Managing Organization

MANAGING
ORGANISAT
ION
NMBA 011
SEM I
COMPILED BY: MOHAMMAD TALHA SIDDIQUI
ASST. PROFESSOR
BORA INSTITUTE OF MANAGEMENT SCIENCES
1
MANAGING ORGANISATION
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UNIT I
NATURE AND SCOPE OF MANAGEMENT
Managing is essential in all organized co-operation, as well as at all levels of organization in an
enterprise. It is the function performed not only by corporation President and the army general but also
of the shop supervisors and the company commander. Managing is equally important in business as well
as non business organizations. During the last few decades, Management as a discipline has attracted
the attention of academicians and practitioners to a very great extent. The basic reason behind this
phenomenon is the growing importance of management in day to day life of the people.
Because of the divergent views, it is very difficult to give a precise definition to the term
Management. It has drawn concepts and Principles from economics, sociology, psychology,
anthropology, history, and statistics and so on. The result is that each group of contributors has treated
Management differently. Management is invariably defined as the process of getting things done
through the effort of others, getting from where we are to where we want to be with the least
expenditure of time, money and efforts, or co-ordinating individual and group efforts, or co-ordinating
individual and group efforts towards super-ordinate goals.
Harold Koontz defines management in a very simple form where he states that Management is
the art of getting things done through and with the people in formally organized groups.
Dalton E. McFarland defines Management as Management is defined for conceptual, theoretical
and analytical purposes as that process by which Managers create direct, maintain and operate
purposive organization through systematic co-ordinated co-operative human effort.
To sum up, we can say that management is the process of designing and maintaining an
environment in which individuals, working together in groups, efficiently accomplish selected aims.
NATURE AND SCOPE OF MANAGEMENT

The study and application of Management techniques in managing the affairs of the organization
have changed its nature over the period of time. The nature of Management can be described as
1. Multi disciplinary
Management integrates the ideas and concepts taken from disciplines such as psychology,
sociology, anthropology, economics, ecology, statistics, operation research, history etc. and presents
newer concepts which can be put in practice for managing the organizations. Contributions to the field of
management can be expected from any discipline which deals with some aspects of human beings.
2. Dynamic Nature of Principles

Principles are a fundamental truth which establish cause and effect relationship of a function.
Based on practical evidences, management has framed certain principles, but these principles are
flexible in nature and change with the changes in the environment in which an organization exists. In the
field of Management, organization researches are being carried on to establish principles in changing
society and no principles can be regarded as a final truth.
3. Relative, Not Absolute Principles

Management Principles are relative, not absolute and they should be applied according to the
need of the organization. Each organization may be different from others. The difference may exist
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because of time, place, socio-cultural factors etc. A particular management Principles has different
strength in different conditions and therefore Principles of Management should be applied in the light of
the prevailing conditions.
4. Management, science or Art

Science is based on logical consistency, systematic explanation, critical evaluation and
experimental analysis. It is a systematized body of knowledge. Management, being a social science may
be called as an inexact or pseudo science. The meaning of art is related with the bringing of desired
result through the application of skills. It has to do with applying of knowledge or science or of
expertness in performance. Management can be considered as an art and a better manager is one who
knows how to apply the knowledge in solving a particular problem.
5. Management as a Profession
The word profession may perhaps be defined as an occupation based upon specialized intellectual
study and training, the purpose of which is to supply skilled service or advice to others for a definite fee
or salary. Profession is an occupation for which specialized knowledge, skills and training are required
and the use of these skills is not meant for self satisfaction , but these are used for the larger interests of
the society and the success of these skills is measured not in terms of money alone. Management
possess certain characteristics of profession, while others are missing. Therefore, it cannot be said to be
a profession, though it is emerging as a profession and the move is towards management as a
profession.
6. Universality of Management
There are arguments in favour and against the concept of universality. The arguments in favour of
universality are:[a]management as a process and the various process of management are universal for all
organizations
The arguments against universality are:[a]management is culture bound
[b]management depends upon the objectives of an enterprise [c]management
depends upon the differences in philosophies of organization
EVOLUTION OF MANAGEMENT
Creative, dynamic management is a driving force behind the success of any business. In todays
marketplace, change is rapid and managers are expected to deal with a broad set of issues and needs.
How they address those issues is very different today than it was a hundred years ago. Times have
changed, labor has changed, and, most importantly, management philosophies have changed. The
management philosophies of yesterday are valuable tools for managers to use today. The development
of management thought has been evolutionary in nature under the following four parts:1.Pre- Scientific Management Era [Before 1880]
2.Classical Management Era [1880-1930]
3.Neo-Classical Management Era[1930-1960]
4.Modern Management Era [1950 onwards]
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During pre-scientific management era, valuable contributions were made by Churches, Military
organizations and writers like Charles Babbage and Robert oven. A school of thought emerged in this era
is known as pre-scientific management school.
The earliest management philosophy, the classical perspective, emerged in the 19th and early
20th century in response to a problem businesses grapple with today: how to make businesses efficient
operating machines. In the factory system, managers had the challenge of coordinating a huge, unskilled
labor force, complex production systems, and an expansive manufacturing operation. The classical
theorists like F.W.Taylor and Henri Fayol concentrated on organizational structure for the accomplishment
of organizational goal.
Frederick Winslow Taylors solution was the Scientific Management approach which proposed that
productivity could be improved only by a series of precise procedures developed from a scientific
observation of a situation. This approach standardized labor and training, employee hiring, and tied
compensation to increased productivity. While highly successful, this approach did not take into
consideration the diversity of abilities and needs within the workforce.
The neo classical writers like Elton Mayo and Chester I. Barnard tried to improve upon the theories
of classical writers. They suggested improvements for good human relations in the organization. A crucial
shift in management philosophy came in the 1920s with a new emphasis on human behaviors, needs
and attitudes in the workplace over the economy and efficiency of
production. This new way of thinking led the way for the human resource perspective, which saw workers
as a resource to be fully utilized, as opposed to tools from which to extract utility. It suggested that
beyond the need for worker inclusion and supportive leadership, organizations should design jobs to
meet the higher needs of their employees and utilize their full potential. This perspective paved the way
for the role that human relations departments play in organizations today.
Many of todays management perspectives grew out of adaptations of the humanistic
perspective. One such perspective is the systems theory, which views an organization as a series of
interconnected systems that affect and are effected by each other
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The modern management thinkers like Robert Schlaifer and Herbert Simon define organization as
a system. They also consider the impact of environment on the effectivenss of the organization. The
social system school, the decision theory school, the quantitative management school, the systems
management school, etc. are the contributions of modern management era.
To sum up
(A)Early management approaches which are represented by scientific management, the
administrative management theory and the human relations movement
(B)Modern management approaches which are represented by scientific management, the
administrative/management science approach, the systems approach and the contingency approach
Frederick Taylor and Scientific Management

Frederick Winslow Taylor is generally acknowledged as the father of scientific management.His
experiences as an apprentice, a common labourer, a foreman, a master mechanic , and then the Chief
Engineer of the Steel company gave Taylor ample opportunity to know at first hand the problems and
attitudes of workers and to see the great opportunities for improving the quality of Management.
Taylor principal concern throughout most of his life was that of increasing efficiency in production, not
only to lower costs and raise profits, but also to make possible increased pay for workers through their
higher productivity. Taylor saw productivity as the answer to both higher wages and higher profits, and
he believed that the application of Scientific methods, instead of custom and rule of thumb, could yield
the productivity without the expenditure of more human energy or effort
Taylors famous work entitled the The Principles of Scientific Management was published in
1911.Scientific Management is not any efficiency device, in its essence, scientific management involves
a complete mental revolution on the part of the working man in any particular establishment or industry
and is equally complete mental revolution on the part of those on the management side. The great
mental revolution that takes place in the attitude of two parties is that together they turn their attention
towards increasing the surplus than dividing the surplus.
The fundamental Principles that Taylor was underlying the Scientific approach of Management
may be summarized as follows:1. Replacing rules of thumb with science.
2.Obtaining harmony in group action, rather than discord
3.Acheiving co-operation of human beings, rather than chaotic individualism.
4.Working for maximum output rather than restricted output.
5.Developing all workers to the fullest extent possible for their own and their companys highest
prosperity.
Contributions of Henry Fayol

Henri Fayol (Istanbul, 29 July 1841Paris, 19 November 1925) was a French mining engineer,
director of mines, who developed independent of the theory of Scientific Management, a general theory
of business administration also known as Fayolism. His contributions are generally termed as operational
management or administrative management.
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He was one of the most influential contributors to modern concepts of management. Fayolism is one of
the first comprehensive statements of a general theory of management developed by Fayol. He has
proposed that there are six primary functions of management and 14 principles of management. The
Primary function of management are forecasting planning organizing commanding coordinating and
controlling.Fayols contributions were first published in the book form titled as Administration
Industrielle at Generale in French language , in 1916.Fayol looked at the problems of managing an
organisation from top management point of view. He has used the term administration instead of
management emphasising that there is unity of science of administrator. For him, administration was
common activity and administrative doctrine was universally applicable. Fayol found that the activities of
an industrial organisation could be divided into six groups.
1. Technical [relating to production]
2. Commercial [buying, selling and exchange]
3. Financial [search for capital and its optimum use]
4. Security [protection of property and person]
5. Accounting [including statistics] and
6. Managerial [planning, organisation, command, coordination, and control]
Pointing out that these activities exist in business of every size, Fayol observed that the first five
were well known, and consequently he devoted most of his book to analyse the sixth one, that is,
managerial activity. Fayol has divided his approach of studying management into three parts;[1]
managerial qualities and training [2]general principles of management and [3] elements of management
Fayol was the first person to identify the qualities required in a manager. According to him, there
are six types of qualities that a manager requires.these are as follows:
1. Physical[health, vigour and address]
2. Mental[ability to understand and learn, judgement, mental vigour, and adaptability
3. Moral [energy, firmness, initiative, loyalty, tact, and dignity]
4. Educational [general acquaintance with matters not belonging exclusively to the function
performed]
5. Technical [peculiar to the function being performed] and
6. Experience [arising from the work]
General Principles of Management

Fayol has given fourteen principles of management. He has made distinction between
management principles and management elements. While management principle is a fundamental truth
and establishes cause-effect relationship, management element denotes the function performed by a
manager. Henry Fayol strongly felt that managers should be guided by certain principles while giving the
management principles, Fayol has emphasised two things.
1. The list of management principles is not exhaustive but suggestive and has discussed only those
principles which he followed on most occasions.
2. Principles of management are not rigid but flexible.
Fayol evolved 14 general principles of management which are still considered important in
management. These are:
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1. Division of work:
This principle suggests that work should be assigned to a person for which he is best suited. Work
should be divided up to that stage where it is optimum and just. This division of work can be applied at
all levels of the organization. Fayol has advocated division of work to take the advantages of
specialization
2. Authority and responsibility:
Responsibility means the work assigned to any person, and authority means rights that are given
to him to perform that work. It is necessary that adequate authority should be given to discharge the
responsibility. Authority includes official authority and personal authority. Official authority is derived
from the managers position and personal authority is derived from the personal qualities. In order to
discharge the responsibility properly, there should be parity of authority and responsibility.
3. Discipline:
This principle emphasizes that subordinates should respect their superiors and obeys their orders.
On the other hand, superiors behavior should be such that they make subordinates obedient. If such
discipline is observed, there will be no problem of industrial disputes. Discipline is obedience, application,
energy, behavior and outward mark of respect shown by employees. Discipline may be of two types; self
imposed discipline and command discipline. Self imposed discipline springs from within the individual
and is in the nature of spontaneous response to a skilful leader. Command discipline stems from a
recognized authority.
4. Unity of command:
Subordinates should receive orders from one superior only. If he receives orders from more than
one person, he can satisfy none. The more completely an individual has a reporting relationship to a
single superior, the less is the problem of conflict in instructions and the greatest is the feeling of
personal responsibility for results.Fayol has considered unity of command as an important aspect in
managing an organization.
5. Unity of Direction:
Each group of activities having the same objective must have one head and one plan. In the
absence of this principle, there may be wastage, over expenditure and useless rivalry in the same
organisation. Unity of direction is different from Unity of command in the sense that former is concerned
with functioning of the organization in respect of its grouping its activities or planning while later is
concerned with personnel at all levels in the organization in terms of reporting relationship.
6. Subordination of individual to general interest:
While taking any decision, the general interest, i.e., the interest of the organization as a whole should be
preferred to individual interests. Individual interest must be subordinate to general interest when there is
a conflict between the two. Superiors should set an example in fairness and goodness
7. Remuneration:
Management should try to give fair wages to the employees and employees should have the
satisfaction of being rightly paid. Remuneration must give satisfaction to both the employers and
employees.
8. Centralization:
Everything which goes to increase the importance of subordinates role is decentralization and
everything which goes to reduce it is centralization. When a single person controls the affairs of an
organization, it is said to be complete centralisation.In small concerns, a single manager can supervise
the work of the subordinates easily, while in a big organization, control is divided among a number of
persons. Thus centralization is more in small concerns and it is less in big concerns. Fayols opinion was
that the degree of centralization should be fixed on the basis of capabilities of the persons.
9. Scalar Chain:
This is the chain of superiors from the highest to the lowest ranks. The order of this chain should
be maintained when some instructions are to be passed on or enquiries are to be made It suggests that
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each communication going up or coming down must flow through each position in the line of authority. It
can be short circuited only in special circumstances when its rigid following would be detrimental to the
organization. For this purpose, Fayol has suggested gang Plank which is used to prevent the scalar chain
from bogging down action.
10. Order:
This is a principle relating to the arrangement of things and people. In material order, there
should be a place for everything and everything should be in its place. In social order, there should be
right man in the right place. Placement of men and materials should be properly made. Proper space
should be made available where materials can be kept safely. Each man should be provided the work for
which he is best suited.
11. Equity:
This principle requires the managers to be kind and just so that loyalty can be won from the
subordinates. Equity is a combination of justice and kindness. The application of equity requires good
sense, experience, and good nature for soliciting loyalty and devotion from subordinates.
12. Stability of Tenure:
Employees should be selected on the principles of stability of employment. They should be given
necessary training so that they become perfect. There should not be frequent termination of employees.
Stability of tenure is essential to get an employee accustomed to new work and succeeding in doing it
well.
13. Initiative:
Within the limits of authority and discipline, managers would encourage their employees for
taking initiative. Initiative is concerned with thinking out and execution of a plan. Initiative increases zeal
and energy on the part of human beings.
14. Esprit de Corps:
This is the principle of Union is strength and extension of unity of command for establishing
team work. Managers should infuse the spirit of team work in their subordinates.
Fayol made it clear that these principles can be applied to most organizations, but these are not
absolute principles. Organizations are at liberty to adopt those which suit them or to delete a few
according to their needs.
Max Webers Bureacracy Theory (1864 - 1924), Germany

Bureaucracy in this context is the organisational form of certain dominant characteristics such
as a hierarchy of authority and a system of rules.
Bureaucracy in a sense of red tape or officialdom should not be used as these meanings are
value-ridden and only emphasize very negative aspects of the original Max Weber model.
Through analyses of organisations Weber identified three basic types of legitimate authority:
Traditional, Charismatic, Rational-Legal.
Authority has to be distinguished from power in this discussion. Power is a unilateral thing - it
enables a person to force another to behave in a certain way, whether by means of strength or
by rewards. Authority, on the other hand, implies acceptance of the rules by those over whom
it is to be exercised within limits agreeable to the subordinates that Weber refers to in
discussing legitimate authority.
Weber presented three types of legitimate authority:
Traditional authority: where acceptance of those in authority arose from tradition and
custom.
Charismatic authority: where acceptance arises from loyalty to, and confidence in, the
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personal qualities of the ruler.

Rational-legal authority: where acceptance arises out of the office, or position, of the person
in authority as bounded by the rules and procedures of the organization.
It is the rational-legal authority form that exists in most organisations today and this is the form
to which Weber ascribed the term 'bureaucracy'.
The main features of bureaucracy according to Weber were:
a continuous organisation or functions bounded by rules
that individuals functioned within the limits of the specialisation of the work, the degree
of authority allocated and the rules governing the exercise of authority
a hierarchical structure of offices
appointment to offices made on the grounds of technical competence only
the separation of officials from the ownership of the organisation
the authority was vested in the official positions and not in the personalities that held
these posts. Rules, decisions and actions were formulated and recorded in writing.
It is not coincidence that Weber's writings were at a time of the major industrial revolutions and
the growth of large complex organisations out of the cottage industries and/or entrepreneurial
businesses.
The efficiency of this rational and logistical organisation shares a considerable amount of
common ground with the thinking of Fayol. In particular, features such as scalar chain,
specialisation, authority and the definition of jobs which were so essential to successful
management as described by Fayol, are typical of bureaucracy. There is also little doubt that
Weber's ideas concerning specific spheres of competence and employment based on technical
competence would have considerable appeal for Taylor's scientific managers.
Advantages
Appointment, promotion and authority were dependent on technical competence and
reinforced by written rules and procedures of promoting those most able to manage
rather than those favoured to manage. We take a lot of this for granted in the UK today.
Anything else is regarded as nepotism and corruption.
The adoption of bureaucratic type of management systems allow organisations to grow
into large complex organised systems that are focused towards formalised explicit goals.
It cannot be stated strongly enough that the Weber theory has the advantage of being
used as a 'gold standard' on which to compare and develop other modern theories.
Disadvantages
Subsequent analysis by other researchers have identified many disadvantages:
Tendency for organisations to become procedure dominated rather than goal dominated.
Tendency for heavily formalised organisational roles to suppress initiative and flexibility
of the job holders.
Rigid behaviour by senior managers can lead to standardised services that do not meet
the needs of the client.
Rigid procedures and rules are demotivating for the subordinates that work in the
organizations.
Exercise of control based on knowledge as advocated by Weber has led to the growth of
'experts' whose opinions and attitudes may frequently clash with those of the more
generalised managers and supervisors.
Behavioral School
The behavioral school has had a profound influence on management. Typical behavioral school
topics include motivation, communication, leadership, organizational politics, and employee
behavior. This approach was stimulated by a number of writers and theoretical movements.
Particularly, two branches contributed to the behavioral school: the human relation movement
and the behavioral science approach..
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The Human Relations Movement

The human relations movement grew from the Hawthorne studies. A group of Harvard
researchers, headed by Elton Mayo, conducted a series of experiments on worker productivity
in 1924 at the Hawthorne plant of Western Electric Company in Illinois. These experiments have
come to be know as the Hawthorne studies.
The Harvard researches suggested that the way people were treated had an important impact
on performance; individual and social processes played a major role in shaping worker attitudes
and behavior. Therefore, management must recognize the importance worker's needs for
recognition and social satisfaction. Mayo termed this concept of the social man: individuals are
motivated by social needs and good on-the-job relationships and respond better to work-group
pressure that to management control activities.
Two of the best-known contributors who helped advance the human relations movement were
Abraham Maslow and Douglas McGregor.
Abraham Maslow (1908-1970) , a practicing psychologist, observed that his patients are
motivated by a sequence of needs, including monetary incentives, social acceptance, and
others. He generalized his work and suggested a hierarchy of needs. Maslow's theory of
"hierarchical needs" was a primary factor in the increased attention that managers began to
give to the work of academic theorists.
Douglas McGregor (1906-1970) advanced two beliefs for managers about human behaviorTheory X and Theory Y.Theory X takes a relative pessimistic and negative view of workers.
Theory Y represents the assumptions that human relations advocates make. The point of
Theory Y is that organizations can take advantage of the imagination and intellect of all its
employees.
Behavioral Sciences Approach
Organizational behavior acknowledges that behavior is much more complex than human
relations realized. Systematic research is the basis for this approach. This research draws from
psychology, sociology, anthropology, economies, and medicine. All of the remaining chapters of
this thesis contain research findings and applications that can be attributed to the behavioral
sciences approach to the study of management.
The Management Science School
The management science school provides managers with a scientific basis for solving problems
and making decisions. This school grew directly out of the World War II groups (called
operational research teams in Great Britain and operations research teams in the United
States).Churchman, Ackoff, and Arnoff define the management science approach as an
application of the scientific method to problems arising in the operation of a system, and the
solving of these problems by solving mathematical equations representing the system.
The term management science sounds very much like scientific management (the approach
developed by Taylor), but the two not be confused. The distinguishing characteristics include:
* Managerial decisionsmaking Scientific management is concerned with production tasks and
the efficiency of workers and machines. Management science stresses that efficiency comes
from proper planning and making the right decisions.
* Mathematical models In management science, a mathematical model attempts to reduce a
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managerial decision to a mathematical form so that the decision-making process can be

simulated and evaluated before the actual decision is made.
* Computer applications The use of the computer has been the driving force behind the
emergence of the management science approach.
* Evaluation criteria In management science, model have been evaluated against a set of
effectiveness criteria (e.g., revenue, return on investment, and cost savings).
Operations management refers to the various models and techniques in use. Some of the
commonly used methods are forecasting, inventory modeling, linear and nonlinear
programming, scheduling, simulation, networks models, probability analysis, and break-even
analysis. Operations management specialists use these techniques to solve manufacturing
problems.
Management information system (MIS) is the most recent subfield of the management science
perspective. MIS is a system designed to provide information to managers in a timely and costefficient manner. It entails and integrated data base (usually in a computer), a hierarchical
information structure, and an orientation toward decision support.
Because management science thought is still evolving, more specific technic can be expected.
Hawthorne Studies conducted by Elton Mayo

