UNIT IV

Prof. T.R.Piplani

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 Managerial Ethics

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Managerial ethics

• Managerial ethics deals with the

situations managers face in their
work lives that are filled with ethical
content

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• Reasons to follow ethics
1. Society and stakeholders’ expectations
2. In the interest of organizational
managers

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Importance of ethics

• Business is part of society

• Image concerns
• Manager is trustee of various groups
• Increasing consumer power
• Government intervention
• To live happily, job values  social
values

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Benefits of good ethical
behavior/ practices
• Economical benefit - Carbon credits

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Determinants of ethics

1. Social factors
2. Economic factors
3. Cultural factors
4. Political factors
5. Organizational factors
6. Contemporary code – eg AIMA

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Principles of business ethics

• Be trustful
• Keep an open mind
• Meet obligations
• Have clear documents
• Become community involved
• Maintain accounting control
• Be respectful
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Social responsibility

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Ethics and stakeholders

• Customers
• Employees
• Industry
• Managers
• Society

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Business values – different
levels
• Individual values
• Group values
• Top management values
• Environmental values

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Ethos

• Characteristics, spirit and beliefs of

community, people…

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Indian ethos

• Principles of management
1. Divine resides in the heart of a person
2. Holistic approach
3. Combining subjective and objective
4. Karma yoga
5. cooperation

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 Determinants of OB

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The determinants

1) Internal vs external determinants of

behavior
2) Personality and situational variables
3) Cognition vs environment

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Models

1) S-R model
o Internal feelings
o External environment

1) S-O-B-C model

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S-R Model

Stimulu
s
input

Organism

Respons
e
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S-O-B-C Model

Stimulu organism
s

Behavior

consequenc
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es
Assumptions

1. Individual differences
2. The whole person
3. Caused behavior through
motivation
4. Human dignity

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Determinants

1) Biographical characteristics
2) Learned characteristics
3) Environmental factors
4) Organizational factors

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Biographical characteristics

Age
Gender
Marital status
No. of dependants
Ability
Intellectual ability
Physical ability

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Learned characteristics

• Attitude
• Values
• Perception
• Motivation

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Organizational factors

• Physical facilities
• Organization structure and design
• Leadership
• Reward system

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 Perception

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Definition

• Perception includes all those

processes by which an individual
receives information about his
environment – seeing, hearing,
feeling, testing and smelling

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Perception vs Sensation

• Perception combines I/P from the

different senses

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Significance of perception

• PERCEPTION – Factors that shape

and produce what we actually
experience. It is described as a
person’s view of reality

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Inwards or outwards?

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 The process
Perceptual mechanism
Perceptual I/P or stimuli Selection interpretation
organization

Characteristics of
perceiver

Characteristics of Perceptual O/P

situation

Behavior
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Perceptual mechanism

1) Perceptual selectivity
2) Perceptual organization
3) Perceptual interpretation

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Perceptual selectivity
1) Internal factors
a) Needs and desires
b) Personality
c) Experience
d) Learning

2) External factors
a) Size
b) Intensity
c) Frequency
d) Status
e) Contrast
f) Movement
g) Novelty and familiarity
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Perceptual organization

1. Figure and ground

2. Perceptual grouping
a. Similarity
b. Proximity
c. Closure
d. Continuity – symmetrical/closed figure

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Figure and ground

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Figure and ground

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Figure and ground

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Similarity

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Characteristics of perceiver

• Needs and motive

• Self concept
• Past experiences
• Current psychological state
• Beliefs
• Expectations
• Cultural upbringing
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Implications of perception for
management
1. Perception and hiring
2. Perception and performance
appraisal
3. Perception and motivation

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Perceptual errors and
distortions
i. Stereotype
ii. Halo effect
iii. Projection
iv. Self serving bias and attribution
error
v. Selective perception

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 Attribution theory

Consequences
(high/low)

Observation of Consistency Attribution

behavior (high/low) Of causes

Distinctiveness
(high/low)

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 Learning

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Definition

• The process of acquiring the ability

to to respond adequately to a
situation

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Nature

• Involves change in behavior

• Change should be relatively
permanent
• Change must be based on some form
of practice, experience or training
• Practice/experience should be
reinforced

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Types of learning

• Classical conditioning
• Operant conditioning
• Cognitive learning
• Social learning

