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DRIVE-Summer 2015

PROGRAM-MBA
SEMESTER-I
MB0038 Management Process and Organizational Behavior

Qus:1 List and describe the different strategies in the Organization.


Listing the strategies
Explaining the strategies
Answer:
Listing the strategies:
Strategy in organisations can be divided into three:
Corporate strategy
Business strategy
Functional strategy
Explaining the strategies:

Corporate strategy: If you are a company like TATA or BIRLA, you will have several
businesses under you and a corporate headquarters which controls these. Each of these
businesses may be run by an independent company much like Tata Motors runs the vehicle
business and Tata Consultancy Service runs the IT business (they both are different companies).
The corporate headquarters will have grand plans on how each business should operate. For
example, it might say that that Tata Motors should design, develop, and manufacture an
indigenous small car Nano or that TCS should expand business to China. This grand plan
created by the corporate headquarters is called Corporate Strategy.

Business strategy: Every business, small or big, will have a business strategy. This is the grand
plan for doing business. For example, Raju can make a grand plan of expanding his business to
another district or having branches. He can take a decision to be the provider of low cost
furniture or highly differentiated furniture, household furniture only, modular furniture only, a
supplier of all furniture needs, etc. This is what business strategy is. If you were a TATA
company, each business of TATA (say Tata Motors, Tata Iron and Steel Company, Tata Hotels,
etc) would have their own business strategy in consonance with the corporate strategy.

Functional strategy: Once you have a business strategy, each independent department will
need its own strategy. For example, the HR of Tata Motors will need a strategy quite different
from the HR of Tata Consultancy Service (TCS). So, the operations, marketing, finance, HR, etc
of each business will make their own grand plan or strategy and this is called functional
strategy. In the case of Raju, he might plan to hire more carpenters and pay daily wages or
wages per piece. This is the HR strategy (of course it is only one element of HR strategy but
illustrates what functional strategy means). In other words, the grand plan made by each
functional area is called functional strategy.

Qus:2 What do you mean by Decision Making? Explain Decision making under certainty,
uncertainty and risk. Describe the steps in Creative Decision making.

Definition of Decision making.


Decision making under certainty, uncertainty and risk
Steps in Creative Decision making

Answer:
Definition of Decision making:
Decision making can be defined as the way of choosing from the alternatives. Since no action can be
taken without a decision, planning will not go any further without a decision and hence, decision
making is an integral part of planning even if it is done quickly or with little thought.
Decision making under certainty, uncertainty and risk:

In the case under consideration, Rakhi, for example, does not have answers to so many
questions, yet she would take a decision. This is called deciding under uncertainty. While taking
a decision under uncertainty, we usually use experience, intuition, and often experimentation
rather than research and analysis.

Some of the decisions can be taken under certainty. For example, you can take a decision after
knowing the rent of the place and the contract details.

Decision under risk Risk is not the same as uncertainty. Risk can be estimated much like an
insurance company estimates the risk of a young person, old person, one with a heart ailment,
etc. Since risk can be estimated, we can hedge the risk.

Steps in Creative Decision making:


In a complex world, we have to take creative decisions more so when there is change and uncertainties.
Let us see how we do this.

Incubation To make creative decisions, first we allow a problem to simmer in our mind in the
unconscious. You must have observed how an important question remains in your mind without
an answer for some time and then you get an answer to it all of a sudden. This happens because
you incubate the problem enabling your brain to connect the various aspects and then find a
possible solution.

Intuition After you have incubated it for some time, you get an intuition, i.e., what is in the
unconscious is connected to the conscious. There is no clear explanation to this process but in
decision making, we accept that this happens in many cases.

Insight Insight is something concrete about the underlying nature of the problem and its
solution comes to us often when we are not thinking of the problem. Your brain connects the
need of a solution with the intuition and gives you possible answers. They are untested and may
or may not work. Insight is the result of hard work where you have thought of many variables,
permutations, and combinations.

Logical formulation or verification Here we verify the insight and see its viability and then
take a decision. These are some of the ways in which we take decisions and since managers are
paid first and foremost to take decisions, it is important that we build on this basic input and
fine tune our creative decision making skills.