The term 'Hawthorne effect' was derived from the location where the phenomenon was first
witnessed during a series of experiments: Hawthorne, Illinois. What are commonly known as
'the Hawthorne experiments' consisted of two studies conducted at the Western Electric
Company's Hawthorne Works, just outside of Chicago, from 1924 to 1932. The Hawthorne
studies were designed to find ways to increase worker productivity.
Part I - Illumination Experiments (1924-27)
These experiments were performed to find out the effect of different levels of illumination
(lighting) on productivity of labour. The brightness of the light was increased and decreased to
find out the effect on the productivity of the test group. Surprisingly, the productivity increased
even when the level of illumination was decreased. It was concluded that factors other than
light were also important.
Part II - Relay Assembly Test Room Study (1927-1929)
Under these test two small groups of six female telephone relay assemblers were selected.
Each group was kept in separate rooms. From time to time, changes were made in working
hours, rest periods, lunch breaks, etc. They were allowed to choose their own rest periods and
to give suggestions. Output increased in both the control rooms. It was concluded that social
relationship among workers, participation in decision-making, etc. had a greater effect on
productivity than working conditions.
Part III - Mass Interviewing Programme (1928-1930)
21,000 employees were interviewed over a period of three years to find out reasons for
increased productivity. It was concluded that productivity can be increased if workers are
allowed to talk freely about matters that are important to them.
Part IV - Bank Wiring Observation Room Experiment (1932)
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A group of 14 male workers in the bank wiring room were placed under observation for six
months. A worker's pay depended on the performance of the group as a whole. The researchers
thought that the efficient workers would put pressure on the less efficient workers to complete
the work. However, it was found that the group established its own standards of output, and
social pressure was used to achieve the standards of output.
Conclusions
of
Hawthorne
Studies
Experiments
The conclusions derived from the Hawthorne Studies were as follows :1. The social and psychological factors are responsible for workers' productivity and job satisfaction.
Only good physical working conditions are not enough to increase productivity.The informal
relations among workers influence the workers' behaviour and performance more than the formal
relations in the organisation.
2. Employees will perform better if they are allowed to participate in decision-making affecting their
interests.
3. Employees will also work more efficiently, when they believe that the management is interested
in their welfare.
4. When employees are treated with respect and dignity, their performance will improve.
5. Financial incentives alone cannot increase the performance. Social and Psychological needs must
also be satisfied in order to increase productivity.
6. Good communication between the superiors and subordinates can improve the relations and the
productivity of the subordinates.
7. Special attention and freedom to express their views will improve the performance of the workers .
Modern
Management
Theory:
Quantitative,
Contingency Approaches to Management!
System
and
The Modern Period (1960 to present). After, 1960 management thought has been turning somewhat
away from the extreme human relations ideas particularly regarding the direct relation between
morale and productivity. Present management thinking wishes equal emphasis on man and machine.
The modern business ideologists have recognized the social responsibilities of business activities and
thinking on similar lines. During the period, the principles of management reached a stage of
refinement and perfection. The formation of big companies resulted in the separation of ownership
and management.
This change in ownership pattern inevitably brought in salaried and professional managers in place
of owner managers. The giving of control to the hired management resulted in the wider use of
scientific methods of management. But at the same time the professional management has become
socially responsible to various sections of society such as customers, shareholders, suppliers,
employees, trade unions and other Government agencies.
Under modern management thought three streams of thinking have beers noticed since 1960:
(i) Quantitative or Mathematical Approach
(ii) Systems Approach.
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(iii) Contingency Approach.
Quantitative or Mathematical Approach or Management Science

Approach:
(I)
Mathematics has made inroads into all disciplines. It has been universally recognised as an important
tool of analysis and a language for precise expression of concept and relationship.
Evolving from the Decision Theory School, the Mathematical School gives a quantitative basis for
decision-making and considers management as a system of mathematical models and processes.
This school is also sometimes called, Operations Research or Management Science School. The
main feature of this school is the use of mixed teams of scientists from several disciplines. It uses
scientific techniques for providing quantitative base for managerial decisions. The exponents of this
school view management as a system of logical process.
It can be expressed in terms of mathematical symbols and relationships or models. Different
mathematical and quantitative techniques or tools, such as linear programming, simulation and
queuing, are being increasingly used in almost all the areas of management for studying a wide
range of problems.
The exponents of this school believe that all the phases of management can be expressed in
quantitative terms for analysis. However, it is to be noted that mathematical models do help in the
systematic analysis of problems, but models are no substitute for sound judgement.
Moreover, mathematics quantitative techniques provide tools for analysis but they cannot be treated
an independent system of management thought. A lot of mathematics is used in the field of physical
sciences and engineering but mathematics has never been considered as separate school even in
these fields.
The contributions of mathematicians in the field of management are significant. This has contributed
impressively in developing orderly thinking amongst managers. It has given
exactness to the management discipline. Its contributions and usefulness could hardly be overemphasized. However, it can only be treated as a tool in managerial practice.
Limitations:
There is no doubt that this approach helps in defining and solving complex problems resulting in
orderly thinking. But the critics of this approach regard it as too narrow since it is concerned merely
with the development of mathematical models and solutions for certain managerial problems.
This approach suffers from the following drawbacks:

(i) This approach does not give any weight age to human element which plays a dominant role in all
organisations.
(ii) In actual life executives have to take decisions quickly without waiting for full information to
develop models.
(iii) The various mathematical tools help in decision making. But decision making is one part of
managerial activities. Management has many other functions than decision-making.
(iv) This approach supposes that all variables to decision-making are measurable and interdependent. This assumption is not realistic.
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(v) Sometimes, the information available in the business for developing mathematical models are not
upto date and may lead to wrong decision-making.
Harold Knootz. Also observes that it is too hard to see mathematics as a separate approach to
management theory. Mathematics is a tool rather than a school.
(ii)
Systems Approach:
In the 1960, an approach to management appeared which tried to unify the prior schools of thought.
This approach is commonly known as Systems Approach. Its early contributors include Ludwing Von
Bertalanffy, Lawrence J. Henderson, W.G. Scott, Deniel Katz, Robert L. Kahn, W. Buckley and J.D.
Thompson.
They viewed organization as an organic and open system, which is composed of interacting and
interdependent parts, called subsystems. The system approach is to look upon management as a
system or as an organised whole made up of subsystems integrated into a unity or orderly totality.
System approach is based on the generalization that everything is inter-related and inter-dependent.
A system is composed of related and dependent element which, when in interaction, forms a unitary
whole. A system is simply an assemblage or combination of things or parts forming a complex whole.
One of its most important characteristic is that it is composed of hierarchy of sub-systems. That is the
parts forming the major systems and so on. For example, the world can be considered to be a system
in which various national economies are sub-systems.In turn, each national economy is composed of
its various industries, each industry is composed of firms; and of course, a firm can be considered a
system composed of sub-systems such as production, marketing, finance, accounting and so on.
The basic features of systems approach are as under:
(i) A system consists of interacting elements. It is set of inter related and interdependent parts
arranged in a manner that produces a unified whole.
(ii) The various sub-systems should be studied in their interrelationships rather, than in isolation
from each other.
(iii) An organisational system has a boundary that determines which parts are internal and which are
external.
(iv) A system does not exist in a vaccum. It receives information, material and energy from other
systems as inputs. These inputs undergo a transformation process within the system and leave the
system as output to other systems.
(v) An organisation is a dynamic system as it is responsive to its environment. It is vulnerable to
change in its environment.
In the systems approach, attention is paid towards the overall effectiveness of the system rather than
the effectiveness of the sub-systems. The interdependence of the sub-systems is taken into account.
The idea of systems can be applied at an organizational level. In applying system concepts,
organizations are taken into account and not only the objectives and performances of different
departments (subsystems).
The systems approach is considered both general and specialized systems. The general systems
approach to management is mainly concerned with formal organizations and the concepts are
relating to technique of sociology, psychology and philosophy. The specific management system
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includes the analysis of organisational structure, information, planning and control mechanism and
job design, etc.
As discussed earlier, system approach has immense possibilities, A system view point may provide
the impetus to unify management theory. By definitions, it could treat the various approaches such as
the process of quantitative and behavioural ones as sub-systems in an overall theory of
management. Thus, the systems approach may succeed where the process approach has failed to
lead management out of the theory of jungle.
Systems theory is useful to management because it aims at achieving the objectives and it views
organization as an open system. Chester Barnard was the first person to utilise the systems approach
in the field of management.
He feels that the executive must steer through by keeping a balance between conflicting forces and
events. A high order of responsible leadership makes the executives effective. H. Simon viewed
organization as a complex system of decision making process.
Evaluation of System Approach:

The systems approach assists in studying the functions of complex organisations and has been
utilised as the base for the new kinds of organisations like project management organisation. It is
possible to bring out the inter-relations in various functions like planning, organising, directing and
controlling. This approach has an edge over the other approaches because it is very close to reality.
This approach is called abstract and vague. It cannot be easily applied to large and complex
organisations. Moreover, it does not provide any tool and technique for managers.
(iii)
Contingency or Situational Approach:
The contingency approach is the latest approach to the existing management approaches. During the
1970s, contingency theory was developed by J.W. Lorsch and P.R. Lawrence, who were critical of
other approaches presupposing one best way to manage. Management problems are different under
different situations and require to be tackled as per the demand of the situation.
One best way of doing may be useful for repetitive things but not for managerial problems. The
contingency theory aims at integrating theory with practice in systems framework. The behaviour of
an organisation is said to be contingent on forces of environment. Hence, a contingency approach is
an approach, where behaviour of one sub-unit is dependent on its environment and relationship to
other units or sub-units that have some control over the sequences desired by that sub- unit.
Thus behaviour within an organisation is contingent on environment, and if a manager wants to
change the behaviour of any part of the organization, he must try to change the situation influencing
it. Tosi and Hammer tell that organization system is not a matter of managerial choice, but contingent
upon its external environment.
Contingency approach is an improvement over the systems approach. The interactions between the
sub-systems of an organisation have long been recognised by the systems approach. Contingency
approach also recognises that organisational system is the product of the interaction of the sub
systems and the environment. Besides, it seeks to identify exact nature of inter-actions and interrelationships.
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This approach calls for an identification of the internal and external variables that critically influence
managerial revolution and organisational performance. According to this, internal and external
environment of the organisation is made up of the organisational sub-systems. Thus, the contingency
approach provides a pragmatic method of analysing organisational sub-systems and tries to integrate
these with the environment.
Contingency views are ultimately directed towards suggesting organisational designs situations.
Therefore, this approach is also called situational approach. This approach helps us to evolve
practical answers to the problems remanding solutions.
Kast and Rosenzweig give a broader view of the contingency approach. They say, The contingency
view seeks to understand the inter-relationships within and among sub-systems as well as between
the organization and its environment and to define patterns of relationships or configurations of
variables contingency views are ultimately directed toward suggesting organization designs and
managerial actions most appropriate for specific situations.
Features of Contingency Approach:

Firstly, the contingency approach does not accept the universality of management theory. It stresses
that there is no one best way of doing things. Management is situation, and managers should explain
objectives, design organisations and prepare strategies, policies and plans according to prevailing
circumstances. Secondly, managerial policies and practices to be effective, must adjust to changes in
environment.
Thirdly, it should improve diagnostic skills so as to anticipate and ready for environmental changes.
Fourthly, managers should have sufficient human relations skill to accommodate and stabilise
change.
Finally, it should apply the contingency model in designing the organization, developing its
information and communication system, following proper leadership styles and preparing suitable
objectives, policies, strategies, programmes and practices. Thus, contingency approach looks to hold
a great deal of promise for the future development of management theory and practice.
Evaluation:
This approach takes a realistic view in management and organisation. It discards the universal
validity of principles. Executives are advised to be situation oriented and not stereo-typed. So
executives become innovative and creative.
On the other hands, this approach does not have theoretical base. An executive is expected to know
all the alternative courses of action before taking action in a situation which is not always feasible.
MANAGEMENT AS A SCIENCE AND AN ART

The controversy with regard to management, as to whether it is a science or art is very old.
Specification of exact nature of management as science or art or both is necessary to specify the process
of learning of management. Management is not easy. It is not an exact science. In fact, it is seen as an
art that people master with experience.. When viewed as an art, management is remarkable, but natural
expression of human behavior. It is intuitive, creative and flexible. Managers are leaders and artists who
are able to develop unique alternatives and novel ideas about their organizations needs. They are
attuned to people and events around them and learn to anticipate the turbulent twists and turns around
them.
However, artistry in management is neither exact nor precise. Artists interpret experience and
express it in forms that can be felt, understood and appreciated by others. Art allows for emotion,
subtlety and ambiguity. An artist frames the world so that others can see new possibilities.
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Science is extraordinary. It is a method of doing things. It is the organized systematic expertise

that gathers knowledge about the world and condenses the knowledge into testable laws and principles.
When science is done correctly, it can advice us in all of our day to day decisions and actions. The
Process of scientific theory construction and confirmation can be viewed as involving the following
steps:1. The formulation of a problem or complex of problems based on observation.
2. The construction of theory to provide answers to the problem or problems based on inductions
from observations
3. The deduction of specific hypothesis from the theory.
4. The recasting of the hypothesis in terms of specific measures and the operations required to
test the hypothesis.
5. The devising of the actual situation to test the theorem; and
The actual testing in which confirmation does or does not occur
Management as an art
The artistic talents of the manager can be enriched by the usage of scientific tools. The artist in
any manager definitely has an edge. His creativity and productivity can be magnified by using the
correct scientific methods. The art of management existed long before automation. Without doubt, the
science has made the management easier. But focusing only on the science may lead to shift of focus of
the entire team and create overheads. Success of managers depends on how effectively they can use the
scientific aid to enhance their artistic skills. Medicine engineering, accountancy and the like require skills
on the part of the practitioners and can only be acquired through practice. Management is no exception
Art is concerned with particle knowledge and personal skill for doing out the desired results. In
management, a manager should have practical knowledge & skill. Otherwise his performance will be
adversely affected.
Management is a way of doing a specific action while doing the function of an art is to achieve the
success in a given action.
According to George R. Terry, "Art is bringing about of a desired result through application of skill."
Thus, art has 5 essential features.
i.
Practical Knowledge
ii. Personal Skill

iii. Concrete Result
iv. Constructive Skill
v. Improvement through practice
These 5 functions of art also belong to the management. When a manager uses his management
skill then he must have practical knowledge for solving managerial problem. A manager also has power
to face the problem to find out the result, which is only possible when he/she has constructive skills. To
improve the managerial skill, managerial work should be done on regular basis because regularity and
practice make the work effective. So, we can say that manager is an artist since he/she posses the skill
of getting the work done through and with the people. Therefore, it can be concluded that manager is an
artist and management is bound to be an art.
Management as a Science
Science refers to an organized and systematic body of knowledge acquired by mankind though
observation, experimentation and also based on some universal principles, concepts, and theories.
Principles of science are developed through testing & observation. With the help of concept of science it
can safely be concluded that management is also a science because it is based upon certain principle
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and concerned as a systematized body of knowledge, observation, test and experiment is a science,
however it is not exact as physics, chemistry, biology, etc.
Before trying to examine whether the management. is a science or not we have to understand the
nature of science. Science may be a described as a systematized body of knowledge pertaining to an
act of study and contains some general truths explaining past events or phenomena. It is Systematized
in the sense that relationships between variables and limit have been ascertained and underlying
principal discovered. Three important characteristics of science are.
1. It is a systematized body of knowledge and uses scientific methods for Observation;
2. Its principles are evolved on the basis of continued observation and experiment; and
3. Its principles are exact and have universal applicability without any limitations
Judging from these criteria, it may be observed that management too is a systematized body of
knowledge and its principles have evolved on the basis of observation not necessarily through the use
of scientific methods. However, if we consider science a discipline in the sense of our natural science
one is able to experiment by keeping all factors and varying one at a time. In the natural science it is
not only possible to repeat the same conditions over and over again, which enables the scientist to
experiment and to obtain a proof. This kind of experimentation-cannot be accompanied in the art of
management since we are dealing with the human element. This puts a limitation on management as a
science. It may be designated as
'inexact' or 'soft science
Management Roles:
Mintzberg proposed ten managerial roles a typical manager has to perform in discharging his day-to-day
activities. Mintzbergs ten managerial roles can be grouped as thoseconcerned with interpersonal
relationships, those concerned with transfer of information,and those concerned with decision-making.
Interpersonal Roles:
This refers to those types of managerial roles that involve people and other duties thatare ceremonial
and symbolic in nature. There are three types of interpersonal roles:
i) Figure head Role: Manager performs a role as symbolic head and accordingly he is obliged to
perform a number of routine duties of a legal or social nature. The typical activities include greeting
visitors, signing legal documents etc.
ii) Leader Role: As a leader of the department, manager gives direction to his employees and other
subordinates to fulfill the assigned goals and objectives. He is responsible for the motivation and
activation of subordinates. Also he is
response for staffing, training and associated activities. Some of the typical activities include goals
setting, providing guidance, review the progress of worketc.
iii) Liaison Role: The manager is required to maintain contact with external sources that provide
valuable information. These sources are individual or groups outside the managers unit and may be
inside or outside the organization. For this he as to
maintain self-developed network of outside contacts and informers who provide favors and information,
for example, acknowledging mail, doing external board work etc.
Informational Roles:
This refers to those types of managerial roles that involve receiving, collecting and disseminating
information. There are three types of informational roles:
iv) Monitor: Typically, manager is spanning the boundaries of the organization and trying to get
information from outside though various sources such as reading magazines, taking with other to learn
current developments, movements of competitors planning, program etc. Manager seeks and receives
variety of special information (much of it current) to develop thorough understanding of
organization and environment. He emerges as nerve centre of internal and external information about
the organization.
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v) Disseminator: M anager acts as conduits of information to organizational members. He is expected

