INTRODUCTION TO ORGANIZATION BEHAVIOUR

INTRODUCTION
Organization is a place where groups of people who work interdependently toward some purpose

Behavior can be defined as what people do which can be observed or measured. Behavior is caused and
directed toward some end that the individual believes rightly or wrongly is in his best interest.

Organizational Behaviour is a field of study that investigates the impact that individuals, groups and
organizational structure have on behavior within the organization, for the purpose of applying such
knowledge towards improving an organizational effectiveness”. The above definition has three main
elements; first organizational behaviour is an investigative study of individuals and groups, second, the
impact of organizational structure on human behaviour and the third, the application of knowledge to
achieve organizational effectiveness.

Organizational behaviour can be defined as -“the study and application of knowledge about human
behaviour related to other elements of an organization such as structure, technology and social systems.

Stephen P Robins Defines “Organizational behaviour as a systematic study of the actions and attitudes
that people exhibit within organizations.”

The principle issues addressed by Organizational Behavior are:-

 Individual behavior and performance at work

 The nature and working of people in groups
 The nature of social structures and organization design at work.
 The process involved in adapting behavior to meet changing conditions.

IMPORTANCE

 To build better relationships by achieving human objectives, organizational objectives, and

social objectives.
 It strives to identify ways in which people can act more effectively.
 It provides useful set of tools at many levels of analysis e.g. It helps managers to look at the
behavior of individuals within an organization
 O.B. helps in the understanding of the complexities involved in interpersonal relations when
two people interact.
 O. B. is valuable for examining the dynamics of relationships within small groups both formal
and informal.

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  It helps managers to view organizations as whole systems that have inter organizational
relationships. e.g. it’s good for mergers and joint ventures.

GOALS OF O.B

 To describe how people behave under a variety of conditions. This allows managers to
communicate about human behavior at work using a common language.
 To understand why people behave as they do. Managers would be highly frustrated if they could
only talk about behavior of their employees but not understand the reasons behind those actions.
 Predicting future employee behavior. Ideally, the managers would have the capacity to predict
which employees might be dedicated and productive or which ones might be absent, disruptive
etc.
 Control and develop some human activity at work. Since managers are held responsible for
performance outcomes, and therefore they are interested in being able to make an impact on
employee behavior, skill development, team effort and productivity. Managers need to be able to
improve results through the actions they and their employees take and O.B. can aid them in their
pursuit of this goal.

FIELDS CONTRIBUTING TO ORGANIZATIONAL BEHAVIOUR.

Psychology: Psychology is an applied science, which attempts to explain human behavior in a
particular situation and predicts actions of individuals. Psychologists have been able to modify
individual behaviour largely with the help of various studies.

Sociology: Science of Sociology studies the impact of culture on group behaviour and has contributed
to a large extent to the field of group-dynamics, roles that individual plays in the organization,
communication, norms, status, power, conflict management, formal organization theory, group
processes and group decision-making.

Political science: Political science has contributed to the field of Organizational behaviour. Stability of
government at national level is one major factor for promotion of international business, financial
investments, expansion and employment. Various government rules and regulations play a very
decisive role in growth of the organization. All organizations have to abide by the rules of the
government of the day.

Social psychology: Working organizations are formal assembly of people who are assigned specific
jobs and play a vital role in formulating human behaviour. It is a subject where concept of psychology
and sociology are blend to achieve better human behaviour in organization. The field has contributed to
manage change, group decision-making, communication and ability of people in the organization, to
maintain social norms.

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Economics: this studies the behaviour of human beings in the process of producing goods and services
also in earning and consuming of income it conclude the following: use of resources, scarcity, costs.

Anthropology: It is a field of study relating to human activities in various cultural and environmental
frameworks. It understands difference in behaviour based on value system of different cultures of
various countries.

PERSPECTIVES OF INDIVIDUAL BEHAVIOR

Behavior refers to the response made by an individual .The response may be the result of the influence
of external factors. The external factor is the termed as stimulus and the action taken by the individual s
known as response .Both heredity and environmental determine the behavior of an individual .The
psychologist says that mans heredity determines what kind of person he/she can be and the
environment determines what he/she become. Behavior of an individual is determined by both the
heredity and environmental factors. Heredity refers to the characteristics transmitted by parents to the
next generation .Human beings biological characteristics through genes, which control the development
of tissues and organs of the body. They are determined at the time of the conception. Parents influence
hereditary characteristics through the transmission of genes. Children acquire certain features of the
physique and psychic qualities out of this genetics transmission. Research in genetic engineering also
suggests that heredity determines physical, mental and emotional states of the individuals. Physical
stature, gender, color, intelligence etc. are influenced by the hereditary factors.

The individuals are brought up in a particular environment like family, society, culture; etc. These
environmental factors influence the behavior of the individuals. Children socialization process start in
the family .Children’s socialization process start in the family .Children are made to follow the
behavioral pattern of the family .Member of the family. Member of the family compels children to
conform to certain acceptable behavior and avoid unacceptable behavior .Thus children acquire of the
acceptable and unacceptable behavior from their school and others members of the society .Thus they
acquire socially acceptable behavior and try to avoid socially unacceptable as a result of their
interaction with these groups. The culture in which children are brought up, determines the decision
making style, attitudes, independence v/c dependence

Soberness v/c aggression, competition v/c cooperation etc. As a member of a particular culture,
children learn norms value and attitudes which are prescribed by the culture .Individuals are compelled
to behave in conformity to the cultural norms established by the society .Thus society and culture exert
greater influence on the behavior of the individuals

FACTORS INFLUENCING INDIVIDUAL DIFFERENCE IN BEHAVIORAL PATTERN

Demographic Factors: these factors and socio economic background. education, nationality, races,
age, sex, etc .The person s belonging to good socio-economic background, well educated, young etc.
may be preferred by the organization because they are likely to perform better .You must be aware that
the professionals having goods academic background and communication skills are in great demand for
example, a call centre prefers the young professional having excellent command on communication.

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Thus the study of demographic factors helps the manager to identify the suitable persons for a
particular job.

Abilities and Skills: Ability refers to the mental or physical capacity of an individual to do something
whereas skills refers to an ability to act in a way that allows a person to perform we;; .Ability and skills
play very important role in individuals behavior and performance .If a persons abilities and skills match
the job requirement ,he/she is likely to perform better in the organization .There for , the manager has a
challenging job of matching the abilities and the skills of the employees to the job requirement

Perception: Perception refers to the cognitive process meant for interpreting the environmental stimuli
in a meaningful way. Every individual may organize and interpret environmental stimuli based on
his/her own reference. Several factors influence the perception of an individual so their study may be
very crucial for the manager. Manager must create the favorable work environment so that the
employees perceive them in a positive way, and therefore likely to perform better.

Attitude: Psychologists have defined attitude as a tendency to respond favorably or unfavorably to

certain object ,persons or situations .The formation of attitude is influenced by the family ,society
culture ,peers and organizational factors .In an organization ,manager requires to study the variables
related to job and create the work environment in such a favorable way that the employees are
attempted to form positive attitude towards the job If the employee s form positive attitude ,he/she may
perform better in the organization.

Personality: personality refers to the study of the characteristics and distinctive trait of individuals, the
inter-relation s between them and the way in which a person responds and adjusts to others people and
situations. Several factors like heredity, family, family, society, culture and situation influence the
personality of an individual. As a result, individuals differ in their manner of responding to
organizational environment. It is the most complex aspect of human beings and influence their behavior
immensely .there for the stud of personality traits provides an opportunity to understand the individuals,
properly direct their effort and motive them for the accomplishment of the organizational goal.

PERSONALITY OF INDIVIDUAL

Personalities are the complex set of various factors. The general meaning of personalities is the external
appearance .However; mere external appearance does not determine the personality of an individual. A
host of factors determines individuals’ personality.

Interestingly personality is not developed spontaneously. It is developed over a period of time. A man
is born with certain physical and mental qualities and the environment further shapes his or her
personality .Several personality theories have been developed to provide an understanding of the
personality of an individual. Personality is an important aspect in understanding the human being that
are the most important resources of an organization. They provide life to other resources for the
accomplishment of goals and objective. Human energy makes all the different in organization
.personalities determines the human energy .It provides an opportunity to understand the individual,
properly directed their energy and motivate them in proper manner .Personality is the study of the
characteristics traits of an individual, the inter relations between them and the way in which a person

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responds and adjust to other people and situation. Stephen P.Robbin has defined personality as the sum
total of ways in which an individual react with others.

These definitions reveal that the personality has the following characteristics

 Personality refer to both physical and psychological qualities of an individual

 It is unique in the since that no two individual are same in term of their personality
 Personalities is the manner of adjustment of individual to the organization, environment and the
group
 It is a qualitative aspect. Certain techniques exist to quantity it indirectly
 Personality is dynamic. It changes with the time and situation
 Personality is a system .it has input, processing and output mechanism
 Personality influences goal achievement and performance of an individual

DETERMINANTS OF PERSONALITY
Personality is an intangible concept. It is complex as it is related to the cognitive and psychological
process. It is believed that a man is born with certain physical and mental qualities but the environment
in which he is brought up shapes his personality. A number of factors determine the personality of
individual i.e. biological factors, family factors, environmental factors and situational factors. Let us
learn them in detail.

Biological Factors: Biological factors are related to human body. Three factors: heredity, brain and
physical features are considered as relevant. They are explained below.

i. Heredity: Heredity refers to those qualities transmitted by the parents to the next generation.
These factors are determined at conception. Certain factors of personality inherited are: physical
stature, facial attractiveness, gender, color of skin, hair and eye balls, temperament, muscle
composition, sensitivity, skills and abilities, intelligence, energy level and biological rhythms.
ii. Brain: Brain is influenced by biological factors. Structure and composition of brain plays an
important role in shaping personality. There are few empirical findings to state that the brain
influences the personality.
iii. Physical features: The physical features and rate of maturation influence personality. The rate
of maturity is related to the physical stature. It is believed that an individual’s external
appearance has a tremendous effect on personality. For instance height, color, facial attraction,
muscle strength influences ones self-concept.

Family Factors: The family factors are also important in determining personality of an individual.
Three major factors: viz, the socialization process, identification process and birth order influence
the personality.

i. Socialization Process: Socialization is a process of acquiring wide range of behavior by an

infant from enormously wide range of behavioral potentialities that is open to him at birth.
Those behavior patterns are customary and acceptance according to the standards of his family
compels the infant to conform to certain acceptable behavior.
ii. Identification Process: Shaping of personality starts from the time the identification process
commences. Identification Process occurs when a person tries to identify himself with some
person who he feels ideal in the family. Normally a child tries to behave as his father or mother.

