from customers to ship books and gift items to their friends and relatives. Sometimes customers request the company to mail gift items directly to their friends and relatives on special occasions like birthdays, anniversaries, and festivals. The company ensures that the gifts are delivered on the day specified by the customers.

As soon as a customer places an order for a product at one of the booking offices, the booking clerk assigns it to the distribution center that is closest to the destination. Before assigning the order to the center, the booking clerk calls up the distribution center to verify whether the product ordered by the customer is available. An employee at the distribution center then takes out the product ordered and places it in a crate used to collect all the products ordered by customers. The crates are then brought to the dispatch section. An employee in this section compares the bar codes on the products with the order numbers to determine which item is to be dispatched to which consignee. A worker then packs all the items ordered by customers in cardboard boxes. For gift items, special wrappers are used to wrap the items. The packages are then delivered to respective consignees using the governmental postal

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Part B service or a courier service. Any mistake by any employee at any stage leads to a failure in the delivery, with a negative impact on customer satisfaction. An executive monitors and coordinates the activities of all the above employees. However, sometimes, Aze made mistakes and made wrong deliveries. One day, the customer relations (CR) manager at Mumbai received several complaints from customers. One of the customers complained that the product he had ordered was delivered two days after the specified delivery date. He had intended to present the item to his son on the occasion of his birthday but was unable to do so due to Azes failure to deliver it on time. The agitated customer then returned the product to the company and claimed a refund of his money. Another customer complained that he had received items which he had not ordered. And then there was yet another customer who had ordered for a book titled Software Solutions for personal reading, but had instead received a Barbie doll wrapped in gift paper. On receiving the complaints, the CR manager sought an explanation from the employees of the distribution center for the failure of the company to deliver the ordered items on time. The employees responded in different ways: One employee denied that any mistake had been made. He blamed his superior for not instructing him properly. Another employee argued violently with the CR manager, asking him how he could send a notice to a person who was not responsible for the mistake. But CR manager argued with same force and asked how a wrong delivery could be made if no mistake had occurred at that level. Then the employee softened his tone and tried to convince the manager that he had not made any mistake. One employee agreed that he had made a mistake and promised that he would not repeat it in future. One employee stood silently before the manager. He neither denied nor accepted that he made any mistake. One employee tried to defend himself by blaming his colleagues for the mistake. Questions for Discussion: 1. When the manager asked the employees to give the reasons for their unsatisfactory performance each employee responded in a different way. Explain the possible reasons for the variations in their behavior? Is the behavior of employees of Aze justified? If so, in what way is it justified and how will it contribute to the growth of the organization? If you consider that the employees behavior was not justified, substantiate your opinion with reasons and give suggestions on how to improve the behavior of employees. Describe any one technique to help the employees solve their problems as a team.

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Caselet 33

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Icare Electronics (Icare), a US-based manufacturer of electronic goods, offered products ranging from air conditioners to electric cookers. Icare began its international operations in 1986. The companys profits improved year after another till 1993. From 1994, profitability took a downturn and in 2000, for the first time, the company reported huge losses. One of the major reasons for these losses was the luxurious facilities it offered to its top management, which far surpassed anything offered by other comparable firms. Icares salaries to its managers in its Asian units were on par with international norms and it also provided them free accommodation in large independent houses in posh localities. Several managers purchased cars and vans on the office account when they were actually for personal use. The management at the headquarters also doubted the genuineness of the sales figures sent in by one of its units in Asia. The company hired external auditors for its Asian operations. Their report revealed that the companys unit in Malaysia was deliberately falsifying the information it sent to the headquarters. Most of the electronics goods it produced were 65

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Introduction to Organizational Behavior defective. The management transferred the defective products from the manufacturing unit to some other place. Then management reported to headquarters that these pieces were sold. Later, the defective units were brought back to the unit. The managers, then reported to top management that they were returned by customers. It also gave a list of expenses incurred by it on customer service. The top management issued show cause notice to the managers of the unit at Malaysia. The managers responded that they were compelled to do this because they were given unrealistically high targets which could not be achieved because of the intense competition in the market. Icare hired an external consultancy, Ashika People Solutions (Ashika), to suggest ways to recover from its losses. Ashika suggested a massive restructuring exercise focusing on the companys human resources. The first task was to put in place a new organizational structure. Each plant was designated as a profit center and the plant incharge (manager) was made responsible for the financial performance of the plant. The compensation of managers was linked to the performance of the plants in which they worked. Each country was divided into regions based on consumer preferences. Each region had a separate head (Regional General Manager), who had the regional functional managers reporting to him. All the Regional General Managers reported to the VP (Operations), who reported directly to the CEO, Alex J. Wilson (Wilson). Wilson recognized that the biggest weakness of Icare was its excess manpower. Hence, he initiated a Voluntary Retirement Scheme (VRS) for its employees. Wilson also conducted a performance appraisal of all the managers. About 50 managers were rated low and demoted. About 10 managers were promoted. Some were laid off. Some of the demoted managers resigned to join other companies. 1. What were the circumstances that led to the restructuring exercise at Icare? What were the various changes made in the organization? What further steps can the company take to improve its functioning?

Caselet 34

Midhila Products Ltd. (MPL), based in Gujarat, manufactured food products. It was a well established and leading player in the food and beverages industry. Till 1995, Gaurav Agarwal (Gaurav) was the managing director of the company. His father, Mohan Agarwal (Mohan) was the chairman of the company and had inherited the company from his father, Kishan Kumar Agarwal. At MPL, top positions like head of sales and marketing and head of operations were held by members of the Agarwal family. The food products of MPL were divided into four segments Health care, Nutrition, Snacks, and Drinks. The organization structure of MPL consisted of sales and marketing, finance, exports, corporate communication, operations, human relations (HR), quality control, purchase and packaging divisions. The sales and marketing division was headed by Aditya Agarwal (Aditya), the son of the Mohan Agarwals brother. The finance, exports and corporate communication divisions were headed by Gauravs cousins. Operations, HR, quality control, purchase and packaging were all headed by other members of the Agarwal family. Towards the end of 1995, many leading global players in food products announced their plans to enter the Indian food and beverages industry. Gaurav felt that MPL needed to be professionally managed in order to face the competition. He told his father, Mohan about his plans to hire professional managers to give strategic direction to the company. At first, Mohan was not convinced but after having an hour-long

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The management of Malaysia misreported sales figures. Who do you think is responsible for this practice? Justify your answer.

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Part B discussion with his son, he agreed to hire professional managers. Gaurav immediately met a leading consultancy in the country, People Solutions, and requested its head to visit MPL and suggest measures to make the company competitive. Consultants from People Solutions visited MPL, made a thorough analysis of the organization and suggested that the organization structure needed to be changed and professional managers needed to be hired in strategic positions in order to make the company competitive. The consultants suggested that MPL should make the following changes to its organization structure. Gaurav and Mohan should join the Board of Directors and make only strategic decisions. They should hire an able and experienced professional from a multinational company as a CEO. The senior family members should join the management committee but should not interfere in the day-to-day management activities except when the management is faced with strategic issues. All the food product segments should be divided into business units with each units head reporting directly to the CEO. Every function, whether it is operations, finance, HR, or quality, should be headed by a functional head who will in turn report to the CEO. When People Solutions observed that there was no formal performance appraisal system and employees were rewarded according to their seniority at MPL, it immediately suggested to Gaurav that the appraisal and compensation systems should be redesigned. 1. MPL was a leading player in the food and beverage industry in India. Do you think Gaurav was justified in approaching a consultancy to make changes to an organization that was performing well? People Solutions suggested that MPL should change its appraisal and compensation system? Do you think MPL should implement this suggestion? Explain with reasons.

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Aastha Manufacturers (Aastha), a Pune-based wires and cables manufacturing company, was second only to Swiz W&C Ltd., the subsidiary of a Swedish multinational firm in India in the industry. The management of Aastha shared all the information relating to the company with employees. Each employee at Aastha was aware of the mission and goals of the organization. They knew clearly what was expected from them, and how to match their performance with the managements expectations. Employees from different departments formed quality circles. They met regularly and discussed how to improve quality in the organization. The employees were given formal training to work in teams, and team members had clear shared objectives and met regularly to review their objectives and strategies. Cross-functional teams comprising of employees belonging to different departments also existed. The team members discussed a range of organizational issues and did not hesitate to challenge decisions and actions of the management. The management encouraged a free flow of communication. This attitude facilitated upward and downward communication, and horizontal communication and coordination among various teams. The management was receptive to new ideas irrespective of their origin. The ideas given by shop floor employees, supervisors and engineers were noted down and discussed in meetings. If an idea was found to be good and adopted, the employee who contributed the idea was rewarded. Aastha was always proactive in its strategies. The top management was of the view that an organization should constantly change and innovate to stay ahead of its competitors. Therefore, the management introduced change initiatives continually, and sought employee participation and involvement in each of these initiatives.

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Introduction to Organizational Behavior Akina Wires and Cables (Akina), a Lucknow-based company, was the third important player in the industry. It was a financially sound company and paid its employees well. Akinas top management believed solely in scientific management techniques. As a result, there was high division of work and job specialization in the company. Every worker on the shop floor specialized in the skills required to perform a particular task and repeated the same task throughout the day. The average job cycle time was two minutes. The management did not attach importance to employee training and development, team work and communication. The employees were, therefore, hardly aware of any developments taking place in their company except for developments pertaining to their work. The company initiated change programs only when it observed its competitors moves threaten its position in the market. However, it was observed that employee involvement and participation in these change programs was minimal. Rather than willingly accepting the change, the employees felt compelled to change. The management in Akina did not encourage or appreciate suggestions or ideas from employees. Questions for Discussion: 1. If competition intensifies further and more multinational firms enter the industry, which of the two firms (Akina and Aastha) do you think would be able to secure competitive advantage over other players? Explain with reasons. Does Akina need to change? Suppose both Aastha and Akina have vacancies in the junior management positions for which they have conducted a recruitment test. You have appeared for the tests of both the companies, cleared them and have been offered a job in both the companies. Suppose that your friends working in these companies have made you aware of the culture in both. Which company would you choose to join? Justify your answer.

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Caselet 36

The head of the Human Resources division, Deepak Paranjey, and his team studied the HR policies of various companies such as Wipro, AT&T, GE and British Telecom which had achieved Six Sigma certification. After completing their study, the HR team identified 20 competency areas spread across the five levels of PCMM. The behavioral issues for each level were identified and the procedures to address them were also clearly defined. At Level 1 of PCMM, the emphasis was on selecting the right people. At Level 2, Excel concentrated on improving its compensation system, training and development programs, performance management system, communication and coordination in the organization. The companys top management took a special interest in educating employees about PCMM concepts. Every new recruit in the company was put through a well-structured induction/training program, which covered all aspects of software development skills required. Excel also offered on-line learning courses for employees. Any employee who felt that he lacked certain skills, could request training. These measures enabled the company to meet the requirements of the PCMM Level 2. Having successfully implemented the process areas for Level 2, Excel focused on the employees career development path in Level 3. The first stage in the career path was

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In 1997, after an internal HR meeting at Excel Software Solutions Ltd. (Excel), a Hyderabad-based company, it was decided that the company should strive to obtain Six Sigma certification. To achieve this, Excel would have to adopt PCMM standards. PCMM (People Capability Maturity Model) is a set of standards established for IT companies by the Software Engineering Institute (SEI), Carnegie Mellon University (CMU), USA.

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Part B to develop as a team member. Employees with less than one year of work experience operated as team members for their first few projects. Their primary task as team members was to gain experience with various tools and software development while developing programs. After this stage, the employees moved on to become team representatives, where they interacted with customers in addition to developing software and leading the team. If team representatives wanted a career in consulting services, they were allowed to work independently. If they wanted to continue in software development, they were given responsibilities like setting standards for a project, building customer relationships and providing technical assistance for their team. Employees who completed these responsibilities successfully became project managers. Project managers were also in charge of developing of a good work culture and environment for their team, besides interacting with other internal departments. Project managers became Technical Managers and managed multiple projects. Successful technical managers could become a Head for any of Excels strategic business units (SBUs). Employees were allowed to alter their career path midway to suit their core competencies. The opportunity to shift to either functional or technical specialization eventually was dependent on the employees interest and expertise. Excel also conducted a Employee Perception Survey to get to know employee perceptions and to help the management understand the requirements for high employee morale. The management ensured that the outcome of the survey was implemented to motivate, empower and recognize the employees performance. After integrating the career development of employees with its strategic HR policies, Excel concentrated on integrating the key process areas at the PCMM Level 4. One of the important requirements for reaching PCMM Level 4 is the organizations ability to develop leadership qualities in employees and empower them to take decisions which will result in better capability management in the organization. Excel recognized the need to groom employees and develop leadership qualities and started the Excel Challenge Program. The program was designed to enable employees face the challenges in their career path and make their way to leadership positions. Excel sought to develop the competencies of the employees through training, coaching, exposure, delegation of authority, counseling and value clarification. While selecting the employees for the programs, Excel set certain parameters. The company tested not only the employees IQ and technical knowledge but also potential leadership competencies. The company delegated enough responsibilities to the employee to prove his leadership abilities and groom his people skills. These initiatives filled the gaps for reaching the PCMM Level 4. To reach PCMM Level 5, Excel began putting in place measures to further streamline its manpower planning and HR policies. Excel made a resource commitment of 5% of its overall manpower costs towards employee training. In 2001, Excel achieved the PCMM Level 5 certification. Questions for Discussion: 1. 2. What is PCMM certification? What benefits can Excel expect by obtaining PCMM certification? What is Six Sigma? Why is it implemented in organizations?

Caselet 37
Smile Hotels Group is a leading hotel group in India. It has about 40 hotels in various cities across India and 25 in overseas locations. The group emphasizes employee training and development, and customer service. But the CEO of the group, Hari Prasad Thakur (Thakur), observed that the customer growth rate of the groups hotels 69

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Introduction to Organizational Behavior had not been high for the last three years. He approached a consultancy and asked it to conduct a customer survey to find out their opinion about the hotels customer service. The survey revealed customer satisfaction to be average. It was almost equal to the rating given to some of the new hotels in the industry. Thakur was shocked to see the results of the survey and called all the senior managers in the company for a meeting. Addressing them, he began, Good morning, Ladies and Gentlemen! As you all know, I had recently hired a consultancy to conduct a customer survey for us. I have the results here with me. It is with great disappointment that I have to inform you all that our group of hotels have rated very low on customer satisfaction. I had never imagined that our customers have such a poor opinion about us. You can see that we are rated at par with some not-so-known hotels. On hearing this, most of the managers were shocked. Some of them expressed their disbelief saying, Oh! We cant believe this. After giving them sufficient time to digest this unpleasant news, Thakur continued, I had gone in for the survey because customer growth rate has been declining considerably for the last three years. What do you think we can do to attract customers? The managers suggested various plans to attract customers. The marketing manager of the company, Milind Patil (Patil), said, It might be a good idea to offer our loyal customers free holiday trips, discounts in holiday packages, discounts in room rent, coupons and lucky draws. The associate marketing manager (corporate sector), Hitesh Chaudhary (Chaudhary), added, We can increase our number of corporate clientele by providing them extra facilities. This, I am sure, will help us attract more executives to stay with us. However, Thakur was not convinced. When both, Patil and Chaudhary, were trying to convince Thakur, the HR manager, Soma Roy (Roy), interrupted them saying, I am sorry to interrupt you but what I wish to point out to you all, in case you have missed the fact, is that these techniques will work only for a short period of time. If we are looking for a permanent solution, I suggest we should focus on our customer service aspect which is crucial for our business. Our employees are trained to deliver good quality service to our customers. But, I believe that we have to motivate them to serve customers still better. Only by doing this will we be able to improve our customer satisfaction level. On hearing this, the operations manager responded, What else do we have to give to our employees? Our employees already get the best salaries in the industry.

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Roy replied, Salary alone wont do. Why cant we begin an employee recognition program? We will reward employees who offer superior customer service. It would motivate other employees to serve customers better. Improved service will fetch us more customers. Thakur appreciated Roy for his suggestion and said, That seems to be a good idea. We will implement it. Can you tell us how we should go about it? Roy replied, We will categorize high performers into three categories good performers, very good performers, and excellent performers. The performance can be measured in terms of integrity, honesty, kindness, respect for customers, environmental awareness, teamwork, coordination, cooperation and trustworthiness. Thakur then asked, What type of rewards would you suggest should be given to each of these categories of high performers? Roy replied, For good performers we may give special two-star badges which they can pin to their coat. For very good performers we can give three-star badges and cash rewards, and excellent performers can be given five-star badges. They can be felicitated in the anniversary celebration function of the group and may be given good

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Part B ranking that would get them faster promotions. Suggestions from other managers were also invited and the recognition program was launched. Questions for Discussion: 1. The salaries of employees of Smile Hotels Group were the best in the industry. Do you think the recognition program was needed to motivate employees? The CEO didnt accept the suggestions offered by the marketing managers to attract more customers but accepted the suggestion given by the HR manager. Why do you think he liked the HR managers suggestion? Substantiate your answer. What more do you suggest can be done by Smile Hotels Group to motivate the employees and improve customer service?

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Caselet 38
Mumbai-based Arkay Supplies Ltd. (Arkay) manufactured office equipment. The CEO of the company, Robert Franco (Franco), believed in employee empowerment and participation. He entrusted his immediate managers with a lot of responsibility. The head of procurement division, Rajiv Gulati (Gulati), enjoyed full autonomy. Gulati could finalize purchase deals amounting to Rs 90 crore without consulting Franco. The marketing manager, N. Shivamani, could design and launch an expensive promotional campaign and then make it known to Franco. Franco did not reprimand the manager if the campaign failed to generate the desired response among customers. But he would not tolerate it if the manager repeated the same mistake again. He wanted his managers to analyze the reasons for failure and take steps not to repeat them in future. He expected his managers also to empower their subordinates, allow them to take risks and develop their leadership skills. Ravi Raj (Raj) was a procurement manager in the division headed by Gulati. Raj reported to Gulati. Under Raj, there were three subordinates designated as purchase executives who assisted him in his work. When the vendors submitted their tenders, the purchase executives scrutinized the proposals, selected the top 10 proposals and forwarded them to Raj. Raj studied the proposals, selected the best of them and then sent his purchase executives to the vendors site to examine the quality of the raw material. The executives personally examined the quality of the raw material, and brought some samples back to their firm for examination. The quality control department at Arkay tested the samples and determined the quality of raw material supplied by the vendors. On the basis of the reports from the quality control department, Raj selected the best vendor(s) and explained to Gulati why he chose those vendors. If Gulati was not satisfied with the explanation, he obtained proposals from other vendors and examined them as well. But if he was satisfied with Rajs explanation, he called the vendors concerned and negotiated on price, the date of delivery, amount and quality of material to be supplied, with them. Gulati ensured that everyone in his department completed their work and did it perfectly before they left for the day unless there was a valid reason for the employee to leave the work pending. If Raj or his subordinates did not understand what they were expected to do, Gulati explained it to them patiently. They could walk in any time and get their doubts cleared if they had any. Gulati never allowed Raj to negotiate with vendors to finalize the price. If, for some reason, Gulati was not free on the given date, he asked the vendors to postpone the date for negotiation. Otherwise he asked Raj to consult him throughout the negotiation and not to finalize the agreement until he came and read all the clauses. Gulati never asked Raj to participate in the negotiations he held with the vendors. Raj also did not insist on participating because the negotiations lasted till late in the night and Raj was glad that boss did not ask him to stay during the negotiations, so that he was free to leave for home. The final documents of the contract were typed by a clerk the next day and formally signed by Gulati and the vendors. Franco praised Gulati for striking the best deals. 71

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Introduction to Organizational Behavior However, in the marketing division, it was a different story altogether. The marketing manager, Shivamani, set sales targets for the marketing executives. Most of the executives complained that the targets he set were very high and difficult to achieve. But Shivamani never agreed to lower the targets once they were established. Many executives complained that Shivamani expected high level of performance from them but never offered them the support required. If Shivamani observed that any executive did not achieve at least 80% of the sales target by the date he gave them, he punished the marketing executive by denying him leave, preventing him from claiming reimbursement for expenses incurred by refusing to sign his form, and so on. Many executives who could not stand Shivamanis highhanded behavior left the organization. Questions for Discussion: 1. 2. Do you think Gulati should assign greater responsibility to Raj or allow Raj to continue to work to the extent he does at present?

Ashritas country manager in India, Ajay Arora (Arora), focused on improving the efficiency of the organizations terminal services. Arora paid close attention even to minute details of the companys operations. He ensured that the food served on flight conformed to the customers tastes and preferences, and that the passengers luggage was transferred from the flight to the luggage room within minutes and they did not have to wait for more than 10 minutes for their luggage. If any customer reported any problem in dealing with any employee at Ashrita, Arora immediately took action in the matter. He called the employee who had interacted with the customer and brought to his notice the customers complaint about his service. Arora also pointed out to the employee that if one customer left Ashrita, it meant a loss of business for the company. He emphasized the fact that if Ashrita were to continue to lose business each day due to inappropriate behavior of employees, soon the organization would become bankrupt and would not even be able to pay salaries to its employees. Arora, thereafter, cautioned the erring employee to rectify his behavior to prevent such a situation from recurring. If it came to his notice that there have been more than three occasions in which a customer has complained against an employee, he demoted the employee or fired him. Arora wanted to further improve the service offered to customers. He hired the services of leading consultancy Apple Consultants which offered special training programs in customer service to airline employees. The training enabled Ashrita to

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Ashrita rotated its employees through different jobs to help them acquire crossfunctional expertise. But the policy of job rotation did not apply to specialists such as engineers and technicians.

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The organization structure at Ashrita was flat in nature. Under the CEO, there were country managers. Under country managers, there were functional managers. All functional executives reported to the respective functional managers. For example, finance executives reported to finance manager and sales executives reported to sales manager.

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Ashrita Airlines (Ashrita), a Mumbai-based company, operated flights to all the Asian countries. In all these countries, Ashrita had subsidiaries which offered Airport Terminal Services. The services included traffic control, cargo services, security services and catering (for staff and passengers). The subsidiary in each country was headed by a country manager who enjoyed a great degree of freedom and could take many decisions without having to consult the headquarters.

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Part B improve its quality of customer service. In a customer survey conducted a few months after the employees had been trained, most of the customers who traveled by Ashrita Airlines rated the organizations customer service as excellent. Ashritas terminal services division in India received many awards for its excellent customer service and superior quality services. The subsidiary in India offered engineering services apart from other regular services like cargo, security and catering. Some international airlines used Ashritas services and paid for them. This became an additional source of revenue for Ashrita and its profitability increased. On the founders day celebrations of the organization, the CEO of the organization praised and rewarded Arora for his efforts to improve customer service. The other country managers present at the function were impressed and announced their plans to follow in Aroras footsteps, and make their subsidiaries efficient and profitable in a similar way. Questions for Discussion: 1. What type of organization structure did Ashrita have? Discuss the advantages and disadvantages of this structure. What are the different methods of departmentation used in organizations? Was the process of decision making centralized or decentralized in Ashrita? How did it benefit the organization? What are the possible negative effects of decentralization?

Sharma visited the firm and held one-to-one meetings with the managers. These meetings revealed something interesting the actual reason for the poor performance of the managers was Prasad himself. The managers did not like Prasads style of management. Prasad was always keen on self-promotion in his meetings with superiors and subordinates. He lacked respect for other people. He would point out even a small mistake committed by a manager and criticize him a lot in the presence of other managers. He imposed a high degree of control over his managers. He always pressurized managers to do whatever task he gave them on priority. Moreover, he changed priorities frequently. Sometimes, Prasad assigned the same task to different managers. Managers believed that this was because Prasad did not have faith in their abilities. However, they respected Prasad for his intellectual capabilities. Prasad was a very good speaker and articulated things in a way that quickly convinced listeners. He was a visionary and encouraged change. He welcomed new ideas and thoughts. He could analyze large volumes of data in a short period of time and took decisions quickly. As a result, he wound up meetings so quickly that managers could not contribute much. If he decided to implement a new process or system in the organization, he worked hard till he achieved it by solving all the problems that came in the way of its implementation.

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Zet Manufacturers (Zet) manufactured iron and steel rods used in construction. The general manager, K. Giridhar Prasad (Prasad), was unhappy with his management team. The managers were not able to fulfill the responsibilities given to them properly. Prasad hired a renowned HR consultant in the city, Sudheer Sharma (Sharma) to counsel and conduct development programs for the managers.

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Introduction to Organizational Behavior Prasad intermittently, unless they were really urgent. Each manager had 30-50 tasks pending with him. Last minute rush and errors were therefore common in the organization. When Sharma spoke to the managers and observed the work practices in the firm, he found that the organization lacked proper planning and the management focused on solving problems rather than preventing problems. Also, there was lack of coordination among the various organizational processes. When Sharma presented the results of his findings to Prasad, Prasad was surprised to know that he was responsible for the demotivation of his managers. Prasad wondered how it was that the managers had such a huge number of pending projects. He went to one of the managers and examined the pending list. After seeing the projects on the list, he told Sharma that some of them were just ideas which had come to his mind, which he had conveyed to his managers. He did not want the managers to take them up as projects. However, Prasad told Sharma that he wanted to change his behavior and improve his leadership style so that the problems would not reoccur in the future. Questions for Discussion:

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When an opportunity to sponsor an International Science Exhibition to be held in the US came up, Regal grabbed it. It advertised its sponsorship in the print and electronic media. The company also publicized its sponsorship widely in its in-house magazines. Regal invited employees to contribute their ideas to set up a unique stall in the exhibition. Employees from different subsidiaries and divisions were invited to form a crossfunctional team. The objective of the cross-functional team was to contribute ideas to improve the companys stall in the exhibition. Each employee gathered ideas from his/her respective division or subsidiary and presented it during team meetings. The team members scanned and evaluated the ideas and forwarded the best among them to the top management. The top management reviewed these ideas and implemented the feasible ones. Finally, the top management finalized the design of the stall. In the stall, Regal set up a six-foot high transparent human body in a standing posture. People could see all the organs inside the body like kidney, heart and lungs. With the help of special inbuilt electronic circuits, it was demonstrated to visitors how Regals different pharmaceutical products acted on different parts of the human body. Large screens were also used to demonstrate the use of products like the special inhaler for asthma patients. Animated pictures were used to demonstrate the use of veterinary drugs. Documentary pictures on quality control at Regals plants and the research efforts of scientists in the companys R&D laboratory were shown to visitors.

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Though Regal manufactured products under different popular brands, the corporate name Regal was not known to many. Regal had never given attention to advertising its brands and improving public relations. But the growing competition and the way new players were becoming increasingly popular with the public and eating into the market share of leading players, compelled Regal to review its communication policy.

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US-based Regal Pharmaceuticals (Regal) was a leading multinational that operated in more than 50 countries across the world. It had subsidiaries in all these countries and each subsidiary enjoyed a great degree of autonomy. Regal had three divisions one division manufactured over the counter (OTC) drugs, the second manufactured prescription drugs, and the third manufactured drugs for animals.

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If you were the HR consultant Sharma, what suggestions would you make to Prasad to improve his leadership style?

Part B Regal encouraged its employees from different countries to visit the stall. The top 3 high performers among the employees from all the subsidiaries got a free return ticket to visit the exhibition in the US. They could stay for a week at the companys guest house. The trips enabled employees from different divisions and subsidiaries to interact with each other. They learned about each other and shared their experiences. They expressed their willingness to continue their friendship and form an informal network. All the employees who attended the exhibition expressed their views and opinions about the company and the exhibition. These views were posted on the companys intranet and notice boards. Many employees wanted the company to sponsor such events frequently. Some wanted the management to set up exhibitions at their locations. The exhibition lasted for 20 days. Each day, an employee gave a presentation at the stall about a particular product of the company. He/she explained how Regal undertook intensive research to come out with safe medicines without any sideeffects. Regal kept its employees and customers up-to-date about the developments at the stall using the companys intranet and website. After the exhibition, Regal conducted an employee survey and a marketing survey. The results showed that that there was a significant increase in the productivity of employees and sales of Regals brands in retail outlets. Internal communication increased and employees across different divisions communicated with each other frequently. Projects were progressing at a faster pace than earlier. At drug stores, it was seen that customers specifically asked for medicines manufactured by Regal. 1. Why did Regal sponsor the science exhibition? Do you think the company achieved what it wanted? What are the ways in which Regal can improve internal communication?

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Situation A

John Morgeld (Morgeld) received an appointment letter from Akay Enterprises (Akay). It was his first job and he would be joining the company as an executive trainee (production). He had got offers from two other companies but he selected Akay because the company promised a cooperative and supportive work environment for newcomers, an informal organizational culture and excellent growth opportunities for employees who stayed with the company.

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On the day of joining, he wore an executive dress, tie and shoes and went to the office. The receptionist looked at him and asked him whether he was a marketing executive from any company. When Morgeld answered in the negative and introduced himself as a new employee, the receptionist wished him and began to attend her calls. Morgeld did not know whether he should go inside the office or wait in the reception till he was called in. He chose the second option and waited. He waited for two hours and nothing happened. So, he got up and asked the receptionist what he was supposed to do. The receptionist asked him to go inside. Morgeld entered into a large hall having several cabins. He did not know, of all the square cabins, which one he should go to. Randomly, he chose one and introduced himself to the occupant. The occupant looked at Morgeld and began to laugh. After 75

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Caselet 42

Why do you think the productivity of employees increased after the exhibition? Also explain the possible reasons for the increase in the companys sales?

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Introduction to Organizational Behavior laughing for two minutes, he told Morgeld that all employees come in casuals to office and Morgeld looked like the CEO of the company in that suit. He advised Morgeld to come in casuals. But he didnt seem to know whom Morgeld should approach and asked him to ask the person in the cabin next to his. When Morgeld knocked on the next cabin, the person inside asked him to go to the big cabin at the far end of the hall where the general manager (GM) of the company sat. Morgeld went to the GM and introduced himself. The GM looked irritated on being disturbed by Morgeld. When Morgeld stated his reason for being there, the GM directed Morgeld to approach the production manager, Shashank Ray (Ray). When Morgeld went to meet Ray whose office was on another floor of the same building, Rays secretary took the appointment letter from him and told him that Ray was busy in a meeting with some important guest. The secretary asked him to sit in the reception till he was called. After two hours, Morgeld was called in. Ray saw Morgeld and he also laughed for a few minutes and told him to come to office dressed in casuals. Ray told Morgeld he had another urgent appointment and asked him to sit with his colleague Dheeraj Patel (Patel) who would instruct him regarding the work he would have to do. Patels appraisal was done recently and he was given grade D. He was not given any increment. Patel told all the possible negative points about the workplace to Morgeld and asked him to leave the place as quickly as possible to have a better career. Patel also warned him not to be seen interacting with other employees during office hours as it was unwritten rule that no employee should be caught socializing during office hours. Patel then told Morgeld that he had some urgent work and left. It was one oclock and no one seemed to leave for lunch. Morgeld waited and waited. Then at three oclock, the office boy came with tea. When Morgeld asked him where he should go to have his lunch, the office boy told him that lunch was available in the office canteen between 12 to 2.30 pm and at three oclock in the afternoon, he cannot expect to get anything but coffee and tea in the canteen. On the very first day of his joining the new office, Morgeld returned home hungry and sad. Situation B Morgeld had completed two years of working at Akay. He was always constantly instructed and closely monitored by his team leader, Sadgun Chari (Chari). Morgeld was never allowed to take any decision on his own. After two years, for the first time, he was given a very important task by Chari. Chari told Morgeld that he would not be able to guide him because he had several other projects on hand. Morgeld felt very happy. But Chari told him, If you can do this task, you can be sure of a promotion this year, but if you cant, I cant even assure you of your job. Hearing this, Morgeld felt highly pressurized. He was suddenly given a very important task and Chari was not ready to offer help. He prayed to God and began to work on it. He put his heart and soul in it. He worked 14 hours a day. Sometimes he spent sleepless nights. However, he finished the task successfully on time. He went to office and found that Chari was on leave. He remembered what Chari had said when he had handed him the project. Chari had cautioned Morgeld that if he couldnt finish the project by the due date, it would put their boss, Ray, in a difficult position since he was answerable to the head office. Therefore, Morgeld went to Rays cabin since Chari was on leave. Ray looked at him with a puzzled look on his face. Morgeld drew his own interpretation of the expression on Rays face and thought inwardly, I guess he is thinking Why did he come directly to my cabin? Ray asked Morgeld Where is Chari? Morgeld replied, He is on leave, Sir. Hence I came to submit this file to you. Chari told me that it is urgent. Ray looked at the file and told Morgeld, You keep it with you. After Chari comes, he will have a look at it and then forward it to me. Morgeld said, But, Sir, it is urgent, I believe. Ray got irritated and said, I know that. You take this file back and start with the next task which is more urgent, OK? Morgeld came out of Rays cabin in no mood to take up the next task.

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Part B Questions for Discussion: 1. 2. The first impression is the best impression, What kind of impression did Morgeld get about his organization? Would this be good for the company? In Situation A and B, Morgeld was demotivated in many ways. Comment on the urgency of the task given to Morgeld and the way he was treated upon completion of the task. What was the impact of the work environment on his morale?

Caselet 43
Mumbai-based Ashika Textiles Ltd (Ashika), was a small but highly profitable firm in the textile industry. Meena Chowdhary (Chowdhary), who had just completed her engineering in textiles joined as a management trainee in Ashika. She was teamed with three other management trainees (Amini Murthy, Anand Sharma and Rajiv Arora) with one to two years of experience in the firm. The team was led by Akash Madhur (Madhur) who had experience of 10 years in the industry, and had been working with the firm for the last three years. Madhur established goals for the team and developed plans and strategies to achieve them. His 4-member team worked according to the plan developed by him and achieved the goals. Chowdhary was the most active member of the team. She was always a step ahead of her team-mates. She completed her tasks ahead of time and helped other team members in completing their tasks. Madhur liked the quality of her work. Madhur frequently conducted meetings with his team members to discuss plans and strategies for achieving their goals. In these meetings, Amini Murthy (Murthy) always concentrated on estimating the extent of increase in work-load of team members as a result of the new project. Whenever she felt that the deadlines set by Madhur were impossible to achieve she objected to it, and Madhur made adjustments to the deadline and tried to come up with a more feasible deadline. This required him to make other changes in the project plan accordingly. Anand Sharma (Sharma) always gave good ideas to Madhur to impress clients. Whenever Madhur wanted to get new clients or find business partners to start a new venture, Sharma took care of the task. He had a very strong informal network. He had friends in many organizations. He talked to them and arranged Madhurs meetings with the desired client. If Madhur invited the client, Sharma took care of all the arrangements for welcoming the guest. Madhur relied on Sharma so much that he did not plan client visits without consulting Sharma. However, as a result of his involvement in these activities, Sharma could not complete his tasks on time. He always took the help of Chowdhary to complete them. Rajiv Arora (Arora) never liked attending meetings and felt that meetings were a waste of time. He always looked forward to action. He only asked Madhur to brief him what he had to do. Once he was told that, he finished his task and reported to Madhur. Chowdhary was a patient listener throughout the meetings. She listened to all the instructions given by Madhur and sought clarification from him for any point that was not clear to her. She knew not just her task but also the tasks of all the team members. Sometimes, during meetings, the team members held opposing views on various issues. Sharma always supported Madhurs views. Murthy always argued against the view proposed by anyone in the meeting. She argued violently and did not allow others to support their views. Arora was a neutral member while Chowdhary patiently listened to the views of all the people present and then expressed her view and substantiated it with facts and figures. As was her habit, Murthy tried to oppose Chowdharys suggestions as well but always failed because she often did not have enough strong points to support her stand. 77

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Introduction to Organizational Behavior After a year of Chowdhary joining Ashika, Madhur was promoted to the post of general manager and he had to work from the headquarters thereafter. The president of the company, Ashok Desai (Desai), asked Madhur to name a suitable candidate to fill his position. Madhur suggested Chowdharys name to Desai. The same week, Chowdhary was handed the letter of promotion. Although Chowdhary accepted the letter, she was worried about the new developments and approached her friend for advice. Questions for Discussion: 1. What are the pros and cons of Chowdhary accepting the new post offered to her? If you were Chowdharys friend, what would you advise her? Justify your answer. Do you think Madhur was right in his decision to suggest Chowdharys name for promotion to his position? Why do you think Madhur did not recommend the name of any of the other team members for the position even though they had more experience of working in the organization? If Chowdhary accepts the promotion, how will her new role be different from her previous role in the organization?

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Vinay had hardly shown any interest in his fathers business till then. He was interested in sports and event management. Niranjan also did not consider it necessary that Vinay should be formally trained to assume the position of a CEO. Niranjan was very confident of the skills and expertise of his senior management team and advised Vinay to take the advice of the senior managers in the organization before he took any decision and formulated any strategy. But Vinay never heeded his fathers advice.

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One day, the senior managers informed Vinay that Geeks competitor, K&K Enterprises, was rapidly gaining market share with its emphasis on quality and employee empowerment and there was a threat of it making an attempt to acquire Geek. The senior management suggested that Vinay should hire an OD consultant to devise a change strategy for the organization and make it more competitive. Vinay did not like the advice given by the senior management and failed to abide by it. Vinay wanted to increase supervision to deal with the quality problems and therefore, added more layers to management. However, this failed to improve the quality of products being manufactured at Geek. Vinay believed that if the companys size was increased, it could be protected from acquisition by K&K. Consequently, he spent huge sums of money acquiring small firms in various industries. This further affected Geeks profitability. Since Vinay was left with no funds to pay the yearly bonus to the employees, he planned to take loans to pay the bonus for that year. Vinay also wanted to sell off Geek and start afresh. He called his close friend Akshay, working as a faculty member for business strategy in a leading business school in the UK, and

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Geek Enterprises (Geek) was a leading cement manufacturing firm in India. The CEO of the company, Niranjan Paul (who took control of the firm from his father and founder, Arjun Paul) did not want to remain confined to the cement business. Because of his efforts and those of his senior management team, Geek diversified into other industries steel, plastic and agricultural equipment. Each of Geeks units was among the top ten leading firms in its industry. As Geek entered more and more businesses under Niranjans leadership, the group lost its focus, and profitability began to decline. Niranjan was of the opinion that in order to beat the competition, an organization should have a young person heading it, a person who would be able to lead the organization effectively by formulating and implementing superior strategies. Therefore, he decided to step down and handed over control of the organization to his eldest son, Vinay Paul (Vinay).

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Part B asked for his advice. Akshay assured Vinay that he would study the problem and come up with a solution. He also informed Vinay that he would be coming to India during that week to visit his parents and would personally meet him then. When Akshay visited India, he met Vinay and advised him not to sell off Geek. He suggested that Vinay call a meeting of all employees and explain to them the financial problem being faced by the company. Vinay reluctantly agreed to this suggestion. At the meeting, Akshay asked the employees if they were willing to forgo the bonus for that year in return for assured employment. Akshay assured them that bonus would be paid to them in the year when the organization would make huge profits. The employees took some time but agreed to the proposal. Akshay later explained to Vinay the benefits of lean structures, quality circles, employee involvement and empowerment. He assured Vinay that he would not lose control over the firm by empowering employees. He also explained him how companies were benefiting by listening to their employees ideas and suggestions. Akshay asked Vinay to call in an OD consultant to bring about the desired change in organization and help it cope with the changes in the competitive environment. 1. 2. What do you think are the reasons for Geeks downfall? What was the role of the companys CEOs in Geeks downfall? Do you think Akshay did the right thing by stopping the sell-off and suggesting to Vinay that he should continue holding the loss-making business? Since change programs involve emphasis on quality and productivity, employees often resist change. What are the various measures used by change agents to overcome employee resistance?

Caselet 45

Kartik Ahuja (Ahuja) completed his bachelors degree in electronics engineering from Osmania University, Hyderabad at the age of 22. He immediately joined as a junior engineer in Ajanta Electronics Ltd in Chennai. He worked there for 7 months and quit the job to pursue higher studies. He went to the US and completed his MS at the age of 25. He joined a leading firm in the US, CNT Innovative Products Ltd (CNT), as assistant manager in the electronics division. After working for one year at CNT, he switched to a leading MNC, KLN International, also in the US. He hardly developed any close relationships with the employees in the firms he worked for. He greeted his colleagues when he entered the workplace and that was all. He never engaged in conversations with other employees either inside or outside the organization. After Ahuja had completed one year at KLN, he returned to India and joined a leading firm in the country, ATB Global, that manufactured steel radials and steel bars, as a production manager. In ATB, he developed very good relations with his peers and subordinates. He worked hard to improve the production processes and the methods used by workers, and increased overall production by a multiple of five. He also devised methods to reduce the scrap in the production department to one-fourth. He was soon promoted as head of the production department. One year later, at the age of 28, he married Sudeshna Ray (Sudeshna), who worked as an assistant manager in the finance division of the same company. In his position as head of the production department, Ahuja restructured the entire division and introduced a team culture among the employees. Though some employees and managers were displaced because of his restructuring efforts, they were placed in other divisions after being given the necessary training. Ahuja conducted training programs for employees to help them acquire new skills and expertise. He also acted as a coach and mentor for his employees. He played a crucial role in identifying talented employees and promoting 79

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Introduction to Organizational Behavior them to higher positions. In the process, he also went up the career ladder and reached the position of country head. When he reached the age of 50, Ahuja identified his successor in the company and retired. But Ahuja did not choose to enjoy his post-retirement life by relaxing. He started his own firm, Suryateja Consumer Electronics Ltd. (Suryateja), with the help of his wife and two sons, Nikhil and Chaitanya. Meanwhile, Sudeshna, who had reached the position of senior finance manager at ATB Global, also quit her job. Nikhil, Ahujas elder son, had completed his MBA from Stanford University and worked for two years as a marketing manager in a leading multinational electronics firm. He too quit his job to help his father set up the new venture. Chaitanya, the younger one, had just completed his PhD in logistics. Ahuja planned to manufacture and market a range of electronic products like rice cookers, oven, mixers, grinders, air coolers and air conditioners. Ahuja was hopeful that Suryateja would outperform other leading firms in the industry. Questions for Discussion: 1. 2. Explain Ahujas career in terms of Halls career stage model. What is Levinsons theory of adult life stages? Why did Levinson change his assumptions? Can Ahujas career be expressed in terms of Levinsons theory? Explain.

Caselet 46

Suman Juneja (Suman), president of Ankita Consultancy Services Ltd. (Ankita), was upset with the high employee turnover in her company. She felt that employees did not have any sense of belonging. The exit interviews conducted by the personnel department revealed that employees were dissatisfied with the companys compensation system. The employees at Ankita were given a fixed salary every month. Ankita maintained equity in compensation by ensuring that all the employees with the same designation received the same salary. The compensation package offered by Ankita was one of the best in the industry. Employees also received annual bonus, festival advance, medical reimbursement and leave travel compensation. Apart from statutory leave, the company gave 10 days of paid leave for marriage and for appearing for competitive exams and six weeks of leave for child adoption. They were also given sabbatical leaves and flexible work options. Employees were allowed to adjust their working time according to their convenience. They did not have to stick to the companys timings of 9-to-6. They could come to work at any time before twelve o clock in the morning and work for 8.5 hours. Some employees like consultants were allowed to work from home. Some employees were allowed to work half-day at home and half-day in the office. Although Ankita was one of the few Indian companies which offered flexible work options to its employees, the employees were still dissatisfied with the company. Suman observed that most of the employees who left the company were highly skilled and talented. Suman began to realize that Ankita did not make any special efforts to reward their performance. She began to consider various incentive programs that can be offered to employees. She surfed the Internet and collected information about the incentive programs offered by various companies in the industry. Most of the companies offered cash incentives, fringe benefits and profit-sharing plans. Some companies distributed a certain percentage of profits equally among all the employees at the end of each year. Some companies distributed profits equally among all the departments and divisions. But the share of each employee in the various departments was determined on the basis of his/her individual performance.

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Part B Some companies adopted a deferred profit-sharing plan. According to this plan, employees are informed about their share of profits, but the payment is not made to them immediately. It is reinvested by the company in business (with the employees consent) or allowed to accumulate till the retirement of the employee. Suman carefully analyzed the pros and cons of each incentive program and finally planned to implement a deferred profit-sharing plan at Ankita. She also decided not to distribute profits equally among employees but base it on their individual performance. Questions for Discussion: 1. The compensation package offered by Ankita was one of the best in the industy. Ankita was one of the few companies which offered flexible work options to employees. Despite these distinctive characteristics, why were employees at Ankita not content with the compensation system? Do you think Suman will be able to motivate employees and reduce turnover by implementing a deferred profit sharing plan in the company? What are the various ways in which referent comparisons can be made by employees to compare their income with that of others?

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On the first day, the employees were very formal and polite to each other. They exchanged their names and information about each others educational background and previous work experience. On the second day, they discussed their views on various issues national politics, international politics, social problems, changes in technology, pollution, business ethics and so on. If any person made any statement on any issue, the people who agreed with him spoke in his support. Most of the people who disagreed with him did not speak out. Even if they expressed their disagreement, they did not do it in a forceful manner and avoided arguments. After two days, the new employees were given training for a week and then they were assigned job duties and responsibilities. As they began to work, interaction among them increased. Some employees formed sub-groups. If differences in opinions arose on any issue, employees argued vehemently and were supported by their sub-group. After a few months, the employees became familiar with their work. They also realized the importance of cooperation and coordination in getting the work done smoothly. The employees also learnt the importance of listening. They tried to listen to their colleagues views and understand their point of view. Therefore, the frequency of violent arguments reduced and the work environment improved. Each member of the group was able to express his views openly. The group took decisions only after considering the opinions of all the members. Since everybody participated in decisionmaking and planning, the group had little difficulty in implementation. The group completed any project assigned to it successfully. 81

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ABZ organization recruited twelve new employees. On the first day, the HR manager addressed the new recruits and explained to them about the companys operations, various facilities offered by the company, the dress code to be followed by employees, and the behavior expected of them. Then each new employee introduced himself/herself to the group. The induction program lasted till lunch. After lunch, the employees were taken on a guided tour in a company van to all the units of the company. The new employees were not assigned any work or given any training for the first two days and were encouraged to get to know one another, and informally learn about the company and its philosophy.

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Introduction to Organizational Behavior Questions for Discussion: 1. 2. The development of a group takes place in stages. Explain how the group developed in ABZ. What is the type of group described in the above case? What are the different types of groups that are formed in organizations?

Caselet 48
The UK-based Maganta Motors (Maganta) was a leading automobile manufacturing firm which made profits year after year. But in 1998, for the first time, its profitability declined significantly. Customers did not like their new models as they felt they did not have any significant new features. The CEO of the company, James Herr (Herr), approached a leading consultancy firm which suggested that the organization had too many rules and procedures that restricted creativity and innovation. The consultant advised Herr to change the structure of organization from formal to informal. But Herr thought that if the new structure also failed then the entire company would have to suffer losses. When Herr was still considering the suggestions of the consultancy, a few engineers and managers came to him with a new product idea. They wanted to work away from the site for a few months so that they could implement their idea and release new models into market fast. They explained that Herrs hierarchical system for approving new ideas delayed the release of new models. They proposed the names of some workers for their team. Herr agreed and a group of managers, engineers and workers were immediately shifted to a new plant. Herr provided them with all the resources required to design and manufacture new cars. The new plant was named Proton X. The employees of Proton X were free from all the rules and regulations that were in force at Maganta. At Maganta, communication flowed from top to bottom. Though the top management facilitated upward communication, in the absence of proper support and encouragement from superiors, employees hesitated to communicate their views and opinions to them. But at Proton X, managers invited suggestions and ideas from workers. Whenever workers gave good suggestions, they were given a lot of appreciation. An employee suggestion scheme was implemented at Proton X. The worker giving best suggestion was given a free holiday trip to Disneyland in Paris. While there was an organizational chart for Maganta which clearly specified the levels of hierarchy and working relationships between people, there was no such chart for Proton X. Any employee could approach anyone (either a colleague or a superior) to discuss any matter. Most employees knew who knew what. So, they could easily approach the right expert to solve their problem. There was no formal head at Proton X. All the employees unanimously agreed to consider a deputy manager, Rupesh Mittal (Mittal), as their head. Mittal was the eldest of all employees. Also, he was knowledgeable and benevolent person. He always listened to peoples problems and helped them find a solution. Therefore, no one objected to accepting him as their informal leader. Mittal listened patiently even to suggestions given by the lowest level employee in the organization. One day, when Mittal was reviewing a new product design, an office boy came to him and informed him that he had a suggestion to offer. He told Mittal that the company could reduce its expenditure on milk, sugar and coffee powder because employees were drinking more soft drinks and juices and the coffee being prepared was being wasted every day. Mittal appreciated the boy for the suggestion and decided to act on it immediately. The employees at Proton X did not just share a working relationship. They considered themselves as members of the same family working towards common objectives. 82

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Part B Mittal played an active role in promoting this close relationship. If any employee deviated from the expected behavior, his colleagues tried to correct him instead of reporting his behavior to the superior. The employees did not mind listening to their colleagues because they too did the same when they saw others do something wrong. Superiors accepted suggestions from subordinates if they had pointed out a real problem in the project and offered a good solution. At Maganta, however, the situation was very different. The superiors were highly conscious of their position and did not tolerate it if lower level employees tried to offer suggestions. Due to the collaborative efforts of employees at Proton X, four new models came onto the market within a year, and all of them were received very well. But Herr believed that the cost of operating the two units separately was high and planned to merge them. He consulted an OD practitioner to seek his advice. Questions for Discussion: 1. 2. Can Proton X be called an informal organization? Justify your answer. Herr wanted to merge Proton X with Maganta? Do you think Proton X will be able to offer the same benefits after merger? Will Herr be able to transfer the benefits of the parallel structure, Proton X, to Maganta?

The meeting was scheduled to start at 10 AM but started at 11 A.M as the heads arrived late for the meeting. Some heads failed to turn up for the meeting. The meeting did not seem to have a clear agenda. One of the heads of the department, Venkata Mani (Mani), also the chairman of the company, convened the meeting. He wanted to discuss about the performance of the various departments. Some HODs wanted to discuss only certain issues like scarcity of resources while some were reluctant to discuss anything at all. Each HOD wanted to discuss the issue he desired and the meeting concluded without any decision on any issue. Jeet concluded that first and foremost thing to be done to improve the companys profitability was to make these meetings productive. When he discussed the matter with Patil, the latter too expressed the same concern. Patil, too, wanted the meetings to make a positive contribution to the organization. Jeet, then spoke to the heads of the various departments individually. He asked them whether they too desired an improvement in the quality of the meetings held in the company. They responded positively. Then Jeet asked Mani to obtain the individual opinions of the various heads of departments about the meetings. Mani collected the data which indicated that the HODs did not like the way meetings were conducted and considered these as a waste of time. 83

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Jeet came to the organization and visited all the departments. Patil introduced Jeet to the heads of all the departments. Jeet spent about five to ten minutes in each department and attempted to understand how the work was done in each department and how information flowed from one department to another. On the next day, a weekly meeting was scheduled for all the department heads. Jeet told Patil that he would like to attend the weekly meeting.

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The CEO of Karthik Group of Financial Services (Karthik), Kiran Patil (Patil), observed that the group was unable to maintain a consistent financial performance from year to year. An increase in profit and rise in market share in one year was followed by sharp declines in the next. The group was never able to maintain its profitability for three consecutive years at a stretch. Upset by this trend, Patil approached his friend and OD consultant, Diwakar Jeet (Jeet) and sought his help to improve the companys profitability.