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Classical (associative)
conditioning
• Before conditioning
Unconditioned Unconditioned
stimulus response
(meat) (salivation)

Conditioned
stimulus No
(bell) response
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Classical (associative)
conditioning
• During conditioning
Unconditioned Unconditioned
stimulus response
(meat) (salivation)

Conditioned
stimulus
(bell)
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Classical (associative)
conditioning
• After conditioning

Conditioned Unconditioned
stimulus response
(bell) (salivation)

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Operant conditioning

• Stimulus >response >consequences

>future response

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 Reinforcement theory
Learning from

Personal factors Post consequences

Organizational factors and experiences, rewards,
Environmental factors Outcomes, punishments etc

Conditional predisposition
to act or not to act
Behavior

Performance
(result of conditional learning)
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 Types of reinforcement
Pleasant/ Unpleasant/
Desirable events Undesirable events
Positive Punishment
Event
reinforcement
applied Behavior more Behavior less likely
likely to occur to occur again
again
Extinction Negative
Event reinforcement
withdrawn
Behavior less likely Behavior more likely
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Reinforcement schedule

a) Fixed interval schedule

b) Variable interval schedule
c) Fixed ratio schedule
d) Variable ratio schedule

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 Personality

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Definition
• “Personality may be understood as the
characteristic pattern of behavior and
modes of thinking that determine a
person’s adjustment to environment”
- Hilgrad, Atkinson

• “Personality includes external appearance

and behavior, inner awareness of self as a
permanent organizing force and the
particular pattern or organization of
measurable traits, both inner and outer”

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Shaping factors
• Heredity
• Brain – ESB research
• Emotional make up or temperament
• Interest
• Motives
• Physical traits
• Family factors
• Social factors
• Situational factors

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Pyscho-analytical theory of
personality
• Postulated by Sigmund Freud
• 3 concepts
i. The Id
ii. The ego
iii. The super ego

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Stages of personality
development
1) Oral stage
2) Anal stage
3) Phallic stage
4) Latency stage
5) Genital stage

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 Chris Argyris’ immaturity-
maturity continuum
Immaturity – maturity continuum

Immaturity Maturity
characteristics characteristics
Passivity Activity
Dependence Independence
Few ways of behaving Diverse behavior

Shallow interests Deep interests

Short-term Long-term perspective
perspective
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Traits of personality

• Trait – enduring attribute of a person

that appears constantly in a variety
of situations

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Cattel’s trait theory
• Surface traits
i. Reserved vs outgoing
ii. Less intelligent vs more intelligent
iii. Affected feelings vs emotionally more stable
iv. Submissive vs dominant
v. Serious vs happy go lucky
vi. Expedient vs conscientious
vii. Timid vs venturesome
viii.Tough minded vs sensitive
ix. Trusting vs suspicious
x. Practical vs imaginative
xi. Forthright vs shrewd
xii. Self assured vs apprehensive
xiii.Conservative vs experimenting
xiv.Group dependant vs self dependant
xv. Uncontrolled vs controlled
xvi.Relaxed vs tense
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 Big 5 traits model
Core traits Descriptive characteristics
1 conscientiousness Dependable, hard working,
organized, self disciplined,
persistent
2 Emotional stability Calm, secure, happy, unworried
3 agreeableness Cooperative, warm, caring, good
natured, courteous, trusting

4 extraversion Sociable, outgoing, talkative,

assertive and gregarious
5 Openness to Curious, intellectual, creative,
experience cultured, artistically sensitive,
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Personality traits – influence on
OB
1. Authoritarianism
2. Machiavellianism
3. Introversion vs extraversion
4. Type A vs Type B
5. Self concept and self esteem
 High – challenge
 Low - seeking approval
1. Locus of control
 Internal vs external

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 Type A Type B
Aggressive and Easy going, laid-
Adv. competent back and non
competent
Impatient, irritable, Better at complex
Disadv. poor judgment tasks

Is always moving Never in hurry

Walks rapidly, talks Does not brag
rapidly
Does 2 tasks at a Plays 4 fun, not 2
time win
Measures success Relaxes w/o guilt
by quantity
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 Motivation

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Definition
• Motive – anything that initiates or sustains
activity
• Motive – idea, need or emotion which prompts
a person into action
• Motivation – The complex of forces starting
and keeping a person at work in organization