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 iii. Birth order: Birth order is another significant variable influencing the personality of an
individual. For instance first born are likely to be more dependent, more rational, ambitious,
hardworking, cooperative and more prone to guilt, anxiety and are less aggressive.

Environmental Factors: Environmental factors are those, which exists in and around the individual.
They are social and cultural factors. Culture determines human decision- making, attitudes,
independence: dependence, soberness: aggression, competition, co-operation and shyness. There are
two vital aspects of culture: Firstly, conformity by the individual and secondly, acceptance by the larger
group. Culture establishes norms, values and attitudes, which are enforced by different social groups.
Individual are compelled to behave in conformity to the culture established by society. Thus, culture
and society exert greater influence in shaping the personality of an individual.

Situational Factors: In recent years, the influence of situational factors on personality is increasingly
recognized. Generally an individual’s personality is stable and consistent, it changes in different
situations. A study conducted by Milgram suggested that actions of an individual are determined by the
situation. He states that situation exerts an important influence on the individual. It exercises constraints
and may provide push to the individual.

Thus it is clear from the above discussion that host of factors exert influence in shaping the personality
of an individual. Therefore, one has to understand personality as a holistic system.

Personality attributes of employees are used in understanding the behaviour of employees and design
suitable strategies to deal with their behaviour. Some of the traits that influence the behaviour in
organization are described below:

1) Authoritarianism: Authoriatarianism is an attribute used to describe the persons having certain

negative belief about the work and workers. Taking this concept, behaviour of employees in
organizations is explained by using the following traits.
 Believe in the formal authority.
 Compels obedience to the authority.
 Adheres to the conventional value and does not give preference to the new idea.
 Conforms to the rules and regulations.
 Believes in directing the subordinates than listening to them.
 Tries to be rigid and prefers structured environment.
Taking these characteristic traits, a leadership style of superiors was developed. Known as
authoritarian. Employees possessing the authoritarian attributes will command respect and achieve
production targets in the short run. In the end, these people cannot maintain the level of motivation and
satisfaction.

2) Locus of control: locus of control is the belief regarding the outcome of the action. Certain
people believe that their skills and abilities influence the outcome of the action. Others believe that
some external factors like fate of chance influence their results. According to Robinson, individuals
who believe they control what happens to them are called internals and individuals who believe
what happens to them is controlled by outside forces such as luck or chance are called externals.
Certain implications of locus of control behaviour of the individuals in organizations are
described below:

a) Absenteeism: People having internal locus of control posses a belief that the health is under
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 their control they inculcate good health habits and take proper care of their health. Thus, they
have lower rate of sickness. Therefore, absenteeism is less in these people.
b) Turn over: with respect to turn over, internals tend to take action and thus might be expected
to quit their jobs more readily. But they tend to be more successful in their job and more
satisfied.
a) Decision making: People having external locus of control are more oriented towards
intuitive decision making. On the other hand, internals consider more information before
taking decisions. They are motivated by achievements. They would like to control the
outcome of the decisions.
b) Motivation: Internals posse’s achievement motivation than externals that are just satisfied
with the available rewards.
c) Job satisfaction: People having external locus of control are more dissatisfied on the jobs.
This is because of the belief that the outcome is not under their control. In the case of the
internals, job satisfaction is more due to the belief that outcome are the results of their
actions.
d) Psychological commitment: externals are less involved in the jobs. Internals posse’s
commitment that is more psychological.
e) Social interactions: People having internal locus of control are more sociable and excited to
have social relationships to keep their identification and steam.
The locus of control influences the job selection also. People having internal locus of control are
successful in the sophisticated jobs. jobs having professionals and managerial nature require complex
information processing ability, needs quick learning, initiatives and independence of action are suitable
to the people having locus of control. On the other hand, people having external locus of control are
suitable to well structured and routine jobs. They are also successful in these jobs that require
complying the directions.

3) Machiavellianism: Niccolo Machiavelli has introduced the concept. The term refers to the
degree of the individual effort to gain control over organizational tasks. According to
Robinson, Machiavellianism is the degree to which an individual is pragmatic, maintains
emotional distance, and believes that ends can justify means. The characteristics of
Machiavellianism personality attributes are:
 They are active to participate in organizational politics.
 They manipulate more, win more and persuade less.
 They are adept at interpersonal game playing, power tactics and identify influence
system in manipulation.
 They consider ethics.
4) Self esteem: self esteem is a feeling of liking or disliking oneself It is related to the
individual desire for success. A person having a greater power of success is rated as high self
esteem person. H e believes that he possesses required ability to succeed on the job. People with
high esteem are high risk takers. They tend to choose risky and challenging jobs. They have
internal locus of control. They give preference to pride, recognition, flair, success,
independence, and are satisfied with higher order needs than simple monetary motivation. On
the other hand, people having low esteem are influenced by the external factors. They give more
respect and importance to the opinion of others. They do not want to face unpleasant situation.
Thus, they try to please others.
5) Self monitoring: self monitoring is the ability to adapt to the situational demands. Individuals
possessing high score on self-monitoring observes the behaviour of others from close angle in
order to adjust their behaviour. They like mobility in their career. they are more successful in
discharging contradictory roles. Simply, they can wear a mask suitable to the situation. Thus;

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 there is high degree of behavioral inconsistency in self - monitoring people. Therefore, self
monitoring attribute helps managers to understand the personality and behaviour of their
subordinates in order to direct, communicate, motivate and regulate them in their jobs.
6) Risk taking attitude: Risk taking is an attitude. persons differ in the attitude towards assuming
the risk. The propensity to take risk, influences decision making. High risk takers are likely to
take a rapid decision. Risk taking, is also related to the job demands. High risk taking is found
in certain caste, religion, nationality and gender. In organisations, risk-taking behaviour is
related to the ability of employees to take up challenging tasks and posses high achievement
motivation. Therefore, a number of personality attributes influence the behaviour of persons in
the organizational behaviour.

The Five Factor Model

As suggested by its title, the Five Factor Model (FFM) proposes that we can describe someone’s
“personality” by looking at five relatively independent factors.
Personality can be defined in simplest terms as the typical way that an individual has of responding. It
is considered a trait because it is fairly stable, even though situations and circumstances might lead a
person to behave in a way that is out of character with his or her overall personality.
The FFM identifies five different components which, when taken together, give a fair representation of
how a person typically responds to events and people. These components and their definitions are
presented in the following table.

The Five Factor Model

FACTOR CHARACTERISTICS
Conscientiousness Responsible, prudent, self-control, persistent, planful,
achievement oriented
Extraversion Sociable, assertive, talkative, ambitious, energetic
Agreeableness Good natured, cooperative, trusting, likeable, friendly
Emotional stability Secure, calm, low anxiety, low emotionality
Openness to experience Curious, intelligent, imaginative, independent
Individual perception

Individual are exposed to varieties of stimuli of the environment. They process these stimuli and
interpret them. The process of receiving information and making sense is known as perception. It refers
to the way the world sounds, looks, feels, smell, tastes. To the individual. The individual’s behaviors is
determined to a large extend by the way the environment is perceived by him or her. Therefore, the
conducive organizational environment must be created for favorable perception. The person who
perceived the environment in a favorable way may contribute their best to the organization. perception
is more than the sum of all the sensory input supplied by our sense organs. Process of perception helps
us to select, organize, and interpret sensory input achieve a meaningful grasp of our surroundings.
Perception yield final products that differ from raw, unprocessed sensations in important ways. In
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simple language perception may be defined as the way a person sees the universe, he feels about certain
element in a situation.

Perception is influenced by mainly three sets of factors:

i) Factors in the perceiver (perceiver variables);

ii) Factors in the target (subject characteristics);
iii) Factors in the situation (situational variables).
Factors in the perceiver include following issues:

Self-concept of the perceiver, Attitudes of the perceiver, Motives of the perceiver; Interests of the
perceiver; Experience of the perceiver; Expectation of the perceiver.

Factors in the target include following issues:

Physical appearance; Verbal and nonverbal communication; Status; Occupations; Personal

characteristics; Novelty of the target; Motion of the target; Sounds of the target; Size of the target;
Background of the target; Proximity of the target.

Factors in the situation include following:

Social context; Organisation rule; Work setting; Location of event; Time.

BARRIES TO ACCURATE PERCEPTION

The perceiver’s own mindset and tendency to use shortcuts in judging others may become the barriers
to accurate perception. Barriers to accurate perception create wider gap between ‘what things actually
are’, and ‘what you think the things are’. Hence you should be vigilant about such barriers. Some of the
important barriers to accurate perception following are:

 Stereotyping: It is judging someone on the basis of one’s perception of the group to which that
person belongs. Through such generalizations help to simplify complex world, its overuse
mostly leads to wrong conclusion.
 Halo Effect: This perceptual bias means, drawing a general impression about an individual on
the basis of single characteristics.
 Similar-to-me Effect or projection: It is another common type of perceptual bias, which
involves the tendency for people to perceive more favorably others who are like themselves
than those are dissimilar.
 Selective perceptions: it explains that people selectively interpret what they see on the basis of
their interests, background, experience and attitudes.
 Distortion: It is distorting what we see (or even totally avoid seeing what actually exists) if we
encounter data, which is threatening or incongruent to our self-concept.
 Contrast Effects: It is evaluations of a person’s characteristics that are affected by comparisons
with other people recently encountered who rank higher or lower on the same characteristics.

Managerial uses of perception

Perception is an important concept for managers or for any decision maker. There are many situations
in which a proper understanding of perception and its various uses help a decision maker to take quality
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decision. Now we shall examine some important managerial activities where concept of perception can
be applied.

Advertising: Advertisers use the concept of perception to draw attention of the prospective customers.
According to concept of perception, selective attention helps us to maximize information gain by
reducing inference from irrelevant sensory sources. Therefore you find hoarding of advertisements are
so designed with respect to shape, size, and brightness, that they should be able to attract attention of
prospective customers.

Maintaining safety: Concept of perception is used to draw proper attention towards message of
warning, through proper design of content and proper display of the message. Message content should
include: signal word, hazard statement, consequences, and instructions. Message characteristics should
have characteristics such as: attention getting, comprehensible, concise, and duration.