Q3. What is meant by span of control? Differentiate between narrow span of control and wide
span of control. What are the factors that influence the span of control?
Meaning of span of control ,
Difference between narrow span of control and wide span of control,
Factors that influence the span of control
Answer:
Span of control:
The number of subordinates that a manager or supervisor can directly control. This number varies with
the type of work: complex, variable work reduces it to six, whereas routine, fixed work increases it to
twenty or more.
Difference between narrow span of control and wide span of control:

Figure 2: Narrow Span and Wide Span of Control


A department may have several homogenous sections of managers, junior managers, and employees.
This leads us to the questions of how many employees should work under a manager, how many
managers should work under a senior manager, then a division head, etc.
The term span of control indicates the number of employees or managers who work under one head.
Span of control may be narrow or broad as seen in Figure 3. When a very few people report to a head
and a chain is made that way upward, then it is called narrow span.
Table 1: Advantages and Disadvantages of Narrow Span and Wide Span

There is some optimal limit to the number of subordinate a manager can have. But considering the
communication and control in mind, usually we say that the number should be within a range of seven
to ten. This however depends on the nature of the industry and technology level. In a computerized
environment, it is possible to have even 40 to 50 people under one head. More the number of
subordinates under one head, flatter then organization becomes. But keeping the factors that influence
the span of control, a balance has to be struck.
Factors that influence the span of control:
The time that a manager gets to spend with the subordinate is the fundamental factor. Based on this,
several sub factors emerge and are discussed below.

Training Wide span demands high level of training while in narrow span, one can manage
with less.

Task definition and delegation Wide span demands clear task definition and delegation
while this can be much less in a narrow span.

Well defined plans and repetitive process If the business has these, a wide span is viable, if
not a narrow span is preferred.

Verifiable objectives Wide span demands verifiable objectives and this is much less in
narrow span.

Speed of change When the speed of change is high, a wide span may not be practical from a
communication perspective but may not be practical if such changes need close control.

Organization structure, written and oral communication When this is of a higher order,
wide span can work well.

Effective interaction and meeting Wide span demands both more than narrow span.

Q4 Define Organizational behavior. What are the various approaches to Organizational


behavior?
Definition of OB
Approaches to OB
Answer:

Definition of OB:

OB can be defined as a systematic study that investigates the impact of individuals, groups and
organizational factors on productivity to include effectiveness and efficiency, absentee, turnover,
organizational citizenship behavior and job satisfaction.

By systematic study we mean looking at relationships and attempting to attribute causes and
effects, and drawing conclusions based on scientific evidence.

By productivity we mean a performance measure that includes both effectiveness (achievement


of goals) and efficiency (ratio on output versus input required to achieve it).

By absenteeism we mean failure to report to work especially without informing.

By turnover we mean voluntary and involuntary permanent withdrawal from an organization


(simply put exiting or quitting).

By organizational citizenship we mean discretionary behavior that is not part of an employees


formal job requirements, but that nevertheless promotes the effective functioning of the
organization.

By job satisfaction we mean a general attitude towards ones job; the difference between the
amount of reward the workers receive and the amount they believe they should receive.

Approaches and Importance of OB:


Modern approach to organizational behavior
There are four main approaches to organizational behavior. They are:
Human resources approach
Contingency approach
Productivity approach
Systems approach
Let us now study each approach which are as below:

Human resources approach: The human resources approach is concerned with the growth and
development of people towards higher levels of competency, creativity and fulfillment. People
are the central resource in any organisation. Hence it tries to create a work climate for improved
abilities. This approach is also known as 'supportive approach' because the manager's primary
role changes from control of employees to providing an active support for their growth and
performance.

Contingency approach: It implies that different situations require different behavioral practices
for effectiveness. Hence each situation must be analyzed carefully to determine the significant
variables that exist in order to establish the more effective practices. This approach ensures or at
least encourages analysis of each situation prior to action. Thus it helps to use all the current
knowledge about people in the organization in the most appropriate manner.

Productivity approach: In this approach, the output per unit input is considered. Besides,
economic inputs and outputs, we need to have human and social inputs and outputs in
workplace, is the premise of this approach.

Systems approach: We have already seen the systems approach. It means that the organization
'people' employ 'technology' in performing the 'task' that they are responsible for, while the
'structure' of the organization serves as a basis for coordinating all their different activities. The
systems view emphasizes the interdependence of each of these elements within the organization,
if the organization as a whole is to function effectively.

Q5. Perception is the way we see and interpret things. Explain the importance of such
perception. What are the factors affecting perception?

Importance of perception,
Factors affecting perception

Answer:
Importance of perception:
Perception is perhaps the most important aspect of OB that we use in our daily life and in management.
The importance of perception is:
While creating vision for an organization, our perception of the future and the way things
should be is a deciding factor.