to transmit information received from outside or from subordinates to member of the organization. Some
information is factual and This some may involve interpretation and integrating of diverse value positions
of organizational influencers. Some of the typical activities of this role include holding informational
meetings, making phone calls to relay information etc.
vi) Spokesman: Manager represents the organization to outsiders by performing the role as spokesman.
. In this context, the manager transmits information to outsiders on organizations plans, policies, results,
achievements, serves as expert
on the chosen field by giving value suggestion to the community etc. As mentioned earlier, he holds
board meeting periodically and gives information to the media.
Decisional Roles:
This refers to those types of managerial roles that revolve around making decision. There are four types
of decisional roles.
vii) Entrepreneur: As entrepreneur, manager initiates and oversees new projects that will improve their
organizations performance. He thoroughly analyses the strengths of the organization and the
opportunities available in the environment
and takes initiative to implement improvement projects to bring about worthwhile changes with in the
organization and continuously supervise designing new developmental projects. Some of the typical
activities include organizing strategy
and review sessions to develop new programs, instrumental in venturing novel projects etc.
viii) Disturbance Handler: As disturbance handler, managers take corrective action in response to
unforeseen problems within as well as outside the organization. Whenever any conflicts occur among the
subordinates regarding the sharing of resources, allocation of funds etc, and the manager intervene
appropriately and resolve those issues. He is responsible for corrective action when organization faces
important, unexpected disturbances.
ix) Resources Allocator: Manager is responsible for the allocation of organizational resources
physical, human, monetary resources of all kind and in effect, the making or approval of all significant
organizational decision. In order to perform this activity, he will be schedule meetings, requesting
authorization, and performing any activity that involves budgeting and the programming of subordinates
work.
x) Negotiator: Manager also performs as negotiators when they discuss and bargain with other groups
to gain advantage for their own units. Manager will negotiate with business partners in case the
organization is seeking alliances to venture projects or extend their operation in new marketing.
Management Skills:
Managers need certain skills in order to perform the duties and activities associated with various
functions. Katz found that managers need three essential skills or competencies. They are technical sills,
interpersonal skills and conceptual skills. It is reported that the relative importance of these skills varied
according to the managers level with in the organization. As managers progresses from lower level to
senior level, he is expected to acquire more of human relations and conceptual skills.
Technical skills:
This refers to acquisition of knowledge and proficiency in a certain specialized fields. For example,
mechanics work with tools, and their supervisors should have the ability to teach them how to use these
tools. Similarly accountants apply specific techniques in
doing their job. First line manger, as well as middle level managers, is required to acquire mastery over
the technical aspects of the organizational work operations. Technical skills include knowledge of and
proficiency in certain specialized fields, such as engineering, computers, finance, manufacturing etc.
Kanz proposed that technical skills becomes less important as manager moves into higher level of
management, but even top managers need some proficiency in the organizations specialty. For example,
senior executives with an IT background are required to know the different types of operating systems
and the current developments in the software industry to use their IT skills frequently in their position as
managers when it comes to handling new projects.
Interpersonal Skills:
It is ability to work with people; it is cooperative effort; it is team work; it is the creation of an
environment in which people feel secure and free to express their opinions
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Human or interpersonal skills represent the ability to work well with and understand others to build
cooperative effort within a team to motivate and to manage conflict. These skills are important for
manages at all levels. Managers need to be aware of their own attitudes, assumption and beliefs as well
as being sensitive to their subordinates perceptions needs, and motivations.
It is important to note that theses skills are called as soft skills and it is proved that the organizations
nurturing those soft skills within the organization are so successful in their business operations. Some of
the important soft skills include communicating, motivating, and leading, delegating and negotiating
skills. As managers deal directly with people within as well outside the organization, such types of
interpersonal skills are crucial in maintaining effective interpersonal relations. Manager with good
interpersonal skills are to get the best out of their people. They know how to communicate, motivate,
lead and inspire enthusiasms and trust.
Conceptual Skills:
It is the ability to see the big picture to recognize significant elements in a situation to understand the
relationships among the elements Managers must also have the ability to conceptualize and to think
about abstract situations. They must be able to see the organization as whole with holistic approach and
able to see the big picture of he organization. The manager must understand the relationships among
various subunits and to visualize how organizations fit into is broader environment. These abilities are
essential to effective decision making, and all managers must involve in making decisions. Conceptual
skills are needed by all
managers at all levels. Katz proposed that these skills become more important in top management
positions. The reason for this is that the top management managers often deals with abstract ideas,
where as lower-level manager normally spend more time
dealing with observable technical day-to-day operational activities.
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UNIT II
MANAGEMENT PROCESS or SCOPE OF MANAGEMENT
Briefly, there are 5 core functions that constitute Scope of Management functions or the process
of management. They are Planning, Organizing, Staffing, Directing and Controlling.
Scope /Process of Management
1. Planning
The first management function in scope of management functions that managers must perform is
PLANNING. Within this function plan is created to accomplish the mission and vision of the business
entity. Under the mission is considered the reason for the establishment, while under the vision is
considered where business entity is aiming. The plan must define the time component and to plan
necessary resources to fulfill the plan. Accordingly plan of organization is developed together with
required personnel; method of leading people is defined and controlling instruments for monitoring the
realization of plans. The guiding idea in the making of mentioned items is the realization of the objectives
and fulfilling the mission and vision of the business entity. Planning may be broadly defined as a concept
of executive action that embodies the skills of anticipating, influencing and controlling the nature and
direction of change.
Each organization should make a good first step, a good plan, because without it the organization takes a
great risk of mistakes and thus compromising their business.
2. Organizing
Organizing is the second function manager, where he had previously prepared plan, establish an
appropriate organizational structure in business organization. In part, it determines the ranges of
management, type of organizational structure, authority in the organization, types and ways of
delegating and developing lines of communication. The organization and its subsystems are placed
under the plan, which was created as part of functions, ie planning. Organizing basically involves analysis
of activities to be performed for achieving organizational objectives, grouping them into various
departments and sections so that these can be assigned to various individuals and delegating them
appropriate authority so that they can carry their work properly. In performing construction and
organization in particular must pay attention to formal and informal lines of communication, because if
these lines are not adequately monitored the possibility of collision between them, resulting in delays
and / or even failure to achieve the goal.
3. Staffing
Staffing, as the next function of management, consists of a selection of appropriate staff for the
organization to reach a goal / goals easier and more efficient. According to todays experience is well
known that it is difficult to financially evaluate, quality and efficient staff. Staff is one of the more
valuable, if not the most valuable resource in any successful organization. For this reason,
good planning of personnel policies, as a function of management, and corresponding execution of that
selection of high quality people is becoming increasingly important. The task of this management
function is to set rules related to employment and personnel policies. Staffing basically involves
matching jobs and individuals. This may require a number of functions like manpower planning,
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recruitment, selection, training and development, performance appraisal, promotion transfer, etc. The
responsibility for staffing rests on all managers at all levels of the organization. It increases as one goes
up in the organizational hierarchy. In order to facilitate the effective performance of staffing function,
personnel department is created in large organizations.
4. Directing
Direction is an important managerial function through which management initiates actions in the
organization. It is a function of management which is related with instructing, guiding and inspiring
human factor in the organization to achieve organization objectives. It is a function to be performed at
every level of management. Direction is a continuous process and it continues throughout the life of the
organization It initiates at the top level in the organization and follows to the bottom through the
hierarchy. It emphasizes that a subordinate is to be directed by his own superior only. Direction has dual
objectives. On the one hand, it aims in getting things done by subordinates and, on the other, to provide
superiors opportunities for some more important work which their subordinates cannot do.
5. Controlling
Control is any process that guides activity towards some pre-determined goals. It can be applied
in any field such as price control, distribution control, pollution control etc.It is an element of
management process and is defined as the process of analyzing whether actions are being taken as
planned and taking corrective actions to make these to conform to planning. Control process tries to find
out deviations between planed performance and actual performance and to suggest corrective actions
wherever these are needed. Controlling is a forward looking function as one can control the future
happenings and not the past. Every manager has to perform the control function in the organization. It is
a continuous process and control system is a co-ordinate integrated system.
Performance of various managerial functions in an integrated way ensures fair degree of coordination among individuals and departments. Co-ordination is related with the synchronization of
efforts which have amount, time and direction attributes. Co-ordination is thus treated as the essence of
management.
FUNCTIONS OF MANAGEMENT
The management process involves performance of certain fundamental functions. One useful
classification of managerial function has been given by Luther Gulick, who abbreviating them using the
word POSDCORB Planning, Organizing, Staffing, Directing, Co- Ordinating, Reporting and Budgeting.
George R Terry has mentioned four fundamental functions of management, Planning, Organizing,
Actuating and Controlling. In short, different scholars in the field of management have their own
classification of functions of management. Some scholars add few functions and delete some other
functions. The Important functions of management are discussed below: -
PLANNING
Meaning
Planning is the most crucial and foremost function of management. It is defined as the process of
setting goals and choosing the means to achieve those goals. A sound planning is inperative for the
successful achievement of the goals in the desired direction. It is rightly said well plan is half done. It
involves setting of objectives and goals, designing appropriate strategy and cource of action, and
framing plans and procedure etc for execution of the proposed activities under the project.
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Definitions
According to George R Terry, Planning is the selecting and relating of facts and making and
using of assumptions regarding the future in the visualization and formulation of proposed activities
believed necessary to achieve desired results.
According to Henry Fayol, Planning is deciding the best alternatives among others to perform
different managerial operations in order to achieve the predetermined goals.
Generally speaking, planning is deciding in advance what is to be done, that is, a plan is a
projected course of action.
Features of Planning
1.
Planning is looking in to the future
2.
It involves predetermined lines of action
3.
Planning is a continuous process
4.
Planning integrates various activities of an organization
5.
Planning is done for a specific period
6.
7.
It discovers the best alternatives out of available alternatives

Planning is a mental activity
8.
Planning is required at all levels of Management
9.
It is the primary functions of Management]
10.
Growth and prosperity of any organization is depends upon planning

Objectives of Planning
Planning in organization serve to realize the following objectives:
1.
To reduces uncertainty
2.
To bring co-operation and co-ordination in the organisation
3.
To bring economy in operations
4.
Helps to anticipate unpredictable contingencies
5.
To achieve the pre determined goals
6.
To reduce competition.
Advantages of Planning
Planning helps the organization to achieve its objectives easily. Some of the advantages of planning
are given below:
1.
It helps the better utilization of resources
2.
It helps in achieving the objectives
3.
It helps in achieving economy in operations
4.
It minimizes future uncertainties
5.
It improves competitive strength
6.
It helps effective control
7.
It helps to give motivation to the employees
8.
It develop rationality among management executives
9.
It reduces red tapism
10.
It encourages innovative thought
11.
It improves the ability to cope with changes.
12.
It create forward looking attitude in Management
13.
It helps in delegation of authority
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14.
It provide basis for control

Planning Process
It is not necessary that a particular planning process is applicable for all organization and for all
types of plans because the various factors that go into planning process may differ from plan to plan or
from one organization to another. This can be presented by using the
following diagram.
Perception of
opportunities
Establishing
sequence of
activities
Establishing
objectives
Formulation of
supporting plans
Planning
premises
Selection of
alternatives
Identification
of Policies
Evaluation of
alternatives
Perception of Opportunities:- It is the beginning of planning process. ThisProvides an opportunity to

set the objectives in real sense. It helps to take the advantage of opportunities and avoid threats. Once
the opportunities are perceived, the other steps of planning are undertaken.
1.
Establishing the objectives:- This stage deals with the setting of major organisational and unit
objectives. The organizational objectives should be specified in all key areas. Once organizational
objectives are identified, objectives of lower units can be identified in that context.
2.
Establishing planning premises:- It means deciding the condition under which planning
activities will be undertaken. Planning premises may be external or internal. The nature of planning
premises differs at different levels of planning.
3.
Identification of alternatives:- This point says that a particular objectives can be achieved
through various actions. Since all alternatives cannot be considered for further analysis, it is necessary
for the planner to reduce the number of alternatives.
4.
Evaluation of alternatives: - Various alternatives which are considered feasible may be taken
for detailed evaluation. It is evaluated on the basis of contribution of each alternative towards the
organizational objectives in the light of its resources and constraints.
5.
Selection of alternatives: - After the evaluation, the most fit one is selected. At the same time
a planner must be ready with alternatives, normally known as contingency plans, which can be
implemented in changed situation.
6.
Developing supporting plans: - After formulating the basic plan, various plans are devised to
support the main plan. These plans are known as derivative plans.
7.
Establishing sequence of activities: - After formulating basic and derivative plans, the
sequence of activities is determined, so that plans are put in to action.
8.
Devising a mechanism of Project monitoring and Evaluation.
Types of Plans
A manager is required to develop a number of plans to achieve the organizational objectives.

Three major types of plans can help managers to achieve their organizational goals.
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1. Operational Plans
2. Tactical Plans
3. Strategic Plans
1.Operational Plans: It is one that a manager uses to accomplish his or her job responsibilities. In
other words, it is the plan used to achieve operational goals. Operational goals are the specific result
expected from the departments, work groups and individuals. Operational plans may be single use plans
or ongoing plans.
a. Single use plans: It is applied to those activities which do not recur or repeat. A special sales
programme is an example of single use plan, because , it deals with the who, what, where, how
and how much of an activity. It includes:
(i)Budget: It is a statement of expected results expressed in quantitative terms for a definite
period of time. It is prepared keeping in view the objectives , resources and of the enterprise. It is a
useful control device and helpful in co-coordinating the activities. It predicts sources and amounts of
income and how much they are used for a specific project.
(ii)Programme: It is a sequence of activities to be undertaken for implementing the policies and
achieving the objectives of an organization. It tells what is to be done to achieve the goals.
b.
Continuing or ongoing plans: These are usually made once and retain their
value over a period of years while undergoing periodic revision and updates. The following plans are
included in this category.
(i)Policy: It provides broad guidelines for managers to follow when dealing with important areas
of decision making. It is basically a general statement that explains how a manager should attempt to
handle routine management responsibilities. They are standing answers to recurring questions.
(ii)Procedures: A procedure is a set of step by step direction that explains how activities or task
are to be carried out. An established procedure ensures uniformity of action. Most organization has
procedures for purchasing supplies and equipments. By defining steps to be taken and the order in which
they are to be done, procedures provide a standardized way of responding to a repetitive problem.
(iii) Rules: It is an explicit statement that tells an employee, what he or she can and cannot do.
Rules are definite and rigid. Rules are do and dont statements put into place to promote the safety
of employees and the uniform treatment and behavior of employees. For eg. Rules about absenteeism
permit supervisors to make discipline decision rapidly and with a high degree of fairness.
2. Tactical Plans: These are plans which usually span one year or less. It is concerned with what the lower
level units within each division must do, how they must do it, and who is in charge at each level. Tactics
are the means needed to activate a strategy and make it work.
3. Strategic Plan: It is an outline of steps designed with the goals of the entire organization in mind,
rather than with the goals of specific divisions. It look ahead over the four, five or even more years to
move the organization from where it currently to where it wants to be. Top managements strategic plan
for the entire organization becomes the frame work and sets dimension for the lower level planning.
Contingency Plan: These plans are used when the original plan proves inadequate because of
changing circumstances.
Limitations of Planning
Following are the limitations of Planning
1. Time consuming: The management cannot prepare any plan without taking much time . A
number of steps are required to complete planning process.
2. Costly: It is considered as an expensive process. A lot of money is to be spent for collection,
25
BIMS
analysis and editing of data.

3. False sense of security: The management people think that there is security, if planning is
properly adhered. But this is not true in practice.
4. Technological changes: The management is not in a position to change its policies according to
technological changes. It will affect the planning process.
5. Political climate: A change in the political climate leads to a change in the policy and attitude
towards different financial aspects. It will affect the planning process.
6. Lack of reliable data: The success of all the plans are based on the availability of reliable data. It is
very difficult to procure reliable data.
7. Initiative: Planning compels everyone to work as per plan. It reduces the scope for initiation from
the part of employees and they will become more mechanical.
8. Limitations of forecasts: Planning is fully based on forecasts. If there is any defect in forecasts, the
planning will lose its value.
ORGANISING
Meaning and Definition
The process of organizing involves establishing an intentional structure of roles for the staff at all
levels of hierarchy in the organization. It is the function of identifying the required activities, grouping
them into jobs, assigning jobs to various position holders, and creating a network of relationship, so
that the required functions are performed in a co-ordinated manner, leading to the accomplishment
of desired goals
According to Koonts O Donnel. Organizing involves the grouping of activities necessary to accomplish
goals and plans, the assignment of these activities to appropriate departments, and the provision of
authority delegation and Co-ordination.
According to GR Terry, Organizing is the establishing of effective behavioral relationship among persons
so that they may work together effectively and gain personal satisfaction in doing selected tasks under
given environmental conditions for the purpose of achieving some goal or objectives.
Steps in Organizing
The logical sequence of steps in organizing is mentioned below:1. Establishing objectives
2. Designing Plans and Policies
3. Identifying specific activities
4. Grouping activities according to available resources
5. Delegating the authority necessary to perform the activities.
6. Tying the groups together through authority relationship and communication.
Functions of Organisation
The following are the important functions of organization
1. Determination of activities:- It includes the deciding and division of various activities required to
achieve the objectives of the organization. The entire work is divided into various parts and sub parts.
2. Grouping of activities :- Here, identical activities are grouped under one department.
3. Allotment of duties to specified persons:- For the effective performance, the grouped activities
are allotted to specified persons.
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BIMS
4. Delegation of authority:- Assignment of duties should be followed by delegation of authority. It is

difficult to perform the duties effectively, if there is no authority to do it.
5. Defining relationship:- When a group of person is working together for a common goal, it is
necessary to define the relationship among them in clear terms.
6. Co- ordination of various activities:- The delegated authority and responsibility should be coordinated by a responsible person.
Principles of Organisation
The following are the important Principles to be followed by management for the success of an
organization.
1. Principle of definition: - It says that, it is necessary to define and fix the duties, responsibilities and
authority of each work. In addition to that the organizational relationship of each worker with others
should be clearly defined.
2. Principles of Objectives:- The objectives of different departs should be geared to achieve the main
objective of the organization.
3. Division of work:- A work should be assigned to a person according to his educational qualifications,
experience, skill and interest. It will result in attaining specialization in a particular area.
4. Principles of continuity: It is essential that there should be a re operation of objectives, re
adjustment of plants and provision of opportunities for the development of future management. This
process is taken over by every organization periodically.
5. Principles of Span of Control: This principles determines the number of subordinates a superior can
effectively manage.
6. Principles of Exception: Here, all the routine decisions are taken by the subordinates; senior
managers will only deal with exceptional matters. It is known as management by exception.
7. Principles of flexibility: The organizational set up should be flexible to adjust to the changing
environment of business.
8. Principles of Unity of Direction: All departmental goals are tuned to achieve common goal. So
there should be co-ordination of all the activities.
9. Principles of Balance: There are several units functioning separately under on organizational set up.
So, it is essential that the sequence of work should be arranged scientifically.
10. The scalar principle: It says that each and every person should know who is his superior and to
whom he is answerable.
11. Principle of efficiency: The work should be completed with minimum members, in less time, with
minimum resources and with the right time.
12. Delegation of Authority: Authority should be delegated to the subordinate for the successful
completion of assigned job.
13. Principles of responsibility: Each person is responsible for the work completed by him. So the
responsibility of the subordinates should be clearly defined.
14. Principles of Uniformity: The work distribution should be in such a manner that there should be an
equal status and equal authority and powers among the same line officers.
15. Simplicity and Accountability: The structures of the organization should be simple and the higher
authorities are accountable for the acts of their subordinates
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BIMS
Classification of Organization
1. Formal Organisation: It is an organizational structure which clearly defines the duties, responsibilities,
authority and relationship as prescribed by the top management. It represents the classification of
activities within the enterprise, indicate who reports to whom and explains the vertical flow of
communications which connects the chief executive to the ordinary workers.
2. Informal Organisation: It is an organizational structure which establishes the relationship on the
basis of the likes and dislikes of officers without considering the rules, regulations and procedures. The
friendship, mutual understanding and confidence are some of the reasons for existing informal
organization.
Differences between formal and informal Organisation:
Formal Organisation
Informal Organisation
1.It is created deliberately
1. It is spontaneous.
2.Authority flows from top to bottom
2. Informal authority flows from top to bottom
3.It is created for technological purpose
or horizontally.
4.It is permanent and stable
3. It arises from mans quest for social
5.It gives importance to terms of authority and satisfaction
function.
4. There is no such permanent nature and
6. It arises due to delegation of authority
stability
7.Duties and responsibilities of workers are 5. It gives importance to people and their
given in writing
relationship.
8. Formal organization may grow to maximum 6. It arises due to social interaction of people
size
7. No such written rules and duties.
8. Informal organisation tends to remain
smaller.
1. Line Organisational Structure:

A line organisation has only direct, vertical relationships between different levels in the firm. There are
only line departments-departments directly involved in accomplishing the primary goal of the
organisation. For example, in a typical firm, line departments include production and marketing. In a line
organisation authority follows the chain of command.
Features:
Has only direct vertical relationships between different levels in the firm.
Some of the advantages of a pure line organisation are:
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BIMS
(i) A line structure tends to simplify and clarify responsibility, authority and accountability relationships.
The levels of responsibility and authority are likely to be precise and understandable.
(ii) A line structure promotes fast decision making and flexibility.
(iii) Because line organisations are usually small, managements and employees have greater closeness.
However, there are some disadvantages also. They are:
(i) As the firm grows larger, line organisation becomes more ineffective.
(ii) Improved speed and flexibility may not offset the lack of specialized knowledge.
(iii) Managers may have to become experts in too many fields.
(iv) There is a tendency to become overly dependent on the few key people who an perform numerous
jobs.
2.Line and staff organizational structure

It is a combination of line and functional structures. In this organisation a structure, the authority flows in
a vertical line and get the help of staff specialist who are in advisory. When the line executives need
advice,
information
about
any
specific
area,
these
staff
specialists
are
consulted.
For example Chief accountant has command authority over accountants and clerks in the accounts
departments but he has only advisory relationship with other departments like production or sales.
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BIMS
Advantages
Line
managers
are
provided
by
expert
advice
by
these
specialists.
Staff managers provide specialist advice which can improve quality of decisions in various departments.
Disadvantages
Line
managers
and
staff
managers
might
have
conflicts
on
particular
issues.
Line and staff managers might not be clear as to what the actual area of operations is and what is
expected
of
them.
Co-ordination
may
be
problem.
Staff personnel are not accountable for the results and thus may not take tasks seriously.
However, Line and staff organisation is very suitable for large organisation.
3.Project Organisation
The project structure consists of a number of horizontal organisational units to complete projects of a
long duration. A team of specialists from different areas is created for each project. Usually this team is
managed by the project manager. The project staff is separate from and independent of the functional
departments.
Advantages
Special attention can be provided to meet the complex demand of the project.
It allows maximum use of specialist knowledge thus chances of failure are very less.
Project staff works as a team towards common goal which results in high motivation level for its
members.
Disadvantages
As the project staff consists of personnel from diverse fields, it might be quite challenging for the project
manager to coordinate among them.
4.Matrix Organisation
Matrix organisation combines two structures functional departmentation and project structure.
Functional department is a permanent feature of the matrix structure and retains authority for
overall operation of the functional units.
Project teams are created whenever specific projects require a high degree of technical skill and
other resources for a temporary period.
Project team form the horizontal chain and functional departments create a vertical chain of
command.
Members of a particular team are drawn from the functional departments and are placed under
the direction of a project manager who has the overall responsibility of a particular project.
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BIMS
Advantage
Is oriented towards end results.
Professional identification is maintained
Pinpoints product-profit responsibility

Disadvantages
Conflict in organisation authority exists.
Possibility of disunity of command exists
Requires manager effective in human relations

Matrix organisations is used in industries with highly complex product systems for example, aerospace
industry where project teams are created for specific space or weapon systems.
5.Functional Organisation
The organisation is divided into a number of functional areas. This organisation has grouping of activities
in accordance with the functions of an organisation such as production, marketing, finance, human
resource
and
so
on.
The specialist in charge of a functional department has the authority over all other employees for his
function.
Advantages
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BIMS
Is logical and reflection of functions
Follows principle of occupation specialisation
Simplifies training
Better control as the manger in charge of each functional department is usually an specialist.
Disadvantages
Overspecialisation and narrow viewpoints of key personnel can limit the organisation growth.
Reduced coordination between functions.
Conflicts between different functions could be detrimental for the organisation as a whole.
Difficult for general managers to coordinate different departments.