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Introduction to Organizational Behavior Jeet then asked Mani to think of three possible actions on his part, which could make the meetings more interesting and productive. Mani took some time to think and suggested that the following actions could enhance the effectiveness of the meetings: The post of chairman for the meetings should not be permanent. Instead, the chairman should be appointed on a 3-monthly basis rotating between the HODs. The chairman should not decide the agenda on his own, but on the basis of suggestions given by all the HODs. The meetings should not be conducted every week but on a fortnightly basis.

Jeet suggested another point - that the chairman should encourage members to discuss issues openly, and should not respond negatively if their opinions contradicted with his. In the next meeting, Jeet and Mani presented the action plan to the heads of departments for discussion. Some more ideas were added to the action plan after prolonged discussions with the various heads. The method of implementation was also discussed. Soon after the meeting, the implementation phase began. An analysis of the consequences of implementation of these actions indicated that most of the actions had a positive impact on employees. Cooperation and coordination between the different departments increased. Transactions were processed speedily, and it took only one-third of the time taken in the past for them to be completed. Customer satisfaction improved and the companys earnings before interest and tax (EBIT) increased by 8% compared to the previous year. 1. 2. What type of intervention did the OD consultant use at the Karthik Group of Financial Services? It is believed that the changes in the global economy, the workforce, technology and organizations will have a major impact on OD practices. What are the changes that are likely to take place in OD practices?

Caselet 50

When Manisha Sharmas (Manisha) uncle, Hariprakash Sharma (Hariprakash), visited her at work in Modern Technologies (Modern), he was pleasantly surprised and amazed to see his niece working leisurely under a tree in the companys sprawling garden. Later, over a cup of coffee in the company cafeteria, Hariprakash asked Manisha how the company allowed its employees to be away from their desks. Doesnt this affect employee productivity? he asked. Smiling at her uncles amazement, Manisha explained, My company believes in providing its employees with the flexibility of working in an ideal environment rather than imposing restrictions upon them regarding the place of work. The companys effort towards creating a relaxed work environment has helped it in more than one way. It has resulted in developing a motivated and highly productive workforce. In fact the company is rated among the top three companies in the country for the fifth consecutive year, with regard to work culture and quality of work life. Manisha went on to elaborate, In fact, like Modern, there are many other companies that also believe in providing their employees with an ideal work environment. These efforts are made to help employees cope with the stress associated with working on time-bound projects. Modern aims at creating a stress-free work environment. It does this by providing its employees with natural surroundings in which to work and with facilities such as a hygienically maintained cafeteria, a well-equipped gymnasium, tennis grounds, and a golf course.

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Questions for Discussion:

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Part B Hariprakash listened to Manisha keenly. As they walked past the golf course, Hariprakash wondered aloud whether such strategies really worked. Manisha clarified his doubt stating that Modern was among the very few companies that had performed well during the last few years despite the economic recession. The conversation between Manisha and Hariprakash revealed that Modern implemented many such strategies to nurture a motivated workforce. It offered facilities like telecommuting, flextime, and a holiday on completion of every six-week project schedule. All these were a part of the companys HR policy. Besides, the company provided excellent growth opportunities for exceptional performers. It had exclusive employee development plans that helped its members progress through the career ladder. In addition to all this, the high salary structure in the organization enhanced employee loyalty and motivated them to attain organizational goals. The enhanced commitment and loyalty towards the organization resulted in bringing down the attrition rate to a considerable extent. Hariprakash could now comprehend how the company benefited from its various strategies to provide its employees with a congenial work environment. These efforts of Modern to provide a people-friendly work environment, agreed Hariprakash, helped retain the invaluable assets of the company the people. Questions for Discussion: 1. The modern corporate world has redefined the rules of work efficiency and aims at employee wellness, in order to obtain maximum productivity from its employees. In the context of the present case, discuss the various measures taken by organizations to enhance employee productivity by catering to employee wellness.

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Organizations have introduced alternative work schedules to help their employees tackle work-related stress, thereby increasing their productivity. Describe the various alternative work schedules that help increase employee productivity.

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Part B: Caselets (Suggested Answers)

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Every caselet will have more than one possible solution. The guidelines are intended to help students develop their abilities to analyze business situations and develop feasible solutions.

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Part B: Caselets (Suggested Answers)


Caselet 1
1. South Indian Technologies created and developed a culture that encouraged innovation and creativity. Employees who came up with innovative ideas for products or organizational processes received encouragement and support from the management. Every employee in the organization was provided with equal opportunities to innovate and to be creative and their suggestions were considered. The employees were given a free hand to experiment and develop their ideas at the companys expense. However, many of the new products failed in the market and resulted in loss to the company. While focusing on employee development the management failed to recognize the developments taking place in the external environment and the changing needs of the customers. Karthikeyan cautioned the management against blindly following old values and assumptions and urged it to change in tune with the external environment However, South Indian Technologies failed to do so and eventually fell into a cultural trap, which prevented the further growth of the organization. Therefore, in the case of South Indian Technologies, a static organizational culture and the organizations inability to meet the demands of the external environment resulted in the downfall of the company. 2. The culture of any organization is greatly influenced by its founders. The values, assumptions and personal traits of the founders influence the culture of the organization they establish. At South Indian Technologies the personal beliefs of the founder of the organization, Murthy, were gradually ingrained into the members of the organization and these beliefs ultimately became the norm at South Indian Technologies. Murthy, an engineer by profession, always felt that constant innovation and creativity by the employees would give the company a competitive edge over its rivals. He nurtured a culture that gave employees immense opportunities to be creative. Murthy invested huge capital to develop the ideas of the employees into marketable products. This finally resulted in plummeting profits for the organization, as most of the new products developed were not successful in the market. The organization failed to keep in tune with the changing external environment. Murthy stuck to his deeply held values of constant innovation and refused to heed Karthikeyans advice that only profitable ventures should be implemented. Murthy continued to invest all the revenue generated by the company into the development of new products without giving a thought to the returns on investment. He was supported in his actions by most members of the organization. Thus the personal values of the founder, Murthy, were instrumental in shaping the culture of the organization. In order to sustain in the highly dynamic business environment, Murthy should have adapted the organizational culture to suit the changes in the external environment. He should have focused on the outcome of the innovations and the revenue generated by them, rather than continuing to maintain same organizational culture. Murthy should have taken steps to make the organization dynamic and sensitive to the ever-changing needs of the customers.

Caselet 2
1. Corporate ethics govern the behavior of employees within an organization. The ethical code of an organization helps the employees differentiate between right and wrong and between favorable and unfavorable behaviors. Ethics therefore play a vital role in sustaining the culture of an organization.

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Introduction to Organizational Behavior Cosmo Energy Services Ltd. was a leading producer of energy in the nation. The company had everything that was required to succeed in business. Cosmo was among the first ones to adapt to technological developments. It had sufficient funds for investment and the best talent available. However, all this proved to be of no use when the company went bankrupt due to ethical deficit within the organization. Though Cosmo Energy Services Ltd. was built on the values of integrity, honesty and sincerity in all its dealings; its values began losing ground over time. The CEO himself was involved in numerous unethical dealings. Being an affluent personality, he managed to muster political support whenever the integrity of the company was questioned. The top management was more interested in filling their pockets at the expense of the workers and the general public who had invested in the company. Fraud and insider trading became a common feature. Cosmo ended up developing a culture of greed, corruption and deception. These developments in the organization led to a toxic organizational culture that finally resulted in the downfall of the organization. None of the positive attributes of Cosmo in terms of financial success, technological expertise, or superior human talent could stop the eventual debacle of this highly successful company which lost out on the factor crucial to organizational survival Corporate ethics. 2. The success of any organization depends on four important factors financial resources, technological expertise, human capital and socio-spiritual capital. Cosmo Energy Services Ltd. had abundant financial resources; it was adept at adapting to changes in technology; and hired the best talent in the industry. However, it failed miserably in one crucial factor the socio-spiritual capital. The development and maintenance of a strong socio-spiritual capital is crucial for the success of an organization. It is the most challenging responsibility of todays managers. Owing to the global nature of the labor market, the workforce of any large organization is a complex mix of people from a wide range of cultures. The values, beliefs and assumptions that guide each of these cultures vary. However, all these people have the same basic needs of belonging and should be able to understand the significance of their role in the organization. The challenge to management is to capitalize on these factors and develop this complex workforce to the advantage of the organization. However, Cosmo Energy Services Ltd. failed develop and maintain a strong sociospiritual capital. It nurtured a toxic and unhealthy work culture where human relationships were given no value. Besides, the initial values and norms of the organization were not given any consideration. The management failed to maintain an open and transparent channel of communication with its employees. The top managers felt that their decisions were final and binding, and any opposition to these decisions were ignored. The top management was busy making money at the expense of the stakeholders of the company. This ultimately led to the bankruptcy of the company. Therefore, the inability of Cosmo Energy Services Ltd. to effectively handle its rich socio-spiritual capital resulted in its eventual downfall.

Caselet 3
1. Innovation is one of the most important characteristics of an organization culture. Innovation determines the extent to which an organization encourages its employees to generate new ideas and take risks to implement the ideas. Considering the highly competitive and dynamic nature of todays business environment, it is not unreasonable to state that only an innovative organization can survive. Organizations have to constantly innovate and improve upon their products and services in order to stay competitive. Therefore organizations need not only to encourage creativity and innovation among the employees, but also empower them to take risks in implementing the ideas for the benefit of the organization. 90

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Part B The organization culture at We Care was built on the core value of continuous development through constant innovation. It was sensitive to the ever-changing needs of its customers. It encouraged employee-participation in all major decisions that affect the employees at the workplace. Their opinions were considered important. This helped to attract good suggestions from the employees. When a recent feedback showed that the rate of new product development in the R&D department was decreasing, the management of the company took immediate action to encourage the employees to be innovative and to experiment upon new products and processes. These initiatives were backed by the willingness of the management to increase the R&D spend. The management assured complete support to any new product idea that the employees might come up with. This not only helped enhance the creativity of the employees but also motivated them to take calculated risks in the development of new products. The risk-taking behavior of employees was further reinforced by the managements decision to reward employees whose new ideas brought in revenue and profits to the organization. Thus, the top management developed an organizational culture that nurtured innovation and creativity among its employees, which eventually led to the success of the organization. 2. The culture of an organization is greatly influenced by its founders. The values, assumptions and personal traits of the founders influence the culture of the organization they establish. The founders of We Care, Ravi Chandran and Srikanth Verma, upheld the values of continuous development through creativity and constant innovation. They believed that employing the right talent in the organization would go a long way in sustaining a culture of innovation. According to them, the organization could be successful only if it was sensitive to the changing customer needs. Hence, they concentrated their efforts on developing products of high quality. These personal values of Chandran and Verma eventually developed into the core values of the organization. We Care thus nurtured a work culture that encouraged creativity among employees. It welcomed employee participation in the decision-making processes of the company. It developed an open feedback system with the help of which employees could voice their opinion about any process or system in the company. The top management used the findings obtained from feedback to further develop the existing organizational processes for the benefit of the company. It gave consideration to all the new ideas generated by the employees to develop existing organizational processes. The organizational culture at We Care was thus greatly influenced by its founders.

Caselet 4

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1. The modern business era has witnessed a tremendous change in the factors that determine the success of organizations. A large organization, with an ample amount of capital and a talented workforce no longer ensures success in the industry. It is the ability of organizations to adapt quickly and effectively to changes in the external environment that determines the rate of success in todays highly competitive environment. This is the reason why large organizations, which are averse to change, fail to succeed while smaller ones, which are flexible enough to adjust to new developments, end up making huge profits and gaining large portions of the market share. The major drivers of change can be identified as people, technology and competition. The needs of customers keep changing rapidly and an inability to cater to their expectations regarding quality of products and services might cause them to switch to brands that satisfy their needs. Therefore, it is imperative for a business organization to change according to the changing needs of customers. 91

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Introduction to Organizational Behavior Also, an organization should learn to quickly adapt to development and sophistication in technology so as to remain competitive in the market. Besides, the increased competition not only from domestic organizations but also from foreign corporations due to liberalization of the economy, forces indigenous organizations to be responsive to external changes. The same was the case with Symphony Technologies. Before the Indian economy was liberalized, Symphony was a market leader in many sectors. It was content with its market share and did not feel the necessity to introduce new products or processes to cater to the changing needs of its customers. However, with the opening up of the economy, the nation witnessed a huge inflow of investments and technologically sophisticated products that were welcomed and accepted by the Indian market. This came as a jolt to domestic companies such as Symphony. Not only did Symphonys bureaucratic organizational structure hamper the decisionmaking process at the company, but it also stifled employee participation and creativity. Symphonys very survival was in question as most of its subsidiaries were making huge losses. Moreover, the employees were not trained to cope with technological advancements. These factors resulted in Symphony coming out with products which were no longer in demand and thereby running into losses. Had the organization been sensitive to the external environment and to the changing needs of customers, it would have sustained its profitability and market share. Anish Vaidyas strategy of bringing about a drastic change in Symphonys organizational structure and its processes finally succeeded in sustaining the organization. Thus for any organization to survive in a highly dynamic external business environment, it is imperative that it is flexible and adaptive. 2. A planned change is one which is deliberately initiated by the management to cope with changes in the business environment. The success of a planned change is greatly dependent on the extent of involvement shown by the top management and employee participation in the change process. In the case of Symphony Technologies, the change process was a planned one initiated by the top management under the leadership of its CEO, Anish Vaidya. The process also had the support of the employees, despite their initial resistance. The change process included changing the organizational structure from one of a tall hierarchy to that of a flat organization. It also saw a phenomenal increase in employee participation in organizational processes. The subsidiaries running into losses, and in which there was no scope for improvement were shut down. Excess staff were either retrenched, or the more efficient among them were retrained to occupy suitable positions. New business areas with a market potential were ventured into. Training and retraining sessions were a common feature in the organization to keep the workforce constantly updated on technological advancements.

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All these changes were initiated and supported by the top management and in order to be successful, they required the wholehearted participation of and acceptance by the employees. The change process was successful only because the employees accepted it wholeheartedly. Thus, from Symphonys example, it is clear that any planned change process initiated in an organization to survive in a dynamic and changing business environment, requires the involvement and participation of both the management as well as the employees.

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Part B

Caselet 5
1. Leadership involves directing peoples behavior towards attainment of a particular goal or objective. Different leadership styles can be seen in organizations depending upon the extent to which employees in the organization are allowed to participate in crucial decision making processes. The leadership style exhibited by Ashish Gupta was that of autocracy, wherein the leader makes the decision based on the information available to him, without consulting his team members. In such a style of leadership, the leader is the sole decision maker and pays no heed to the suggestions of the organizational members who are likely to be affected by the decisions. An autocratic form of leadership has the following outcomes The information which the decision maker possesses may or may not be sufficient. Therefore, the decision made may or may not be an informed one, as the knowledge of the decision maker is limited. Besides, no suggestions are taken from those who would be affected by the decision. Sometimes, autocratic leaders do invite suggestions from employees without revealing the actual problem on hand. The decisions, however, are made only by the leaders. Such a style of leadership results in a demotivated workforce. Since no suggestions are invited from the employees, their participation in the organizational processes is minimal. This demotivates them as they are only required to perform routine and mundane jobs, which are neither challenging nor exciting. The performance of employees is appraised based on the extent to which an employee conforms to organizational rules and policies. They are thus discouraged from experimenting with innovative ways of doing routine jobs. Thus, their creativity is curbed and innovation ceases within the organization.

2. Micromanagement arises out of a managers tendency to keep every organizational process and system under his complete control. A micromanager is one who delegates a job to his employees but minutely inspects the way it is being done. Thus, in his attempt to ensure that the job is performed in the right way, he keeps interfering and meddling with the way it is being done. He feels that employees work effectively only when they are being constantly monitored. So, he not only keeps a constant watch on the employees while they are on the job, but also expects them to do it the way he wants it done. This kind of manager ends up over-analyzing things and subconsciously frustrates his/her subordinates by disempowering them. The employees are also demotivated as they perceive that their superior thinks they are inefficient. They get the impression that the manager doesnt trust their capability. In the present case, just because the targets for a week werent met, the manager, Ashish Gupta, forced his subordinates to follow the procedure laid down by him, saying that only then would the targets be achieved. The procedure designed by Gupta, however, did not consider the real market situation in which the sales representatives had to work. This demotivated the staff as they felt that they were in a better position to design an effective procedure to achieve their targets. Further, Gupta observed and monitored the actions of each employee on a continuous basis. This further reduced the autonomy of the employees and served to demotivate them. This continuous monitoring and reduced autonomy even in the case of routine tasks resulted in Mehra and his colleagues deciding to quit their jobs. 93

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The autocratic style of leadership that Gupta exhibited is thus not advisable in the current business scenario. It is recommended instead that organizations seek the enhanced participation of their employees in organizational processes.

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Introduction to Organizational Behavior If Gupta had just explained the problem to his subordinates (in this case, achievement of a huge target) and left it to them to work out how to achieve the target, he would have got better results. This is because the employees would have been encouraged to participate more in problem solving. Thus, micromanagement has a negative impact on employee behavior and motivation.

Caselet 6
1. Due to the increased competition in the present business scenario, organizations are vying with each other to hire the best talent in the industry. They offer large salaries to their employees and numerous other perks and benefits just to retain them in the organization. But todays professionals seem to need something over and above the financial benefits they receive from the organization. They seek greater responsibilities, autonomy, and challenging job profiles. They also desire to work for organizations which allow them to be creative and innovative. The employees want to remain thoroughly updated on the latest developments in their field. To fulfill this need of their employees, organizations should conduct periodic training and development sessions. This enables organizations to ensure that the skills of their employees are constantly upgraded, and this in turn, helps employees as well as the organizations to adapt to changes in the external environment. The realization among the employees that the organization is facilitating continuous development and upgradation of their skills acts as a psychological barrier to their leaving the organization. Thus, mere financial gains do not encourage employees to stay on in a particular organization. Rather, employees look for self-actualization and empowerment along with growth in an organization. Therefore, management in any organization must also concentrate on other means of employee retention like providing learning opportunities to its employees, constantly upgrading their skills, and empowering them to effectively take up new responsibilities. They should also endeavor to design the career graph of employees and direct individual goals of employees towards the achievement of organizational goals. Thus, any effort by the management to cater to the changing needs of employees, will go a long way in retaining efficient employees in an organization. 2. The chief cause for concern for every personnel manager is the dearth of talented workforce. This means that personnel managers have to ensure retention of the human capital in their organizations to minimize the costs of acquiring and training new employees. However, due to the growing competition in the industry and the high demand for talent, employees shift from one organization to another more frequently than in the past. Thus, in the current business scenario, the escalating rate of employee turnover is a major challenge faced by HR professionals. The needs of employees and the factors that motivate them are constantly changing and HR professionals across organizations are trying their best to cater to these needs. Further, technological changes in the external environment demand that employees constantly upgrade their skills. Continuous upgradation of employee skills not only helps organizations to counter the growing competition in the market but also to motivate and retain existing staff. HR professionals can overcome these challenges by taking the following measures: The HR policy must help identify employee needs and ways to satisfy reasonable demands. This helps organizations maintain a low attrition rate. The HR policy should emphasize employee training and constant upgradation of skills so that employees are quick to respond to the technological changes in the external environment. The HR manager should not only select those candidates whose skills and interests match the nature of the job, but also draw up career graphs for individual

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Part B members of the organization. This enhances employee motivation and ensures their all-round development. In other words, personal growth must be linked with organizational growth. Learning must be facilitated by offering new and responsible tasks to employees. Addressing these factors helps HR managers in modern organizations to motivate their workforce as well as to retain them.

Caselet 7
1. The phenomenon experienced by Aishwarya Pandey and her female colleagues at Kalpa Biosciences is called the glass ceiling effect. Glass ceiling refers to the invisible barrier in organizations that prevents women from being promoted to top managerial positions. Research indicates that around 40% of the workforce in organizations consists of women. However, their share in the top management is negligible. Even though modern organizations offer management jobs to women, these tend to be jobs at entrylevel positions only. Many factors contribute to this effect, known as the glass-ceiling effect, which restricts the growth of women in organizations. Some of these factors are:

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Lack of adequate education and training of women employees also forms one of the major reasons for the glass ceiling. Women tend to give preference to family and hence skip training sessions conducted by their employers. There prevails a belief that women are not capable of making tough decisions which might be demanded by crucial decision making positions in organizations. Therefore management in organizations does not promote them to positions that involve crucial decision making responsibilities. An economic consideration from the organizations point of view may be the increased cost of employing a woman, in terms of maternity leave.

These are the most prominent factors that contribute to the existence of glass ceiling in organizations and need to be overcome in order to eliminate gender bias in organizations. 2. Having realized the negative effects of the glass ceiling phenomenon, organizations are taking various initiatives to provide their female workforce with equal opportunities for growth and development. Some of these initiatives are: Organizations have introduced various policies and programs that focus on development of women employees. Some of these include developing detailed 95

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Women are believed to turn down offers of promotion if the new position requires relocating to a different place or if it involves frequent mobility. They are therefore not offered jobs that demand such challenges.

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Introduction to Organizational Behavior career plans for women, training them to handle responsible and decision making positions, effectively. These initiatives have a positive impact on women, specially those belonging to the younger generation. Organizations also implement various support initiatives like mentoring, coaching, and training, which are found to be effective in encouraging women to perform well and climb up the career ladder. Other initiatives include part-time jobs, child care centers, day care facilities for the elderly, etc. which are provided by organizations to facilitate women employees to concentrate on their jobs and help them to strike a balance between their personal and professional lives. In some organizations, female employees are given a choice to accept or reject job responsibilities that require them to relocate frequently. This helps them manage their family along with handling the demands of their job in the organization.

An individuals ability to analyze, process, and interpret complex situations and contingencies describes his conceptual skills. Conceptual skills are of more significance to individuals at the top of the organizational hierarchy. These skills enable an individual to analyze an existing problem, process the information available, and make effective and informed decisions in a problem solving situation. Good conceptual skills enable leaders to predict the consequences of decisions. Thus, while all the three skills are important to individuals in organizations, the relevance of each depends upon the position the person occupies in the organizational hierarchy. Organizations today are trying to inculcate these skills in their emerging leaders by establishing training and learning centers for organizational members. 2. The trait theory of leadership, one of the earliest theories on leadership, stated that leaders are born, not made. In other words, the qualities of leaders cannot be learnt or developed. They are inherent abilities that only a few individuals possess. Therefore, only people with a particular set of traits can become leaders. According to this theory, a great leader would have been great even under different circumstances. However, studies in the field of behavioral management showed that leadership was a skill and an art that could be learnt and developed. Behavioral theory stated that leaders demonstrated a particular trait which played a role in making them leaders. These studies identified behaviors associated with successful leaders.

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The ability of an individual to cooperate with other employees and work in teams determines his human skills. Effective human skills, which develop with a willingness to help other people in the organization, and involves maintaining good interpersonal relationships, helps a leader gain the acceptance of employees. This acceptance plays an important role in determining an individuals success as a leader.

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1. According to behavioral expert, Robert Katz, in order to be effective, leaders should possess the three skills technical, human and conceptual. Technical skill refers to the knowledge and ability of a leader to effectively use a particular process or technique. Employees working at the operational level or individuals offering professional services are expected to possess good technical skills. However, as one goes up in the organizational hierarchy, these skills lose their importance and other managerial skills become more relevant.

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Thus, the various initiatives taken by organizations to encourage the growth of female workforce will help shatter the glass ceiling that exists in most organizations and will allow women to carve a career path for themselves along with managing the domestic front successfully.

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Part B Later, with the development of the contingency theory of leadership, it was believed that leadership qualities changed according to the situation or contingency facing an organization. In other words, a particular style of leadership, which was successful in a particular situation might or might not be successful in another. Therefore, leaders should analyze the current situation and evaluate the suitability of that style in the current situation. Thus behavioral studies propounded that leadership was a quality that could be developed over time with appropriate orientation and training. However, the individual must be open-minded, and must accept and welcome new ideas. Taking this into consideration, organizations now strive to provide their members with excellent learning opportunities. Satyams Learning Center, Wipros leadership workshops, and Tata Consultancy Services leadership development system, are examples of how some organizations are attempting to nurture leadership qualities within their employees.

Caselet 9
1. Due to the increasing competition among the various players in the call center industry and the unconventional work environment, employee turnover in this industry is as high as 40%. However, the constant efforts by the HR Manager, Aditya Sinha, helped provide a people-friendly work environment in the company and so, helped contain employee turnover at a low of 25%. The following features of corporate culture contributed to the low employee turnover at Excel: The regular revision of the financial incentive policy at Excel ensured that the company paid its employees on par with the industry. It ensured that employees did not leave the organization for the sake of a couple of hundred rupees. Employees were, therefore, by and large satisfied with the remuneration offered at Excel and were hence loyal to it. The new recruits were welcomed by the HR manager himself. This showed Sinhas genuine interest in guiding and helping the agents in their jobs. It also showed that the top management was easily accessible to the employees. This enabled the employees to easily voice their concerns, if any, directly to the top management. Open channels of communication existed between the employer and the employees. The management created a transparent communication channel to ensure the accuracy of the messages communicated. Transparency in the communication channel also made it possible for the employees to air their grievances directly to the management. The quarterly meetings arranged with the employees also allowed them to express their views about the organizations systems, policies and procedures. Not only were employee grievances given a patient hearing, but they were also solved to a great extent. The appraisal system in place encouraged the team as a whole to improve its performance in every quarter. Basic facilities like transportation and food for the agents were taken care of by the company. This helped the agents concentrate on their job despite the inconveniences arising due to the odd working hours. The work culture at Excel was employee-friendly. The workplace was made lively with piped music, and monitors flashing news items on the latest developments in various regions of the US, etc. 97

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Introduction to Organizational Behavior All these factors contributed to making Excel a fun place to work for, thereby effectively tackling the potential negative factors at the work place. This, in turn, helped Excel maintain an attrition of 25%, while the industry average stood at around 40%. 2. Although Excel Networks promoted an informal work culture, there were open channels of communication among the different levels in the organizational hierarchy. The management at Excel ensured an open and transparent channel of communication, where any important organizational matter was communicated directly by the HR manager, and sometimes by the CEO himself, so that the accuracy of the message was maintained. This helped effective communication take place among the various levels of the hierarchy in the organization and prevented unwanted grapevine activity which would completely distort the original message that the management intended to communicate. The formal communication system helped both the management and the employees to openly express their views and come up with solutions to various problems. For example, the recent US legislation placing restrictions on outsourcing to other nations made the employees anxious and apprehensive about their future in the organization. However, the organization responded immediately. The top management directly addressed the employees and provided them with the assurance of job security, thereby preventing a panic situation from arising in the organization. Besides, the employees were free to discuss matters pertaining to the organizational systems and procedures directly with a representative of the top management. This not only enhanced employee participation in improving systems and procedures in the organization, but also helped solve their problems at a very early stage. This was made possible by the open channels of communication which drew the attention of the management towards employee concerns at a very early stage.

Caselet 10

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Even today, women are not given the same opportunities for professional growth as their male counterparts. This is because, women are still not accepted, recognized or considered on par with men in most organizations. Women are often asked to assist male workers. They are seldom given the opportunity to lead and are given routine and mundane jobs to handle, which offer little challenge or motivation. Women are generally offered entry level positions, because of the misconception that they cannot make effective decisions that are crucial for the growth of an organization. The management in organizations generally feel that women do not willingly accept challenging or responsible positions. Women are perceived as being susceptible to pressure. Many men in organizations feel that a womans place is in the home and that she is incapable of managing both, home and office effectively. Women are rarely appreciated for delivering exceptional performances. Instead, they become the target of malicious gossip within the organization.

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1. Having been dominated by men for decades, the business environment offers stiff resistance to the professional growth of women in organizations. It is extremely difficult for a woman to progress to the middle and top management levels, despite the fact that womens participation in business has been constantly on the rise. The various factors that inhibit the progress of women up the corporate ladder are discussed below:

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Part B With this kind of biased environment prevailing in organizations, it has become extremely difficult for women to rise up the corporate hierarchy. 2. Organizations have witnessed very few cases where women have reached the top level of management, within as short a time as Kalpana Singh. Her journey to the top was not an easy one. She had to face discriminatory treatment from her male colleagues who refused to accept her capabilities. However, it was her constant determination and untiring efforts that enabled her to become the companys vice president. Singhs keen interest in making a career in business made her take up an entry-level job in a manufacturing firm. She was extremely hard-working, and wanted equal opportunities for growth and promotion within the firm. She was even willing to relocate and never asked for special favors on the grounds that she was a woman. She was willing to take on any kind of responsibility on a par with her male colleagues. This made her a versatile member of the organization, and one who was aware of all the operations in the organization. Even though she accepted and held decision making authority, her superiors were doubtful about her ability to make tough decisions just because she happened to be a woman. They, therefore, interfered in her job to ensure that she made the right decisions. However, this did not demotivate her. On the other hand, she put in extra efforts to gain the confidence of her superiors. Lack of appreciation by her superiors or malicious gossip by her colleagues did not deter her nor did she succumb to work pressure. She tried to maintain a good relationship with most of her colleagues in the organization. Thus, her dedication and commitment to her job helped her reach the top level in the organization structure.

Caselet 11

1. Sexual harassment is defined as the unwelcome advances, requests for sexual favors, and other verbal or physical conduct of a sexual nature that working women could be subjected to by their male colleagues at the workplace. The victims implicit or explicit rejection of these gestures could lead to her employment being jeopardized. Sexual harassment not only affects the individuals performance at work, but also creates an intimidating, hostile or offensive work environment. Like gender discrimination, sexual harassment is considered an illegal act and forms a very complicated part of the employment law. Other forms of sexual harassment include undesirable looks or comments, jokes that are in bad taste, sexual artifacts in the workplace, or the boss being too friendly with the employee.

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2. With incidents of sexual harassment at workplaces increasing by the day, organizations have now become sensitive to this issue. In order to prevent talented women from leaving the organization, organizations are taking all possible measures to address this problem. The following are the measures that organizations most commonly use to curb sexual harassment: In most organizations, a concerted effort that involves all the members of the organization is taken to change their attitude towards women workers. These organizations ensure an attitudinal change in their members by conducting various awareness programs aimed at changing their behavior. Organizations initiate programs to address problems associated with gender biases that may lead to sexual harassment. In many organizations, the organizational policy itself caters to solving these problems, by strictly prohibiting activities that may lead to charges of sexual harassment. 99

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Introduction to Organizational Behavior Most organizations have set up special redressal bodies that deal with problems faced by working women. These look into any allegations of misconduct and try to protect the women in the workforce against any kind of harassment or discrimination.

Thus organizations today, in their attempts to attract and retain talented women in the workforce, are striving to provide a safe and encouraging workplace for women.

Caselet 12
1. Going by the belief that two heads are better than one, organizations of late have been encouraging employees belonging to the middle and lower levels of the organizational hierarchy to participate in the decision-making process. Such a process where decisions are made by a group rather than a single individual at the top, is known as group decision-making. There are various advantages in having employees participate in the decision-making processes. Some of them are:

2. One of the demerits of group decision-making is the conformity pressures of being in a group. Because of their desire to be accepted by the group and its members, individuals tend to let go of their values, opinions, views, etc., in favor of the majority opinion or views. In this case, the group pressures for conformity inhibited the employees from evaluating the new proposal critically, though it was against the existing norms and procedures. When a group succumbs to such pressures of conformity, groupthink takes place. Groupthink hinders the process of effective decision-making in groups. It also results in the deterioration of the mental efficiency and, moral and rational judgements of individuals participating in the decision-making process. The characteristic features of groupthink are as follows There appears to be an illusion that the entire group subscribes to the decision made, even if it contradicts the basic values and norms upheld by the group. Even those members who are momentarily opposed to the groups opinion are pressurized into conforming to the decision made by the majority. Sometimes, members themselves remain silent even if they hold differing views about a situation so as to avoid deviating from the group consensus. They also go to the extent of rationalizing the decision made by the rest of the group, thereby devaluating the rationale behind their own opinion.

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Thus groupthink occurs when members of a group find it better to be in agreement with the group they belong to, rather than raise doubts, however genuine and rational, against the opinion or decision of the group.

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It has been observed that when decisions are made collectively, acceptance of the new decision becomes easier. This is because the participants themselves were involved in making that decision.

The decisions made are generally of higher quality than those made by a single individual as various aspects of the decision-making situation are considered.

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Since individuals working together in organizations show wide diversity in terms of educational qualifications, culture, gender and demography, the ideas contributed by them to solve a problem on hand are also diverse. In other words, various aspects of the decision-making situation are explored in a group decisionmaking process and the decision made is the most effective one.

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The information and knowledge gathered from the participation of several individuals in the decision-making process is more complete and comprehensive.

Part B

Caselet 13
1. Menons response to the performance appraisal illustrates the role equity plays in motivating employees in organizations and is best explained by the equity theory proposed by J. Stacy Adams. According to the theory, individuals compare their efforts and the outcome of their efforts with that of others. If individuals perceive that the ratio of their efforts to outcome is the same as that of others, they feel that the organization has been fair. However, if they feel that this ratio is unequal, inequity results and they tend to react in such a way that this inequity is eliminated. The equity theory thus proposes that individuals are not concerned only with the rewards they receive for their efforts. They also compare their rewards with what others receive for their efforts. In this case, Menon compared her input to outcome ratio with that of her colleague. When she observed an inequity in the ratio, she was demotivated and so began considering other job options. 2. As suggested by the equity theory, once an individual perceives an inequity between his/her input to outcome ratio and that of others, he/she behaves in a way that eliminates this inequity. The inputs might be effort, experience, education and competence while the outcomes could be the salary, hikes, recognition, incentives, etc. In the above case, Tina Menon could have reacted in any of the following ways to reduce the inequity: Menon could have changed or modified her perception of herself. In other words, she could have seen the outcome of the performance appraisal in a more positive sense. She could have made a self-assessment of her performance, assessed whether there were any shortcomings in her performance, and in what aspects her performance was not up to the mark and then tried to perform better in order to get the desired outcome. She might have changed her opinions and perceptions of Kapoor, in terms of her inputs, performance, etc. In other words, Menon might begin to feel or realize that her performance might not have been as good as that of Kapoor, thereby justifying the actions of her superior.

Caselet 14
1. Anand and his organization were facing the consequences of being too dependent on a particular person Nair. In other words, the primary problem that Delta Manufacturers faced was that of dependency. When someone possesses a resource that is scarce and required by others, it gives the person possessing the resource a certain amount of power over others. Dependency increases when the resource possessed is important, scarce and non-substitutable. Also, the greater the dependency of B on A, the greater the power A has over B. In the above case, the marketing department was dependent on a single individual, Vishal Nair. Nairs four-year experience as head of the marketing department equipped him with expertise and skills that were difficult to replace. This expertise in his domain made the organization and its members dependent on him. The general managers lack of experience in marketing further enhanced his dependency on Nair. Nairs excellent interpersonal relationships with the rest of his team made it all the 101

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She could have quit her job and looked for some other option that rewarded her equitably in comparison with Kapoor.

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Menon could even have chosen a different referent. In other words, she could have compared her input-outcome ratio with that of some other person in the organization.

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She could have enhanced her outcome quantitatively at the cost of quality.

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Introduction to Organizational Behavior more difficult for Anand to sack him as it would have made the rest of the employees in the marketing team hostile towards the management. Besides, the post held by Nair was crucial to the performance of the entire team. Thus, all the above factors contributed to the extreme dependence of the marketing team on Nair. And with Nair refusing to cooperate with Anand, the efforts to improve the performance of the team were affected. This, in turn, reduced the productivity of the organization as a whole. 2. Dependence on a single entity in the organization has to be maintained at a low level, as this kind of dependence increases the chances of a crisis occurring. Delta depended excessively on Nair because he possessed skills that were rare in the team and played a crucial role in the organizations development. The inability of the general manager to find a qualified replacement for Nair also added to the problem. Anand could have handled the problem better if he had acted in one of the following ways: Anand could have identified and recognized the extent to which the department and the organization were dependent on a single person, i.e. Nair, and could have developed a strategy to reduce this dependence. Alternatively, he could have started looking for a replacement for Nair, right from the beginning. He could then have dismissed Nair for poor performance and recruited a more capable person for the post.

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1. Roopali Deshmukh implemented the MBO process as an intervention to improve the productivity of her sales team. She successfully implemented the process by following a sequence of effective planning, control and development. The following are the various phases of the MBO process that led to its success: The MBO program was initiated by the top management which set the overall organizational goals and communicated them to the people down the hierarchy. However, the management did not interfere much with the means of achieving the objectives. In other words, it gave adequate autonomy to its employees to implement the process.

Deshmukh then drafted a plan of action to achieve the targets decided by the management for the year. She invited employee participation in various aspects of implementation of the program. She encouraged her team members to decide the role each one would play in order to achieve the teams target. She sought their suggestions to determine, in specific terms, the short-term targets that each individual would achieve. These short term targets were in line with the teams long term goals and objectives. Deshmukh also set specific time frames for the accomplishment of the targets. Thus the goals were not only specific but also time bound.

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He could have come up with innovative parameters to measure the short-term performance of the marketing team, rather than wait for more than six months to actually obtain the results of the teams performance.

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Anand could have sought the help of the heads of those departments which were dependent on the marketing department and could have worked out a strategy to improve the marketing teams performance.

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Part B Deshmukh closely monitored the performance of all the team members without actually interfering in their job. She also offered positive feedback to her subordinates and this helped them overcome their shortcomings and perform effectively.

Thus the MBO program implemented in the sales team proved to be beneficial to both the employees and the management. 2. Management by objectives is a goal-setting tool where goals are set by employees in collaboration with the management. The aim of management by objectives is the achievement of organizational goals. MBO involves setting up short-term goals for employees in line with the long term objectives of the organization. MBO is thus an effective tool for planning, control and development. Most organizations use MBO as a control mechanism to ensure that there is no deviation between employee performance and organizational objectives. Organizations also use MBO as a performance measurement tool. Since MBO is a bottom-up approach, the organization gains from the participation of employees in the establishment and achievement of employee goals. Since individual goals are set collaboratively by employees and employers and are closely linked to the organizations mission and objectives, achievement of individual goals results in accomplishment of organizations objectives. Thus an effective MBO program not only motivates employees to achieve their individual goals but also helps in attaining organizational goals.

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Trust and work ethics are two important factors that determine the success of job sharing. People who opt for job sharing must have adequate trust and confidence in each other. They must act like a single individual and must value the end result rather than their own personal goals. Employees who share their job with another person must keep meeting each other often to ensure effective planning and implementation of their job responsibilities.

2. Job sharing provides a variety of benefits for both employees as well as employers. Employees benefit from job sharing by having the flexibility and freedom to work at convenient timings. They also find it easy to balance their personal and professional lives by adopting this type of alternative work arrangement. This also helps reduce work-related stress in them. The employers also reap several advantages by implementing the concept of job sharing in their organizations, provided they take the necessary measures to implement the system effectively. Job sharing, of late, has been used as an effective 103

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Employees who adopt this type of alternative work arrangement must ensure that there is proper communication and coordination between themselves so that every aspect of the job is accomplished and communicated effectively to the other partner despite both working on the same job during different work timings.

Employees should be trained properly in order to coordinate with each other under the new pattern of work arrangement.

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Job sharing is a tool that is generally used to cater to the varying needs of the organizations diverse workforce. Therefore, only organizations that value workforce diversity can successfully implement the system of job sharing.

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1. Job sharing has numerous benefits to both the organization as well as the employees. However, its successful implementation requires fulfillment of certain prerequisites which are as follows:

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Introduction to Organizational Behavior retention technique, and to attract, employ and retain talented women and retired persons in the workforce. The organizations have the advantage of paying only for one employee although they utilize the skill sets of two persons. Job sharing also helps maintain workforce diversity as it is a tool to cater to the needs of different groups of people in organizations. It helps motivate people and enhance their morale, thereby leading to enhanced productivity. Thus, job sharing proves advantageous to both employees and the employers. However, there are also a few pitfalls and serious repercussions that could arise by implementing the job sharing arrangement in organizations. A lack of communication between employees sharing a particular job might lead to a counterproductive organizational outcome. There have been cases where customers of organizations implementing the concept of job sharing felt neglected as there was no single person to solve their problems. Also, organizations sometimes find it difficult to split employee benefits between two individuals although the salary would be shared by both equally. Thus, job sharing can prove effective only if these pitfalls are addressed.

1. An organization that is open to changes and adapts itself to those changes is called a learning organization. A learning organization is one which has developed the capacity to adapt and change in a planned and systematic manner so that it stays ahead in the competition. The establishment of a learning and development center, Excel Development Center, indicates a conscious effort on the part of the company to enhance the skills and knowledge of its employees. With the help of EDC, Excel ensures that all employees of the organization are given constant training to upgrade their knowledge and skills in their respective domains. Apart from the mandatory 80 hours of annual training, it also facilitates its employees to attend other training sessions as and when a need arises. It also endeavors to ensure the all-round development of its employees by allowing them to attend training sessions conducted by behavioral experts, who help them understand the dynamics of the organizational behavior. EDC spends an average of Rs.25 crores merely to ensure that its employees are technically updated. The world class learning facilities provided by EDC and the various tie-ups it has entered into with academic institutions has made Excel Computer Services an effective learning organization.

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2. In order to ensure that continuous learning takes place in organizations, the management must initiate the following measures Commitment of the management towards ensuring constant change and innovation in the organization is essential to foster a learning environment. Apart from investing in technology and installation of advanced equipment, the management must also invest in development of its human talent. Employees must be trained in such a manner that their skills are enhanced to adapt to changes in the external environment. It should also constantly encourage innovation and creativity among its employees. The traditional hierarchical structures in organizations may sometimes pose barriers to effective learning and knowledge-sharing. Reducing the number of hierarchical levels within the organizational structure may facilitate learning across the organization. Cross-functional teams can also be set up to increase the interaction among employees, which in turn enhances coordination and learning among the various departments of the organization.

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Caselet 17

Part B A change in organizational culture may sometimes become imperative if the conservative values of the organization are seen to hinder creativity and innovation. A culture of openness, risk-taking and growth has to be fostered in order to ensure continuous learning and development. The organization must encourage innovation among employees even if this involves investment of substantial resources.

Implementation of the above measures enables management to manage learning in the organization effectively and to make the organization a learning organization.

Caselet 18
1. Every expatriate is faced with the challenge of understanding a new culture and appreciating the differences between the host culture and the culture of his home country. He must then utilize his business skills and abilities to manage his responsibilities in the new context effectively. In the present case, Behl also had to face a lot of other problems, as discussed below:

2. To ensure a successful cultural adaptation of expatriates, organizations must formulate an effective expatriation policy. The policy must cater to various aspects of adaptation which include organizational efforts to change and develop an efficient workforce to meet the requirements of a multicultural work environment. The other factors that require the managements attention are as follows: Selection of the employee Although technical expertise is a crucial factor for organizations when they select employees for foreign assignments, there are various other factors that determine the success of cultural adaptation of the employee. It is important to select only those who have the flexibility to learn and accept the values and norms of the new culture. A self-assessment tool such as a questionnaire may be used to determine whether or not the timing, the country to which the employee is being sent and the duration for which he will have to stay abroad are acceptable to him as well as his family. The perception of the employee about the new culture and his attitude towards learning that culture is also an effective criterion for selection. Effective training Organizations must provide adequate training to prospective expatriates to help them adjust to the new environment. The expatriate must be trained in the local language of the host nation. This would help him 105

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All these resulted in a total mental and emotional exhaustion for Behl and his family. Most expatriates face similar problems even though overseas assignments seem lucrative and challenging.

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The new workforce, dominated by French nationals, was tough to deal with. Behl had to face a culture shock as their cultural practices, norms, and work values were significantly different from those in India.

Introduction to Organizational Behavior communicate effectively with the natives. He should also be made aware of the values, norms, customs and cultural orientations at the new workplace. Family members of the expatriates should also be trained in the new culture. Domestic support Organizations must help expatriates relocate themselves and their family by offering assistance in getting a job for their spouse, and providing educational allowance for their children. First assignment The first assignment of the expatriate must essentially be one in his own area of expertise. This would help him gain confidence in the new work environment. Constant support The expatriate must receive constant support from the parent organization as this would motivate him to perform better. A mentor often plays a crucial role in enhancing the performance of the expatriate by offering him adequate moral support to help him perform effectively at the new workplace. Home leaves If employees are granted leave to visit their country once a while, difficulties in readjusting to the home culture will be minimized. The number of home leaves may differ with differences in the tenure of deputation. Repatriation policy Organizations must also have an effective repatriation policy which addresses the needs of people coming back to the home country after a specific period. Issues like performance appraisals of the expatriates, effective placements once they are back, assistance in relocation, etc. should be taken care of by the repatriation policy. This is done to ensure an easy integration of repatriates into the parent organization.

Caselet 19

Cost savings Inviting suggestions from an in-house team is definitely more cost-effective than employing an external consultant for the purpose of problem solving within the organization. Besides, employees might also propose new alternatives to existing organizational systems and procedures, which might help reduce operational costs. Increased revenues Employees might also suggest ways and means of earning extra revenues like the suggestion given by Fontaine of the Justice Department, which helped it cut down its costs by a significant amount. These suggestions may not only reduce costs but enhance profits as well. Improved quality As employees are the ones who are actually on the job, they are aware of the difficulties of existing procedures. They are thus in a better position to come up with alternate suggestions to the existing systems that would result in enhanced quality. Therefore employee participation enhances the quality of organizational systems. Better customer service The variety of ideas generated by employees in an organization caters to the ever-changing needs of customers. By pooling together all these ideas, the organization will be in a better position to satisfy these needs, thereby providing better customer service.

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1. As is evident from the examples given in the caselet, implementation of employee suggestion programs that encourage employees to participate in the problem-solving process of the organization, creates a distinct competitive advantage for these organizations. Some of the significant benefits of employee suggestion program are as follows:

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Part B Employee satisfaction Participation in organizational problem solving processes encourages employees to involve themselves in various organizational processes. This, in turn, motivates them and creates a sense of belongingness in the organization, thereby enhancing their job satisfaction. Improved corporate culture With enhanced employee participation, resulting in a satisfied and motivated workforce, the overall culture of the organization improves.

Thus suggestion systems prove to be an effective tool to motivate employees, enhance their performance, and increase their productivity, thereby contributing to the organizations bottom-line. 2. Employee suggestion programs are aimed at encouraging employee participation and also to reward employees for contributing innovative, novel and creative ideas which benefit the company. However a few measures must be taken by organizations to ensure the success of employee suggestion programs. These are:

Caselet 20
1. The survey feedback methodology is a widely implemented tool to bring about organizational change and organizational development. The methodology involves the use of questionnaires to identify employee perceptions of various organizational processes and systems. The responses to these questions are evaluated and feasible 107

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Employees who contribute effective suggestions, the implementation of which helps the organization cut costs or earn revenue, must be rewarded. Timely rewards stimulate employees to generate more ideas, which in turn might result in improving organizational performance. Therefore employees who generate productive ideas must be adequately rewarded. Both, intrinsic and extrinsic rewards prove to be effective in motivating employees. Finally, the suggestion system must also include vendors, suppliers, customers and other stakeholders as they might also offer valuable suggestions for organizational improvement.

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Organizations must ensure that employee suggestions that are worthwhile are speedily implemented. Employees expect a quick feedback or a response of some sort from the management regarding their suggestions. The managements failure to give timely feedback might demotivate employees from providing further ideas for organizational improvement.

Employee suggestions must be reviewed at regular intervals, preferably not by a single individual in a position of authority but by a committee comprising members from a cross-section of the organization. Organizations are therefore introducing online suggestion systems to facilitate regular and speedy review of the suggestions obtained.

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The employee suggestion program must be an open one and should encourage participation of employees from all levels of the organizational hierarchy. It should be a simple and easy to use system accessible to all the organizational members.

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At times, managers or people in supervisory positions in organizations hesitate to invite employee suggestions. They feel that seeking the views of subordinates to solve organizational problems might threaten their power and authority in the organization. Therefore, organizations must encourage and reward supervisors and managers who invite employee participation in improving organizational systems and procedures.

Introduction to Organizational Behavior solutions to such problems are collectively arrived upon. In other words, in survey feedback methodology, employee suggestions and views are used to solve organizational problems. Organizations benefit in a number of ways by deploying survey feedback technique. The direct benefits include the identification of the organizations strengths and weaknesses, and drafting of action plans to capitalize on its strengths and work upon its weaknesses to achieve organizational goals. The implementation of survey feedback enhances employee morale as it encourages employee participation in solving organizational problems. It also works as an effective tool for empowering organizational members. Survey feedback methodology is an effective problem-solving technique. The entire process, right from problem identification to drafting an effective solution to the problem, involves the participation of the members of the organization who are in a better position to handle the situation as they are the ones who are most familiar with the job processes. Therefore the survey feedback methodology results in solving the problem most effectively. However, the success of the survey feedback methodology depends on the extent of employee participation, in terms of how open they are in expressing their areas of concern and how enthusiastic they are in suggesting probable solutions to the problems. The greater the participation of the employee, the more is the effectiveness of the technique. 2. Employee participation is one of the key factors for the success of survey feedback methodology. However, employees tend to hesitate expressing their concerns through this technique due to an inherent fear of confidentiality. Employees are generally apprehensive about negative consequences if their point of view happens to differ from that of their superiors. Therefore, in order to ensure complete employee participation, organizations have to take a number of measures. Some of these are: All the members of the workgroup dealing with the analysis of the feedback must conform to the confidentiality norms. They must not take advantage of their role and position in the workgroup to misuse the information or any part of the discussion that follows in the work group.

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Any information regarding the survey must be shared with others only with the consent of all the members of the group. The varied opinions of people must be accepted and appreciated. All members of the workgroup must be treated with respect and honor even though their perspectives and opinions might differ.

Different points of view within the workgroup that bring in varied opinions about a particular work situation must be encouraged as they provide the group with a wide range of options to solve the problem on hand. The workgroup must work together in mutual trust and harmony that yields satisfaction and motivation and an improvement in organizational systems and processes.

The above measures, when adopted ensure confidentiality of the survey responses, and play an important role in determining the success of survey feedback methodology. However, at times it becomes important to trace back the identity of the respondent. Under such rare circumstances, a unique code may be given to each employee, which can be used by responsible officials.

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All the responses of the employees to the questions asked in the questionnaires must be confined to the knowledge of the members of the workgroup.

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Part B

Caselet 21
1. Human relations is the study of how people can work in groups and teams to satisfy both organizational goals as well as personal needs. Unlike postulates of scientific management, human relations movement focuses on the attitudes and feelings of workers. It propounds that informal groups and norms influence individual behavior in organizations. In other words, human relations is the integration of personal needs and organizational goals. Human relations is a blend of various interrelated disciplines like psychology, social psychology, sociology, anthropology etc., that has enabled a better understanding of individuals in organizations. Organizational behavior, on the other hand, is the study and application of knowledge about how people as individuals and groups behave in an organization. In other words, it is a study of the human aspects in organizations. Organizational behavior is very important in understanding the factors that motivate people at workplace, how to motivate them, and how to enhance and constantly develop their skills and abilities. OB thus taps potential human performance by the effective utilization and constant development of human talent. With significant contributions from various fields of psychology, social psychology, sociology, etc., HR and OB facilitate effective problem solving processes in organizations. Contributions from these fields have enhanced the comprehension of both macro aspects of human behavior like group processes and organization development, and micro aspects such as decision making, communication, leadership and innovation that facilitate individual and organizational change.