Managing Impression: Everyone attempts to make favorable impression of self in the mind of others.
This business of impression management becomes more important when you face employment
interview. While facing an interview if you happen to create positive impression in the beginning, most
likely you happen to establish an early lead. In the beginning, if you do not help experts to create
positive perception or impression for yourself, it becomes difficult to turn the table in later part of the
interview. Hence during employment interview it is in your favour to create positive first impression.
On the other hand, evidence indicates that interviewers make perceptual judgments that are often
inaccurate. However, more matured experts or evaluators do not give undue importance to first
impression.

Impression management is done in various other organizational activities. Whereas efforts at

impression management may improve the quality of social functioning, overdoing of such actions may
occur at the cost of information accuracy and high quality decision making.

Building Corporate Image: Not only individual, but organizations as a whole also, attempt to manage
positive impression. This is termed as corporate image. Organizations, just like individuals, stand to
benefit by positive impressions.

Managing performance: Theories suggest that people start behaving as you expect them to behave.
The result is that the expectations become reality. Concept of self-fulfilling prophecy or Pygmalion
Effect characterizes the fact that people’s expectations determine their behavior. Self-fulfilling
prophecy states that when one person inaccurately perceives a second person the resulting expectations
cause the second person to behave in ways consistent to the original perception. The message is: if you
want people to achieve high performance, do expect high performance of them, and let them know your
level of expectations. Substandard perceptions tend to produce substandard performance.

Evaluating performance: In the organizations, performance is evaluated against both objective and
subjective criteria. Perception particularly plays its role when performance is evaluated against
subjective criteria. Future career of a manager depends on performance evaluation, so perception plays
important role in advancing in career and getting right deployment. For you the point of caution is that
if you are evaluating a person merely on your perception, challenge the base of your own perception,
and ensure that your perception is as far as possible free of any bias.

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Judging Employee’s Loyalty: Whether an employee is ultra-loyal, just loyal, or sub-loyal, may
depend on the perception of the perceiver. One may perceive a person who does not think beyond one’s
organization as very loyal, but the other may think of the person as conformist. A whistle-blower (who
reports unethical practices by their employer to outsiders) may be perceived as ethical and person of
guts by one, but may be perceived as troublemaker by the other.

Self-Assessment and Development: Our values, attitudes, and perception, influence each other. For
development of self as a manager, you should have your correct self-assessment picture, intelligently
verified through multiple sources.

Motivation

Today in the increasingly competitive environment maintaining a highly motivated workforce is the
most challenging task. The art of motivation starts by learning how to influence the behavior of the
individual. This understanding helps to achieve both, the individual as well as organizational
objectives. Motivation is a powerful tool in the hands of leaders. It can persuade convince and propel
people to act.

DEFINING MOTIVATION

Motivation is to inspire people to work, individually or in groups in the ways such as to produce best
results. It is the will to act. It is the willingness to exert high levels of effort towards organizational
goals, conditioned by the efforts and ability to satisfy some individual need. Motivation is getting
somebody to do something because they want to do it. It was once assumed that motivation had to be
injected from outside, but it is now understood that everyone is motivated by several differing forces.
Motivation is a general term applied to the entire class of drives, desires, needs, wishes and similar
forces. To say that managers motivate their subordinates is to say that they do those things which they
hope will satisfy these drives and desires and induce the subordinates to act in a desired manner. To
motivate others is the most important of management tasks. It comprises the abilities to communicate,
to set an example, to challenge, to encourage, to obtain feedback, to involve, to delegate, to develop and
train, to inform, to brief and to provide a just reward.

In a system sense, motivation consists of the following three interacting and interdependent elements
namely:

1. Needs

These can be defined as deficiency. Needs are created whenever there is physiological or
psychological imbalance. Example, a need exists when the personality is deemed (deprived) of other
people who serve as friends or companions.

2. Drives

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Drives or motives are set up to alleviate needs. A drive can be simply defined as a deficiency with
direction. Drives are action oriented and provide an energizing thrust towards goal accomplishment.
The need for friends becomes a drive for affiliation.

3. Incentives

An incentive is defined as anything that will alleviate a need and reduce a drive. Therefore, attaining
an incentive will tend to restore physiological or psychological balance and will reduce or cut off the
drive. Obtaining friends will tend to restore the balance and will reduce or cut off the drive. Obtain
friends will tend to restore the balance and reduce the corresponding drives. Friends become the
incentive in this example.

When people’s needs are unsatisfied or the outcomes are unsatisfactory, frustration may be
experienced, leading to negative attitude towards employment and even to anti-social behavior, in the
workplace. Negative behavior can be triggered by apparently insignificant short-comings in workplace
conditions. Most people are de-motivated if their contribution is neither recognized nor rewarded.
When employees feel that they are important and that their work is valued by the management, they
will produce high performances even if some aspects of working conditions are poor.

In the initiation a person starts feeling lackness. There is an arousal of need so urgent, that the bearer
has to venture in search to satisfy it. This leads to creation of tension, which urges the person to forget
everything else and cater to the aroused need first. This tension also creates drives and attitudes
regarding the type of satisfaction that is desired. This leads a person to venture into the search of
information. This ultimately leads to evaluation of alternatives where the best alternative is chosen.
After choosing the alternative, an action is taken. Because of the performance of the activity
satisfaction is achieved which than relieves the tension in the individual.

TYPES OF MOTIVATION

(1) Achievement Motivation

It is the drive to pursue and attain goals. An individual with achievement motivation wishes to achieve
objectives and advance up on the ladder of success. Here, accomplishment is important for its own
shake and not for the rewards that accompany it. It is similar to ‘Kaizen’ approach of Japanese
Management.

(2) Affiliation Motivation

It is a drive to relate to people on a social basis. Persons with affiliation motivation perform work better
when they are complimented for their favorable attitudes and co-operation.

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(3) Competence Motivation

It is the drive to be good at something, allowing the individual to perform high quality work.
Competence motivated people seek job mastery, take pride in developing and using their problem-
solving skills and strive to be creative when confronted with obstacles. They learn from their
experience.

(4) Power Motivation

It is the drive to influence people and change situations. Power motivated people wish to create an
impact on their organization and are willing to take risks to do so.

(5) Attitude Motivation

Attitude motivation is how people think and feel. It is their self confidence, their belief in themselves,
their attitude to life. It is how they feel about the future and how they react to the past.

(6) Incentive Motivation

It is where a person or a team reaps a reward from an activity. It is “You do this and you get that”,
attitude. It is the types of awards and prizes that drive people to work a little harder.

(7) Fear Motivation

Fear motivation coercions a person to act against will. It is instantaneous and gets the job done quickly.
It is helpful in the short run.

Theories of motivation

Abraham Maslow’s “Need Hierarchy Theory”:

One of the most widely mentioned theories of motivation is the hierarchy of needs theory put forth by
psychologist Abraham Maslow. Maslow saw human needs in the form of a hierarchy, ascending from
the lowest to the highest, and he concluded that when one set of needs is satisfied, this kind of need
ceases to be a motivator.

As per his theory these needs are:

(i) Physiological needs:

These are important needs for sustaining the human life. Food, water, warmth, shelter, sleep, sex,
medicine and education are the basic physiological needs which fall in the primary list of need
satisfaction. Maslow was of an opinion that until these needs were satisfied to a degree to maintain life,
no other motivating factors can work.

(ii) Security or Safety needs:

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These are the needs to be free of physical danger and of the fear of losing a job, property, food or
shelter. It also includes protection against any emotional harm.

(iii) Social needs:

Since people are social beings, they need to belong and be accepted by others. People try to satisfy their
need for affection, acceptance and friendship.

(iv) Esteem needs:

According to Maslow, once people begin to satisfy their need to belong, they tend to want to be held in
esteem both by themselves and by others. This kind of need produces such satisfaction as power,
prestige status and self-confidence. It includes both internal esteem factors like self-respect, autonomy
and achievements and external esteem factors such as states, recognition and attention.

(v) Need for self-actualization:

Maslow regards this as the highest need in his hierarchy. It is the drive to become what one is capable
of becoming; it includes growth, achieving one’s potential and self-fulfillment. It is to maximize one’s
potential and to accomplish something.

As each of these needs are substantially satisfied, the next need becomes dominant. From the standpoint
of motivation, the theory would say that although no need is ever fully gratified, a substantially
satisfied need no longer motivates. So if you want to motivate someone, you need to understand what
level of the hierarchy that person is on and focus on satisfying those needs or needs above that level.

Maslow’s need theory has received wide recognition, particularly among practicing managers. This can
be attributed to the theory’s intuitive logic and ease of understanding. However, research does not

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validate these theory. Maslow provided no empirical evidence and other several studies that sought to
validate the theory found no support for it.

“Theory X and Theory Y” of Douglas McGregor:

McGregor, in his book “The Human side of Enterprise” states that people inside the organization can be
managed in two ways. The first is basically negative, which falls under the category X and the other is
basically positive, which falls under the category Y. After viewing the way in which the manager dealt
with employees, McGregor concluded that a manager’s view of the nature of human beings is based on
a certain grouping of assumptions and that he or she tends to mold his or her behavior towards
subordinates according to these assumptions.

Under the assumptions of theory X:

 Employees inherently do not like work and whenever possible, will attempt to avoid it.
 Because employees dislike work, they have to be forced, coerced or threatened with punishment
to achieve goals.

 Employees avoid responsibilities and do not work fill formal directions are issued.

 Most workers place a greater importance on security over all other factors and display little
ambition.

In contrast under the assumptions of theory Y:

 Physical and mental effort at work is as natural as rest or play.

 People do exercise self-control and self-direction and if they are committed to those goals.

 Average human beings are willing to take responsibility and exercise imagination, ingenuity
and creativity in solving the problems of the organization.

 That the way the things are organized, the average human being’s brainpower is only partly
used.

On analysis of the assumptions it can be detected that theory X assumes that lower-order needs
dominate individuals and theory Y assumes that higher-order needs dominate individuals. An
organization that is run on Theory X lines tends to be authoritarian in nature, the word “authoritarian”
suggests such ideas as the “power to enforce obedience” and the “right to command.” In contrast
Theory Y organizations can be described as “participative”, where the aims of the organization and of
the individuals in it are integrated; individuals can achieve their own goals best by directing their
efforts towards the success of the organization.

However, this theory has been criticized widely for generalization of work and human behavior.

