1

L-4, T-0 Credits —4 External Marks: 75

GURU GOBIND SINGH INDRAPRASTHA UNIVERSITY, DELHI

BACHELOR OF BUSINESS ADMINISTRATION (BBA)

BBA 101: Management Process & Organizational Behaviour

L-4,Objective:
T-0 The course aims at providing Credits —4 knowledge and exposure
fundamental External
to theMarks: 75
concepts,
theories and practices in the field of management.
Course Contents
Unit I (14 Hours)
Management: Concept, Nature, Process, Significance; Managerial levels, skills, Functions and
Roles; Management vs. Administration; Coordination as Essence of Management.
Planning: Nature, Scope and Objectives of Planning; Types of plans; Planning Process; Process
and Techniques of Decision-Making; Bounded Rationality. Organising: Concept, Principles of an
Organization; Span of Control; Departmentation; Types of an Organization; Delegation and
Decentralization.

Unit II
(14 Hours)
Staffing: Concept, Nature and Importance of Staffing. Motivating and Leading: Nature and
Importance of Motivation; Types of Motivation; Theories of Motivation: Maslow, Herzberg, X,
Y and Z.

Controlling: Nature and Scope of Control; Types of Control; Control Process; Control
Techniques — Traditional and Modern.
Unit III (14 Hours)

Organisational Behaviour-1: Concept and nature of Organizational behavior, Importance,

Challenges and Opportunities,

Individual Behaviour: Personality — Determinants and Traits; Learning-Theories and Process,

Perception —Process and Errors, Attitudes- Formation, relationship between individual
determinants like personality, learning, perception and attitude with behaviour.
Unit IV (14 Hours)

Group Behaviour & Team Development: Concept of Group and Group Dynamics, Stages
of Group Development, Theories of Group Formation; Concept of Team v/s. Group; Types of
Teams, Building and Managing Effective Team.

Suggested Readings:
1.Robbins, (9th Ed., 2016). Fundamentals of Management: Essentials Concepts and Applications,
Pearson Education.
2.Robbins, S.P. and Sanghi, S.,(16th Ed., 2014), Organizational Behaviour; Pearson Education.
3.Koontz, H.(10th Ed., 2015), Essentials of Management, McGraw Hill Education. 4
Ghillyer, A, W., (rd Ed. 2011) Management- A Real World Approach, McGraw Hill Education.

5.Stoner, Freeman and Gilbert Jr. (8th Ed. 2010) Management, Pearson Education.
6.Luthans, Fred, (12th Ed., 2013), Organizational Behavior, McGraw Hill Education.

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 GURU GOBIND SINGH INDRAPRASTHA UNIVERSITY, DELHI
BACHELOR OF BUSINESS ADMINISTRATION (B&I)
BBA (B&I) 101: Management Process & Organizational Behaviour
L-4, T-0 Credits —4 External Marks: 75
Objectives: The course aims at providing fundamental knowledge and exposure to the concepts,
theories and practices in the field of management.
Course Contents
Unit I (14 Hours)
Management: Concept, Nature, Process, Significance; Managerial levels, skills, Functions and
Roles; Management vs. Administration; Coordination as Essence of Management.
Development of Management Thought: Classical, Neo-Classical, Behavioral, Systems and
Contingency Approaches.
Planning: Nature, Scope and Objectives of Planning; Types of plans; Planning Process; Business
Forecasting; MBO: Concept, Types, Process and Techniques of Decision-Making; Bounded
Rationality. Organizing: Concept, Principles of an Organization; Span of Control;
Departmentation; Types of an Organization; Authority-Responsibility; Delegation and
Decentralization;
Unit II (14 Hours)
Staffing: Concept, Nature and Importance of Staffing. Motivating and Leading: Nature and
Importance of Motivation; Types of Motivation; Theories of Motivation: Maslow, Herzberg, X, Y
and Z; Leadership: Meaning and Importance; Traits of a leader; Leadership Styles — Likert's
Systems of Management, Tannenbaum & Schmidt Model and Managerial Grid.
Controlling: Nature and Scope of Control; Types of Control; Control Process; Control Techniques
— Traditional and Modern; Effective Control System.
Unit III (14 Hours)
Organisational Behaviour-1: Concept and nature of Organizational behavior, O.B. Models,
Importance, Challenges and Opportunities.
Individual & Interpersonal Behaviour: Personality — Determinants and Traits; Emotions;
Learning-Theories, Perception —Process and Errors, Attitudes- Formation, Theories, Relationship
between Attitude and Behavior; Interpersonal Behaviour: Johari Window; Transactional
Analysis — Ego States, Types of Transactions, Life Positions, Applications of T.A.
Unit IV (14 Hours)
Group Behaviour & Team Development: Concept of Group and Group Dynamics, Stages of
Group Development, Theories of Group Formation; Concept of Team Vs. Group; Types of Teams;
Building and Managing Effective Teams.
Organization Culture and Change Management: Concept of Organizational Culture, Managing
Conflict,. Managing Change, Resistance to Change, Managing Cross Cultures
Suggested Readings:
1.Robbins, (9th Ed., 2016). Fundamentals of Management: Essentials Concepts and Applications,
Pearson Education.
2.Robbins, S.P. and Sanghi, S.,(16th Ed., 2014), Organizational Behaviour; Pearson Education.
3.Koontz, H.(10th Ed., 2015), Essentials of Management, McGraw Hill Education.
4.Ghillyer, A, W., (2°4 Ed. , 2011) Management- A Real World Approach, McGraw Hill
Education.
5.Stoner, Freeman and Gilbert Jr. (8th Ed. ,2010) Management, Pearson Education.
Luthans, Fred, (12th Ed., 2013), Organizational Behavior, McGraw Hill Education.