Caselet 22
1. Employees in organizations learn in a number of ways. One of the most effective learning processes is observational learning. Employees tend to learn more by simply observing others at the workplace and emulating their behavior. This is called observational learning. It takes place in two phases first, the employee merely 109

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In todays rapidly changing business environment, employees undergo more stress, greater frustration, and have higher job expectations. These factors may affect their performance. Realization has now dawned upon organizations that employees, i.e. human resource is its most important asset. Hence, organizations are leaving no stone unturned to develop the skills of their employees to keep their employees prepared for any new development in the external environment. Talent and skill of employees can be honed by training, motivation and provision of opportunities for education and personal development. Organizations are seen investing substantial amounts for training their employees and for upgrading their skills regularly. A manager today spends ample time in improving interpersonal relations and directing employees to improve their quality of performance. It is very important for the superior to know the factors that motivate an employee since the present day employees are more educated and more demanding. Organizations too have become more complex than what they were earlier, and so require greater managerial skills for effective management. Further, government regulations, labor problems and the growing demands of customers subject managers to higher levels of stress. In such a scenario, a knowledge of human relations and OB contributes significantly toward effective management of organizations.

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2. Human relations and OB play a significant role in the development of skills of employees and improvement of organizational performance.

Thus HR and OB have helped organizations gain competitive advantage by facilitating a harmonious working of human performance and other resources.

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Introduction to Organizational Behavior observes the way in which others behave in a team. He frames a mental picture of that behavior and its consequences. He then enacts the learnt behavior and studies the outcome of displaying it. If the outcome is favorable, he tends to continue with that behavior and keeps repeating it. However if the outcome is unfavorable, he is likely to discontinue exhibiting such behavior. Observational learning plays an important role in shaping employee behavior in organizations. Employees modify their behavior according to the expectations of the environment in which they work. In other words, employee behavior is a function of the environment and the behavior of others in the organization. Thus, an individuals behavior depends on his cognition and the social environment. Observational learning gains even more significance in case of new employees. While the incumbents do possess a basic knowledge of their functions, other important aspects like expectations that the organization has from its members in terms of discipline, the way its members dress to work, etc. are learnt by observing other members of the group. This form of learning therefore helps employees adjust themselves in a new environment.

2. The case deals with effecting a change in the behavior of Sonal Mehra, a new member in Chawlas team. The behavior and attitude of Mehra affected the behavior and thereby the performance of other members of the team, which in turn resulted in negative organizational outcomes. Chawla therefore wanted to shape Mehras behavior in a way that would facilitate achievement of organizational goals. He attempted to do so by implementing one of the most important principles of learning punishment. Punishment is an attempt to decrease the probability of occurrence of a behavior by introducing something aversive that discourages the behavior. Since, punishment is an unfavorable outcome, an individual tends to abstain from such behavior to avoid negative consequences. Chawla showed displeasure about Mehras behavior by curtailing her chances of promotion to a higher position in the organization. This loss, he thought, would bring about a positive change in her behavior. However, he found that despite being punished, Mehra did not change her behavior. Thus, in this case, punishment was an ineffective tool as far as changing Mehras behavior was concerned. The learning process suggested by Abhinav Raj is known as reinforcement. Reinforcement is a positive way of shaping employee behavior. To reinforce/strengthen a certain behavior, means to encourage that behavior by rewarding the employee when he/she exhibits that behavior. In other words, when a particular behavior is rewarded with a positive consequence, employees are encouraged to repeat it. In this case, Abhinav Raj intended to shape Mehras behavior by rewarding her whenever she behaved in a way that was favorable to the organizational goals and objectives. This indeed helped change Mehras behavior, which in turn led to positive organizational outcomes.

Caselet 23
1. In the given case, the principle of closure was in operation. According to the principle of closure, a person may sometimes perceive a whole, where it does not exist, and at other times, a person may not be able to perceive a whole although one exists. The employees of the textile designing unit at Goa perceived a complete picture although there were many missing gaps. They saw that their boss, Sethi did not return to office after the holidays and a new boss, Gulati, had assumed his position. This led them to believe that a strong reason must exist for such a sudden 110

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Thus, observational learning plays an important role in shaping employee behavior, so that a cultural fit is established between the employees and the organization.

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Part B replacement to have taken place. Although they were aware that Sethi was on extended leave, in light of the new development, they attributed their own reasons to his absence. They focused on only one fact without an official announcement and without a formal farewell being given to the old boss, a new boss had assumed office. Sethis mention of having a party after the holidays led them to assume that either Sethi himself was unaware of the change that was to take place or he had intentionally concealed the information from them. The employees perceived that such a situation could not have arisen unless he had done some wrong. Further, the employees attempted to support their views with the observations made by them regarding the extravagant lifestyle of the Sethis. They presumed that Sethi had been dismissed for misappropriating companys funds. 2. The corporate office should not have sent a relieving letter to Gulati without confirming Sethis transfer or, at least it should have mailed a copy of the letter to the Goa unit. The management should have asked Gulati not to report at Goa until the issue of Sethis transfer had been sorted out. If the management had taken any of these steps, it would have avoided the embarrassing situation that arose at the Goa unit. The situation that arose, and the subsequent allegations made against him, would no doubt, have hurt Sethis feelings and demotivated him. Since the management was unable to prevent the situation from arising, the least it can do now is to take measures to correct the unfortunate happening. The corporate office can arrange a farewell party for Sethi and ensure that a representative from the top management attends the party and explains to the staff at the Goa unit what actually happened and the circumstances that had led to the misunderstanding. This will assure Sethi that the company cares for him and respects his feelings. Sethi faced this embarrassing situation because of poor communication between the corporate office and the units. In the absence of proper information, rumors spread fast and lead to unpleasant situations. Therefore, the management should take steps to improve the flow of formal communication in the organization to prevent such situations arising in the future. The management should also keep track of the informal communication within the organization, and if they observe that any wrong information is being circulated, they should immediately use formal channels to communicate with the employees. When information flows freely between various hierarchical levels and across levels, employees will depend less on their perceptions to fill the gaps in information and the probability of undesirable situations arising will be less.

Caselet 24

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1. There are five methods that are widely used to resolve conflicts. These include avoiding, dominating, accommodating, compromising and problem-solving. In avoiding, conflicting parties stop interacting with each other and eliminate the need for resolving the conflict. This is not an effective method because the conflict remains unresolved. Moreover, Kapoor and Shah are in the relationship of superior and subordinate which requires them to frequently communicate with each other. In the dominating method, each individual tries to satisfy his own interests without concern for the other individual. This is also not an effective method of resolving a conflict because while one of the conflicting parties may win over the other, the one that loses will develop hostility towards the other party. Therefore, they are likely to get into conflict again in the future. In accommodating, one party subjugates its interests to satisfy the other party. In compromising, the conflicting parties give up some of their demands in order to resolve the problem. These methods lead to dissatisfaction and discontentment among the parties. In problem-solving, both the parties sit together, discuss all the factors that led to the conflict and try to arrive at a solution 111

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Introduction to Organizational Behavior that is mutually acceptable. This is the most effective method of resolving a conflict. Kapoor and Shah can resolve the conflict between them by using the problem-solving method. 2. As an employee with Navya Products Ltd since its establishment, Shah got many clients for the company and contributed to its growth. He reported directly to Sinha until Kapoor was appointed in the higher management cadre. This resulted in a decline in the importance given to Shah. Prior to the restructuring of the company, Sinha called Shah and his colleagues for all important meetings and strategic discussions. Now Kapoor attended such meetings and Shah had to depend on him for all information. Although the change was not acceptable to Shah, he could not give vent to his feelings. Therefore, he expressed his anger through his actions and behavior. He always opposed Kapoors views during meetings. He stopped responding to customers queries in his usual polite manner. Shah must have felt that when Kapoor was given so much importance, the responsibilities also should be given to him. Therefore, he stopped visiting customers. He ceased identifying himself with the company and decided to part with it. Sinha must not lose an efficient manager like Shah. Sinha should have a personal talk with Shah and explain the factors that necessitated the appointment of Kapoor and other personnel in the senior management cadre. Since Kapoor and others have the experience in dealing with international companies, which Shah lacks, Shah should understand the need of the situation. He should also recognize and improve upon his shortcomings in order to go up the ladder in the company. Sinha may create separate divisions for international operations and regional operations. Shah may be given a responsible position at the regional level and the need for him to report to Kapoor can be avoided so that his self-esteem needs are fulfilled. These measures would help Sinha to retain an experienced employee like Shah.

Caselet 25

1. The quality awareness of Sharp was poor prior to the survey. It did not check the quality of products before shipping them to customers. Most of the complaints from customers concerned the quality of products delivered to them. It had become a regular feature for the company to reimburse the customers with the mailing charges as well as replace defective products. Although the customers placed the orders well in time, the delay in processing orders prevented the company from being able to deliver the products in time and make use of economic modes of transportation. The recurrence of such instances will certainly drain the companys resources in the longterm. The means are as important as the end. While the company was able to satisfy its customers it had to spend more resources than necessary to achieve the objective. If the company continues to incur such high costs on rectifying its mistakes rather than preventing them, the financial health of the company will be badly affected and it may find it difficult to survive. The committee was, therefore, right in suggesting that the company should improve the way it functioned, implement TQM and empower its employees. 2. Sharp Enterprise used TQM to improve the quality of its processes and services. TQM involves giving attention to each and every aspect of an organizations operations to ensure quality. TQM emphasizes continuous improvement of quality. As part of TQM, organizations may use one or more of the techniques of self-managed teams, task forces, quality circles and statistical control. Self-managed work teams comprise employees selected from different departments who are empowered to take decisions related to their work and the work environment. These teams attempt to identify the requirements of customers and the problems

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Part B associated with existing products and services. They collect information pertaining to the organization and try to identify the reasons for the failure of the organization to meet customers requirements. They then list out the measures to be taken to improve the products and services of the organization. If the list is too long, the teams hold discussions and determine the measures that need to be given priority. They also develop strategies to implement these measures. Such measures are initially implemented in selected departments and feedback obtained from the employees. Based on the feedback, they make necessary changes in their plans and strategies. The process is repeated till the desired improvement is achieved in the organization. The procedure is then standardized and applied throughout the organization. Necessary monitoring and feedback processes are established to track the improvement made in various processes. Statistical quality and process control techniques are used to analyze and control deviations in products and processes. TQM helps to increase the productivity and efficiency of an organization. It also improves the quality of products and services, cuts down the costs of the organizations operations, and improves customer satisfaction and profitability of the organization.

1. The communication strategy of Yani is effective because it encouraged free flow of information across the organization. The mission, goals and strategies of the company were communicated to employees. When employees know the mission and goals of their company, they are motivated to achieve them. Yani sponsored get-togethers of employees from various departments where they interacted with each other and exchanged information. Employees could also read about their company by accessing the in-house electronic newsletter. Yani encouraged two-way communication. Employees could communicate with senior management through e-mails and intranet. Management encouraged employees to give suggestions to improve the processes of the company. The mission, goals and values of the company are what the management needs to communicate clearly to their employees. Employees should also be made aware of their role in the organization and the importance of the work done by them. Some companies also share information about financial performance, like sales and profits, with their employees. Employees are increasingly demanding that management share more information about the company with them. Companies like Wal-Mart, Home Depot and Sears share key information with their employees. These companies also accept suggestions from their employees to improve the way their businesses are conducted. These measures have helped companies improve their productivity and profitability. 2. Yani was not able to procure business from clients as there was a slowdown in the IT industry. If it retained all its workforce, it would not have been able to pay salaries to its employees. Yani did the right thing by laying off the excess manpower. The employees could seek jobs elsewhere. Yani even assisted them in finding employment. When Yanis business improved, it recruited more manpower and gave preference to its ex-employees. The management communicated directly with the employees in an emergency meeting that they were being laid off. Yani also explained to the employees the reasons leading to the decision. Yani announced a benevolent severance package and offered counseling sessions for employees who were badly affected by the news. The management was right in conveying the information in a face-to-face session. There was no point in delaying the bad news. If the employees were not informed formally, they would get the information from the grapevine. This would lead to confusion 113

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Caselet 26

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Introduction to Organizational Behavior among employees and they would be wondering whether they should continue to work for the organization or look for another job. The formal communication eliminated any ambiguity.

Caselet 27
1. A self-managed team is a leaderless group of employees in organizations where employees themselves are responsible for a variety of functions like developing production schedules, improving the quality of work life, resolving conflicts within the group, increasing output and organizational effectiveness. Self-managed teams are characterized by multiple skills, common goals, interdependence of members, authority and accountability. Each member of the team masters a variety of skills and all the members work towards a common purpose and cooperate with each other in accomplishing it. The teams are entrusted with a high level of responsibility. Organizations can contribute to the growth of self-managed teams by designing tasks in such a way that they interest and motivate the team members. The tasks should not be pieces of work but be whole, meaningful and significant. Team members should be given reasonable autonomy to complete the tasks without having to consult senior managers unless a major problem arises. The tasks should require application of a variety of skills so that all the members need to cooperate with each other to complete them. Organizations can help employees acquire a variety of skills by job rotation and giving them the necessary training to perform those jobs.

The management should entrust employees with higher responsibilities.

Caselet 28
1. When Anjali Nayak joined the company, she was given a certain job description. The manager, Kishore Sharma explained to her how she had to carry out her roles and responsibilities but did not tell her anything about the communication policies in the organization. The management left it to the employees to learn the communication procedures through experience. She was able to communicate effectively with her team members because she was their superior. They accepted her instructions in whatever way she communicated them. In fact, she kept her team members happy by 114

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The top management does not give much desired support to self-managed teams. The management does not trust employees and hesitates to give them greater responsibilities. Supervisors and middle managers often resist change because they perceive it as a threat to their job. Employees also resist change due to the fear that they may be expected to achieve ambitious production targets.

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Following are the barriers which often come in the way of effective implementation of self-managed teams:

Employees should be encouraged to take risks and the management should tolerate mistakes in the initial stages.

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The top management should develop a clear vision and establish values and articulate them to employees in such a way that they share these values and are committed to achieving them.

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2. Some of the essential prerequisites for successful implementation of self-managed teams are:

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Part B encouraging upward communication. This is evident from the way she handled the decline in performance in one of the employees. She did not deal harshly with the employee. Instead, she called him and asked him the reasons for it, listened carefully to his problem and promised to take necessary action to solve it. Therefore, it is clear that she is an effective communicator. When she came to know that the customers wanted to be put on to the MD directly, she investigated the matter, found the reasons for it and communicated it to her team members. Her communication with her team members was always smooth. She hesitated in communicating matters to the manager because she was never sure when he would shout at her for conveying some matter. Also, she had not spent enough time in the company to be able to observe her colleagues and know about the communication policies. Therefore, the absence of clear directions regarding the companys communication policies was the major reason for Nayaks failure to communicate effectively with the management. 2. When Nayak arranged for a party to felicitate her team on being rated best by the customers, Sharma got it canceled. He warned her that she should never take such an initiative without consulting him. Sharma could have developed better relations with Nayak if he had warned her against such behavior in the future, but allowed the party to be conducted. As things went, Sharma spoilt the employees plans and demotivated them. It was true that Nayak had committed a mistake by not consulting her manager before making arrangements for the party. But Sharma could have communicated the mistake to her without being harsh. In fact, Sharma could have used this opportunity to explain to Nayak about the organizational hierarchy and the importance of following hierarchy in all matters. When Nayak informed Sharma about the reason for customers contacting the MD directly, he could have appreciated her efforts in finding out the cause. He could have explained to her that such information was crucial to the management and asked Nayak to inform the management immediately whenever she came across such crucial information. When Nayak informed Sharma at a review meeting about the problems of a team member, he told her bluntly that she was wasting his time. Instead, he could have appreciated her concern for an employees problems and asked her to approach the personnel manager regarding such issues. Sharmas behavior was inappropriate from an organizational point of view. He should have encouraged Nayak to communicate the employees problems to him since a sympathetic attitude on the part of the management towards employees problems helps improve relations between them.

Caselet 29

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1. The change program initiated by Global resembles the survey feedback technique used by change agents in organizations. In the survey feedback technique, data pertaining to an organizational problem is collected from employees at all levels of the organization. The data is collected using tools like attitude or (organizational) climate surveys. The questions are so designed that responses to them reveal employees opinions about organizational processes and the problems faced by the organization. The data collected from employees is then given to the managers or heads of units who share it again with their employees. The managers conduct a meeting with employees where they discuss the details of the data collected, analyze and interpret it and try to identify the problem areas and the need for change. Then they develop plans and strategies to bring about the desired change in the organization. All the above steps were followed in the change program that Global initiated. Thus, the program initiated at Global was a survey feedback technique used by change agents. 115

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Introduction to Organizational Behavior Globals change program sought to change the behavior of employees by creating awareness in them about the obsolescence of their beliefs and attitudes and encouraging them to think rationally. As they begin to think rationally, they recognize the need to change themselves and their attitudes. With the help of the change agent and managers, they take the actions necessary to adopt new beliefs and attitudes and achieve the desired change in their behavior. 2. The data collected through the opinion survey questionnaires can be used to analyze employees perceptions about organizational policies, culture and structure, and their attitude towards the work environment and organizational climate. The employees of Global were involved in data analysis and interpretation. They not only identified problems but also contributed their ideas to develop solutions to these problems. The managers and employees together developed plans and strategies to bring about organizational change. As the employees were involved right from the beginning in the change initiatives, they are likely to contribute well to the successful implementation of the change program.

Caselet 30

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1. The introduction of teamwork at Akrur encouraged workers in the company to take many decisions on their own and question managers about their decisions and strategies. This made the managers feel uncomfortable because they were used to working in an environment where workers followed their orders without questioning. The managers, therefore, tried to retain their power and control over organizations whereas workers tried to be independent. This tug of war led to conflict between the workers and managers. Akrurs top management made a mistake by designating middle managers and supervisors as team leaders. Because of being designated as leaders, middle managers and supervisors could not do away with their old habit of controlling their subordinates. This affected the team spirit in the employees and the expected level of cooperation and coordination could not be realized. The MD, Chaitanya Sarathi should have hired a consultant to educate the middle managers and supervisors about the changing organizational environment, the

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Make commitment to solve problems: Employees should be committed to solve the problems identified in the system. They should actively involve themselves in the problem-solving process by suggesting alternative solutions.

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Accept responsibility: If the questionnaire reveals that some mistakes had been committed, the employees should accept responsibility for the mistakes and attempt to rectify them. The leaders of work groups should act as role models by owning responsibility for the problems.

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Agree with the facts revealed by the survey questionnaire: Sometimes, employees may deny the facts revealed through questionnaires. For example, suppose that the responses to the questionnaire indicate that the manager of a particular work group is lenient and highly people-oriented, and gives too little importance to work resulting in a lot of pending work. If the change agent attempts to discuss this with the employees, the employees may refuse to agree with the fact fearing that the present manager may be replaced by an autocratic manager. Employees should not resist and deny facts to avoid change. If they are doing so in order to escape work, in the long-term, it will result in lower productivity and inefficiency, and finally may even lead to closure of the unit. Hence, employees should attempt to find solutions to problems rather than denying their existence.

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Employees need to cooperate with the change agents in the following ways in order to implement such change programs:

Part B importance of team work and the need to change their behavior, listen to the suggestions of employees and implement the best ones. The consultant could be requested to conduct team interventions like role analysis technique and role negotiation technique. This would enable managers to clearly know what their role is and the expectations that workers have from them. 2. Sarkar and Sarathi are right in their belief that team work would enhance organizational performance. Teams offer many advantages to organizations. Since teams are not confined to a particular unit or department or project, they make organizations agile. After completion of a particular project, the team members disperse and each member is put on to another project where his/her skills are required. This enables organizations to leverage the skills and expertise of employees effectively, and cope with changes in the competitive environment. Teams help organizations find effective solutions to problems through collaborative thinking and brainstorming. Effective implementation of team culture helps organizations attract and retain talented employees. The conflicts between managers and employees can be resolved by training managers to adapt to change along with the workers. Managers should accept the challenges posed by the implementation of team culture in the company. They should be prepared to face criticism. They should take decisions after a thorough analysis of all the available information and after considering all the alternatives. This will help managers to convince the workers easily, and to face their questions with confidence. Similarly, if the workers point out that the solution suggested by the managers is not effective and propose a much better alternative, managers should learn to appreciate the contribution of the workers and accept the solution. The managers should recognize that they are being paid to contribute to the growth of the organization. Therefore, they should implement a solution that is in the best interest of the company, rather than a solution that serves their own interest.

Caselet 31

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1. Though BOH was a profitable organization, the founder and CEO of the company, Murthy was not happy with its performance. Murthy wanted BOH to be a leading financial services provider in India. To realize his dream, he initiated many changes. He identified two leading organizations in the industry as benchmarks and instructed his managers to plan and develop strategies to surpass the standards of these organizations. The pay package of managers was linked to the performance of the organization. Although this increased the pressure on the managers and increased their workload, it was essential for the growth of the company. Murthy restructured BOH to improve customer service. He eliminated the need for customers to approach separate departments individually for each service they wanted from the company. He set up three new departments CCP, ICG and NPAG. CCP dealt with corporate clients, ICG dealt with individual clients and NPAG dealt with lower-end clients. Employees in NPAG were apprehensive that since they primarily dealt with near-bankruptcy clients, they would be unable to perform as well as their peers in the other departments. They feared that this would reflect badly in their appraisal ratings. Murthy should assure the employees that the difficulties involved in each department would be taken into account during employee appraisal. Employees may be rotated across departments to ensure that they acquire multiple skills and no one is stuck in a particular department for too long. 2. The apprehensions of Akhiras employees were justified as the working culture at BOH and Akhira were quite different and the emphasis of the respective managements was also different. Akhira was a rural-oriented financial services provider. As employees of Akhira were unfamiliar with urban marketing practices, they were uncertain about their future in BOH. Moreover, Akhira was overstaffed and 117

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Introduction to Organizational Behavior some employees could be laid off. While Akhiras management concentrated on the overall profitability of the bank and gave uniform pay packages to employees in similar positions, the management of BOH considered each department as an individual profit center and the pay packages of employees differed from one department to another. At BOH, bonus for employees was based on the performance of individual profit centers rather than profits of the entire organization. This would mean more work pressure on the employees of Akhira who were new to the system. To ensure employee participation and to decrease the employees resistance to change, the management at BOH should establish clear communication channels throughout the organization to avoid any communication gap or incorrect communications. Training programs should be conducted to upgrade the skills of all employees. The management should also work on contingency plans and initiate direct dialogue with the employees to maintain good employee relations. If there is any downsizing resulting from the merger, the management should communicate the message clearly to reduce uncertainty. It should also provide assistance to the employees being laid off to find new jobs elsewhere.

2. The behavior of the employees of Aze is not justified. The employees are trying to pass on the blame to one another. No one was ready to accept the responsibility for the delayed delivery of the products. If the same situation continues in the company, mistakes are likely to recur, and the complaints from customers regarding product deliveries will increase. Ultimately, dissatisfied customers will leave the company and take their business to competitors. For a mail-order company, precision and on-time deliveries are crucial for success. Therefore, the management needs to take measures to ensure that these do take place as scheduled. It must warn employees of the consequences of the companys failure to deliver the products on time, and the repercussions it would have on their own jobs. The management may initiate training programs to improve employee behavior. The employees may also be trained in teambuilding. Unless employees learn to work as a team and cooperate with each other, it will not be possible to accomplish organizational goals. Management should invite employees in all the departments to form teams. The teams should be responsible for identifying all the problems in the existing system. After that, the teams should interact and discuss the problems they identified and prepare a list of the total number of the problems identified and the nature of the problems. One problem can be displayed on the board at a time, and the teams can brainstorm to find

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1. When employees were asked to explain the reasons for their inefficiency at work, each employee behaved differently. Their behavior could be attributed to various external and internal factors. External factors include the work environment. Environment plays a significant role in influencing the behavior of an individual. Internal factors include instincts, personality traits, and cognition of the individual. Instinctive actions are actions taken by a person without considering the consequences of those actions. Behavior such as anger and frustration result from instincts. Instincts have their origin in genes and pass from one generation to another. Personality traits also influence human behavior to a great extent. Some of the traits are hereditary while some are learned and adopted by people. Cognition also influences an individuals behavior. A person may respond in a particular way when he is subjected to a certain stimulus for the first time. If the consequences of this behavior are positive, the person is likely to respond in the same way in the future as well. If the consequences are negative, he would change his behavior. This is also seen in the given case. One of the employees tried to behave aggressively with the manager thinking that the manager would not question him further. But the manager also reacted equally aggressively. If the employee continued with his aggressive behavior, he could lose his job. Therefore, he changed his behavior and talked softly afterwards.

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Caselet 32

Part B all the possible solutions for it. The solutions should be considered by the management, and the best of them selected for implementation. One by one, all the problems should be discussed and the solutions finalized. If the employees are involved at the stages of problem identification and solution-finding, they would be committed to implementing the solution. The employees should also be made responsible for monitoring implementation, and ensuring that the problem does not recur.

Caselet 33
1. Icare had been a highly profitable company till 1993. Therefore, the company spent lavishly on its managers. They were provided with luxurious houses in posh locations. The salaries of managers in the Asian units were on par with those of their counterparts in developed countries. After a time, managerial expenses went out of control. For some years, the company could cope with the spending patterns of managers in various units. But as competition increased, the sales declined and profits fell, but the spending continued. As a result, the company began to incur losses. The top management was alarmed and initiated change in the organization. The organization structure was changed to facilitate better communication between the top management and managers in various units. The responsibility and accountability of managers was increased. Plants were considered as profit centers, and the manager in-charge of each plant was held responsible for its performance. Managers pay was linked to the performance of their respective plants. Countries were divided into regions. Each region was headed by a regional General Manager. Regional functional managers reported to the regional General Manager who in turn reported to the VP (Operations) at the headquarters. The VP reported directly to the CEO. Excess manpower was laid off and managers who were performing poorly were demoted. Talented people were promoted to higher positions. Apart from these changes, Icare can also take some steps to cut costs. It should shift its managers to smaller accommodations in less expensive areas. It should put a freeze on buying new cars. It should adjust managerial salaries so that they are comparable with leading companies in the country rather than having them on par with the highest international standards. But the top management should communicate to the managers that this reduction in their salaries is temporary and they would be hiked once the profitability of the company improves. 2. The management of the Malaysian unit had misreported sales figures, in order to achieve what they claimed were impossible targets. This implies that the top management did not devolve enough responsibility to the units for determining targets and maintaining genuine profitability. The management of the unit at Malaysia was wrong to misreport sales and produce defective items. It should, instead, have communicated to the top management the difficulties it faced. The fact that the top management was unaware of these practices for quite a while, until it was unearthed by the consultants it hired, also indicates that adequate control mechanisms were not in place. Both the managers (of the Malaysia unit) and the top management were responsible for the situation. Now that the top management has decided to change the organization structure, reporting relationships and responsibilities, it reduces the scope for misreporting. Further, the members of the top management should periodically inspect the units to wipe out deceptive practices. The top management should set sales targets after analyzing the market conditions and consulting with unit managers. If unit managers are involved in establishing targets, they are more likely to be committed to achieving them honestly. 119

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Introduction to Organizational Behavior The top management should announce rewards for units that are most profitable. This will encourage units to improve their sales. At the same time, external auditors should check the accuracy of accounts kept by the various units on a regular basis. The top management should allocate more resources to units for training and development of sales executives and managers so that they can improve their skills and enhance sales.

Caselet 34
1. MPL was, no doubt, in a leading position in the food and beverages industry in India. But the company until this time, had faced only Indian players who had less marketing clout than MPL. In the future, however, MPL will have to face competition from experienced international players. If MPL remains unprepared, it may lose its market share to its competitors. Traditional and outdated organization structure and processes may come in the way of MPLs ability to compete with its rivals. Therefore, Gaurav has done the right thing by being proactive. He approached a good consultancy called People Solutions and sought its help in making the company competitive. People Solutions advised MPL to hire professional managers in strategic positions. This would help the company leverage their expertise to design competitive strategies and stay ahead of competitors. It is also likely that the members of the Agarwal family may feel sidelined and resist change. Therefore, Gaurav has to explain to them the problems that may arise in the future because of competition from foreign players, and the necessity for change. They may be encouraged to observe the professional managers in action and obtain the expertise to lead the company in the future. Younger family members who are interested in running the firm may be sent to business schools to be formally trained and educated about the changes in the organizational environment, the latest trends in leadership style and competitive strategies. 2. MPL should accept People Solutions recommendations regarding a change in MPLs appraisal and compensation system. MPL rewarded its employees according to their seniority. This is not an appropriate technique for rewarding employees because it ignores high performers and demotivates them. MPL should begin to reward employees based on their performance. At the beginning of the appraisal period, each employee should be informed about the goals he is required to achieve by the end of the appraisal period. The goals should be established by the manager only after discussing them with the employee, and convincing him that he is capable of achieving the established goals. Generally, the goals of individuals (like improvement in QWL and increase in salary) are different from the goals of the organization (like increase in production, sales and profits). The management should talk to employees and try to identify such personal goals which can be aligned with organizational goals. They may include career advancement, employee stock option schemes, and so on. The goals set for employees should be clear, objective and measurable. Laying down clear and quantifiable goals would make it easier to obtain commitment from employees. The link between performance and reward should be clearly established. For example, an employee who is able to get business worth Rs 1 crore for the company may be given a spacious flat worth Rs 20 lakhs in the center of the city. The management should determine the time period for achievement of goals and ensure that goals to be achieved are not too ambitious. The manager should review the progress of the employee at regular intervals and in case the progress is less than expected, the manager should suggest measures to ensure the goal is achieved. The manager should extend his support as the employee attempts to implement the suggestions given by him. The parameters for appraisal of a plant manager may include the number of units produced in the year, reduction in costs and reduction in job cycle time. The 120

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Part B parameters of appraisal for senior management may include return on investment, customer satisfaction and shareholder value.

Caselet 35
1. Aastha Manufacturers is more likely to secure a competitive advantage over the other players because it is proactive in its strategies and makes constant efforts to innovate and change in tune with changes taking place in the environment. Thus, Aastha would be able to come out with innovative products and services continuously and maintain its position in the market. Akina, on the other hand, has a traditional management style. Akina wants its employees to do the way they are told by the management. It does not encourage innovation and creativity and is not receptive to new ideas. Moreover, the company responds only when it is threatened by its competitors strategies. Adherence to principles of scientific management has made the company efficient in its operations. But operational efficiency can be easily duplicated by other players in the industry. Therefore, modern companies need agility to achieve competitive advantage. Aastha has made itself highly agile by making change a part of its culture, whereas Akina is highly rigid in its structure and processes. Therefore, if competition intensifies, Aastha is more likely to succeed than Akina. If it is to survive in the changing business environment, Akina needs to change its management style. It has to implement a organization-wide change program to bring about a change in its culture, business processes, leadership style and employee behavior. Employees should be encouraged to communicate upward freely. Akina may announce rewards for the employees who contribute good suggestions. Managers should be willing to listen to employees and appreciate those giving good suggestions. Akina should deemphasize job specialization. It should attempt to give entire tasks rather than a part of a task to employees. Akina should encourage employees to work in teams, learn new skills, share information and seek greater responsibilities. Employees should be trained to identify problems (e.g. defective equipment, poor quality inputs and outputs) in their departments and develop solutions for them. 2. I would choose to join Aastha Manufacturers for the following reasons: Aastha has an organizational culture that encourages innovation and creativity. All ideas big or small from employees are welcomed and discussed. Akina, on the other hand, never welcomes ideas and kills creativity. In Aastha, all the employees are encouraged to work in teams. I will, therefore, get an opportunity to learn to work in a team, which is essential in modern organizations. Moreover, in Aastha, employees are free to interact with each other, share information and discuss various issues. Employees can also challenge the decisions of management if they do not agree with them. Therefore, Aastha will help me develop as an individual. By participating in quality circles, I will be able to develop my knowledge about quality and the ways to improve it. At Akina, employees are not free to socialize at work. They are not informed about any developments in the company. Upward communication is almost non-existent and even downward communication is not effective. Aastha tries to move ahead of competitors by encouraging continuous change and innovation in organizational processes. By participating in change initiatives, I will be able to acquire the flexibility and agility required to compete in the modern business environment. In Akina, there is no emphasis on team work, training and development. Akina neither offers training nor the opportunity to learn. Therefore, employees will not be able to develop their skills and abilities to take on higher responsibilities. The rigid structures and policies at Akina would prevent me from developing the flexibility to adapt to change. This will hamper my career growth. Therefore, I would prefer to work with Aastha rather than Akina, even if both of them offer the same salary. 121

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Introduction to Organizational Behavior

Caselet 36
1. PCMM stands for People Capability Maturity Model. To achieve PCMM certification, an organization should achieve maturity at five levels. At the first level, an organization concentrates on improving its staffing process. At the second level, the organization seeks to improve its compensation system, training and development programs, performance appraisal process and communication and coordination. At the third level, the organization encourages employee participation in planning and decision making, develops workgroups, improves manpower planning, evaluates the competencies of its employees, and helps them in their efforts for career development. It also adopts better workforce practices. At the fourth level, the organization emphasizes mentoring, organizational capability management, quantitative performance management, competency-based assets, empowered workgroups and competency integration. At the fifth level, the organization seeks to achieve continuous workforce innovation, organizational performance alignment and continuous capability improvement. PCMM certification will help Excel enhance the skill sets of its employees and increase their productivity. Excel will be able to focus both on people development and business process efficiency. It will be able to implement change management effectively. It will be able to adapt itself better to the changes in the Indian information technology industry. The PCMM certification will help the company motivate its employees to work toward organizational goals. It will also provide employees with better training and on-the-job experience. Employees will feel more involved in the processes of the company and become more committed to the company. The certification would go a long way in helping Excel integrate its human resources with its strategic objectives and organizational goals. 2. Six Sigma is a disciplined, data-driven technique adopted by organizations to reduce defects in their processes and output. To achieve Six Sigma certification, a process should not produce more than 3.4 defects per million opportunities. Many global companies like Motorola, ABB and GE have implemented Six Sigma. Six Sigma is achieved in eight stages Recognize, Define, Measure, Analyze, Improve, Control, Standardize and Integrate (RDMAIC). By following these phases, organizations collect data systematically, conduct statistical analysis, pinpoint the factors that lead to poor quality and strive to eliminate those factors. In order to implement six sigma, employees are trained as Champions, Master Black Belts, Black Belts, and Green Belts. Champions are employees who lead Six Sigma within specific businesses in the organization and ensure that all the key functions of the organization are linked to Six Sigma. Master Black Belts are employees who are entrusted with the responsibility for disseminating information on Six Sigma throughout the organization. Black Belts work full-time under the Master Black Belts and apply the tools of Six Sigma to specific projects. Green Belts work under Black Belts and lead small-scale Six Sigma projects. Six Sigma enables organizations to achieve defect-free performance in its manufacturing, designing, engineering, and business processes. It also helps organizations reduce the costs of generating quality products and services.

Caselet 37
1. According to Herzbergs two-factor theory of motivation, there are two major factors that play a major role in employee motivation hygiene factors and motivating factors. The absence of hygiene factors like fair pay, working conditions, organizational policies leads to employee dissatisfaction and demotivation. But even if the hygiene factors are provided above the usual level, they fail to motivate 122

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Part B employees. The motivating factors include nature of work, recognition for good work, rewarding good performance, etc. The presence of motivating factors is essential for employee satisfaction and motivation. 2. Since salary is a hygiene factor, Smile Hotels Group failed to motivate employees by giving more salary. To motivate employees they have to make their job interesting, appreciate them when they perform well and give them greater responsibilities. The employee recognition program proposed by Roy aimed at providing these motivational factors. Therefore, the CEO of the group, Hari Prasad Thakur agreed to implement the suggestion offered by Roy. The program was essential to motivate employees and improve customer service. The marketing manager and the associate marketing manager suggested that the company should offer free holiday trips, discounts in holiday packages, discount in room rent, coupons and lucky draws to loyal customers, and extra facilities for customers from the corporate segment so as to attract more number of customers. These techniques work only as long as the schemes are being offered. Once, the company stops spending on gifts, the problem of customer switching will recur. Hence, the CEO chose to concentrate on addressing the problem from a long-term perspective by improving customer service which would, in turn, help increase the customer satisfaction level and thus help the company retain customers for a long time. For this to happen, the employees had to be motivated to offer still better service than they were currently offering to customers. Therefore, keeping the long-term benefits of the company in view, the CEO decided to implement the suggestion proposed by the HR manager. 3. The management of Smile Hotels Group has initiated an employee recognition program which recognizes employees who work very well. In addition to it, the management should invite ideas from employees to improve customer service and reward good suggestions. If the management implements a suggestion and obtains a good response from customers, the employee who made the suggestion should be rewarded by giving him a higher rating and due weightage in his performance appraisal. However, the management should not discourage employees whose suggestions are not implemented. A training program may be started for employees to tell them how to develop ideas and refine them so as to be applicable in organization. The training will help employees review their ideas before submission. This will reduce the time taken by management to review employees ideas, and concentrate on other strategic issues of significance. Also, this will nurture creativity in the organization and improve customer service and satisfaction. Occasionally, managers should also attend to customers, find out their opinions on the service being delivered by the staff, and note any suggestions they may give to improve the service. Abiding with the companys philosophy of delivering superior customer service, the managers should not hesitate to serve a customer if they find that none of the staff is available. This will not only set an example for the employees to follow but will also demonstrate the importance given to customer service at Smile. In this way, Smile Hotels Group will be able to retain existing customers, attract new customers, and improve its profitability.

Caselet 38
1. Gulati never asked Raj to participate in the negotiation process. If Gulati asked Raj to participate and Raj refused because he had more important responsibilities at home, then we could say that Gulati was right in his approach. However, this is not the case here. Even when he was not able to attend the negotiation session and Raj conducted negotiations on his behalf, Gulati did not allow him to take any decision on his own. He insisted that Raj should consult him before he took any decision. The CEO, 123

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Introduction to Organizational Behavior Franco, wanted his managers to delegate greater responsibilities to their subordinates. But Gulati never delegated responsibilities to his subordinates. It was wrong on Gulatis part to prevent Raj from developing the skills he would need to progress in his career. He enjoyed the autonomy given by his boss but was not willing to pass on the same benefits to employees in his department. Even though Gulati may be concerned about his employees life after work, it is his responsibility to explain to Raj the advantages of learning negotiation skills and taking on greater responsibilities, and help him understand the importance of career growth. Gulati should make Raj understand the importance of perfecting these key skills, without which Rajs career would stagnate. Gulati should ask Raj to attend some of the negotiation sessions so that he can learn these skills. If Raj does not show any interest even then, Gulati can assume that Raj is not interested in personal growth and can stop making efforts to develop him as a potential leader. However, at the same time, Gulati should identify an employee with potential in his department, and train him in managerial skills so that he can succeed Gulati, in case the latter gets promoted or leaves the organization. 2. Gulati had great concern for his employees and did not want to make his employees work after scheduled working hours. He set well-defined rules within which everyone worked. Each of his subordinates knew his role and performed it. There was no role ambiguity. He offered support the employees needed at work. He gave equal importance to people and work. Therefore, according to the leadership grid, Gulati exhibits 5, 5 leadership style (middle of the road management). Gulati however failed to develop his employees to assume leadership roles. There was no one in Gulatis department who could carry out his responsibilities in his absence. In contrast, the marketing manager, Shivamani, was not at all concerned about his employees. He set difficult targets for his employees and expected them to achieve the targets at any cost. He misused his power to punish them. He did not sanction them leave and prevented them from claiming reimbursement for the expenses they incurred on duty. It was an inhumane way of treating employees. Shivamani gave more importance to work than people. Therefore, Shivamani exhibits 9, 1 leadership style (authority-compliance). Both the leaders have to strive hard to reach 9, 9 leadership style (team management) which is considered ideal. If Gulati cannot develop anyone in his department to be his successor, someone external to the organization can be chosen to head the department. But the autocratic style of leadership displayed by Shivamani demotivates employees, and drives down their performance thereby affecting the entire organization. The negative effect of Shivamanis leadership style is more immediate and more detrimental to the organization than that of Gulati. Hence, Shivamani has to strive harder than Gulati to improve his leadership style because his style is not desirable at all.

Caselet 39
1. Ashrita was characterized by a functional structure; the various departments were set up based on their management function. In this structure, employees who use similar skills are grouped into a unit. For example, the finance department consists of people who have accounting skills, the marketing department consists of people having good marketing skills, and the human resources department consists of those who have people skills. This kind of structure helps organizations use the skills of their employees efficiently and reap the benefits of economies of scale. Functional departmentation can also lead to conflicts. This happens because different departments have different interests, and the functional heads hold their interests above those of the others. For example, the HR department may want to offer special incentives and rewards for high performers to retain them, but the finance department may want to minimize expenditure. Functional departmentation does not encourage 124

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Part B employees to have a sense of ownership of the final output, as employees in each department perform only a small part of the entire process involved. Another disadvantage of a functional structure is that employees develop expertise in a particular function but lack knowledge of other areas. They do not have a holistic picture of the organization. Apart from departmentation by function, the different types of departmentation used in organizations are: departmentation by geography, by process and by customer. In organizations having departmentation by geography, jobs are grouped on the basis of territory. For example, different marketing departments may be set up for Middle East countries, South Asian countries and the US. This will enable the organization to formulate strategies depending on the competitive conditions in the region. In organizations having a departmentation by process, various departments are created based on the processes performed in them. For example, in a textile manufacturing company, there are different departments like cleaning, weaving and dyeing. Some organizations classify departments based on the type of clients they serve. For example, an organization may have different departments to serve individual customers, corporate customers, and overseas customers.

2. The process of decision making at Ashrita was decentralized, and this was possible because of its flat structure. There were only a few levels of hierarchy in the company, namely the CEO, the country managers, the functional managers and the functional executives. Each manager enjoyed a certain degree of autonomy in this structure. The country managers could make most of their decisions without having to approach the CEO for his assent. Since the country managers understood the nature of local markets and competitors strategies better than the headquarters, they were able to allocate resources efficiently and formulate customized strategies. Decentralization helped the company promote internal competition between various subsidiaries and strive for efficiency. Ajay Arora, the country manager of India, used his autonomy to take bold decisions and make his subsidiary efficient, self-sufficient and profitable. He invested time and resources to educate his employees about the importance of customer service and customer satisfaction and achieved desired performance from them. The quality of services offered by his subsidiary attracted even foreign players and earned revenues for the company. The subsidiary became a role model for the other subsidiaries and initiated healthy internal competition between them.

Caselet 40
1. I would make the following suggestions to Prasad: He should inform his managers about the agenda of meetings in advance. This would help managers to be prepared, and contribute their ideas and suggestions at the meeting, improving the quality of decisions. 125

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Decentralization is not without its drawbacks. In the case of Ashrita, as decisionmaking power lies in the hands of the country manager, the performance of the subsidiary will depend entirely on the managers efficiency. Under decentralization, vesting the power of decision-making in incompetent managers may result in bad managerial decisions and losses for the company. Each subsidiary tries to be independent by acquiring all the resources it needs, and not having to depend on other subsidiaries for resources. In doing so, duplication increase occurs and the cost to the organization as a whole also increases. The headquarters has to make special efforts to get up-to-date information pertaining to all its subsidiaries. The costs of collecting and processing information in the organization will also therefore be high.

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Some organizations may also use a combination of two or more of the above departmentation methods.

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Introduction to Organizational Behavior He should give the managers enough time to express their ideas. Currently, Prasad calls for a meeting, presides over it, quickly goes through the available information, makes decisions, communicates his ideas and winds up the meeting. He should also allow the managers some time to communicate their views and suggestions. He should make it clear to the managers whether he is simply expressing an idea or whether he wants his idea to be implemented as a project. This would help managers reduce their workload by not adding unintended projects to their list. He should stop giving false report about the status of various projects to the head office. The build-up of work with the head office sending fresh projects to Prasads team would then be prevented. As a result, the managers would no longer be overburdened and would be able to complete their work peacefully He should stop labeling every task as urgent. This would help managers recognize truly urgent tasks and complete them first. This will eliminate chaos and confusion in the organization. He should conduct a regular employee survey. A questionnaire which includes questions related to employees satisfaction with their job, and the behavior of their superiors, peers and subordinates, will help Prasad to obtain feedback about his behavior. He should ask his employees to explain the changes they would like to see in his behavior. He should also convey to them what changes he expects in their behavior. Both parties should then discuss the pros and cons of making changes in their behavior. If they realize that there are many advantages to be gained by changing their behavior, they should try to adopt the new behavior or seek the help of a change consultant.

Prasad also did not take any initiative to find out whether the managers were comfortable with his style of management and the work pressure he put on them. People like challenging work to a certain point, but beyond this point, it induces stress and results in burnout. That was what had happened in his office. However, finally, Prasad did the right thing by approaching an HR consultant to resolve the problems in his organization. He even offered to change his behavior when the HR consultant explained to him that his behavior had caused many of the problems.

Caselet 41
Regal wanted to improve its communication with its employees and customers in order to be able to face intense competition from emerging players in the industry. By sponsoring an international science exhibition and setting up a uniquely designed stall, Regal wanted to attract the attention of the larger public. Regal believed that familiarity with the companys name would increase the sales of its over-the-counter (OTC) drugs. Regal also wanted to improve its internal communication (communication between employees of different divisions) and keep all its employees informed of the developments taking place in the organization. By inviting employees from different subsidiaries across the world, Regal was able to facilitate interaction among them. As these employees spent a week together, they exchanged lot of information about their jobs and the way of functioning of their own subsidiaries. 126

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2. I believe that the managers were responsible for the situation in the organization. The managers were finding it difficult to cope with the behavior of their general manager, Prasad. Since all the managers were facing similar problems, they should have gone to Prasad and discussed their problems with him. Instead of finding a solution to the problem, they were finding their own ways to disguise the problem temporarily. They tried to disobey Prasad by keeping all the tasks he assigned them pending. Since no one dared to approach Prasad, the situation worsened, and both Prasad and managers were unhappy and frustrated with each other. Their feelings of resentment affected their performance, and made their life at the workplace miserable.

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Part B They continued communicating even after they returned to their original places of work. Knowledge exchange improved as the employees tried to learn from the experiences of one another. The findings of the survey conducted after the exhibition revealed an increase in employee productivity and sales and clearly indicated that the company attained its objectives. Regal can further improve internal communication by using the following methods: Rotate employees through various departments and subsidiaries. This will help employees realize the importance of cooperation and coordination between departments and subsidiaries. Encourage team-building activities between heads of various departments and subsidiaries. The friendly relations between heads of departments and subsidiaries will encourage communication among their subordinates as well. Make internal communication an essential part of standard operating manuals. They should not only specify when and how the product components should flow between various departments or subsidiaries but also the nature of flow of information.

As employees from different divisions worked together as a team for a few days, they developed a sense of belonging, and they could identify themselves with the organization and their divisions in a much better way than in the past. This might have been a reason for the increase in productivity in the employees. When the people who came to the science exhibition saw that the brands they bought actually belonged to a company called Regal, they must have been surprised. As Regal had never advertised its corporate brand before, many customers did not know about it. To attract more people to its stall, Regal, had advertised its sponsorship as well. Therefore Regal became a very popular corporate name. When customers found that their favorite brand was associated with a big corporate name, they must have been reassured in continuing to buy Regals products. Therefore, the sales of its products increased.

Caselet 42
1. Morgeld joined Akay because it promised him a supportive and encouraging work environment, informal culture and growth opportunities. But on the day of joining, he found that the employees working in the organization were not very helpful. No one cared to guide him through the procedures when he came with his appointment letter to join the company. He waited for almost two hours in the reception but no one came to receive him. There were absolutely no efforts made by anyone in the organization to introduce a new employee to the other employees. The receptionist did not try to find out whom he should meet. He had to ask and find his way between the various 127

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As employees from different divisions were able to interact with each other, they learnt more about each others roles in their respective divisions. They knew how the activities of different divisions were interrelated. They could visualize how their division and they themselves contributed to the overall performance of the organization. As the significance of their role in the organization became clear, the employees were motivated to work better.

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2. Many employees from different divisions met for the first time during the exhibition. They shared their experiences and exchanged personal mail addresses. Thus, in a way the interactions led to the development of informal networks which would be useful in the future. The employees were able to get to know of other employees skills and expertise. In their future projects, if they want some information from other divisions, they know the person to contact. Because of the informal relationship between them, the desired information will flow much faster and the projects will also progress fast.

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Introduction to Organizational Behavior cabins to find out the person whom he had to report to. He was not told anything beforehand about the dress code and when he came dressed in formals, many in the organization laughed at him and commented that he should come dressed in casuals. Further, no one in the office bothered to inform him about the lunch-break or where lunch was available. No one bothered to show him the way to the canteen. As a result, he had to come back from office hungry. Morgeld must have experienced dissatisfaction and must have regretted his decision to join this company. He must have also thought that if the company could not keep its promise of a supportive work environment for newcomers, how could it keep its promise of opportunities for career growth. Akay failed to facilitate a smooth induction of new employees into the organization. Poor induction and socialization processes dampen the spirits of new employees who join the organization with a lot of hope and ambition. This can have a negative impact on their work performance as well. Moreover, if an employee is not allowed to interact with other employees, he will not develop any sense of belonging to the organization and coworkers. Therefore, he is likely to switch jobs at the earliest opportunity. 2. During the first two years of his joining the company, Morgeld was not allowed to do tasks on his own. He was constantly instructed, guided and monitored by his team leader, Sadgun Chari. Such constant monitoring prevents employee development and reduces their growth prospects. One day suddenly, Chari gave an important task to Morgeld and asked him to complete it on his own. He induced psychological pressure on Morgeld saying that it was a high priority task and had to be done perfectly within a short time. Although Morgeld was tense, he worked hard for 14 hours a day and completed the task. When he went to report to Chari that he completed the task, the latter was on leave. Therefore, Morgeld went to submit the file directly to his boss, the Production Manager. This was not appreciated by the manager. He wanted the file to come only through Chari. Even after Morgeld tried to remind him that it was a priority task, he insisted that he would accept the file only through Chari. This showed that the organization had a bureaucratic culture. The boss communicated only with his immediate subordinates. When the Production Manager asked Morgeld to take up another priority task, Morgeld was too demotivated to work on it. He was sad that he hadnt got even a word of appreciation from his boss for completing the previous task on time. The Production Manager, in fact, did not even have a look at it. Morgeld felt that probably his team leader had given him a normal task and made it appear as urgent to ensure that he slogged on it and completed it in time. Morgeld was depressed with the kind of response he received from his superiors for his successful performance. He was also disheartened by the kind of work environment that prevailed in the company. This adversely affected his morale and he failed to display enthusiasm and commitment in his next assignment.