Frederick Herzberg’s motivation-hygiene theory:

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Frederick has tried to modify Maslow’s need Hierarchy theory. His theory is also known as two-factor
theory or Hygiene theory. He stated that there are certain satisfiers and dissatisfiers for employees at
work. In- trinsic factors are related to job satisfaction, while extrinsic factors are associated with
dissatisfaction. He devised his theory on the question : “What do people want from their jobs ?” He
asked people to describe in detail, such situations when they felt exceptionally good or exceptionally
bad. From the responses that he received, he concluded that opposite of satisfaction is not
dissatisfaction. Removing dissatisfying characteristics from a job does not necessarily make the job
satisfying. He states that presence of certain factors in the organization is natural and the presence of
the same does not lead to motivation. However, their non-presence leads to demotivation. In similar
manner there are certain factors, the absence of which causes no dissatisfaction, but their presence has
motivational impact.

Examples of Hygiene factors are :

Security, status, relationship with subordinates, personal life, salary, work conditions, relationship with
supervisor and company policy and administration.

Examples of Motivational factors are:

Growth prospectus, job advancement, responsibility, challenges, recognition and achievements

McClelland’s Theory of Needs:

1. Three- Needs Theory

The three needs theory refers to the needs for achievement, power and affiliation, which are the major
motives in work. This theory is associated with David C. McClelland who believed that each person
possesses three needs but people differ in the degree to which the various motives dominate their
behavior.

i. Need for achievement

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Some people have a compelling drive to succeed. They strive for personal achievement rather than for
the rewards of success. They have a desire to do something better or more efficiently than it has been
done before. They seek situations in which they can attain personal responsibility for finding solutions
to problems. They also seek situations in which they can receive rapid and unambiguous feedback on
their performance in order to tell whether they are improving or not, and in which they can set
moderately challenging goals. High achievers dislike succeeding by chance. They prefer the challenge
of working at a problem and accepting the personal responsibility for the success or failure, rather than
leaving the outcome to chance or the action of others. Such people are motivated to perform when they
see atleast some chances of success.

ii. Need for power

This is the desire to have an impact and to be influential. Individuals with a high need for power enjoy
being in charge, strive to have influence over others, prefer being in the competitive and status-oriented
situations, and are more concerned with gaining influence over others and prestige than with effective
performance. Basically people for high need for power are inclined towards influence and control. They
like to be at the center and are good orators. They are demanding in nature, forceful in manners and
ambitious in life. They can be motivated to perform if they are given key positions or power positions.

iii. Need for affiliation

This is the desire to be liked and accepted by others. Individuals with a high need for affiliation strive
for friendship; prefer situations that are rather competitive, and desire relationships that involve a high
degree of mutual understanding. They prefer job situations with personal responsibility, feedback and
an intermediate degree of risk. When these characteristics are prevalent, high achievers are strongly
motivated. In the second category are the people who are social in nature. They try to affiliate
themselves with individuals and groups. They are driven by love and faith. They like to build a friendly
environment around themselves. Social recognition and affiliation with others provides them
motivation.

Equity Theory: 

As per the equity theory of J. Stacey Adams, people are motivated by their beliefs about the reward
structure as being fair or unfair, relative to the inputs. People have a tendency to use subjective
judgment to balance the outcomes and inputs in the relationship for comparisons between different
individuals. Accordingly:

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If people feel that they are not equally rewarded they either reduce the quantity or quality of work or
migrate to some other organization. However, if people perceive that they are rewarded higher, they
may be motivated to work harder.

The referent that employees choose to compare themselves with is categorized as other, system, and
self.

The other category includes other individuals with similar jobs in the same organization. It also
includes friends, neighbors, or professional associates.

The system category considers organizational pay policies and procedures and the administration of the
system. It considers organization-wide pay policies, both implied and explicit.

The self category refers to input-outcome ratios that are unique to the individual. This category is
influenced by criteria such as past jobs or family commitments.

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The choice of a particular set of reference is related to the information available about reference as well
as their perceived relevance. When employees perceive an inequity, they may:-

a. Distribute their own inputs or outcomes or that of others.

b. Behave in a way to induce others to change their input or outcomes.
c. Behave in some way to change their own inputs or outcomes.
d. Choose a different comparison referent and /or quit the job.

The major concern of the equity theory is not only with the absolute rewards that individuals receive
for their efforts, but also with the relationship of these rewards to what others receive. The theory has
the following propositions related to inequity:-

a. Given payment by time, over-rewarded employees will produce more than equitably paid
employees.
b. Given payment by quantity of production, over-rewarded employees will produce fewer but
higher quality units than equitably paid employees.
c. Given payment by time, under-rewarded employees will produce less or poorer quality output.
d. Given payment by quality of production, under-rewarded employees will produce a large
number of low quality units in comparison with equitable paid employees.

Under the foregoing prepositions therefore, employee motivation is influenced significantly by relative
rewards. Whenever the employees perceive inequity, they act to correct the situation. The result might
be lower or higher productivity improved or reduced quality of output, increased absenteeism, or
voluntary resignation.

Goal Setting Theory of Edwin Locke:

Instead of giving vague tasks to people, specific and pronounced objectives, help in achieving them
faster. As the clearity is high, a goal orientation also avoids any misunderstandings in the work of the
employees. The goal setting theory states that when the goals to be achieved are set at a higher standard
than in that case employees are motivated to perform better and put in maximum effort. It revolves
around the concept of “Self-efficacy” i.e. individual’s belief that he or she is capable of performing a
hard task. The intention to work towards such a goal is a major source of job motivation. Therefore,
goal- setting deals with people and applies only to those who accept and are committed to the goals;
hence difficult goals will lead to higher performance only if they are accepted.

MANAGERIAL APPROACHES TO MOTIVATING EMPLOYEES

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The commonly used approaches to motivate employees are discussed below:

Money is a Powerful Motivator: money is a powerful motivator even in the modern day society. It is
believed that society status, position, power, prestige, recognition etc. are associated with money.
Employees receiving higher salary can lead luxurious life and commands respect from society.
Organization incentives to motivate employees include: variable pay packages, piece rate plan,
incentives based on the performance, profit sharing plan, gain sharing schemes, skill based financial
incentives plans and flexible benefits.

Job Re-designs: job redesign in one of the strategies to motivate employees in organizations. Some job
redesign techniques includes: job enlargement, job enrichment and job rotation. Job enlargement is
adding more task and job responsibilities. Thus providing an opportunity to employees to spend more
time on the job and still feel comfortable. Job enlargement motivates employees as they are allowed to
perform variety of tasks. The work modules are made meaningful. Job enrichment is enriching the jobs
by adding motivators such as challenging goals, creativity and innovative process, making it more
exciting and incorporating growth opportunities in the job. This motivates employees and provides
satisfaction. Job rotation is another strategy. It involves changing the employees from one job to
another job.

Involvement of Employees: participation in management decision have been provide as an

effective way of motivating employee. Participation allows employees to express their views. It helps
in developing greater communication among superiors and subordinate. Employees develop a feeling
that their suggestion is accepted in the process of decision making it improves acceptance of
decisions and act as a motivating force. some commonly used participation schemes are allowing
representative participation, quality circles and employee ownership plans commonly known as
employee stock option plan.(ESOP).

Quality of Work Life (QWL): Quality of work life is relatively new concept that received attention of
the managers today. It has different meaning to different people. As a motivation technique it includes:
provision of adequate and fair compensation and safe and healthy work environment, work
environment, continuous effort of employees development, provision of growth potentials in the job,
protecting self esteem, creating a sense of identity, up keeping self respect, equity of employees, and
dignity of employees, and integration of job with family life.

Management by Objectives (MBO): Management by objectives is technique of allowing setting the

goals by participation and actively involving manager and subordinates at every level. This allows them
to feel personal responsibility and a sense of achievement.

Performance Appraisal: Performance appraisal is a technique of assessing the employee performance

at regular and continuous intervals in order to appraise their abilities. It helps in appraising the merits
and deficiencies of employees’ performance. This appraisal suggests feedback to employees and they
are allowed to overcome their deficiencies.

Group Dynamics

A group refers to the association of two or more persons interacting among themselves for the
achievement of common goal. Jennifer and Gareth have defined a group as set of two or more people
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who interact with each other to achieve certain goals or to meet certain needs. Here group interaction
and common goal are very important elements of group. The interaction reflects regular discussions and
communication which may influence the behaviour of the group members. Moreover the group
members agree to achieve some common goal which is termed as group goal. The group goal binds the
members together for making effort in the direction of realization of the goal.

A collection of individuals is called a group, (characteristics of groups) when:

 Commonality of Purpose: They have a common goal.

 Social Interaction: The members of the group constantly interact with each other, so that one
person’s actions affect and are being affected by the action of another person.
 Identity: Each member of group identifies with other member of the group
 Perception of a Group: The member of the group is psychologically aware of each other.
 Interdependence: The behaviors of each member is interdependent on others.
Thus, a group is a set of two or more people who continuously interact with each other to achieve
certain goals or meet certain needs. A group can be called a team when it is formally formed by the
organization.

Katzenbach & Smith have defined a team as a small number of people with complementary skills who
are committed to a common purpose, set of performance goals, and approach for which they hold
themselves mutually accountable. Thus major difference between the team and group is that the group
can also be informally formed without any complementary skills and formal efforts of the organization.
Team is always constituted by the organization. It so happens because it is practically impossible for a
formal organization to meet the informal needs of its employees.

As a manager it is important to understand the behaviour of the group. As you must be aware that the
behaviour of a single individual is complex, complicated and unpredictable, therefore, it is difficult to
understand the behaviour of a group. The manager has to understand the behaviour of several people
together to manage them. more interestingly, people behave differently when they work in a group than
when they work individually. Although groups can do wonders for an organization, as they have done
in IT companies today, but they can also break havoc in an organization when they function
improperly.

Significance of Group Behaviour

Group goals: It is also interesting to note that although group members may have one or more goals in
common. This does not mean that all their goals are identical. They may agree on the common goal
providing the best customer service, but in deciding what constitute the best, the group may differ. In a
firm, the production department may consider the best engineered and quality product as the best. The
finance department may consider the reasonable cost as the best. The marketing department may
consider the marketing strategy as the best. The personnel department may consider the high level of
satisfaction level of the group as the best. Despite these different views, the best customer service may
be the common goal of all departments. Normally group goal refers to the goal which most members or
all members of a group usually agree as a common goal.