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Unit Unit Name Page
No. Number
I Lesson 1 : Introduction , Nature, Process, Significance, managerial 5-35
levels , Functions and roles, skills, Management v/s Administrations,
coordination as Essence of Management
Lesson 2: Development of management thoughts- Classical and neo
classical, behavioral and contingency approaches
Lesson 3: Planning: Nature, Scope and Objectives of Planning: Types of
plans; Planning Process; Business Forecasting: MBO: Concept, Types,
Process and Techniques of Decision-Making: Bounded. Rationality.
Lesson 4: Organizing: Concept, Principles of an Organization; Span of
Control; Departmentation; Types of an Organization; Authority-
Responsibility; Delegation and Decentralization
Descriptive questions 36-42
MCQs
Glossary/Key Words
References and Further Readings
Introduction : Concepts related to Staffing, Motivation, leadership 43-71
II and Controlling
Lesson 5: Staffing
Introduction, Definition of Staffing, Importance, Recruitment, Methods
of Recruitment, Selection, Performance Appraisal
Lesson 6: Motivation
Introduction, Objectives, Techniques, Theories, Morale
Lesson 7: Leadership
Meaning, Importance, Traits, leadership styles, Qualities of a leader,
Managerial Grid
Lesson 8: Controlling
Introduction, Nature and Scope of Control, Types of control, Control
Process, Essentials of Good Control, Techniques of control
MCQs 72-75
Descriptive questions
Glossary/Key Words
References and Further Readings
Lesson- 9: Organisational Behaviour-1: Concept and nature of 76-92
III Organizational behavior, O.B. Models, Importance, Challenges and
Opportunities.
Lesson 10: Individual & Interpersonal Behaviour: Personality —
Determinants and Traits; Emotions; Learning-Theories, Perception —Process and
Errors, Attitudes- Formation, Theories, Relationship between Attitude and
Behavior;
Lesson 11: Interpersonal Behaviour: Johari Window; Transactional
Analysis — Ego States, Types of Transactions, Life Positions, Applications of T.A
MCQs 93-96
Descriptive questions
Glossary/Key Words
References and Further Readings
Lesson 12: Group Behaviour & Team Development: Concept of Group and 97-126
IV Group Dynamics, Stages of Group Development, Theories of Group Formation;
Concept of Team Vs. Group; Types of Teams; Building and Managing Effective
Teams.
Leeson 13: Organization Culture and Change Management: Concept of
Organizational Culture, Managing Conflict,. Managing Change, Resistance to
Change, Managing Cross Cultures
MCQs 127-130
Descriptive questions
Glossary/Key Words
References and Further Readings

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 UNIT -I
Lesson -1 :- Definitions of Management
“Management is the art of getting things done through others.”
“Management is the art of getting things done through and with people in formally organized
groups.” Harold Koontz
“Management is creation and maintenance of an internal environment in an enterprise where
individuals, working in groups, can perform efficiently and effectively towards the attainment of
group goals”-Koontz and O’Donnell
“Management is coordination of all resources through the process of planning, organizing,
directing, staffing and controlling in order to attain stated goals.”- Henry L. Sisk
Nature & Features of Management
1. Management is Universal- Management is required in every form of group activity whether
it is a family, a club, a government, any army or a business enterprise.
2. Management is purposeful- Management exists for the achievement of specific objective.
3. Management is unifying force- The essence of management lies in the coordination of
individual efforts into a team. As a unifying force, management creates a whole that is more
than the sum of individual parts.
4. Management is social process- Management is done by people, through people and for
people. It is social process because it is concerned with interpersonal relations.
5. Management is multidisciplinary- Management has to deal with human behaviour under
dynamic conditions. Therefore, it depends upon wide knowledge derived from several
discipline like engineering, sociology, psychology, economics, mathematics etc.
6. Management is continuous process- Management is dynamic & on-going process till the
achievement of group goals.
7. Management is intangible- Management is unseen or invisible force. It can’t be seen but its
presence can be felt anywhere in the form of result.
8. Management is situational- Efficient management is always situational or contingency
management because there is not one best way of doing things.
9. Management is Essentially an Executive Function- It deals with the active direction &
control of activities of people to attain predetermined objective.
10. Management is an art as well as a science- Management contains a systematic body of
theoretical knowledge as well as practical application of such knowledge.

Managerial Skills
Definition of Managers
They are the individuals charged with monitoring the workflow, integrating efforts, meeting
goals & providing leadership.
Five important components of effective manager:
i.Working with and through others
ii.Achieving goals
iii.Balancing effectiveness & efficiency
iv.Making the most of limited resources
Coping with a changing environment
Skills of an Effective Manager
Planning Skills
 Ability to think ahead;
 Ability to forecast future trends;
 Ability to state organizational objectives clearly & precisely;
 Ability to make choices that help in realizing predetermined goals;
 Ability to set performance standards for measuring & implementing the plans.
Organizing Skills
 Ability to analyze & describe various organizational jobs;
 Ability to select, train, develop & maintain people in various jobs;
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  Ability to define working relationship and authority-flow properly.
 Ability to get along with changing situations.
Leading Skills
 Ability to communicate ideas effectively;
 Ability to inspire people to do better;
 Ability to inculcate a sense of collectivism in the employees & forcing them to work as a
team;
 Ability to assess the situation and initiate the needed behaviour in an appropriate manner.
Controlling Skills
 Ability to keep the activities on the desired paths;
 Ability to initiate corrective steps at the right times;
 Ability to ensure control measures without hurting the feelings of employees in negative
manner.
Decision-making Skills
 Ability to make good & timely decision;
 Ability to devote on key, important & strategic issues;
 Ability to make right choices & pursue activities that enable the organisation to accomplish
its purpose;
Managerial Roles
Managers must fill many roles as they carry out the management functions.
These roles can be grouped into three categories:
i. Interpersonal Roles
a)Figurehead b)Good Leader c) Public Relation Officer
ii. Informational Roles
a)A Monitor b) Disseminator c) Spokes Person
iii. Decisional Roles
a)An Entrepreneur b) Resource Allocator c) Disturbance Handler d) Good Negotiator
Roles
Roles
Manager’s Formal Figurehead: Representing the organisation in formal matters;
Authority serving as a symbol of organisation.
Liaison: Interacting with peers & people outside the organisation;
developing external links.
Interpersonal Leader: Activities concerned with subordinates; motivating;
Roles staffing; communicating & directing.
Monitor: Receiving & collecting information; utilizing the channels
through which information comes.
Disseminator: Transmitting information within the organisation.
Informational
Roles Spokesman: Transmitting information to people outside the
organisation.
Entrepreneur: Introducing change; initiating projects to improve
the organisation.
Disturbance Handler: Taking charge when organisation is
threatened.
Resource Allocator: Deciding where the organisation will
Decisional Roles
expend its efforts & what resources will be expended.
Negotiator: Involving the organisation with other organisations.