Caselet 43
1. If Chowdhary accepts the promotion, she would gain power and authority. By performing well in her new role, she can gradually climb up the career ladder. But she has to lead people who were her colleagues for a certain period of time. Her colleagues may be demotivated because of her promotion since she is younger than them and has lesser experience than them. They may try to express their dissatisfaction and resentment by disobeying her orders and not cooperating with her in achieving organizational goals and objectives. As Chowdharys friend, I would advise her to accept the offer. But I would also caution her to be prepared for initial resentment and resistance from her co-workers. 128

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Part B She has to accept the challenge of managing a tough team and develop the required courage to face it. Soon after assuming her new role as team leader, she should conduct a meeting with her team members and make it clear to them that although her position has changed, her relationship with her team members would not change. She should convince them that each member of the team has unique skills and she would like to learn from them. She should involve all the team members in developing proposals for new projects. While accepting or rejecting a suggestion, she should clearly explain to them why she is doing it. She should also hire another person to replace her position in the team. She can give the responsibility of induction and orientation to Sharma who has good social skills. This will allow her to make good use of his skills in the right direction. Chowdary should treat all the members of her team with respect, and emphasize the importance of their participation and involvement in all projects. When team members face any problem in project implementation, she should not only find a solution to the problem but also explain to them how she developed the solution so that if such a problem recurs in the future, they would be able to solve it themselves. All these strategies would help Chowdary gain respect from her team members and be accepted as their leader. 2. Madhur was right in his decision to suggest Chowdarys name for promotion to the position of team leader. A person who leads the team should be a team player. He should have good knowledge of the work done by the team. He should be able to express his views in a convincing manner. He should be able to solve the problems of the team. Madhur did not recommend the name of any of the other team members because he found that each one of them lacked one or other quality that was required to be an effective team leader. Rajiv Arora was an individual player. He was hardly interested in knowing about the tasks of the other members of the team. He was concerned about his own work. Also, he never took a stand on any issue or express his own views and opinions. Therefore, Madhur did not consider him suitable for the position. Sharma had a good social network, which is one of the desired characteristics of a leader. However, he had very poor work knowledge. He would not be able to solve the problems of the teams and hence, would not be able to gain the confidence of his team members. Moreover, he blindly supported the views of his superior and didnt have any individual opinion and view. Therefore, Madhur did not select him for the leaders position. Murthy had analytical ability but did not possess the articulation skills (ability to communicate a view in a way that convinces the other person). Although she opposed any view that was presented by another person, she was unable to support her own views. A manager has to accept a good suggestion or view even if it is offered by an employee of a lower rank. Therefore, Murthy cannot make a good manager. Chowdhary, on the other hand, has a good knowledge about the work in the organization, a helping nature and also has problem-solving skills. She listens to the views expressed by everyone in the team and votes for the best of them, or expresses whatever point of view she feels is appropriate. As she has more desirable skills than the rest of the team members, Madhur selected her as his successor in the organization.

Caselet 44
1. The following are the factors that led to the decline in Geeks profitability: Niranjan Paul, the second CEO of Geek, concentrated only on diversification of the company and not on its performance. When the company had its operations in a limited number of industries, it was among the leading firms in each industry and earned huge profits. But with the increasing diversification of Geek, Niranjan 129

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Introduction to Organizational Behavior was unable to concentrate on so many businesses and, as a result, the profitability of the organization suffered. Niranjan handed over the control of Geek to his son Vinay Paul without ensuring that he was formally trained for the position. Vinay was not aware of the companys problems and requirements. Moreover, Vinay had an autocratic style of leadership and did not listen to anyone and did what he felt was right. When all other organizations were trying to cut down extra layers in the organization, Vinay added additional management layers to his organization. This simply added to its costs. Instead of trying to solve the existing problems of the company, Vinay spent huge sums of money on acquiring businesses, simply to increase the size of the company and prevent it from being taken over. The acquired businesses increased the cost of operations of the company.

As none of the CEOs took steps to improve the quality of products and services and cut down the costs of operations, the companys profitability declined. 2. Yes, Akshay was right in advising Vinay not to sell off Geek. However, Vinay could dispose off the companys units in unrelated industries. When Akshay requested the employees to forgo their bonus for a year for the sake of the company, they agreed. This implies that the employees were very cooperative. Therefore, Vinay could seek their cooperation in implementing the necessary change programs in the organization and bringing the company back to the path of success. Even if there is some initial resistance to the change initiatives, the change agents can overcome it by using the following measures:

Facilitation and support: Employees whose skills become obsolete because of introduction of advanced and latest technology as a part of the change program, should be given the training to acquire new skills required to make use of the technology. Employees who find it difficult to cope with change and become anxious about it should be given support and counseling to help them overcome their fears. Negotiation: Sometimes, union leaders or other powerful groups resist change. The management should negotiate with them to obtain favorable terms.

Caselet 45
1. According to Halls career stage model, there are four stages in the career of an individual exploration, establishment, maintenance and decline. In the exploration stage, an individual searches for a suitable job, and in the process he may switch from one job to another. Ahuja joined many firms in the beginning. At first, he joined 130

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As far as possible, the management should avoid techniques like manipulation, cooptation and coercion because they do not contribute to a healthy long-term relationship between employees and the management.

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Encourage employee participation: Change agents should seek the active involvement of employees right from the initial stages of the change program implementation. This will help management reduce employees resistance to change and increase their commitment to the change program.

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Educate employees and improve communication: Change agents should explain the factors that necessitate change in the organization, and the benefits that would accrue to the organization and its employees by adapting to change. Employees should be allowed to express their fears about the impact of change on their work. Change agents should assure employees that there will be no lay-offs or unreasonable increase in workload as a result of the change program.

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Part B Ajanta Electronics but he left the job to pursue higher studies in the US. Then, in the US, he joined CNT Innovative Products Ltd, and later joined KLN International Ltd. But he worked only for one year in each of these firms. Then he returned to India and joined ATB Global. In the establishment stage, an individual is relatively more stable than he was in the earlier stage. He develops a rapport with peers, superiors and subordinates. His productivity is also comparatively high. Once, Ahuja joined ATB Global he did not look out for another job. He developed good relations with fellow employees as well as superiors and subordinates. He took steps to increase the productivity of the organization. In the maintenance stage, the individual wants to coach his subordinates and new employees and prepare them for higher positions. In the decline stage, the individual becomes weak, his productivity declines and he seeks to take retirement. However, advances in the field of medicine have resulted in changes in this stage, and individuals are still active in this stage today. In Ahujas case, he started his own organization with the help of his wife and sons. 2. According to Levinsons adult life stages theory, there are four transition periods in an individuals life age-thirty transition, mid-life transition, age-fifty transition and late adult transition. Age-thirty transition lasts between twenty-eight and thirty-three years, mid-life transition takes place between forty and forty five years, age-fifty transition begins at fifty and ends at fifty five years, and late adult transition takes place between sixty and sixty five years. According to Levinson, during these transition periods, an employees attitudes are shaped or modified more significantly as compared to periods of stability. Levinson also specified the four periods of stability: twenty-two to twenty-eight, thirty-three to forty, forty-five to fifty and fifty-five to sixty. But Levinson could not prove his theory. He could not explain the reasons for the differences in personalities of people of the same age. For example, some people develop clear life goals in their early twenties itself. Therefore, he reclassified the stages into three eras early adult, mid-life and late adult. He also changed his assumption that some periods were characterized by stability while some were characterized by change in behavior. He suggested that each era included a transitionin period and a transition-out period, i.e, both stability and mobility were part of each stage. In his early twenties, Ahuja was not sure what he wanted to do. After completing his engineering degree at the age of 22, he joined Ajanta Electronics. But he left it within 7 months to pursue his post graduation in the US. After completing MS at 25, he worked in two US firms successively. He worked for not more than a year in each of these firms. He then returned to India and joined ATB Global where he worked till his retirement. Ahuja did not show any interest in socialization with other employees in the two firms where he worked at the beginning of his career. But after joining ATB Global, he actively interacted with superiors and subordinates. According to the old assumption of Levinsons theory, in the period between twenty two to twenty-eight, a persons personality is stable. But Ahujas personality seems to have undergone a transition in this period. Therefore, Levinsons new theory which assumes that an individuals lifecycle is characterized by an interplay of mobility and stability holds true in Ahujas case.

Caselet 46
Ankita paid the best wages and salaries in the industry. It also allowed employees to work according to their convenience. But the firm failed to reward high performing employees. It gave the same salary to all employees at the same level irrespective of 131

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Introduction to Organizational Behavior their skills, talent and individual performance. This was the major factor that demotivated talented employees. Employees generally compare their outcome-input ratio with that of others. They expect the company to compensate them reasonably for their efforts. According to the equity theory, equity takes place when: Persons outcomes = Persons inputs Others outcomes Others inputs

When talented and high performing employees at Ankita compared their salaries with their colleagues they found that their efforts were not adequately rewarded. Persons outcomes < Persons inputs Others outcomes Others inputs

Self-inside: An employee compares his experiences with that of employees in a similar position in his organization.

Caselet 47
1. The development of a group takes place in four stages: forming, storming, norming and performing. In ABZ, groups developed in the following manner: When a group of employees joined ABZ, they were new to its values and work culture. They were uncertain about the nature of work they would be assigned, their colleagues, the way in which they worked (workgroups, teams or independently) and the style of leadership. They tried to identify the behavior acceptable to others in the group and mold their own behavior accordingly. They did not refute the opinions of others strongly, even if they were in contradiction with their own opinions. This stage in the development of the group at ABZ is the forming stage. The new employees then acknowledged the existence of a group. But they resisted the constraints imposed by it. They tried to form their own sub-groups.

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Others-inside: An employee compares his experiences with that of employees in a different position in the same organization. Others-outside: An employee compares his experiences with that of employees working in a different position in a different organization.

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Self-outside: An employee compares his experiences with that of employees in a similar position in a different organization.

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2. Suman has chosen to implement a deferred profit-sharing plan in the organization. This plan is likely to motivate employees to improve their performance in order to be able to obtain maximum share of the profits. As the amount of individual compensation will be proportional to the companys profitability, employees will share a sense of ownership. They will cooperate with the management in achieving organizational goals and objectives and contribute to organizations success. As Suman has decided to distribute profits to employees based on their performance, this will motivate talented employees to improve their performance and increase the organizations profits so that they can benefit from it. When their efforts are fairly rewarded, talented employees are likely to stay with the company for long. Hence, Suman will be able to motivate employees and reduce turnover by introducing a profit-sharing plan in the company.

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Talented employees, despite putting in more efforts and achieving greater output than others, received the same salary as those who put comparatively lesser efforts at work. This led to dissatisfaction among the skilled and talented employees and resulted in high turnover.

Part B They were often involved in conflicts with the members of the main group. This indicates that the employees had entered the stage of storming. After spending a few months on their work, the employees developed close relationships with their group members. They realized that cooperation between group members was essential to achieve their group goals. The common goals and interdependence of activities encouraged employees to develop a strong sense of identity with other group members. This indicates that the group had entered the phase of norming. The members of the group respected each others point of view. Thus, there were fewer unproductive conflicts. As all the group members were involved in decision making, the group was able to make better decisions and implement them successfully. They achieved their group goals. This indicates that the group had entered the phase of performing.

Organizations generally have two types of groups depending on the degree of formalization: Formal groups and Informal groups. i. Formal groups: These groups are formed by the organizations, and have welldefined tasks and goals. The management determines the size of the group and selects its members after considering their skills and abilities carefully.

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Task groups: These are most temporary in nature. The management forms task groups to achieve specific organizational goals. The members of a task group may come from the same department or different departments in the organization, depending on the purpose for which the group is formed. After the group accomplishes the purpose for which it was formed, the management dissolves the group. Employees return to their permanent groups (The permanent group represents the group in which employees work regularly). Sometimes employees may not be able to do justice to their roles both in the task group and in the permanent group. In such cases, their duties as members of the permanent group are reduced, or temporarily eliminated to facilitate the progress of their work in the task group. Investigation committees or problemsolving groups formed by selecting employees from different departments to find out the reasons for certain quality-related problems can be considered as task group. Command group: It is permanent in nature and is clearly shown in the organizational chart. The members of a command group work in the same department and report to the same superior. The functional departments in an organization are the best examples of command groups. For example, employees working in a marketing department form a command group. ii. Informal groups: They are formed by the employees themselves and lack any specific structure. They are formed mainly by people who share common interests. Informal groups serve the employees needs for socializing, having fun, and for deriving moral support and help in times of need. Employees from different departments but residing in the same neighborhood can be considered as an informal group. Informal groups are divided into two types friendship groups and interest groups. Friendship groups are formed because of close relationships between its members. Therefore, they are relatively permanent in nature as compared to interest groups. The members come close to each other because of similarity in age, educational background, family background or views. 133

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Formal groups can be further divided into two groups Task groups and Command groups.

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2. The given caselet describes the development of a formal group. The goals of the group were set by the organization. The group was formed and strengthened because of the interdependence of the activities performed by the employees in the organization, and not as a result of the will of its members to form a group.

Introduction to Organizational Behavior Interest groups comprise of people who work on things of common interest. The members will disperse once their purpose is served. Therefore, interest groups are temporary in nature. For example, a group of employees coming together to organize a cultural program on the occasion of the foundation day of the company constitute an interest group.

Caselet 48
1. Yes, Proton X can be considered as an informal organization because it has all the essential characteristics of an informal organization. The job titles and reporting relationships at Proton X were not represented in the form of an organization chart. The employees shared close personal relationships with one another, which reinforced their official relationship. They considered each other as friends rather than colleagues or members of the same organization. Proton X did not have any formal leader. Rupesh Mittal was the informal leader of the employees at Proton X. He acquired informal power through his knowledge, the respect the other employees gave him, his empathetic nature and his problem-solving abilities. At Proton X, information flowed freely among the employees through all the levels of the organization. Employees did not hesitate to discuss organizational problems with superiors and suggest new ideas to them. If one of the employees deviated from expected behavior, the other employees would correct him. Even those in managerial positions did not mind being corrected if they made any mistake. The managers accepted a good suggestion from anyone, irrespective of his/her position in the hierarchy. Mittal accepted a suggestion given by an office boy. People who offered good suggestions were rewarded with a free holiday trip to Disneyland in Paris, under the employee suggestion scheme. The informal culture of the organization encouraged employees to be genuinely concerned about their work responsibilities, the quality of their work and the profitability of the organization. They worked hard on their own and did not have to be directed by the management to put in extra effort when required. At Proton X, no one was considered as a permanent leader. Depending on the need of the situation, anyone who had the relevant knowledge and expertise could become a leader. Because of the informal culture and structure, employees at Proton X were able to use information and other organizational resources efficiently and produce more output than the parent organization in a short period of time. They were able to design and manufacture four new models of cars in a single year. 2. I think, James Herr should not take a decision in haste. If Proton X is merged with Maganta, the smaller Proton X may not be able to influence the larger workforce of Maganta to adopt the informal culture. Instead, members of Proton X may have to readapt to Magantas bureaucratic structure. This will adversely affect the speed and agility Proton X achieved when it functioned as a separate entity, and the old problems will tend to recur. Hence, Herr should retain Proton X as it is for some time. Proton X may be considered as a parallel learning structure, operating parallel to the formal organization and seeking to solve problems which the latter is unable to resolve. Parallel learning structures can be temporary or permanent. But before eliminating a parallel learning structure, the top management should ensure that its characteristics are imbibed into the formal organization so that the learning and expertise acquired by that structure is not lost. Employees of Maganta should be allowed to observe and experience the differences between the work practices of the traditional organization and those in the parallel learning structure. Towards this end, Herr should encourage employees from different levels of the formal organization to work in the parallel learning structure for some period of time. When they return to the parent organization, these employees should 134

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Part B explain to other employees the practices adopted in the parallel learning structure and the advantages of using them. They should try to implement in their own departments what they learnt in the parallel learning structure. The management should also support such efforts. In this way, the culture of Proton X will be imbibed in Maganta. Maganta will acquire the speed and agility and the problem-solving abilities of Proton X. When employees at Maganta are able to imbibe the culture of Proton X, then Proton X can well be closed down and Maganta will be able to succeed on its own.

Caselet 49
1. The type of intervention the OD consultant at the Karthik Group of Financial Services used, is called Action Research. Action research intervention consists of the following steps: Making a preliminary diagnosis Providing feedback about the data to the client Exploration of data by the client Development of an action plan by the client Implementation of the action plan Collection of data from the client

Further information was gathered by Venkata Mani, the current chairman of the meetings, at the request of the OD consultant. The information gathered indicated that the HODs too did not like the way meetings were being conducted. They felt the meetings were simply a waste of time. The meetings lacked a proper agenda, did not allow them to discuss issues they wanted and ended without any conclusion. This information formed the basis for the development of a three-point action plan, to which, further actions were added after discussing it with the other HODs. When implemented, most of the actions elicited a positive response from employees. Attendance increased at the weekly meetings of the heads of departments, a larger number of issues were discussed, and many decisions were taken at these meetings. Cooperation and coordination among departments increased. As a result, customer satisfaction increased and organizational profitability improved. 2. Some of the changes that are likely to take place in OD practices are: i. Employees and managers will also acquire OD skills:

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Not only professional OD consultants, but employees of organizations will also learn and implement some OD interventions. Therefore, implementation of change will be much easier and faster in the future. Moreover, OD interventions will not be limited to HR problems and team-building activities, but will extend to important business processes such as strategic planning, product development and order fulfillment. ii. Extensive use of IT: In future, organizations will have many of their employees working from home using the Internet. OD practitioners will therefore have to implement their interventions 135

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All the above steps were implemented at the Karthik Group of Financial Services. Kiran Patil, the CEO of the group was worried about the inconsistent performance of the group. Patil approached an OD consultant who identified that the major problem affecting the profitability of the company was the practice of conducting weekly meetings of HODs which tended to be unproductive always. The consultants view met with a positive response from the CEO and the HODs. They showed a keen interest in improving the effectiveness of the meetings.

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Introduction to Organizational Behavior online. They have to adopt online methods of monitoring discussions and offering their suggestions while the participants discuss their problems and action plans using chat rooms and video conferences. OD practitioners may have to redesign the interventions so that they can be applied virtually. iii. There will be more emphasis on learning, innovation and radical changes: OD interventions will not be designed just to manage change but will seek to encourage innovation and learning in organizations. Interventions like parallel learning structures will be given more importance. OD practitioners will not attempt to make small changes in organizational processes so that they adjust to environmental changes temporarily. Rather, they will attempt to bring about a permanent change in the organization by creating entirely new processes, structures and behaviors. iv. OD will derive concepts from more disciplines: OD derives concepts from disciplines such as industrial engineering, industrial relations, organization theory and corporate strategy. In the future, OD will have to resolve new and more complex problems related to e-business, virtual teams networks, and workforce diversity. Therefore, it will derive more concepts from other disciplines such as labor economics, entrepreneurship, international relations, sociology and IT. v. OD will have to serve diverse cultures and diverse organizations: As more and more organizations expand globally, they employ people from diverse cultures. OD practitioners have to help these organizations design new structures and processes that accommodate diverse cultures. The interventions they develop will aim to help organizations to build cross-cultural teams and improve coordination among subsidiaries. In the past, OD interventions were implemented only in large corporate firms. But in the future, even small start-up companies, government organizations and non-profit organizations like Amnesty International will be among the clients of OD practitioners. Therefore, OD practitioners will have to design and implement appropriate OD interventions for these diverse organizations.

1. In the present day scenario, the workforce in most organizations is no longer motivated to deliver exceptional performance merely on hikes in salary or extravagant bonuses. The overall feeling of wellness experienced by employees is a prime factor in determining how satisfied the employees are with the organization. Organizations are therefore thinking of innovative ways to motivate their employees and ensure their loyalty to the organization. A few examples of the innovative methods adopted by organizations to ensure employee motivation and satisfaction are discussed below: Many large organizations provide employees with large open workspaces such as beautiful gardens, in which to work. Employees are allowed to go for long walks to beat stress. Tennis grounds, table tennis courts, golf courses, gymnasia etc. are all commonly used stress-busters in companies. Employees in most organizations also have the facility of a company cafeteria along with coffee or coke-vending machines. Organizations also offer their employees the option of alternative work methods such as telecommuting, flextime, a much-deserved holiday after a particularly long work schedule, etc.

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Caselet 50

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Part B In most organizations, the HR department is also engaged in developing career plans for their employees so as to establish a correlation between employee growth, and the growth of the organization as a whole. Provision for an excellent career path, a challenging job profile, unlimited learning opportunities are some of the expectations of the modern workforce and organizations are striving to cater to these needs.

Thus, most modern organizations concentrate on catering to the overall wellness of their members, and also give them attractive incentives for exceptional performances in an attempt to absorb and retain the best talent in the industry. 2. Keeping in mind the high cost of acquiring new employees, modern organizations are coming up with innovate ways to motivate and retain people. In doing so, they are ensuring that they help employees manage stress that arises from the monotonous nature of their jobs. This, in turn, will help organizations get the best out of their employees. Most organizations today offer their employees various work alternatives that increases their productivity. Some of them are discussed below -

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Working from home This is another concept which has become quite popular in the recent times. Employees work from home on a regular basis and visit the office only once or twice in a week. This results in a great saving for the employers too in terms of office space and other facilities. The employees of course save time and resources as they need not spend time and money traveling to and from the office. The biggest advantage to employees is that they can cater to the needs of their family which helps them balance their personal and professional lives.

Most organizations offer some or all of the above work alternatives that not only help employees cope with stress but also help in increasing their productivity.

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Condensed work week This option involves compressing the work week by increasing the number of working hours per day. Normally, a 40 hour, five day work week is condensed into four days, by increasing the number of working hours from eight to ten hours per day. This would reduce absenteeism and tardiness at the work place and give the employees more time for their personal needs.

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Job sharing - This takes place when two or more part-time employees share the work of a full-time employee. It is advantageous both for the organization as well as the employees. The employees can reschedule their work hours to suit their personal needs and can concentrate better on their job, without any distractions. The organization can enjoy the benefits of some cost savings and also have a better performance from its employees.

Telecommuting - It is the practice of working from home or while traveling, keeping in contact with the office. New developments in the field of information technology have made this a feasible concept. By operating from home, employees are able to avoid rush hours and thus save traveling time. This, in turn, allows them to be more productive.

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Flextime - As the name suggests, it allows the employees to choose their working hours, but within some specified limits. For example, if a firm requires an employee to put in 40 hours of work during a week, he is allowed to do it by varying the number of hours he puts in everyday.

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Part C: Applied Theory Questions

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The applied theory questions in this section are intended to deepen the students understanding of theoretical concepts and their practical implications. Students have to apply the theories theyve learnt to a wide variety of business situations and come up with innovative solutions to the problems posed.

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Part C: Applied Theory (Questions)


1. Organizations must adapt to changes in the external environment in order to survive. This may involve bringing about a change in the organizational culture as well. Sketch a brief strategy for bringing about an effective cultural change in an organization. Socialization is the formal procedure in which new employees in an organization are educated about the organizational culture, and are encouraged to internalize the values and ideologies of the organization. Describe the various stages in the process of socialization which help in improving employee productivity and commitment. Organizational culture acts as a powerful control mechanism that helps predict and control employee behavior. Explain how culture acts as a mechanism to control employee behavior in an organization. The communication gap within institutions and between groups in society has been widening steadily to the point where it threatens to become an unbridgeable gulf of total misunderstanding, observes Peter Drucker. Elaborate on this statement explaining the various barriers to communication in organizations. Effective management of organizational diversity helps build strong and competitive organizations due to the synergy created by the talents of a diverse workforce. Discuss the advantages of workforce diversity and explain how management in organizations are trying to capitalize on the synergy obtained from such diversity. Research provides evidence that an increasing number of people are investing in health club memberships, cosmetics, plastic surgery, etc. to make themselves attractive to others and to create an impression. Discuss how employees in organizations as well as the organizations themselves use impression management to project a good image of themselves. The top management of a large manufacturing organization had a tough decision to make. It had to decide whether or not to invest in a new venture, whose returns on investment were uncertain. An informal opinion poll among the members revealed that 62% of them were in favor of investing in the new venture. However, during discussions, it was found that around 90% of the same group favored investment in the venture. Describe what could have been the probable reason for this difference in results. Also discuss the characteristics and the implications of such a phenomenon. Choosing the right people for the right job ensures a long-lasting, motivated workforce. Discuss this statement in the context of the current business scenario. People in their third or fourth job seek opportunities to contribute their best to their organizations, while people in their first or second job are motivated purely by the pay checks. Correlate this finding to Maslows theory of hierarchical needs.

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10. While a shared set of values and beliefs does help to draw a group of people closer, it could stifle creativity and growth in an organization. Explain how a strong organizational culture can become detrimental to the survival of an organization. 11. Consider a situation in which an employees superior gives him instructions to carry out certain tasks that are against his values and principles. The employee is faced with the dilemma of whether he should obey his superiors orders or act

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Introduction to Organizational Behavior according to his personal values and principles. The employee thus experiences a role conflict What is role conflict and what are the effects of role conflict on employees and organizations? 12. Employees at Flash Technologies felt constantly demotivated by the behavior of their new boss, Narendra Reddy. Reddy was fond of giving instructions and directing his staff on how to do their work. He expected them to follow his instructions without questioning him and hated receiving suggestions from his subordinates. His staff therefore, considered him a one-way communicator. Which type of manager is Reddy? Discuss the typical characteristics exhibited by this type of manager. 13. While stereotyping in some forms is useful and efficient, it sometimes leads to a prejudiced notion about an individual or a group of individuals. It makes managers ignore individual differences among employees in an organization. Describe the process of stereotyping and discuss its impact on managing workforce diversity. 14. Employees who are new to an organization observe other employees and their behavior and tend to modify their own behavior according to what suits the new environment. What is this process known as? Also discuss the importance of this process in an organization. 15. Atul Goyal wanted to enhance the sales performance of his team members which seemed to have stagnated since the previous quarter. To do this, he attempted to enrich the jobs of the sales representatives by allowing them to determine for themselves the frequency at which they could call upon their customers. They were also authorized to finalize deals independently to a certain extent, without the intervention of their supervisors. Goyals initiatives enhanced employee morale and the profits of the sales team increased by 20%. Briefly describe job enrichment and discuss how Goyals job enrichment initiatives helped enhance employee productivity and motivation in the organization. 16. Carefully implemented, self-managed teams (SMTs) can be used as effective empowerment tools in organizations. Briefly enumerate the features of a selfmanaged team that make it a potential empowerment tool in the organizational context. 17. Rahul Khanna was extremely pleased with the performance of Anjali Sharma, the new creative executive of his advertising agency. Within six months of appointment, Sharmas performance brought fame to the company which, in turn, helped the company obtain many new contracts. Her creative genius and hard work was evident in all her projects. Impressed with her performance, Khanna called her to his cabin and offered her a cheque in recognition of her outstanding performance. He felt that a monetary incentive would boost her morale and motivate her to perform even better. However, Khanna failed to see any happiness or enthusiasm in Sharmas face when she received the cheque. She thanked him for it and left. Besides there was no expected improvement in Sharmas performance during the weeks that followed. What do you feel was wrong with the way Khanna intended to motivate Sharma? Discuss the motivational theory that best accounts for Sharmas reaction.

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18. Although T-group has been one of the greatest training innovations that helps gain better understanding about the dynamics of groups and teams, there are instances where this technique has failed to achieve its basic objectives. Discuss the possible problems that might crop up during the implementation of T-groups. 19. Nikhil Khanna, the CEO of Sizzlerz, a leading player in the cosmetics industry had to make a crucial decision. Due to a financial crisis in the company, he had to decide between two equally profitable products. He had to choose between investing into the production of more number of products of a particular brand

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Part C which was doing reasonably well and another new product which, he felt, would do exceptionally well if introduced into the market at that point of time. Khanna knew that he neither had time nor sufficient information to make a rational decision. He decided to go ahead with the latter option. What are the factors that prompt managers to show bounded rationality in decision-making? 20. Individuals tend to exert power over others in the organization, which may or may not be sanctioned by the formal organization. Discuss the various tactics employed by such individuals that might, based on their legitimacy and acceptability in the organization, be categorized as good, bad, and neutral political behaviors. 21. Aniketh Basu was recently promoted as the safety inspector at the manufacturing unit of a leading chemical weapons manufacturing company. Prior to that, he served the company as a supervisor in the stores department. Going through the old records of the safety measures to be followed by the company, Basu realized that the company violated a number of laws relating to environmental protection. The hazardous wastes let out by the company into the nearby river was likely to have serious health implications on the people staying close to the manufacturing unit. Besides, the callous attitude of the employees and the management towards controlling pollution tempted Basu to bring the issue to the notice of an eminent social worker who he thought might help him blow the whistle. However, he later withdrew the idea of making this a public issue after listening to the plight of various whistle-blowers across different organizations. Do you think Basu was right in his decision to blow the whistle on his own company? Bring out the various problems he might have to face in the process and also propose a plan to blow the whistle. 22. In a particular brainstorming session that was intended to solve a serious organizational problem, it was found that members of the group were not actively participating in the problem solving process. After a futile attempt, the leader of the group finally gave up and split the group. He asked the members to contribute their suggestions individually to him. In contrast to the commonly accepted fact that groups create a synergy of ideas, the team leader found more valuable suggestions in the latter case. In other words, members of his team performed better when they were isolated than when in groups. Discuss the group phenomenon that is evident here. Also discuss the reasons for such behavior. What can organizations do to prevent such behavior? 23. Ketan Malhotra, a middle-level manager at a large manufacturing firm was worried about the rumors that were fast spreading in his organization about the companys trademark being acquired by its rival. These rumors were demoralizing his sales team and creating feelings of insecurity in them. The lack of accurate and complete information further demotivated them which in turn resulted in decreasing their productivity. Malhotra knew that if this continued for some more time, it would cause serious damage to the company in terms of lost productivity and reduced profitability of the organization. What are the measures that Malhotra and the top management of the company should take to manage the spread of the rumor? 24. Sheetal Enterprises was a leading jute manufacturing company in the nation and the workers were on an indefinite strike demanding an increase in the tenure of their wage contract. The strike had entered its sixteenth day. Negotiation efforts between the labor and the management failed to reach any mutual agreement. It was therefore agreed that they would resort to third party negotiation and take the assistance of the Arbitration and Conciliation Advisory Board set up by the state government to resolve the issue. Briefly discuss the various options or alternatives available to a third party to help resolve a conflict. 143

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Introduction to Organizational Behavior 25. The increasing rate of employee turnover was posing a problem to Abhinaya Iyer, the head of the production department of a medium-sized manufacturer of leather goods. Her goal for the new assessment year was to contain employee turnover considerably. Her initial analysis of the problem showed that while a number of factors contributed to a reasonably commendable high rate of retention, there were an equal number of forces that made employees leave the organization as well. Discuss an Organization Development (OD) intervention that can be used by Iyer to effectively enhance employee retention. Also discuss the steps required to ensure high employee retention in the organization. 26. At Eureka, a leading manufacturer of computer chips, it is common to find groups of people involved in serious discussions in the cafeteria. However the employees are not trying to while away time during office hours by indulging in gossip, but are actually involved in exchange of information relating to possible improvements in the organizational systems and procedures. In other words, they strive towards developing a learning organization by creating an informal group that functions in parallel to the formal organizational structure. Discuss the importance and characteristics of parallel learning structures within an organization. 27. Fads Today (Fads) was a lead player in the garment manufacturing industry. However, a recent change in the top management resulted in increased friction between the management and the workers. These constant conflicts between them had a negative impact on the companys performance. In an attempt to resolve these conflicts, it was decided that an external consultant would help the two parties to understand the various human and social processes in the organization and its impact on interpersonal relationships. Thus, the rising problems at Fads were contained with the concerted efforts of the organizational members and the external process consultant. Discuss the various stages of process consultation and the role played by the external consultant in the successful implementation of this intervention. 28. Sandeep Battacharya, the new CEO of a large hospital, proposed a plan for a complete restructuring of the organization. He wanted to transform it into a matrix organization. This invited a lot of opposition from employees across all departments. However, the top management insisted on the restructuring as they felt that it would help organize the firms operations more efficiently. Nevertheless, they could not ignore the objectives of their employees. Discuss the various advantages and disadvantages of a matrix structure. 29. Meghna Patel was excited about her new job as financial advisor to a mediumsized manufacturing company. However, one day her boss wanted her to manipulate the financial status of the organization to gain short-term tax exemption. She experienced a conflict between the values she upheld and the tasks she had to perform in the organization. She now had to choose between holding on to her personal values or conforming to the expected norms of behavior at the organization. Discuss the concept in organizational behavior that best explains such a situation and the ways in which Patel might react to the situation. 30. Armaan Dev, the operations manager at one of the busy branches of a private sector bank just received a call from the regional manager. The regional manager wanted a report on the performance of the branch during the past year. It was almost the end of the day and most of the staff members had left office. Dev was however glad that one of his subordinates, Sheetal Deshpande, was still in the office. He requested her to stay back to help him prepare the report. As Dev was Deshpandes reporting officer, she agreed to stay back and help him prepare the 144

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Part C report despite having other commitments at home. Describe the power exhibited by Dev in influencing Deshpande to stay back after office to help him prepare the report. 31. In modern organizations, employees from different departments are required to work together to achieve various tasks. Employees often hold opposite views on various issues and get into conflict. Explain how these conflicts can be resolved? Do you think management should allocate time and energy to resolving each and every conflict that occurs between them? Justify your answer. 32. During negotiations, each of the conflicting parties tries to obtain the maximum benefit from the final agreement. Some people may be very aggressive and try to win by all means. What are the tactics generally used by such people and what could be done by the other party to deal with them? 33. Different researchers suggested different communication models to improve the effectiveness of organizations. What is the importance of a communication model? Discuss any modern communication model with an organizational example. 34. In an organization there may be several barriers to communication. The management may believe that it has taken all possible steps to keep employees informed of organizational matters, but employees often complain that they have not received the information. Why is internal communication so important in an organization and what are the barriers to it? 35. Supervisors play an important role as mediators between employees and management. They have to be effective communicators to be successful. Discuss various communication problems that are likely to be faced by supervisors and how they can be tackled. 36. Changes introduced in organizations often fail to achieve desired objectives because of the managements failure to address issues relating to planning and implementation. What are these issues and how should organizations address them? 37. Bhargav Raj, the HR manager of Aditi Manufacturers Ltd. (Aditi), suggested to the management of the company that employees be allowed to work in teams to improve organizational productivity and performance. The management agreed and the team culture was introduced. However, to the surprise of management, the programme not only failed to achieve desired results but also caused decline in performance. The management called a meeting to decide whether the company should revert to the traditional style of working. Do you think Aditi Manufacturers Ltd. should do away with team culture? Justify your answer. 38. Ashok Dwivedi, Vice President (Operations), Zintac Plastics, wanted to resign because of health problems. Ashok, being a very efficient and capable manager, the CEO, Niranjan Dev, asked him to identify his successor before quitting the organization. How can Ashok fulfill his responsibility? 39. According to the White Paper on Science and Technology published by the British Government in 1993, Firms which are skillful at innovation, the successful exploration of new ideas will secure competitive advantage in rapidly changing world markets; those which are not will be overtaken. In this context, explain how an organization can develop an environment conducive for creativity. 40. In a typical organization, the ideas suggested by superiors are easily accepted but those suggested by people at a lower level are often ignored. In this way, organizations run the risk of curtailing creativity and losing brilliant ideas in this way. PMI, a thinking tool developed by Edward de Bono, aids organizations in analyzing ideas and identifying practical and feasible ideas. Discuss the 145

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Introduction to Organizational Behavior importance of management support in promoting creativity and innovation in organizations and describe how organizations can enhance the creativity of employees by using PMI as a tool. 41. Every employee wants to be recognized for his/her good performance. How can organizations address the need for recognition in employees? Explain with the help of an example. 42. Zeta Metals Ltd, adopted teamwork culture in 1999. Employees performed well in teams and the organizations productivity shot up. However, the performance appraisal of the employees the following year was carried out in the same way as it had been in the past. This demotivated the employees as in their perception, teamwork was not given any special recognition for the purpose of appraisal. As a result, their productivity declined. Explain how Zeta can determine the accomplishments of teams and reward them appropriately. 43. Organizations are increasingly employing knowledge workers to develop innovative products to serve customer needs and innovative solutions to address clients problems. The personality traits, skills, needs and expectations of these highly skilled employees are different from that of unskilled workers. What are the general characteristics of knowledge workers? Describe how they can be motivated by organizations. 44. Abhay Bedi joined Esha Electronics Ltd., as an engineer. When he had completed five years in the firm, his manager resigned to join another firm in a higher position. After evaluating the performance records of 10 engineers in the firm, the top management decided to promote Abhay to the position. When Abhay was handed the promotion letter, he was happy but also tense about his new role. What are the different roles that Abhay will have to perform as a manager? 45. The factors that differentiate leaders from non-leaders include initiative, desire to lead, integrity, self-confidence, analytical ability and knowledge of the specific company or industry. If these factors are supplemented by traits such as charisma, creativity and flexibility, an individual is likely to be an effective leader. Substantiate this point giving an example of a business leader. 46. Unlike many organizations which employ teams at the workplace, the employees at Neha Manufacturers were divided into work groups with each group being assigned a different task. The general manager of Neha Manufacturers, Phani Desai, observed that the groups often committed errors and failed to complete their tasks on time. Even at the group meetings, Desai found that all the members of the group did not participate in decision making and action planning. Differentiate between work groups and work teams and suggest how the management at Neha can deal with the work group problems. 47. The personnel manager of Sai Office Equipment Suppliers, Sesha Ratnam, was upset that the members of work groups in various departments were always involved in conflicts and complained about the behavior of their fellow members. They pestered Ratnam to transfer them to another group or department. Ratnams past experience, however, had taught him that it was likely that they would face the same problems again in another group or department. Recommend ways in which Ratnam can find a solution to this problem. 48. The concern of every manager in todays competitive business world is to improve the performance and productivity of his employees. Only motivated employees can perform well and increase the productivity of the organization. Discuss how managers can motivate employees and improve their productivity. 49. There is an increasing emphasis on quality in organizations. This increases the pressure on employees to attain perfection in their work. Do you think that the emphasis on quality has benefitted employees in terms of improving the quality of their work life? 146

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Part C 50. High quality products are possible only when an organization hires high quality employees and trains and develops them to suit its needs. In most modern organizations, employees work in teams. It is the responsibility of the team leader to shape the attitudes of team members and foster a culture that emphasizes on quality. As team members strive to attain quality, they may come across many problems. Explain how a team leader can help improve the problem solving skills of his team members, and thereby improve their quality of work. 51. According to the equity theory, people not only relate their rewards to the efforts they have put in, but also try to relate their rewards to those of others. Any perceived inequity would lead to employee dissatisfaction and demotivation. Comment on the inequity resulting from the disparity in compensation packages offered to top executives and ordinary workforce in organizations. Further discuss how organizations are trying to reduce this inequity. 52. At Paragon, a leading cosmetics manufacturing firm, CEOs change every two years. Some stakeholders expressed concern about this policy of the firm. The board of directors explained that Paragon was in the growth stage of its life cycle and the swift changes taking place in the fashion industry demanded a change in leadership style. Therefore, the company changed leaders constantly. What are the various stages in a companys life cycle and what are the responsibilities of a leader in these stages? Do you think Paragon was right in changing leaders so rapidly? 53. Innovation results from thinking. A leader has to continuously encourage his employees to think creatively. It is only the thinking power of employees that makes great companies. Suggest how leaders should encourage thinking in organizations.

55. Harita Safety Equipment Manufacturers (Harita) gave special gifts in the form of premium brand watches, executive coats and gold-framed spectacles to employees who had completed 10, 15 and 20 years of service respectively. However, the general manager of the company, Keshavaram Pillai, came to know that employees having less than 5 years of experience in the company were dissatisfied with the reward system of the company and desired to have a reward system that recognized performance and not just the duration of employment in the company. How could Harita enhance its reward system for the satisfaction of all its employees? If Harita wants to introduce a new recognition program for employees, how should the company go about doing it? 56. Studies have shown that flexible work options improve the quality of work life of employees and improve organizational productivity. By the late 1990s, almost all leading companies in different industries across the world, particularly in the US and Europe, had started offering a variety of flexible work options. What do you understand by flexible work options? Can you name some companies in India which are offering flexible work options, and the facilities that are being provided to employees as part of these options? 57. APZ Bank, headquartered in Mumbai, employed about 25 people in 2001 to fill vacancies for bank tellers at various branches across the country. The minimum qualification required was post graduation. They conducted a rigorous entrance test followed by an interview in which the candidates were thoroughly tested for their knowledge on various subjects. Appointment letters were posted to the top 35 candidates. Ten opted out for various reasons and 25 joined the bank. The general manager commented in a company meeting, This year, weve got real gems. But within two years, about 19 out of the 25 new employees left the 147

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54. Whether leaders are born or made is always a debatable issue. According to some people, an ordinary person cannot be developed into a leader by being given the required skills. Do you agree? Substantiate your answer with examples.

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Introduction to Organizational Behavior organization. What could be the reasons for such high employee turnover in APZ Bank? Did the organization fail to match personalities with jobs? Explain with the help of Hollands personality-job fit theory. 58. Global competitiveness is one of the greatest challenges confronting organizations in the new millennium. Can you give an example of any Indian company that has brought about considerable changes in its HR policies in response to the challenges of globalization? 59. According to Herzbergs two-factor theory, hygiene factors (such as reasonable pay and conducive working conditions) are essential to retain employees. A survey conducted by Whirlpool Foundation in 1997 revealed that employee wellness programs reduce absenteeism and turnover, enhance employee satisfaction and morale, reduce health care costs of employees and enhance organizational efficiency. Describe the employee wellness programs being implemented by any well-known company and the benefits of these programs on its employees. 60. Some people as well as organizations believe that successful leaders exhibit similar behaviors. They believe that a person needs to learn those behaviors to become a successful leader himself. Do you support these beliefs? Explain with reasons. 61. The Managing Director of Akhita Tool Designs, Ashutosh Dev, instructed his personnel manager, Anita Jain, to begin the process of recruiting new people for the company to meet the companys manpower needs after its expansion into new sectors. Jain suggested that the company should use a questionnaire to assess the personalities of applicants and to know the personality-job fit. However, Dev disagreed with the utility of the personality-job fit theory and forbade Jain from relying on such a technique of recruitment. If you were in Jains position, would you obey Dev or try to convince him of the benefits of using personality tests in recruitment? How will you support your stance? 62. Most organizations prefer to hire people who have already worked in other firms in similar positions as it saves the time and money needed for training new employees. Some organizations emphasize knowledge and experience. But there are companies which emphasize attitude above everything else. Which of these companies will be more successful according to you? Explain giving organizational examples. 63. Right culture is crucial for organizational success. Organizations spend substantial resources in developing and maintaining their culture but only a few are successful. Describe the organizational culture of any one of the successful companies.

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64. Kurt Lewin suggested a three-step approach to change unfreeze, change and then re-freeze. If change is as simple as that, then why do managers in large organizations find it difficult to implement change? Explain the reasons for complexity in implementation of change initiatives in corporate firms. 65. Informal groups and informal networks play a crucial role in product development, product improvement and process improvement initiatives. Research studies have shown that individuals in organizations tend to rely more on friends and acquaintances for information and assistance than impersonal sources of information such as books and the Internet. Managers encourage such informal communication and networks because they help employees to informally contact the experts concerned, obtain requisite information and complete their projects speedily. Explain what management can do to develop informal networks in the organization.

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Part C 66. Organizations conduct formal training programs to help employees learn the desired skills, work culture, values and norms. But the training programs are effective only when a relatively permanent change occurs in the employees behavior. Apart from the formal methods of learning, learning can also take place informally. How can organizations make their training programs effective? What are the various methods of informal learning? 67. Bradley Sullivan, CEO of Alka Electronics Ltd., encouraged semi-autonomous work teams in the various units of his organization. Task forces were also commonly used in the organization. Although Alka could rapidly imitate the competitors products, it lacked ability to innovate. When Sullivan approached an internationally renowned OD consultant with his problem, the consultant pointed out the necessity of creating a climate conducive to innovation and learning in Alka. He suggested that Sullivan implement parallel learning structures and described the process. Sullivan told him that he already had a parallel learning structure in his organization and gave the example of the teams implemented by Alka. The consultant, however, refused to consider them as parallel learning structures. What are the characteristics of parallel learning structures? Why do you think the consultant did not consider teams as parallel learning structures? How can a parallel learning structure be implemented in an organization? 68. The CEO of Deepseas ship manufacturers, Sam Blair, realized that his organization would be in deep trouble if he did not take adequate measures to solve the problems resulting from organizational bureaucracy, and improve the deteriorating union-management relations. Blair sent his HR manager to consult a famous OD consultant, Gervase Cohn, to seek his help in improving the organizational situation. What are the various issues that need to be considered when an external OD consultant is hired? Discuss any three of them in detail. 69. OD consultants are increasingly playing a critical role in organizations. But selecting the right consultant is always a difficult task for management. Explain how executives can determine the right consultant to help them resolve organizational problems. 70. In future, individuals will not be required to come together at one place to participate in OD interventions. They can participate in these interventions even virtually by using the Internet. Discuss how an OD practitioner can help organizations manage virtual teams? 71. Of all the change initiatives undertaken by OD consultants, cultural change is a challenging task for them. Manoj Verma, the CEO of CBT Chemicals Ltd, invited a leading OD consultant in India, Sanjay Chopra to help him change the conservative culture of his organization. With the help of an organizational example explain why it is difficult to change organizational culture. How can Chopra help Verma in implementing cultural change in his organization? 72. James Kitt, the CEO of Yugandhar Manufacturers, hired the services of Jagan Mehra, a popular OD consultant, to suggest changes in his organization that would improve its productivity and efficiency. But after Mehra submitted his report, Kitt felt that Mehras recommendations were impractical and unacceptable. He felt that the consultant did not deserve the fees he was paid. Kitt conveyed his opinion on the report to Mehra. Mehra was unhappy at this, and felt that Kitt either lacked the management skills to implement his recommendations, or the courage to do so. Discuss the reasons for differences in perception of the client and consultant. How can these differences be overcome? 73. According to French and Bell, The OD process is basically an action research program in an organization designed to improve the functioning of that organization. Most OD approaches are, however, not implemented in their 149

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Introduction to Organizational Behavior original form, but are slightly modified to suit the unique requirements of organizations. Discuss the importance of action research and how it is implemented in organizations. 74. Nikhil Khanna was a very efficient employee of Mithila Data Processors. However, recently there has been a change in organization structure, policies and procedures at Mithila to meet the challenges of a more competitive environment. After the change, Khannas performance declined. Though his manager, Atyut Kumar wanted to know the reasons for the deterioration in his performance, Khanna did not give him a convincing explanation. Therefore, Kumar asked the HR manager, Jayant Chowdary, to counsel Khanna. How can Chowdary help Khanna adapt to the change and improve his performance? 75. Organizational politics is a reality in most organizations. Researchers and practitioners of OB have also acknowledged the role played by politics in organizational dynamics. Discuss how OD practitioners can deal effectively with organizational politics. 76. As the departments/units of an organization are interrelated, the impact of many OD interventions will not be confined to the department or the unit in which it is implemented. In international organizations, the impact is far-reaching. Therefore, when working in international organizations, OD practitioners need to have a holistic perspective. How can OD practitioners develop a holistic perspective? 77. Interventions seek to change the status quo in an organization and bring about a desired and effective state. What are the various factors that need to be considered by an OD consultant for designing effective interventions? 78. Akshita Garment Manufacturers was a leading company in India. The managing director of Akshita, Rakhi Kohli, wanted to expand the business by establishing subsidiaries in various countries in Asia and the US. Rakhi wanted to promote one of the managers in the domestic firm as the manager for international operations. Since global managers must have a special mindset that allows them to manage international operations, Rakhi wanted to exercise utmost care while selecting the person. What are the characteristics Rakhi should look for, while selecting the person to manage the international operations of her company? 79. Due to changes in market conditions and technology, organization structures have also undergone a major change. Comment on the changing organizational structures and work patterns across the world. 80. For some organizations, empowerment is a form of delegation, and for some, it is a way of passing blame for failure to employees down the hierarchy. What is empowerment? When does empowerment take place in organizations? Explain with examples. 81. PeopleSoft, a developer of client/server software for financial and human resource management, is known as one of the best places to work in. One of the main reasons for the employee turnover at PeopleSoft being as low as 10% even while the employee turnover rate in the industry hovered between 25 and 30%, was the flexibility the company offered to its employees. Telecommuting was the most popular work arrangement offered by PeopleSoft to its employees, which helped the company raise its productivity and contain its employee turnover. Citing the example of PeopleSoft, briefly explain how telecommuting helps the employees and the employer. Also, discuss the limitations of telecommuting and the pitfalls that could arise from its implementation. 150

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Part C 82. It is not the cultural differences themselves, but the strategies to overcome the cultural barriers, that are important for a successful cultural adaptation. In the light of this statement, briefly state the various barriers to cultural adaptation, and the strategies to cope with them. 83. Integrating grapevines into the formal communication system reduces the negative effects of grapevines. Briefly discuss how organizations can benefit by effective management of grapevines. 84. A leading staffing company based in the US believes that people are the most valuable assets of any organization, and that organizations can derive a competitive advantage by developing their human resources through effective mentoring. In the light of the above statement, briefly explain how organizations benefit from mentoring programs, and also discuss the various roles a mentor plays during the mentoring program. 85. Technological developments help employers monitor many aspects of their employees jobs. However, this is construed as violation of employee privacy. Organizations thus run a risk of liability while monitoring employee performance. Discuss the various aspects of employee jobs that are subject to monitoring at workplaces. Also, discuss how organizations can effectively avoid getting involved in litigation. 86. Rakesh Ranjan, a senior manager at a twelve-year old software firm was facing a difficult time. Six months ago, he had taken a wrong decision and given the green signal to a project which ideally should have been rejected. Preliminary studies and the cost-benefit analysis of the project had indicated that it should be rejected. Despite this, Ranjan had given his assent to the project. This wrong decision was now posing serious problems to the organization. Decision makers tend to stick to a bad decision even though they are aware that it will lead to undesirable consequences. What is this phenomenon called? Discuss the various factors that cause managers to take such decisions. 87. Organizations today are inviting and appreciating employee participation in the organizational decision making process due to the benefits involved. However, certain prerequisites must be satisfied to ensure effective participation of employees in making decisions. What are the prerequisites for effective employee participation in organizations? 88. Imagine that you are the head of the production department of a large manufacturing concern. You observe that employees are not performing to the desired standards. The quality of the products is also deteriorating. What would you do to shape the behavior of employees in a way that benefits the organization? 89. According to Peter Senge in his book The Fifth Discipline, A learning organization is a place where people are continually discovering how they create their reality and how they can change it. Briefly discuss the characteristics that distinguish a learning organization. 90. Theory Z, propounded by William Ouchi is a blend of the American and the Japanese styles of management. Briefly discuss the various characteristics of a Theory Z organization. 91. The existence of an informal organization within a formal structure is inevitable. Organizations must attempt to exploit the benefits of this informal organization rather than trying to combat its dysfunctional characteristics. Discuss the various functional and dysfunctional aspects of informal organizations. 151

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Introduction to Organizational Behavior 92. A research conducted on a large Russian factory and a cross section of organizations in the US reveals that while 42.5% of Russian managers concentrate on traditional management practices, only 32% of the managers in the US emphasize on these practices. Likewise, many such differences in leadership styles exist across different cultures. Briefly explain the factors that contribute to such differences in managerial leadership across cultures. 93. Of late, researchers have come to believe that leaders are made, not born. This is in sharp contrast to the traditional belief that leaders are born, not made. Substantiate your stance on this long-standing debate. 94. The structure of a group helps determine the behavior of its individual members. Discuss the various structural variables of the group that shape the behavior of its members. 95. Robert Katz has identified three essential management skills or competencies that managers must possess. These skills are also related to the various roles played by managers in organizations. Discuss the essential competencies of effective management as explained by Katz. 96. Cross-functional teams (CFTs) at 3Ms Industrial Specialties Division, play a vital role in managing its overall business activities. CFTs manage almost all the product families. At 3M, CFTs comprise members from the laboratory, manufacturing and sales departments, who manage routine functions as well as activities pertaining to new-product development. Likewise, there are many other organizations who deploy CFTs for effective management of business operations. Discuss the major benefits of cross functional teams that prompt organizations to form such teams to achieve their business objectives.