However, it is much suitable for large organisations where there is ample scope for specialisation. Once
harmony and proper coordination among different functions is achieved, it could lead to sure success for
an organisation.
6.Divisional Structure
Divisional structure typically is used in larger companies that operate in a wide geographic area or that
have separate smaller organizations within the umbrella group to cover different types of products or
market areas. For example, the now-defunct Tecumseh Products Company was organized divisionally-with a small engine division, a compressor division, a parts division and divisions for each geographic
area to handle specific needs.
The benefit of this structure is that needs can be met more rapidly and more specifically; however,
communication is inhibited because employees in different divisions are not working together. Divisional
structure is costly because of its size and scope. Small businesses can use a divisional structure on a
smaller scale, having different offices in different parts of the city, for example, or assigning different
sales teams to handle different geographic areas.
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BIMS
DELEGATION OF AUTHORITY
AUTHORITY
It is the power to make decisions which guide the actions of others. In other words, it is the power to give
orders and make sure that these orders are obeyed. In order to finish the work in time, there is a need to
delegate authority and follow the principles of division of labour.
Definitions
According to Koonts and ODonnell, Authority is the power to command others to act or not to act in a
manner deemed by the possessor of the authority to further enterprise or departmental purposes.
According to Luis Allen,It is the sum of powers and rights entered to make possible the performance of
the work delegated.
RESPONSIBILITY
It is the obligation to do something. In other words, it is the obligation to perform the tasks, functions, or
assignments of the organization. The essence of responsibility is obligation. If a person is entrusted with
any work, he should be held responsible for the work that he completes
Definitions
According to Davis, Responsibility is the obligation of individual to perform the assigned duties to the
best of his ability under the direction of his executive leader.
In the words of Theo Haimann, Responsibility is the obligation of subordinates to perform the duty as
required by his superior.
DELEGATION OF AUTHORITY
Delegation is a process which enables a person to assign a work to others with adequate authority to do
it. The authority can be delegated but not the responsibility. Delegation of authority is considered to be
one of the most important methods of training subordinates and building morals. It is acknowledged that
delegation of authority is one of the surerest and best methods of getting better results.
STEPS IN SUCCESSFUL DELEGATION PROCESS

The following steps will help the successful delegation of authority.
1. Deciding the goals to be achieved: The purpose of delegation is to enable efficient
accomplishment of organizational objectives. If it is not clearly defined, the subordinate may hesitate to
accept the authority.
2. Establishment of definite responsibility: The authority and responsibility of each subordinate
should be clear in terms. It helps to avoid duplication of authority.
3. Determining what to delegate: This will necessitate the evaluation of the capacity of the individual
and needs of the organization.
4. Training: Subordinate should be properly trained in handling delegated work.
5. Control system: There should be a suitable control system to keep a careful watch over the
performance of the subordinates.
CENTRALISATION AND DECENTRALISATION

Centralization: It means concentration of decision making authority at the top level management. All
the decision are taken by the top management without delegating to the subordinate. As far as a big
organization is concerned, it is not possible to run the organization for long period without delegating the
authority.
Decentralization: In decentralization, each section has its own workers to perform activities within the
department. According to Allen, Decentralisation refers to the systematic efforts to delegate to the
lowest levels all authority except that which can only be exercised at central point.
Advantages of Decentralization
1. It saves the time of top executive and give relief to the top executive
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BIMS
2. Decentralisation gives the subordinates the freedom to act and make some decisions. It gives him a
feeling of status and recognition.
3. It helps to coordinate the activities of the organization in a better way.
4. It helps to take prompt and quick action at the earliest.
5. It is a best devise to develop future business executives
Disadvantages of Decentralisaiton
1. It is suitable only to a big business enterprise.

2. It creates problem of co-ordination among various levels
3. There is a chance to miss the uniformity in policies and procedures.
Span of control
Span of Control means the number of subordinates that can be managed efficiently and effectively by a
superior in an organization. It suggests how the relations are designed between a superior and a
subordinate in an organization. Span of control is of two types:
1. Narrow span of control: Narrow Span of control means a single manager or supervisor
oversees few subordinates. This gives rise to a tall organizational structure.
2. Wide span of control: Wide span of control means a single manager or supervisor oversees a
large number of subordinates. This gives rise to a flat organizational structure.
<-
Narrow span
<-
Wide span
DIRECTION
Directing is the process of integrating the people within the organisation so as to obtain their willing cooperation towards meeting the pre determined goals.
According to Theo Haimann, Directing consists of the process and techniques utilized in issuing
instructions and making certain that operations are carried on as originally planned.
Principles of Direction:
The following are the basic principles of directing:
1. Integration of individual and organizational goals: This implies that the individuals contribute to
the organizational goals to their maximum capabilities and at the same time satisfy their personal needs.
2. Participative decision making: Effective direction can be achieved by involving individuals and
groups in decision making process.
3. Delegation of Authority: The subordinates should be delegated with adequate authority in order to
facilitate decision making.
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BIMS
4. Effective communication: The managers should ensure free flow of communication at all levels of
organizational hierarchy.
5. Right type of leadership: The management should develop leadership quality among the
employees.
6. Unity of Command: This principle states that the subordinates should get directives from one
superior only and should be accountable to one superior only.
7. Appropriateness of direction techniques: The direction techniques selected should be according
to the situation.
8. Follow up: The management should see that whether the direction issued by them is carried out or
not.
In simple words, direction can be described as providing guidance to workers for doing work.
Techniques of Direction
There are mainly three techniques are used for direction:

1. Consultative direction: Under this method, the supervisor has consultation with his subordinates
before issuing a direction. The consultation is made to find out the feasibility, enforceability and nature of
problem.
2. Free rein direction: Under these techniques, the subordinate is encouraged to solve the problem
independently. The subordinate should take initiative to solve the problem.
3. Autocratic direction: It is opposite to free rein direction. The supervisor commands his
subordinates and has close supervision over them.
CO-ORDINATION
It is a process of integrating the interdepartmental activities as unified action towards the fulfillment of
the predetermined common goals of the organization.
According to Henry Fayol, To co-ordinate is to harmonize all the activities of a concern so as to
facilitate its working and its success. In a well co-ordinated enterprise, each department or division,
works in harmony with other and is fully informed of its role in the organization. The working schedule
of various departments is constantly turned to circumstances
Types of Co-ordination
The following are the important types of co-ordination.
1. Vertical co-ordination: - It refers to co-ordination between activities of a manager and his subordinates
2. Horizontal co-ordination:- It refers to co-ordination among peers ie employees working at the same
levels in organizational hierarchy and among various departments.
3. Diagonal co-ordination: It is co-ordination among the users and between users and service personnel,
which is achieved through understanding, negotiation and voluntary effort.
CONTROLLING
The Control function is closely related with all other functions of management. The management
control is the process of ensuring that the actual plan implementation matches with the original plan.
It is an ongoing and dynamic function and linked with other function of the management in a circular
relationship.
Definition
According to Koonts ODonnel, Controlling is the measurement of accomplishment against the
standards and the correction of deviation to assure attainment of objectives according to plan.
Steps in Control Process
The control process involves four basic steps as mentioned below:-
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BIMS
1. Establishing standards:- Standard represents criteria of performance. This implies the statement of
goals and objective envisaged under the planning process are stated in clear and measurable terms
along with specific milestones. The standard should have some characteristics to produce effective
performance.
2. Measurement of performance against standards: The measurement of performance is an
ongoing process. Several techniques are used by the management to measure the performance.
3. Comparing the actual performances with standards: The measured results are compared with
the project and standards. In case the performance meets the standards, then it would mean that the
performance or activity is progressing in the desired direction.
4. Taking corrective action: In the situations when performance does not confirm to the specified
criteria of the standards, then it is necessary to take corrective measures to deal with the observed
deviations in the performance.
Decision making
Decision making is a daily activity for any human being. There is no exception about that. When it
comes to business organizations, decision making is a habit and a process as well.
Effective and successful decisions make profit to the company and unsuccessful ones make losses.
Therefore, corporate decision making process is the most critical process in any organization.
In the decision making process, we choose one course of action from a few possible alternatives. In the
process of decision making, we may use many tools, techniques and perceptions.
In addition, we may make our own private decisions or may prefer a collective decision.
Usually, decision making is hard. Majority of corporate decisions involve some level of dissatisfaction or
conflict with another party.
Let's have a look at the decision making process in detail.
Steps of Decision Making Process
Following are the important steps of the decision making process. Each step may be supported by
different tools and techniques.
36
BIMS
Step 1: Identification of the purpose of the decision

In this step, the problem is thoroughly analysed. There are a couple of questions one should ask when it
comes to identifying the purpose of the decision.
What exactly is the problem?
Why the problem should be solved?
Who are the affected parties of the problem?
Does the problem have a deadline or a specific time-line?
Step 2: Information gathering
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BIMS
A problem of an organization will have many stakeholders. In addition, there can be dozens of factors
involved and affected by the problem.
In the process of solving the problem, you will have to gather as much as information related to the
factors and stakeholders involved in the problem. For the process of information gathering, tools such as
'Check Sheets' can be effectively used.
Step 3: Principles for judging the alternatives
In this step, the baseline criteria for judging the alternatives should be set up. When it comes to defining
the criteria, organizational goals as well as the corporate culture should be taken into consideration.
As an example, profit is one of the main concerns in every decision making process. Companies usually
do not make decisions that reduce profits, unless it is an exceptional case. Likewise, baseline principles
should be identified related to the problem in hand.
Step 4: Brainstorm and analyse the different choices
For this step, brainstorming to list down all the ideas is the best option. Before the idea generation step,
it is vital to understand the causes of the problem and prioritization of causes.
For this, you can make use of Cause-and-Effect diagrams and Pareto Chart tool. Cause-and-Effect
diagram helps you to identify all possible causes of the problem and Pareto chart helps you to prioritize
and identify the causes with highest effect.
Then, you can move on generating all possible solutions (alternatives) for the problem in hand.
Step 5: Evaluation of alternatives
Use your judgement principles and decision-making criteria to evaluate each alternative. In this step,
experience and effectiveness of the judgement principles come into play. You need to compare each
alternative for their positives and negatives.
Step 6: Select the best alternative
Once you go through from Step 1 to Step 5, this step is easy. In addition, the selection of the best
alternative is an informed decision since you have already followed a methodology to derive and select
the best alternative.
Step 7: Execute the decision
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BIMS
Convert your decision into a plan or a sequence of activities. Execute your plan by yourself or with the
help of subordinates.
Step 8: Evaluate the results
Evaluate the outcome of your decision. See whether there is anything you should learn and then correct
in future decision making. This is one of the best practices that will improve your decision-making skills.
UNIT III
Organisational Behaviour
OB is concerned with study of the structure, functioning and performance of the organizations and the
behavior of the groups and individual within them. Study of human behaviour, attitude and
performance within an organizational settings, drawing on theory, methods and principles from such
disciplines as psychology, sociology and cultural anthropology to learn about
individual perception, values, learning capabilities and actions while working with groups and within the
total organization; analyzing the external environment affect on the organization and its human
resources, missions,objectives and strategies
From these definitions we view of OB as :
1. A way of thinking
2. An inter-disciplinary field
3. Having a distinctly humanistic outlook
4. Performance Oriented
5. Seeing the external environment as critical
6. Using scientific method
7. Having an application orientation
Meaning : Organizational Behaviour is concerned with the understanding prediction and control of
human behaviour in organisations. In other words organizational behavior is a subset of management
activities concerned with understanding, predicting and influencing individual behaviour in organizational
settings. Organizational behavior attempts to understand
individuals in an organization as a basis of meeting individual need and achieving organizational
objectives.
Organizational behaviour is the study and application of knowledge about how people as individuals and
groups-act within organizations. In other words, the understanding of organizational behaviour can be
used by the managers in performing their jobs effectively.
Levels of analysis :
1. Individual
2. Team
3. Inter-group
4. Organizational
5. Inter-organizational
6. Societal
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BIMS
7. International
8. Global
Features of Organizational Behaviour

The essential characteristics of organizational behaviour are as follows :
i) An integral part of Management : OB is a part of general management and not the whole of
management. It represents behavioral approach to management. It is significant to note that because of
the importance of human behaviour in organizations, OB has assumed the status of a distinct field of
study.
ii) A field of study : OB is a field of study backed by a body of theory, research and application
associated with a growing concern for people at the workplace. Its study helps in understanding the
human behaviour in work organizations.
iii) Inter-disciplinary approach : The field of organizational behaviour is heavily influenced by several
other behavioral sciences and social sciences.
iv) Levels of Analysis : OB involves three levels of analysis of behaviourindividual behaviour, group
behaviour and behaviour of the organization itself. It provides a rational thinking about people.
v) Goal-oriented : OB is an action-oriented and goal-directed discipline. The major goals of
organizational behaviour are to understand, explain and predict human behaviour in the organization.
vi) Human Tool : OB is a human tool for human benefit. It helps in understanding and predicting the
behaviour of individuals.
vii) Science and Art : OB is both a science as well as an art. The systematic knowledge about human
behaviour is a science and the application of behavioral knowledge and skills is an Art.
viii) Satisfaction of Employees Needs : OB seeks to fulfill employees needs and aspirations. Every
employee in the organization wants to fulfill his needs through organizational activities.
Challenges for Organizational Behaviour :

The field of Organizational Behaviour is dynamic and not static.Behavioral scientists are continuously
engaged in updating behavioral skills to scope up with the emerging changes in the external
environment of the organizations. The major challenges of organizational behaviour are as follows
1) Globalisation of Business : Barriers to trade between different countries have been reduced to a great
extent. Managing in a global economy poses many challenges and opportunities. The global managers
must work to understand the local culture and the behavioral forces that affect the workforce in order to
manage the workers more effectively.
2) Adapting to different people : Managing workforce diversity is a major challenge currently face by
organizations. Globalization deals with differences between people of various countries, whereas
workforce diversity focuses on the differences among people within the given organization. If
management fails to accommodate diversity it would give rise to problems such as high employee
turnover, interpersonal conflicts and ineffective communication.
3) Improving Quality and productivity : TQM and reengineering are two widely used methods to improve
quality and productivity in organizations. Both of these methods require the participation and
cooperation of employees to achieve desired improvement in quality and productivity. OB gives some
valuable insights to help the managers plan and implement
these changes.
4) Satisfaction of Aspirations of Workforce : There has been a rise in the proportion of employees in
todays industries who belong to the younger generations whose aspirations are different from those of
the earlier generations. Todays workers are more career-oriented. The managers would be required to
evolve appropriate techniques to satisfy the higher level need of workers. They would be motivated by
better career prospects, growth opportunities and autonomy.
5) Management of Change : Earlier, the structure and processes in organizations were stable for a long
period of time and change took place only occasionally. But now in present times, change is a continuous
process. The challenge before managers is to prepare organizational members for change. They must
play the role of change agents or facilitators of change to improve organizational effectiveness.
6) Improving Ethical behaviour : In the business environment characterized by cut-throat competition,
organizations set very difficult targets for employees who under pressure break rules and even uses the
unfair practices to achieve the targets. Therefore ethically healthy environment is essential for improved
productivity and efficiency.
Contributing disciplines of OB :
Organizational behaviour is an applied behavioral science that is built upon contributions from a number
of behavioral disciplines. The main areas are psychology, sociology, social psychology, anthropology &
political science.
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BIMS
Psychology : Psychology is the science that attempts to measure,explain and at times change the
behaviour of humans and other animals.Early industrial/organizational psychologists were concerned
with problems of fatigue, boredom and other factors relevant to working conditions that could
disrupt/impede efficient work performance. More recently, their contributions have been expanded to
include, learning, perception, personality, emotions, training, leadership effectiveness, need &
motivational forces, job satisfaction,work design and job stress.
Sociology : Sociologists study the social system in which individuals fill their roles, that is, sociology
studies people in relation to their fellow human beings. Their significant contribution to OB is through
their study of group behaviour in organizations, particularly formal & complex organizations.
Social Psychology : Social psychology blends the concepts of psychology and sociology. It focuses on
the influence of people on one another. The major challenges deals with the issue of how to implement it
and how to reduce barriers to its acceptance.
Anthropology : Anthropology is the study of societies to learn abouthuman beings and their activities.
Anthropologists work on
cultures & environments. For ex. They have aided in understanding differences in fundamental values,
attitudes and behaviour among people in different countries and within different organizations.
Political Science : Political science studies the behaviour of individuals & group within a political
environment. It focuses on areas, such as, conflicts, intra-organizational politics & power.
Personality
. Meaning : The term personality has been derived from the Latin term persona which means to speak
through. The Latin term denotes the masks worn by actors in ancient Greece & Rome. According to
Gordon Allport, Personality is the dynamic organization within the individuals of those Psychological
systems that determine his unique adjustment to his
environment.
Or
According to Fred Luthans. Personality means how a person affects others and how he understands and
views himself as well as the pattern of inner and outer measurable traits, and the person-situation
interaction.
Personality emphasizes two aspects i) uniqueness and ii) consistency.
According to Fishback, Personality is the unique but stable set of characteristics that sets each individual
apart from others. In short, it offers to the testing way in which a given person is different from others.
Determinants/factors of personality :
1. Biological factors :
a) Heredity : It means the transmission of qualities from ancestor to descendant through a mechanism
laying primarily in the
chromosomes of the germ cells. It is more important in determining a persons temperament than his
values & ideas.
b) Brain : There is a general feeling that brain plays an important role in the development of ones
personality.
c) Physical feature : Good physical feature/appearance in an assess for the job of a sales person and
public relations.
2. Family & Social factors : Family & other social group also influence the development of an
individuals personality. The infant acquire those behaviour patterns that are customary & acceptable to
the standard of the family and the community where the family lives. The status of the family is the
society influence an individuals perception about self, others, work,money etc. Family & social factors
shape a persons personality through the process of socialization and identification. The identification
process
occurs when a person tries to identify himself with some person whom he feels ideal in family.
3. Situational factors : An individuals personality may change in different situations. The demand
of different situations may call for different aspects of ones personality there exist significant individual
difference which are further influenced by situational factors.
4. Temperament : Temperament & other non-intellectual traits are distributed according to the
normal distribution. Temperament is the degree to which one responds emotionally.
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5. Interest : The individual normally has many interests in various areas The top executive in any
organization do not have interest in common. Successful person in the same occupation have to a large
extent, the same interest.
6. Character : Character means honesty. It is resistance to cheating others. Character is very
important requirement for responsible jobs. It is essential to study the situation as well as the individual
before analyzing the behaviour that shows undesirable character.
7. Schema : It is an individuals belief, perception and attitude which the individual possesses towards
the management, the job, working conditions, Govt. & satisfaction derived from environment and cultural
influence of his community. The other social & idealogies responsible for his behaviour are the religion,
education and language.
8. Motive : Motive are the inner derives of the individual they represent goal directed to behaviour.
The behaviour of an individual goal varies because of his inner drives.
Personality traits :
Personality states are enduring characteristics that describe an individuals behaviour. The more
consistent the characteristics and the more frequently it occurs in diverse situations. The more important
that trait is in describing the individual.
Assumptions of personality traits :
1) Traits distinguish one personality from another.
2) Individual can be described in terms of construction of trains.
3)Traits can be quantifiable.
4) The amount of each trait that a person has is assumed to be stable fairly.
Criticism :
1. Traits may be too abstract.
2. Without knowing which traits are most important it is not possible to make adequate description of an
individuals personality.
3. More important the trait theory are essentially descriptive rather than analytical.
Development of personality :
1. Freudian stages :
Sigmund Freud propounded psychoanalytic theory of personality which is

based on the nation that man is motivated more by unseen forces than by conscious and rational
thought. This framework contains three aspects, though interrelated but often conflicting. These are Id,
ego & super Ego.
a) The Id : The Id is the source of psychic energy & seeks immediate gratification for biological or
instinctual needs. Freud believed that instincts could be classified under life instincts & death
instincts.Life instincts are hunger, thirst & sex, the energy involved in these is the libido. As an individual
matures, he learns to control the id.
b) The Ego : The Ego is the conscious and logical part of the human personality and is associated with
the reality principle. While Id represents the unconscious part, ego is conscious about the realities of the
external environment.
c) The Super Ego : The Super Ego represents societal & personal norms and serves as an ethical
constraint on behaviour. It can best be described as the conscience. The super ego provides norms to
ego to determine what is right or wrong.
According to Freud the stages of formation of personality are as follows
i) The Oral Stage 0-1 years
ii) The Anal Stage 1-3 years
iii) The Phallic Stage 3-4 years
iv) The Genital Stage During adolescence & adulthood
2. Erikson Stages : He criticized the heavy emphasis given by Freud on the sexual & biological
factors in the developing personality. He felt that relatively more attention should be given to the social
factors. Erikson identified eight stages of life that characterize the unending development of a person.
He characterized each stage by a particular conflict that needs to be resolved successfully before a
person can more to the next stage. Movement between stages is development as explained below.
i) Infancy : During the first year of life, a child resolves the basic crisis of trust vs. mistrust. An infant
who is cared for in an affectionate way learns to trust other people. Lack of love and affection results in
mistrust. This stage makes a serious impact on a child that influences events for remaining life.
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ii) Early Childhood : In the second and third years of life, a child begins to assert independence. If the
child is allowed to control these aspects of life that the child is capable of controlling, a sense of
autonomy will develop. If the child encounters constant disapproved by elders a sense of self-doubt and
shame is likely to develop.
iii) Play age : The four and five year old seeks to discover just how much he can do. If a child is
encouraged to experiment and to achieve reasonable goals, he will develop a sense of initiative. If the
child is blocked and made to feel incapable, he will develop a sense of guilt & lack of self-confidence.
iv) School age : From ages 6 to 12, a child learn many new skills and develops social abilities.
v) Adolescence : The crisis of the teenage years is to gain a sense of identity rather than to become
confused about who you are. While undergoing rapid biological changes, the teenager is also trying to
establish himself or herself as socially separate from the parents.
vi) Early adulthood : The young adult during the twenties faces the crisis of intimacy versus isolation.
The sense of identity developed during the teenage years allows the young adult to begin developing
deep and lasting relationship.
vii) Adulthood : During this stage, the adults face the crisis of generativity versus self-absorption. Selfabsorbed persons never
develop and ability to look beyond themselves. They become absorbed in career advancement and
maintenance. Generative
people see the world as much bigger than themselves.
viii) Mature Adulthood : The person is developed as a highly mature person. He has gained a sense of
wisdom and perspective that can really guide the younger generations.
Personality traits influencing OB :
1. Self Esteem : The way a person views the world depends a great deal on the self-concept or image he
has about himself. The self-concept plays an important role in shaping personality.
2. Locus of Control : It refers to an individuals belief that events are either within ones control (inner
locus of control) or are determined by forces beyond ones control.
3. Authoritarianism : It refers to a belief that there should be status and power differences among
people in organizations. An individual with authoritarian personality naturally prefer stable and
structured work environments which are governed by clean rules and procedures.
4. Machiavellianism : It represents the degree to which an individual is pragmatic, maintains emotional
distance and believes that ends can justify means.
5. Introversion & Extroversion : These terms are generally associated with an individuals sociability and
interpersonal orientation. Extroverts are gregarious and sociable individuals while introverts are shy,
quiet and retiring.
6. Type A and Type B : People who are impatient, aggressive and highly competitive are termed as
Type A personality. But those who are easy going, laid back and non competitive are termed as Type B
personality.
Personality Theories :
Perception
. Meaning : Perception is the set of the processes by which the individual became aware of and
interprets information about, the environment. A general discussion of behavioral concepts and might
identify perception as a single process, but actually it consists of several distinct processes. Perception is
the set of the processes by which the individual became aware of and interprets information about the
environment.
Perceptual process : Perception is the process through which people receive, select, organize and
interpret information from their environment. The components of perceptual process are as follows
Perceptual Mechanisms
1. Selection : Many things happen in the environment simultaneously.However one cannot pay equal
attention to all these things. Individual collects information not randomly but selectively depending on
the interests. Background experience, attitudes etc. people selectivity perceive aspects in a situation
that relate specifically to their area of activities or specialization.
2. Organization : After the information from the situation has been selected, it is organized to extract
meaning out of what is perceived by the individual. Thus, while selection is a subjective process,
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organizing is a cognitive process. The information organizes into a meaningful whole according to the
following principles: figure ground, perceptual grouping, implications and closure.
a) Figure ground : This principle implies that the perceived object, event or person stands out distinct
from its background and gets the cognitive attention of the individual. The significant & meaningful
portion is called the figure and the insignificant and meaningless portion is known as ground.
b) Perceptual grouping : It is the tendency to club the information into meaningful patterns. Grouping is
possible depending upon the similarity or proximity.
c) Simplification : Whenever people are overloaded with information they try to simplify it to make it
more meaningful & understandable. Simplification occurs when the perceiver ignores less salient
information and concentrate on important one while taking any decision.
d) Closure : People when faced with incomplete information have a tendency to fill the gaps themselves
to make it more meaningful. The tendency to form a complete message is known as closure.
3. Interpretation : It is an integral part of the perception process. Without interpretation, selection and
organization of information do not make any sense. Several factors contribute towards the interpretation
of data. More important among them are perceptual set. Stereotyping, halo effect, perceptual defence,
personality theory and projection.
Perceptual Errors & Distortion