Levels of Management

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 Levels of Management
Determines objectives & policies;
Designs the basic operating & financial Interprets & explains the policies
structure of an org.; framed by top management;
Provides guidance & direction; Issues detailed instructions;
Lays down standards of performance; Participates in operating
Top decisions;
Maintains good public relation.
Management Trains other managers.

Middle
Management

Plans day to day Lower

operation; Management
Assign jobs to workers;
Provides supervision &
control over work;
Arrange material tools &
equipments;
Maintain discipline.

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Levels of Management: Differences

Point of Top Level Management Middle LevelLower Level Management
Distinction Management
Action Focus A small group of policyAct as a connecting linkThese managers are in
makers deciding the fateb’w top & lower leveldirect contact with
of an organisation people & manageemployees.
activities of other
managers.
Representation Chief Executive OfficerFunctional HeadsSection Head, Supervisor,
(CEO), President,(Marketing Manager,First-Line Manager, etc.
Chairman, ManagingPersonnel Manager, etc.)
Director (MD), etc. & immediate
subordinates
Nature of Work They generally spendMiddle managers,Generally physically active,
most of their time withcompared to supervisor,experience frequent
peers, outside & to lesserare far less physicallyinterruption, spend most of
extent with subordinates.active & far morethe time with subordinates
A top managers scheduleinvolved in paper work && peers caring for resource
is typically hectic. meeting. Their job is lessproblems.
hectic but more reflective
& frustrating.

Functions of management
Management Functions
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Planning
1. It is the process of designing in advance that:
2. What is to be done?
3. When it is to be done?
4. Where it is to be done?
5. How it is to done ?
6. By whom it is to be done?
Organizing
• It is concerned with the arrangement of an organization’s resources- ‘5 M’ in order to
achieve enterprise’s objectives
“Organizing is the process of creating structure of relationship to enable employees to carry
out management’s plan & meet its goals.”
“Organization structure is the formal pattern of interactions & coordination designed by the
management to link the tasks of individuals & groups in achieving organizational goals.”
“ Organizational design is the process of developing an organization structure.”
Organizing refers to certain dynamic aspects:
 What tasks are to be done?
 Who is to do the tasks?
 How the tasks are to grouped?
 Who is to report to whom?
 Where the decisions have to made?
Staffing
“The process by which organizations meet with their human resource needs, including
forecasting future requirements, recruiting & selecting candidates & orienting new employees.”
Recruitment is the process of attracting the maximum number of applications for a particular
job.
Selection is the process of screening the candidates & choosing the best ones out of them.
Training involves imparting the necessary knowledge & skills required for the performance of a
particular job
Compensation is the price paid to the workers for the services rendered to the organization.
Directing
“Directing deals with the steps a manager takes (guiding, supervising, motivating, etc.) to get
subordinates and others to carry out plans.”
Elements of Directing
Leadership is the process of influencing others to act towards the attainment of goals.
Motivation is the process of stimulating people to take desired courses of action.
Communication is the process of transferring of information and understanding from one person
to another through words, symbols & gestures.
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Supervision is seeing that subordinates do their work and do it as directed. It involves
overseeing employees at work.
Controlling
Controlling is concerned with monitoring employees’ activities, keeping the organization on
track towards its goals, and making corrections as required.”
Controlling includes four things:
i.Setting standards of performance;
ii.Measuring actual performance;
iii.Comparing actual performance against the standard;
iv.Taking corrective actions to ensure goal accomplishment.
Management Vs Administration
(Management)
“Management is the process of planning, organizing, actuating and controlling to determine and
accomplish the objective by the use of people & resources.” Terry G
Administration
“The overall determination of policies, the setting of major objectives and the laying out of
broad programmes.” Haimann
Administration is broader than management-
 Some authors like Ordway Tead, Oliver Sheldon, William Sprigal maintain that,
administration is broader than management.
 Administration determines the specific goals and lays down the broad areas with in
which those goals are to be achieved. It is basically a policy making function.
 Management is concerned with carrying out the broad policies laid down by
administration.
 So in the words of William Sprigal, ‘Administration is largely determinative, whereas,
management is essentially executive’
According to this definition ‘Administration is a top level activity and management is lower
level function
Administration is part of management
• According to English School of Thought, represented by E.F.L Brech, Henry Fayol,
Kimball & Kimball, Management is wider concept than administration.
• Administration handles the current problems that may arise in carrying out the policies laid
down by management.
• Management is rule-making and rule-enforcing body.
• Management is an all-encompassing and comprehensive term administration is a part of it.
• Administration is just an implementing agency.
Management & Administration are Identical
• Some authors like William Newman, Harold Koontz, Dalton E. McFarland hardly maintain
the distinction b’w the two terms.
• The management process is same in all organizations and at all levels in the organisation
and there is hardly any need to appoint two individuals to discharge the administrative and
managerial function.
• All undertakings require planning, organizing, command, coordination and control in order
to function properly, all must observe the same general principles.
How to Resolve Controversy
Nature Thinking function (what is to be done & Doing function (who will do it &
when) how)
Scope Determines broad objectives & policies. Implement plans & achieves goals
through people.
Level Top level function Middle & lower level function.