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98. Eshwar Dayal is a middle level manager in a manufacturing concern. He heads a team of sixteen members. Most of his team members perceive him as a biased supervisor as he overly tends to support and take a positive view of the actions of one of the team members just because he graduated from a top-rated business school in the country. The other team members feel that Eshwar Dayal is making a serious error of perception. What is this kind of error in perception known as? Describe its main features and compare and contrast it with another perceptual error. 99. Span of control is one of the key elements to be determined while designing an organizational structure. However, there is no foolproof method to determine the optimal span of control. What is span of control? What are the various factors that must be considered to arrive at an ideal span of control? 100. The constant friction between the Marketing and the R&D departments of Smilez, a lead player in the cosmetics industry, was a serious cause for concern to the General Manager, Raj Gopal. While the members of the R&D department felt that the marketing team was unduly pressurizing the R&D department to produce new products at frequent intervals, the marketing team felt that the R&D department was not working hard enough to meet the changing demands of their customers. Gopal had to take immediate action on this conflict situation to ensure the smooth functioning of the organization. Accordingly, he invited an Organization Development (OD) practitioner to solve the problem. After studying the case, the consultant suggested that the two groups discuss the problem and arrive at a mutually acceptable solution. Do you think this is possible? If so, what might be the prerequisites for this process to be successful?

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97. Every individual is subjected to numerous stimuli at a given point of time. However, different people respond differently to the same stimuli leading to a difference in their perception. What are the factors responsible for the differences in perception of individuals? Briefly discuss any set of factors.

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Part C: Applied Theory Answers

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Each question can be answered in a variety of ways. Students should be able to come up with reasoned answers that reflect their knowledge of theoretical concepts and the current business environment.

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Part C: Applied Theory (Answers)


Answer 1
In order to remain competitive in todays dynamic business environment, organizations are expected not only to react to the changes brought about by external factors but also to anticipate these changes well in advance. Organizations may be forced to transform their culture either due to a change in the top management or due to changes in the external business environment. However, such a change is not easily received by the organizational members. The resistance to change on the part of organizational members may be due to their lack of willingness to shed their closely held values and assumptions. It is, therefore, the responsibility of the management not only to identify the need for change but also to develop a change strategy that is accepted by its members. The change process ideally begins with an assessment of the existing organizational culture and a realization of the need to change it. This stage also involves determination of the drivers for change and definition of the desired objective. The change process can be made more effective by the presence of an external change agent, who has the advantage of recognizing those aspects which the management or the employees have failed to identify. However, the change agent must study the organizational processes thoroughly before venturing to design the change strategy. An open channel of communication should exist between the change agent and the members of the organization to facilitate a better understanding of the existing culture. Changing the culture of an organization is not an easy process because of the pervasive nature of culture. The values and assumptions upheld by the founders of the organization are generally internalized by its members over a period of time. Therefore, transforming the organizational culture necessitates a well- planned change strategy. The top management plays a vital role in effectively changing the culture of an organization. A lot of uncertainty is bound to prevail among the members during the process of change. It is the responsibility of the top management to reduce the levels of anxiety among them. It must also ensure that the change process is a quick one, and not a gradual transition. This reduces the tendency of the employees to revert to the old methods of doing things. It should present a clear picture of the desired state of the organization. This ensures that the behavior and actions of the employees are directed towards the objective. As members of the organization have been blindly following the widely accepted ways of doing things, they tend to ignore better alternatives for the task. In such a scenario, the change agent must present such alternatives to members of the organization and get them to appreciate the benefits of the new procedures. Acceptance of new procedures can be facilitated by educating the members about the paradigm of the changed culture that they are actually working to bring about. Employee participation in the change process cannot be ignored as encouraging their contribution not only helps get their perception of the change process but motivates them to accept the changes as well. The change agent, in collaboration with the top management, must design an effective set of guidelines and reference points that the employees can rely on during the transformation process. This would also help the members to easily shed their old practices. A change strategy that is initiated by the top management, guided by an external change agent and backed by employee participation, is bound to be a successful one which, in turn, will help the organization remain competitive in the dynamic business environment.

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Introduction to Organizational Behavior

Answer 2
Socialization helps maintain and sustain the culture within an organization. The other factors that help maintain the organizational culture are the selection procedure and the top management. The actions of the top management have a tremendous effect on the culture of an organization as they are the ones who guide and control employee behavior. The selection procedure also plays a vital role in sustaining the organizational culture. By selecting only those applicants whose interests and behavior match the expectations of the organization, the management ensures that minimum deviations from expected employee behavior occur. However, no selection process succeeds in inducting candidates whose behavior is fully in tune with the organizational expectations. This is because an element of subjectivity always creeps into the selection procedure. In such cases, socialization helps tune the behavior of these newcomers to the organizational requirements. Socialization is thus a formal program which educates new employees on the prevailing organizational culture and encourages them to internalize the values of the organization. Socialization aims at establishing a perfect fit between employees and organizational culture. Ensuring a cultural fit among the employees helps enhance their productivity and reduce employee turnover. Socialization is generally conducted during the induction program, as it is the best time to mold the employees behavior to the organizational culture.

The next phase is the encounter stage, which is considered to be the most important phase in the entire process of socialization. At this point of time, the employees face the actual organizational culture, i.e. they are exposed to the reality existing in the organization. Here, the newcomers compare their expectations of the organizational culture with the actual culture prevailing at the workplace. The process of socialization is said to be effective if the comparison results in minimum deviation. If the deviations are large, the chances are that employees become completely disillusioned with the culture and this might have a counter-productive effect on employee behavior. In other words, the lesser the differences between the employee expectations and the real conditions at the workplace, the greater the success of the encounter stage of socialization. This stage, therefore, attempts to obtain a cultural fit between the employees and the organization. Metamorphosis is the final stage of the socialization process where the actual change takes place and the employee behavior conforms to the organizational expectations. Once the newcomer embraces and internalizes the organizational culture and value system, the metamorphosis stage is said to be complete and successful. This stage aims at creating a sense of identity and belongingness among the employees thereby enhancing employee productivity and commitment and reducing the chances of his/her leaving the organization. Thus, the three-stage process of socialization enhances organizational profitability and decreases the attrition rate at organizations.

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When a new employee enters an organization, he/she is gradually introduced to the norms, values and rituals of the organization. At this stage, every employee is treated as an individual with a distinct and unique set of values and principles. The greater the accuracy with which the employee is able to anticipate the organizational expectations from him/her, the greater is the success of the prearrival stage of socialization.

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The process of socialization can be divided into three distinct stages namely, prearrival, encounter and metamorphosis.

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Part C

Answer 3
Organizational culture comprises the various assumptions, values, beliefs and norms shared by the people in an organization. It refers to a pattern of learned behavior that is shared and passed on among organizational members. Although culture might seem implicit and intangible, it cannot be taken for granted. This is because, over a period of time, every organization tends to develop and uphold a set of values and beliefs that govern employee behavior. The organizational members tend to follow and abide by these core values. Therefore, uniformity of behavior is found in most organizations that have a strong culture. One of the important functions of organizational culture is to predict and control employee behavior. The accepted norms and assumptions of an organization actually guide the behavior of employees. Management rewards favorable employee behavior, i.e. any individual who behaves in a manner that upholds the culture of the organization is adequately rewarded. The rewards are very attractive and serve to encourage other employees to emulate them. Performance appraisals and reports of the employees are also influenced by their behavior at the workplace. In other words, these rewards act as positive reinforcements to improve employee performance. Conversely, any deviation in behavior from the accepted standards is taboo. An individual behaving in a way that conflicts with the organizational culture is looked down upon and is liable to be penalized. Any undesired behavior will lower the rating in the performance appraisal, thereby affecting the career growth of individuals within the organization. Conformity to organizational culture thus becomes the basis for organizational rewards and upward mobility of the employee in the organizational hierarchy. Organizational culture, therefore, acts as a powerful tool not only to encourage favorable behavior but also to punish unfavorable dispositions. Newcomers to the organization are given adequate training on the expected standards of behavior. They also go through the socialization process which acquaints them with the organizational culture. They are familiarized with the actual work conditions and organizational environment through these programs. The employees are then molded to obtain the right employee-organization fit. The newcomers are also taught about organizational culture through stories, rituals, material symbols and jargon. Until they absorb these values and conform to the existing organizational culture, they are not treated as members of the organization. Thus, organizational culture plays a vital role in predicting and controlling employee behavior. Besides, organizational culture has assumed even greater importance with the widened spans of control, flattened structures, and the introduction of teams. The different teams have a shared meaning because of the common organizational culture. This, in turn, provides them with a common direction towards attainment of organizational goals. There are numerous examples of well-managed organizations with strong organizational cultures. Disney and Wal-Mart are good examples of organizations where employees exhibit uniformity of behavior. This can be attributed to the culture prevailing in these organizations. Thus, organizational culture acts as a powerful mechanism to control the behavior of employees. It not only predicts and controls their behavior but binds them socially within the organization.

Answer 4
Despite constant efforts at effective communication within organizations, people end up miscommunicating messages. In other words, messages get distorted by the time they reach the receiver and sometimes, they are not communicated at all. This happens due to the presence of a number of barriers to effective communication and these are discussed below: 157

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Introduction to Organizational Behavior Semantic barriers: Communication tends to become ineffective when words or symbols with more than one meaning are used. This generally happens when the words used during communication convey different meanings in different contexts to different people. Also, for the message to be communicated effectively, the body language has to match the oral communication. Psychological barriers: These are the basic, inherent obstacles present within individuals, which prevent effective interpersonal communication. Mental state: Various emotions like happiness, sorrow, anger, and anxiety affect the meaning of the words used by the sender of a message. They also affect the way the receiver looks at the message. In other words, the mental state of both the receiver and sender of the message affect communication. If their state of mind differs, they may interpret the same message in different ways. Perceptions: The words or actions of people may have different connotations for different people, depending upon their perception. For example, when one supervisor observes his subordinate leaning back in his chair with eyes closed, he might think that the subordinate is shirking work and is sleeping during office hours. Another supervisor might feel that the subordinate is deeply engrossed in thinking about a problem on hand. Therefore, communication depends to a great extent on the perception of the receiver. Halo effect: Receivers tend to interpret messages based on their bias towards the sender. If the sender is someone whom the receiver admires and respects, he/she tends to easily agree with the sender. On the other hand, if the sender is someone whom the receiver dislikes, he/she is more likely to oppose the same message and act according to his/her will. Cognitive dissonance: At times when the message contradicts the beliefs and attitudes of the receiver, he/she tends to ignore the communication or disagree with it. The receiver thus becomes selective in responding to, and in interpreting the message. This affects the effectiveness of communication. This phenomenon is called cognitive dissonance. Filtering: This generally happens when the communication has to pass through a number of persons or levels before it reaches the ultimate receiver. The message is likely to get distorted at each level and may eventually lose its true meaning. This leads to miscommunication.

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Besides these personal barriers to communication, certain organizational factors also tend to make communication ineffective. Some of these are: Filtering: The greater the number of levels in the organizational hierarchy, the greater the distortion of the message that is communicated. In other words, communication proves to be more effective in organizations with a flat structure, rather than in organizations with a vertical and tall hierarchy.

Dependency syndrome: The degree of dependency of the receiver on the sender affects the effectiveness of communication to a great extent. For example, a subordinate is dependent on his superior for favors and promotions and therefore, tends to agree with and accept the information communicated by his supervisor. Interpersonal relationship: Vertical communication is greatly affected by the relationship between the superior (usually the communicator), and the subordinate (usually the receiver). The vertical flow of communication is thus affected by the rapport between the two. Thus, effective communication in organizations is facilitated only when these barriers are overcome.

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Part C

Answer 5
The presence of people belonging to different age groups, genders, ethnic groups and educational backgrounds gives rise to diversity in organizations. Though managing a diverse group of people is a challenging task for the management, capitalizing on this diversity may bring in huge benefits to the organization. This is because diversity enhances the competitiveness of the firm. Since people belonging to diverse cultures come together for a common objective, the synergy obtained from the various ideas and viewpoints of these people can help solve problems on hand. This helps organization to be more innovative and come up with better alternatives to existing systems and processes in the organization. Managing diversity also helps when the organization plans to go global. This is because once an organization has effectively managed people belonging to various cultures, it becomes easier for it to adapt to cultures across the globe. Therefore, it is crucial for organizations to effectively manage diversity if they are to capitalize on these advantages. Many organizations offer family-friendly workplaces to improve employee morale and productivity. This also helps them reduce absenteeism and attrition rates. Organizations provide employees with a mix of family/work programs such as day-care centers, elderly care centers, flextime, compressible work weeks, telecommuting, part-time employment, etc., in order to cater to people belonging to diverse age groups. Similarly, organizations also provide various incentives for good performance based on the differing needs of its diverse group of employees.

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These strategies are generally used when employees want to play it safe by shifting the responsibility of failure to others to remain out of trouble. Demotion-preventative strategies generally have the following identifiable features: Accounts: This is observed when an employee tries to justify his/her failure to do a task by giving excuses. Ill-health or concentration on another priority task, etc., are common excuses used by employees to account for a negative outcome. Apologies: Apologies are used when there is no proper excuse for a job failing. Employees apologize when they want to show to their boss that they actually regret the failure and will take care to see that the mistake is not repeated. Dissociation: This tactic is generally adopted when a group of employees make an effort that fails. Each of them then tries to dissociate himself/herself from the group and thus disown the responsibility for the failure. This form of attributing the failure to others is called dissociation.

Promotion-enhancing strategies As the name suggests, promotion-enhancing strategies are used when employees seek special favors for enhancing their responsibilities, or improving their image in the organization. Some of the common features of this strategy are: 159

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Demotion-preventative strategies

People generally like to present themselves in a way that is socially acceptable to others. Also called self presentation, impression management refers to the process by which people try to manage or control the opinion that others have about them. People generally use impression management to gain social acceptance. Employees in organizations use impression management strategies to either prevent demotions or enhance their chances of promotion. Hence, they are classified as demotionpreventative strategies and promotion-enhancing strategies.

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Organizations effectively manage diversity in these ways so as to capitalize on the synergy such a diverse workforce produces.

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Introduction to Organizational Behavior Entitlements: When employees feel that they have not been given due credit for a positive outcome, they take the help of formal or informal sources to let their bosses know about their performance and their contribution towards the success of the task. Enhancements: When the efforts of an employee in an organization result in exceptional profits to the organization, he/she feels that he/she deserves more than only financial incentives, say an increase in responsibilities, or a promotion to a higher post within the organization. In such cases, the employee tries to communicate to his superior about the efforts made by him/her and his/her expectations anticipating a favorable result in this case, a promotion. Obstacle disclosures: This strategy is employed by subordinates to convey to their superiors, the personal and organizational obstacles they had to overcome in order to obtain the desired outcome. The employees desire to inform their superiors about these obstacles arises from the feeling that they deserve to be rewarded more since they have successfully achieved the outcome despite all the obstacles. Association: Employees try to create a favorable impression of themselves by showing that they have good contacts and are associated with successful projects and organizations.

Answer 7

Decisions in modern organizations are made by groups and teams rather than by individuals. This has enhanced the importance of the phenomenon of group polarization. Group polarization has the potential to change the final decision of the group without actually changing the rationale behind such a decision. In the above case, only 62% of individuals approved investment in the project, prior to the group discussion. However post-discussion analysis resulted in an increase in the number of people subscribing to the initial notion. This can be explained by the fact that individuals in a group subscribe to a popular opinion which they may not have subsribed to at an individual level. This results in making a decision that might seem too extreme. Persuasive arguments enhance the possibility of group polarization. Group polarization occurs when a small group of people holding an opinion cogently convince the rest of the group who might be in a dilemma about the decision-making situation. Group polarization tends to gain greater significance due to the fact that the outcome of the decision made cannot be attributed to a single individual. The consequences of a wrong decision is the responsibility of the entire group. Therefore, individuals are encouraged to make decisions that seem to be a risky proposition and that which they would not have opted for as individuals.

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The phenomenon that has occured in the present case is called group polarization. Group polarization is said to occur when the choice made by the group is different from that of the individuals in the group or when a groups initial tendency is enhanced following a group discussion. In such a case, groups tend to make risky decisions which they would not have made as individuals. This tendency to make risky decisions in a group is called risky shift.

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Organizations use impression management too, to project an attractive image of themselves to outsiders. Often, organizations use impression management to establish their legitimacy and credibility in the society.

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People use all these strategies to develop a positive image or perception in others about themselves. This is because employees feel that if the organization has a positive image of them, it will help them get promotions or financial benefits.

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Part C While group polarization has its disadvantages, it also has many potential benefits. It proves to be extremely useful when a group has to be counseled about the negative effects of quitting the job, smoking, diet programs etc. Therefore, if group members favor a particular stance before the group discussion, a discussion that follows might lead to a decision that further reinforces their stance about the situation.

Answer 8
The ultimate motive of all organizations is to make profits. And profits can be made only if the people in an organization are motivated to achieve this objective. Therefore organizations are leaving no stone unturned to develop a long-lasting and motivated workforce. In recent times, management in organizations have begun to see the importance of ensuring a right fit between the skills and attitudes of the employees and nature of the job and the culture of the workplace. Therefore, they have been designing selection procedures that ensure that the right person is chosen for the right job. The selection of an employee whose interests are in synchronization with the nature and demands of the job is the main objective of an ideal selection procedure. This is because if the employee is satisfied by the nature of the job itself, external rewards, which are short-lived in nature, will not be required to motivate him/her. Organizations should ensure that the career growth that an employee expects is in keeping with the organizational goals. This helps the organization provide employees with adequate opportunities for growth, and this, in turn, helps retain them. Organizations also need to design jobs in such a way that people enjoy what they are doing and find themselves doing something that is closest to their heart. Both these objectives can be achieved when the selection procedure in organizations is capable of choosing the right people for the right job.

Even though people have common needs, they are affected by these needs in different magnitudes. Thus, their motivational drive tends to differ, depending upon their position in their career life-cycle, comfort levels and abilities. Maslows hierarchy of needs identifies and prioritizes the factors that motivate people in organizations. According to this theory, people have different needs and the factors that motivate them also vary depending on their needs. Maslow identified five levels of human needs and placed them in a hierarchy. He classified them into physiological, safety, social, esteem and self-actualization needs. According to Maslow, once the needs at a particular level in the hierarchy are satisfied, they no longer motivate the individual, and he will attempt to satisfy the next higher order of needs. Generally, people in their first job, tend to concentrate on satisfying their physiological needs first. This is because they are more interested in first acquiring the bare necessities of life before looking at satisfying other needs. To ensure that, they generally tend to look for jobs that pay more. Once their basic physiological needs are met and they are able to satisfy their needs of hunger, thirst, sleep, etc., they try to satisfy their next higher order of needs. Thus, it is commonly observed that in their initial jobs, people are considerably motivated by the pay checks they receive. On the other hand, people who are in their fourth or fifth jobs must have already met their basic physiological, safety and social needs. These needs, therefore, no longer motivate them. So, they concentrate on establishing an identity for themselves within the organization, and on doing something that gives them a sense of self-actualization. Thus, they seek jobs that give them more responsibility and power. 161

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Introduction to Organizational Behavior

Answer 10
Organizational culture may be defined as a set of values, assumptions, and norms that guide employee behavior within an organization. It is a set of practices that has been established, accepted and internalized over a period of time. In other words, organizational culture is evolutionary in nature, and cannot be easily changed. Since the members of the organization accept and emulate these values, they tend to be bound together as a single cohesive unit working towards a common objective. While such cohesiveness is essential in guiding employee behavior and ensuring the smooth functioning of the organization, a strong culture has the propensity to stifle the creativity and growth of the organization. This is because the pervasive nature of the organizations culture makes its members blindly follow existing practices, even if there is an enormous mismatch between these and the external environment. Creativity is curbed, as the employees are not encouraged to think up alternative methods to existing practices. To succeed in this dynamic business environment, it is imperative for every organization to be sensitive to changes in technology. However, if the members still follow existing procedures, it will fail to survive the competition from external environment. IBM for example, lost out to HP due to its inability to adapt itself to the changing external environment, reflected in the form of the changing needs of the customer. HP, however, was able to adapt itself to these changes and thereby secure a competitive edge over IBM. Thus, while a strong culture at IBM resulted in its failure to adapt to the changing needs of its customers, an adaptive organizational culture at HP helped it gain a competitive advantage.

In the present case, the employee is expected to act in a way that goes against personal values and principles. He now has to choose between complying with the organizations expectations of him and his personal values and principles. If he opts for the former, he ends up feeling discontented because he is going against his principles, but if he chooses the latter, his job security is threatened. Such conflicts create undesirable tension and frustration in the individual, resulting in stress-related problems. Behavioral responses to such situations may be either total compliance with organizational rules or a refusal to enact such a role. Role conflict leads to emotional exhaustion, reduced participation in team activities, and diminished levels of job satisfaction in the individuals. This, in turn, leads to negative organizational consequences such as decrease in employee productivity and loyalty towards the organization, increased employee turnover, and increased expenditure to the organization due to health-related problems of employees.

Answer 12
From the characteristics that Reddy exhibits, it is clear that he is a Theory X manager. Theory X was proposed by Douglas McGregor in his book, The Human Side of Enterprise. The theory helps in understanding the simple rules for managing people effectively in organizations. According to Theory X, an average person dislikes work and tends to avoid it. It says that employees prefer to be directed, that threats have to be used to get them to do work and that they should be constantly monitored. It also 162

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Role conflict is defined as the conflict that arises in an individual due to the incompatibility of enacting several roles at the same time. It is generated when an individual finds that compliance with one role may result in non-compliance with another. The individuals desire to perform all the roles perfectly gives rise to role conflict.

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Answer 11

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Part C states that people are never enthusiastic about their jobs and are more concerned about their job security. In other words, people are more concerned about their lower order needs as described by Maslow in his needs hierarchy theory. Most managers tend to belong to the Theory X category. They believe that employees are lazy and need to be pushed and prodded to carry out even their basic responsibilities. They, therefore, constantly issue instructions to their subordinates, and monitor their performance regularly. Theory X managers prefer to control the performance of their employees by explicitly stating how the job has to be done. They seldom invite suggestions from subordinates and are poor listeners. They do not encourage employee participation. Team work hardly exists in organizations headed by such managers. A Theory X manager does not appreciate his subordinates for doing a good job. On the other hand, he suppresses their creativity and initiative due to an inherent fear or insecurity of losing his position and power in the organization. Likewise, he does not take kindly to criticism of his actions and is likely to adopt a vengeful attitude towards critics. He is generally poor at delegation though he tends to shift accountability on to his subordinates when things go wrong. A manager of this type is mostly unhappy with the performance of his team. Despite this, he makes no attempts to bring about an improvement in the teams performance. A Theory X manager tends to remain aloof and detached and is more concerned about meeting deadlines and targets than about the development of the human resource in the organization.

Stereotyping is the process of categorizing or grouping people on the basis of a single characteristic. Managers often tend to classify workers on the basis of age, gender, race, ethnic origin, or other characteristics. Sometimes this helps a manager to be more effective. For example, if a manager of a content development firm believes that a strong academic background is an essential requirement for prospective research associates, he concentrates on the academic qualifications of the candidates, and this helps him to filter out unwanted or incompetent applicants easily. Stereotyping, however, tends be counter productive in some situations. When managers stereotype workers, they tend to overlook the individual differences among them and form rigid opinions about their subordinates. They may then tend to ignore the actual characteristics of the individual and overlook the need of the situation. Stereotypes may also lead to prejudice against an individual or a group of individuals. Once a manager forms a particular opinion about someone (due to stereotyping), it becomes extremely difficult to change that opinion. This leads to an exaggerated or diminished assessment of the worth of a group or an individual. Prejudice and stereotyping do not lead to favorable organizational results specially if the organization has a diverse workforce. For example, a manager may select a candidate who is not suitable for a particular job only because he has a favorable impression of the group to which the candidate belongs. In other cases, managers under the influence of stereotyping, may develop motivational strategies for the entire group without considering their individual differences. For example, a manager may stereotype all workers as being motivated by monetary benefits. He might therefore, design strategies that focus on providing monetary incentives. Such strategies may not necessarily serve as motivators for all the workers. Besides, due to stereotyping, managers may fail to recognize talented people in the organization simply because he does not have a good opinion of the group to which 163

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So, Theory X managers are more suited for conventional and traditional organizations, and are generally less effective as managers in modern organizations.

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Introduction to Organizational Behavior the individual belongs. Under the influence of stereotyping, the manager may also wrongly assume that just because an individual belongs to a certain group, he will be effective/ineffective in handling his responsibilities. This may cause demotivation in the individual and in turn reduce his productivity level. Thus, stereotyping sometimes leads to unfavorable organizational results like lowered productivity, lowered employee morale and a disillusioned and underutilized workforce.

Answer 14
The process by which an individual observes and emulates the behavior of other individuals is termed social learning. In organizations, social learning takes place when new employees observe the behavior of other employees and its consequences and modify their own behavior accordingly. Individuals modify their behavior in accordance to how they are expected to behave in the new environment to get desired results. Learning in organizations takes place in many forms. It may take place when an employee is instructed to do something in a particular manner, or directly from the personal experiences of the employee, or by the employee observing others in the organization. Learning that takes place by observing others and by direct experience is generally called social learning. People also learn not to do things in a particular way when they see others facing negative consequences for behaving in that manner. In the social learning process, behavior is influenced by its eventual consequence. In other words, people behave in ways that they perceive might reward them positively. Social learning takes place in four phases. First, by paying attention to a particular behavior and attempting to remember it. The second phase involves retention of the behavior. In the third phase, the individual attempts to imitate and practice that behavior. The fourth phase of social learning takes place when the organization rewards such behavior, thus reinforcing it in the individual. Social learning has many advantages. It provides people with specific cues that help them modify their behavior and fit into the new environment well. For example, a newcomer to an organization might benefit by observing the behavior of existing employees as it gives him an insight into the expectations of the organization. This, in turn, helps him modify his behavior in keeping with the organization. Thus, social learning helps in molding employees to the benefit of the organization and is an effective learning tool.

Answer 15
Job enrichment is a vertical expansion of jobs, and includes not only increasing the number of tasks an employee performs but also enhancing his control over these tasks. By enriching a job, an attempt is made to increase an employees freedom and independence to plan, execute and evaluate his own work. Job enrichment is based on the assumption that employees can be positively motivated by enhancing their sense of participation, involvement, responsibility, accountability, and achievement. Job enrichment aims at reducing absenteeism and turnover among employees. It also helps enhance employee morale and motivation and thereby increase their productivity. So, this technique has been widely implemented by employers to enhance employee motivation and productivity levels. However, in a few cases, job enrichment does prove to be ineffective as it does not produce the desired results. The success of a job enrichment initiative depends, to a great extent, on the willingness of the employees to take on new responsibilities at the workplace. 164

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Part C By permitting his sales representatives to make their own decisions regarding the way they followed up a prospective customer and the way they finalized a deal, Atul Goyal attempted to increase the participation and accountability of his subordinates, and this motivated them positively. They were also given adequate autonomy over their jobs, which enhanced their participation and productivity. Thus, with effective implementation of the job enrichment process, Goyal was successful in enhancing the sales performance of his team.

Answer 16
A self-managed team consists of a cohesive group of employees working towards the accomplishment of a common objective under the guidance of an effective leader. In a SMT, members share responsibility and hold themselves mutually accountable for their goals. SMTs have a number of features that make them effective tools for empowering organizational members. Members of the SMT are given the freedom to determine what, where, when and how they are going to attain their objectives. In other words, they are given the power to organize themselves. They are allowed to take calculated risks and are expected to make their own production-related decisions, i.e. they are given decision-making power. In doing so, members of the team actually develop the required skills and competencies to manage and direct themselves, thus empowering themselves. SMTs can be considered as effective empowerment tools in organizations because the members of a SMT are given the power and the responsibility to accomplish tasks by themselves. They are made accountable not only for the achievement of goals but also for the process of achieving the same. The role of the team leader is relinquished in many aspects. He now plays the role of a coach rather than that of a supervisor. In other words, his role is transformed from that of decision making and giving instructions to that of guiding the team members and nurturing leadership qualities in them. He merely advises employees on certain crucial aspects and reviews the end objectives rather than interfering in every aspect of task accomplishment. He, however, offers his knowledge and expertise as and when required by the team members.

Answer 17

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Anjali Sharmas reaction to Rahul Khannas gesture can be best explained with the help of Vrooms expectancy theory. According to Vrooms theory of expectancy, an employee tends to perform well only when he feels that a certain effort will lead to a particular level of performance, which in turn will lead to specific outcome that will satisfy his personal goals. Therefore, an employee would be motivated only when his efforts will lead to a favorable outcome that satisfies his personal goals. Vroom explains employee motivation based on three sets of relationships, which are as follows: Effort-performance relationship This relationship determines the expectation of an individual that a certain effort will lead to a particular level of performance. An employee will initiate a task only when he feels he is capable of attaining a certain level of performance. Performance-outcome relationship The individuals perception of the probability that a certain performance level will lead to a particular outcome 165

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Members of a SMT, in the long run, develop leadership qualities like risk-taking, being open to ideas and suggestions of team members, decision making, etc. Therefore, organizations are adopting the concept of self managed teams to empower their workforce.

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Introduction to Organizational Behavior denotes the performance-outcome relationship. The outcome might be as simple as recognition or as high as a raise in pay or a promotion in the organizational hierarchy. Rewards-valence relationship Valence is the value that an individual attaches to a particular outcome. In other words, it is the extent to which an outcome or a reward is attractive to the individual. Motivation of an employee depends on the strength of this relationship between the outcome of efforts and its valence. i.e. the more attractive the outcome or reward, the greater would be the motivation of the employee.

Thus, depending on the importance an individual attaches to the outcome of a certain effort, his level of motivation varies. Therefore, it is important that managers try to reward employee performance in a way he/she expects. In other words, the rewards offered to employees must also satisfy their personal goals. This is because different people are motivated in different ways. This also explains why some people do just the bare minimum tasks that are expected of them in the job. In this case, it is evident that Sharma was not motivated by the monetary benefits she received in recognition of her exceptional performance. She is likely to be motivated by other means like a promotion in her job, or additional responsibility or authority or simply praise or recognition in public. Therefore, Khanna should have identified what motivates Sharma and then rewarded her performance accordingly. That will bring about the desired results in her behavior.

The success of T-groups depends on how forthcoming the participants are in offering suggestions for organizational improvement. However, few organizations encourage employee participation; in some organizations, employees who initiate such participation are also punished. Therefore, T-groups fail in organizations that do not encourage employees to voice their opinions. As T-groups comprise members belonging to different departments who do not have to interact during their routine operations, having them to work in a team may seem a useless exercise. The work schedules, deadlines, goals and objectives to be accomplished by the Tgroups are different from those that are to be achieved by them in the real organizational setup. Therefore, application of the learning from T-groups is not always possible. T-groups may result in raising questions about the participants behavioral patterns. This might result in straining interpersonal relationships at the workplace. The participants of T-groups are nominated by team leaders. Very often, the members may not actually be interested in the activity. Such forcible participation defeats the very objective of organizational learning. Besides, constant support

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However, in a few cases, T-groups have failed to achieve their objectives for various reasons. Some of these reasons are discussed below:

A T-group is a small group of people who have come together with an objective of understanding each other. The group generally consists of people from different departments/units of the organization who do not know each other. The purpose is to gain an insight into their own behavior and the behavior of others in the group with the intention of understanding individual behavior in groups. T-groups provide participants with an opportunity to appreciate how their behavior might affect others. They become more sensitive to others feelings and foster a more humane work atmosphere in the organization.

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Part C and encouragement from the team leader is also essential for the success of such activities. This requires that the leaders be trained adequately to guide their members. The above problems deter organizations from implementing T-groups effectively.

Answer 19
Managers often encounter decision making situations where they may not have enough time to gather sufficient information that is required to make a rational decision. There are many instances when managers might have to make a choice between various options based on their prior experiences, or sometimes even based on their intuition. Such decisions have also been successful in many situations. In such cases, managers are said to operate under conditions of bounded rationality. When individuals tend to make decisions by imagining a simplified version of the problem situation, without considering all the possible alternatives, they are said to act under the conditions of bounded rationality. This is a common tendency among decision-makers who are pressed for time. In the absence of complete information, it becomes difficult for the human mind to formulate and solve problems with complete rationality.

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Inability to prioritize When the alternatives to solve a particular problem are too many, and the criteria of evaluating them unclear, managers find it difficult to rank and prioritize the various options available. Under these circumstances, they fail to make rational decisions. Changing criteria Due to the dynamic nature of the business environment, the criteria of evaluating the various options available to solve a problem keeps changing. The constant change in the criteria of evaluation prevents decisionmakers from making rational decisions.

Due to the above discussed factors, managers often have to make irrational or illogical decision based on past experiences or mere hunches. In doing so, they are also prone to personal biases which might lead them to make wrong decisions. In other words, the human factor creeps into the decision making process. Decisions made under bounded rationality are generally based on a list of tried and tested alternatives that are most likely to occur. The decision-maker evaluates all the available alternative courses of action until he arrives at an alternative which, according to him, meets the acceptable level of performance. In other words, the decision-maker chooses that alternative which is good enough and which is the first option, that is, the first acceptable alternative. He doesnt probe further, thereby limiting his chances of assessing all possible alternatives to solve the problem. 167

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Inability to visualize consequences When the decision-maker is unable to visualize the consequences and repercussions of selecting a particular course of action, he resorts to making decisions based on past experience under bounded rationality.

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Lack of clarity When the decision-maker lacks information about the situation, the problem remains unclear and ambiguous. Since he is not completely informed about the complexity of the problem and about all the possible alternatives to solve it, he fails to make an informed and rational decision.

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Time and information crisis The decision-maker finds it difficult to make a rational decision when he lacks information about the decision-making situation, as well as the time required to collect and analyze the necessary data to make an informed decision.

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Rational and logical decision-making becomes difficult under the following circumstances:

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Introduction to Organizational Behavior In the given situation, Nikhil Khanna lacked the necessary information to make an informed decision. Besides, the decision was time-sensitive and had to be made immediately to meet the requirements of customers. Therefore, he had to make a satisficing decision which would or would not lead to the desired outcome. However, this was the best option available to Khanna as he had to make a quick decision that was both satisfactory and capable of solving the crisis.

Answer 20
Politicking in organizations comes into play when certain individuals tend to use their power and influence to pursue their own interests which may or may not be beneficial to the organizations. Individuals deploy various tactics to influence others to do what they perceive as the right thing to do. The legitimacy of political behavior of individuals in organizations depends on how well he/she understands the political character and structure of the organization. An awareness of the business environment, and the interpersonal skills necessary to be politically competitive, along with an ability to maintain a balance between the interests of the group and his/her own interests allows an individual to exhibit legitimate political behavior in an organization. Based on its legitimacy, political behaviors in organizations may be classified as good, bad, and neutral politicking. When an individual attempts to educate, persuade, or involve others in constructive discussions about the work he wants them to do, he is said to exhibit a legitimate political behavior. When politicking is based on a factfinding exercise, involving all the members of the group, it helps make the members aware of its hidden consequences and is therefore, considered as good political behavior. Legitimate political issues could include decisions on issues like marketability of a new product, customer satisfaction, and the impact of a particular effort on the overall business. At the other extreme is what is called bad politicking. This refers to unpleasant attempts to influence others such as deliberately misleading the group to do something unethical, attempting to bribe the group, or even using the threat of likely negative consequences in case of nonconformity. Other tactics such as personal attacks, delaying activities so as to benefit ones own interests, undermining the importance of a crucial factor, conspiring against an individual or a group, etc., also constitute bad political behavior. Committing to do something that one has no intention of doing, or committing not to do something that he/she intends to do are other examples of bad politicking. Machiavellianism is a good example of bad political behavior which proposes that the means justify the end. As long as the ultimate result is achieved, those involved in bad politics do not worry about the means of achieving it. Apart from good and bad politicking, there also exists a set of behaviors that do not seem to belong to either category. As its legitimacy is still questionable, such behavior is termed as neutral political behavior. Tactics such as cajoling group members towards accomplishing an objective, or contrastingly, ridiculing a behavior, etc., belong to this category. Lobbying and thereby convincing others to accept a responsibility is also termed as neutral-politicking. Thus, depending upon the legitimacy of politicking in organizations, political behavior in organizations is termed differently.

Answer 21
The term whistle blowing refers to someone disclosing the misconduct of an organization that poses a serious threat to the society or that violates the law. The whistle blower is generally a member of the organization, and information about the misconduct is generally given to outsiders who are, by virtue of their profession, responsible to protect the law. 168

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Part C In this case, Aniketh Basu wanted to protect the health of the general public by making public the inadequate measures taken by his company to abide by the laws of environmental protection. But later he decided against doing so as he was apprehensive about the implications of such an act. Although whistle blowing is no longer believed to be a taboo in todays organizations, whistle blowers still face a number of problems from their employers. Some of the most common problems faced by whistle blowers are as follows: The organization may initiate legal proceedings against whistle blowers. In such cases the law does not provide enough protection to whistle blowers. This might be because of its restricted interference into the internal processes of organizations. Besides, the whistle blower may not even be able to pay the charges for legal proceedings. The whistle blowers are deprived of opportunities for promotion within the organizational hierarchy. In fact, there are cases where they are demoted from a managerial position to an entry-level position. They also have to face other issues like social isolation from the group. They find it extremely difficult to find jobs elsewhere because of their tarnished images in the previous organization.

As a whistle blower, he must maintain a list of important and relevant facts pertaining to the organizations misconduct. Basu must identify and approach support groups, social workers dealing with environmental protection, or non-governmental organizations which might offer support to him when legal proceedings are on.

Answer 22
Often people exhibit a tendency to reduce their effort when working in a group. This is called social loafing. It is observed that people perform better at complex tasks, yet worse on simple tasks when in a group. There exists an inverse relationship between the size of the group and the performance outcome of the individual members of the group. In other words, as the size of the group increases, the effort put in by individual members of the group decreases. Social loafing arises due a number of individual and organizational factors. Some of them are discussed below: 169

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Basu must consult a legal expert to ensure the strength of his case before proceeding further.

After blowing the whistle, Basu must be extremely conscious of his behavior at the workplace. He must avoid even the slightest deviation from expected employee behavior to avoid getting dragged into controversial disciplinary proceedings.

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He must also attempt to identify other members within the organization in whom he can confidently confide and who will help and support him in blowing the whistle.

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He must ensure that he is actually approaching the right person in the right manner before disclosing the issue. He must also consider the consequences of each course of action before blowing the whistle.

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Aniketh Basu, in this case might proceed with bringing out the issue in public by taking the following measures:

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These probable consequences of whistle blowing prevent employees from voicing their concerns to the authorities concerned.

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Introduction to Organizational Behavior As the size of the group increases, the members feel unwanted or neglected. This demotivates them, and consequently they do not contribute to the problemsolving exercise. Social loafing increases when members begin to feel that their personal contribution cannot be explicitly determined and hence performance evaluation is not possible. This generally happens in large groups where the performance of individual players cannot be evaluated explicitly. Individuals tend to hold back their contribution towards organizational objectives when they feel that they are neither going to be punished for poor performance nor rewarded for exceptional performance. In other words, members do not perform optimally when they perceive that they receive neither the credit nor the blame for their output. Individual differences among team members may also cause social loafing. When the relationship between group members is strained, they do not cooperate with each other resulting in poor performance.

Answer 23
Rumors are unofficial bits of information that spread quickly throughout the organization. Rumors generally arise due to ambiguity or interest in a particular organizational situation. They generally thrive during times of anxiety and uncertainty about matters concerning the members of an organization. They also spread fast when the information is of interest to its members. When the information is passed on through different levels in an organization, it might be misinterpreted or distorted due to differing perceptions of different individuals. Further, gaps may exist in the information and in order to fill in these gaps, people tend to add their own input to the 170

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Offer interesting and challenging job profiles to employees that motivate them to perform well. Jobs that are challenging enhance their achievement drive and lead to better performance. Instances of social loafing are found to be lower in highly cohesive groups. Therefore by ensuring that the group is closely knit and highly cohesive, organizations can contain social loafing.

Thus organizations can benefit by reducing the instances of social loafing and thereby enhancing the overall performance of the teams.

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Involvement of members may be encouraged by enhancing the task significance (task significance is the importance of the task and the degree to which the job makes an impact on the lives or work of other people) of employees. Once the employees feel the extent to which their job affects them and the environment, they are motivated to perform better. This motivation helps reduce instances of social loafing.

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The performance of each of the members must be evaluated, and they must be rewarded appropriately. Low performers must also be punished accordingly. These act as motivators that drive performance.

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The members should be aware that the performance of each individual in the group can be measured and evaluated. An awareness that each of them is being monitored closely ensures that they put in their optimal efforts in their jobs.

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The size of the group should be as small as possible. The smaller the size of the group, the lower the probability of social loafing.

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As social loafing leads to reduced employee productivity, organizations must make efforts to minimize it. The following are a few measures that can be taken to prevent social loafing:

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Part C information thereby distorting it and giving rise to undesirable organizational consequences such as a workforce, reduced productivity levels, and high organizations must manage rumors effectively in consequences. rumors. Rumors might produce demotivated and a demoralized employee turnover. Therefore, order to minimize its negative

As a middle-level manager, Ketan Malhotra must not comment on the rumor as long as he is unsure of the accuracy of the information. He must seek information from the top management regarding the accuracy of the rumor. He must also attempt to seek suggestions from his subordinates regarding effective ways to contain the rumors. This involvement of employees might reduce their anxiety and might also prompt them to come up with effective suggestions to manage the rumor. Malhotra must also assure the employees that the management is keen on addressing their concerns and is making sincere efforts in this direction. The organization itself must initiate the following actions to manage the rumor: The credibility of the organization plays a key role in managing a rumor. During times of uncertainty, it is the credibility of the organization that helps assure its employees. Therefore, the management must not give any information that may not be true. If baseless information is communicated to the members, the organization might lose its credibility and it would be extremely difficult to tackle rumors that might arise in future. Openness in communication is important in controlling rumors. However, this transparency must not lead to increased levels of anxiety. Therefore, the management must be judicious about the extent to which the organizational communication is open.

Organizations must recognize any probable source of anxiety or uncertainty well in advance. This helps them to identify and solve the consequent problems before they become too difficult to handle.

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Answer 24

When discussions between the two parties involved in a conflict fail to reach a mutually accepted agreement, a third party is invited to solve the problem. In this case, a legal body instituted by the state government acts as a third party negotiator. The Arbitration and Conciliation Advisory Board has the options of acting as a mediator, arbitrator, conciliator, or a consultant. If the Board persuades both parties to arrive at a mutually accepted solution by reasoning the behavior and demands of both parties, it is said to act as a mediator between the two parties. In some cases, the mediator may also suggest other alternatives to solve the dispute. Mediators are most effective in solving labormanagement problems. However, they must be invited at the very initial stages of the conflict. Otherwise, they fail to deliver the desired results. Besides the mediator must be extremely persuasive and be perceived as unbiased and reliable by both parties involved in the conflict. Arbitration is treated as one of the most successful negotiation processes in terms of arriving at a settlement. This is because the arbitration process is voluntarily chosen 171

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Therefore, organizations must strive to manage rumors to create effective channels of communication and to maintain a motivated workforce.

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When information passes down the hierarchy, people tend to add their own versions to the original story and distort the original information by various means such as interpretation, filtration and elaboration. Organizations must leave no such scope for rumors. Therefore, any information that passes down the hierarchy must be complete and explicit, with no gaps in the message.

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Introduction to Organizational Behavior by both the conflicting parties, and the judgement that results from it has to be abided without question. In other words, the arbitrator imposes decisions on the parties. This settlement, however, may or may not be accepted by both the parties involved, which might result in a recurrence of the conflict situation at a later date. A conciliator is someone who is accepted and trusted by both the conflicting parties. As a relationship of trust prevails, the conciliator finds it easy to find a mutually acceptable solution to the problem on hand. He thus forms an effective communication link between the two parties. The Board can play the role of a consultant who, in simple terms, is a skilled person employing simple and logical management techniques to solve disputes between two or more parties. A consultant attempts to create a friendly atmosphere that fosters a positive attitude among the conflicting members, thereby enhancing their interpersonal relationships. He creates a participative atmosphere by encouraging employee suggestions to solve the problem. He facilitates the parties to come up with their own solutions rather than merely imposing his decision to solve the problem. Thus the negotiator may play the role of mediator, arbitrator, conciliator, or a consultant as and how is demanded by the conflicting situation and the parties involved in the conflict.

Answer 25

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Brainstorm a list of all the factors that affect employee turnover at the department. These might be both facilitating as well as restraining forces. Iyer might benefit by inviting employee participation in this process as they are in a better position to actually analyze the situation. Now divide the list of forces into two categories viz., those that facilitate accomplishment of a high retention level, and those that hinder its accomplishment. The drivers for change may be factors like enhanced employee motivation, reduced acquisition costs, etc. On the other hand, forces that hinder attainment of a high retention rate may include poor quality of work life, bureaucratic organizational structure, minimal scope for growth in the organization, and low pay scales. Then analyze these forces to assess the degree to which they affect employee turnover. Make a list of all those forces that can be controlled by the organization. For example, one of the drivers for achieving a high retention rate is enhanced employee motivation. Likewise one of the forces that hinder the attainment of a high retention rate would be poor quality of work life. Organizations can improve the quality of work life by adopting a number of measures. Such forces that can be influenced by the organization have to be identified.

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Clarify the end objective. Ensure that you identify the correct problem that needs to be solved. In this case, as already identified by Iyer, it is the reduction of employee turnover. In other words, the objective is to enhance the retention rate of the production department.

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In this case, the following steps might facilitate the organization in ensuring high employee retention-

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In order to contain employee turnover and reach a state of high employee retention in the organization, Abhinaya Iyer could adopt the technique of force-field analysis propounded by Kurt Lewin. The force-field analysis technique involves the identification of all the forces that drive towards obtaining a desired goal and also those forces that hinder its attainment. The objective is to minimize the effect of the restraining forces while maximizing the impact of the factors that actually aid the accomplishment of the established goals.

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Part C Also sketch action plans to control the identified forces. In other words, decide how to go about enhancing the impact of the drivers that facilitate the accomplishment of the objective and reducing the effect of those forces that hinder its accomplishment.

Thus, Kurt Lewins force field analysis can help retain employees in the production department.

Answer 26
Parallel learning structures are informal groups within organizations that are formed in addition to the formal hierarchical structure to solve organizational problems. Parallel structures coexist with the formal structures and solve those problems that cannot be addressed by the formal structure alone. Parallel learning structures generally consist of a steering committee comprising members of the top management, and a number of working groups comprising people from a cross-section of the organization. The working groups may include idea groups, action groups, implementation groups, or simply groups with different purposes. Thus in parallel structures, members belonging to different departments and levels in the organization come together to exchange information relating to improvement of existing organizational practices, and to find innovative means of solving problems. The initial phase of development of a parallel learning structure is concerned with the definition of its purpose and scope. The steering committee and the various work groups are then formed with specific objectives assigned to each of them. The strategies to attain these objectives are explicitly identified and communicated to the organizational members. Working norms and procedures are then framed, and facilitators are assigned to the work groups to accomplish their objectives. The strategies are implemented and the learning thereof is diffused throughout the organizational system. Parallel learning structures are believed to be the foundation of OD in organizations as they have been predominantly used as developmental interventions in a number of organizations. Parallel structures are mostly implemented in large bureaucratic organizations where an organization-wide change has to implemented. They help overcome the initial resistance to change, break the barriers to communication, facilitate an informal exchange of information, and nurture creativity among its members. They are especially beneficial when the change involves a total shift in the organizational culture and practices. The informal nature of these structures enhance employee participation towards problem-solving. As parallel structures focus on information-sharing among its members, they can be used as effective tools of organizational learning. These structures facilitate distribution of the organizations collective expertise to the right people in a timely and efficient manner. Parallel structures thus create a shared sense of purpose among its members.

Answer 27
Process consultation is an OD intervention that involves a skilled third-party who helps individuals and groups in organizations to understand human and social processes, and to help them to solve their own problems. In the present case, an external consultant is invited to solve the rising conflicts between the management and the workers. The intervention is basically initiated by the client (Fads) and involves the consultant in resolving the issues. The process consultation intervention generally has the following stages: 173

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Introduction to Organizational Behavior The consultant asks relevant questions to organizational members belonging to various levels. The responses to these questions provide the consultant useful cues to solve the problem. The consultant attempts to understand the interpersonal processes that might have led to the conflict situation. Feedback of observations is communicated to the individuals and groups after gathering and analyzing the data. An attempt is made by the consultant to counsel both parties regarding expected behaviors that might help them resolve the conflict. The consultant also suggests a few areas of improvement to both the parties that might help them implement the intervention successfully. The consultant then offers a list of suggestions pertaining to probable changes in the existing structures and processes of the organization which includes issues like group membership, communication pattern between the various levels in the organization, and the leadership styles that might affect the prevailing interpersonal relationships.

Thus an organizational problem can be effectively solved by the concerted efforts of the organizational members and the external consultant by means of process consultation.

Answer 28
Matrix structure is a modern organizational design which combines the features of a project design with those of a functional one. Therefore, matrix organizations exhibit pooling and sharing of resources as in functional departmentalization, and coordination among specialties to achieve on-time completion of tasks and meeting of budgetary targets as in product specialization. Matrix designs are popularly used in sectors characterized by a high degree of specialization along with an emphasis on projects and other specific goals such as R&D organizations, consultancies, advertising agencies, hospitals, universities, etc. In the present case, by introducing a matrix structure, the hospital may benefit by enhanced coordination between its diverse complex functions. Such a structure also enables the organization to allocate functional specialists among different departments in an effective manner. Matrix structures enable organizations to make optimum 174

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Listen to the various alternatives proposed by the client to solve the problem and provide accurate feedback in terms of consequences of each alternative. He/she must however leave the decision-making role to the client itself.

Pass on the skills that facilitate the problem-solving process to the client organization. During this process, the consultant should ensure that he doesnt make the client dependent on him. Instead, he must merely facilitate the transition by enhancing the capacity of the organization to solve its own problems.

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Make the organization aware of the organizational processes, their implications, and the ways in which they can be modified. The organization must be involved in the entire intervention, beginning from diagnosis of the problem, to framing a possible solution.

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Merely facilitate the organization to solve its own problems, without imposing his opinions on the client.

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Thus the process consultant helps the organization in identifying the problem, collecting relevant information, analyzing the various alternatives, and proposing a feasible solution to solve the problem. The consultant, however, must ensure that he does not enhance the dependence of the organization on his skills and expertise. He therefore must -

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Part C utilization of employee skills, ensure that knowledge is available to employees in all the departments and projects, facilitate quick response to changes in customer demands and project requirements, and help organizations reduce costs and improve performance. However, the matrix structure is not devoid of weaknesses. The structure violates the principle of unity of command, due to which the employees report to two (or more) bosses. This could give rise to conflicts between the managers. These conflicts, if allowed to continue without resolution, can demotivate employees, reduce their loyalty and preclude them from identifying themselves with the organization. The matrix design is also criticized for the confusion it creates and the amount of stress it places on individuals. Reporting to more than one superior leads to role conflict and ambiguity among employees, which can increase their work-stress. As the superior changes from one project to another, superior-subordinate relationships also gets weakened. As the matrix structure embodies two structures, it often leads to duplication of activities resulting in an increase in costs. The success of the structure, thus depends on how effectively managers overcome the deficiencies and leverage its positive aspects. Therefore Bhattachrya, in this case, will benefit by conducting a comprehensive cost-benefit analysis of implementing the plan for an organizational restructuring.