The errors may arise due to selective perception, projection, stereotyping, haloeffect etc.
i) Selective perception : People differ in terms of their needs, motives, interests etc. They tend to
perceive what is in accordance with their needs, motives and interests. Sometimes, they distort
meanings so that
they may fit with what they want.
ii) Projection : It means attributing ones own traits or characteristics to the people being judged. The
tendency to attribute ones own characteristics to other people can distort perceptual judgments about
others.
iii) Stereotyping : Judging people on the basis of the characteristics of the group to which they belong is
called stereotyping.
iv) Halo effect : It refers to the tendency of drawing a general impression about an individual based on a
single characteristic such as intelligence, sociability or appearance. This is a very common type of error
committed by managers while evaluating the subordinates.
v) Impression : People often form impression of others on the first sight. Even before knowing any of
their personality traits, they start having impression and making assessment of individuals they meet for
the first time. This sometimes leads to perceptual distortion because first impression need not be the last
impression.
vi) Inference : There is a tendency on the part of some people to judge others on limited information.
vii) Attribution : When people give cause and effect explanation to the observed behaviour, it is known
as attribution. When a person observes an event in an organization, his evaluation of and reaction to
others behaviour may be highly influenced by his perception.
Application of perception in OB : Managers can use perception for the following processes.
i) Employment Interview ii) Performance Appraisal
iii) Assessing levels of efforts iv) Assessing Loyalty
Attribution Theory :
This theory explains the ways in which we judge people differently, depending on the meaning we
attribute to given behaviour. It suggests that when we observe an individuals behaviour we must
attempt to determine whether it was internally or externally caused. Internally behaviour are those we
believe to be under the personnal control of individual. Externally caused behaviour is what we imagine
the situation forced the individual to do.
There are three factors
a. Distinctiveness b. Consensus c. Consistency
Distinctiveness refers to whether an individual displays different behaviour in different situation. If
everyone who face a similar situation respond in the same way, we for this called that behaviour as
Consensus. When the person respond the same way every time like when a person comes late to office
10 or 15 min everyday, it is called as Consistency in behaviour.
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UNIT 4
Learning
Learning is part of every ones life. In our life, all complex behavior is learned. Learning is defined as any
relatively permanent change in behavior that occurs as a result of experience. Whenever any change
occurs learning is taken place in the individual. If an individual behaves, reacts, responds as a result of
experience which is different from others, a person has encountered some new learning experience in his
life. This definition consists of the following four key elements:
i) Change process: Learning involves some change in oneself in terms of observable actions explicitly
shown to others or change in ones attitude or thought process occur with oneself implicitly. Change may
be good or bad or positive or negative from an organization point of view. If a person is happened to
experience some negative incidents, that person will hold prejudices or bias or to restrict their out put.
On the contrary, if a person is encountering some good incident, that person is likely to hold positive
attitude.
ii) Permanent change: Due to whatever exposure a person encounters, the impact what it generates
may be long lasting and permanent. Hence, the change must be of relatively permanent. If change
occurs due to fatigue or alcohol consumption or temporary adaptation, it may be vanished once the goal
is achieved.
iii) Setting behavioral actions: Explicit changes occurring in behavior is the main goal of learning
process. A change in an individuals thought process or attitudes without any changes in any explicit
behavior will not be considered as learning process.
iv) Need for meaningful experiences: Some form of experiences is necessary for learning. Experience
may be acquired directly through observation or practice. If experience results in a relatively permanent
change in behavior, one can confidently say that learning has taken place. Theories of Learning: There
are three types of learning theories. These theories are classical conditioning, operant conditioning and
social learning.
Classical Conditioning Theory:

Russian physiologist Ivan Pavlov developed classical conditioning theory. When he was doing a research
on the chemical properties of saliva of dog, he noticed accidentally that the dog started salivating the
moment hearing the sound of a door of cupboard clinging.
Based on his observation, he wanted to do some experiment whether the dog can be conditioned to
respond to any neutral stimuli. He used a simple surgical procedure to operate the salivary glands of a
dog to measure accurately the amount of saliva.
Pavlovs Experiment: Pavlov conducted his experiment in three stages.
Stage I: When Pavlov presented the dog with a piece of meat, the dog exhibited a noticeable increase in
salivation. The meat is unconditional stimulus and salivation is unconditional response.
Stage II: In this stage, the dog was not given a peace of meat but only exposed to a sound of ringing
bell; the dog did not salivate to the mere sound of a ringing bell.
Stage III: Pavlov decided to link both the presentation of meat and the ringing of a bell one after the
other with an interval of 5 minutes. After repeatedly hearing the bell before getting the meat, the dog
began to salivate as soon the bell rang. There is an association or link between meat and ringing a bell.
After repeating the association between meat and ringing a bell, the dog started salivating merely at the
sound of the bell, even if no food was offered. The dog is now conditioned to respond to a sound of a bell
and started salivating. This is called classical conditioning process.
Thus, classical condition is defined as the formation of S-R link (Stimulus-Response) or habit between a
conditioned stimulus and a conditioned response through the repeated pairing of conditioned stimulus
with an unconditioned stimulus.
In this experiment, the meat is unconditioned stimulus, and the expected response that is, salivating to
the meat is called as unconditioned response. The sound of a bell is a neutral stimulus which does not
have any property to elicit salivation, is called as conditioned stimulus. Although it was originally neutral,
if the bell was paired with meat (unconditioned stimulus) it acquired the same property as meat eliciting
the salivation. The sound of a bell produced salivation when presented alone. This is called conditioned
response, that is, now the dog is conditioned to respond to the sound of a bell. Learning conditioned
response involves building up an association between a conditioned stimulus and unconditioned
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stimulus. When the stimuli, one is natural and the other one neutral are paired, the neutral one becomes
a conditioned stimulus and hence takes on the properties of the unconditioned stimulus. Closely
associated with classical conditioning as a vehicle for learning new behaviors are the phenomenon of
extinction, spontaneous recovery, stimulus generalization and stimulus discrimination.
Extinction
Once a dog has learned to salivate to a bell, does this reflex continue to occur if the bell is sounded for
many trails without the meat (unconditioned stimulus). Pavlov found that without meat, the bell elicits
less and less salivation on each trail and eventually stopped salivating once for all. This phenomenon is
called as extinction.
Spontaneous RecoveryBut they also found that extinction does not return the animal fully to the
unconditioned state. The mere passage of time following extinction can partially renew the conditioned
reflex, a phenomenon is known as spontaneous recovery. And a single pairing of the conditioned stimulus
with the unconditioned stimulus can renew the conditioned reflex, which can be abolished again only by
another series of extinction trails. On the basis of such findings, Pavlov concluded that the conditioned
reflex is not truly lost during the extinction, but is somehow inhibited, and that it can be disinhibited by
such means as the
passage of time or the recurrence of the unconditioned stimulus.
Stimulus Generalization
Learning research has demonstrated that individuals can respond to two separate stimuli in the same
way on the basis of their similarities. Once the dog is conditioned to salivate to sound of a bell, the dog is
also likely to respond to the sound of a buzzer sound which similar to the sound of a bell. In work life, for
example, coffee taster must learn to respond appropriately to various flavor and aromas in deciding
whether to accept or reject samples of coffee beans. Once they have learned what an ideal tastes and
aroma should be, they must judge and compare samples to this standard. After conditioning, stimuli that
resemble the conditioned stimulus will elicit the conditioned response even though they themselves are
never paired with the unconditioned stimulus. This phenomenon is called generalization. The magnitude
or likelihood of a response to the new stimulus is correlated with its degree of similarity to the original
conditioned stimulus. Thus a dog conditioned to salivate to a 100-hertz tone
also salivated to tones of other frequencies. But the farther the tone was in frequency from the original
conditioned stimulus, the less the dog would salivate to it.
For example, the acceptable or permissible level of standard is up to 4 degree variation, the taster will
check to what extent the samples of coffee ordered is matching to this permissible within the 4 degree
standard. On the basis of this similarity, the taster
responds in a similar fashion to all samples and accepts those which are matching to that standard. If a
person is learned to drive a car, and apply the same principles of driving to drive other mode of vehicles
such as truck, van etc.
Stimulus Discrimination
Individuals can respond differently in the presence of two separate stimuli on the basis of differences in
their characteristics. In the salivation experiment, the dog is conditioned to salivate to the sound of bell
and not to the sound of any other sound. In due course of time, the dog is able to discriminate the
sounds which are relatively different from the ideal bell sound. The dog, on the basis of stimulus
dissimilarity, responds differently to the sounds of different tones by salivating only to the sound of a bell
and not to any other mode of sound such as buzzer, metronome, musical note etc. The dog has shown
stimulus discrimination. In another experiment, dog is conditioned to salivate to the sight of Black Square
and not to any other colored square. After a series of trails in which presentation of gray square were
never followed by food and the presentation of the Black Square were always followed by food, the dog
stopped salivating to the gray square and continued to salivate to the black one. The researchers
continued this procedure with even-darker shades of gray, until the dog is conditioned to discriminate a
Black Square from the gray shades.
In traffic control, the drivers are learned to respond to different colors of signal and maintain the order in
the traffic regulation.
Stimulus generalization and discrimination are highly important as facilitator of learning through classical
conditioning. Because of our ability to recognize similarities, individuals are able to transfer what we
already know to new situations through the process of stimulus association and generalization. Classical
conditioning is a major avenue of learning among individuals in work organizations. For example, trainer
in organization take great care to make sure that conditions in the classroom or training
facility are as similar as possible to actual work conditions in order to assure that what is learned can be
transferred to the job.
Application of Classical Conditioning Principles at Work
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Whenever President or Vice-President of Corporate Office visits factory site the employees in the shop
floor will more attentive at work and look more prim, proper and active in their work life. It is quite
natural that top management personnel visit (Unconditioned Stimulus) evoking or eliciting a desired
response- being prim and proper at work from the employees (Unconditioned Response). The routine
cleaning of windows or floor of the administrative office will be neutral stimulus never evoking any
response from the employees. If the visit of the top management personnel is associated with such
cleaning process, eventually the employees would turn on their best output and look prim and active the
moment windows and floor are being cleaned up. The employees had learned to associate the cleaning
of the windows with a visit from the head office. The cleaning process (conditioned stimulus) evoked
attentive and active work behavior (conditioned response). Similarly, Christmas Carols songs bring
pleasant memories of childhood as these songs are being associated with the festive Christmas Spirit.
Classical conditioning is passive. It is elicited in response to a specific, identifiable event.
Operant Conditioning
Operant conditioned principle is proposed by B.F. Skinner, an American Psychologist. It is a type of
conditioning in which desired voluntary behavior leads to a reward or prevent a punishment. Operant
conditioning principle emphasizes strongly that the behavior of an individual is a function of its
consequences. If the consequences are pleasant, the behavior associated with such consequences will
be repeated again and again. If the consequences are unpleasant, the behavior will be in extinct. The
rationale behind this theory is that people learn to behave in order to get something they want or to
avoid something they dont want. Operant condition is learned process. The tendency to repeat such
behavior is influenced by the reinforcement or lack of reinforcement brought about by the consequences
of the behavior. The proper reinforcement strengthens a
behavior and increases the likelihood that it will be repeated.
Skinners Experiment: Skinner developed an apparatus to conduct a series of learning experiment
using rats. He named that apparatus as Skinners Box which has certain features such as a lever, bowl,
light, water container etc. A highly deprived rat is placed in the box. Once a rat nudges or touches or hits
the lever attached in the corner of the box, a piece of food pellet is dropped in the bowl. By trail and
error, the rat learns that hitting the lever is followed by getting a food pellet in the bowl. Skinner coined
the term operant response to any behavioral act such as pressing or hitting or nudging the lever that has
some effect on the environment. Thus in a typical experiment with a skinner box, hitting or pressing the
lever is an operant response, and the increased rate of lever hitting or pressing that occurs when the
response is followed by a pellet of food exemplifies operant conditioning.
Application of Operant Conditioning in Work Life
If a sales person who hits the assigned target of sales quota will be reinforced with a suitable attractive
reward, the chances of hitting further sales target in future will be exemplified. Skinner argued that
creating pleasant consequences (giving attractive
rewards) to follow specific forms of behavior (hitting sales target) would increase the frequency of that
behavior. People will most likely engage in desired behaviors if they are positively reinforced for doing so.
Rewards are most effective if they immediately follow the desired response. In addition, behavior that is
not rewarded is less likely to be repeated. A commissioned sales person wanting to earn a sizeable
income finds that doing so is contingent on generating high sales in his territory.
Social Learning Theory

People learn through both observation and direct experience, which is called as sociallearning theory.
Individual learn by observing what happens to other people and just by being told about something, as
well as by direct experiences. By observing people around us, mostly from parents, teachers, peers, films
and television performers, bosses, we learn new behavior pattern.
Albert Bandura, who has most vigorously studied observational learning in humans, has emphasized that
people observe others to learn not just specific motor skills (such as driving a car and performing
surgery) but also more general modes or styles of behaving. Bandura demonstrated both of these
functions of observational learning acquiring specific actions and learning general styles of behavior
in experiments with children. Bandura proposed that people actively observe the behavior of other
people to gain knowledge about the kinds of things that people do, and use that knowledge in situations
where it is useful.
Social learning theory gives much importance to perceptual process. People respond to how they
perceive and defy consequences, not to the objective consequence themselves. The influence of models
is key to the social learning process. The following four processes are vital to determine the influence
that a model will have on an individual.
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i) Attention Process: People learn from a model only when they recognize and pay attention to its
critical features. People tend to be most influenced by models that are attractive, repeatedly available
similar to us in our estimation.
ii) Retention Process: A models influence will depend on how well the individual remembers the
models action after the model is no longer readily available.
iii) Motor Reproduction Process: After a person has seen a new behavior by observing the model, the
watching must be converted to doing. This process then demonstrates that the individual can perform
the modeled activities.
iv) Reinforcement Process: Individual will be motivated to exhibit they modeled behavior if positive
incentives or rewards are provided. Behavior that is positively reinforced will be given more attention,
learned better and performed more often.
Reinforcement Theory
Reinforcement theory is broadly based on learning theory and the works of B.F.Skinner.The foundation of
this approach is on three fundamental factors. Firstly, it is believed that an individual is basically passive
and merely mediates the relationship between the forces acting on him and their output. Secondly,
reinforcement also rejects the explanation that behavior is based on an individuals needs, drives, or
goals because they believe that such aspects are unobservable and hard to measure. The focus of
attention is on behavior itself, which can be observed and measured. Finally, reinforcement theorists
state that a relatively permanent change in behavior of an individual result from reinforced behavior or
experience. By giving a proper reinforcement, the likely hood that desired behavior will be exhibited can
be increased and the likelihood that the undesired behaviors will be
exhibited can be reduced or both.
TYPES OF REINFORCEMENT
In operant conditioning, the consequences of behavior (rewards or punishment) are made to occur
contingent on the individuals response or failure to respond. There are three basic components of
operant conditioning: i) stimulus, ii) response or performance and iii) consequences or contingencies of
reinforcement or rewards. The consequences or types of reinforcement determine the likelihood that a
given behavior or response, will be performed in the future. Thus, to change the behavior of an
individual, the consequences or reinforcement of the behavior must be changed.
There are four types of reinforcement available to manage or modify an individuals behavior.
1. Positive Reinforcement
2. Punishment
3. Avoidance Learning
4. Extinction
1) Positive Reinforcement:
The application of this type of reinforcement to a given response or behavior increases the likelihood that
the particular behavior by the individual will be repeated. For example, an engineer is given the task of
designing a new piece of equipment (stimulus). The engineer exerts a high level of effort and completes
the project in time (response). The supervisor reviews the work and not only praises the engineer for his
or her work, but recommends, for example, a pay increase for the excellent work
(positive reinforcement). Negative reinforcement increases the frequency and strength of a desired
behavior by making it contingent upon the avoidance of undesirable consequences for the employees. In
order to avoid the heavy fine imposed for not
wearing the helmet, the riders of two wheelers are likely to wear helmet continuously even though such
an act is not so pleasant and voluntary. In order to avoid the firing of supervisor for late coming, the
employee will ensure to report to office on time.
Just to avoid the unpleasantness in the future, the person will try to exhibit the desired work behavior.
Thus the negative reinforcement implies the mere anticipation of noxious stimuli from the environment
by the employees will reinforce the desired
behaviors.
2) Punishment:
The application of punishment is used to decrease the likelihood that the undesirable behavior or
response by the individual will be repeated. Just as positive reinforcement strengthens a particular
behavior, punishment weakens it. For example hourly
workers in a plastics plant are given one hour for lunch (stimulus). When a particular work continually
takes an hour and thirty minutes for lunch (response), the supervisor will call the particular worker in his
or her office and impose an half-a-day salary cut
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for their prolonged absent from work (punishment). The use of this punishment will hopefully change this
workers response back to acceptable behavior. The difference between punishment and negative
reinforcement is that in the former case, noxious
consequences is applied to decrease the frequency or strength of an undesired behavior, where as in the
latter, a noxious consequences is withheld when a desired behavior is exhibited.
3) Avoidance:
Just as with positive reinforcement, this type of reinforcement is a method used by managers to
strengthen desired behavior. When a particular reinforcement can prevent the occurrence of an
undesired stimulus, it is termed avoidance learning. As
the same example cited above, in order to avoid reprimand and criticism, the worker makes a special
effort to take only an hour for lunch. With the avoidance learning, the individual works hard to avoid the
undesired consequences of the stimulus.
4) Extinction:
Extinction is the withholding of positive reinforcement for a previously acceptable response. With
continued non-reinforcement over time, the response or behavior will eventually disappear or be
eliminated. Extinction involves three steps: i) identifying
the behavior that needs to eliminated ii) identifying the reinforcers which encourage the behavior that is
desired to be eliminated and iii) stopping the reinforcers. Behavior that is desired to be eliminated in an
organizational setting, a company may offer their
salespersons a bonus for every order from a new customer. This results in increased effort on the part of
the salespersons to cultivate new sales outlets. After a period of time, the company evaluates this bonus
system to be too costly to maintain, and there fore eliminates it. The sales force not seeing any further
reward for extra effort in developing new sales, reduces their effort to normal levels. The company, by
removing the reinforcement, caused an extinction of the behavior on the part of their
sales persons. An undesirable behavior can thus be effectively extinguished by withholding the
reinforcers.
Schedules of Reinforcement:
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Reinforcement works effective when they follow some schedules or pattern. The two main types of
reinforcement schedules are continuous or partial (intermittent)
1) Continuous Reinforcement:
This schedule reinforces the desired behavior each and every time it is demonstrated. Continuous
reinforcement helps to direct behaviors toward desired goals quickly. However, it is more expensive to
administer, especially if monetary rewards are used
as reinforcement. Behaviors reinforced through a continuous reinforcement schedule are also likely to
weaken very rapidly once the reinforcements are stopped.
2) Intermittent or Partial Reinforcement:
In this type of reinforcement not every instance of the desirable behavior is reinforced, but reinforcement
is given often enough to make the behavior worth repeating. It is like a gambling house poker machine
in which people will continue to play even when they know the chances of winning is one in ten or
hundred times. Intermittent reinforcement can be based on either a time frame or behavior response
pattern. Intermittent schedules of reinforcement tend to be slow in establishing the desired behaviors.
But once established, the behaviors also tend to be sustained after the reinforcements are stopped.
There are four types of intermittent reinforcement schedule based on the intermittent intervals and
intermittent behavioral responses.
Fixed Internal Schedule
Fixed interval schedule refers to the interval of time when behaviors will be rewarded. It could be hourly,
weekly, daily, monthly and so on. For example, organizations reinforce desired behaviors in employees
by paying their salaries on a monthly basis. Contractors pay daily wages to employees and other staff
members by reinforcement their behaviors of doing a good days work for a good days pay. These are
reinforcements based on a fixed interval schedule.
Variable Interval Schedule:
A variable interval schedule rewards desired behaviors at random intervals of time. Instead of praising
every day, a manager praises his employees occasionally, once in a ten days or fortnightly without a
fixed time frame. An example of this schedule of
reinforcement is a manager patting a good employee whenever he takes unscheduled visits to the shop
floor. This kind of reinforcement is easy to administer and the desired behaviors are also sustained over
time.
Fixed Ratio Schedule:
A fixed ratio schedule is followed when reinforcement are given every nth time (at a fixed ratio) a desired
behavior occurs. An example of this will be suggestion scheme department giving a certificate of
commendation after every fifth suggestion
accepted by the department from an employee.
Variable Ratio Schedule:
A variable ratio reinforcement schedule is followed when behaviors are rewarded randomly in terms of
the number of times they occur. For example, some times employees are required to stay back at office
to complete the required work. In such cases, a manager may reinforce an employee who is staying back
to complete his job the first time the person stays late, and not reinforce the same behavior for the next
four or five times, but reinforce it once again in the sixth time he stays back and again in fifteenth time
he stays back and so on.
Motivation
Motivation is defined as individuals intention or willingness to put maximum effort in his/her work to
reach organizational goals and enhance ones ability to satisfy some individual needs. The cyclic process
of motivation starts from Unsatisfied needsTension Drives- Search Behavior-Satisfied Need- to end with Reduced Tension. There are three major
elements related to motivation: Effort, Goals and Needs.
Effort:
It refers to an individuals intensity in reaching the stated goal. The intensity varies from individual to
individual and also depends upon the extent to which individual importance to various goals. If these
efforts are channeled in proper direction consistent
with organizational goals, the organization will maximize its profit and reach a state of excellence in their
field.
Need:
It refers to some internal state that makes certain outcomes appear attractive. It is also a state of
deficiency and the organism tries to restore this deficiency to make it as equilibrium. An unsatisfied need
creates tension that stimulates drives within an
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individual. These drives direct the individual in different directions or searching in different places to find
a particular goal, If the goal is attained the organism will satisfy the need and reduce the tension.
Goals:
Human behavior is always goal directed. Once the desired goal is satisfied, individuals will always restate
the goals or look for other goals to get sastisfied. Goals will always be changing from one level to
another. In order to motivate an individual, managers must ensure to set a goal in such a way which
stimulates him or her to put more effort in their work. An effective way to set goals is to follow the SMART
approach, which states that goals should meet five characteristics:
1. Specific
2. Measurable
3. Achievable
4. Relevant
5. Timely or Time Limited
If the chosen goal has these characteristics, the employee will have a highest level of motivation.
CONTENT THEORIES OF MOTIVATION
Maslows Hierarchy of Needs