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 Skill Conceptual and human skills. Technical & human skills.
needed
Represents Owners who invest capital & receive Paid individuals who work for
profits. remuneration.
Usage Mostly in Gov., military, educational, Mostly in business organisation.
social & cultural organization.
Coordination as the essence or life line of Management
Definition
 Co ordination is process of pulling together the different parts of an organization &
unifying them into a team to achieve pre determined goals in an effective manner by
ensuring suitable allocation of tasks & seeing that the tasks are performed with harmony
among the members.
 It is prevalent in all the functions of management & binds them together with one
another.
 It is not a separate function but is regarded as the essence or life line of Management.
Significance of CO ORDINATION
 Unity in diversity
 Team work
 Conflicting goals
 Synergy effect
 Interdependence

 Barriers in co ordination
 Uncertain future
 Unclear & confused vision & mission
 Less knowledge of other areas
 Lack of acceptance of new ideas & programmes by all departments
Co ordination Vs co operation
 Co operation implies willingness to help each other while co ordination can be forceful.
 Co ordination is an organizational activity while co operation is a personal activity.
 Co ordination is the association of all independent works & activities of the organization
structure while co operation is not bounded to any structural association i. e. highly
personal
 Co ordination is a broader concept in terms of scope while co operation is narrower in
scope.
Types of co ordination
 Internal & External co ordination
 Vertical & Horizontal co ordination

Lesson -2 :-Evolution of Management Thought: Classical Theory, Neo-Classical Theory and

Modern Theory of Management
The evolution of management thought may be divided into three stages:
1. The Classical Theory of Management
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2. The Neo-Classical Theory of Management
3. The Modern Theory of Management

Evolution of Management Thought # 1. The Classical Theory of Management (With

Features):
Thinking on management as a separate field of learning and practice began early in the 19th century.
It was at this time that persons like Robert Owen, Charles Babbage, Metcalf, Henry Robinson
Towne, James Watt Jr., Mathew Boulton, Max Webber, F.W. Taylor and Henry Fayol etc.
expressed their ideas on the ways and means of making management practices effective and
efficient.
This approach is also known as traditional approach or empirical approach. It was developed
through three streams such as – (1) Scientific Management developed by F.W. Taylor, Harrington
Emerson, Henry Ganlt etc. (2) Administrative Theory developed by Henry Fayol, Lyndall, Urwick
etc. (3) Bureaucracy developed by Max Webber.

The main features of this classical approach are:

1. Management is a systematic network (process) of interrelated functions.
2. Formal education and training is emphasized for developing management skills.
3. People are motivated by economic gains.
4. Stress was given to the formal organization structure.
5. Many principles have been developed for the practicing executive.
6. Functions, principles and skills of management are considered universal.

The contributions of some thinkers in this area are discussed here:

1. Robert Owen (1771 – 1858):
He managed a group of textile mills in Lanark (Scotland) during 1800 – 1828. He carried out many
experiments and introduced many social reforms. He emphasized that workers’ performance was
influenced by the total environment in which they worked. He said employees are Machines and
their maintenance is necessary. Throughout his life he worked for the building up of a spirit of
cooperation between the workers and management.
He suggested that investment in human resources is more important than the investment in physical
resources. He introduced new ideas of human relations, e.g., shorter working hours, housing
facilities, education of children, provision of canteen, rest pauses, training of workers in Hygiene
etc. He began cooperative movement in 1828 in Rochdale, England. He is rightly called the father
of Modern Personnel Management.

2. Charles Babbage (1792 – 1871):

He was a professor of mathematics at Cambridge University. His best known book is “on the
economy of machinery and manufactures” published in 1832. He found that manufactures were
using traditional methods of work, relying more on guess work and based decisions on old
opinions. He perceived that the methods of science and mathematics could be applied to the
operations of factories.
His main contributions are as follows:
i. Use of Science and Mathematics in improving manufacturing operations.
ii. There should be division of work and workers should be assigned work as per their skills.
iii. The decisions should be based on investigation and accurate knowledge.
iv. Applying the Mechanism of time and motion study for improving the performance on machines.
v. He emphasized the necessity for reducing cost through the discovery of improved methods of
work.
vi. He suggested that the interests of management and workers must be closely linked through
profit sharing and participative decision making.
vii. He invented calculating Machine – The Fore runner of the modern calculator.
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He laid emphasis on specialization, work measurement, optimum utilization of machines, cost
reduction and wage incentives. He laid the foundation for formulation of scientific study of
management.

3. Henry Vamun Poor:

He was the editor of the American Railroad Journal. During that period he closely studied
functioning of the American Railroad system. He stressed upon the need for effective management.
He advocated three Principles – organization, communication and information for Railroad
managers. He observed the need for a managerial system with a clear organization structure. He
suggested a kind of leadership to overcome the rigidities of the formal organization.

4. Henry Robinson Towne (1844 – 1924):

He was a President of a lock manufacturing company. He has taken interest in the better
management of business and has applied his ideas successfully in his company. In 1886, he has
presented a paper entitled “The Engineer as an Economist.” In this paper he urged the combination
of engineers and economists as industrial managers. He also suggested organized exchange of
experience among managers and an organized effort to gather the accumulated knowledge in the art
of workshop management.

5. James Watt and Mathew Robinson Boulton (1796 – 1848) (1770 – 1842):
They were the sons of the distinguished inventors of steam engine.
They applied several management techniques such as:
(1) Market research and forecasting.
(2) Standardization components and parts.
(3) Production Planning.
(4) Scheme for developing executives.
(5) Maintenance of advance control report and cost accounting procedures.
(6) Elaborate statistical records.
(7) Planned Machine for better work flow.
(8) Provision of employee welfare with sickness benefit scheme.