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In this case, Meghna has to strike a balance between her personal values and the instructions given by her superior. If she obeys the instructions of her superior, she will have to go against her ethics. On the other hand, if she sticks to her personal values, she might have to face serious consequences and may even lose her job. According to the theory of cognitive dissonance, Patel might deal with dissonance in the following ways: She might stick to her personal ethical values, and refuse to manipulate the financial figures while projecting the status of the company to the members concerned. Alternatively, she might, out of fear of losing her job, or of damaging the impression her superior has about her, act according to his instructions. Otherwise, Patel might even change her attitude towards the ethical values she upholds. She might justify her actions by assuming that such a behavior is common and that such values are no longer adhered to in the current business environment. 175

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According to Festinger, an individuals desire to reduce dissonance depends on the importance of the elements that cause the dissonance, the degree to which the individual can influence these elements, and the consequences that the individual is likely to face as a result of such dissonance. An individual will make little effort to reduce dissonance if the elements that are responsible for the dissonance are not important to him.

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In the above case, Meghna Patel is said to experience cognitive dissonance. Cognitive dissonace is the incompatibility that an individual may perceive between two or more of his attitudes, or between his behavior and his attitudes. The cognitive dissonance theory was proposed by Leon Festinger in the late 1950s to explain the relationship between attitudes and behavior. He proposed that individuals are uncomfortable with any form of inconsistency and try to reduce the dissonance and discomfort that results from such inconsistencies. They seek to obtain a stable state where there is least dissonance. However, no individual can completely eliminate dissonance.

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Introduction to Organizational Behavior Patel might also begin to believe that the rewards of conforming to the expected behavior exceed the costs she might have to bear for adhering to her basic values.

An individuals desire to reduce dissonance also depends on the extent of control he has over the elements causing dissonance. If an individual believes that these elements are not in his control, he will try to justify his behavior. Thus, the effort made by an individual to reduce dissonance depends on the significance of the elements that lead to dissonance, the ability of the individual to control these elements, and the rewards that are likely from making such an effort. The greater the dissonance, the higher the pressure on the individual to overcome the dissonance.

Answer 30
In this case, Armaan Dev was Sheetal Deshpandes superior. Deshpande knew that she should obey his instructions as he would be evaluating her performance. Deshpande was aware that whatever rewards she would receive depended on how Dev appraised her. Deshpande hence accepted to stay back to help him prepare the report even though she had no formal obligation to do so. Thus, Dev exerted a reward power over Deshpande. Reward power has its source in a persons ability to control the resources used to reward others. Reward power is based on Bs belief that A has the ability to grant rewards to B. Reward power is diametrically opposite to coercive power. Coercive power arises from the ability to inflict punishment or withdraw a reward. Reward power, however, arises from the ability to give a reward or eliminate a negative factor from a persons work sphere. People comply with the wishes and directives of managers because compliance brings about positive benefits. Thus, managers will have power over their employees if they can give rewards that are valued by the employees. The most important feature of reward power is that the power is dependent on the recipient. What the manager perceives as a reward may not hold any value for the employee, and vice versa. In such a situation, the manager will not hold any reward power. For instance, a manager may offer his subordinate a promotion with increased responsibility, but the subordinate may not value it since the promotion is accompanied by a change of location, which is not convenient to him. In this case, the manager will not have reward power. But if the subordinate considers the promotion rewarding, then the manager is said to have reward power. Sometimes, managers may not have the authority to dispense rewards, but as long as their subordinates believe that they do, they possess reward power. Potential rewards that are valued in the organizational context include pay increases, promotions, favorable work assignments, new equipment, praise, feedback, and recognition. Reward power gives managers the power to offer positive reinforcement to employees which encourages repetition of positive behavior in them. Therefore, in this case, Dev was able to influence Deshpande because of her belief that displaying positive behavior might bring her appropriate rewards. Hence, Dev exerted a reward power over Deshpande.

Answer 31
Conflicts are common in organizations. They can be resolved easily provided employees follow certain guidelines. Employees should attempt to resolve conflicts at the earliest. They should not wait till the conflict assumes larger proportions. If conflicts are not resolved in their initial stages, at later stages they disturb employees emotionally, reduce employee productivity, consume more time in their resolution and affect organizational profitability. 176

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Part C Employees should learn to address the issue at hand rather than trying to find fault with other employees. They should not form rigid opinions about their colleagues based on one particular interaction with them during a project. Sometimes an employee X may declare that he cannot work with employee Y because Y gave a lot of trouble in project ABC where they worked together. But avoidance of interaction between conflicting individuals cannot be a permanent solution to the problem. If projects require skills of both employees and they are not willing to work together, management will face problems in coordination. Therefore, management has to encourage employees in conflict to confront each other, discuss the factors that led to the conflict and find out a solution. Employees should be encouraged to think from the perspective of their colleagues. This will help them understand their co-workers and their interests better. When employees understand each other and respect each others opinions and attitudes, there is less scope for conflicts to arise. If the employees find it difficult to resolve a conflict by themselves, organizations may employ a neutral third party to facilitate conflict resolution. In this approach, conflicts can be resolved in two steps. In the first step, a brainstorming session is conducted and employees are encouraged to suggest all the possible solutions they can think of. All the solutions are listed on a board or white sheet and displayed to be viewed by all the parties. In the second step, all the suggested solutions are evaluated and the best one or a combination of solutions is selected. Before allocating time for resolving a conflict, management should consider the importance of the issue of the conflict. They may try to quantify the impact of the conflict on the organization. For example, the number of people affected by the conflict, and the amount of loss of productivity that may result if the conflict remains unresolved may be worked out. If many people are affected by the conflict or the organization suffers loss because of it, the conflict should be resolved immediately. Further, if the conflicts involve major legal issues or ethical dilemmas, special care needs to be taken to resolve these conflicts. But minor issues, which simply irritate a few employees for a short period of time and do not have any effect on employee productivity and organizational performance, can be discounted.

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Sometimes, in organizations, the rival party (say, a workers union) may describe how unsatisfactory the previous agreement was, and demand for a complete change in the agreement. This is generally an attempt to attack the confidence of the manager at the negotiation table and reduce his power to negotiate for better terms. The union representatives may also express their concern about the deteriorating relationship between employees and employers and the need to enhance it. The management should not get carried away by these discussions because the union representatives are trying to combine the non-negotiation issues with those for negotiation and confuse the management. The negotiating manager should make it clear to the union representatives that they need to stick to the agenda of the negotiation. However, if the issues are important, the manager may agree to discuss them but ensure that they are not considered as part of the negotiation process. The union representatives are likely to present a long list of demands at the negotiation table. The management has to ask them to cut the list by including only the issues of primary importance to the union. But sometimes, the union representatives may refuse to do so and state that all the issues are important to them. In such cases, the management may accept the list as it is but should counter it with its own list consisting of issues they consider to be of priority. Then the issues in both the lists may be compared and discussed one after the other. In this way, primary issues that are valued by both parties can be settled first and secondary issues can then be taken up for discussion. 177

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Introduction to Organizational Behavior Sometimes, the union representatives may present some demands at the end of the negotiation process. Generally, they use this tactic to get the management to agree to their demands quickly as they would be in a hurry to wind up the meeting. But the management should be very careful in giving its assent to such demands. If the management refuses to discuss these demands, the disagreement on this issue could nullify all the earlier efforts put into the negotiation. Therefore, the negotiating managers should agree to discuss the issue but explain to the union representatives that they need time to discuss it because they have to consider the effect of the new demands on the issues that have been finalized so far. At the end of the meeting, union representatives generally read out the concessions made by the management. The negotiating managers have to be very attentive because the concessions read out could be more than what had actually been agreed upon during discussions and could be skillfully introduced into the final document by the union representatives. Hence, it is important that managers note down the concessions made as soon as a particular issue is settled. This will help them in overcoming manipulations by union representatives at a later stage of the negotiations and prevent further conflicts.

Lets describe the Managerial Communication Climate (MCC) model, a model that was adopted by FedEx. The MCC model at FedEx aims to give rise to a communication climate which is composed of two components information openness and interactive supportiveness. Information openness constitutes three subcomponents information adequacy, information flow and managerial information sharing practices. Interactive supportiveness, too, comprises eleven sub-components. The sub-components of interactive supportiveness are the various managerial skills that are essential for fostering an effective communication climate in any organization. The MCC model requires organizational leaders to be good communicators who can make their employees feel comfortable, valued and supported. They need to listen actively and empathize with employees. They need to check messages for accuracy. They have to ensure that the messages convey the intended meaning. They should be able to express their emotions in the right manner. They should encourage their employees not only to communicate but also to provide feedback. They too should provide feedback pertaining to the information they receive. Managers should master the skills of managing conflicts in organizations. They need to place special emphasis on effective and constructive feedback from employees in the organization. The MCC model at FedEx has the following characteristics: Openness of communication: All the information is disseminated freely throughout the organization. It ensures that each employee obtains the specific information he needs to perform his job well.

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Communication is the fundamental requirement of any organization. The communication process model of an organization promotes understanding among employees and enhances the level of trust in the organization. It ensures that information flows in the desired direction and facilitates coordination among the various processes of the organization. Management should continuously assess the model to ensure that communication flows freely in all directions. In case they observe any interruption in the flow of communication, they should immediately take steps to restore the flow of communication. Organizations should strive to improve the communication skills of managers. Managers should not only teach effective communication behavior to employees but should also practise it themselves. This would encourage subordinates to adopt the same behavior.

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Part C Elimination of barriers: Both horizontal communication (between employees at the same level) and vertical communication (between employees at different levels) channels are likely to face barriers that restrict the flow of information. The MCC model enables the management to act fast so that it can identify the source of obstruction, and eliminate it to facilitate smooth flow of information. Type of information shared: The information related to job, employees, organizational operations as well as information of strategic importance is shared throughout the organization. The functioning of overall communication system of the organization depends on micro communication systems (at department and unit levels) that constitute it. This necessitates each manager to encourage information sharing in his department. Emphasis on people element: The model places emphasis on the ways in which employees communicate with each other. It does not attempt to know what is being communicated by one employee to another, thus ensuring employee privacy and encouraging employee interaction. Regardless of their busy work schedules and tight deadlines, at FedEx, managers are required to allot a certain amount of time to participate in meetings with their teams. Despite the difficulty they face in taking out time for such meetings, managers abide by the companys policy and conduct meetings of short duration. Managers are assessed periodically for their communication skills as well as other skills. The top management distributes questionnaires to the employees throughout the organization to assess the effectiveness of the MCC model, and managers effectiveness in implementing the model. Employees give ratings for the MCC model. They rate their respective managers on their interpersonal skills and information-sharing practices. Based on the results of the assessment, managers are trained to upgrade their communication skills. The top management also takes necessary steps to improve communication in the organization.

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The barriers to communication in organizations are: Imbalance in the flow of communication Employees expect to be informed about certain organizational matters. However, they are often flooded with information. The number of channels of communication in organizations have also increased. Employees receive information through company bulletin boards, in-house magazines, circulars, notice boards, formal meetings, informal chats, etc. Thus, employees often experience an information overload. They are unable to separate unimportant information from the important and choose to ignore most of the information. Reengineering and organizational restructuring have eliminated the middle management which used to filter information that flowed to lower level employees. Ineffectiveness of modern means of communication People communicate through phone, voice mail and e-mail, but these are not as effective as face-to-face communication. In direct communication, a person can observe the body language of the other person, his facial expressions and voice. He can better analyze that person and customize his responses accordingly. Negotiations become easier and agreements can be arrived at quickly. 179

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Organizations need to inform employees about the vision, mission and objectives of the organization. This is essential to motivate employees and secure their commitment towards organizational objectives. Committed employees give more time and energy to achieve organizational goals. In the absence of commitment from employees, organizations cannot survive in a competitive world.

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Introduction to Organizational Behavior Some organizations conduct face-to-face meetings but fail to achieve desired results. This is primarily because of lack of proper agenda; lack of participation of key people; and lack of focus in the discussions. Advanced means of communication such as telecommunication enable employees on the move to stay connected with their office. But such devices may be used by some employees to mislead their managers regarding the progress of a particular project. Isolation of employees due to online training and development programs Online training and development programs are on the rise. This deprives employees of their social needs to interact with each other and share their experiences. Technology is isolating employees, and minimizing the possibilities of knowledge-sharing. Poor listening skills of the management Managers generally speak well but have poor listening skills. They are being trained to improve their communication skills. They must be able to effectively communicate their vision of organizational development to employees in order to secure their commitment towards the task. Changes in work and work environment Concepts like teams, telecommuting, outsourcing and virtual organizations are gaining popularity. While some organizations have successfully used these concepts to improve their productivity and profitability, some have failed miserably. Telecommuting failed because employees as well as management personnel were not adequately trained in online communication. Teams failed because team leaders could not communicate to their members, the goals and objectives of the team and what was expected from them to accomplish the goals. Organizations also suffered from the absence of proper communication facilities within and between teams. This resulted in poor coordination, wrong decisions and low productivity. With people becoming increasingly mobile in the search for better opportunities, workforce diversity has increased at work places. However, most organizations do not have appropriate training programs to meet such challenges. Therefore, managers find it difficult to communicate effectively with a diverse workforce. Mergers and other changes primarily fail because of the managements failure to communicate its plans and expectations to the employees. Unless leaders inform employees about their plans and strategies, employees cannot contribute to the success of the programs.

Answer 35

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The communication problems that supervisors are likely to face and the possible ways in which they can be tackled are discussed below: Fear of punishment may cause employees to withhold information relating to low productivity. They may also try to hide the mistakes they have committed. They hesitate to clarify doubts they had when the supervisor gave instructions. If employees start working without having a clear idea of what they are expected to do, the quality of work would be adversely affected. To deal with such problems supervisors should promote upward communication. They should encourage employees to approach them whenever they have a problem. They should listen to employees problems and empathize with them. Supervisors can remove fear from employees minds by developing a good rapport with them. They should appreciate employees when they do a good job. When employees approach supervisors with personal problems, they should express their sympathy and if possible, suggest solutions.

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Part C Employees often complain that supervisors use technical jargon in their instructions, which they are unable to follow. Supervisors should therefore minimize the use of such jargon. They should also give instructions slowly so that employees understand what they say. They should repeat important and complex instructions to prevent employees from missing out on any vital information. At the same time, supervisors should avoid repeating every statement of theirs, as this would tend to annoy employees and cause them to disregard further instructions given by the supervisors. As far as possible, supervisors should avoid explaining several assignments at the same time since some of the employees may find it difficult to remember all the instructions. This would have an adverse effect on work. Often, employees are not able to meet the expectations of supervisors because they do not have the basic information pertaining to their work. Therefore, supervisors must inform employees when, where and how they should get the required inputs, when they should complete their assignment and how frequently they should report their progress. Sometimes, employees feel that they are inadequately informed about developments in the organization. Such issues can be addressed by supervisors. They should inform employees of changes like increase in production targets, changes in production lay-out and expansion (or downsizing) of workforce. But information relating to the companys sales and profits, achievements in R&D, number of patents filed, etc. may be selectively communicated by supervisors.

Answer 36

Managers often assume that employees will acquire new skills on their own. They believe that employees resistance to change will gradually disappear. Resistance, in its initial stages, cannot be observed clearly because employees do not express it verbally. If the management does not deal with resistance in the initial stages, it will assume larger proportions and the change may have to be abandoned. The management should always anticipate resistance to change and take necessary steps to overcome it. Managements sometimes forget about the primary objectives of change and concentrate on aspects like team-building exercises. Undue emphasis on such aspects mislead employees. They focus on learning the new methods and processes and developing specific skills but do not apply them to achieve the change goals. Sometimes, managements conduct training programs for employees but restrict the scope of training. For instance, the programs train employees in the skills required to use new machines but do not counsel them or lay to rest their fears of being laid off. Generally, information percolates from the top to the bottom and this process does not occur as frequently as desired by employees. Consequently, the flow of information through the organization is affected and this in turn slows down the process of change. Managements should therefore encourage two-way communication and impose minimum restrictions on the and quantity of information exchanged. 181

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Employees must acquire new skills and capabilities as well as change their attitudes and mindset if organizational changes are to be successful. If the management fails to allocate time and funds for training employees in these skills and capabilities, it cannot hope to reap benefits from the change, even if it may have taken care of all other aspects.

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Managements often concentrate on the organizational aspects and ignore the employee aspects. They focus on restructuring the organization, redesigning organizational processes and information systems. They forget that employees need to be informed about changes, educated and trained to accept and participate in them. Employees are vital to the success of any change. If they resist change, organizations cannot succeed in implementing changes.

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Introduction to Organizational Behavior Middle managements and other stakeholders like customers and suppliers should also be involved in the process of change. This would enable the management to obtain multiple perspectives on its initiatives as well as suggestions for improvement. In some organizations, top management does not come forward to explain changes to employees. In the absence of visibility of the top management, employees will not be committed to the process of change. Top management support is vital for the success of changes introduced in an organization. It should actively guide and support new initiatives, motivate employees, address their concerns and encourage them to participate in the process of change without apprehension.

Answer 37
Organizations often face problems while making the transition from traditional work culture to team culture. The problems at Aditi Manufacturers Ltd started after the concept of teamwork was introduced. This does not imply that teamwork caused the problems. The concept of teams, if implemented properly, can increase organizational productivity and efficiency. Rather than doing away with the team culture the management of Aditi should try to identify the factors that led to decline in performance and work out a solution. If the management of Aditi had introduced teamwork simply because other organizations had adopted it, then it was a wrong move. The management should analyze the nature of work in the organization. If it finds that the nature of work is not conducive to the team culture, Aditi should revert to its traditional work culture. However, if the management finds that employees can work in teams, it can continue with the team culture albeit, with some modifications to suit the companys work environment. Teamwork does not mean employees are not bound by any rules and regulations. Disciplinary rules remain in force. If employees act contrary to the interests of the company, they are liable to be subjected to disciplinary action. After introduction of teamwork, the management may initiate a new social contract with the employees, which specifies the companys goals and each individuals role in their achievement. The contract may also specify the behavior expected from an employee in his interaction with customers, colleagues, superiors and subordinates. The process of resolving conflicts can also be standardized. Without a proper communication system teams cannot deliver expected results. The management has to ensure that teams have access to necessary information. They should be encouraged to communicate freely with each other. Employees often tend to resist changes at the workplace. Therefore, the management must explain to them why teamwork was introduced and how it benefits both the organization and its employees. Employees should be involved in defining their own roles and responsibilities. This will ensure their commitment and cooperation. Specific and measurable targets should be set for each team and the role of each member should be specified. The management should encourage healthy competition between and within teams to improve performance of employees. Moreover, the management should give some time to employees so that they may adapt themselves to the change. In order to secure the long-term benefits of teamwork, the management should deal patiently with problems that may arise during its implementation. 182

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Part C

Answer 38
There is no universally accepted fool-proof method to identify and develop potential leaders. However, Ashok Dwivedi may adopt the following ways to screen the employees and identify potential candidates to succeed him. Ashok should look for an employee who displays the true characteristics of a leader. For example, the employee should be good at persuading and influencing his colleagues to do things the way he believes is right. He should come forward to take up responsibilities though it would mean more risk for him. He should have a thirst for excellence. He should do his job perfectly and expect the same from others. He should be emotionally stable. Ashok should study the track record of employees through their appraisal files. The right employee should have completed his projects successfully. He should have some unique skills and expertise which differentiate him from the rest of employees. He should have followers who are willing to accept him as leader.

Answer 39

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Organizations should design jobs in a way that allow employees to use a variety of skills. An employee should be given a complete job rather than a piece of work. The tasks given should be important, and he should be given autonomy to decide on how to do the job. The employee should be given regular feedback on his performance to enable him to improve his performance. Apart from designing good jobs and encouraging individual employees, organizations should also promote team culture. Specific, measurable, and attainable goals and objectives should be established for the teams to provide a clear focus to the team members. Team leaders should be encouraged to adopt a participative style of leadership. They should not try to be authoritative because that suppresses the creativity of team members. Team members should have reasonable freedom to interact with each other, share information, discuss various issues and take decisions. Team members should be open to new and seemingly impractical ideas and to criticism from each other, and should be committed to achieving excellence. If a 183

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Ashok should ensure that the development programs do not dictate to the future leader on what approach he should use to solve a problem. Instead, the programs should equip him with problem solving skills. He should be encouraged to use his creativity to design new techniques and approaches to solve problems. He should be taught about different leadership styles but should not be forced to adopt one. He should be encouraged to maintain and develop his own individual style.

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Leaders are often faced with new problems and challenges. Therefore, the selected candidate should be trained to use his own skills as well as those of his followers to solve problems and convert challenges into opportunities.

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The selected candidate should be sent for a training and development program. The development program should not attempt to teach the future leader what to learn but should teach how to learn on his own from his experience. Leaders should have a knowledge about a variety of issues ranging from local problems to global concerns. Therefore, the candidate should be encouraged to learn about different cultures, economies, societies, human psychology, technology, and so on.

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Ashok should select the candidate who satisfies the above criteria. But he should not forget to get an opinion about the selected candidate from his superiors, peers and subordinates so as to ensure that the candidate chosen will make a true leader.

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Introduction to Organizational Behavior majority of the team members agree on a particular issue and only a few oppose it, the minority view should not be rejected outright but should also be heard and the rationale behind it considered. Team meetings should be conducted regularly. Team members should review the team objectives and strategies and make modifications, if required, in these meetings. They should trust each other and cooperate in implementing the strategies. Support from team members and the top management is crucial for promoting innovation and implementing innovative ideas in organizations. Moreover, in innovative organizations, there is free flow of communication in the form of in-house newsletters and weekly review meetings. Cross-functional teams are also common and facilitate interdepartmental communication and coordination. Sometimes conflicts may arise between departments. The cross-functional teams then use conflict resolution methods to try and sort things out. Innovative organizations encourage employee participation and involvement in decision making processes. Further, they encourage workforce diversity. Employees from different backgrounds possess different skills and express different perspectives, attitudes, views and opinions. The resulting disagreements are solved by open discussions.

Answer 40

The use of PMI as a thinking tool involves the initial generation of ideas from all the participants of the meeting, followed by the analysis of every idea with regard to its positive, negative and interesting aspects. The idea facilitator writes down the ideas on a white board to be noted by everyone in the room. Below every idea, the participants are required to note down the positive (plus) attributes, negative (minus) attributes and the interesting aspects in the form of three columns named P, M and I. The facilitator asks the participants to describe the positive (plus) aspects they can think of pertaining to the idea and note them in the column P. Similarly, the participants are required to note down the negative and interesting aspects of the idea in the columns M and I respectively. To get the right responses from the participants, the facilitator gives them hints on the direction in which they need to think. After the responses of all the participants have been obtained, the ideas are evaluated to determine whether any of them have practical value. Ideas that are of practical value to the organization are implemented.

Answer 41
Organizations can address the need for recognition in employees in several ways. These may be in the form of promotions, increments, personal or written praise, praising the employee in front of other employees, sending across a note of appreciation or a thank-you note for excellent performance, sending e-mail messages of praise, offering surprise gifts, etc. 184

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In order to analyze the ideas, management in organizations may make use of a tool called PMI. This tool was developed by Edward de Bono in 1992 to analyze ideas, where P stands for plus, M for minus and I for interesting. One of the managers in the organization should be designated as an idea facilitator whose responsibility is to facilitate the generation of ideas.

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Organizations should not discourage the generation of ideas, whatever be their source. Discouraging the generation of ideas from personnel belonging to the lower levels in the organization will undermine their creativity and reduce the scope for innovation in the organization. Organizations can create an idea-friendly workplace by systematically evaluating ideas contributed by employees.

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Part C The employee recognition program of the Taj Group of Hotels, STARS, aims to identify, recognize and reward those employees who excel in their work. STARS is actively promoted across the groups chain of 62 hotels worldwide and among its 18,000 employees, of whom 15,000 are from India. STARS has five different levels. Though employees do not receive any cash awards, they gain recognition by the levels they attain through the points they accumulate for their acts of kindness or hospitality. Level 1 is known as the Silver Grade. To reach this level, employees have to accumulate 120 points in three months. To attain Level 2, known as the Gold Grade, employees have to accumulate 130 points within three months of attaining the silver grade. To reach Level 3, called the Platinum Grade, employees have to accumulate 250 points within six months of attaining the gold grade. To attain Level 4, employees have to accumulate 510 or more points, but below 760 points and become eligible to be a part of the Chief Operating Officers club. Level 5 which is the highest level in STARS, is attained when 760 or more points are accumulated, making the employee eligible to be a part of the MDs club. Points are granted on the basis of parameters like integrity, honesty, kindness, respect to customers, environmental awareness, teamwork, coordination, cooperation, excellence in work, new initiatives, trustworthiness, courage and conviction. Employee suggestions that bring benefits to the organization fetch significant points. Employee suggestions originating from each hotel are examined by the General Manager, HR Manager and Training Manager of the hotel. The suggestions can also be posted on the web, which is constantly monitored. Employees can also earn points through appreciation by customers, compliments from colleagues and various suggestion schemes. Employees are awarded 20 default points if the review committee does not give feedback to the employee within two days of his/her offering a suggestion for the betterment of the organization. STARS helps employees work together as a team and appreciate fellow employees for their acts of kindness and excellence. It enhances their motivation levels and leads to increased customer satisfaction. On the basis of the number of points accumulated, employees receive a star that can be pinned on to their coat. When a certain number of points are collected, employees receive gift hampers, cash vouchers or a vacation at a Taj Hotel of their choice in India. The winners of STARS are felicitated at a function held in Taj, Mumbai. The winners photographs are displayed on a big screen at the function and they receive awards given by the MD of the Taj Group. This awards ceremony significantly boosts their morale. STARS has not only been successful as an HR initiative, but has also brought many strategic benefits to the group as well. The service standards at all hotels of the group improved significantly because the employees felt that their good work was being acknowledged and appreciated. This resulted in repeat customers for Taj hotels. Because of STARS, the Group won the Hermes Award 2002 for best innovation in HR in the hospitality industry. Thus, employee recognition goes a long way in motivating employees to improve their performance further and contribute to the growth of the organization.

Answer 42
Team accomplishments may be defined as the results achieved by teams with the active contribution of its members. To determine the accomplishments of each team in the organization, the management at Zeta should clearly establish the results to be achieved by each team. This helps the teams focus on obtaining results. However, the management should take care not to dictate to team members on how to achieve results since this would curtail the creativity and freedom of team members and 185

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Introduction to Organizational Behavior demotivate them. But, the management can always suggest ways in which to achieve results and extend their support to them. The management should avoid monitoring the activities of team members constantly. Instead, they should monitor the results. Following are some of the methods to determine team accomplishments: The management should express the relationship between the team and its different customers in the form of a diagram. The diagram makes it clear to team members, who are the internal and external customers they need to serve, and the types of products and services customers expect from them. Therefore, team members will have no ambiguity about the results they have to achieve. Thus, designing of a customer diagram helps to determine the desired output of the team. The teams goals should be aligned with that of the organization. The goals should be objective and quantifiable. The quantifiable nature of the goals will allow the management to assess the extent to which they have been achieved by the team. The management should prioritize the organizational goals. It should then identify the goals that are important and relevant to the various teams. For example, increasing the organizations sales and profitability can be the goal of a sales team. But the same goal should not be set for the production team as well because the production team has no control over the sales and profits of the organization. The management should also ensure that the team has control over the goals set for it. Clarity of goals helps the management compare the actual output with the desired output and thus acts as a measure to determine team accomplishment. The management should identify all the activities involved in a certain work process to provide a value-added product or service to the customer. The work process should be expressed in the form of a diagram. The diagram should clearly indicate the kind of activity each team performs in order to produce the final output for the customer. This is referred to as work process mapping. It helps in measuring team performance.

Have clear goals in their life and work hard to achieve them. Strive to realize their full potential. Want to lead a meaningful life. Are motivated by intrinsic factors rather than extrinsic ones Try to control destiny rather than being led by it. Challenging work: This satisfies the desire of knowledge workers to realize their full potential. Minimum supervision: Knowledge workers are self-driven and, therefore, do not require close supervision. Moreover, close supervision prevents knowledge workers from concentrating on their work and kills their creativity. Higher responsibilities: Knowledge workers try to control their destiny. They try to overpower circumstances and bring them under their control. If they are given responsibilities, they will fulfill them successfully by turning even difficult situations in their favor.

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Organizations can motivate knowledge workers by providing them with the following:

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Knowledge workers (or highly skilled employees):

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Part C Adequate organizational resources: Scarcity of organizational resources prevents work from progressing further and irritates and affects the thinking processes of knowledge workers. Therefore, organizations should ensure that an adequate amount of resources are made available to knowledge workers in order to be able to tap their potential. Autonomy: Knowledge workers should be allowed the freedom to take decisions related to their work without having to consult superiors. This satisfies their selfesteem needs and motivates them to enhance their performance.

In addition to equipping knowledge workers with these factors, the management should recognize and appreciate their good work. Further, the organization should clearly communicate to knowledge workers, the results expected of them. The outcomes should be expressed in objective and quantitative terms. Once knowledge workers achieve them, they should be rewarded appropriately with a promotion, more power and autonomy. Organizations are constantly finding new and unique ways to tap the talent of employees and improve the efficiency of work processes. If an organization fails to provide opportunities for career growth, knowledge workers are likely to leave it in search of an organization which provides those opportunities. In order to retain and motivate knowledge workers, it is essential for organizations to treat them as a precious resource and address their higher order needs of self-esteem and selfactualization.

Interpersonal Roles

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Informational Roles

Informational roles include those of monitor, disseminator and spokesperson. In his role of a monitor, Abhay has to constantly keep track of and obtain knowledge about competitors strategies and developments in the industry. In the disseminator role, Abhay needs to keep subordinates informed about various organizational aspects. In the role of a spokesperson, Abhay has to represent his department at interdepartmental meetings, and meetings with the press, suppliers and clients. Decision Roles

Decision roles include roles of entrepreneur, disturbance-handler, resource-allocator and negotiator. In his role as entrepreneur, Abhay has to initiate new projects and monitor the progress of existing ones. As a disturbance-handler, Abhay has to find solutions to problems and resolve conflicts that may arise among the employees in the department. As a resource-allocator, Abhay has to allocate adequate resources to his subordinates to enable them to perform their work. And in the role of a negotiator, Abhay has to negotiate with the top management and with managers from other departments in the organization and obtain a fair share of the organizational resources for his department. 187

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The interpersonal roles include the role of a figurehead and those of leadership and liaison. In the figurehead role, Abhay will have to perform certain symbolic duties as the head of his team. For example, if the CEO of the company visits his department, Abhay has to take him on a guided tour of the department and brief him on the department activities. In the leadership role, Abhay has to hire, train, motivate and ensure discipline among employees in the department to facilitate the accomplishment of departmental objectives. In the liaison role, Abhay needs to interact with other managers in the organization and with people outside the organization.

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Abhay has to play new roles and learn new skills in order to be a successful manager. Some of the new roles that Abhay will have to play are:

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Answer 45
Akio Morita, the cofounder of Sony, is an example of an effective leader. He was brave and creative and did not hesitate to break traditional rules to realize his vision. Along with his friend, Masaru Ibuka, he established a company called Tokyo Tsushin Kogyo KK which manufactured tape recorders. Within a short period of time, the company obtained a large share of the Japanese market. But Mokita refused to be content with this. He wanted his company to be an international company. So, he went to the US, Germany and other European countries to find a market for his products. When he observed that people in the West were unable to pronounce the name of his company, he immediately decided to change it. Though many people within and outside the company opposed the move, he went ahead and changed the companys name to Sony, a name that could be easily pronounced by all people. Some US companies asked Morita to market his product under their brand name. But Morita refused to do so although his Japanese colleagues strongly opposed his decision. Because of Moritas emphasis on quality, his companys products were readily accepted in the international market. Later he adopted the direct marketing method for some of Sonys products. This was unusual for Japanese companies and many people criticized his decision. But he went ahead and succeeded. Morita was the person who changed peoples opinion about the capability of Japanese companies to manufacture high quality products. Morita once again broke the rules when he set up Sony Corporation of America in 1963 and shifted his family to New York. It was due to his efforts that Sony became the first Japanese company to be listed on the New York Stock Exchange. He developed and maintained a strong network with people across different countries. Morita ensured that Sony always led its competitors in technology. Thus, it was Moritas self-confidence, perseverance, knowledge and creativity which made him a successful leader.

A work group comprises a group of people at the work place, interaction among whom takes place primarily for the purpose of sharing information. Decisions in work groups are aimed at helping each member of the group perform within his or her area of responsibility. A work team, on the other hand, is a group of people at the work place, whose performance is based on the synergy resulting from the performances of the individual members such that the output of the team is greater than the summation of the individual efforts of each member of the team. Following are a few suggestions to solve the work group problems at Neha Manufacturers:

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Emphasis on group and task: The members of the group should give primary importance to the interests of the group and the task at hand. Whenever a decision has to be made, all the members should be involved. If any conflict arises during discussions, individuals should try to resolve them amicably. For this, the group members need to concentrate on resolving the issues of conflict rather than try to blame each other. They should ensure that the conflicts do not prolong to the extent that the task remains unaccomplished. Unambiguous communication: While assigning tasks to a group, the management should give clear guidelines to avoid ambiguity among group members. Clear guidelines minimize the chances of errors in the final output. In a group, there is a possibility that each member understands a given instruction in a different way. This prevents members from working in a coordinated manner. Therefore, it is worthwhile

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Part C for managements to obtain feedback from all group members after giving instructions to ensure that each member has understood the instructions correctly. Group members should also do the same when they try to communicate with each other. Each time they revise their goals and objectives, they should write them on a board and display it in a place where it can be seen by all group members. Encouraging quiet members to participate: In a group, there may be a person who does not voice his views or contribute to discussions. The other members should not let the skills and expertise of that person remain unutilized. They should encourage that person to express his views and appreciate him each time he does so. This helps the group have 100% participation in all meetings and decisions. Subduing dominating members: There may be a member in the group who always tries to dominate the rest of the members. This member coerces other members to support his opinions and suggestions. He talks for a long time and interrupts others when they are expressing their views. Such domination in work groups should be discouraged by the other members. To do this, they can request the dominating member to cut short his speech and allow others to express their views. Each time he tries to dominate others, he should be reminded that all the members share an equal right to express themselves.

Dealing with failure: If any of the members fails to accomplish a task, the other members should not isolate him. The group members should together try to explore the reasons for the failure and think of ways to eliminate the factors that have led to the failure. The unsuccessful member should also be involved in these discussions and other members should encourage him to contribute his or views. To prove its trust in the member, the group may reassign the task to him for completion. It motivates the member to strive hard to accomplish the task. Dealing with conflicts: When several group members are involved in discussions, there is bound to be a difference in opinion among them. Differences of opinion may often lead to conflicts. Although conflicts are inevitable, bitterness among members can be avoided by dealing with conflicts carefully. Sometimes, the group may be divided into smaller sub-groups with each sub-group being firm on its own stand. None of the sub-groups may be willing to accept the view of the other sub-group on certain issues. This results in a deadlock. In such cases, the sub-groups should be encouraged to take up the viewpoint of another sub-group and to debate about it with the other sub-groups to make them accept this viewpoint. This will help the members understand each others views better. They will be able to find a solution which serves the interests of all the sub-groups. It is also necessary that the group first understands the importance of the issue which has given rise to the conflict. If the issue is critical, then the group can devote time to resolve the conflict first. If the issue is a minor one, the members should discuss it 189

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Constructive criticism: The group members need not hesitate to point out each others mistakes. But the members should also attempt to suggest what their colleague can do to rectify his mistake. If one of the members presents reports in a poorly formatted way, the other members should take time to teach him how to put them in the proper format. Once he learns the skill and presents reports in the correct format, the other members should not forget to appreciate him for his good work.

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Ratnam should call the group members for a meeting and suggest that they take the following measures to avoid hurting the feelings of other group members and to maintain group cohesiveness. In order to modify their behavior, he can also conduct a training program covering the following aspects:

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Introduction to Organizational Behavior only for a limited period of time and if it still remains unresolved, they should drop the matter and go on to the next issue. Further, when a group tries to find a solution to a given problem, the members should not stop at the first solution they come up with but instead, should explore all the possible solutions and select the best among them.

Answer 48
Managers need to take the following steps to improve the productivity and performance of employees: Select the right employee: The manager should be very careful in hiring employees. He should ensure that employees skills and abilities match the job requirements. He should cross check with the references provided by the employee to ensure that he has not quit the previous job because of unacceptable behavior or mediocre performance. To succeed in the competitive world, it is not enough if the manager is highly skilled and qualified, his employees should be equally talented. Avoid monitoring employees excessively: The manager should give proper training and support to employees when they join the organization. Once the employees acquire the necessary skills, the manager should assign them the task they are to perform, and give them the freedom to develop and execute action plans to accomplish the task. A managers constant interference in the work of senior employees, and his insistence that they perform the task strictly according to his instructions may tend to demotivate them and make them doubt their own capabilities. Some employees, however, may like to be constantly guided in their work. It is the managers responsibility to discourage this dependence so that the employees learn to work without constant supervision. The manager should encourage the employees to take their own decisions and implement them even though they may be wrong initially. If they go wrong, the manager should explain to them where they went wrong and suggest the right way to do the job. Motivate employees with the right rewards: A manager can never motivate an employee to accomplish a job unless he gives the employee what he desires. Money is generally the most important motivating factor for employees. Therefore, the manager should focus on giving them monetary benefits. He should ensure that employees are compensated adequately for their work. Employees are not motivated by fixed wages or a steady income. Therefore, the manager should design the compensation system in such a way that the amount of money received by the employees is directly proportional to their productivity or organizational profitability. This will motivate them to perform better. The manager should also focus on non-monetary techniques of motivation such as appreciating employees for good work done by them, seeking their opinion on organizational issues, and treating them in a way that makes them feel respected and needed. Encourage positive behavior in employees: A manager should encourage desirable behavior on the part of the employees by rewarding them whenever they exhibit such behavior. For example, if the firm has been able to save a certain sum of money due to the careful practices of the employees, the manager should distribute a part of the money among the employees in order to encourage repetition of such behavior. However, if a manager, due to personal vengeance, deprives some employee of his share of incentive, it would result in the employee attempting to intentionally waste organizational resources, lowering employee productivity, and resulting in problems for the manager. In addition to this, the manager should avoid ordering employees around and should observe tact in issuing instructions. He should listen to employees problems and try to solve them. As far as possible, the manager should avoid criticizing employees because it has a negative impact on employee behavior. He should appreciate an 190

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Part C employee for completing a job and suggest how errors, if any, could have been avoided.

Answer 49
The quality of a product or service should be viewed from the customers perspective. A product is said to be of superior quality if it satisfies customers better than similar products produced by other organizations. To give an example let us assume that company X sells a color TV for Rs 7,000 while company Y sells a color TV with the same features for Rs 10,000. Customer A buys a CTV from X and customer B buys one from Y. If the TV that customer A buys begins to give him problems within a year of purchase, he will obviously not buy a TV from company X again. Not only that, he will also discourage his friends and relatives from buying a TV from X. On the other hand, if the TV that customer B buys from Company Y works well and doesnt give any problem for several years, B will recommend the same brand to all those planning to buy a TV. Since no one will be prepared to buy a TV that works for only one or two years, they will opt only for brand Y and will not mind paying a little extra to get the desired quality. In the long-term, therefore, company Ys sales will increase. However, companies should take care that the cost of maintaining high quality does not increase disproportionately since customers will not be willing to spend arbitrary sums of money to derive a meager additional benefit in terms of quality. So, organizations attempt to find ways to obtain the desired quality without having to spend too much on it in terms of resources. In this search for solutions, managements realized that workers on the shopfloor and frontline were the ones who could contribute good ideas to improve quality and reduce cost of production. To motivate employees to provide suggestions, managements began to reduce their control over them, seek their involvement in decision making, and encourage them to think creatively. Thus, organizations implemented the concept of quality circles. Quality circles comprise employees from different departments who meet regularly to discuss ways to improve the quality of products and processes at the workplace. The members of these groups are trained in problem analysis, decision-making, and implementing and evaluating change. Instead of having to report their problems to the management and wait to obtain solutions, members of quality circles find and implement solutions themselves. These employees are empowered, and their ideas and suggestions are valued. Thus, the emphasis on quality of products and services in organizations has, in a way, led to improvement in the quality of work life of employees.

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Answer 50

Following are some of the steps that can be taken by a team leader to improve the quality of work delivered by his team: Involve team members in problem-solving: Whenever a team leader comes across a problem, he should ensure that all the team members are involved in tackling the problem. He should explain the problem to them, and invite suggestions from each member. If any member provides a good suggestion, the team leader should express appreciation for that member but reward the entire team in order to maintain the team spirit. The team leader should also ensure that he presents a unique problem each time to his team members. The constant change in focus and the variation in the manner of tackling each problem will keep the team members on constant alert as well as bring in the desired flexibility in them. The entire exercise should be aimed at enabling the team members to be able to gradually solve the problems themselves without the guidance of the team leader. The leader should initially present his team members with small problems which have simple solutions. Once they succeed in solving these problems, he should give them 191

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Introduction to Organizational Behavior more complex problems to solve. If they face a difficulty in solving these problems, he should suggest the approach to be adopted to solve these problems. Create right atmosphere to encourage participation: The leader should encourage team members to speak out. No member should be allowed to make fun of other members ideas and suggestions. No idea should be considered silly as a seemingly crazy idea may have a brilliant thought hidden in it. If explored, it could give rise to a practically applicable solution to a problem. Encourage information-sharing: The team leader should encourage his team members to exchange useful information and skills. If any member knows certain skills or techniques he should be encouraged to share his knowledge and skills and play the role of a coach to other team members. If a member has never played the role of a coach, he should be trained to acquire new skills and techniques. Use of statistical control techniques: Statistical control techniques should be used to measure the output of the team and the results should be displayed in the form of graphs during meetings. This helps team members to clearly understand how much they have achieved and how much more they need to achieve. Focus on customer: The effectiveness of a team is determined by the quality of the product it gives to its customer and the level of customer satisfaction achieved. The team members should be encouraged to communicate with their immediate customer. Further, whenever a leader assigns a project to his team, he should clearly specify to his team members, its objectives, the statistical measures that would be used to evaluate its progress, and the criteria for determining its completion. This will help the team track their progress and rectify any errors that may arise. Reduce guidance and control: The leader should gradually minimize the guidance he offers to his team members and delegate as many responsibilities as possible to them. He should perform only the roles of protector and liaison person. As protector, he should protect the team from being reprimanded by managers for trying out innovative solutions. In the liaison role, he should communicate to them all the organizational information required to take decisions.

It was observed by analysts that the companies which distributed stock options equally among the executives and non-executives gave higher shareholder returns compared to those which gave a significant portion of their stock options to top executives. Therefore, shareholders expressed dissatisfaction with companies offering larger number of stock options to senior management and the CEO. Employees and the general public also expressed dissatisfaction with the high compensation packages offered to CEOs and top management. In most industries, the CEO compensation soared to astronomical heights by the end

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of the 20 century. It was felt that the top management was becoming richer and richer at the expense of the workforce. The CEO of GE, Jack Welch, was offered $ 80,000 per month and an apartment in Manhattan along with facilities such as free satellite television service and 24 hours access to corporate jet as a part of retirement package. When the public criticized the expensive package, Welch voluntarily agreed to it being reduced. In a similar case, the CEO of Cisco, John Chambers, reduced his basic salary from $ 323,319 to $ 1 and returned $ 14 million worth stock options to the company in 2001. Generally, the pay package for top executives is decided by compensation committees and top management. It is commonly observed that none of the members of these committees has knowledge of human resource management. This is probably one of the reasons for the design of inequitable compensation packages. The committees

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Answer 51

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Part C blindly use some benchmark studies of other companies in their industry to determine the pay package for executives. They often fail to differentiate between small and large companies and high-performing and poor-performing companies. They also fail to take into consideration the economy of the country while deciding the pay package for top executives. However, the growing resentment of employees and dissatisfaction of shareholders has led organizations to invite human resource executives to play a lead role in designing executive compensation packages. The HR executives have to ensure that compensation of executives is based on their performance with respect to key performance indicators (KPI). Some of the KPI are: customer satisfaction, market share, sales growth, profitability and patents filed. While designing the package, the HR executives should ensure that the package doesnt affect returns of shareholders. Many organizations are also taking the help of external consultants who specialize in executive compensation. The compensation packages of top executives of these organizations are designed by leading consultants who work in close collaboration with human resources division and the compensation committee set up for the purpose. All the three bodies work together to develop a compensation package that rewards performance. However, it has to be ensured that the rewards are proportionate to performance. For example, Paychex, an outsourcing services provider, developed a very effective compensation package for its employees. The package included components like basic pay, bonus and stock options, with more emphasis on basic pay. The CEO of Paychex, B Thomas Golisano and top three executives who receive high salaries, forgo stock options and allow them to be distributed among lower level employees. The compensation package at Paychex served the interests of shareholders, top management and employees. Golisano was named as the most valuable CEO by Forbes magazine in 2002.

Answer 52

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A company passes through several stages in its life cycle. Each stage requires a different style of leadership. During the initial stages of a company soon after it is established, a visionary leader is required. The leader should have a clear vision as well as the determination to realize his vision. He should be able to foresee the future of the industry and prepare his company to face future challenges. He should be willing to take risks to enable the company to progress forward rapidly. He should welcome change and innovation. The second stage in the life cycle of a company is the growth stage. In this stage, the leader should be aggressive. He should grab every opportunity he comes across to help the company increase its market share and profits. He should respond swiftly to competitors moves and changes in market conditions and make quick decisions. But, at the same time, he should consider the short-term and long-term effects of the decisions on the organization. With further growth in size and market share, the company requires a leader who can build and develop an effective team. As part of team building activities, the leader should delegate greater responsibilities to his team members, train them in multiple skills and provide them with necessary support to carry out their responsibilities. As the company reaches maturity stage, the leader should explore new markets and expand the companys operations. The leader should be able to locate new markets which the company can penetrate and achieve success. Moreover, the leader should be able to identify companies with which the company can enter into partnership deals, formulate appropriate strategies, and implement them to attain success. 193

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Introduction to Organizational Behavior In the next stage of the life cycle, the company requires a leader who is also an effective administrator. At this stage, the leader is required to delegate tasks to his subordinates, and directly supervise the performance of these tasks. He has to set definite rules and conditions that all employees in the organization should follow. The leader also has to ensure that they work in coordination and achieve the desired goals and objectives. However, it is not necessary that a new leader be hired each time the company enters a new stage in its life cycle. Instead, the leader should adapt his leadership style to suit the requirements of the company as it passes from one stage to another. Hence, Paragon is not right in its policy of changing its leader every two years. Though a change in leadership style is necessary, it can be brought about by the same leader adapting and modifying his leadership style to suit the requirements of the new situation.

Answer 53
Communicate ideas clearly: A leader should have clarity of own thoughts and ideas so that he can communicate them clearly to his employees. The leader should also communicate the underlying assumptions of his ideas to the employees. This would enable the employees to have a clear understanding of the leaders expectations and the role they are required to play to meet his expectations. Encourage deep and purposeful thinking: Whenever a problem occurs in the organization, the leader should explain the problem to employees and initiate the thinking process. He should first direct employees to think about the possible reasons that led to the problem. He should discourage employees from making superficial observations. Employees who present their views after considering multiple aspects of a problem should be encouraged. After they explore the reasons, the leader should initiate the process of generating alternative solutions to the problem. Even unconventional and seemingly irrational solutions should be welcomed. After the employees have presented their solutions, the leader should begin the process of selecting an appropriate solution. Such a systematic process would help employees develop quality solutions. Never stop thinking: When employees believe that they have obtained a solution to their problem, they stop thinking. In such situations, the leader should encourage them to consider new aspects of the problem. He should ensure that the employees have made use of all available data to arrive at the solution. The employees should consider the solutions used by other organizations in similar situations and attempt to find a solution more effective than theirs. In some cases, neither the leader nor the employees may be able to come up with a solution. The leader should then attempt to redefine the problem from a different perspective, restructure the underlying assumptions and try to find a suitable solution. Enhance the thinking abilities of employees: A leader should enhance the thinking abilities of employees by posing questions to them and channelizing their thinking in the desired direction. When employees contribute their ideas, the leader should listen to them patiently, evaluate them, focus on the ones which are applicable to the given situation, refine them and implement them. A leader should exclude from his group those individuals who lack the required skills to perform group tasks, are unwilling to learn, and are not committed to the goals and objectives of the group.

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Leaders should take the following steps to encourage thinking in organizations:

Part C Delegate decision-making power to lower levels: If a leader tries to find solutions to even minor problems and makes all the decisions himself, he will have little time for strategic decisions and critical organizational issues. Therefore, as far as possible, a leader should allow lower level employees to solve their own problems and make necessary decisions. Once, the lower level employees are able to come up with a solution to the problem by themselves, not only is their confidence strengthened but they are also able to resolve similar problems in future. This will speed up the decision-making process in the organization. Encourage employees to think together: When employees from different backgrounds think collaboratively they are likely to develop a better solution than one arrived at by individual thinking. This happens because an individuals thinking abilities will be limited to his knowledge and experience. Collaborative thinking greatly enhances the quality of thinking because it involves the participation of members belonging to different backgrounds. Therefore, a leader should encourage collaborative thinking in the organization.

Answer 54

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A leader should maintain integrity of character giving no one the scope to point out any drawback in him. He should be a role model for followers and use his position to persuade people. For example, Bill Gates, the CEO of Microsoft practised what he preached. Since Gates himself was a tireless worker, he expected his employees to work like him. He demanded hard work and complete dedication from his employees. He respected his employees for their unique skills and acknowledged the work done by them. He was always willing to listen to his employees ideas and suggestions. A leader can use supporting facts and logic to persuade people to believe what he tells them. For example, Akio Morita, the co-founder of Sony corporation, used logic and research-based facts to persuade people. Under his leadership, Sony produced magnetic tapes in 1950. But there were no takers and almost every one in the organization opined that the product could not be sold in the market. After considerable research, Morita found that Japanese courts could be their potential customers as they were facing an acute shortage of stenographers. Moritas logic proved right and Sony was able to sell twenty machines to the Supreme Court of Japan. Sony also marketed the tapes to schools in Japan. 195

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A person desirous of being a leader has to learn the art of persuading people to do what he wants. To persuade people, he can adopt any of the three approaches suggested below.

As a child, the support and motivation received from family members and teachers helps an individual develop intellectual and interpersonal skills required to become a leader. As the individual grows up, the responsibilities that are entrusted to him by family members help develop his self-confidence. This encourages the individual to seek and take up more responsibilities and work hard to carry them out successfully. He should be trained to take risks, accept challenges, establish future goals and develop long-term plans. He should learn to visualize the future, establish a vision and develop a plan to realize that vision. He should be able to motivate his followers to adopt the vision and commit themselves to achieve it.

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If leaders were born and could not be developed, there would not have been so many successful organizations in the world. A person cannot be developed into a leader in a day or two by a personality development center. But gradual training acquired over the years can help an average person develop into a leader. The way a person is brought up in his childhood, his schooling, personal experiences and the training he receives play a major role in shaping his leadership skills.