Group Function: The work that a group performs for the accomplishment of organizational goals is
called group function. The function of a formal group is different from the functions of an informal
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group. A formal group has to perform the assigned tasks of the organization. For example, in a car
manufacturing plant, one group’s function may be to make the automobile bodies, another’s function is
to fit engine in the body, and another’s could be to fit the accessories in the body. In fact, we can say
that the entire organization consists of a series of groups linked with each other depending upon their
functions they perform in order to help the organization to achieve its goals. Thus, group function is
important both for the group as well as for the organization. The function of a group influences the
behaviour of its group members. The group provides them a sense of purpose of their work and
motivates them to achieve the target.

Social Facilitation: The presence of group members may either facilitate the performance or create
obstacle in performing the task. The presence of other members may stimulate the effort of the
individual because he/she may think that others are evaluating his/her performance. This feeling
induces the desire of the individual to perform better in the group. In the same way, if the task is not
liked by group members, the individual may show little interest in performing such task. Therefore, the
leader must create such environment at the work place, where the group influences the better
performance of the individuals.

Factors of Group Formation

Psychological Factors: After joining the organization, individual joins a particular group in which
he/she finds interest, attitude, personality, perception etc. matching with other individuals within the
department or the organization. As a result, group is formed.

Social Factors: Individuals also form or join the group based upon their social class, caste, and religion
to satisfy their social needs. They do it primarily for satisfying their love, affection and care needs,
which initially they feel deprived after leaving their families.

Security Factors: As an individual, sometimes one can feel insecure over unexpected developments
such as sudden health problem, termination, suspension, local problems etc; therefore, everyone likes to
be in a group to feel secured to work. Especially in a new place, for a new employee, the security need
could be one of the major factors for joining a group.

Economic Factors: When an individual works in an organization, he/she gets all types of economic
incentives and benefits available within the rules and regulations. Sometimes organizations cannot meet
an individual’s accidental or obligatory needs like money for marriage, house construction, medical
care and other proposes. So he/she gets associated with those people who help him/her at the time of
need.

Cultural Factors: Individuals come to work from different society and culture. In case the places at
which they work are far away from their place of origin, region and culture, they feel like a fish out of
water. It may be due to the absence of cultural celebrations. This is one of the reasons for which people
coming from same culture, tradition and speaking similar language usually form the group.

Proximity, Interaction, Interest and Influence: This is one of the common and logical reasons for
which people form the groups in the organization. Some people have to work together. Due to the
similarity of nature of job, they have to interact with each other for this purpose. In course of

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interaction, interest develops which ultimately influences each other to sit, eat, discuss and share
besides working together.

Types of groups

There are different ways through which we can classify the groups. One broad way to classify the
group can be formal group or informal group.

Formal Work Groups

Formal work groups are formed by the organizations. These groups are formed in order to help the
organization to achieve its specific goals. The goals of formal work group are determined to the needs
of the organization. For example, purchase committee, quality control group, disciplinary action
committees are the formal groups constituted by an organization. These groups are established to
accomplish certain organizational goals such as increasing product quality, safety, discipline etc in an
organization.

Types of Formal Workgroups

There are different types of formal groups in an organization. Four important kinds of formal groups
are command groups, the committees, teams, and self-managed work teams. Let us learn them in detail

Command Group: It is the collection of employees who report to the same supervisor. Command
groups are based on the basic reporting relationship in organizations. The existence of formal groups is
represented on organizational charts as departments (such as finance, personnel, marketing, sales, or
accounting). Command groups help an organization to accomplish variety of tasks. They have
tremendous impact upon the extent to which an organization is able to achieve its goals. The leaders of
the command group play an important role in determining the effectiveness of these groups.

The Committees: It is the collection of people who are brought together by the organization to
accomplish a specific goal. Once the goal is achieved, the organization disbands the committee. In case
such committees are dealing with long term problems, in that case they may not be disbanded but the
members in the committees can be changed or rotated on the basis of seniority and other criteria. These
kinds of committees are known as standing committees.

The Team: It is a formal work group. People work in a group does not mean that they work in a team.
A team is formed by the organization for some specific purpose. In a team, there is a high level of
interaction among its members. The members of the team work together very intensely to achieve a
common goal. In course of working together, the member of the team learn the abilities and experience
of their members to accomplish things that could not be achieved by individuals working separately or
by any other kinds of work groups.

Self-Managed Work Teams: Self-managed work teams are little different from m normal teams. The
members of self-managed work team are responsible for ensuring that the team accomplishes its goals.
Leader of this team is identified by its members. The performance of leadership tasks is assigned to
individual group members. The team is empowered to discipline its members who are not performing at
an adequate level. There is coordinating efforts across group members, and even hiring and firing for

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and within the team is done by the team itself. In the recent years self-managed teams are gaining
popularity and they have created a dramatic impact on organizations as well as on their members.

Informal Work Groups

Informal work groups emerge naturally in organizations. It is because organizational members perceive
that it is difficult for their organizations to formally fulfill some of the bare needs and feel that
membership in a group can help them to achieve their goals and meet their needs. For example, when a
group of five factory workers go for a picnic, movie, or booz together to satisfy their common need for
affiliation and friendship this is the case of an informal group. Even sometimes, some employees form
informal groups due to their ideological similarity.

These groups can be classified into two:

i. Friendship Groups: It is a group of employees in an organization who enjoy each other’s
company and love to socialize with each other.
ii. Interest Groups: Employees may form interest groups when they have a common interest or
goal to achieve in the organization.

Group Development

Tuckman has divided the developments of a group in to five stages. They are forming, storming, and
norming, performing and adjourning. Let us learn them in detail.

Forming: The first stage of group development is called forming. At this stage, members try to know
each other and establish a common understanding among them. They struggle to clarify group goals
and determine appropriate behavior within the group. The forming stage is completed once individuals
within the group feel that they are truly the members of the group.

Storming: As its name implies, this stage is characterized by considerable amount of conflict. At this
stage, group members try to resist for being controlled by the group very often, the members disagree
about who should lead the group. They also have difference of opinion over how much power should
the leader of their group have etc. this stage is completed when group members no longer resist the
group’s control and there is mutual understanding and agreement about who will lead the group.
Normally this stage is completed when group members consider that it is better to work together for the
achievement of the group goals.

Norming: This is the third stage in the group development. At this stage, group members really start
feeling that they belong to the group. They develop a very close intimacy and relationship with one
another. A feeling of friendship develops among them. A well-developed sense of common purpose of
the group emerges among the members. In this stage, group members agree on standards to guide the
behaviour in the group.

Performing: When this stage reaches, the group is ready to tackle all types of group tasks. The
members of the group work toward achievement of the group goals. The real work of the group gets
accomplished at this stage. To arrive at this stage, groups should not take very long time.

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Adjourning: This is the last stage of the group development. At this stage, a group disbands after
having accomplished its goals. However, ongoing work groups in organizations do not go through this
stage rather they remain at the performing stage.

Thus the five stages model of group development forming-storming-norming-performing-adjourning

though sounds logical, research reveals that not all groups go through each of the stages and groups do
not necessarily go through the stages sequentially. There can be considerable levels of conflict
throughout their existence. As a result, the elements of storming stage continue for a long time.

GROUP COHESIVENESS
With the passage of time, a group develops maturity and becomes cohesive. Cohesiveness is achieved
in a group when the group appears to be very attractive to its members; individuals value their group
membership and have a very strong willingness to remain members of the group. Thus, group
cohesiveness is nothing but it is the attractiveness of a group to its members. A highly cohesive group
very much appeals to their members. The cohesiveness of a group affects its performance and
effectiveness. There are a large number of factors, which influence the level of cohesiveness of a group.
Those factors can be broadly categorized into five types. They are: size of the group, homogeneous
character of group members, success of the group, competition with other groups, and the exclusiveness
of the group. Let us learn them in detail.

Size of the Group: Just like small family is more cohesive, similar is the case with a group. In case the
size of the group is large, their members tend to be less satisfied and do not tend to be cohesive.
Normally in a large group, only a few members of the group try to dominate everything such as
suggestion, opinion, its day to day functioning without giving opportunities for participation to the
other members in the group. Therefore, the large groups are more prone to conflict, and members find it
difficult to form close ties with each other, than a small or medium size group in which there exists
cohesiveness.

Homogeneous Character of Group Members: More similarity the member feel with each other,
better the chances that they will well get along with, and feel comfortable to communicate with each
other. The most cohesive group is one where members are more homogeneous in terms of age, sex,
education, marital status etc, and they share certain attitudes, values, experiences, and other
characteristics, which are common to each other.

Success of Group: It is success of the group which can make it cohesive. A realization develops
among its members to avoid differences for achieving group goals. When groups are successful in
achieving their goals, they become especially attractive to their members, and group cohesiveness
enhances.

Competition with Other Groups: Competition between groups in an organization increases group
cohesiveness when it motivates members of each group to band together to achieve group goals. For
this reason, organizations often promote group cohesiveness by having work groups competition in the
organization between/among groups over sales targets, zero defect production, minimization of
wastages, etc. a group of production workers may compete to see which group can maintain the highest
quality standards, and groups of maintenance workers may compete to have the best attendance record.

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Giving group names and publicizing also encourage healthy competition, which groups are doing
extraordinarily well.

Exclusiveness: A group’s exclusiveness is indicated by how it is difficult to become a member of the

group, the extent to which outsider look up to group members. The exclusiveness of a group gives
status in the organization. It also provides special rights and privileges to its group members.

Thus, in cohesive group members become more active participants in the group activities and the level
of communication within the group increases. They share a common goal, develop high group loyalty
and get united to perceive threat. Moreover, in a cohesive group information flows through the group
very fast.

GROUP STRUCTURE
In order to establish and maintain norms every group needs to develop a structure of its own. The
structure of the group will enable it to create position and power in the group. Though leadership may
be rotated throughout the membership but structure requires a leader to lead the group. It will determine
who is to do what in the group. Various structural variables which govern group are:.

Group size: Group size is an important determinant of group structure. Size of the group is determined
by the number of members who constitute a group. The size of group influences group’s overall
behaviour. In case size of group is large, it affects the productivity, commitment of group members
towards group, which is called social loafing.

Social Loafing: When individuals work in a group, it sometimes becomes difficult to assess and
identify an individual’s contribution to group performance by the other group members of by the
supervisors under whom they work. For example, group of workers who are jointly responsible for
quality control in an organisation can not be individually assigned to particular areas but have to work
together. When individuals work in groups, where their performances are not readily observable, there
is a strong possibility for social loafing. I.e. the tendency of individuals to exert less effort when they
work in a group than when they work alone.