6. Max Webber (1864 – 1920) (Bureaucratic Model):

He was the chief exponent of the Bureaucratic model. He emphasized on the recognition and
exercise of authority is the fundamental question. For answering this question he has classified
authority structures into three categories. They are charismatic, traditional and Bureaucratic. A
charismatic leader’s authority is expected by virtue of some exceptional innate qualities.
The authority which flows from generation to generation or hereditary is called traditional
authority. The authority which comes from the position in the organization is called Bureaucratic
authority. This authority will have a clearly defined set of rules, procedures and roles.

This model includes the following:

(i) There is clearly separation between superior and sub-ordinate.
(ii) There is a division of labour based upon competence and functional specialization.
(iii) There is a clear divorce between personal and official matters.
(iv) There is a system of rules, regulations and procedures.
(v) There is a hierarchy in positions based on legal authority and power.

Benefits of Bureaucracy:
The following are the benefits of this model:
i. The rules and procedures are decided for every work which in turn leads to consistency in
employee behaviour.
ii. The duties and responsibilities of each job are clearly defined with which overlapping of duties
can be removed.
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iii. The selection process and promotion procedures are based on merit and expertise.
iv. The division of labour helps workers in becoming experts in their jobs.
v. Organization does not suffer when some persons leave it.

Disadvantages of Bureaucracy:
They are as follows:
i. This system suffers from too much of red tape and paper work.
ii. The employees may not have belongingness to the organization.
iii. Too much dependence on rules and regulations and sticking to these policies lacks initiative and
growth of the employees.

7. Fredrick Winslow Taylor (1856 – 1915):

Father of scientific management. In his experiment he has concluded that the main reason of
general inefficiency and wastage in factories was ignorance on the part of both workers and
management. He made efforts to replace the primitive rule of thumb methods by modern scientific
methods based on investigations, analysis and measurement. He defined management as “the art of
knowing exactly what you want men to do and seeing that they do it in the best and cheapest way”.
He gave the following principles of scientific management:
i. Every job should be broken into elements and a scientific method to perform each element should
be established.
ii. Scientific selection, training and development of workers for each job.
iii. Management should cooperate with workers to maximize efficiency and productivity.
iv. The work and responsibility should be scientifically distributed between workers and
management.
Scientific management has the following applications:
i. The efforts to be utilize to the maximum, wastages should be eliminated.
ii. Use of monetary and other incentives for improving the productivity of workers.
iii. Establishment of performance standards.
It has been criticized due to the following factors:
i. It ignored the human side of organization and was devoid of a human touch.
ii. The incentives to workers were not commensurate with the increase in productivity.
iii. Specialization makes the work repetitive and monotonous.

8. Henry Fayol (1841 – 1925):

Henry Fayol wrote a book on General and industrial management. This book is considered to be
one of the best classics in management.
His contributions to management may be analyzed under the following heads:
Classification of Business Activities:
According to him, all activities of a business enterprise could be divided into six categories- (i)
Technical Activities (production), (ii) Commercial activities (buying, selling and exchange), (iii)
Financial activities (search for and optimum use of capital), (iv) Security activities (protection of
property and persons), (v) Accounting activities (including statistics), (vi) Managerial activities.

Functions of Management:
He divided the key (unction of administration into five sub-groups such as- (i) Planning (to foresee
and provide means for the future), (ii) Organizing (provides everything useful to its functioning,
raw material, tools, capital, personnel). (iii) Coordinating (binding together – unifying and
harmonizing all activity), (iv) Commanding (lead the personnel in a better way), (v) Controlling
(ensuring everything goes as per plans).
Principles of Management:
He gave 14 principles of management- (i) Division of work (ii) Authority and responsibility (iii)
Discipline (iv) Unity of command (v) unity of direction (vi) Sub-ordination of individual to general

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interest (vii) Remuneration of personnel (viii) Centralization (ix) Scalar chain (x) Order (xi) Equity
(xii) Stability of tenure of personnel (xiii) Initiative (xiv) Esprit de Corps.
Managerial Qualities and Training:
Fayol stressed that management skills can and should be taught first in the class room and then at
the work place.
He identified the following skills which persons desirous of entering management career
should learn:
(i) Physical (health, vigour and address),
(ii) Mental (ability to understand and learn, judgment and adaptability),
(iii) Moral (energy, firmness, initiative, loyalty, tact and dignity)
(iv) General education (general acquaintance with matters not belonging exclusively to the function
performed)
(v) Special knowledge (peculiar to the function being performed)
(vi) Experience (knowledge arising from work proper)

Merits:
The following are the merits:
i. It is a comprehensive theory of management applicable to all organizations.
ii. He has given functions of the management and principles.
iii. He stressed the universal character of management and the need for formal training.
Demerits:
Following are the demerits:
i. His theory is considered to be too formal.
ii. This approach pay less attention to workers.
iii. There is a vagueness and superficiality about some of his terms and definitions.
Distinction between Taylor and Fayol:
We have seen that both F. W. Taylor and Henry Fayol have contributed to the science of
management. There are points of similarity and dissimilarity in the works of both of these pioneers.
Thus sum up the points of similarity and dissimilarity between the two as follows:
Similarity:
i. Both of them realized the universality of management.
ii. Both applied scientific methods to the problems of management.
iii. Both realized the importance of personnel and its management at all levels.
iv. Both wanted to improve the management practice.
v. Both of them developed their ideas through practical experience.
vi. Both of them expressed their ideas through their books.
vii. Both of them emphasized mutual co-operation between employers and employees.