“ Motivation is the core of management”

- Likert

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The mechanism
Need Tension Search behavior

Performance/
failure

Incentive/
Need satisfaction reward
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Ramifications of failure

• Aggression
• Rationalization
• Regression
• Fixation
• Resignation
• Apathy

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Maslow’s hierarchy of needs

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Maslow’s hierarchy of needs

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 Self
Physiological Security
Social Esteem actualization

Intensity
of needs

Realization
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Drawback of Maslow’s
theory
• Does not take into account individual
differences

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Alderfer’s ERG model
• The 3 needs
1. Existence > Physiological and safety
2. Relations > Social, esteem needs derived from
other people
3. Growth > Self actualization

• Revision of Maslow
– Decreasing concreteness
– Achieving a goal causes a decrease in its importance
– Satisfaction progression; frustration regression

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McClelland’s theory

1. Need for power (nPow)

 Esteem -> Self actualization
2. Need for achievement (nAch)
 Esteem -> Self actualization
3. Need for affiliation (nAff)
 Social needs

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Critical appraisal of
McClelland
1. Doubtful research evidence
2. Objectionable use of techniques
3. Does not deal with process of
motivation
4. Achievement motivation training is
time consuming and expensive

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Herzberg’s 2 factor theory
• Hygienic factors (Deal • Motivational factors (deal
with environment) with nature of work)

1. Company policy and 1. Achievement

administration
2. Technical supervision
3. Relations with 2. Recognition
supervisors 3. Advancement
4. Relations with peers
5. Relations with
subordinates 4. Possibilities of growth
6. Salary 5. Work itself
7. Job security 6. responsibility
8. Personal life
9. Work conditions
10.status
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Herzberg and Maslow – A
comparison Motivation

Self actualization

Esteem

Social

Safety

Physiological

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Loopholes in Herzberg

• Study focused on engineers and

accountants
• Defective methodology
• Off-the-job satisfaction elements like
pay, status, inter personal
relationships neglected

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Incentives
• Financial incentives
• Non financial incentives
– Status
– Job security
– Performance and feedback
– Praise
– Opportunity of growth
– Participative and consultative management
– Career development plan

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Job related motivation
strategies
• Job enrichment
– Freedom to workers in deciding how to
do the work
– Increase responsibility
– Encourage participation’
– Provide feedback
– Make workers understand significance of
their task
• Job enlargement
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McGregor’s theories
• Theory X
– Directing, motivating, modifying behavior
– Carrot and stick approach

• Theory Y
– Work can be a source of satisfaction or punishment
– Employee will exercise self direction and self control
– Commitment depends upon rewards
– Avoidance of responsibility, lack of ambition and
emphasis on security are consequences of experience
– Most people are imaginative, creative and ingenuous

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Critical appraisal

• Theory X > unskilled,

uneducated low
level workers
• Theory Y > skilled & educated
employees

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Ouchi’s Theory Z
Features
1. Mutual trust
2. Strong bond b/w company and
employees
3. Employee involvement
4. Integrated organization
5. HRD
6. Role of leader
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Critical appraisal

• Based on Japan’s unique culture

• Lack of empirical research to confirm
utility
• No guidelines as to in what
conditions it is to be applied
• Operational problems

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 Stress management

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“ A person experiences stress when a
situation is perceived as presenting a
demand which threatens to exceed
the person’s capabilities and
resources for meeting it”
- McGrath

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Stages
Alarm reaction

Resistance

Exhaustion

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Causes
• Work overload
• Time pressure
• Poor quality of supervision
• Insecure political climate
• Inadequate authority to match responsibilities
• Role conflict and ambiguity
• Change of any type, especially major/unusual
• Frustration

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Leads to

• Physiological discomfort
• Some emotional unhappiness
• Strained relationship

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Nature

i. Eustress and distress

ii. Stress is additive
iii. Depends on individual

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Symptoms

a) Physiological symptoms
b) Psychological symptoms
c) Behavioral symptoms

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 Stress and performance

Distress Distress

Performance

Stress Eustress
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• Type of job and stress
• Personality and stress
• Type A and Type B personality
• Sources of stress
– Factors intrinsic to job
– Role in organization
– Relationship at work
– Career development
• Job security
• Status incongruity
– Organizational structure and climate
– Extra-organizational sources of stress