Social loafing also occurs in workers who think that their own efforts are unimportant or not really
needed, and this belief lowers their level of motivation. Thus social loafing is a serious problem for
work groups because it results in a process loss that lowers group performance. In order to reduce the
social loafing, the groups are kept as small as possible.

Group Composition: The composition of a group is influenced by several characteristics, which are
similar among the group members. In a homogeneous group, several common characteristics can be
demographic characteristics such as age, sex, socioeconomic and cultural environment, education
background and psychological characteristics such as personality traits, skills, abilities, attitudes,
values, belief influence them to form the group. However, in a heterogeneous group, there exists a lot
of differences over these characteristics. Therefore, while a homogeneous group is characterized by
similarly, a heterogeneous group is characterized by diversity. Therefore, the members of homogeneous
groups find it simple to share information, have lower levels of conflict, and have relatively fewer
problems in communication and coordination than the members of the heterogeneous groups. Therefore

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the performance and goal attainment of homogeneous groups is too high than that of heterogeneous
groups, their motivation and satisfaction level is high.

Group Status: Depending upon the tasks performed by a group in an organisation, it has its
importance and status in an organisation. Though it is not expressed but status of a group is implicitly
agreed-upon. For example, a top management team has a very high status as it not only sets
organizational goals but also determines how the organisation has achieved them. Thus more important
a task performed by a group or a group’s, the higher is its status in the organisation. The status of group
in organisation motivates its members to perform at a high level.

Group Roles: The structure of the group specifies the rules of its roles of the members to facilitate the
control of behaviour. It is the role, which tells group members about what are they expected to do. Role
enables the group to hold its members accountable for their behaviour and provide the group with a
standard through which the behaviour of the individual member and the group as a whole can be
evaluated. Role relationships may be formally specified in a written job description that describes about
how a role occupant is expected to interact with others to accomplish the group’s or organization’s
goals.

Written Rules: To control the behaviors of its members, to ensure high levels of performance and the
attainment of group goals, every effective group need to establish written rules. Written rules specify
behaviors that are required by group members and behaviors that are forbidden. Written rules have
several advantages in controlling and managing behaviour and performance of the members of the
group. Rules help the groups to ensure that when and how their members will perform their assigned
task that contribute to group and organizational effectiveness and avoid behaviors that impact
performance and goal attainment. The rules help newcomers to learn the right way to perform their
roles. It develops at any stage of its development. Normally rules developed at early stages are often
changed or abandoned as the nature of the group’s work, group goals, or organizational goals changes.

THEORIES OF GROUP BEHAVIOUR

Propinquity Theory of Group Behaviour (George Homes 1950 – 60)

Propinquity means affiliation which may be due to spatial or due to geographical proximity. Group
Behaviour refers to activities, interactions and sentiments.

Balance Theory

Balance theory was proposed by Theodore Newcomb that states “persons are attracted to one another
on the basis of similar attitudes and common interest relevant to some object or a group goal” As long
as there is balance, the relationship lasts. If due to some reason an imbalance is created efforts are made
by both to restore the balance by compromising. If that does not work the relationship breaks. Reasons
for maintaining relationship is based on common interest in politics, religion, similar life style,
authority etc. in the organization interest, it is the responsibility of the manager to ensure effective
functioning of the group.

Exchange Theory

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Exchange theory is based on cost-reward relationship. Every individual before joining the group
evaluates its outcome. If he feels that the outcome (reward) is greater than the cost he joins the group,
he will form the part of the group. It should be noted that an individual joins group if a minimum
positive level of outcome exists in order to establish attraction and affiliation to take place. The cost of
relationship or affiliation is measured in terms of outcome that relates to fulfillment of various levels of
needs of an individual.

CONFLICT IN ORGANIZATIONS

Conflict is a condition that arises whenever the perceived interest of an individual and group crash with
those of another individual or group in such a way that strong emotions are aroused and compromise is
not considered to be an option. Conflict when managed effectively can contribute to organizational
effective but when mishandled can give rise to counter-productive behavior in such both sides lose. It is
also the struggle between incompatible or opposing needs, wishes, ideas, interest or people. Intergroup
conflict may be caused by competition for resources, goal incompatibility, time incompatibility, and
contentious influence tactics. There are activities that organizations can participate in to reduce or
prevent competition between groups.

Causes of conflict

Resources: Resources (e.g., budgets, personnel, physical space) are generally limited within
organizations so that competition for resources between groups is often unavoidable. If an organization
has limited resources such that they can’t be sufficient for all people, it leads to conflict as organization
activities will not be carried out usually and the plans for the organization will not be accomplished.
Also the people in the organization may be competing for the scarce resources in the organization
which will never be enough hence conflict arises.

Goal Incompatibility: Goal incompatibility occurs when the goals of two or more groups are in direct
opposition such that one group will achieve its goal while the other group(s) will be unable to meet the
goal. Goal incompatibility may be distinguished between real goal incompatibility and perceived goal
incompatibility.

Time Incompatibility: Work groups perform different tasks, have different goals, and interact with
different customers such that groups will have different time frames or deadlines in which they operate.

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Contentious Influence Tactics: Contentious influence tactics (e.g., threats, demands, and other
negative behaviors) may be used to attempt to influence others from another group creating cycles of
retaliation and influencing the opinions of those within their own group (e.g., creating bad reputations).

Competitive reward system: Reward systems in an organization can lead to conflicts e.g. if a certain
group in an organization is rewarded for a certain performance, and another has performed and has not
or has been given different rewards which are lower than the other group, this leads to conflict since it
is hard to measure the intensity of work performed and the reward strategies to apply.

Work environment: The work environment in which people work in an organization differs a lot and
can lead to conflict. If e.g. employees are working in unfavorable environment, they will complain
among themselves and this can lead to conflicts if the employers are less concerned hence grievances.

Improving the Quality of Intergroup Relations

Super ordinate goals: are goals that are approved by all groups and that may require the groups to
interact in a cooperative manner to achieve the goals (e.g., produce a product, prepare a report, and
complete a service to customers). Super ordinate goals may also be used to create a “common enemy”
that increases the cohesion among group members to defeat the enemy.

Negotiation may facilitate communication of issues causing conflict between groups so that groups can
form a resolution that is suitable to members within both groups. “Principled negotiation” refers to one
style of negotiation so that members attempt to problem-solve until a resolution between groups is
reached rather than focusing on which their individual positions. (Fischer and Ury, 1981)

Member exchanges: allow group members to exchange roles with those of the other group members.
These exchanges are intended to provide a new perspective.

Intergroup Team Development: may be used to improve relations for members within the same
group or between groups. One intervention developed by Blake, Shephard, and Mouton (1964) has
members of both groups generate one list about how the group perceives the other group and one list
that describes how they think the other group will describe them; the lists are then shared with both
groups to reduce misperceptions.

Reducing the need for intergroup interaction: may be necessary for work groups that cannot work
well together. A “coordinating group” may be used as an intermediary between groups so that each

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group would communicate through the “coordinating group”. Organizations may create slack resources
by adding additional inventory so that groups do not have to interact as frequently. Organizations may
also reduce task interdependence between those groups that function under different time frames and
deadlines (i.e., physically separate the groups).

The resource allocation process should be fair so that all groups have access to the process and
political considerations between groups are minimized. Organizations should first reexamine the
process to determine that groups have the resources needed to be effective.

Consequences of Intergroup Conflict

Effects related to conflict between groups may be either negative or positive.

Advantages

 It acts as a basis of rewarding managers. E.g. if a manager is hard working, he is rewarded

accordingly.
 Makes people to be innovative and creative to experiment with new ideas.
 It stimulates people to search for improved approaches that lead to better results.
 It makes once hidden problems to be known therefore being solved easily.
 Leadership becomes more directive.
 Organization structures become more rigid that is, responsibility among members become more
clearly defined.

Disadvantages
 Leads to stress, frustrations and anxiety to the people involved
 It threatens harmony and unity among people
 Causes employees to be dissatisfied
 Leads to high absenteeism
 Leads to high labor turn over
 Leads to distrust among people who want to work together
 Leads to demotivation

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CONCEPT OF LEADERSHIP

Leadership may be defined as a process of influencing group activities towards the achievement of
certain goals. Thus, the leader is a person in a group who is capable of influencing the group to work
willingly .He guides and direct others people and provide purpose and direct to their effort. The leader
is a part of the group that he leads, but his distinct from the rest of the group. As defined by the George
R. Terry “leadership is the activity of influencing people to strive willingly for group objectives.

THEORIES OF LEADERSHIP

Trait Theory

This the earliest theory based on a distinction between the personal qualities or traits of successful
leaders .The theory suggest a list of personality traits or characteristics which must be presented in a
person for his success as a leader. According to this theory, leader must be physical strong and well –
build ,intelligent, honest and mentally mature .He must have initiative ,self confidence ,ability to take
decision ,and so on .Since all individual did not have these qualities ,only those who had them, would
be considered potential leaders .Following are the limitations of these theory :

 The trait theory is not accepted as a valid theory.

 There is no universally agreed list of traits associated with successful leaders.
 It is difficult to measure the traits and, therefore it is not always possible to distinguish between
leaders and followers.

Behavioral Theory

The behavioral theory of leadership are based on the belief that leader can be identified by reference to
their behavior in relating to the followers .In other words it is suggested that leadership can be
described in term of what leader do rather than what they are; Behavioral theories have been presented
mostly on the basis of research studies .According to the studies conducted in the state of Michigan
,U.S.A, leader who treats their subordinates as human being ,are concerned about their well being and
encourage and involve them in goal settings ,are more effective .They are described as ‘employee –
centered “leaders. On the other and ,leader who are ‘production-centered” emphasize job performances
in conformity with prescribed standard .He exercises close control over the employee as if they were
tools of production .Such leadership is associated with unsatisfactory work performance due to the low
morale of employee .

Situational Theory

In the situation theory of leader ship the success of leadership depends upon the situation in which the
situation in which the leader operates. According to leader ship contingency model developed by Fred
E .fielder, the leader s effectiveness depends upon three situational factors.

 Leader followers relations, that is the degree of followers trust, confidence and respect for the
leaders
 The extend to which the task performed by subordinate is route or non routine (known as task
structure)

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  The position power of the leaders, that is the power associated with the rank and position of the
leader to exert his influence over his group.