Dissimilarity:
i. Taylor focused his attention on the problems of shop floor while Fayol concentrated on the
functions of managers at top level.
ii. Taylor worked from the bottom of the industrial hierarchy upwards, while Fayol concentrated on
the chief executive and worked downwards.
iii. The main aim of Taylor was to improve productivity of labour and eliminate wastages. Fayol
attempted to develop a universal theory at management.
iv. Taylor called his philosophy or work as ‘Scientific Management’ whereas Fayol described his
work as ‘General Theory of Administration’.
v. Taylor is known as Father of Scientific Management and Fayol as the father of Principles of
Management.
vi. Taylor’s philosophy has undergone a big change under the influence of modern developments,
but Fayol’s principles of management have stood the test of time and are well accepted even in the
present days.
vii. Fayol looks to the management in the wider aspect as compared to Taylor.
14
Evolution of Management Thought # 2. The Neo-Classical Theory of Management:

This theory deals with the human factor. Elton Mayo and Mary Parker Follett are the main
contributors of human relations approach. This approach also causes ‘Behavioural Science
Management’ which is a further refinement of human relations approach.
Human Relations Movement:
This approach deals with the factors which encourage higher performance on the part of workers.
The productivity can be increased in the organization by improving the working conditions,
lowering of hours of work, by establishing social relations among managers.
The contributions of some thinkers in this area are discussed here:

a. Elton Mayo (1880 – 1949):

He was an Australian by birth. He was a professor of industrial research at the Harvard Graduate
School of Business Studies. Elton Mayo and his associates contributed much to this approach.
Mayo is called as father of human relations approach. He is known for his work which is commonly
referred as the Hawthorne studies. These studies conducted to study the relationship between
workers’ output and physical conditions in the organization.
This study revealed that an organization is not only a formal arrangement of men and functions but
also a social system which can be operated successfully only with the application of the principles
of psychology and other behaviour sciences.
He observed that the performance of workers in the organization can be improved by considering
the following factors- (1) Less restrictive methods of supervision (2) giving independence to
workers (3) allowing the formation of small cohesive sub-groups of the workers (4) creating good
conditions to improve themselves and (5) a good cooperation between management and workers.
Distinction between Taylor and Elton Mayo:
Both of them have focused on increasing production and reducing industrial conflicts.
But they have differed in the following way:

Taylor’s Scientific Management Theory:

i. Financial incentives have been given much importance to increase the satisfaction of employees.
ii. Workers are considered as ‘individuals’ so far as their contribution to organizational output is
concerned.
iii. This theory has considered management from the point of view of managers.
iv. It has applied all scientific methods to increase production.
v. Here lower order needs of workers are given more importance than higher order needs.
Elton Maya’s Human Relations Theory:
i. Non-financial incentives have been given importance.
ii. Workers are considered as part of the group.
iii. This considered from the point of view of workers.
iv. This has given importance to human relations to increase productivity.
v. Here, higher order needs are given more priority than lower order needs.

Mary Parker Follett (1868 – 1933):

(i) Another thinker associated with this approach is Mary Parker. She favoured participation of
workers in the decision-making process. She was also favoured for professionalization. She
interpreted classical management principles in terms of human factors. She has a reputation as a
pioneer of human relations approach.
(ii) Behavioural Sciences Movement- Many sociologists and psychologists like Maslow, Douglas
McGregor, Resins Likert, Keith Davis, Chester Bernard etc., have made contributions to the
development of this approach. This approach has concentrated on inter-personal roles and
responsibilities.
15
The basic features of this approach are- (1) an organization is a socio-technical system (2) there
should the relationship between organizational goals and human needs (3) many factors will
influence inter-personal and group behaviour of people in the organization (4) conflicts are
inevitable in the organizations.

Merits:
Following are the merits of this approach:
(1) This approach recognizes the quality of leadership as a critical factor in management success.
(2) It recognizes the role of individual psychology and group behaviour in organizational
effectiveness.

Limitations:
The following are the limitations:
(1) It errs by almost identifying management with the study of social and industrial psychology.
(2) This approach neglects the economic dimension of work satisfaction.

Some of the contributions under this approach are discussed as follows:

A. Abraham Maslow:
He has propounded a general theory of motivation known as Need Hierarchy Theory. The features
of this theory are- (1) Human needs are multiple, complex and interrelated. (2) Needs form a
particular structure or hierarchy. (3) As soon as one need is satisfied, another need emerges, (4) A
satisfied need is not a motivator. (5) Various need levels are inter-dependent and overlapping.

He classified the needs as follows:

i. Physical Needs – These are biological needs required to preserve human life such as food, cloth
and shelter.
ii. Safety Needs – These consists of physical safety against murder, fire, accident, security against
unemployment etc.
iii. Social Needs – Needs refer to need for belonging, need for acceptance, need for love and
affection etc.
iv. Esteem Needs – These are the needs derived from recognition, status, achievement, power,
prestige, etc.
v. Self Actualization Needs – It is the need to fulfill what a person considers to be his real mission
in life.

B. Douglas McGregor (1906 – 1964):

He has developed a theory of motivation on the basis of hypotheses relating to human behaviour.
According to him the function of motivating people involves certain assumption about human
nature. There are two alternative sets of assumptions which he has described as theory X and theory
Y. Theory X represents the traditional and narrow view of human nature. That is the average
worker is lazy and dislikes work, his unambitious, avoids responsibility and prefers to be led. He
gave theory Y as an answer to such situations.

C. Rensis Likert (1903 – 1972):

He was the director of the institute of social research at the University of Michigan (USA). He
conducted research in the field of leadership. He has summarized the research by conducting that
the most effective managers engage in both dimensions of leadership behaviour by getting
employees involved in the operation of their developments or divisions in a positive and
constructive manner, setting general goals, providing fairly loose supervision and recognizing their
contributions. He called these managers employee-centered leaders.