While making strategy, out perception of the opportunities and threats make us see the same
situation differently.

Perception gives the impetus to seek more information to make more rational decisions e.g., the
perception of Rakhi on the situation of the bakery in trouble, made her travel and talk to the
employees to gain more information. If she had perceived what the manager did was right or
that it is too small a thing to intervene, she would not have made the effort to find out more
information.

Perception affects the planning because the goals set depend on our perception of the world and
the employees and their ability to achieve them.

The way we organize, i.e., flat versus hierarchical, depends on our perception of the competence
of the employees and business needs. You will find the same industry having different
organizational set up because of this.

Factors affecting perception:


Factors that affect perception are:

Perceiver related factors


Target related factors
Situation related factors

Figure : Factors affecting perception


Perceiver related factors- Peoples attitude, motives, interests, experiences and expectations
affect perception. Attitude and motives. Attitudes are evaluative statements (whether spoken in
words or otherwise) about objects, people and events. The manager in our case was making
statements about the need to adhere to procedures while the assistant manager about the need to
please customers. Motives are strong drives that we have for taking an action. As a result they
perceive the same service manual differently.

Target related factors- These are novelty, motion, sound, size, background and proximity. We
see how these are used in business especially advertisements. Rakhi used to bake a cake for
birthday of every one of her employees. This is novelty because employers dont do it. Had the
manager talked to this assistant manager softly but firmly in his room the sound, background
and proximity would have been more appropriate for the advice rather than on the shop floor.

Situation related- Time, work setting, work tradition, nature of word and social setting are
important factors in a work situation that affect perception. The manager admonished his
assistant manager with long experience during the peak work time, it was done against a work
setting that focus on total customer satisfaction if not literal pampering of the customers, which
was Sambhavis tradition, the nature of work too was service and the attraction was kid care and
merchandise, which makes the service very different from a standard eatery or even a good
restaurant.

Q6. Give the definition and importance of motivation. Describe Maslows hierarchy of needs
theory.

Definition of motivation,
Importance of motivation,
Maslows hierarchy of needs theory

Answer:
Definition of Motivation:
Motivation is the process that account for an individuals intensity, direction, and persistence of effort
toward attaining a goal. (Robbins, 2003) Intensity is concerned with how hard a person tries. This is
the element most of us focus on when we talk about motivation. Direction is the orientation that
benefits the organization. And persistence is a measure of how long a person can maintain his/her
effort. Motivated individuals stay with a task long enough to achieve their goal.

Importance of Motivation:
Motivation is important to an individual because:
Motivation helps to achieve personal goals.
Motivation gives job satisfaction.
Motivation helps in self-development of individual.
An individual would always gain by working with a dynamic team.
Similarly, motivation is important to a business because:
The more motivated the employees are, the more empowered the team is.
The more is the team work and individual employee contribution, more profitable and
successful is the business.
During period of change, there is more adaptability and creativity.
In general, motivation has the following benefits:
Puts human resources into action and enables organizations to coordinate its physical and
financial resources to achieve its goals.
Improves efficiency by increasing productivity and decreasing cost.
It leads to innovation because of the desire to do a job better and accomplish a challenge.
Maslows hierarchy of needs theory:
According to this theory, proposed by Maslow (1943), human beings have wants and desires which
influence their behavior. Only dissatisfied needs can influence behaviour. The needs follow an order of
importance (called hierarchy) and when a lower need is satisfied, he has a need to satisfy a higher level
need. Maslow created the following five hierarchies

Physiological Includes hunger, thirst, shelter, sex, and other bodily needs. So if the workplace
does not fulfill these, an individual will not be motivated. If he gets these, he will need the next
hierarchy.

Safety Includes security and protection from physical and emotional harm and therefore he
looks for safer working place, and does not want to be threatened or abused in the workplace.

Social Includes affection, belongingness, acceptance, and friendship in the workplace and if
he gets this, he will be happy to work hard. Workplaces which guarantee this motivate them. We
saw in the Hawthorne experiments, how social relationship led to higher productivity.

Esteem Includes internal esteem factors, such as, self-respect, autonomy, and achievement;
and external esteem factors, such as status, recognition, and attention. So, when we set goals,
supports him to achieve it and rewards him for it, it fulfills his esteem needs and also other
needs because of the money he gets as a result which he can use to fulfill the other needs such
as buying a house (safety), giving a party (social) or donating for charity (self esteem or self
actualization).

Self-actualization The drive to become what one is capable of becoming; includes growth,
achieving ones potential, and self-fulfillment.

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