The most favorable situation for leaders to influence their group is one in which they are well liked by
the members, the task is highly structured (i.e, routinised and predictable) and the leader has enormous
power attached to his position.On the other hand ,the most unfavorable situation for leaders is one in
which they are disliked ,the task is highly instructed and he will have little position power .

Another situational theory is the path-goal Theory. According to this theory ,leaders are effective due
to there influence on followers motivation ,ability to perform and their satisfaction .Subordinates are
motivated by the leader to the extend he has able to influence their expectancies relating to the
performance and attractiveness of the goal .Further ,individuals are satisfied with their job if they
believe that (a)performance of the job will lead to desirable out come and (b) with hard work they will
be able to achieve the desirable outcomes. The following leadership behavior from path goal theory

Situation Leaders Impact on Outcome

behaviour Follower
Follower lacks Supporting Increase More effort; Improved
selfconfidence leadership confidence to satisfaction and
achieve work performance
outcome

Ambiguous job Directive Clarify path to More effort; Improved

leadership reward satisfaction and
performance
Lack of job challenge Achievement- Set high goals More effort; Improved
Oriented satisfaction and
leadership performance
Incorrect reward Participative Clarify follower's More effort; Improved
leadership needs satisfaction and
and change performance
reward

LEADERSHIP STYLES

The dominant behavior pattern of the leader-manager in relation to his subordinate is known as
leadership style. There three basic style of leadership as follows.

1) Autocratic or authoritative styles

2) Democratic or participation styles ,and
3) Laissez –faire or free –rein style

Autocratic or Authoritative Style

A n autocratic leader centralizes power and decision making in himself and exercise complete control
over the subordinate .In this style subordinates are compelled to follow the others of the leaders under
threat or make suggestion .They are subject to close supervision and ,thus have a tendency to avoid
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responsibilities .The autocratic manager has little concern for the well being of employee, who suffer
from frustration and low morale .They do not have any sense of belonging to the organization and try
to work as little as possible. Since the leader manager takes all decision in autocratic style, there is
uniformly and consistency in –decision making

Democratic or Participation Style

The democratic style is also known as participative style, decision are taken by the leader in
consultations with the subordinates and with there participation in the decision making Process. The
participation leaders encourages subordinates to make suggestion and take initiative in setting goals
and implementing decisions .This enables subordinates to satisfy their social and ego needs ,which
intern, lead to there commitment to the organizational goal and higher productivity. Frequently interacts
between the manager and subordinates help to build up mutual faith and confidence.

 Decision taken through consultation may cause delay and require compromises to meet
different viewpoint
 A few focal individual may dominate the decision –making progress
 No one individual may take the responsibilities for implements the decision taken by the group
as a whole

Laissez Faire Leadership Style

Laissez faire leadership style is just the opposite of autocratic style. A manager whom adopts this style,
completely give up his leadership role .The subordinates group is allowed to make decision and its left
to the member of the member to do as they like .The role of any leader is absent. The group member
enjoy full freedom as regard goal setting and acting on it .Hence there is chaos and mismanagement of
group, goal .However ,laissez faire leadership is found to be quite suitable where the subordinates are
well-trained ,competed and the leader –manager is able to fully delegate the power of decision t the
subordinates.

FUNTIONS OF LEADERSHIP

A leadership function of a manager is closely related with his managerial function. But they are
some what different as well as overlapping .Essentially ,the leader as a manager has to set the group
goal , make plans ,motivate and inspire subordinate and supervise performance. But has to perform
several other functions are given below:

1. To develop team work: Once of the following function of the leaders is to develop his work
group as a team .It is responsibility to create a create a congenial work environment keeping in
view the subordinates competence, need and potential abilities.
2. To act as representative of the work- group; The leader of a work –group is expected to act
as a link between the group and the top management .When necessary .the leader has to
communicate the problem and grievances of his subordinates to the top management .
3. To act as a counselor of the people at work. Where the subordinates face problem in
connection with their performance at work, the leader has to guide and advise the subordinates
concerned .The problems may be technical or emotional in nature.

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 4. Time management: The leaders function includes not only ensuring the quality and
efficiency of work performed by the group ,but also checking on the timeless completion at
different stage of work
5. Proper use of power: While exercising power of authority in relation to his subordinates ,the
leader must be careful about about using his power in different ways according to the
situation .It may be necessary t use reward power, coercive power, or expert power, formal or
informal power ,depending on what will stimulate positive response from the subordinates .
6. Secure effectiveness of group –effort: To get the maximum contribution toward the
achievement of objective the leader must provide for a reward system to improve the
efficiency of capable work men ,delegate authority and invite participation of employees in
decision –making ensure the availability of adequate resources ,and communication necessary
resources ,and communication necessary information t the employee.

LEADERSHIP EFFECTIVENESS

The manager leaders may be effective or infective depending upon the leadership styles adopted by
him. He may be employee –centered (i.e, relation- oriented) or production centered (i.e., task
oriented).In other word, the style may reflect leaders concern for people or concern for production .But
in reality, the manager-leader may combine his concern for people and concern for production with
different degrees of emphasize on each .This idea was developed in the form of what is known as
“managerial Grid” which is briefly outlined below.

Managerial grid :The managerial grid refer to a diamagratic representation of the possible
combination of concern of the people and concern for production which may be reflected in the style of
leadership .The concept of managerial grid was developed by Blake and Mounton in 1964.

Diamagratic Representation of Managerial grid.

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Concern for production

As shown in the figure above there are nine degree of concern each for people and production
.Combining lower degree of concern ,five basic style of leadership are presented as follows (No.1
representing minimum concern ,and No.9 maximum concern):

 1, 1 style, where the manager has minimum concern for people as well as production, is known
as impoverished management. This represent a casual attitude of the manager towards his job
and the organizational can not be expected to survive
 9,1 style reflect the manager s highest concerned for production but least concerned for people
.It known as task management
 1,9 style in which the manager has the maximum concern for the people and minimum concern
for production is described, as country club management, accomodating .it implies that the
manager is inclined to keep people happy expecting that happiness happiness will make them
more efficiency, which is not true for business enterprises.
 5,5 style representation moderate concern for both people and production and there fore known
as middle of road management .This style of leadership is preferred by many manager whose
approach to management is that of “live and let live’
 9,9 style is the best combination of concern for people and production with maximum concern
for both .In this case ,the manager tries to integrate the objective of the organizational with the
objective of the people employed .This style therefore represents team management . It may be
suggested that .9.9 management style is likely to be most effective.

Effective and ineffective Style

Effectiveness depends n the situations demand of a specific environment .When the style of a leader is
appropriate to give a given situation ,it is termed effective .On the other hand, when the style is in a
appropriate to a given situation is termed ineffective

Power

Change management

Organization structures

Organizational structure may be defined as the established pattern of relationship among the component
of the organization. Organisation structure in this sense refers to the network of relationship among
individuals and positions in an organization. Jennifer and Gareth have defined organization structure as
the formal system of task and reporting relationship that control, coordinates and motivates employees
so that they cooperate and work together to achieve an organizational goal. While designing a good
structure; the manager too must look into factors like benefits of specialization, communication
problems, and problems in creating authority levels etc before designing the organization structure.

COMPONENTS OF ORGANISATION STRUCTURE

Organizational structure may be defined as the established pattern of relationship among the component
of the organization. Organisation structure in this sense refers to the network of relationship among
individuals and positions in an organization. Jennifer and Gareth have defined organization structure as

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the formal system of task and reporting relationship that control, coordinates and motivates employees
so that they cooperate and work together to achieve an organizational goal. In fact organization
structure describes the organization framework. Just as human beings have skeleton that defines their
parameters, organizations have structures that defines their. It is like the architectural plan of building.
Just as the architect considers various factors like cost, space, special features needed e.t.c.While
designing a good structure; the manager too must look into factors like benefits of specialization,
communication problems, and problems in creating authority levels etc before designing the
organization structure.

The manager determines the work activities to get the job done, writes job description, and organizes
people into groups and assigns them to superiors are controlled through a reporting system. The whole
structure takes the shape of a pyramid. The structural organization implies the following things:

 The formal relationship with well-defined duties and responsibilities:

 The hierarchical relationship between superior and subordinates within the organization:
 The tasks or activities assigned to different persons and the departments:
 Coordination of the various tasks and activities:
 A set of policies, procedures, standard and methods of performance which are formulated to
guide the people and their activities.

Since organization structure relates to relatively stable relationship and process of the organization,
all influencing factors must be analyzed for designing the organization structure.

1. Formalization is the degree to which tasks are standardized and rules and regulations govern
employee behavior. It influences the amount of discretion an employee has over his or her job. In
an organization with high degrees of formalization, job descriptions and policies provide clear
direction. Where formalization is low, employees have a great deal of freedom in deciding how
they conduct their work. Within the same organization, different departments may have different
degrees of formalization. For example, in a hospital, doctors have freedom in selecting treatments,
drugs, and methods for treating patients. However, the hospital physical plant staff has a strict
schedule for cleaning buildings, mowing lawns, and maintaining the facilities.

According to Robbins organization structure stipulates how tasks are to be allocated, who reports to
whom, and the formal coordinating mechanism and interaction patterns that will be followed. The
components of organizational structures which are also considered as the factors that influence
organizational structures are as follows;

2. Division of labour/work specialization

Division of labor is important in order to survive in a competitive environment. The work is divided
into specialized tasks. The logic of the argument in favor of specialization is that each person has a
special job hence becomes expert consequently productivity of the organization increases. The benefits
of specialization includes the following; less skilled workers can be used because the complex work has
been simplified into smaller jobs the workers who do these jobs do not have to be highly trained.
Workers with few skills are paid less. It helps in selection and training of the workers because the skills
required are minimized. It is easier to identify applicants who already have those skills. Training of new
workers takes less time and is not so difficult. Proficiency is gained more quickly, the specialized task
is repetitive, the workers get a lot of practice and become experts quickly.
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The benefits of specialization are economic in nature, when human beings are taken into consideration
overspecialization can be boring and degrading. Specialization can lead to absenteeism and turnover,
low productivity and even sabotage. Over specialization can lead to employee dissatisfaction.

3. Distribution of authority/Chain of command

Authority is the legitimate power of a supervisor to direct subordinates to take action within the scope
of the supervisor's position. Formal authority in the organization can be traced all the way back to the
U.S. constitutional right to own property. The owner of the organization has the authority to make
decisions. For example, entrepreneurial firms have an informal arrangement of employees and
centralization of decision-making authority.