16
Less effective leaders are mostly directive in their approaches and most concerned with closely
directing employees, explaining work procedures and monitoring progress in task accomplishment,
there he called job centered leaders.
So he is best known for his classification of management styles into four categories:
i. Exploitative Autocratic – Subordinates are given no participation in decision-making because
leaders have no confidence in them.
ii. Benevolent Autocratic – Management has condescending confidence in sub-ordinates just as a
master has towards a servant.
iii. Participative – Employees are allowed to participate meaningfully in decisions affecting their
lives.
iv. Democratic – Leaders have full confidence in sub-ordinates. Therefore, participation is
meaningful.
He developed the concept of ‘linking pin’ to integrate individual and organizational goals. Lender
this approach each group is integrated with other groups in the organization by means of persons
who are members of more than one group. Such members are known as ‘linking pins’. So he will
be a leader for the lower level unit and a member in the upper level unit. He and his associates also
developed a measuring instrument for evaluating leadership styles of individual managers.

D. Chester I. Barnard (1886 – 1961):

He was the President of new Jerry Bell Telephone Company. His important publications are “The
Functions of the Executives”, “Organization and Management” and “Elementary Conditions of
Business Morals”.

The main contributions of Barnard are given below:

i. He defined organization as a ‘system of consciously coordinated activities of two or more
persons’. He highlighted three characteristics of the organization i.e., – (a) the persons are able to
communicate with each other (b) they are willing to- contribute to the action (c) there is a common
purpose.
ii. He has also divided the organization into formal and informal and he said that informal
organization is an important part of formal organization.
iii. He has divided the functions of executive into three categories- (a) The maintenance of
organizational communication (b) Securing essential services from individuals in the organization
(c) formulating and defining the purpose.
iv. He has also concentrated on the acceptance of authority for achieving organizational goals.
v. He has contributed towards the establishing the relationship between formal and informal
organizations.
vi. He stressed the complexity of organization processes and human motivation.
vii. He considered that leadership is the most important factor in an organization. So his
contributors to management thought have been outstanding.
Human Relations Theory and Behavior Science Theory- A Comparison:
Human Relations Theory:
i. It has concentrated on individual behavior.
ii. This considers group conflict as a negative force that affects organizational efficiency.
iii. It views the workers as a ‘Social Man’.
iv. It gives importance to formal organization structure.
v. It views organization as social system.
vi. It does not provide scientific vision to study human behavior.
vii. Self-direction and self-control techniques are used in a limited extent.
viii. It permits group decision-making to a limited extent i.e., only to the routine decisions.

Behavioral Science Theory:

i. It has concentrated on group behavior.
ii. This considers group conflict as source of new and innovative ideas.
17
iii. It views the workers as a ‘Self-Actualizing Man.’
iv. It emphasizes on comparatively a flexible organization structure.
v. It views as socio-technical system.
vi. It provides scientific understanding of human behavior.
vii. Self-direction and self-control techniques are used to increase group efficiency.
viii. It encourages group decision-making for both routine and important matters.

Evolution of Management Thought # 3. The Modern Theory of Management:

Under modern management thought, streams of thinking have been noticed since 1960.
These approaches are discussed as under:
1. Quantitative Approach or Mathematical Approach:
It is also known as Management science approach or decision theory approach. It was developed by
W.C. Churchman and others. It focused on use of mathematical and statistical techniques in
management. It also focused on finding right answers to management problems.
The basic features of this approach are – (1) Management is a series of decision-making (2)
Mathematical models can be developed by quantifying various variables of the problems (3)
Mathematical symbols can be used to describe managerial problems (4) Organizations exist for the
achievement of specific and measurable economic goals.

Merits:
The following are the merits of this approach- (1) It emphasizes the great importance of the study of
diverse decision situations and the means of perfecting them. (2) It stresses the replacement of
intuition and hunch by factual data and logical analysis in the decision-making process.

Limitations:
They are – (1) The data available in the business may not always be upto date and it may lead to
wrong decision-making (2) It errs by arguing that management has no other functions except
decision-making (3) This approach is based on unrealistic assumptions i.e., all related variables are
measurable and have a functional relationship.

2. System Approach:
This approach is based on the generalization that an organization is a system and its components are
inter-related and inter-dependent. The effectiveness of the system mainly depends upon the inter
dependence and inter- relatedness of the various sub systems.
The features of this approach are- (1) An organization is a system consisting of several sub-systems
(2) All sub-systems are mutually related to each other (3) All sub-systems should be studied in their
interrelationship rather than in isolation from each other (4) The organization is responsive to
environment effect.

Uses:
The following are the uses of this approach- (1) It provides a unified focus to organizational efforts
(2) It provides a strong conceptual framework for meaningful analysis and understanding of
organizations (3) It recognizes the interaction and inter-dependency among the different various of
the environment (4) This approach is better than others because it is close to reality (5) It treats
organization as an open dynamic system.
Limitation:
The following are the limitations- (1) This system is oftenly called abstract and vague and cannot
directly and easily be applied to practical problems (2) It does not offer specific tools and
techniques for the practicing executive (3) It is not clearly specifying the nature of interactions and
inter-dependencies specially between an organization and its external environment.

4. Contingency or Situational Approach:

18
This approach was developed by J. W. Lorsch and P. R. Lawrence. This is new approach to
management. The basic essence of this approach that organizations have to cope with different
situations in different ways. So managers should develop variable methods, tools and action plans
as per the required situation.
Features:
They are – (1) Management is entirely situational so the application and effectiveness of any
technique is contingent on the situations. (2) Policies and procedures should be according to
environmental conditions (3) Managers should understand that there is no one best way to manage.
They must not consider management principles and techniques universal.
Uses:
The following are the uses of this approach- (1) This approach takes a realistic view in management
and organization. (2) It dispels the universal validity of principles. (3) Managers are advised to be
situation oriented. (4) Managers become innovative and creative. (5) This approach has a wide
applicability in organization. (6) It is an improvement over the systems theory, as it not only
examines the relationships between sub-systems of an organization but the relationship between the
organization and its environment too.
Limitations:
They are as follows- (1) It lacks theoretical base (2) A manager is required to think through all
possible alternatives before taking action which is not always possible.