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Consequences of stress
• Disruption of relationship
• Situation of physical danger
• Extreme sense of failure, loss of self esteem
• Sudden moment of triumph

• Physical
• Behavioral
• Psychological
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Consequences for
organization
• Decline in performance
• Absenteeism, turnover
• Job satisfaction, morale, commitment

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Management of stress
• Coping stress at organizational level
– Stress reduction and stress mgmt. programs
– Job redesign
– Collateral programs
– Counseling
– Meditation
• Coping stress by individual
– Relaxation
– Time management
– Mgmt. of self role
– Support group

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Psychological counseling
• Discussion of an emotional problem
within an employee, with general
objective of decreasing it

• Need for counseling

– Conflict
– Frustration
– stress

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Functions of counseling

• Advice
• Reassurance
• Communication
• Release of emotional tension
• Clarified thinking
• Reorientation

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Types of counseling
• Non – directive counseling > counselee
centered

• Directive counseling > counselor centered

• Co – operative counseling > neither

centered

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 Inter personal behavior:
transactional analysis

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Transaction analysis

• TA is the study of social transactions

b/w people. It is a technique used to
help people better understand their
own and others’ behavior

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 Analysis of ego states
Nurturing
parent ego
P
(Parent)
Critical
Parent ego

A
Personality (Adult)
Natural child

C Little professor
(Child)
Adaptive child
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Stroking

• Unit of recognition which may be

positive or negative

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Types of transactions

1) Complementary transactions
2) Crossed transactions
3) Ulterior transactions
4) Gallows transactions

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Complementary
transactions

P P

A A

C C
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Complementary
transactions

P P

A A

C C
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Crossed transactions

P P

A A

C C
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Analysis of life position
• Life position > combination of assumption
of self and other person

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 Self
OK Not OK

OK Belief in both Belief in other

Other

Belief in self Belief in none

Not OK

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Basic human hungers
• Stroke hunger
• Structure hunger
– Withdrawing from threatening environment
– Engaging in rituals
– Engaging in productive activity
– Engaging in pastimes
– Being intimate
• Position hunger

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Script analysis

• Shakespeare:
“All the world is a stage. And all the
men and women are merely players.
They have their exits and entrances.
Each plays many parts or roles.”

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Roles in script
• Legitimate
– Prosecutor
– Victim
– Rescuer
• Illegitimate
– Prosecutor
– Victim
– Rescuer

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Game analysis
• Characteristics
– Transaction tends to be repeated
– Makes sense on superficial level
– One or more transaction is ulterior

• Reasons
– To get strokes
– Strengthen life position
– To avoid or control intimacy

• Roles
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Benefits of TA
• Insights to psychological make up
• Interpersonal communication is
improved
• Interpersonal relations improve
• Leadership skills among people
• Useful where success depends on
interpersonal effectiveness like sales,
counseling
• Reinforces and implements
management development activities
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 Johari window

Known to self Unknown to self

Known to Public Blind

others

Unknown to Hidden Unknown

others

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Interactive Johari window

• www.Kevan.org/johari

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Interactive johari window

• http://kevan.org/johari

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 Group dynamics

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Group

A group consists of two or more

persons who interact with each other
consciously for the achievement of
some common objectives

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Characteristics

Interaction b/w members Awareness

Common objectives Group perception

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Types of groups

1. Small and large

2. Primary and secondary
3. Formal and informal
a. Formal groups: command group and
task group

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Group dynamics

• Concerned with the formation of

groups, their structure and the way
they affect individual members,
other groups and organization

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Theories of group formation

1) Propinquity theory
2) Homand’s theory
3) Balance theory
4) Exchange theory

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Homand’s theory

Activities Interactions

Sentiments

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Balance theory

Mr. G Mr. F

Common attitudes

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Causes of group formation
• Desire for socialization
• Sense of identification
• Goal achievement
• Monotonous jobs
• Security
• Source of information
• Reduction of monotony
• Innovation and creativity
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Importance of informal group
for organization
• Support of formal structure
• Filling gaps in management’s abilities
• Speedy communication
• Social function
• Solution of work problems
• Norms of behavior
• Better relations