Forms of Authority

Three forms of authority are line authority, staff authority, and team authority.

Line authority is direct supervisory authority from superior to subordinate. Authority flows in a direct
chain of command from the top of the company to the bottom. Chain of command is an unbroken line
of reporting relationships that extends through the entire organization that defines the formal decision-
making structure. Span of control refers to the number of employees that should be placed under the
direction of one manager. Spans within effective organizations vary greatly. The actual number
depends on the amount of complexity and the level of specialization. In general, a wide span of control
is possible with better-trained, more experienced, and committed employees.

Staff authority is more limited authority to advise. It is authority that is based on expertise and which
usually involves advising line managers.

Team authority is granted to committees or work teams involved in an organization's daily operations.
Work teams are groups of operating employees empowered to plan and organize their own work and to
perform that work with a minimum of supervision. A team is a small number of people with
complementary skills who work toward common goals for which they hold themselves mutually
accountable. Self-managed teams are responsible for producing an entire product, a component, or an
ongoing service. In most cases, members are cross-trained on the different tasks assigned to the team.
Often, these teams are trained in technical, administrative, and interpersonal skills. Problem-solving
teams do not affect an organization's structure because they exist for only a limited period. They are
often used when organizations decide to make improvements in the quality of a product or service.
Special-purpose teams consist of members who span functional or organizational boundaries and whose
purpose is to examine complex issues such as introducing new technology, improving the quality of
work process, or encouraging cooperation between labor and management in a unionized setting.

Delegation

Delegation is the downward transfer of formal authority from superior to subordinate. The employee is
empowered to act for the superior while the superior remains accountable for the outcome. It is a
person to person relationship requiring trust, commitment and contracting between the superior and
employee.

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Delegation of authority is one of the most important elements in the process of organization.
Organizations are characterized by a net work of activities and roles. Delegation is the process through
which the interrelationships are crated among individuals in their different roles in the organization.

Elements of delegating

For effective delegation, the authority granted to an employee must equal the assigned responsibility.
Upon accepting the delegated task, the employee has incurred an obligation to perform the assigned
work and to properly utilize the granted authority. Responsibility is the obligation to do assigned tasks.
The individual employee is responsible for being proficient at his or her job. The supervisor is
responsible for what employees do or fail to do, as well as for the resources under their control. Thus,
responsibility is an integral part of a supervisor's authority.

When someone is responsible for something, he or she is liable, or accountable to a superior, for the
outcome. Thus, accountability flows upward in the organization. All are held accountable for their
personal, individual conduct. Accountability is answering for the result of one's actions or omissions. It
is the reckoning, wherein one answers for his or her actions and accepts the consequences, good or bad.
Accountability establishes reasons, motives and importance for actions in the eyes of managers and
employees alike. Accountability is the final act in the establishment of one's credibility. It is important
to remember that accountability results in rewards for good performance, as well as discipline for poor
performance.

4. Decentralization and Centralization

Centralization is the degree to which decision-making is concentrated in top management's hands.

Decentralization is the extent to which decision-making authority is pushed down the organization
structure and shared with many lower-level employees. Centralized organizations have more levels of
management with narrow spans of control. Employees are not free to make decisions. Decentralized
organizations have fewer levels of management with wide spans of control giving employees more
freedom of action. All other things being equal, a wide span of control is more efficient because it
requires fewer managers. However, it is important to recognize that, at some point, effectiveness will
decline.

The current trend is toward broadening decentralization. As competition intensifies, the need for
organizations to be responsive increases. This has made employees, usually those at the lower levels,
who are closest to customers extremely important. They are an excellent source of knowledge and
implement changes that directly impact performance. The benefits of decentralization include speeding
up of operational decisions by ensuring that problems and issues are dealt with at the point at which
they occur rather than having to refer every matter back to top management. It contributes to
organization and staff development and also contributes to staff motivation.

5. Departmentation
The division of labour divides the job into smaller activities. in order to coordinate these activities, they
are grouped together. The basis by which these activities are grouped together are known as
departmentalization.

It may be defined as the process of forming departments or grouping activities of an organization into a
number of separate units for the purpose of efficient functioning.this term vary a great deal between
different organizations. For example in business undertaking, terms are divisions, departments and
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sections: in governments these are called branch, department and section: in military, regiment,
battalion groups and company.

The impact of department tin is a delineation of executive responsibilities and a grouping of operating
activities. Every level in the hierarchy below the apex is departmentalized and each succeeding lower
level involves further departmental differentiation.

6. Span of Control: The departmentation reflects the type of job which is grouped together. Different
persons are involved in performing these jobs. They are required to be supervised closely. Span of
control refers to the number of individuals a manager can effectively supervise. This is expected
that the span of control, that is the number of subordinates directly reporting to a superior should
be limited so as to make supervision and control effective. This is because executives have limited
time and ability.

It is sometimes suggested that the span of control should neither be too wide nor too narrow. In other
words, the number of subordinates should not be too larger too small the number of subordinates
cannot be easily determined because the nature of jobs and capacity f individuals vary from one
organization to another. Moreover; the actual span of supervision affects the organization in different
way. A wide span results in fewer levels of supervision and facilitates communication. It permits only
general supervision due to the limited availability of time. Narrow span, on the other hand, requires
multiple level of supervision and hence longer time of communication. A narrow span however enables
managers to exercise close supervision and control.

Types of organizational structure

ORGANISATIONAL EFFECTIVENESS

The study of organizational structure is necessary to understand organizational effectiveness. In simple

term better the structure of an organization more effective would be the organization and vice-versa. In
order to measure the effectiveness the following components of organization effectiveness are analyzed

Determinants of organizational effectiveness

Several factors influence the organizational effectiveness

Determinants of Organizational Effectiveness Employee

characteristics
Managerial policies and
 goals
practices  skills
 motives
 strategies
 attitudes
 leadership
 values
 decision making
 rewards
 communication Organizational Organizational
effectiveness characteristics
Environment
characteristics  structure
 technology
 predictability  size etc
 complexity 39 | P a g e
 hostility
Managerial Policies and Practices

Managerial policies and practices integrate the entire organization, maintain balance among the interest
groups in the organization, and accommodate them with the external environment. Manegerial policies
and practices have a direct bearing on the organizational effectiveness. The major managerial policies
and practices are as follow:

1. Strategy: A strategy is a plan for interacting for the competitive environment to achieve
organizational goals. Goals defines where does the organization want to go and strategy define how
will the organization reach there. In the other words, strategy is the determination of basic long term
goals for the organization, the adoption of the causes of action and the location of resources necessary
to achieve them. The strategy is the most important factor of an organization which decides the future
cause of action for the organization. New strategy is often selected based upon environmental needs,
and then the top management attempts to design organization to achieve those ends.

2. Leadership: In the process of influencing members towards the achievement of organizational goals.
It is said that managers are people why do things right and leaders are people who do the right thing.
Leaders facilitate the identification of organizational goals. They initiate the development of vision for
there organization

3. Decision-making: Decision making is choosing among alternatives. It has close relationship with all
traditional management functions. The decisions that management makes has a profound impact on the
success of an organization

4. Rewards: Organization success to a large extent depends on how is management able to gain support
of its team by way of compensating them for the efforts they are making for the achievement of
organizational goals. It is primarily meant to certain employee morale and improves or maintains
productivity.

5. Communication: It is the linkage among members of the organization where by they exchange the
information. The organizational structure has to provide a perfect communication among different
members of the organization. Organisational communication is the grease that enables any organizational
change.

Environmental Characteristics: Organizational effectiveness is influenced to a great degree by the

external environmental characteristics. It is dependent on how is the external environment predictable,
complex and hostile to the organization and its activities. The major characteristics are follows:

1. Complexity: Environment complexity refers to the heterogeneity and range of activities which are
relevant to an organizations operation. How many diverse groups from external environment the
organizations have to deal with.

2. Predictability: Predictability refers to how certain or uncertain an organization may be towards supply
of varies resources: Human, raw material e.t.c.It is an element of external environment. Complexity:
Environment complexity refers to the heterogeneity and range of activities which are relevant to an
organizations operation. How many diverse groups from external environment the organizations have to
deal with.
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3. Hostility: A hostile environment is one in which the underpinning of the organization is threatened.
How is an organization viewed by the people at large? You may recall the case of union carbide after the
Bhopal gas leakage about the hostility of the environment.

Employee Characteristics: The characteristics of human resource could make or break an organization.
It is employee characteristics, which is reflected ion the success or failure of an organization. The major
characteristics are as follows:

1. Goals: Goals define where the organization wants to go. Goals are intension that an individual or an
organization would like to achieve in course of their working. Goals provide a directional nature to
people behaviour and guide both thought and action.

2. Skill: Skill is the ability to engage in a set of behaviour that are functionally related to one another and
that lead to a desired performance in a given area. The skill can be technically, managerial, behavioral
e.t.c.

3. Motives; A motive is an inner state of a person that energizes activates, or moves and directs towards
the achievement of a predefined goal. The motivated employees have high motives to perform better and
achieve the target.

4. Attitudes: Attitudes are evaluative statements either favorable or unfavorable concerning objects,
events or people. Attitudes influence job behaviour and hence organizational effectiveness.

5. Values: Values represent basic convictions or a specific mode of conducts. It generally influences an
individuals attitudes and behaviour.The value that a person holds influences his or her motivation and
subsequently behaviour.

Organizational characteristics

An organizational characteristic refers to the general conditions that exist within an organization.Variour
organizational characteristics influences organizational effectiveness. The major characteristics are as
follows:

1. Structure: An organizational structure defines how are job task formally divided, grouped and
coordinated. For organizational effectiveness six elements are needed to be addressed while designing
organizational structure. These are: work specialization departmentation, chain of command, span of
control, centralization and decentralization and formalization.

2. Technology: The term technology refers to how does organization transfers it inputs into output.
Every organizational has at least one technology for converting financial, human and physical resources
into product or services. The choice of technology and its use influences organizational effectiveness.

3. Size: In a narrow sense organizational size refers to the number of people in an organization. But, if we
take a broader view, size refers to the physical capacity of the organization, the personnel available to the
organization, the organizational inputs or output and the discretionary resources available to an
organization. It is the size which influences the structure which in turn influences the organizational
effectiveness.

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