Abraham Maslow formulated one of the most popular theories of human motivation.
Maslows theory is based on the following propositions.
The needs are arranged in a hierarchy of importance, ranging from the lowest need
to highest need level
All needs are never fully satisfied
Once a need is fairly well satisfied, it no longer motivates behavior
The needs are interdependent and overlapping
Maslows theory of motivation explains five levels of needs.
Physiological Needs
The need for sunlight, sex, food, water and others, which are basic to human survival, are called
physiological needs. At work level, this need can be met through by providing good working conditions,
attractive wage or salary, subsidized housing, free catering etc.
Safety Needs
The safety needs include the need for freedom from threat caused by the environment, animals and
people. It also includes the need for shelter, security and peace. At work level, this need can be met by
providing private health insurance cover, attractive pension provisions, safe working conditions etc.
Love and Belonging Needs/social
These needs cover the need of relationships, affection, giving and receiving love and sense of belonging.
The manager can provide the following facilities to take care of these needs: company sports and social
clubs, office parties, barbeques, outings, permission for informal activities, and encouraging open
communication
Self Esteem Needs
It is also known as ego needs, which fulfill the need for strength, achievement, recognition, appreciation,
respect and prestige. The managers can provide regular positive feedback, prestigious job titles,
photographs in company newsletter, promotions etc.
Self-actualization Needs
These are the need for full development of ones potential. Challenging job assignments, discretion over
work activities, promotion opportunities and encouraging creativity can fulfill these needs. In terms of
motivation, Maslow argued that each level in the hierarchy must be substantially satisfied before the
next level is activated, and that once a need is fully satisfied, it may not motivate people. The next level
in the hierarchy will be dominant only after the fulfillment satisfaction level. This theory has a lot of
implication for managers. As a manager if you want to motivate an employee, first try to understand
what level that person is on in the hierarchy and focus on satisfying those needs at or just above the
level.
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Maslows framework:
It is based on three fundamental assumptions
1. Individuals are goals oriented whose needs can influence their behavior. Only unsatisfied needs can
influence behavior; satisfied needs do not act as motivator
2. A persons needs are arranged in an order of importance, or hierarchy, from the basic (eg. Food and
shelter) the complex (eg. Ego and achievement)
3. The person advances to the next level of the hierarchy, or from basic to complex needs, only when the
lower need is at least minimally satisfied. That is, the individual worker will first focus on satisfying a
need for safe working conditions before motivated behavior is directed toward satisfying a need for
achieving the successful accomplishment of a task.
Implications of Maslows Hierarchy of Needs Theory
This model helps the managers to understand and deal with issues of employee motivation at the
workplace. This model can be applied to motivate people at all levels in the organization. Managers who
understand the need patterns of their staff can help the
employees to engage in the kinds of work activities and provide the types of work environment that will
satisfy their needs at work. For instance, the employees love and belonging needs can be fully satisfied
by organizing yearly dinner and dance program,
office week end parties, creating recreation clubs or social clubs etc. Fortunately, the workplace has the
potential to offer need gratification for several different types of needs, and mangers can motivate
employees by giving appropriate organizational support which will gratify individuals needs. Thus,
despite its drawbacks, Maslows theory offers managers a good technique on understanding the motives
or needs of individuals and how to motivate organizational members.
Herzberg Two-Factor Theory of Motivation

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Herzbergs two-factor theory of motivation suggests that there are two sets of factors which either led to
job satisfaction or dissatisfaction. They are Motivating factors and Hygiene factors. Herzberg collected
data from 200 accountants and engineers asking a simple question such as Can you describe, in detail,
when you feel exceptionally good about your job Similarly, Can you describe, in detail, when you feel
exceptionally bad about your job? Good feelings about the job were reflected in comments concerning
the content and experiences of the job (e.g, doing good work or a feeling of accomplishment and
challenge), bad feelings about the job were associated with context factors, that is, those surrounding
but not direct involving in the work itself (e.g., salary and working condition) This study revealed two
distinct types of motivational factors: satisfiers and
dissatisfiers. Herzberg resulted in two specific conclusions:
1. There is a set of extrinsic job conditions that, when not present, result in dissatisfaction among
employees. If these conditions are present, this does not necessarily motivate employees. These
conditions are the dissatisfiers or hygiene factors because they are needed to maintain at least a level of
no dissatisfaction. These factors are related to the context of the job and are called dissatisfiers.
These include:
a. job security
b. salary
c. working condition
d. status
e. company policies
f. supervision
g. Interpersonal supervision
h. Fringe benefits
2. A set of intrinsic job conditions exist that help to build levels of motivation, which can result in good
job performance. If these conditions are not present, they do not result in dissatisfaction. These set of
aspects are related to the content of the job and are called satisfiers. These include:
a. Achievement
b. Recognition
c. Work itself
d. Responsibility
e. Advancement
f. Personal growth and development
Motivating Factors
The presence of motivating factors always ensures job satisfaction and happiness among the employees.
They are: achievement, recognition, responsibility, advancement, growth and the work itself. These
motivating factors are relating to the work content factors.
Hygiene Factors
The other set, which leads to dissatisfaction, is the hygiene factors such as salary, company policy,
supervision, status, security and working conditions. These hygiene factors are relating to the work
contextual factors. Herzberg argued that improvement in
the hygiene factors would only minimize dissatisfaction but not increase satisfaction and motivation.
Implications for Managers:
In order to motivate employees, the managers must ensure to provide the hygiene factors and then
follow the motivating factors. Hertzbergs motivation-hygiene theory proposes that intrinsic factors are
related to job satisfaction and motivation, whereas extrinsic factors are associated with job
dissatisfaction.
According to Herzberg, the factors that led to job satisfaction were separate and distinct from those that
led to job dissatisfaction. Therefore, manages who sought to eliminate factors that created job
dissatisfaction could bring about workplace harmony but not
necessarily motivation. Because they do not motivate employees, the extrinsic factors that create job
dissatisfaction were called hygiene factors. When these factors are adequate, people will not be
dissatisfied; but at the same time they may not be fully
satisfied. They will be in neutral state. If we want to motivate people on their jobs, it is suggested to give
much importance on those job content factors such as opportunities for personal growth, recognition,
responsibility, and achievement. These are the
characteristics that people find intrinsically rewarding.
Herzberg model sensitizes that merely treating the employees well through the good company policies is
not sufficient to them motivated. Managers should utilize the skills, abilities, and talents of the people at
work through effective job designing. In other
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words, the work given to employees should be challenging and exciting and offer them a sense of
achievement, recognition, and growth. Unless these characteristics are present in the job, employees will
not be motivated.
In Herzbergs framework, these managerial reactions have focused primarily on the hygiene factors
surrounding the job, which has resulted in bringing individual to the theoretical zero point of
motivation. The two-factor theory would predict that improvements in motivation would only appear
when managerial action focused not only the factors surrounding the job but on the inherent in most
assembly line jobs and developing jobs that can provide increased levels of challenge and opportunities
for a
sense of achievement, advancement, growth and personal development.
McGregors Theory X and Theory Y

McGregors theory is based on how a manager feels about human nature. In general, people tend to have
either positive or negative assumptions about human nature. Based on these assumptions, McGregor
proposed two sets of theories as Theory X (negative assumptions) and Theory Y (positive assumptions).
Theory X
Theory X represents the traditional approach to managing and is characterized by the following basic
assumption about human beings.
The average human being has an inherent dislike of work and will avoid it if he can.
Because of human characteristic of dislike of work, most people must be coerced, controlled, directed,
and threatened with punishment to get them to put forth adequate effort towards the achievement of
organizational objectives.
The average human being prefers to be directed, wishes to avoid responsibility, has relatively little
ambition, and wants security above all. Once the team leaders tend to have the above-mentioned
negative assumptions about their members, consequently, they will adopt the following strategies to
influence them.
Control measures or strict supervision are properly exercised to get results from them
Such control can be achieved by the appropriate use of rewards and punishment.
Implications of X Theory:
The implication for a manger working in an organization with these premises is that the group will be
strictly controlled and supervised. Decisions will be made largely by the manager and communicated in
writing or verbally in a formal situation. Members of the group will rarely be involved in determining their
own tasks. Theory X usually operates in traditional, highly centralized organizations.
Theory Y
Theory Y is more people oriented. It refers to Maslows hierarchy of needs, particularly the higher-order
needs and the motivation to fill these needs at work. It is based on the following assumptions. The
following are some of the assumptions of Theory Y.
The expenditure of physical and mental effort is as natural as play or rest.
External control and threat of punishment are not the only means for bringing about effort toward
organizational objectives. People will exercise self-direction and self-control in the services of objectives
to which they are committed.
Commitment to objectives is a function of rewards associated with their achievement.
The average human beings learn, under proper condition, not only to accept but to seek responsibility.
The capacity to exercise a relatively high degree of imagination, ingenuity, and creativity in the solution
of organizational problems is widely, not narrowly, distributed in the population.
Under the conditions of modern industrial life, the intellectual potentialities of the average human being
are only partially utilized.
Implications of Y Theory:
Leaders operating under these assumptions will be more likely to consult the group, encourage members
to contribute to decision making and work without strict supervision. Communication between the group
and the leader will be two of the members of the
group. The acceptance of the Theory Y approach, with its tenets of participation and concern for worker
morale, encouraged managers to begin practicing such activities as
i)delegating authority for many decision,
ii) enlarging and enriching jobs of workers by making them less repetitive,
iii) increasing the variety of activities and responsibilities and
iv) improving the free flow of communication within the organization.
The major criticisms are that too much emphasis was put on informal group process with knowledge of
the complexities of group dynamics. Also the strategies evolved based on Theory Y may be successful in
one organization and may not be successful in another.
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ERG Theory:
Alderfer proposed a modified version of Maslows need hierarchy and labeled as ERG theory. Alderfers
ERG refers to three groups of core needs Existence, Relatedness and Growth (ERG).
Existence Needs:
These needs are all the various forms of physiological and material desires, such as hunger, thirst and
shelter. In organizational settings, the need for pay, benefits, and physical working conditions are also
included in this category. This category is comparable to Maslows physiological and certain safety needs.
Relatedness Needs:
These needs include all those that involve interpersonal relationships with others in the workplace. This
types of need in individuals depends on the process of sharing and mutuality of feelings between others
to attain satisfaction. This category is similar to Maslows safety, social and certain ego-esteem needs.
Growth Needs:
These needs involve a persons efforts toward creative or personal growth on the job. Satisfaction of
growth needs results from an individual engaging in tasks that not only require the persons full use of
his or her capabilities, but also may require the development of new capabilities. Maslows selfactualization and certain of his egoesteem needs are comparable to those growth needs.
ERG theory is based upon three major propositions:
i) The less each level of need has been satisfied, the more it will be desired (need satisfaction). For
example, the less existence needs (pay) have been satisfied on the job, the more they will be desired.
ii) The more lower level needs have been satisfied, the greater the desire for higher level needs (i.e.,
desire strength) For example, the more existence needs have been satisfied for the individual worker
(pay), the greater the desire for relatedness needs (satisfying interpersonal relationships)
iii) The less the higher level need have been satisfied, the more the lower level needs will be desired (i.e.,
need frustration) for example, the less growth needs have been satisfied (challenging work), the more
relatedness needs will be desired (satisfying interpersonal relationships).
Difference between Alderfers ERG and Maslows Need Hierarchy:
ERG theory differs from Maslows need hierarchy in two aspects.
(a) Alderfer highlighted that once an individuals higher level need is not fully satisfied or encounters
difficulty in fulfilling these needs resulting in frustrations and disappointment, the person will exhibit a
strong desire to regress to a lower level needs where he/she finds more comfort and satisfaction.
(b) Alderfer further stated that an individual may have an intention to fulfill more than one need at the
same time. In other words, individuals may be working towards fulfilling both their relatedness needs and
growth needs or their existence and related needs simultaneously.
Implications of ERG Theory:
Alderfer has proposed two sets of views on individuals aspirations and fulfillment. One is satisfactionprogression and other frustration-regression. Satisfaction-progression is similar to Maslows model in
which once an individuals basic needs are satisfied, he/she will progress to the next level to satisfy the
succeeding higher level to have them satisfied. Alderfer proposed yet another view of individuals
aspirations and fulfillment. If people eventually become frustrated in trying to satisfy their needs at one
level, their next lower level needs will re-emerge and they will regress to the lower level to satisfy more
basic needs. This is called as frustration-regression. For manages, ERG theory provides a more workable
approach to motivation in organization. Because of the frustration-regression approach component, it
provides the manager with the opportunity of directing employee behavior in a constructive manner
even though higher order needs are temporarily frustrated. In summary, ERG theory argues that satisfied
lower-order needs lead to the desire to satisfy higher-order needs; but multiple needs can be operating
as motivators at the same time and frustration in attempting to satisfy a higher-level need can result in
regression to a lower-level need.
McClelands THREE NEEDS THEORY
McClelland proposed three types of needs common in work life. They are Need for Achievement, Need for
Power and Need for Affiliation.
Need for Achievement:
This refers to the drive to excel, to achieve in relation to a set of standards and to strive to succeed.
People with a high need for achievement are striving for personal achievement rather than for trappings
and rewards of success. They have a desire to do something better or more efficiently than it has been
done before. They prefer jobs that offer personal responsibility for finding solutions to problems, in which
they can, received 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 are not
gamblers, they dislike succeeding by chance. They are motivated and prefer the challenge of working at
a problems and accepting the personal responsibility for success or failure.
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Implications for Need for Achievement Theory:

Too little challenge will bore them since there is no opportunity to satisfy their urge to achieve, and too
much challenge would mean that the job is difficult and hence will induce the fear of failure in them.
Since their need for achievement and accomplishment are high, high Need for Achievement individuals
will not try to work on jobs that are so challenging that successful task accomplishment become
doubtful. Also, high achievers avoid very easy or very difficult tasks instead they show willingness to take
a moderate level of difficulty which will have much challenge in accomplishing them. They like to set
goals that require stretching themselves a bit.
Need for Power:
This refers to the need to make others behave in a way that they would not have behaved otherwise.
Individuals high in Need for Power enjoy being in-charge, strive for influence over others, and prefer to
be in competitive and status oriented situations.
McClelland distinguished two types of power Personal Power and Institutional Power. Individuals high in
personal power like to inspire subordinates and expect that latter to respect and obey them. Such
behaviors gratify their own need for power in a personal sense. Managers, who are high in institutional
power, tend to exert authority and influence so as to achieve the goals of the organization rather than to
gain any personal
ego satisfaction. McClelland describes the institutional power managers as organization minded
and getting things done in the interest of the organization. That is, the
institutional power manager exercises power in the interests and welfare of the organization. Institutional
power managers are said to be very effective since they are willing to somewhat sacrifice their own
interests for the organizations overall wellbeing.
McClelland feels that institutional or social power is good for the organization and personal power is
detrimental to the overall interests of the organization.
Implications for Need for Power:
Persons with high need for power would naturally be turned on by holding positions of authority and
influence in the organization. They like to take charge and be in control of situations. Placing such
individuals in high level positions will help them to gratify their own needs as well as get many of the
organizations policies and orders followed and carried out by employees.
Need for Affiliation:
This refers to the desire for friendly and close interpersonal relationships. Individuals high in Need for
Affiliation like to interact with colleagues in the organization. They have a strong desire for approval and
reassurance from others and they are willing to
conform to the norms of groups to which they belong. In effect, they have needs to
develop affinity and warm relationships with people in the work system. They are usually
gregarious by nature and like to work with others in a friendly atmosphere. Team work,
co-operative efforts, and joint problem-solving sessions, and committee assignments are
all suited for those high in Need for Affiliation.
Implications for Need for Affiliation:
People high in need for affiliation are said to perform better in their jobs when they are
given supportive feedback. Thus, friendly manages and supervisors can influence
individuals high in Need for Affiliation and motivate them to work harder.
Equity Theory :
According to this theory (Adams) employees make comparisons of their job inputs & outcomes relatives
to those of other. If an individual perceives the input-outcome ratio to be equal to that of relevant others
with whom they compare their, a state of equity is said to exist. They perceive the situation as fair. If the
ratio appears to be unequal, the individual experience inequity.
There are four referent comparisons that an employee can use-:
1. Self inside : An employees experience in a different position inside
his or her current organization.
2. Self outside : An employees experience in a situation or position
outside hi or her current organization.
3. Other inside : Another individual or group of individual inside the
employee organization.
4. Other outside : Another individual or group of individuals outside the employees organization.
Expectancy Theory :
This theory is given by Victor Vrooms. Motivation is based on peoples belief, goals & linkage between
effort & performance, performance & reward & reward & individual goal satisfaction. Expectancy theory
argues that the strength of a tendency to act in a certain way depends on the strength of an expectation
that the act will followed by a given outcome & on the attractiveness of that outcome to the individual.
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Performance= f (Ability x Motivation x opportunity)