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Disadvantage of informal
groups
• Restriction of O/P
• Conformity
• Power politics by informal leaders
• Role conflict
• Generation of rumors
• Resistance to change
• Social costs
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Management’s response to
informal groups
• Postitive attitude towards informal
groups
• Rapport with informal leaders
• Use of informal communication
• Involvement of groups
• Developing common areas of interest
or goal congruency

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Group processes and
behavior
• Group objectives
• Authority relations in groups
• Communication in groups
• Leadership in groups

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• Group roles
– Unwritten division of tasks

• Group norms
– Standard of behavior or performance which
the members are expected to observe

• Group cohesiveness
– Degree to which group members form a strong
collective unit reflecting a feeling of oneness

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Factors affecting
cohesiveness
• Proximity of group
• Size of group
• Common elements
• Satisfaction of members’ needs
• Interdependence among members
• External pressures or threats
• Autonomy
• Leadership style
• Status of the group

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 Relation b/w different
factors
Cohesiveness
High Low

High Medium
High productivity productivity

Performance
norms Low Low
productivity productivity
Low

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 Leadership styles and
influence

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Leadership

• It is the process of influencing the

behavior and work of others in group
effort towards the realization of
specified goals in a given situation

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Functions of leadership

• Setting goals
• Organizing
• Motivation
• Coordination
• Representation
• Control

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Role and importance of
leadership
• Providing inspiration to employees
• Securing cooperation
• Creation of confidence
• Providing conducive environment
• Building higher morale
• Facilitation of change

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Types of leaders

• Intellectual leaders
• Democratic leaders
• Autocratic leaders
• Persuasive leaders
• Creative leaders
• Institutional leaders

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Types of Leadership

1. Charismatic leadership
2. Transformational leadership
3. Transactional leadership

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 Transactional Transformationa
leadership l
leadership
Contingent reward Charisma

Management by Inspiration
exception(active)
Management by Intellectual
exception simulation
(passive)
Laissez-faire Individual
consideration
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Styles of leadership

1. Autocratic leadership
a. Strict autocrat
b. Benevolent autocrat
c. Manipulative autocrat
2. Participative or democratic leader
3. Laissez-faire or free-rein leader

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Autocratic leader

Leader

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Democratic leader

Leader

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Laissez-faire leader

Leader

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Likert’s management
systems
1. Exploitative authoritative
2. Benevolent authoritative
3. Consultative
4. participative

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Leadership skills

• Visionary skills
• Communication skills
• Sensitive skills
• Self awareness skills

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Traits or qaulities of good
leader
• Intelligence
• Physical features/ appearance
• Maturity
• Vision and foresight
• Inner motivation
• Sense of responsibility
• Empathy
• Human relations attitude
• Emotional balance

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Trait theory of leadership

• Stogdill’s trait factors

– Intelligence and scholarship
– Physical traits
– Personality
– Social status and experience
– Task orientation

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 Behavioral theory of
leadership
• Tannenbaum’s continuum of
leadership behavior

Autocratic Free-rein
(boss centered) (subordinate centered)

Use of authority
By manager Area of freedom
For subordinates

Presents tentative Permits subordinate

Manager takes, Decisions subject To function
announces decision To change Within limits
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Choice of leadership style

• Depends upon
– Forces in manager
– Forces in subordinate
– Forces in situation

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Michigan studies
Employee Production
centered leader centered leader
Treats subordinates as Emphasizes technical
human beings aspect of job
Shows concern for well Relies on work
being of employees standards

Encourages and Close supervision,

involves the employees are seen as
employees in setting a tool in the
and
11/10/10implementing production process 178
 Managerial grid
9
1-9 9-9
Country club Team
Concern for people

5-5
5 Middle road

1-1 9-1
Impoverished Task
0
5 9
Concern for production
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Appraisal of behavioral
theories
• There was assumed to be a single
“best” style of leadership

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Situational theories of
leadership
External
environment

Economic
International
Organization

Leader followers
Politico-legal
Technological

Socio-cultural

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Fiedler’s contingency theory
Combina Leader- Task Position favorabl
tion follower structure power eness

1 Good High Strong High

2 Good High Weak
3 Good Low Strong
4 Good Low Weak
5 Poor High Strong
6 Poor High Weak
7 Poor Low Strong
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Conclusion

• Task oriented >

favorable/unfavorable leadership

• Relationship oriented >

situation intermediate in
favorableness for leader

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