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Introduction to Organizational Behavior A leader can use emotions to persuade followers. For example, leaders of terrorist and religious groups use emotions to influence their followers.

Last but not least, a leader should acquire good communication skills. He should be able to articulate his vision in a simple and comprehensible manner. Only then can leaders motivate people to work towards their vision. Therefore, a person who acquires the skills like communication, persuasion and vision formulation, can develop into a good leader. Bill Gates is a great visionary and is able to communicate his vision clearly to his employees. Among the leaders mentioned above, Morita was born in a business family but Bill Gates was born in a middle class family. Gates acquired leadership skills through education in college, observation in the organizations he worked for and his own experience. Therefore, it can rightly be said that a person need not be born as a leader. He can develop into a leader by acquiring the required skills.

Answer 55
Harita rewarded employees for their stay in the company and rewarded those who were loyal to the company. However, now-a-days, due to intense competition and restructuring by companies, many organizations are downsizing their workforce. Employees do not know how long they will work in a particular organization. Either the employer or the employee may terminate the employment contract at any time. Employees are also on the constant lookout for new opportunities. Any employee who receives an attractive offer from a competitor may quit the job. Therefore, employees are no longer keen on or interested in a reward system that recognizes the duration of their service in a company. They desire performance recognition rather than long-term service recognition. This was the reason for employees at Harita being discontented with the companys reward system. Harita should take the following measures if it plans to introduce a new recognition program for employees in the company: Invite suggestions from employees: The recognition program should be welcomed by employees, if it has to be successful. Therefore, Pillai should take suggestions from the employees before designing the program. He can do this by asking them to suggest various ways in which high performing employees can be recognized. They should also be encouraged to suggest performance criteria and methods to measure individual or team performance. All the views and opinions given by employees should be duly considered while designing the recognition program.

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Consider organizational resources: Recognition of the good work done by an employee should be in the form of a gift, a prize or a trophy because after a certain point, employees fail to get motivated if the management merely conveys words of appreciation as recognition of superior performance. Further, while deciding upon the gift, prize or trophy, the HR department should ensure that its cost does not exceed the budget allocated for recognition programs. It should also ensure that the gift is not so trivial that it fails to generate interest among the employees. Make the event memorable for employees: The high performing employee should be appreciated or given a trophy by his superior or one of the top management members during an annual function or any function attended by all the employees. If the manager conveys to all those present what the employee has achieved and appreciates him for his contribution to the profitability of the organization, it would be even more motivating.

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Part C Review recognition program: The recognition program should be reviewed continuously and should be changed in accordance with change in organizational goals, environmental conditions and profitability of the organization.

Moreover, employees should be constantly reminded of the recognition program through in-house newsletters, handbooks and the company intranet.

Answer 56
Flexible work indicates the different work styles and employment practices followed in some companies. It encompasses all types of employment practices other than conventional 9am-to-5pm jobs. Flexible work options (FWOs) enable employees to strike a balance between their professional and personal lives, since it allows them to spend more time with their families. At the same time, FWOs make the employers more competitive. FWOs include flexibility in working location, flexibility in timings and flexibility in contract. Flexibility in location: Employees can work from home or from any other place they find convenient. Flexibility in location also allows employees to work while they are on the move by using laptops, palmtops, etc.

Flexibility in contract: Employees need not work permanently for a particular company. They can serve the organization for a particular period (specified in the contract or based on mutual understanding) or till they complete the job they had undertaken. Some of the companies in India which are offering flexible work options (FWO) are HP India, Procter & Gamble India, ICICI and GE. The facilities offered by these companies to their employees as part of flexible work options are explained below: HP India allows its employees to start their day within two hours from 8 am on a regular 8-hour working day. The company allows job sharing whereby any two employees can work for 20-40 hours per week on one job. Employees can even work half-a-day in office and the other half from any location. Employees also have the option of switching from flexible work schedule to the regular work schedule whenever they want.

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P&G India began to offer FWOs in 1999, as a part of adopting the new culture Stretch, Innovation, and Speed (SIS). The company offered FWOs under the Flexible Work Arrangement (FWA) Scheme. This enabled it to retain highly talented employees. This also made India the best among Asian countries as a global source of talent for P&G. Initially, the company started offering its employees flexitime options. Employees who wished to avail themselves of the flextime options, discussed with their managers which part of the day they would have to work for, and accordingly, put in 8.5 hours in a working day. A three-month sabbatical leave was also offered to employees who had been employed by the company for at least 5 years. P&G introduced the work from home option in late 2001. This option allows employees to work from home once in a week. P&G also allows its employees to work half-a-day, but pays them accordingly. ICICI is one of the few Indian companies, which offers flextime as well as work from home option to its employees. In 2001, 8% of ICICI employees availed of these options. It also implemented flexi-hours in the companies formed as a result of joint ventures with other companies, and its subsidiaries. 197

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Flexibility in time: Employees can come to office at any time provided they complete the fixed number of hours they require to work per working day.

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Introduction to Organizational Behavior GE Capital International Services introduced FWOs in its human resources and credit departments in early 2001. Employing people in part-time and contractual jobs, helps the company save cost in terms of providing professional, medical, provident fund and other benefits to the employees. Westside, a chain of retail stores in India, also offers FWOs to its employees. Westside employs people on a contractual basis. These people work for the store only during the peak business season. This allows the company to lessen its financial burden.

Answer 57
According to the personality-job fit theory proposed by John Holland, a person whose personality matches the requirements of the job is satisfied with the job and is thus less likely to quit the job. Based on his research, Holland categorized the personalities of people into six types Artistic, Realistic, Conventional, Investigative, Social and Enterprising. He also described the characteristics of the people having these personalities and the jobs they best fit into. Artistic people are highly creative. They do not like to be restricted by rigid structures, rules and regulations. They are sensitive and emotional. They are least concerned about practicability of their thoughts and imaginations. Generally they do well as musicians, writers, interior decorators, jewellery designers and so on. On the contrary, realistic people are highly practical. In whatever they think and do, they consider practicability first. They are generally shy in nature and try to conform to the rules and regulations of the group to which they belong. They are comfortable in jobs that require specific skills, physical strength and a certain amount of coordination. People having such a personality are well suited to be farmers, assembly line workers, drill press operators and mechanics. Conventional people are very efficient but highly rigid. Once they conform to certain rules and regulations, it is difficult to change their mindset. They do not believe in imagination and always consider practicability in whatever they think and do. They perform well only in situations where there is no ambiguity involved. They are well suited to jobs like bank tellers, office clerks and accountants where duties and responsibilities are well defined. Investigative people have good analytical skills. They are independent in nature and are eager to acquire knowledge and learn new things. They fare well as journalists, economists and researchers. Social people mingle with new people easily and make friends quickly. They are willing to listen to others problems and offer necessary advice and help. They like to take up jobs that allow them to interact with others. They perform well in professions like social work, teaching and counseling. Enterprising people are aggressive, confident and ambitious. They are good at influencing others and gaining power from it. They can become good lawyers, entrepreneurs and politicians. The reason for such high turnover at APZ Bank was probably its failure to select people with the right personality for the job of bank teller. APZ bank should have recruited people having a conventional personality for the job of bank teller but instead, it recruited people with an enterprising personality. These people were dissatisfied with the job and quit it within a few months. APZ bank should conduct a personality test to know whether an applicant is suitable for the job. This will enable the bank to obtain the right candidates and reduce employee turnover.

Answer 58
Larsen & Toubro is a leading engineering and construction conglomerate in India. The economic reforms introduced by the Indian government in the 1990s posed a serious threat to L&Ts existence. The import duties on engineering and construction 198

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Part C equipment were reduced from 85% to less than 5%. This made the imported equipment cheaper leading to a sharp increase in its demand. L&Ts business was seriously affected by this change. The operating profit margins of the company fell down from 14% to 10%. The capacity of the large plants that it had built over the years was underutilized. The other businesses in which the company made huge investments also performed poorly and this worsened the situation. L&T approached Boston Consulting Group (BCG) which advised the company to focus on global markets. L&T was new to the field of international business. To cater to global clients, L&T had to improve its production processes and the quality of its products and services. L&T had to complete the project within 10 to 12 months of the order being placed by the client. However, L&T took more than two years to complete each project. Moreover, it was not familiar with the legal issues in foreign countries. Therefore, it decided to supply only construction equipment in foreign countries and not to undertake construction projects till the necessary changes were made in the organization. L&T recognized that it had to change its human resources practices to motivate employees to improve their performance. The salaries of employees at L&T were very less compared to the industry average. Moreover, the company paid equal amount of bonus to all employees irrespective of their individual performance because L&T always placed emphasis on team work hardly recognizing individual performance. The company did not make any efforts to train and develop employees and thus, there was an exodus of employees from the company. During the period between 1989 and 2002, the company lost about 1000 employees. In August 2000, L&T hired a new Chief of Human Resources Yogi Sriram who was vice president, HR in Dabur industries. He initiated a change program in L&T. He introduced performance-based compensation packages and emphasized individual performance. Employees resisted the change because the organization had always emphasized teamwork. They argued that the new HR policies would destroy team culture and affect organizational performance. There was a debate among the HR heads of various divisions of L&T on this issue. Sriram convinced them that team work was ideal for accomplishing longterm objectives but if individual performance was ignored, talented people would leave the organization thereby affecting its current performance. He also established performance criteria for conducting performance appraisal of employees. He conducted management leadership program to develop leaders for the future. All these efforts resulted in a positive attitude among employees. It helped the company improve its performance and qualify for constructing turnkey projects for overseas clients. By 2002, 14% of the companys total revenue came from international business.

Answer 59
Johnson & Johnson (J&J), a leading international pharmaceutical and health care company, has always laid special emphasis on providing proper care to its employees. It introduced Health and Wellness Program (HWP) for its employees in 1995. J&Js HWP included an employee assistance program, disability management program, ergonomics injury prevention program and the safe fleet program. Employee assistance program: Under this program, J&J helped employees to maintain a balance between their personal and professional lives. The employees were offered flexibility in deciding their work timings and in a few cases, they were also allowed to work from home. J&J hired professionals who assisted employees as well as their family members to solve issues related to work, family or interpersonal 199

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Introduction to Organizational Behavior problems including anxiety, behavioral changes, disease prevention, divorce, death, education, health, parenting, financial and legal concerns, lifestyle management, marriage and so on. Disability management program: Under this plan, an employee was entitled to disability insurance claim, if he/she was either partially or fully, temporarily or permanently disabled during the course of his/her work. In such cases, all financial expenditure was borne by the company. Ergonomics injury prevention program: J&J was among the very few companies to have taken adequate measures to minimize the occurrence of musculoskeletal problems among its employees, before the US Occupational Safety and Health Administration (OSHA) framed rules and regulations for ergonomics. (OSHAs objective is to safeguard the lives and protect the health of US workers and prevent the occurrence of accidents and injuries at the workplace.) J&J introduced a voluntary program, JOBFIT for its employees in the US and Puerto Rico to prevent musculoskeletal problems. The program focused on maintaining fitness levels of employees and provided them with an opportunity to participate in physical exercises (for physical conditioning), yoga and meditation (for mental conditioning) and stress management sessions. JOBFIT primarily aimed at new recruits, employees who were transferred to the US and Puerto Rico, employees in high-risk jobs, and those who had come back to the job after a temporary disability. Once the program was implemented, it was found that employees in six out of seven J&Js facilities were able to do their jobs better and the company reported fewer cases of insurance claims, injury, sickness, stress or absence from work. Safe fleet program: Safe fleet teams were formed in each country by selecting 7 to 8 people from different departments of the company. The safe fleet team was responsible for implementing several measures like training new drivers, reducing cases of high-risk driving and hiring field safety coordinators. Drivers were educated regarding the causes of accidents, the preventive strategies to be undertaken and advantages of safe driving. The drivers were also trained to keep their vehicles in good running condition as per the vehicle maintenance plan, which was also a part of the safe fleet program. By implementing the Health and Wellness Program, J&J enjoyed substantial financial benefits to the tune of $8.5 million in the form of annual savings in medical care costs of employees. Most of the savings were realized in the third and fourth year of the implementation of the HWP. The company saved $225 per employee annually due to the decrease in the number of hospital admissions, cases of mental health problems and outpatient services. J&J also benefited from increased employee productivity, lower benefit plan costs and reduced absenteeism.

Answer 60
No, it is not true that all successful leaders exhibit the same behavior. GE had a series of successful CEOs including Reg Jones, Jack Welch and the current CEO, Jeffrey Immelt. But none of them exhibited identical behavior or adopted a similar style of leadership. Even though both Reg Jones and Jack Welch were successful CEOs, they differed greatly in their leadership style. Despite Reg Jones being a successful leader, Jack Welch never tried to imitate Jones leadership style. Moreover, Jones had not laid off as many people as Welch did within a few years of his tenure. Jones concentrated on expanding the GE empire. But Welch divested all the businesses which he felt were not performing upto his expectations. Despite all this, Jack Welch was a very successful leader. The next CEO, Immelt too did not imitate his predecessor, Jack Welchs style. This clearly shows that in order to be a leader, it is not necessary for an individual to acquire the competencies of his predecessor. Instead, he should be able to apply his own knowledge and discretion and achieve the desired outcome. 200

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Part C Moreover, it is not easy to learn a behavior; some behaviors are especially difficult to acquire. For example, assertiveness, dedication, focus, agility, empathy are some qualities which are difficult to acquire by training. On the other hand, interpersonal and communication skills can be easily learned by individuals with some effort. Therefore, managers while trying to train their subordinates to take up leadership positions, should identify what an employee possesses and what he lacks. If the employee lacks the necessary skills and knowledge, he can be given some time to learn them. If the employee lacks important skills, the manager should observe whether the competencies he possesses can make up for the skills he lacks. For example, if an employee lacks aggressiveness but makes up for it by being articulate and tactful, he will be able to convince people easily to agree to his point of view and he can be considered for leadership position. If the employee lacks both skills and competencies, he cannot be considered for a leadership position. Many managers try to identify the weaknesses of their subordinates and help them deal with them believing that it would lead to success. But this leads to wastage of time. Instead, managers should try to build upon the strengths of their subordinates so that their weaknesses are compensated for. For example, if an employee has good networking and communication skills but lacks in negotiating skills, the organization need not spend valuable time in training him in negotiating skills. Instead he can be trained to use networking effectively to obtain requisite information for the organization and use it in negotiations to achieve success.

Answer 61

In general, there are vast differences in productivity and performance of employees in an organization. The productivity of employees in an organization can be depicted in the form of a bell-shaped curve. In any organization, 16% of employees have maximum productivity. This is followed by people who fall into the area between 84% to 50% and have an above average productivity, and those who fall in the area between 50% to 17% and have a below average productivity. Around 2/3 of the employees in an organization fall into these areas which indicate the standard deviation in employee performance.

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It is estimated that the standard deviation is 19% for unskilled workers. This implies that the productivity of a high performing worker in an organization is 19% more than the average productivity and that of a low-performing worker is 19% below the average productivity. For skilled employees, the standard deviation is 32% and it is 48% for managerial personnel. If productivity differences are expressed in terms of rupees, it amounts to crores of rupees annually for a corporate firm. In case of skilled personnel and managerial personnel, the losses that accrue to the organization due to low productivity can be astronomically high. The use of advanced personality tests helps organizations minimize this standard deviation and increase organizational performance. 201

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If I were in Jains position, I would try to convince Ashutosh Dev to allow the use of personality tests to recruit employees. Personality tests help identify people with the right personality for the job. In the absence of personality tests, it would be difficult for the HR department to determine the right fit between employee personality and the job. When a persons natural abilities match the type of work he does, he is able to perform to his optimum capability. Therefore, individual performance increases, resulting in high organizational performance. On the other hand, if there is a mismatch between an individuals personality and the nature of his job, he will not be able to carryout his duties effectively and his productivity will be below average. The more misfits in an organization, the lesser its productivity and profitability.

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Introduction to Organizational Behavior

Answer 62
Companies which give more importance to the attitude of people while hiring them, will be more successful than those which emphasize knowledge and experience because knowledge and skills can be imparted to people by training them for a few months. But attitude is difficult to acquire by training. For example, a person aspiring for the job of customer service representative should be willing to listen to people, understand their problems and resolve them. Though a person may have worked in a similar position in another firm, his experience guarantees that he acquired the skills but not the required attitude. A person who does not have the right attitude will be dissatisfied with his job and will fail to serve customers properly. Not only will this affect repeat business, but in the long-term, it will damage the image of the organization as well. On the other hand, a person who has the right attitude will be content with his job and offer superior service to customers. He will help the organization retain existing customers, attract new customers and succeed. Southwest Airlines, one of the most successful companies in the world, hires people who have the right attitude. The company once rejected the application of a pilot despite his having excellent flying skills and the experience of working for another major airline, simply because the pilot did not have the right attitude that suited the culture at Southwest. It so happened that just before the interview, the pilot had behaved rudely with the companys receptionist. This showed that the pilot had no respect for others and since Southwests culture emphasized respect for people, the pilot did not fit the role. Applicants often got rejected for saying I too many times during the interview since this showed that the person was not fit for the teamwork culture at Southwest.

The fun-loving culture of Southwest is termed as Southwest Spirit, and is promoted extensively through annual reports, company newsletters and pictures.

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Southwest hires people who are team players, philanthropic and have a good sense of humor. Applicants are interviewed in an informal setting. They are asked to sit in a group and introduce themselves to others. They are asked to tell how they have used humor to ease the tension in the atmosphere while they were in college or in previous organizations where they worked. Southwest takes special interest in educating its new recruits regarding the culture of the company. Employees from different levels of the organization are selected to form a culture committee. The committee communicates the mission, vision, philosophy, values and norms of the organization to the new recruits. The committee conducts get togethers wherein employees exchange their opinions regarding what made the company successful. Southwest conducts a program called Walk-A-Mile which encourages employees of one department to work for a day in another department. The company also forms cross-functional groups as part of one of its Mind the Gap program. The program helps employees to interact with people with whom they would have otherwise never interacted, understand each others activities and the difficulties involved. This enhances teamwork and cooperation in the organization and often results in innovative ideas.

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Southwest Airlines is the fourth largest airline company in the US. The company has always been profitable even during the times of slowdown in the economy. Southwest adopts an informal culture. Employees do not have to wear uniform. They can wear whatever they are comfortable in. The founder and CEO of Southwest, Herb Kelleher, encouraged employees to have fun and humor at workplace. He believed that fun does not affect the quality of work but motivates employees to perform better. Southwest frequently arranges parties for employees, celebrates various occasions and distributes awards for outstanding employees.

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Part C

Answer 64
Kurt Lewins theory and for that matter, most of the change theories assume that one type of change is implemented at a time and that the change process has a clear starting and end point. But, in reality, these assumptions do not hold true. In organizations, especially in large corporate firms, owing to their size, complexity and technology, managers face many problems in implementing change. In these organizations, many types of changes have to be implemented at a time and it is difficult to determine their starting and end points. When several types of changes need to be initiated simultaneously in organizations, it is referred to as multidimensional change. It is very complex and puts pressure on managers. Often, the change initiatives differ in their importance, nature, characteristics and direction, making it difficult for managers to coordinate them. The rapid changes taking place in the external environment in political, economic, social, technical, legal and ethical aspects makes multidimensional change necessary in organizations. Some change initiatives may be independent of each other while some may be dependent on other change initiatives. In case of dependent change initiatives, the implementation of one affects the implementation of another. Such change initiatives pose more problems than independent change initiatives. Sometimes, an artificial multidimensional change situation is created in organizations. For instance, after the top management decides to implement a certain change in the organizational process, it communicates its plans to the middle management which in turn communicates them to front-line management. A lot of vital information is lost as the message passes down through various levels of hierarchy. Further, a considerable amount of time may have elapsed since the initiation of the change process by the top management till the time when the employees understand the change process and its objectives. Ultimately, when the employees begin to adapt to change, they face many difficulties. The front-line management and middle management give positive feedback about the change process to impress the top management. Therefore, the top management perceives that the change process is complete while in reality, the process is only halfway through. Encouraged with the feedback provided by the middle management, the top management begins another change initiative. The middle management then directs the employees to focus on the more recent change initiative. In this way, while the employees are trying to cope with one change initiative, the top management implements another, thereby making it difficult for the employees to cope with the change initiatives. The simultaneous implementation of many change initiatives thus gives rise to an artificial multidimensional change situation. While the top management assumes that the previous change initiatives are complete, the middle management is still in the process of implementing them. Such a situation can be avoided if members of the top management visit the actual workplace and monitor the progress of change programs instead of depending on written reports. They can understand the problems faced by employees in adapting to change and suggest some solutions. The middle management should also be honest in its reporting.

Answer 65
Managers often believe that informal networks are just a result of personal relationships between people and that managers cannot do anything to influence the 203

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Introduction to Organizational Behavior growth or survival of these networks. However, in reality, they can bring about changes in the organization structure, culture and management practices to develop these networks. During recruitment, they should attempt to hire people who not only possess high level of skills, expertise and talent but who can also work in collaboration with others. The applicants may be asked to narrate critical incidents which describe their achievements and the extent to which they attribute their success to others. The individuals who mention the people who helped them in being successful should be given more importance than those who discount others. If management has to make a choice between selecting one employee for the entire project or two or more employees from different departments on the project. In making its choice, it should take into consideration the long-term benefits to the organization. Sometimes, the first option may be profitable for the organization since every employee is involved singly in a different project. However, because of the benefits offered by teamwork in the form of better interpersonal relations, knowledgesharing, etc, management should choose the second option. Even after they return to their respective departments after the completion of the project, they will continue to exchange information, i.e, they form an informal group. The employees in the group will automatically enter into an informal network. If an employee in this network faces a problem in his subsequent projects and requires professional advice and help, he will be able to access other employees belonging to this network. They, in turn, will be able to provide the required information to the first employee by contacting their own acquaintances. Thus, informal networks facilitate employees to resolve their problems and complete their projects faster. In the absence of such networks, the organization will have lost many hours of productivity as the employee tries to locate a person with requisite knowledge to help him with the problem. Further, the managers should encourage employees within the unit to interact with each other. Wherever possible, they should encourage employees to work in teams rather than in isolation. Employees in the same department who perform the same or related activities tend to form good teams and collaborate with each other better than employees from different departments or units. Once employees get used to working together in collaboration, they can team up easily even with employees belonging to other departments, if necessary. In modern organizations, team work is crucial for organizational success. Organizations where employees are not used to work in teams, are paying millions of dollars to consultancies to train their employees to work in teams. By promoting team work among the employees, managers can avoid the huge costs associated with team-building activities in future. Teamwork facilitates speedier dissemination of information compared to people just working together in a department/organization. Employees working in teams will be valuable members of informal networks. Sometimes the rigidity in organizational structure, restrictions on upward communication, boundaries between departments and functions affect the informal structures as well. For instance, an employee (A) in an organization (XYZ) approached a friend (B) in his informal network to solve a certain technical problem and B suggested that the concerned expert (D) was in As organization but working in another department. But if the personal conflict between the heads of the two departments prevents flow of communication between the two departments, A will be forced to find an alternative source of expertise. This will reduce the effectiveness of an otherwise valuable informal network. Hence management should take steps to reduce constraints and promote interdepartmental and interunit collaboration and contribute to the growth of informal networks.

Answer 66
Learning is fast when it is interactive and experience-based. Organizations should therefore facilitate interactive and experiential learning in their training programs. Trainers should not try to impart too many concepts to employees because after a 204

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Part C point of time, employees stop absorbing the concepts. Instead, the trainer should explain the concept first and then create a situation where the learner can practically implement the concept. The trainer can use simple methods like case studies, role play and simulation to help employees apply the concepts they have learnt. For example, in order to explain the importance of interpersonal skills to the trainee employees using the case study method, the trainer distributes a case study among them which describes a managers failure to win the confidence of his superiors and subordinates due to lack of interpersonal skills. The trainees are then asked to suggest what the manager should do to improve his credibility. In role play, the trainer narrates a situation describing a problem faced by a manager and asks each trainee to describe how he would deal with the problem, if he was the manager. In simulation, the trainer describes a problem faced by an organization and assigns different roles to trainees. The trainees are then asked to discuss among themselves and come up with a solution to the problem. The above methods encourage employees to apply the theoretical concepts to find a solution to a given problem. Once the solution has been found, the trainer should give feedback to the employees which will help them know their shortcomings. If the trainees find it difficult to solve the problem with the knowledge they have acquired, they can pose questions to the trainer. The trainer can then help them find a solution using the concepts they have already learnt or educate them with more concepts. Thus, experiential learning increases interaction between the employees and trainer and stimulates employees to learn more. In such cases, learning is permanent and employees will not forget what they have learnt after returning to their workplace but will also be able to impart the skills and knowledge to other employees.

Answer 67
Parallel learning structure is a techno-structural intervention which seeks to bring about necessary changes in the structure of the organization and the technology it uses in order to improve the efficiency of the organization. It consists of a steering committee and working groups. The steering committee provides the necessary direction and control to the working groups. The groups consist of employees from different levels of organizational hierarchy. The chain of command that is followed in a formal organization is not maintained in the parallel learning structure. All the 205

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Associative learning: If an individual begins to respond in a similar way to two different types of stimuli over a period of time, it is referred to as associative learning. Suppose, in an organization coffee is served once in the morning and once in the evening. During this time, the employees chat with other employees and are often away from their workplaces. After a new manager assumes charge, suppose he comes to meet employees during coffee time and admonishes those who are away from their workplace. The employees begin to associate coffee time with the managers visits and learn to remain at their workplaces during this time to avoid being scolded by the manager.

Instrumental learning: In this form of learning, an individual behaves in a particular way because behaving in that way in the past resulted in positive consequences like reward and recognition. Suppose, an employee canceled his leave and completed an important project to help the organization deliver a product to the customer on time. If his manager applauds him before all the other employees and presents him with a gift cheque and a free holiday trip to a tourist place, then the employee will come forward to make more such sacrifices in future.

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Employees also learn to behave in a certain way without having undergone any formal training. This kind of learning is called informal learning. It takes place in two ways associative learning and instrumental learning.

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Introduction to Organizational Behavior members are given equal status irrespective of their position in the formal organization in order to create an atmosphere conducive to collaborative thinking and problem-solving. Parallel structures may be temporary or permanent depending on the requirements of the organization. The OD consultant did not consider the teams and task force structure at Alka as a parallel learning structure because teams and task forces follow the norms and values of the formal organization and are generally controlled by managers. Parallel learning structures, however, create their own norms and procedures to facilitate creativity and innovation and are led by a steering committee. Semi-autonomous teams have the power to make decisions and deal with production processes and product improvement. But the parallel structures are concerned with finding innovative solutions to given problems. In order to have a parallel learning structure in Alka, a steering committee consisting of members of the top management must be formed. The organization also has to encourage employees from various departments to form small working groups. The members of working groups may belong to different hierarchical levels and vary in their education, experience, skills and expertise. The working groups should collect data from the system, analyze it to diagnose the problems faced by the organization, discuss the problems and each member should suggest a solution based on his perspective. The members would then consider all the suggestions and choose the optimal solution that suits the situation best. The solution will then be presented to the steering committee which will review it, suggest necessary changes and give its approval. The solution may often consist of several change initiatives to be introduced in the organization. However, since the committee consists of top management members, it has the power and authority to implement the change initiatives in the organization. The committee assigns tasks and responsibilities to idea groups, action groups and other groups that assist it. As the change initiatives are implemented in the organization, the working groups will require to monitor the progress of the change process constantly and take necessary steps to correct deviations and speed up the change process.

The various issues that arise when an organization plans to enter into a contract with an OD consultant are: entry and contracting, defining the client system, mutual trust between the client and the consultant, the nature of the clients expertise, diagnosis and selection of the appropriate intervention, the depth of the intervention, the risk of being influenced by the clients culture, the ability of the consultant to act as a model, the possibility of the consultant team being viewed as a microcosm, ongoing action research and its effect on the OD process, the dependency issue and terminating the consultant-client relationship, ethical standards in OD, and implications of OD process for the client. Some of them are explained below: Entry and contracting: At this stage, a representative from the organization visits the consultant, explains the problems faced by his organization and seeks his help. In this case, it was the HR manager of Deepseas who played the role of the representative. Often, the consultant may ask the representative to meet him again and provide him with more details about the problems so as to obtain a clear picture of the organizational situation. If the problems are more serious and acute, the OD consultant may like to visit the organization himself and closely examine the activities and processes in the organization. The consultant and his assistant may also take interviews of employees at various levels. After diagnosing the problem and identifying the causative factors, the consultant suggests the type of OD intervention that needs to be implemented in the organization. He discusses with the top management how to implement the intervention, how to involve the employees in its

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Part C implementation, how to overcome resistance if employees refuse to participate in the process, how to obtain the support of key people and have them influence other employees favorably and other such issues. In this phase, the OD consultant tries to settle the consultation fee and the period of time for which he would offer his services to the client organization. Defining the client system: Initially, the consultant considers only the representative from the organization who comes to visit him as his client. Once the consultant enters into a contract with the client and visits the organization, he begins to view the entire organization as his client. The top management members are considered as the key client. Mutual trust between client and consultant: The client and consultant should avoid involving themselves in any such activities which will have a negative impact on their relationship. Sometimes, the employees may express their true opinions and views about the managers but they do not want their names to be revealed. The consultant has to maintain confidentiality in such matters. The key client (senior management) wants to ensure that subordinates do not develop a negative attitude towards the management because of the intervention. Such fears are true especially when an intervention involves delayering and depriving some employees of their power. The consultant needs to tackle such situations with utmost care. If small failures occur in the initial stages of implementation, the management should not get impatient and blame the consultant. Mutual cooperation between the management of the organization and the consultant will help strengthen their relationship which is essential for the success of any OD program.

The five questions that the executive needs to ask the consultant are:

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1. 2. 3. 4.

Will you please tell me something about organization development? As a consultant, what role would you play in solving the problems facing our organization? Will you work with the people of the entire organization or a select few? How long will you work with us? Will the OD intervention implemented by you involve both people and systems?

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The responses to these questions depend on the nature of OD consultant. Some consultants have a systemic relationship orientation while some have human relations orientation. Consultants having a systemic relationship orientation believe that they cannot contribute to the development of an organization simply using seminars, workshops or T-groups. They like to study the actual problem faced by the organization and help employees find the reasons for the problem, generate alternative solutions and choose one that best suits them. They design customized intervention to solve their problem rather than choosing one from the available interventions. They emphasize on open communication and problem-solving. 207

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If an executive is going to visit a consultant for the first time, he should possess some knowledge about organization development, the nature of OD and the consultants role in implementation of OD interventions. He should also understand the problem being faced by his organization and the complexities involved in it. This would enable the executive to select the right OD consultant. The executive should pose five questions to the consultant and depending on his responses, the former can determine whether he should enter into a contract with the latter or continue his search for the right OD consultant.

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Introduction to Organizational Behavior HR oriented consultants emphasize interpersonal relationships above everything. They select the teams or departments where a problem is actually identified and try to use their interpersonal skills to resolve the problems and maintain peace in the organization. Consultants having a systemic relationship orientation do not intervene in the system as far as possible. They teach problem-solving techniques and give the necessary training to employees to deal with problems. Then they expect employees to derive the solution themselves. If the employees find any difficulty in the process, these consultants do the needful. HR oriented consultants participate in the problem-solving process and help employees find the right solution to the given problem. Consultants having a systemic relationship orientation attempt to interact with all the people in the organization. For them, the whole organization constitutes their client system. HR oriented consultants consider only a small group of people who participate in the intervention as their client. They interact only with these people throughout the intervention. They fail to realize that the implementation of an intervention or a change program in one part of the organization has an impact on the entire organization. Consultants having a systemic relationship orientation work with the client for several years though the degree of interaction and involvement with the client system may not remain the same throughout the years.

Hence, if the responses of the consultant to the questions posed by the executive indicate that he is a HR oriented consultant then the executive should look for another consultant. However, if the responses indicate that he is a consultant having a systemic relationship orientation, the executive can go ahead and enter into a contract with him because consultants having a systemic relationship orientation are concerned about the entire organization, empower employees to solve problems themselves, work with the organization for longer period of time and help it deal with any problems resulting from an intervention implemented by them.

Answer 70
Virtual teams enable organizations to leverage the competencies and skills of people irrespective of their geographic location. Many leading global companies like Motorola, Microsoft, Philips and Oracle have adopted the concept of virtual teams. The advancement in information and communication technology enables members of virtual teams to communicate with each other and with customers. But due to factors like work pressure and discomfort in using advanced equipment, team members fail to communicate with each other as effectively as they would in a physical environment. This can seriously affect coordination in work and communication with customers. Therefore, organizations should not just install advanced communication equipment but encourage employees to use it. Working in isolation tends to depress and demotivate some people. 208

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HR oriented consultants emphasize only on improving relations between people. They often use team interventions which improve cooperation between team members.

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Consultants having a systemic relationship orientation try to find solutions which enhance interaction between employees and the system. They focus on techniques like job enrichment and job rotation which enable employees to know more about the system.

HR oriented consultants work with the client system for only a limited period of time. Once they implement the intervention, they part with the organization.

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Part C An OD practitioner has to motivate members of virtual teams and help them function effectively. To achieve this, the OD practitioner also needs to learn to use latest technology equipment to communicate with members spread across various countries. The OD practitioner should communicate with the members of virtual teams regularly and seek their ideas to improve the way the team works. The team members should be allowed to post their ideas on the company intranet or send it through e-mail to the practitioner. If the idea is good, the OD practitioner should immediately communicate it to all the members of the team. Then the practitioner should invite the team members for online discussions about the implementation of the idea. After all the members agree on the method of implementation, the practitioner should assign the responsibility of implementation to them. He may divide the tasks among them and ask them periodically about the progress they have made. Mutual trust plays an important role in online OD intervention. Both the team members and the OD practitioner should be honest in their interactions and communication and strive to maintain mutual trust. OD practitioner may conduct team building exercises like Role Analysis Technique online for virtual teams to improve their effectiveness in the following manner: Each member of the team will be asked to describe his duties and responsibilities and his contribution to the achievement of organizational goals and mail this information to all the team members as well as the practitioner. It is essential for team members to inform the practitioner so that he is updated about the activities of the team members. The team members will suggest some other responsibilities to the focal role incumbent. Each member will ensure that he communicates his opinions to all the other members of the team and the OD practitioner. The communication among the members will continue till they reach consensus on the definition of the focal role. If necessary, the practitioner will offer necessary help Similarly, the focal role incumbent will explain what kind of cooperation he expects from other members of the team. Then all the team members express the behavior they expect from the focal role incumbent. The focal role incumbent may make some suggestions and subsequently, the entire team discusses and finalizes the duties and responsibilities of focal role. The focal role incumbent prepares a written description of his role, called role profile and mails it to all the members of the virtual team and the OD practitioner for future reference. While redesigning the OD techniques and processes for virtual teams, OD practitioners should ensure that all the members are involved in key decisions.

Answer 71

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It is difficult to change organizational culture because it gets imbibed in the actions and thinking of the employees. Changing the culture of the organization would require changing the behavior and mindset of all these people. Culture is formed often without conscious intent or knowledge. Hence, it is difficult to change the culture. Carly Fiorina, the CEO of HP, had to face stiff resistance from employees when she attempted to change the compensation system and transform the culture at HP. To encourage innovation and product development, Fiorina increased the focus on breakthrough projects. She started an incentive program that paid researchers for every patent filed. Earlier, they concentrated on making improvements to existing products as their bonuses were linked with the number of new products developed rather than the impact of their inventions. She demanded regular updates on key units and based the bonus given to the employees on HPs performance vis-a-vis its competitors. Thus, in spite of HP reporting a profit in the first half of the financial year 2001 for the first time in 39 years, the employees did not get their bonus. Her change initiatives attracted a lot of criticism among analysts. 209

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Introduction to Organizational Behavior In his efforts to change the culture at CBT, Sanjay Chopra should not try to change the values held by the employees at CBT chemicals. Values are the fundamental principles and standards such as integrity or respect which cannot be changed easily. Chopra should therefore, attempt to change peoples beliefs that influence their behavior. People form certain beliefs during training, by observing the employees working in the organization, through their experiences, and by reading. The beliefs held by people change only when they see new evidence that proves that what they believe is wrong. Hence Chopra should focus on gathering such information which can be used to prove that the existing beliefs of employees are wrong and invalid. For example, if employees believe that they cannot work without a leader to guide them, Chopra should describe with examples how self-managed teams are working successfully without leaders in various organizations. He should encourage Verma to communicate the available new evidence and emphasize the need for employees to change their beliefs. Changing the culture is possible only when people who are part of the culture become aware that their unconscious assumptions and thinking patterns are wrong. Chopra should ask Verma to conduct an all-employee meeting. In the meeting, Verma should ask his employees to describe the beliefs that shaped the course of the company in the past five years and new beliefs that are needed to take the organization forward. The new beliefs listed by the employees should become an agenda for attitude change among all leaders of CBT. Bringing a new set of beliefs and practices into the culture can be difficult even when they are consistent with the core of the culture. It is even more difficult to bring in practices that are contrary to the existing culture. Therefore, Chopra and Verma will have a tough time changing the culture of the organization from a conservative culture to a risk taking culture. Chopra should ask Verma to take the following steps to transform the culture of CBT: Communicate constantly how new practices would lead to improvement in employee as well as organizational performance Ensure that new recruits believe in the new norms and values Promote only those employees who adhere to the new values and norms Encourage employees aged above 55 years to take VRS and discourage people supporting the new culture from leaving the organization.

Answer 72
The reasons for the differences in perception of the client and consultant, and the measures that can be taken by them to resolve these differences are discussed below: Clients failure to disclose complete information: The top management often gives only partial information to the consultant. For example, if the consultant asks the management to provide him with information about the union-management relations in the organization for the past ten years, the management may provide the consultant with information that shows the management in a good light. If the current problems in the organization are the result of managements actions in the past, then the consultant will have a tough time identifying the causes of current problems with the partial information that he has. He may have to depend on his intuition and imagination to identify the reasons for the problems. In such a situation, the solution he suggests will be inaccurate. Hence, the client should not hide any information from the consultant if he expects the consultant to make effective recommendations. 210

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Explain why employees should put an end to the old culture

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Part C Inhibitions of client and consultant: In the beginning of the project itself, the client and consultant should communicate their views to each other clearly. If the client has any objections to the consultants views and opinions about organizational problems, he should make it clear to the consultant. The consultant should, in turn, be able to justify his views and make the client view the problem from his perspective. Sometimes, the consultant may find that he does not have the required expertise to deal with the particular problem faced by the client organization. The consultant should communicate this to the client as soon as he realizes his incompetence and withdraw from the contract rather than giving inaccurate recommendations to the problem and worsening the situation. Failure to review progress: The client and consultant should meet regularly to discuss the developments in the organization after the consultancy assignment is signed. If the client does not perceive any positive developments in the organization, he is free to ask the consultant about this. Sometimes, employee resistance slows down the work of the consultant, despite his best efforts. But if the consultant is not able to show any progress for a prolonged time, the client needs to consider the issue seriously. The client has the right to cancel the contract if he finds that the consultant is unable to serve the organizations requirements. Periodic review meetings help client and consultant discuss and solve various problems before they pose a serious threat to the change initiatives. Failure of the client to do the groundwork: The client organization should take measures to ensure that its employees are mentally prepared to receive the OD consultant. The management of the organization should communicate to its employees the problems faced by the organization and the need for help from an external consultant for resolving them. By doing this, the management of the client organization can ensure that its employees have a positive rather than a hostile attitude towards the consultant. If such efforts are not undertaken by the client organization, the consultant may have to spend too much time trying to change the negative attitude of the employees and establish good relations with them. Coercive efforts: Sometimes the client organizations, especially large public sector organizations, attempt to dictate to the consultant what he should recommend. In contrast, it may also happen that sometimes the consultant may, based on his previous experience, recommend a particular approach as appropriate, and may force the client organization to accept the recommendations, although the client feels they are not suitable in the given context. It is important that both the client as well as the consultant give primary importance to organizational requirements above personal interests.

Answer 73

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Action research is a process of systematically collecting data from the organization and planning and implementing suitable action based on the data. Action research forms an important component of most of the interventions of OD. Hence, action research may be considered as the foundation of the organization development process. Action research involves four main activities diagnosing the problem, designing a plan to solve the problem, implementing the plan, and evaluating the effectiveness of the plan. Moreover, the approach requires participants to gather data continuously and discuss it in response to the feedback given by the consultant. Though the management may design a highly effective plan to introduce change in an organization, it may still face several problems in the implementation phase. Action research seeks to address these problems in a systematic way, and successfully achieve the desired change. In the process, employees get the opportunity to learn new things, enhance their knowledge and apply it in the future when the need arises. Action research requires organizations to give its employees training to participate in 211

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Introduction to Organizational Behavior the problem-solving process. Though action research requires organizations to invest a lot of time and money, it does yield long-term benefits. As employees at different levels of the organization participate in action research, they express different perspectives on each problem and help in finding an effective solution to the problem. As employees collect data, obtain feedback and conduct discussions frequently, there is improved scope for learning and knowledge-sharing across the organization. As the people responsible for implementing change are involved in the data collection, problem identification and planning stages, the process of implementation is relatively smooth. Employees obtain expertise in testing the solutions they develop, documentation and analysis of the results, and in using the lessons learnt from failures/successes to develop better solutions. The employees are therefore wellequipped to solve whatever problems arise in the future. Although the basic process of action research has not changed, organizations are beginning to implement spin-offs derived from action research. While action research emphasizes various features like collaboration, systematic data collection and learning by doing, its spin-offs (collaborative inquiry, action science and action learning) emphasize only one of these features at a time. In collaborative inquiry, employees come forward voluntarily to investigate the reasons for the problem they identified. In action science, data is collected systematically and solutions are tested for their validity. In action learning, people learn by doing. They form small groups and try to work out a solution for problems on their own. The consultant does not support them by collecting data, analyzing it and explaining the results to them. This approach was used in Fokker Aircraft, a leading supplier of advanced components to the aerospace industry, as a part of its organizational change program.

Answer 74

Pose a few questions: Chowdary should meet Khanna and ask him a few questions to know the extent of the latters knowledge about Mithila. These questions may include What is the current agenda of Mithila? What are the barriers faced by Mithila in its attempts to improve its performance? Has the organization succeeded in implementing change? What had Khanna done in the past six months to contribute to the organizations growth? The responses to the above questions will help Chowdary understand Khannas opinion of the change, the reasons for his poor performance and his expectations from the organization. But in order to get true responses from Khanna, Chowdary needs to make the following efforts to win his confidence: Listen carefully: Chowdary should allow Khanna to speak his mind. He should not interfere when Khanna is talking. Repeat what Khanna says: In order to convey his sincerity in addressing Khannas concerns, Chowdary should repeat what Khanna has told him. This will not only help Chowdary in confirming that he is understanding Khanna correctly but will also assure Khanna of his genuine concern for the latter.

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The organizational environment shapes the attitudes and work behavior of employees. Khanna learned certain behaviors after he joined Mithila. But because of the competitive environment, Mithila had to change its organizational structure and policies. This required employees also to adapt to the change. But Khanna found it difficult to change his behavior. Chowdary needs to take the following steps to modify Khannas behavior and improve performance:

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Part C Empathize with Khanna: After listening to Khannas problems, Chowdary should express his sympathy and reassure him by recounting how he has helped people facing similar problems in the past.

Confront: Chowdary needs to confront Khanna if the latter appears to put personal interests above organizational interests, passes blame to others, or refuses to acknowledge that a change in his behavior is desired. Chowdary should clearly point out to Khanna the negative aspects in his behavior and make it clear to him that he needs to improve on those aspects. Khanna may be shocked, show anger or refuse to accept it, when the negative aspects in his behavior are pointed out. Chowdary should be careful to allow Khanna to defend himself but should not allow him to leave the meeting place without committing himself to take some specific action to eliminate the negative aspects of his behavior. For every defensive statement made by Khanna, Chowdary should be able to explain with evidence that Khanna is wrong. This is possible only if Chowdary makes a careful observation of Khannas behavior throughout the meeting. For example, if Khanna claims that he has a positive attitude, Chowdary can repeat some pessimistic statements used by Khanna during their conversation to show that his attitude can certainly become more positive. Of course, Chowdary should be tactful in his conversation with Khanna so as not to antagonize the latter. Arrange another meeting: After having obtained a verbal commitment from Khanna in the first meeting, Chowdary should now ask Khanna to develop an action plan to achieve the desired change in his behavior, and assure him that the required support for this would be provided by the management.

Answer 75

The following measures can help OD practitioners deal effectively with organizational politics: Achieve expert power: Power accrues automatically to knowledgeable and skilled people. Doctors, computer professionals, tax accountants, industrial psychologists and other such professionals acquire power as a result of the specialized knowledge they possess. Similarly, OD practitioners can also acquire expert power by achieving a high level of competence. They should continuously improve their communication, coaching, counseling and problem-solving skills. They should attempt to resolve many problematic situations in a complete manner so that they master these skills. In order to have expert power, an OD consultant should also be considered as honest and trustworthy. By being honest in his interactions with people, an OD consultant will win their confidence and trust and thereby wield expert power over them. Design result-oriented OD programs: OD practitioners should design and implement OD programs in such a way that they help organizations achieve their goals. They should be able to help organizations address strategic issues, solve long-standing problems which could not be dealt by even the senior managers in the organization, and overcome all the barriers that prevent the implementation of solutions. Focus on goals of top executives: Although it is important for OD practitioners to address the needs of people at all levels of the organization, they should give special attention to the needs of the top management because this will ensure the support of the top management in implementation of the OD program. Obtaining the support of the top management will also ensure that the OD program does not face any political hurdle, and the likelihood of its success increases. Also, OD practitioners should ensure that they gain support from different political groups in the organization. This will prevent the OD program from being politically influenced by any prominent group in the organization. 213

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Introduction to Organizational Behavior Avoid win-lose and lose-lose solutions: OD practitioners should also acquire expertise in conflict resolution techniques. They should resolve conflicts among the members of the organization in such a way that no one perceives that he is the loser. To the extent possible, OD practitioners should attempt to find win-win solutions and enhance social relationships among employees. Never give secondary importance to the managements goals: Some OD practitioners tend to forget that they are hired by the management to solve their problems, and instead, attempt to educate the management about the values, philosophy and methodology of OD. OD practitioners should remember that management did not invite them to get trained in OD skills but to seek their help in solving an organizational problem. Do not provide solutions, only help find solutions: If the management approaches an OD practitioner with a problem, the OD practitioner should not attempt to provide a solution to the problem. This will be a violation of the professional ethics of OD practitioners. They should only help the management use appropriate problem-solving processes and find the best possible solution to the problem. At the most, they can suggest possible alternative solutions but should never influence them in choosing the solution. An OD consultant should help the client to be able to independently solve the problem if it recurs in future.

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Environmental protection: OD practitioners help their clients to find cost-cutting solutions. In their attempt to cut costs, the management of the client organization may consider reducing expenditure on pollution-treatment equipment. At this juncture, the OD practitioner should explain to the client the environment laws in the country, the penalty for violation, the loss of image to the organization due to its polluting activities and the impact of such actions on its sales. OD practitioners should also discourage the clients attempts to save costs by setting up polluting plants in developing countries and taking undue advantage of the loopholes in the environmental protection laws in such countries. Recognition of cultural differences: OD practitioners should be very careful when they are working with international clients. Many OD practitioners who believed that they had done everything right in implementation of their intervention, realize too late that they were grossly incorrect and have to begin the process from scratch. This may have happened because they assumed that they could apply the same technique across widely varying cultures. OD practitioners should recognize that cultural differences cannot be ignored and should be given due consideration before undertaking any intervention. For example, techniques

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Social justice: OD practitioners encourage clients to find alternative solutions to problems. If the client comes up with a solution that undermines the principle of social justice, the OD practitioner should raise the issue with the client, and suggest that a different solution should be found. Suppose a multinational organization in the US is finding it difficult to manage its diverse workforce. One of the managers may suggest that the organization should avoid recruiting people from different cultures. Though this may help the management avoid cultural problems, it is not a fair solution, and moreover, the organization will be violating the Equal Employment Opportunity law by doing this. OD practitioners should, therefore, discourage clients from considering such discriminatory and controversial solutions.

In order to have a holistic perspective, OD practitioners should try to keep themselves informed in the following areas:

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Part C like TQM and Kaizen cannot be implemented in US-based organizations without some modifications. This is because people in the West do not like lengthy discussions and incremental improvements which are the major characteristics of these techniques. People orientation: OD practitioners should respect people, their beliefs and values. Employees have the knowledge, skills and experience to contribute to the development of their organization. But their knowledge and expertise may be limited to their area of specialization. For example, employees in the production department will be able to suggest ways to reduce scrap and improve productivity. They may not understand the importance of cooperating with marketing personnel to market the products in a better way, or of adapting themselves to the changes in the external environment, or of solving problems in a systematic way. If OD practitioners can combine their knowledge of problemsolving processes and change processes with the business knowledge of the employees, they can help build great organizations.

Answer 77

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Employees ability to implement change: There should be at least a few employees at different levels in the organization who have the ability to motivate other employees to accept change, and who can lead the change process. They should be able to influence power groups and obtain political support for the change process. They should be able to maintain the enthusiasm of employees till the change has been implemented. If at any level, there are no employees who possess these leadership skills, then the consultant will have to select some of them, and give them the necessary training before beginning the process of intervention. Cultural differences: OD practitioners should always design an intervention in such a way that it accommodates the differences in culture among the organizational members. The culture of the place in which an organization is located influences the values and beliefs of a majority of the employees in the organization. While implementing interventions designed for one country in another one, the OD practitioner should modify the interventions to suit the culture of the latter country. Skills of the OD practitioner: Every OD practitioner cannot excel in all types of OD interventions. Sometimes he may lack the skills and expertise to implement a specific intervention to solve a particular problem in a client organization. In such a situation, the OD practitioner should consider an alternative effective intervention, or seek the help of another consultant who specializes in that type of intervention. Apart from this, OD practitioners should design interventions which can address strategic issues (e.g. mergers and acquisitions), technostructural issues (e.g. organization design), human resources issues (e.g. reward system) and human process issues (e.g. conflict resolution). 215

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Employees willingness to change: Unless employees are willing to change, the OD consultant cannot design an intervention to solve the problem identified in the organization. He needs to motivate the employees and create dissatisfaction in them against the present state, so that they respond positively to change. The management too has to allocate sufficient time and enough resources to implement change in the organization. Once the employees and management are prepared for change, the consultant can implement the problem-solving intervention in the organization.

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The various factors that need to be considered by an organization while designing OD interventions are:

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Answer 78
Rakhi should look for the following characteristics while selecting the person to manage the international operations of her company: Extensive knowledge: The person must have extensive knowledge about business, industry and the latest technology in the market. He must also have in-depth knowledge of market conditions. A global manager needs to constantly track the activities and strategies of existing and emerging competitors. This will enable him to manage domestic and international operations successfully. Analytical skills: A global manager must have a high level of conceptual skills. He must have the ability to view a particular situation not only from a specialist point of view, but also from a holistic or systems view. The systems view enables him to understand the mission, vision and strategy of the organization and their impact on organizational design, culture and people policies. He should be able to utilize his specialized skills to identify the components and sub-components of complicated problems so that they can be resolved easily. Some problems and conflicts cannot be resolved, however hard one may try. In such cases, a global managers ability to appreciate contradictory ideas, beliefs and values will help him manage the conflict and be successful in his role. Agility: A good global manager is characterized by a high amount of flexibility. He should be able to change continuously to adapt to changes in the domestic and global business environment. He should not have pre-set notions or depend on structured decision making methods to take decisions. He should determine the decision making or problem solving process depending on the situation. Cross-cultural skills: The employee should be open to new cultures and to acquiring a new range of skills and abilities to be able to work with people from these cultures. He should be self-confident and emotionally stable. Though he may have his own philosophies and beliefs about life, he should be willing to listen to others views, understand them, and change his own views according to the work situation, if necessary. Decision-making: The employee should be able to make decisions even if he is not able to obtain all the information needed to make a perfect decision. He should consider uncertainty as an opportunity to learn new things and should not be uncomfortable when faced with uncertainty. He should be confident about his decisions and judgement skills. Even if there is pressure in terms of time, he should not make hasty decisions without analyzing the available information. He should record the consequences of his decisions, and attempt to learn from his successes and failures so as to prepare himself for future challenges.