Reinforcement theory :
This theory (given by Komaki) argues that reinforcement cnditions human behaviour. According to this
theory, behaviour is a function of its consequences.Behaviur is environmentally caused.
The behavior can be shaped as following :
1. Positive reinforcement : This is the process of getting something pleasant as a consequences of
the desired behaviors. eg. a boss which praises an employee for a job done.
2. Negative reinforcement : This is a process of having a reward taken away as consequences of
undesired behaviour. Eg-Schlarsip is withdrawn from the student who has not done well n the
examination.
3. Punishment : This is causing an unpleasant condition in an attempt to eliminate an undesirable
behaviour. For eg- Giving an
employee 2 days suspension from work without payfor showing up drunk.
4. Extinction : Eliminating any reinforcement that is maintaining a behaviour. So if a person put extra
efforts, but gets no recognisation for it, he will stop doing it.
Values
The word value is derived from French word valoir which means worth, merit, usefulness or importance
of a thing. Values are traits or qualities that are considered valuable. They represent an individuals
highest priorities and deeply held driving forces.
A broad definition of values, derived from an insight into ancient Indias psycho philosophical wisdom
literature is Values are states of feelings/emotions that underpin the content of a choice/decision and
determine the manner of using the intellect/reason for justifying and implementing that
choice/decision.The study of values is fundamental in managing an organizations behavior.
Characteristics of Values
1.
2.
3.
4.
5.
6.
Values represent an individuals highest priorities and deeply held driving forces
Values are the hub of personality and is powerful force affecting behavior
Value varies according to time
Many values are relatively constant and durable
It contains a judgment element
Everyone does not hold the same values
TYPES OF VALUES
In extensive research conducted during the last 2 decades, Milton Rokeach has identified 2 basic types of
values- terminal and instrumental. A terminal value is an ultimate goal in a desired status or outcome. An
instrumental value, on the other hand, is a tool or means for acquiring a terminal value. For e.g., a
person may desire and strive to achieve happiness, a terminal value by being ambitious, independent
and responsible (instrumental values).
Some of the terminal values are- Equality, Freedom, Family Security, Happiness, National security. Some
of the Instrumental values are Ambitious, Broad-minded, Capable, Cheerful, Honest.
The different values an individual has, both terminal and instrumental, combine to create an enduring
cluster of values, a value system. Our values and value system then are primary determinants of who
and what we are as individual Another way of categorizing values is given below:
Theoretical Interest in the discovery of truth through reasoning and systematic thinking.
i. Economics- Interest useful and practicality, including the accumulation of wealth.
ii. Aesthetic- Interest in beauty, form and artistic harmony.
iii. Social- Interest in people and love as a relationship.
iv. Political- Interest in gaining power and influencing people.
v. Religious- Interest in unity and understanding the cosmos as a whole.
Formation of Values
Values are learned and acquired primarily through experience with people, institution. Parents, for e.g.,
will have substantial influence on the values of their children values. Parents relation to everyday events
demonstrates what is good and bad, acceptable and unacceptable, and important and unimportant
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values are also taught and reinforced interest in schools, religious organization, and social groups. As we
grow and develop, each source of influence contributes to our definition of what is important in life.
Cultural moves have influence on the formation of values. Basic conviction of what is good or bad are
derived from ones satisfaction about own culture.
Values and OB
An understanding of values is useful to a manager interest following ways:
i. Values are important to the study of OB because they lay the foundation for the understanding of
attitudes and motivation as well as influencing our perception. Individual enter an organization with
preconceived notion of what ought and what
ought not to be. Of course, these notions are not value free. On the contrary they contain
interpretation of right and wrong. Further, they imply that certain behaviours or outcomes are preferred
over others. As a result, it clouds objectivity and rationality.
ii. Values generally influence attitudes and behaviour. Suppose an individual enters an organization with
the view that allocating pay on the basis of performance is right, whereas allocating pay on the basis of
seniority is wrong or inferior. He is likely to get disappointed if the organization rewards seniority and
merit, disappointment is likely to lead to dissatisfaction and decline interest performance. His attitude
and behaviour would be different if his values are aligned with the organizations pay policies.
iii. The challenge and relationship-examination of established work values constitute of the cornerstones
of the current management revolution all over the world. Hence, an understanding of values becomes a
necessity
iv. Values differ across culture What is permissible in the U.S may be simple considreation. Strangely,
majority of the principles and concepts of OB have been developed by American, using American
subjects within domestic context. A study of more than 11000 articles published in 24 management and
OB journals over a ten-year period reveals that, approximately 80% of studies have been done in the U.S
and have been conducted by Americans. This implies that OB specialists should remember that, no
theories and principles are universally applicable to managing people around the world. They should take
into consideration cultural values when trying to understand the behaviours of peoples interest different
in countries.
ATTITUDES
Attitudes can be defined as an individuals feelings about or inclinations towards other persons, objects,
events, or activities. Attitudes encompass such affective feelings as likes and dislikes, and satisfactions
and dissatisfactions. Our needs, past experiences, selfconcept, and personality shape the beliefs,
feelings, and opinion we hold towards the perceived world. Once we have formed our likes and dislikes,
we generally cling on to them and find it difficult to change our attitudes, unless we make a conscious
and determined effort to do so. An interesting phenomenon is that our values shape our attitudes.
Traditionally, behavioral scientists have divided attitudes into two major groups:
i) those that are cognitive (for example, beliefs or expectations about cause-effect relationships between
events) and ii) those that are evaluative (for example, liking or disliking for event). An example of a
cognitive attitude would be an employees belief that superior job performance would be rewarded by
praise from a superior. An example of an evaluative attitude would be the degree to which he or she
would like or value such praise.
Components of Attitudes
There are three components of attitudes such as Cognitive (Thinking), Affective (Feeling) and Conotive
(Behavioral).
i) Cognitive Component:
Cognitive component deals with thinking, evaluation, comparison, rational, logical issues with respect to
the targeted object. This will facilitate to form a strong belief or further strengthen the belief system
towards various objects. By observing and analyzing the various features of Sony lap top computer, you
may form a very good opinion stating that Sony laptop is best among others. Such an evaluation is based
on the cognitive component of attitudes.
ii) Affective Component:
Affective component deals with feelings or emotional issues of the targeted objects. I do not like Ramesh
as he had hunted down a rare species of deers in the forest. As deers are harmless creatures, I love
them very much. The disliking of Ramesh is due to emotional aspects or personal feelings towards the
targeted object.
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iii) Behavioral Components:

This refers to intention to behave in a certain way towards someone or something. As I do not like rock
music, I am not interested to attend the concert. The action of not attending is due to a part of disliking
of rock music concert. All these three components
collectively act together for the formation of attitudes.
Sources of Attitudes:
Attitudes are formed through various sources. We acquire or learn from parents, teachers, peer group
members.
i) Family Members:
Parents or siblings influence strongly to form favorable or unfavorable attitudes towards various objects.
The child rearing practices, the types of reinforcement received from parents or siblings will help mould
certain attitudes such as strong preference towards color, religious faith, choices of food habits etc which
would be stable and long lasting over a period of time.
ii) Reference Group:
People tend to form a strong attitude based on the influence of powerful personalities whom they admire
a lot. For example, celebrities, charismatic political or religious leaders significantly influence either to
strengthen the existing attitudes or form new
attitudes. Marketing managers rely on celebrity figures to endorse the products to subtly influence their
admirers to buy the products.
iii) Peer Group influence:
Friends or colleagues at work place will have a strong influence on the formation of certain attitudes or
belief system due to pressure to conforming to their norms, standards, values etc. People need people.
The acceptance or reassurance of group members will strongly reinforce the chosen attitudes and
behavior.
iv) Socialization and Learning process:
The way in which people are brought up in family, the dos and donts laid down by the parents,
educational and educational institutions, the rules and regulations of work place, the types of rituals,
cultures, norms of society etc will strongly influence the formation of attitudes.
Methods of changing the Attitudes :
An attitude once formed can be changed by changing any one or more of the following factors:i) Change in ideas and beliefs : when the reason for the undesirable attitude is insufficient
information, attempts to change such attitudes can be made by supplying sufficient amount of desired
information to the person. For Eg. Peoples negative attitude towards the staff in govt. offices can be
changed by drawing the attention of peoples towards the circumstances in which staff works.
ii) Change in feelings or Emotions : The most effective way in such circumstances is listening. That
is why complaint boxes are provided in some organizations.
iii) Change in situation : To change an undesirable attitude, some situational variables which are
causing inadequate pay is the cause of negative attitude then pay increase may be planned.
iv) Change in behaviour : In the ultimate analysis, the undesirable behaviour accompanying some
attitude is the focus of change. Though, it is a direct method of changing some undesirable attitude, it is
more complicated and not likely to last long.
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UNIT 5
LEADERSHIP
Leadership is an activity on the part of the managers to get something done by others, willingly and not
by compulsion. Leadership is a process of influence on a group. Leadership is the ability of a manager to
induce subordinates to work with confidence.
In the words of Koontz and O Donnel, leadership is the ability of a manager to induce subordinates to
work with confidence and zeal.
According to Chester I Bernard, leadership refers to the quality of the behavior of individual whereby
they guide people on their activities in organized efforts
According to Luis A Allen, a leader is one who guides and directs other people. He gives the efforts to
his followers a direction and purpose by influencing their behavior
Thus leadership is a psychological process of influencing followers and providing guidance, directing and
leading the people in an organization towards attainment of the objectives of the enterprise.
Nature or Characteristics of Leadership

1.
2.
3.
4.
5.
6.
7.
A leader should have followers

leadership is basically a personal quality
leadership involves a community of interest between the leader and his followers
leadership is a process of influence
leadership is the function of stimulation
A leader ensures absolute justice
Leadership is a continuous, dynamic and ever evolving process.
Importance of Leadership
Without a good leader, organization cannot function efficiently and effectively. The leader guides the
action of others in accomplishing the organizational goals. A good leader motivates his subordinates,
creates confidence and increases the morale of workers. The importance of leadership can be discussed
as follows
1. Leadership is the process of influencing the activities of an individual or a group towards the
achievement of a goal.
2. An effective leader motivates the subordinates for higher level performance.
3. Leadership promotes team spirit and team work which is quite essential for the success of any
organization
4. Leadership is an aid to authority as it helps in the effective use of formal authority.
5. Leadership creates confidence in the subordinates by giving them proper guidance and advice.
Functions of a Leader
The functions of a leader can be detailed as follows
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1. Taking the initiative A leader initiates all the measures which are necessary for the purpose of
ensuring the health and progress of the undertaking in a competitive economy.
2. He identifies group goals
3. he represents the organization
4. He acts as an arbitrator
5. To assign reasons for his actions
6. To interpret the objectives of organization
7. To guide and direct the organization
8. To encourage team work
9. He manages the organization
Leadership Styles
The term leadership styles can be defined as a leaders behavior towards group members. It refer to the
pattern of behavior which a leader adopts in influencing the behavior of his subordinates in the
organizational context. Different leadership styles can be categorized as follows.
1. Autocratic Leadership
Autocratic leadership is also known as authoritarian, directive, leader centered or monothetic style.
Under this style, leader concentrates all authority in himself, instructs a subordinate as to what to do,
how to do it, when to do it etc. He also exercises close supervision and control over his subordinates.
There are three categories of autocratic leaders
a. Strict Autocrat A strict autocrat relies on negative influence and gives orders which the subordinates
must accept. He may also use his powers to disperse rewards to his group.
b. Benevolent Autocrat The benevolent is effected in getting high productivity in many situations and
he can develop effective human relationship. His motivational style is usually positive.
c. Manipulative Autocrat A manipulative autocrat leader is one who makes the subordinates feel that
they are participating in decision making process even though he has already taken the decisions.
2. Participative Leadership
This style is also called as democratic, consultative, group centered or ideographic style. A participative
leader is one who consults and invites his subordinates to participate in decision making process. Under
this style, subordinates are freely allowed to communicate with the leader and also with their fellow
subordinates and take their own initiative.
3. Laissez Faire or Free-rein Leadership
Under this style of leadership, the leader largely depends upon the group and its members to establish
their own goals and make their own decisions. The leader is passive and assumes the role of just another
member in the group. Only very little control is exercised over group members. This style is also known
permissive style of leadership. This style is suitable to certain situations where the manager can leave a
choice to his groups.
Qualities of a successful leader

The following are the major innate qualities in a successful leader.
1. Physical features like height, weight, health and appearance
2. Intelligence
3. Emotional stability
4. Human relations
5. Empathy
6. Objectivity
7. Motivating skills
8. Technical skills
9. Communicative skills
10. Social skills.
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THE MANAGERIAL GRID

A graphic pottayal of a two dimensional view of leadership style has been developedby Blake and
Mouton. They propose a managerial grid based on the styles of concern for people and concern for
production, which essentially represent the Ohio state dimensions of consideration and initiating
structure or the Michigan dimensions of employee -oriented
and production -oriented.
The grid, as illustrated below, has some possible positions along each axis, creating eighty-one different
positions in which the leaders stylemay fall. The gird does not show results produced, but rather the
dominating factors in a leaders thinking in regard to getting results. Based on the findings from the
research Blake and Mouton conducted, they concluded that managers perform best under a 9,9 style as
contrasted for example with a 9,1 (task oriented) or the 1,9 (country - club type) leader. Unfortunately,
the grid offers a better framework for conceptualizing leadership style than for presenting any tangible
new information inclarifying the leadership quandary since there is little substantive evidence to support
the conclusion that 9,9 style is most effective in all situations.
i.
(1,1) Impoverished Style
It implies exertion of minimum effort to get required work done and is appropriate to sustain organization
membership.
ii.
(1,9) Country Club Style
It implies thoughtful attention to needs of people for satisfying relationship and leads to a comfortable,
friendly organization atmosphere and work tempo.
iii.
(5,5) Middle Road Style
It implies adequate organization and performance is possible through balancing the necessity to get out
work with maintaining morale of people at a satisfying level.
iv.
(9,1) Task Style
It implies efficiency in operations results from arranging conditions of work in such a way that human
elements interfere to a minimum degree.
v.
(9,9) Team Style
It implies that work accomplished is from committed people, and interdependence through a common
state. In organization, purpose leads to relationships of trust and respect
Likerts System Four Model:

Rensis Likert suggests that managers operate under four different systems.
System I Exploitative Authoritative: The manager believes in very authoritarian manner and
actually exploits the subordinates
System II Benevolent Authoritative: The manager takes a paternalistic approach while still being
autocratic. Behaving as benevolent autocratic, the leader maintains strict control over the subordinates
albeit in a paternalistic manner.
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System III Consultative: The manager consults the subordinates and sill maintains the right to make
the final decision.
System IV Participative Groups: The manager uses a democratic style and makes decision by
consensus and majority vote.
Likert feels that the best way for all organizations to manage employees is to move towards System IV
Transactional Leadership
Transactional leadership styles are more concerned with maintaining the normal flow of operations.
Transactional leadership can be described as "keeping the ship afloat." Transactional leaders use
disciplinary power and an array of incentives to motivate employees to perform at their best. The term
"transactional" refers to the fact that this type of leader essentially motivates subordinates by
exchanging rewards for performance.
A transactional leader generally does not look ahead in strategically guiding an organization to a position
of market leadership; instead, these managers are solely concerned with making sure everything flows
smoothly today.
Transformational Leadership
A transformational leader goes beyond managing day-to-day operations and crafts strategies for taking
his company, department or work team to the next level of performance and success. Transformational
leadership styles focus on team-building, motivation and collaboration with employees at different levels
of an organization to accomplish change for the better. Transformational leaders set goals and incentives
to push their subordinates to higher performance levels, while providing opportunities for personal and
professional growth for each employee.
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Difference Between Leader and Manager
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Organizational Conflict
Definition of Conflict :
It is any tension which is experienced when one person perceives that ones needs or desire are or are
likely to be thwarted or frustrated.
Eollett simply defines Conflict as, the appearance of difference of opinions, of interest.
Features :
1. Conflict occurs when individuals are not able to choose among the available alternatives courses of
actions.
2. Conflict between two individuals implies that they have conflicting perceptions, values and goals.
3. Conflict is a dynamic process as it indicates a series of events. Each conflict is made up of a series of
interlocking conflict episodes.
4. Conflict must be perceived by the parties to it. If no one is aware of a conflict, then it is generally
agreed that no conflict exists.
Levels of Conflict :
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BIMS
1. Intrapersonal conflict :
Some conflicts that affect behavior in organizations involve the individual alone. It can be of three
types :
Approach-approach conflict occurs when a person must choose between choose between a valued
promotion in the organization or a desirable new job with another firm.
Avoidance-avoidance conflict occurs when a person must choose between two negative and
equally unattractive alternatives. An example is being asked either to accept a job transfer to another
town in an undesirable location or to have ones employment with an organization terminated.
Approach-avoidance conflict occurs when a person must describe to do something that has both
positive and negative consequences. An example is being offered a higher paying job whose
responsibilities entail unwanted demands on ones personal time.
2. Interpersonal Conflict : It occurs between two or more individuals who are in opposition to one
another. It may be substantive or emotional or both.
3. Inter-group conflict :
It occurs among members of different teams or groups.
4. Inter-organizational conflict :
It occurs as the competition and rivalry that characterizes firms operating in the same markets.
The Conflict process :

The process of conflict management has the following steps :
Stage 1 : Potential Opposition or Incompatibility
This stage concludes the conditions that create opportunities for conflict to arise. The conditions are as
follows:
1. Communication :
Communication becomes a source of conflict due to semantic difficulties, misunderstandings, and noise
(distortion) in the
communication channels.
2. Structure :
The term structure includes variables such as size, degree of specialization, jurisdictional clarity,
member-goal compatibility,
leadership styles, reward systems, and the degree of dependence.
3. Personal Variables :
Personal Variables include individual value systems and personality characteristics. Certain personality
types lead to potential conflict.
Stage 2 : Cognition and personalization

Antecedent conditions lead to conflict only when the parties are affected by and aware of it. Conflict is
personalized when it is felt and when individuals become emotionally involved.
Stage 3 : Intentions
The primary conflict-handling intentions are represented as follows :
Cooperativeness : the degree to which one party attempts to satisfy the other partys concern.
Assertiveness : the degree to which one party attempts to satisfy his or her own concerns.
Competing : When one person seeks to satisfy his or her own interests, regardless of the impact on
the other parties to the conflict.
Collaborating : When the parties to conflict each desire to fully satisfy the concerns of all parties.
Avoiding : A person may recognize that a conflict exists and want to withdraw from it or suppress it.
Accommodating : When one party seeks to appease an opponent, That party is willing to be selfsacrificing.
Compromising : When each party to the conflict seeks to give up something, sharing occurs,
resulting in a compromised outcome.
Stage 4 : Behavior
The behavior stage includes the statements, actions and reactions made by the conflicting parties. These
conflict behavior s are usually overt attempts to implement each partys intentions.
Stage 5 : Outcomes
Outcome may be functional-improving group performance or dysfunctional.
Functional Outcomes are :
Improves the quality of decisions
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BIMS
Stimulates creativity and innovation.

Encourages interest.
Provides the medium through which problems can be solved and
tensions released.
Dysfunctional Outcomes are :
Undesirable consequences include a retarding of communications.
Reductions in group cohesiveness
Conflict Management Approaches :
These are two types of conflict management approaches:
Direct
Indirect
TYPES OF CONFLICT
In organizations, conflicts can be interpersonal, intra-group, inter-group or intraorganizational in nature.
Intra-organizational conflict encompasses vertical, horizontal, line-staff and role conflict.
Vertical Conflict:
It refers to conflicts that occur between individuals at different levels. Conflict between the superior and
subordinate is an example of vertical conflict. Such conflicts could happen because of perceived
transgression of psychological contract, inadequate or ineffective communication, selective perception,
misperception, incongruence in goals, values, cognition, affect and behavior etc.
Horizontal Conflict:
It refers to tensions between employees or groups at the same hierarchical level. Horizontal conflict
occurs because of interdependence among the parties concerned in the work situation or the common
pooled resources shared. For example, sharing personal computers among the various departments is
likely to produce tensions among the departments. Incompatibility of goal and time orientations often
results in horizontal conflicts. Conflicts will take place between the units due to the misunderstanding
and frustration experienced by both parties. Horizontal conflict increases as: i) functional
interdependence increasers among people or groups at the same level ii) more units depend on common
resources that have to be shared raw materials and iii) the fewer the buffers or inventories for the
resources shared.
Line and Staff Conflict:
It refers to the conflicts that arise between those who assist or act in an advisory capacity (staff) and
those who have direct authority to create the products, process, and services of the organizing (line).
Staff managers and line managers usually have different personality predispositions and goals and come
from different backgrounds. Staff managers have specialized skills and expertise acquired through
training and education and have greater technical knowledge which is intended to help the line manager
who are basically money maker for the organization. Staff people serve as advisor for the line people in
as much as
they have the expertise to streamline methods and help in cost-cutting mechanisms. Line managers may
feel that the staff people are unnecessarily interfering in their work by always telling them how to do
their job and thrusting their ideas and methods. Staff
people often get frustrated that the line people do not consider all the ideas put forth by them and
thereby fail to benefit.
Role Conflict:
It arises because different people in the organization are expected to perform different task and
pressures build up when the expectation of the members clash in several ways.
There are two types of conflict.
i) Inter-sender role conflict: This occurs when different role senders (bosses) expect the individual to
perform different things and these expectations and the messages conflict with each other
ii) Inter-role conflict: This occurs when role requires associated with members in one group conflicts with
role requirements stemming from members in another group.
CONFLICT PROCESS
The conflict process can be categorized into five stages. They are as follows:
Stage I: Potential opposition or incompatibility:
This covers the present condition that creates opportunity for conflicts to arise. This may be one of the
conditions responsible for the occurrence of conflict. The major sources of conflict can be further
categorized as communication, structure and personal variables.
Communication: It is reported that word connotations, jargon, insufficient exchange of information and
noise in the communication channel are all barriers to communication and potential antecedent
conditions to conflict.
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Structure: It is reported that the size and specialization act as forces to stimulate conflict. The larger the
group size and the more specialized its activities, the greater the likihood of conflict. The potential for
conflict tend to be greatest when group members are younger and when turnover is high.
Personal variables: The evidence indicates that certain personality types such as highly authoritarian and
dogmatic people who demonstrate low self-esteem lead to potential conflicts.
Stage II: Cognition and personalization:
Perception or sense making plays a major role in the resolving conflict. Conflict may either be perceived
or felt in nature. Perceived conflict is defined as awareness by one or more parties of the existence of
conditions that create opportunities for conflict to arise. Felt conflict is defined as emotional involvement
in a conflict creating anxiety, tenseness,
frustrations or hostility. Negative emotions have been found to produce over simplification of issues,
reductions in trust, and negative interpretations of the other partys behavior.
Stage III: Intentions:
Using two dimensions cooperativeness (the degree to which one party attempts to satisfy the other
partys concerns) and assertiveness (the degree to which one party attempts to satisfy his or her own
concerns) five conflict handling intentions can be
identified. There are as follows:
i)competing (assertive and uncooperative),
ii)collaborating (assertive and cooperative),
iii) avoiding (unassertive and uncooperative),
iv) accommodating (unassertive and cooperative) and
v) compromising (mid-range on both assertiveness and cooperativeness).
Stage IV: Behavior:
All conflicts manifest in behavior somewhere along with continuum ranging from no conflict or minor
conflict such as minor disagreements or misunderstanding, overt questioning or challenging of others, to
annihilatory conflict such as threats and
ultimatum, aggressive physical attacks or overt efforts to destroy the other party.
Stage V: Outcomes.
The outcomes of conflict may be functional or dysfunctional. Conflict is constructive when it improves the
quality of decision, stimulates creativity and innovation, encourages interest and curiosity among group
members, provides the medium through which problems can be aired and tensions released and fosters
an environment of self-evaluation and change. The evidence suggest that conflict can improve the
quality of decision making allowing all points particularly the ones that are unusual or held by a minority
people. The dysfunctional consequences of conflict on a group or organizations performance are
generally well known. Among the more undesirable consequences are retarding of communication,
reduction in group cohesiveness and subordination of group goals to the primacy of infighting between
members. At the extreme, conflict can bring group functioning to a halt and potentially threaten the
groups survival.
CONFLICT MANAGEMENT TECHNIQUES

The various strategies for minimizing and resolving conflicts can be classified into five categories: i)
Avoidance, ii) Accommodating, iii) Compromise, iv) Competition and v) Collaboration.
Avoidance:
This strategy involves a general disregard for the causes of the conflict and the person might
diplomatically sidestep a conflicting issue, postpone addressing it till later, or withdraw physically or
psychologically from a threatening situation. Avoiding mode is
used when the individual is both unassertive and uncooperative that is, the person has a very low
concern for his own and his opponents needs. The individual follows the following three methods
i) Non-attention: The manager totally avoids or ignores the dysfunctional situation. Individuals tend to
look the other way or disregard hostile action in hopes that the situation will resolve itself in time
ii) Physical separation: It involves moving conflicting groups physically apart from each other. The
rationale is that if the groups cannot interact, conflict will diminish.
iii) Limited interaction: Groups are allowed to interact only on formal situations.
Avoidance style can be very beneficial under the following conditions:
- When the issue involved in the conflict is trivial,
- When more pressing issues are to be handled by the individual with a limited time
frame.
- When ones power is very low and there is no chance of satisfying ones concern
- When more information is needed to make a good decision
- When someone else can resolve the conflict more effectively
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- When you require time to regain more strength and look into different perspective
Accommodation:
Accommodation is a negotiation style where one party is willing to oblige or adapt to meet the needs of
the other party. That party that accommodates loses and the other party wins. Accommodation is useful
for negotiation on minor matters. The negotiation parties may not look for creative, new solutions.
Accommodation might take the form of selfless
generosity, or obeying anothers order rather unwillingly or giving in to another persons point of view. In
all these cases, the individual neglects his or her own concern to satisfy the concerns of their other party.
There is an element of self-sacrifice.
Accommodating is useful in the following situations:
- Where the individual realizes that he or she is wrong
- By yielding, the person indicates to the other conflicting person that he is reasonable
- When an issue is much more important to the other person than to the individual
- By being accommodating, the person maintains good will and a cooperative relationship and also build
social credits so that the other person gives in when a later issue becomes important to this individual.
- When preserving harmony and avoiding disruption are especially more important
- When continued competition would only damage ones cause because one is outmatched and is
losing.
Competition:
Competition occurs when one party negotiates to maximize its results at he expense of the other partys
needs. Competition leads to one party gaining the advantage over the other. One party wins while the
other party loses. Although it is quick and can be used as counter against another person, this option
usually produces a win-lose result.
Competing is a power oriented mode of resolving tensions and one uses whatever power one has or can
muster such skills, knowledge, abilities, rank being well-connected etc to win.
Competing is useful in the following situations:
- When the resources are limited and the system has to be pruned
- When quick and decisive action has to be taken during emergencies
- When one has to take unpopular decision such as enforcing discipline, unpopular rules, cost cutting
measures
- When issues are vital to the survival of the company where one is aware of the right solutions.
Thus, while competing mode is useful in certain situations, people have to be careful not to surround
themselves with yes-men and not to foster ignorance and duplicity in the system. People low on this
mode can learn to use their power more and enhance their own as well as their organizations
effectiveness.
Compromising:
Compromise is the settlement of differences through concessions of one or both parties. In
compromising, the party tries to find some expedient, mutually acceptable solutions with partially
satisfies both parties, though neither is fully satisfied. A compromising stance addresses the issue
without avoiding it, but does not explore the alternative in a way that would be completely satisfying to
both parties as in the case of collaboration.
Compromising involves splitting the difference, exchanging concessions and seeking quick middleground solutions.
Compromising is a useful mode in the following situations:
- When the goals pursued are important, but not so important that it is worth potential disruptions by
taking very assertive or unyielding positions.
- When two parties with equal power are strongly committed to mutually exclusive goals such as in labormanagement bargaining situations
- When interim solutions are required till a more thorough and permanent solutions to the problem can
be found.
- When solutions have to be arrived at under extreme time pressures
- When both collaboration and competition fail to work effectively in resolving conflicts.
Thus, compromise as a conflict resolution mode might offer an easy way out, but is also likely to produce
adverse overall effects for the organization if that is the main or only approach to conflict resolutions
taken by managers in the organization.
Collaboration:
Collaboration occurs when people cooperate to produce a solution satisfactory to both. Collaborating
involves an attempt to work with the other person to find solutions that would be satisfying to both
parties. Here, the underlying concerns of both parties are
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explored in depth, the disagreements examine in detail and resolutions arrived at by combining the
insights of both the parties. A creative solution usually emerges because of the joint efforts of both the
parties who are keen on both gaining from the situation
without hurting the other.
Collaboration is useful in the following situations:
- When two goals of the two parties are both too important to be compromised
- When the commitment of both parties is essential for important projects to succeed
- When the objectives of the parties are i) to learn ii) to merge insights that different people bring to a
problem because of their backgrounds, training, discipline or orientations iii) to work through hard
feelings which are interfering with a desired
interpersonal relationship Thus, in collaborating, the intention of the parties is to solve the problem by
clarifying differences rather than by accommodating various points of view. Examples include attempting
to find win-win solutions that allow both parties goal to be completely achieved and seeking a
conclusion that incorporates the valid insights of both parties.
Culture
Culture is the set of important understandings that members of a community share in common. It
consists of patterned ways of patterned ways of thinking, feeling and reacting that are acquired by
language and symbols that create distinctiveness among human groups. A system of shared values is
the building block of culture. The study of organizational culture is important because of the following
reasons :
1. No organization can operate in isolation to its cultural environment.
2. People in organization come from different cultural backgrounds. They have different beliefs, customs,
preferences etc.
Characteristics of organizational culture :
1. Individual Autonomy : The degree of responsibility and freedom that individuals in the organization
have.
2. Structure : The rules and regulations and the direct supervision that is used to control employee
behaviour.
3. Support : The degree of assistance provided by managers to their subordinates.
4. Identity : The degree to which members identify with the organization as a whole rather than with
their particular field of work.
5. Performance-reward : The degree to which reward system in the organization is based on the
employee performance criteria.
6. Conflict tolerance : The degree of conflict present in relationships as well as the willingness to be
honest and open about differences.
7. Risk tolerance : The degree to which employees are encouraged to be innovative and risk-taking.
Functions of culture :
Cultures serve two critical functions in organizations :
i) Internal integration : means that members develop a collective identity and know how to work
together effectively.
ii) External adaptation : refers to how the organization meets goals and deals with outsiders.
Impact of Culture on Modern Organizations :
i) Freedom : It represents a basic cultural value that affects work in modern organizations.
ii) Equality : This value states that all people are equal, having equal rights.
iii) Security : People seek security of job and personal life.
iv) Opportunity : another value that affects people in organization is the opportunity. People expect
many opportunities to climb the ladder in organization.
Organizational change
INTRODUCTION
Changes are constantly taking place in our environment. Changes occur outside organization that
requires internal adaptation. The manager has to ensure that individual and groups in organizations, and
structures, process and behaviors of sub-systems must
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adapt to the changing external and internal environments. In effect, the manager is a change agent who
facilities changes to occur in the various subsystems of the organization needed. Changes at the
individual level can be facilitated by offering special
training to particular employees to handle a new assignment. At group level, team building efforts can be
initiated to operate interactively in a smooth and harmonious fashion so as to increase their
effectiveness. Changes can be brought at the echnological level through implementation of sophisticated
and more effective machines or by better ways of doing things. At the structural level, job can be
redesigned or new policies initiated which serve the needs of both employees and the organization.
Changes at the perceptual, attitudinal and behavioral levels can be brought about by changing the
organizational climate. By being able to scan the internal and external environment of the organization
and deciphering how changes in these environments are likely to widen the gap between desired and
actual state of affairs (performance, productivity, customer satisfaction, employee satisfaction etc), the
manager can become an effective change agent for introducing planned changes.
ORGANIZATIONAL CHANGE PROCESS

FORCES FOR CHANGE
There are both external and internal forces that result in pressure for change,
External Forces:
The external forces that create the need for change come from various sources. Some of them are as
follows:
Competitive Market Force:
Competition is changing. The global economy means that competitors are as likely to come from across
the ocean as from across town. Heightened competition also means the established organizations need
to defend themselves against both traditional competitors that develop new products and services and
small, entrepreneurial firms with innovative offers. Successful organizations will be the ones that can
change in response to the competitor.
Government laws and regulations:
These are frequent impetus for change. Creation of special economic zones and foreign direct investment
in India sparked off major changes in the IT Industries, Insurance, and Car manufacturing industries. More
foreign automobile industries are setting up
manufacturing plants and generating more employment opportunities in India.
Technology:
It creates the need for change. For example, technological developments in sophisticated and extremely
expensive diagnostic equipment have created significant economy of scale for hospitals and medical
centers. Assembly-line technology is under going dramatic change as organizations replace human labor
with robots. Even in the greetings card industry, electronic mail and internet have influenced the way
people send greetings.
Labor Markets:
The fluctuation in labor markets forces managers to change. For instance, the demand for webpage
designers and website managers made it necessary for organizations that need those kinds of
employees to change their human resources management activities to attract and retain skilled
employees in the areas of greatest need.
Economic Changes:
Economic changes affect almost all organization. The appreciation of rupee value against the US dollar
affects the export prospects of knitwear products from India to America as those products cost more to
Americans. But even in strong economy, uncertainties about interest rates, government budgets deficits
and current exchange rates create conditions that may force organizations to change.
Internal Forces:
Internal forces can also stimulate the need for change. These internal forces tend to originate primarily
from the internal operations of the organizations or from the impact of external changes.
Structural factors:
A structural force would be the inability to transmit important information from the top of the
organization to the lower level cadre. Because of numerous layers in the hierarchy, information moves
slowly from one level to the next. This could be viewed as a process or a behavioral problem involving a
failure to communicate effectively.
Strategy:
A redefinition or modification of an organizations strategy often introduces a host of change. The
strategic move of Reliance Industries in getting into retail business in urban and rural markets made
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them to introduce a change in the managerial approach as well as the human relations approach to gain
acceptance from the different cross section of the customers.
Organizations Workforce:
In recent times, the work force composition is varied and is not very static. Its composition changes in
terms of age, education, sex and so forth. In a stable organization with a large pool of seasoned
executives, there might be a need to restructure jobs in
order to retain younger managers who occupy lower ranks. The compensation and benefit system might
also need to be adapted to reflect the needs of an older work force
Technology:
The introduction of new equipment represents another internal force for change. Employees may have
their jobs redesigned, they need to undergo training on how to operate the new equipment or they may
be required to establish new interactions patterns
with their work group.
Employee Attitudes:
Employee attitudes such as increased job satisfaction may lead to increased absenteeism, more
voluntary resignations, and even labor strikes. Such events will often lead t o changes in management
policies and practices.
RESISTANCE TO CHANGE
In planning for change, the team leaders must take into consideration the various factors on which the
members exhibit their resistance to implement the change process. For example, the company wanted to
install a new software program in cash counter
computer terminals to facilitate the fast movement. But some employees may not respond favorably and
display their refusal to cooperate by increasing absenteeism, sub-standard work, joining of union
increased labor turn over etc. Resistance to change can also be a source of functional conflict. For
example, resistance to a reorganization plan or a change in a product line can stimulate a healthy debate
over the merits of the idea and result in a better decision. Resistance can be overt, implicit, immediate or
deferred. It is the easiest for management to deal with resistance when it is overt and immediate such as
employees strike, work
slowdown etc. The greater challenge is managing resistance that is implicit or deferred. Such as loss of
loyalty to the organization, loss of motivation to work, increased errors or mistakes increased
absenteeism etc. .
Individual Resistance
Individual sources of resistance to change lie in basic human characteristics such as perceptions,
personalities and needs.
Habit: The team members are habituated or conditioned to do their job or activity in a particular way.
When they are asked to do differently, they tend to respond to resist change. When employees are asked
to move to new office building across the town,
they are likely to change their routine habits like waking up ten minutes earlier, finding new parking
place, adjusting to new office layout, developing new lunch time routine etc.
Security: The team members with a high need for security are likely to resist change because it
threatens their feelings of safety. When Indian Railway introduced new online booking for their
reservations, employees may have similar fears.
Economic Factors: If the members feel that the new changes result in lower pay, they may likely to
resist change process. Changes in jobs or established work routine can also arouse economic fears if
people are concerned that they wont be able to
perform the new tasks or routines to their previous standards, especially when the pay is closely tied to
productivity.
Fear of the Unknown: The cashiers or secretaries might fear the new activities due to lack of
knowledge in operating the new software program. They might develop a negative attitude towards
working with new programs or behave dysfunctionally if
required to use them. Employees in organizations hold the same dislike for uncertainty. For example, if
an organization introduced TQM, the production employees will have to learn statistical process control
techniques. Therefore, they may develop a negative attitude towards TQM or behavior dysfunctionally if
required to use statistical techniques.
Selective Information Processing: Once the team members shape their world through their own
way, they prefer to do their work based on their perceptions. If the change process demands to follow
the new method, the members tend to resist. So
individuals are guilty of selectively processing information in order to keep their perception intact. They
hear what they want to hear. They ignore information that challenges the world they have created.
Organizational Resistance
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BIMS
Some organizations prefer to follow their routine and reluctant to venture new things or follow any new
methods of doing. Government agencies want to continue doing what they have been doing for years,
whether the need for their service changes or remains the same. Six major sources of organizational
resistance have been identified. They are as follows:
Structural Inertia: Organizations have built in mechanisms to produce stability. For instance, the
training and orientation programs reinforce specific role requirements and skills. Formalization provides
job descriptions, rules and procedures for
employees to follow. Once the routine has been established, organization is very reluctant to adapt to
new changes. When an organization is confronted with the change process, the team members tend to
resist.
Limited Focus of Change: The change process is interlinked. One activity cannot be changed with out
affecting the others. If change is introduced in technology without considering the structural changes,
the change in technology is not likely to be
accepted. Organizations are made up of number of interdependent subsystems.
Group Inertia: Some times the group norm or standards could act as a constraint. For example, the
union norms may dictate resistance to change process.
Threat to Expertise: The change process could threaten the expertise of team members of the
groups. Once the members feel that they are forced to learn something new, they tend to resist. The
introduction of decentralized personal computers, which allow managers to gain access to information
directly from a companys mainframe, is an example of a change that was strongly resisted by many
information system departments in the 1980s. Because of decentralized end-user computing was a
threat to the specialized skills held by those in the centralized information system departments
Threat to Established Power Relationship: The change process can threaten long established
power relationships within the organization. Due to this reason, the members can resist the change.
Threat to established resource allocation: The group, which enjoys sizable resources, may not like
to accept the change process that facilitates reduction in their budget.
OVERCOMING RESISTANCE TO CHANGE

John Kotter and Leonard Schlesinger offered six ways of overcoming resistance to change, which are
highly situation dependent. More than one of these techniques may be used in any given situations.
Education and Communication: If the logic and advantages of the change are explained early to the
team members, resistance can be reduced. This can be achieved through one-to-one discussions,
memos, group presentations, or reports. This tactics
assumes that the source of resistance lies in misinformed or poor communication. If the team members
received the full facts and have their misunderstanding cleared up, their resistance will subside. Once
people have bought into the idea, they will
implement the change. The only problem is that this could be very time consuming process, if too many
people are to be communicated with.
Participation and Involvement: Resistance to change can be reduced or eliminated by having those
involved participate in the decision of the change through meetings and induction. It is difficult for
individuals to resist a change decision in which they
participated. Once people have had an opportunity to contribute ideas and become a part of the change
process, they will be less inclined to see it fail. However, working in committees or task forces is a time
consuming activity, and hence it will take a
longer time to bring about changes.
Facilitation and Support: Easing the change process and providing support for those caught up in it
is another way managers can deal with resistance. Retraining programs, allowing time off after a difficult
period, and offering emotional support and
understanding may help. This emotional support can be given through empathic listening, offering
training and other types of help. Such facilitation and emotional support help individual to deal more
effectively with their adjustment problems. This
process can be time consuming and there is no guarantee that it will always work.
Negotiation and Agreement: It is sometimes necessary for a team leader to negotiate with potential
resistance or exchange something of value for a lessening the resistance. For instance, if the resistance
is from a few powerful individuals in the
team, a specific reward package can be negotiated that will meet their individual needs. Though in some
instances this may be the relatively easy way to gain acceptance, it is possible that this could be an
expensive way of effecting changes as well. Also, if the use of this strategy becomes public knowledge,
others might also
want to try to negotiate before they accept the change.
73
BIMS
Manipulation and Co-optation: The team leader seeks to buy off the key members who are
resisting by giving them an important role in the change decision. The team leaders advice is sought,
not to arrive at a better decision but to get their endorsement. Some of the co-opting tactics include
selectively sharing information and consciously
structuring certain types of events that would win support. This can be a quick and relatively easy and
inexpensive strategy to gain support. However, the purpose will be defeated if people feel they are being
manipulated.
Explicit and Implicit Coercion: The team leaders can force the members to go along
with changes by threats involving loss or transfers of jobs, lack of promotion, etc.
Such methods, though not uncommon, i s more difficult to gain support for future
change efforts. This strategy can be particularly resorted to when changes have to be
speedily enforced or when changes are of a temporary nature. Though speedy and
effective in the short run, it may make people angry and resort to all kinds of mean
behaviors in the long run.
CHANGE
Kurt Lewin argued that successful change in organizations should follow three steps
i) Unfreezing the status quo
ii) Movement to a new state
iii) Refreezing the new change to make it permanent.
Unfreezing:
It is actually the process of preparing the system for change through disconfirmation ofthe old practices,
attitudes, tendencies, or behaviors. This is the initial phase where thoseinvolved in the change
experience a need for something different and a sense of
restlessness with the status quo. In essence, the feeling that the system is hurting itself badly now and
desperately requires a change to survive, is sensed by all. Initiative for changes efforts are taken to
overcome the pressures of both individual resistance and group conformity.
Movement to a new state:
Changing or moving is the phase where the changes that have been planned are actually initiated and
carried out. Changes could relate to the mission, strategy, objectives, people, tasks, work roles,
technology, structure, corporate culture, or any other aspects of the organization. Well thought out
changes have to be carefully implemented with participation of the members who will be affected by the
change. Changes incorporated too quickly without adequate preparation will result in resistance to
change.
Refreezing:
It is the last phase of the planned change process. Refreezing ensures that the planned changes that
have been introduced are working satisfactorily, that any modifications, extra considerations, or support
needed for making the changes operational are attended to, and that there is reasonable guarantee that
the changes will indeed fill the gap and bring the system to the new, desired state of equilibrium. This
necessarily implies that the results are monitored and evaluated, and wherever necessary corrective
measures are taken up to reach the new goal. If the refreezing phase is neglected or temporarily
attended to, the desired results will not ensure and the change may even be total disaster
74
BIMS

Managing Organization

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MANAGING

NATURE AND SCOPE OF MANAGEMENT

2. Dynamic Nature of Principles

3. Relative, Not Absolute Principles

4. Management, science or Art

Frederick Taylor and Scientific Management

Contributions of Henry Fayol

General Principles of Management

Max Webers Bureacracy Theory (1864 - 1924), Germany

personal qualities of the ruler.

The Human Relations Movement

managerial decision to a mathematical form so that the decision-making process can be

Hawthorne Studies conducted by Elton Mayo

(iii) Contingency Approach.

Quantitative or Mathematical Approach or Management Science

This approach suffers from the following drawbacks:

Evaluation of System Approach:

Contingency or Situational Approach:

Features of Contingency Approach:

MANAGEMENT AS A SCIENCE AND AN ART

Science is extraordinary. It is a method of doing things. It is the organized systematic expertise

ii. Personal Skill

v) Disseminator: M anager acts as conduits of information to organizational members. He is expected

Planning is looking in to the future

It involves predetermined lines of action

Planning is a continuous process

Planning integrates various activities of an organization

Planning is done for a specific period

It discovers the best alternatives out of available alternatives

Planning is required at all levels of Management

It is the primary functions of Management]

Growth and prosperity of any organization is depends upon planning

To bring co-operation and co-ordination in the organisation

To bring economy in operations

Helps to anticipate unpredictable contingencies

To achieve the pre determined goals

It helps the better utilization of resources

It helps in achieving the objectives

It helps in achieving economy in operations

It minimizes future uncertainties

It improves competitive strength

It helps effective control

It helps to give motivation to the employees

It develop rationality among management executives

It reduces red tapism

It encourages innovative thought

It improves the ability to cope with changes.

It create forward looking attitude in Management

It helps in delegation of authority

It provide basis for control

Perception of Opportunities:- It is the beginning of planning process. ThisProvides an opportunity to

Devising a mechanism of Project monitoring and Evaluation.

A manager is required to develop a number of plans to achieve the organizational objectives.

analysis and editing of data.

4. Delegation of authority:- Assignment of duties should be followed by delegation of authority. It is

1. Line Organisational Structure:

2.Line and staff organizational structure

Is oriented towards end results.

Professional identification is maintained

Pinpoints product-profit responsibility

Conflict in organisation authority exists.

Possibility of disunity of command exists

Requires manager effective in human relations

Is logical and reflection of functions