Answer 79
In the past, there was high degree of departmentalization in organizations. If employee (A) at one level of hierarchy in one department wanted to communicate with a employee (B) at the same level in another department, the message had to go up the chain of command in As department and then down the chain of command in Bs department. Again Bs feedback or response had to follow the same path. Now, with companies following a flat organization structure, the chain of command has been shortened considerably. The barriers to communication between departments are being reduced. Cross-functional teams are being formed to increase interdepartmental communication. Many layers of hierarchy have been removed so that managers are closer to employees, work processes and customers. Managers no longer command and extract work from employees but actively work with them to accomplish 216

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Part C organizational goals. Managers and employees now work as a team. Employees are given a great deal of authority and responsibility. They are allowed to participate in decision-making processes. Earlier, all the members of the team had to be physically close to each other to facilitate better communication among them. Modern day advances in technology enable even employees located at distant places to work as a virtual team. Managers have to coordinate and manage team members whom they do not see. The emergence of virtual teams for work has been accompanied by factors like the shorter life cycles of products (e.g. IT solutions), constantly changing tastes and preferences of customers, and increasing competition in global markets. Virtual teams enable organizations to leverage the skills and abilities of individuals from different parts of the world without incurring high costs of transporting individuals from one country to another. For example, Motorola uses virtual teams where members from various countries work together on complex projects. Leading multinational companies like Philips, Oracle, Daimler Chrysler and Ericsson also employ virtual teams. The members of these teams perform various functions like product designing, product development, and product testing from their respective locations. At Microsoft, product development engineers work in the US, while product test engineers work from various countries across the world. The teams at Texas Instruments also work from its offices located in different parts of the world. According to Peter Drucker, Structure is an instrument to achieve objectives. Thus, in such work set-ups, though the members of the virtual teams do not see each other and work independently, managers need to determine some basic structure in order to coordinate the work of team members and accomplish the desired organizational goals and objectives. The structure of virtual teams depends largely on the organizational objectives and the nature of the work. Also, organizations should consider factors like the differences among cultures of team members, their skill levels and socializing needs while designing virtual teams. The structure of these teams should facilitate continuous communication among the members, help them learn and adopt a common culture, and attempt to create a sense of bonding in them. Another concept that is becoming increasingly popular in the business environment is that of virtual organizations or Networked Virtual Organizations (NVOs). Organizations like Wal-Mart Stores and Cisco systems have successfully adopted the NVO business model. A virtual organization is a temporary organization formed by collaboration between two or more entities (including suppliers, customers, and sometimes competitors) to produce a specific product or service. Once the product or service is delivered, the organization dissolves. Virtual organizations have only a few permanent members with unique skills called the core group. The core group includes professionals, technicians and managers. Virtual organizations outsource most of their manufacturing and customer service responsibilities to sub-contractors. They have temporary or part-time workers to cope with the workload at peak times.

Answer 80
Empowerment is a process of authorizing employees to exercise power. It is not a process in which a manager assigns a few responsibilities to his subordinates whenever he gets overburdened. Before simply following the trend, managers should question themselves on the issues who should be empowered, and what should be 217

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In virtual organizations, members do not share a physical work space. They may work from home or any place of their convenience. They exchange information through the Internet or high technology communication devices. Thus, virtual organizations are able to reduce costs (of investing on real estate and a permanent work force), improve productivity and profitability.

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Introduction to Organizational Behavior the objectives of empowerment. The organizations vision can be used as a guide to answer these questions. Empowerment requires people to think differently, discuss their ideas with team members, defend their ideas, review others suggestions, and make decisions. To be able to perform these new responsibilities, employees need to learn new skills like communication skills, analytical skills and conflict resolution skills. Therefore, organizations should provide employees with the training required before empowering them. Without trust between the management and employees, empowerment cannot take place. Both parties should be able to predict each others actions in a given situation. The management should encourage employees to give suggestions and should implement them. They should involve them in making decisions and share profits with them. Employee should not misuse this power to serve their personal interests. Only then will trust develop between the management and employees. As a part of empowerment programs, organizations link employee incentives to business performance and profits achieved by them. For example, Honeywell designed a performance incentive plan for its employees in which employees received additional incentives depending on the performance of the organization. It was observed that performance-based pay dramatically changed the way of thinking of employees. In the company, when the performance-based incentive plan was explained to workers, they introspected on their actions while performing their work and came up with new ideas to save power and reduce losses for the company. British Petroleum (BP) is one of the companies that realized that true empowerment can result only when the organizations goals, the employees roles in their jobs and the people they can approach if they have any queries, are clearly defined and communicated to them. BP has invested heavily in communicating with employees, and sought to increase the flow of knowledge across the organization. Before making decisions, managers at BP always invite the opinions and suggestions of employees. The companys intranet enables employees to keep themselves updated with the latest company information. To facilitate empowerment, BP has adopted a flat organizational structure. The employees of its 92 business units can communicate directly with the executives in the headquarters. Dana Corporation, an Ohio-based manufacturer of components for automobile companies, implements several programs to facilitate and encourage employee participation in business processes. Dana allocates about 40 hours for employee education and training every year. It encourages employees to give two ideas per month, reviews them regularly and tries to implement 80% of them. It has adopted a decentralized structure to facilitate transfer of power and responsibilities to employees. It offers employee stock options to its employees and its retirement program is designed such that it encourages employees to stay with the company for long, and grow with it.

Answer 81
Organizations today are striving to provide their workforce with an environment that is free from inhibiting rules, and which stimulates their productivity. In such an attempt, companies like PeopleSoft have adopted various measures like telecommuting to enhance productivity and maintain a low level of employee turnover. Telecommuting, also known as teleworking, involves accomplishment of all, or part of an employees tasks from home through computer links to the office. Telecommuting offers a number of advantages to both the employees as well as the employer. Organizations implement telecommuting as a viable cost-cutting strategy 218

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Part C since it cuts costs by reducing the amount of office space required. Telecommuting attracts talented people who prefer to work from their homes. Companies also use telecommuting as a retention tool, to retain efficient and talented workers, thus maintaining the quality of output. The employees find telecommuting beneficial as it makes it easier for them to strike a balance between their personal and professional lives. It also helps reduce workrelated stress, thereby creating a healthy and motivated workforce. Further, employee morale is enhanced as a result of telecommuting as this kind of work arrangement indicates the employers trust in the employee. This, in turn, increases their job satisfaction, ultimately leading to enhanced productivity levels. However, not all organizations are willing to offer this facility to their employees. Some employers are not convinced of the efficiency of this work alternative as there is no concrete evidence of the benefits of telecommuting. It is difficult to maintain contact with telecommuters and to support them when they encounter problems in their work. Employers also find it hard to keep track of the productivity of telecommuting employees and to decide upon the compensation to be given to them. Employees too, in some cases, are not happy with this system as they feel isolated and are deprived of the interaction and stimulation that are derived in a real work environment. Telecommuting could also lead to burnout in some cases since the employees do not have fixed hours of work and tend to overwork. This proves counterproductive to the organization and the employees themselves. Thus, organizations must ensure that a proper study of the benefits of implementing telecommuting is done before offering this option to its employees.

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Ethnocentrism When an individual judges a new culture based on the similarities between the new culture and his/her own organizational culture, the individual is considered to be making use of the self-reference criterion. The tendency of the individual to evaluate other cultures on the basis of how different or how similar they are to the culture in his/her own home country is known as ethnocentrism and makes it difficult for the individuals to understand and empathize with employees in the host nation, thereby rendering cultural adaptation difficult. Cultural distance The extent of difference or variation between the social systems of the expatriate and the host nation is called culture distance. The greater the culture distance between the two nations, the greater would be the difficulty in cultural adaptation. Culture shock When an expatriate experiences dramatic differences in language, mannerisms, practices, values, customs, perceptions, and cultural 219

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Parochialism Cultural parochialism tends to arise when an individual believes that the practices in his/her home country are better than those in the host nation. This happens when he/she takes a narrow or restricted view on a certain issue, based on the limited knowledge he/she has by virtue of his cultural background. This poses serious problems as such a belief can impede the progress of an organization working in an international environment.

In order to compete in the rapidly-changing business environment, organizations are establishing operations at locations beyond the geographical boundaries of their home countries. By doing so, they inevitably face the challenges of managing a diverse workforce in a multicultural environment. Conducting operations in a multicultural environment causes organizations and its workforce to encounter various barriers to cultural adaptation. A few of these barriers are -

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Introduction to Organizational Behavior orientations of people belonging to his home country and those of the host nation, he is said to undergo a culture shock. This might affect the individual mentally and emotionally, thereby hindering his cultural adaptation. Organizations must, therefore, take necessary steps to ensure a smooth cultural adaptation. Some of these measures are Careful selection of employees A careful selection of employees who fit in well with the new culture goes a long way in cultural adaptation. Employees selected for foreign assignments must have a willingness to experience a new organizational culture, possess adequate knowledge about the culture of the host nation, be able to understand and communicate in the new language, etc. Selection of suitable candidates will ensure the success of foreign assignments. Compatible assignments Organizations should ensure that the assignments handled by the expatriates in the host country are similar to those they have handled in the home country. This will help the expatriates to easily adapt to the new culture as they already have experience and knowledge of handling such assignments. Predeparture training Organizations offer training to employees in language, business practices and mannerisms of the host country, to help them to adapt to the new environment. This also helps the expatriates to create a favorable impression among the people in the host nation and ensure their easy acceptance. Orientation and support Organizational support is vital for employees to overcome cultural barriers and to facilitate smooth cultural adaptation. Employees are offered adequate facilities to help them adapt to the new culture through provision of proper accommodation, transport, mentors, etc. They are also given opportunities that challenge their abilities, thereby motivating them. Preparation for reentry A reverse culture shock is said to take place when the expatriates return to their home country after serving in the host country for a substantial period of time. Organizations must support this readjustment by formulating repatriation policies which ensure that they are given equally challenging opportunities and prospects for growth.

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Answer 83

Informal transmission of information within organizations takes place through grapevines. Grapevines arise out of the social interactions that occur among the members of an organization. Information passing along this informal network is undocumented, and, therefore, vulnerable to distortion depending upon the different ways in which people interpret the message. When effectively managed, grapevines have many advantages. Grapevines humanize the organization by creating a sense of belonging among its members. It is also a great means of relieving stress among the employees as it helps people express their concerns, feelings, emotions and apprehensions about the various organizational systems and procedures. Grapevines help to create strong social bonds among employees, thereby encouraging teamwork and employee participation. Grapevines are, therefore, effective indicators of the morale, health, trends and productivity of employees. If organizations are able to integrate this effective informal communication channel with the formal network of communication, they can benefit enormously. Researches

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By taking the above measures, organizations can improve their performance in the global arena and ensure effective cultural adaptation of its employees in a multicultural environment.

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Part C indicate that nearly 75% of the information carried by grapevines, is accurate. Therefore, the management can learn and understand the employee perception of the various organizational procedures and systems, which would otherwise not be known. Research also shows that supervisors who heed to grapevines generally have 50% more credible information than those who do not. Grapevines can be used as an effective tool for transmitting information among the organizational members as they are fast. Therefore, the desired information can be easily transmitted throughout the organization within a short span of time. Besides, employees feel that the information that passes through the grapevine is reliable and accurate. When managed effectively, grapevines help to minimize the negative consequences of rumors within organizations. This is possible when the management treats this informal network as an open channel of communication, and uses it to transmit important and complete information to its members. Participants of the grapevine play a key role in information transmission. Thus, maintaining a good rapport with the grapevine members goes a long way in knowing employee perceptions, which in turn acts as an effective feedback mechanism.

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Organizations use mentoring programs to develop a culture of continuous learning. Such programs are aimed at inculcating values and behavior that are considered important for the organization. Mentoring programs reflect the commitment of the organization towards the overall development of its workforce. This, in turn, helps organizations attract, recruit, place and retain the best talent in the industry. Mentoring enhances interaction among the different levels in the organizational hierarchy, thereby encouraging teamwork. Organizations also benefit by such programs as employees are trained in their respective domains by people within the organization itself, without having to involve external personnel for the purpose. Besides, these programs enhance the motivational levels of the mentors as it gives them a sense of achievement and job satisfaction. Thus, mentoring programs provide a competitive edge to organizations by developing and enhancing the social system at the workplace, thereby ensuring the long-term health of the organization. Mentors play a vital role in realizing the benefits of mentoring. While acting as a role model for their protgs, mentors play a variety of other roles, which are discussed below: Coach As a coach, a mentor trains his protg in all the skills and expertise that the job or profession of the protg demands. Counselor A mentor acts as a counselor for his protg by offering moral and psychological support as and when required. This helps boost the confidence and morale of the protg. Sponsor As a sponsor, a mentor helps his protg to get challenging offers and assignments, and also sponsors and recommends his name for organizational rewards such as incentives, promotion, etc.

Thus, a mentor plays a multifaceted role developing an organizational culture that promotes continuous learning, thereby enhancing employee competencies, which create a competitive advantage for the organization over others in the industry. 221

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Mentoring is a deliberate association of a more skilled or more experienced person (mentor) with a relatively less skilled or less experienced person (protg), in order to develop specific competencies in the protg.

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Thus, grapevines when managed properly, can act as an effective supplement to the formal channels of communication.

Introduction to Organizational Behavior

Answer 85
One of the major ethical issues in organizations is that of employee privacy. Organizations feel a need to control employee behavior by monitoring various aspects of their jobs. However, these measures sometimes cease to be justifiable as they invade the privacy of employees. Technological developments have made it possible for organizations to monitor what employees are doing on their computer terminals, track their telephonic conversations, trace the messages sent and received by employees through their e-mails and instant messengers, etc. While employers argue that this kind of surveillance is essential to control employee behavior, keep track of their activities, and to detect company thefts, etc., these arguments are sometimes contested in the court of law. Organizations, must therefore, adopt preventive measures to avoid litigation. To begin with, they must inform their prospective employees beforehand about the kinds of restrictions that will be imposed on them and their performance. Employee privacy issues should be documented and communicated to all the employees of the organization. Organizations must also justify such actions by giving the reasons for imposing these restrictions. Once employees are convinced about the rules, they generally abide by them. Also, employers must keep in mind the best interests of both the organization and its members before imposing any kind of restriction over employee behavior.

Answer 86

Escalation of commitment takes place under the following circumstances -

Answer 87
Organizations stand to benefit considerably if they encourage employee participation in crucial decision-making processes. Therefore, modern organizations are taking measures to involve employees in organizational decision-making. Effective 222

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In certain cases, the decision-maker succumbs to peer pressure and takes a decision despite knowing that it is wrong. Further, in order to save face, he continues to remain committed to the wrong decision. Organizational factors like ineffective communication, resistance to change, and dysfunctional conflicts and politics within organizations tend to escalate commitment towards the wrong course of action.

Thus, complex human dynamics play a role in keeping managers committed to a decision, which they know is wrong and detrimental to the organization.

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Certain psychological elements also contribute towards making a wrong decision. This happens when the ego of the decision-maker prevents him from admitting that he made a wrong decision. Instead, he tends to take more than a reasonable risk in an attempt to prove that he was right. He therefore, tries to defend his decision by ignoring information which suggests that it was wrong.

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Certain characteristics of the project like the expected returns, short-term profits, amount of investment, etc., seem unfavorable, and may cause the decision-maker to desist from taking a bold decision. Instead, the decision maker may choose to take a sub-optimal or less risky decision.

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Sometimes, under the influence of certain psychological dynamics, decision-makers tend to hold on to a decision, despite knowing that it is wrong and will lead to an unfavorable outcome. This phenomenon is known as escalation of commitment.

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Thus, by taking certain preventive measures, organizations can effectively manage issues concerning employee privacy at the workplace.

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Part C employee participation is influenced by both the work environment as well as the employees themselves. For effective employee participation, fulfillment of the following conditions is essential Sufficient time Organizations can derive maximum benefit from employee participation, only if the employees are allowed to involve themselves in the process for a substantial period of time. If time is a limiting factor, employee participation should not be sought for making a decision. Cost-benefit analysis Employee participation in decision-making should not affect the routine processes in organizations. A careful cost-benefit analysis has to be carried out to study the advantages and disadvantages of employee participation. Only if the benefits exceed the costs, should employee participation be encouraged. Employees area of interest Active and effective participation by employees can be ensured only if the decision made pertains to the daily tasks and responsibilities of the employees. In other words, employees show interest only when the decision made affects their routine job in the organization. Employee aptitude Employee participation results in the desired outcome only if the employees possess the requisite aptitude and ability to make such decisions. They must possess adequate knowledge and intelligence to make decisions. Besides, the decisions made should be within the employees sphere of authority. Absence of apprehensions In a participative decision-making process, various apprehensions might prevail among both the superiors and the subordinates. While the subordinates fear that voicing their opinions may invite the disapproval of their superiors, the superiors possess an inherent apprehension that their authority and power could be threatened by involving their subordinates in decision-making. The apprehensions of both parties must be addressed in order to make the participation process effective.

Employee behavior in organizations is a function of consequences. In other words, a behavior that results in desirable or pleasant consequences tends to repeat itself, and behavior that results in unpleasant consequences is less likely to be repeated. When a particular behavior is repeated as a result of it being followed by a pleasant consequence, it is said to be reinforced. Reinforcement can be used as an effective tool to control employee behavior in organizations. In the present case, the employees are not performing to the desired standards, which is resulting in a loss of productivity and deterioration in the quality of output. Therefore, their behavior must be modified to enhance productivity of the organization. In this case, positive reinforcement may be used for the purpose. Positive reinforcement could be in the form of a reward or any other desirable consequence that follows a certain behavior. Positive reinforcement motivates people to maintain or enhance the frequency of occurrence of desirable behavior. For example, in this case, employees who perform well may be praised, or monetarily rewarded, which might encourage them to repeat the behavior, and the other employees to emulate such behavior. Employees exhibiting desirable behavior may also be promoted to higher positions, in appreciation of their efforts. This motivates them to continue behaving in the same way, thereby enhancing the quality of output. Thus, employees may be made to behave in a particular manner by rewarding them 223

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Answer 88

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Once these prerequisites are fulfilled, the benefits of employee participation can be reaped in real terms.

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Introduction to Organizational Behavior when they repeat it. However, managers must find out how attractive the rewards are to the employees. Only those rewards that are attractive to employees succeed in motivating them to perform. Thus, employee behavior may be controlled or modified by positively reinforcing desirable behaviors exhibited by them, thereby improving the quality of output and productivity of employees.

Answer 89
The concept of a learning organization has gained increasing relevance in the present competitive and dynamic business environment. The survival of organizations in the present-day business environment depends on how fast and readily they accept and adapt to changes in the external environment. Although there is no single, widelyaccepted definition of a learning organization, it is considered to exhibit the following characteristics Competence In a learning organization, it is assumed that each individual member of the organization is capable of performing to his/her level of competence, with minimum supervision from his/her supervisors. In other words, a flat structure, minimal supervision and checks are important features of a learning organization. Such organizations emphasize effective training and an internalization of organizational values and culture at the very early stages of an individual joining an organization, so that the employees behavior is shaped in a way that accomplishment of organizational goals becomes easier. Urge and willingness to learn Competence without curiosity and willingness to learn is meaningless. A learning organization provides adequate learning opportunities to employees, and employees in such organizations demonstrate an urge to constantly enhance their skills. Curiosity in employees has the potential to develop new ways of solving organizational problems. The employees are, therefore, encouraged to question existing organizational systems and procedures, which in turn, stimulates them to discover novel and profitable ways of performing routine tasks. Tolerance One of the most important features of a learning organization is its willingness to tolerate mistakes and errors. Employees, in their search for new alternatives to existing practices and customs, tend to make mistakes which might cost the organization substantially in terms of financial investment, and time and other resources spent on the experiment. However, learning organizations not only encourage employees to try out innovative means of solving problems and celebrate the success of such ventures, but also exhibit a reasonable degree of tolerance to failure as well. Trust Employees in learning organizations enjoy the trust of their colleagues and are, therefore, motivated to experiment constantly, thereby resulting in successful ventures that might bring in considerable revenue to the organization. Open culture Learning organizations promote an open culture where information is shared among all the members of the organization. This facilitates collaboration among a cross section of people, thereby creating a positive synergy within the organization. Adaptation A learning organization constantly interacts with the external environment and is aware of all the new developments in its domain of operation. It also encourages and facilitates easy adaptation to all relevant developments in order to remain competitive.

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Thus a learning organization is held together by shared values and norms, and by people who are committed towards a common goal of constant learning and adaptation.

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Part C

Answer 90
Like Theory X and Theory Y proposed by Douglas McGregor, Theory Z propounded by William Ouchi makes a few assumptions about workers in an organization. Theory Z assumes that workers are generally self-motivated and possess an inherent drive for achievement and self-actualization. They tend to build strong interpersonal relationships with all the members of the organization. They value the organizational culture and collaboratively strive towards the achievement of organizational goals. Employees exhibit a high need for support from management and are loyal towards the organization. They tend to value family and personal life as much as the values, traditions and norms of the organization. Therefore, organizations that subscribe to Theory Z tend to exhibit the following characteristics Organizations offer a long-term employment option to their employees. They provide extensive training, and invest in the all-round development of their employees with the expectation of developing and maintaining a loyal and skilled workforce.

Answer 91
An informal organization is a network of all personal and social interactions among the people in it. An informal organization plays a significant role in the organizational dynamics and offers various benefits, some of which are discussed below Informal organizations help develop a sense of belonging among its members through the various social and personal interactions among them. These interactions motivate them to perform better and thereby enhance employee productivity. Due to the flexibility and ability to produce spontaneous responses to a problem, which is generally not possible in a rigid formal structure, decisions can be made quickly in informal organizations. This, in turn, enhances the effectiveness of the organizational system. 225

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Thus, Theory Z organizations promote a stable environment that encourages a high quality of output and fulfills the employees needs for affiliation, achievement, independence and mutual trust.

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Decisions in these organizations are made in a participative manner and involve employees from all levels. Employees are encouraged to give suggestions regarding various decision-making situations. The active participation of employees motivates them, and creates in them a sense of belonging towards the organization. However, the accountability of the decision lies with the manager or the ultimate decision-making authority.

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Mutual trust exists between the employers and employees in these organizations. While the management has complete faith in its employees and believes that they would perform to the best of their abilities, the employees trust the top management to provide them with necessary support for the achievement of common objectives.

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Employees are promoted on the basis of their performance and contribution towards achievement of organizational goals.

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Introduction to Organizational Behavior The workload of managers decreases substantially once they manage to obtain the cooperation of the members of the informal organization. A cooperative approach between the managers and members of the informal organization reduces the need for frequent supervision and monitoring. Informal organizations give rise to a sense of security and stability among the members, which in turn, enhances their job satisfaction. This also leads to lowering the attrition rate in the organization. Informal organizations provide an effective outlet for employee concerns and apprehensions. The various social interactions among members reduce anxiety and stress levels among them.

Although informal organizations possess many advantages, they also have certain dysfunctional aspects, which are as follows When members of an informal organization give importance to their personal values or benefits, undermining the norms of the informal group, conflicts may arise between members. This might affect the motivational levels of employees, thereby reducing their productivity. Informal organizations tend to be conservative and offer stiff resistance to any change in the organization. Even if a change is enforced upon them, they are seen to stick with the status quo. This may sometimes prove detrimental to the growth of the organization. Members of an informal organization sometimes experience role conflicts due to the diverse and contradicting expectations of the formal and informal structures. This results in lowering their productivity levels. Therefore, in order to reduce the dysfunctional consequences of an informal organization, an integration between the values of the formal and the informal structures becomes inevitable. Members of an informal organization are expected to conform to certain fixed norms of the group. These norms may at times conflict with their personal values and beliefs. However, if the members choose not to abide by those norms, the group imposes sanctions against them. This may lead to isolation of these individuals which, in turn, might affect their motivation and productivity levels and ultimately prove dysfunctional for organizational effectiveness.

Therefore, while informal organizations might lead to an increase in organizational effectiveness, they also possess the ability to thwart organizational activities. Managements must, therefore, strive to integrate the formal and informal organizations to derive maximum benefit from the informal organization.

Answer 92
Leadership can be defined as a process of influencing the behavior of others so that they concentrate their efforts on achieving a common objective. In todays global economy, managers face the challenging task of overcoming cultural differences in transnational organizations. To be successful leaders, managers must adopt various leadership approaches to suit the varied cultural backgrounds of the workforce in these organizations. Therefore, differences in managerial styles in organizations across different cultures are bound to exist. There are many factors that lead to this difference in leadership styles, some of which are discussed below Personal values The personal values of managers have a great impact on factors like how they perceive a problem-solving situation, their outlook towards the various alternatives that exist while solving the problem, the decisions they make,

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Part C etc. Besides, other factors like the perception of subordinates in terms of how they accept the authority of the manager, their commitment towards achieving the common objectives of the organization, etc., also determine how successful the manager is as a leader. Therefore, the personal values of both the manager and the subordinates affect the leadership style of managers across different cultures. Background of managers The manner in which a manager leads his subordinates is to a great extent influenced by his background in terms of education, family values, etc. For example, while an educational qualification from a prestigious institution may help an individual climb the career ladder faster in countries which value educational qualifications, in other countries, performance at the workplace is the criteria for earning promotional opportunities. Family values also play an important role in determining the style of leadership a manager might adopt. For instance, if a manager has been brought up in India, where the culture is to treat elders with respect and obey their orders, he tends to be an authoritative leader, who takes all decisions on his own. Likewise, he expects respect and obedience from his subordinates. Thus, the background of the managers influences the way he leads his subordinates. Interpersonal skills It has been observed that the interpersonal skills of a manager have a great impact on his leadership style. His interpersonal skills affect various aspects of his leadership and management style, such as the extent of employee participation he encourages, his concern for bureaucratic rules and employee welfare, the extent to which he cooperates with others in the organization, the decision-making approach he adopts, etc. These skills vary according to the cultural backdrop of the organization. Thus managers are seen to differ in their interpersonal skills across cultures. Competency of managers The competency of a manager also determines his leadership style. As organizations are going global, there is a growing need for managers to possess a knowledge of the business environment from a global perspective, awareness of various cultures across the globe, ability to create a synergy across various cultures, and to adapt to a new culture, etc. A managers sensitivity towards cultural differences, motivation, and leadership will help him gain these competencies. These skills and competencies of managers affect their leadership style across cultures.

Answer 93

The trait theory of leadership proposed that leaders are born, and not made. People subscribing to this notion believed that some individuals are born with leadership traits. They are natural leaders and possess the ability to become leaders, whatever the situation might be. Thus, leadership was thought of as a quality that is inborn and which cannot be developed. However, there was no substantial evidence to prove a cause-effect relationship between leadership traits and successful leadership. This gave rise to a modern approach to leadership, which proposed that leadership is an art that can be developed by effective training and by learning from experience. The various factors that affect leadership skills are early family experiences, education levels, presence of role models and mentors during the early stages of life, etc. A supporting family and a motivating environment, is the first requirement in the development of leadership skills. An individual who aspires to become a leader must possess the drive to accept challenges, and to take risks and responsibilities. This drive to accept challenges can be developed by aspiring individuals. Another important requirement is the ability to visualize the end objective for which he is striving. An effective leader must have clarity of thought and also a clear plan on how to achieve the end objective. 227

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Introduction to Organizational Behavior To become a leader, an individual must possess the ability to persuade and influence peoples behavior to concentrate their efforts towards the achievement of that end objective. He must be able to effectively communicate his vision and plan of action to his followers. Once he is able to effectively communicate his thoughts and plans to his followers, he becomes successful as a leader. All the above qualities can be learnt and developed over time. Therefore, leaders can be made if they imbibe the qualities of effective leadership.

Answer 94
The behavior of members in groups and their performance, to a large extent, is influenced by the structure of the group. The various structural variables of a group that determine the behavior of its individual members are as follows Leadership The leader of the group, generally called the manager, supervisor, etc., who is formally appointed to lead the group, plays an important role in determining the success of the group. His personal values, beliefs, norms, etc., have a great impact on the behavior of the group as the members try to emulate and follow those values and norms. Thus, leaders greatly influence member behavior in groups. Role Role is a pattern of expected employee behavior that is determined by virtue of his/her position in the organization. Behavior of individuals in a group is affected by the role he/she plays in the organization. Depending upon the role expectations associated with the employees position in the organization, his/her behavior changes. Norms Norms are accepted standards of behavior in a group that are shared by its members. They determine and predict how an employee should behave under a particular circumstance. Norms may or may not be formalized or documented. However, a majority of these norms are informal. Though informal, these norms are expected to be followed by its members. Only then will they be accepted as members of the group. These norms may pertain to the expected standards of behavior in the group, appearance of the group members, or allocation of resources among them. Thus group norms help predict and control employee behavior. Status Status is the social position or rank held by a few members of the group. Status may also be acquired by an individual on the basis of his age, skill, experience, etc. The criteria of status is generally decided by the members themselves. Individuals in a group tend to behave in a way that is expected of anyone occupying that position in the group. In other words, employee behavior in groups is largely dependent on the position he/she occupies within the group. Size Though a five or seven member group is what is recommended, the size of an ideal group depends on the nature of the tasks being done. For example, tasks involving collection of large amounts of data might require a larger group size when compared to tasks relating to analyzing that data. However, very large groups should be avoided in order to minimize incidence of social loafing, (tendency of individuals to expend less effort when performing as a group than when contributing individually), domination by a few members of the group, development of too many subgroups, excessive time taken to arrive at decisions, and reduced individual participation by a few employees. Thus, behavior of individual members of the group is influenced by the size of the group. Composition Groups are generally successful when its composition is heterogeneous, rather than homogeneous. In heterogenous groups, the presence of people from diverse backgrounds in terms of age, gender, personality, skill sets, knowledge, abilities etc., tends to produce a synergy of ideas which help the

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Part C group to perform more effectively than a homogeneous group. However, heterogeneity may sometimes lead to conflict among individuals or groups of individuals. This generally happens when cultural, racial or nationality differences exist among the members. In such cases, a homogeneous group tends to perform better than a heterogeneous one. This is because groups which have a diverse composition take time in learning and assimilating the values and culture of other members of the group. Employee turnover and conflict within the group increase in such cases. Thus, employee behavior within groups is affected by its composition. Cohesiveness Cohesiveness is the degree to which members in a group are motivated to stay in the group. It depends on the degree of social interaction among the group members. The more the interaction among the members, the greater the cohesiveness of the group. The cohesiveness of a group depends on the performance norms in the group and has a positive impact on the productivity of employees. In other words, productivity of employees increases with an increase in its cohesiveness.

Answer 95

Technical skills refer to the abilities of a manager to use tools, techniques or specialized knowledge and expertise. Consider professions like accountancy, personnel, operations research, etc., which require a high level of technical expertise. Managers generally learn these skills through management education and while on the job. Technical skills provide managers with adequate confidence for making decisions and also help them to earn respect and support from subordinates. The human skills that managers must possess include the ability to work with a group of people. These also include the the ability to understand and empathize with peers and to motivate them to work towards organizational objectives. Communication plays an important role in all managerial activities as managers are expected to get work done by their subordinates. Good interpersonal skills and an ability to effectively manage conflicts go a long way in determining the success of a manager. Therefore, it is a widely accepted fact that technical expertise alone is not enough to become an efficient manager. It has to be adequately supplemented with human skills. Conceptual skills are necessary for managers to analyze and diagnose complex business situations that help them in various problem-solving and decision-making situations. Conceptual skills comprise the ability to identify probable problem situations, the various alternative approaches to solve them, and the ability to select the best alternative. Mere technical and human skills, do not help in effective management of organizations. Conceptual skills which help managers solve problems in a logical and rational way are also required to successfully manage organizations. It is universally accepted that a successful manager has to essentially possess the above competencies.

Answer 96
A Cross functional team (CFT) comprises a group of people from a variety of functions or disciplines drawn from across the organization, whose concerted efforts are required to accomplish a common objective. The team may be a permanent or a 229

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The three essential skills that managers must possess are technical, conceptual, and human. Managers must possess these skills to successfully achieve organizational goals and objectives.

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Thus, these seven structural variables determine individual employee behavior in groups.

Introduction to Organizational Behavior temporary one. CFTs are generally employed in organizations that operate in a highly dynamic environment, and which are sensitive to the constantly changing needs of customers. Thus, CFTs are more effective in organizations which operate in fastchanging markets. Apart from the various advantages that can be derived from teamwork, CFTs also have the following benefits Adequately empowered CFTs generally solve organizational problems faster than the traditional problem-solving techniques. As a CFT consists of people belonging to different disciplines in an organization, solving organizational problems becomes easier. This is because these problems are tackled by people with a variety of skill-sets, knowledge domains and experiences. Creativity in solving problems is enhanced due to the synergy created by people with differing perceptions. These differing perceptions help explore numerous alternatives to solve organizational problems. Effective organizational learning occurs in CFTs as people learn about the activities of other departments, of which they had no knowledge previously. They also learn how to work along with people with different values, working styles and belonging to different cultural backgrounds. CFTs increase employee motivation as they enhance their participation in solving organizational problems. Members feel a sense of belonging and achievement, which enhances their morale.

With a potential to provide these benefits, cross functional teams can give organizations a competitive edge over competitors.

Answer 97

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Intensity When an individual is exposed to a very intense stimuli, he tends to pay more attention towards that stimuli than to one of lesser intensity. For example, an individual is more likely to respond to a loud noise or a strong odor. Size Size is closely related to the principle of intensity. Accordingly, a large object tends to attract more attention than a small object. Contrast Stimuli that is different from the background and that is not generally expected is more easily perceived. Repetition Response to a particular stimuli is likely to increase with the number of times it is repeated. This principle is used by supervisors while giving instructions to subordinates. Motion The perception of an individual of objects that are in motion is greater than towards objects that are stationary. Novelty and familiarity New events in a familiar environment or a familiar event in a new environment are likely to gain more attention from the perceiver.

Apart from the above external factors, there are internal factors that also affect perceptual selectivity. People tend to respond to stimuli based on their learning, motivation, and personality.

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Differences in perception of individuals arise due to the principle of perceptual selectivity. Perceptual selectivity causes individuals to select only a few stimuli from the various stimuli they are exposed to at any given point of time. There are a number of factors that determine how and why individuals select only a few stimuli at a given point of time. These factors may be external or internal. The external factors that affect perceptual selectivity are:

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Part C Thus, a set of internal and external factors affect the perceptual selectivity in individuals and thereby their perception.

Answer 98
The perceptual error in this case is called the halo effect. Halo effect is the tendency of an individual to judge another person based on a single striking characteristic. Halo effect is very similar to stereotyping. While in stereotyping, an individual is judged based on ones perception regarding the group to which the individual belongs, it is a single trait that forms the basis of perception in the case of halo effect. Halo effect in general is a rater error. In other words, this error occurs when one tries to rate or evaluate the behavior of another individual. People tend to commit this error when they try to make the process of perception or evaluation simpler and more manageable. People tend to draw wrong conclusions about a person, based on a particular trait like intelligence, appearance, dependability, etc. This may lead to inaccurate perceptions about people at times. In the above situation, Eshwar Dayal is prone to halo effect as he takes a positive view of all the actions of one of his team members, only because of his educational background. Dayals perception of the team member overlooked the fact that the latters actions may or may not contribute to improve organizational performance. Just because he belonged to a reputed institution, it does not necessarily follow that every action of his would result in a positive outcome. Such biased judgment might influence the perceiver into arriving at wrong conclusions. Hence, halo effect has to be avoided because of its negative consequences. Halo effect in organizations is more likely to take place during performance appraisals. The appraiser has the propensity to judge his subordinates behavior or performance based on a single attribute like his educational background, experience, interpersonal relations, etc. He might rate him more positively or more negatively than what is justifiable. This error in perception generally tends to peak under conditions of uncertainty as regards certain traits which are yet to be identified in the individual. When certain traits are less commonly observed or have moral implications halo effect tends to surface. Although halo effect poses serious implications in the study of organizational behavior, not much research has been carried out to study the impact of this error. Therefore, tackling perceptual errors like stereotyping and halo effect is a challenging task for managers.

Answer 99

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Span of control in an organization indicates the number of subordinates reporting to a manager. In other words, span of control determines the size of the organizations workgroups. Also termed span of management, it represents the number of levels and managers in the organizational structure. The services of managers must be optimally utilized since maintaining managerial staff is expensive. The span of control, therefore, is indicative of how effectively managerial personnel are utilized. While a low span of control has the advantage of allowing close monitoring of employees, since the number of subordinates is less, it could prove to be counterproductive as employees might be micromanaged. Micromanagement demotivates employees as they tend to be disturbed by the constant supervision and interference of their superiors, thereby reducing employee autonomy at work. Besides, the large number of hierarchical levels makes vertical communication in organizations difficult. It also slows down the decision-making processes in organizations as communication has to pass through a number of levels in the hierarchy. 231

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Introduction to Organizational Behavior These problems can be avoided by increasing the span of control of managers or, in other words, by increasing the number of employees reporting to each manager. This results in flattening the organizational structure. Widening the span of control helps organizations to reduce management costs. Wide spans of control reduce the number of levels in the organizational hierarchy, thereby facilitating communication between the various levels in the organization. This also facilitates faster decision-making in organizations. Further, a wide span of control not only increases organizational flexibility in various processes, but also empowers employees, thereby enhancing their motivational levels. However, the wider the span of control, the greater will be the difficulty in managing employees. Therefore, it is imperative to strike an effective balance between costs of management and effectiveness of control. There are various factors that can help determine the ideal span of control in organizations. Some of these factors are discussed below Factors like degree of job specialization and extent of interdependence among the various members in the organization determine the extent of coordination that is required among the various work groups. This extent of coordination required among various work groups affects the span of control in an organization. Depending upon similarity of various tasks within a specific unit, the span of control varies. If there is a greater need for autonomy of employees in an organization, it is advisable to have wider spans of control and vice versa. Therefore, employees need for autonomy also determines the ideal span of control. The need for effective communication among various levels of the organizational structure also helps determine the span of control. Depending upon the extent to which subordinates must interact with their supervisors, the span of control varies.

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Yes, the OD practitioner was right in suggesting that both parties should confront the situation. Rising inter-group conflicts such as the one described above can be solved using a third-party peace-making intervention. In such cases, an external consultant, generally an OD consultant is invited to resolve the conflict. The consultant first diagnoses the problem situation to find out the issue that led to the conflict between the two groups, the issues that aggravated the conflict situation, the actions of the two conflicting parties that led to the problem, and the consequences of the conflict. Third-party intervention includes a confrontation of the two conflicting parties, their acceptance that a conflict exists between them, and that it is affecting the functions of the individual departments and the organization as a whole. A productive confrontation process can be achieved only if the following conditions are satisfied: Both the conflicting parties must be motivated to arrive at a positive solution to the conflict situation. The two parties must be equally powerful. In other words, no party should be able to overpower the other. Both parties must resolve the conflict in a concerted and synchronized manner. Both parties must have sufficient time to understand each other so that they can identify and overcome their negative feelings and appreciate the positive aspects of the other party.

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Thus, there is no specific or ideal number of subordinates who ought to work under a manager. The span of control varies according to the various factors discussed above.

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Part C All the conditions that support the resolution of the problem situation such as norms, procedures, processes etc. must be adopted to solve the conflict. Effective communication must exist between the conflicting parties throughout the confrontation process. The organization must impose reasonable pressure on the two parties to arrive at a solution to the problem.

Thus, implementing third-party peacemaking interventions, provided the abovespecified pre-requisites are satisfied, can effectively solve inter-group conflicts.

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Part D: Model Question Papers with Suggested Answers

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The model question paper consists of three parts A, B, and C, Part A is intended to test the conceptual understanding of the students. It contains 30 multiple-choice questions carrying one point each. Part B consists of cases and carries 50 points. Part C consists of applied theory questions, carrying 20 points. Students should note that ICMR reserves the right to change the format of the question paper without notice. The faculty members of ICMR with a view to assisting the students have prepared the answers. These answers should not be regarded as the only possible answers.

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Model Question Paper I


Time: 3 Hours Total Points: 100 Part A: Basic Concepts (30 points)
Answer all the questions. Each question carries one point. 1. a. b. c. d. 2. a. b. c. d. 3. a. b. c. d. 4. a. b. c. d. 5. Which of the following models of OB is based on welfare programs and benefits for employees? Collegial model Supportive model Custodial model Autocratic model What do the terms perfectionist, self-realized, resigned, arrogant vindictive, self-effacing represent? Types of attitudes Types of personality Types of values Types of behavior What is the study movements known as? Kinesics Paralanguage Postures Gestures c. d. 7. a. b. c. d. 8. a. b. c. d. 9. a. b. c. d. Cognitive learning theory Law of Effect Work councils is a form of Self-managing teams Quality emphasis Industrial democracy Middle management committees Pooled, sequential and reciprocal all represent types of Bargaining Outcomes Interdependence Conflict resolution techniques Power in an informal organization is attached to Person Position Authority Status

Which among these is a situation specific trait? Self-concept Self-esteem Self-awareness Self-efficacy

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Which of the following scientists associated job satisfiers with job content and job dissatisfiers with job context? Abraham Maslow Frederick Herzberg Clayton Alderfer Victor Vroom Edward Tolman popularized the Social learning theory Controlled learning theory

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10. The phenomenon in which the desire for unanimity of decision overpowers the need to appraise alternative courses of action is known as________________. a. Group think b. Halo effect c. Politics d. Irrationality 11. Which of the following involves the use of direct threats or force upon people showing resistance? a. Co-optation b. Manipulation c. Facilitation d. Coercion

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Introduction to Organizational Behavior 12. Which of the following is not a structural intervention? a. Self-managed teams b. Quality circles c. Force field analysis d. MBO 13. What is an individuals understanding of supposed behavior in a particular role known as? a. Role identity b. Role expectation c. Role perception d. Role conflict 14. Which of the following theories forms the basis for the synthesis of the career stage model? a. Cognitive dissonance theory b. Adult life stage theory c. Socialization process d. Continuum from immaturity to maturity 18. The self-perceived competence and self-image of people is called ___________. a. Self-esteem b. Conscientiousness c. Extraversion d. Agreeableness 19. Which of the following disciplines deals with the study and application of knowledge about the behavior of individuals and groups within organizations? a. Organizational behavior b. Organizational psychology c. Organization theory d. Organization development 20. _______ is the process by which individuals select, organize and interpret stimuli into a meaningful and coherent picture of the environment in which they live. a. Conception b. Perception c. Cognition d. Confrontation 21. Perceived objects are separated from their general background by the perceiver. What kind of perceptual organization is this? a. Figure-ground b. Closure c. Continuity d. Proximity 22. Which of the following factors can lead to conflicts? i. Organizational changes ii. Personality clashes iii. Threat to status iv. Perceptual differences a. b. c. d. i, ii and iv i, iii and iv i, ii, iii and iv ii, iii and iv

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16. In which technique of conflict resolution, management uses its formal authority to resolve the conflict and then communicates its desires to the parties involved? a. Smoothing b. Authoritative command c. Avoidance d. Superordinate goals 17. A temporary group that exists only till the problem is solved is called a a. Task force b. Short-term team c. Contingent team d. Functional team

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15. Which of the following was developed to represent a behavioristic approach to the management of human resources for performance improvement? a. Social Learning Theory b. Law of Effect c. O.B. Mod process d. Exchange theory

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23. Every organization has a general policy or a set of guidelines, which determines the organizations behavior towards its employees and

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Part D customers. What is this general policy or set of guidelines known as? Organizational philosophy Rules Norms Values 27. Which of the following determines personality? a. b. c. d. Heredity Environment Situation All the above

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24. Which of the following is not a decisional role played by managers? a. Disseminator b. Disturbance handler c. Entrepreneur d. Resource allocator 25. What is the relatively permanent change that occurs in a persons beliefs and attitude due to time and experience known as? a. b. c. d. Maturation Personality Learning Attitude

28. On what concepts is Vrooms model based on? a. b. c. d. 29. a. b. c. d. Growth, relatedness, existence Lower-order needs, higher-order needs Valence, instrumentality, expectancy Achievement, power and affection Negative reinforcement is a form of Punishment Demotivation Social blackmail Respondent conditioning

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Upward communication Downward communication Horizontal communication Vertical communication

Caselet 1
The HR Manager, Rakesh Mishra (Mishra), had just had an hour long discussion with Vandana Mathur (Mathur). The discussion left Mishra in a troubled state of mind. Mathur had just resigned. Mathur was one of the most efficient employees of the company and Mishra could not stop her from leaving the organization. This had now become a common phenomenon at PeopleSource, a 4-year old call centre. The company was experiencing an attrition rate that was as high as 40%. This was a serious cause of concern to the top management since the training costs were very high. As Mishra was still brooding over the matter, the phone rang. The caller was Rajiv Ghosh (Ghosh), the Chairman and Managing Director of PeopleSource. Ghosh informed Mishra that there would be a meeting later that day to discuss the rising attrition rate. The meeting would address employee related problems. Mishra wondered if it was already too late to hold such a meeting. 239

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26. Open door policy is a tool used to promote

Part B: Caselets (50 points)


Each case carries 25 points.

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Introduction to Organizational Behavior Ashutosh Sen (Sen), the representative of the call centre agents was also present for the meeting. The meeting commenced with Ghosh drawing attention to the serious issues facing the organization including the rising attrition rate. Ghosh then asked Mishra to present the information he had gathered from employee feedback. The company obtained employee feedback on a quarterly basis to assess the effectiveness of the organizations people policies in creating a happier and satisfied work force and a better organizational culture. The information presented by Mishra was expected to be supplemented by inputs from Sen. Mishra started his presentation by stating the problems being faced by the company on the HR front. While the industry average is about 25%-30%, the company faces an attrition rate of 40%. Absenteeism has also become a major cause for concern and has been affecting the productivity of the organization. Growing employee dissatisfaction also needs to be contained. All this is despite the fact that the company has been constantly increasing its spend on employee retention. At this point, Ghosh said, It is indeed a serious challenge for the top management. But has there been any attempt to find out the cause of these problems, Mishra? Well, Mishra responded, we have found that firstly, despite our excellent induction and training programs, the odd timings of work have a negative impact on the performance of the employees. We cannot undermine the counterproductive effect of changing the employees physiological clock. The timings tend to interfere with their personal lives too. Secondly, employees are dissatisfied with the lack of growth opportunities in the company. The third reason, revealed by our exit interviews, is that quite a few people leave the company to pursue higher studies. Sen supported Mishras observations saying, Since there are limitations to professional growth in this industry, people leave the company when they get better offers in terms of salary or promotions. Some people find the job monotonous and not challenging enough. He went on to say, The other factor is the pressure experienced on the job. The excessive monitoring of our performance affects our efficiency. Most of the customers we handle are irate and communicating to them within the fixed time becomes difficult. Pressure builds because we know that if we exceed the stipulated time limit for a call it reflects adversely on our performance. To add to all these, the long shifts without adequate breaks makes it extremely stressful for the individual.

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Ghosh said, We need to understand that people are our most important assets and we have to retain them to enhance the profitability of the company. So, lets discuss ways to contain employee turnover in the company and thereby enhance our productivity. The discussion that followed led to the identification of various ways to help control employee turnover and increase profitability of the company. Based on the discussion, the organization took the following strategic initiatives: It introduced psychometric tests to select candidates with the right mental framework. The candidates who would be able to handle the stress and monotony of the job and work at nights were selected. This helped the company reduce turnover that was earlier caused by cultural misfits. A better induction program was introduced. External experts were brought in to train newcomers to adapt to the working hours. The program also taught them to deal with the physiological problems associated with stress at the workplace. PeopleSource shifted its focus from an outcome-orientated culture towards a more people-oriented one. It ensured this shift by introducing a more peoplefriendly work atmosphere and better organizational climate facilitated by a conducive physical layout which enabled employees to perform more efficiently.

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That covers most of the important challenges the company faces now, concluded Mishra.

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Part D Employees were trained to deal with difficult and irate customers in a productive manner. It was found that people in the age group of 25-30 tend to be better at dealing with difficult people. It was decided that a greater percentage of people selected would belong to this age group. A de-stressor room with exercise and games equipment and was created on the premises. Employees were encouraged to work off stress through exercise and games. PeopleSource introduced a boarding/housing scheme providing accommodation to its employees. Water and electricity charges were paid for by the company. PeopleSources Education Policy was introduced subsequently. The company entered into agreements with the countrys top management institutions to provide management education to its employees. The scheme also included scholarships for extraordinary performance in educational pursuits. As promotional opportunities could not be enhanced significantly, PeopleSource decided to give more incentives in the form of bonuses to reward exemplary performance.

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Discuss how the organizational culture at PeopleSource shifted its focus from an outcome-oriented one to a people-oriented one. Highlight the impact of this shift on the productivity and profitability of PeopleSource. Citing the example of PeopleSource, discuss the importance of organizational climate in fostering a culture that enhances employee productivity.

2.

Motorola Space System Technology group replaced its traditional workgroups with modern self-managing teams. This has helped Motorola reduce manufacturing defects by thirty times, cycle time by 25%, and work space needs by more than 50%. After the implementation of SMTs, there was an enhancement in the productivity of customer support executives which led to an increase in sales of the company by 26%. Benefits of implementing the concept of SMTs were also observed in many other companies. Tennessee Eastman experienced a 70% gain in productivity after the deployment of SMTs in the organization. In Asea Brown Boveri (ABB) and 3M, it was observed that implementation of self-managed teams led to the creation of workplaces that stimulate employee performance by motivating them to perform better. Other leading companies like GE and Xerox have also benefitted by deploying self managed teams, in terms of enhanced productivity and profitability. However, there are a few organizations which have utterly failed to derive any benefits by implementing SMTs. These organizations which have had disappointing results due to the introduction of SMTs in their workplaces have reported high absenteeism and turnover rates compared to organizations working with traditional work teams. Members of these teams did not experience an increase in their level of job satisfaction. However, there is no clear and specific reason available for these adverse results. The undesirable effects of SMTs have resulted in organizations rethinking about its consequences. It has also been observed that the term itself is losing its importance in the present business scenario. 241

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These initiatives helped motivate employees, enhanced their productivity and increased the organizational profitability. These programs also helped PeopleSource reduce the annual attrition to 16% within a span of just one year. Soon PeopleSource developed into one of the best business process outsourcing units in the country.

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Introduction to Organizational Behavior However, it is believed that SMTs should be deployed after proper research on its applicability in the organizational context. Although organizations experience a few difficulties while implementing self-managed teams, once they establish such teams, they tend to derive more benefits than expected. Besides, in todays organizations, SMTs exist with a different name. They are now called agile teams. Therefore, self-managed teams are still relevant in organizations with a slight modification in terminology or a few functions. A careful study of the business context and the organizational preparedness determines the success of self managed teams. Questions for