4. Operational Approach:
Koontz and O’Donnell have advocated this approach to the management. This approach recognizes
that there is a central core of knowledge about managing which exists only in the field of
management. Such as line and staff, departmentation, managerial appraisal and various managerial
control techniques, span of management etc. In addition, the operational approach derives
knowledge from other fields like systems approach, decision approach, motivation and leadership
theories, theories of communications and cooperation.
This approach regards management as a universally applicable body of knowledge that can be
brought to bear at all levels of managing and in all types of enterprises. At the same time, the
approach recognizes that the actual problems manages face and the environment in which they
operate may vary between enterprises and levels and it also recognizes that application of science
by a perceptive practitioner must take this into account in designing practical problem solutions.
The above decision reveals that management thought is an outcome of many contributions of many
management thinkers.
CONTINGENCY APPROACH OF MANAGEMENT
The contingency approach believes that it is impossible to select one way of managing that works
best in all situations like promoted by Taylor. Their approach is to identify the conditions of a task
(scientific management school), managerial job (administrative management school) and person
(human relations school) as parts of a complete management situation and attempt to integrate them
all into a solution which is most appropriate for a specific circumstance. Contingency refers to the
immediate (contingent or touching) circumstances. The manager has to systematically try to
identify which technique or approach will be the best solution for a problem which exists in a
particular circumstance or context. The contingency approach seeks to apply to real life situations
ideas drawn from various schools of management thought. They claim that no one approach is
universally applicable and different problems and situations require different approaches. Managers
must try to find the approach that is the best for them in a certain given situation, so they can
achieve their goals. It is important to note that the contingency approach stresses the need for
managers to examine the relationship between the internal and external environment of an
organization. Critics of the contingency approach have blamed it to lack theoretical foundation and
are basically intuitive. Managers today are advised to analyze a situation and use ideas from the
various schools of thought to find an appropriate combination of management techniques to meet
the needs of the situation.

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BUREAUCRATIC MANAGEMENT AND ITS CHARACTERISTICS.
Max Weber contributed the theory of bureaucracy to the management thought. He used the word;
bureaucracy to the specific king of administrative organization whose characteristics are given
below; Max Weber‘s main contribution to management is his theory of authority structure and his
description of organizations based on the nature of authority relations within them. It was Weber‘s
contention that there are three types of legitimate authority which run as follows: Rational legal
authority - Obedience is owed to a legally established position or rank within the hierarchy of a
business, military unit, government, and so on.
Traditional authority- People obey a person because he belongs to certain class or occupies a
position traditionally recognized as possessing authority, such as a royal family.
Charismatic authority - Obedience is based on the followers‘ belief that a person has some special
power or appeal.
CHARACTERISTICS OF BUREAUCRACY
A bureaucratic organization shows the following characteristics:
Division of work- There is a high degree of division of work at both the operative and
administrative levels. This leads to specialization of work
Hierarchy of positions- There is a hierarchy of authority in the organization. Each lower position is
under the control of a higher one. Thus, there is unity of command.
Rules and regulations- The rules, regulations and procedures are clearly laid down by the top
administration.
Their benefits are as under:
Impersonal conduct- There is impersonality of relationships among the organizational members.
The decisions are entirely guided by rules and regulations and are totally impersonal.
There is no room for emotions and sentiments in this type of structure
Staffing- The personal are employed by a construal relationship between the employee and
employer. The employees get salary every month which is based on the job they handle and also the
length of service.
Technical competence- The bureaucrats and neither elected nor inherited, but they are appointed
through selection. Promotions in bureaucracies are also based on technical qualifications and
performance
Lesson -3

Planning
“Planning is today’s projection for tomorrow's activity.”
Meaning
 “Planning is a trap laid down to capture the future”(Allen).
 “Planning is deciding in advance what is to be done in future”(Koontz).
 “Planning is informed anticipation of future”(Haimann).
 “Planning is ‘anticipatory’ decision making”(R.L.Ackoff)

20
 Planning Question What is the amount of
difference between
where we are now and
where we want to be?
3. Gap?

4. How to bridge the gap?

This is a question of deciding

in the present what has to be
done in future. Planning is
(Current Status) concerned with future
implications of current
decisions, not with decisions
to be made in future.
1.Where we are now? (Future Image)

This question is concerned 2.Where we want to be?

with making a realistic
assessment of the current This is concerned with
situation and forecasting finding out the desirable
how a picture may change in objectives, keeping the
future. present as well as the future
requirements in mind.
Thursday, August 10, 2017 3

Nature of Planning
• Planning is Goal Oriented
• Planning is a Primary Function
• Planning is All-Pervasive
• Planning is an Intellectual or Rational Process
• Planning is a Continuous Process
• Planning is Forward Looking
• Planning Involves Choices
• Planning is Integrated Process.
• Planning is Directed Towards Efficiency
Importance of planning
• Helps in achieving objectives & results
• Reduces uncertainty & risk
• Provides sense of direction
• Encourages innovation & creativity
• Provides guidelines for decision making
• Provides efficiency in operations
• Facilitates control.
Limitation of Planning
• Lack of accurate information
• Time & cost
• Rigidity
• Lack of ability to plan
• False sense of security
• Environmental constraints
Planning Process

21
 Planning Process Comparing Alternatives in Light of
Goals
Which alternative will give us the best chance
of meeting our goals at the lowest cost &
highest profit.

Choosing an alternative
Selecting the course of action we will
Setting Objectives or Goals pursue.
Where we want to be, what we want to
accomplish and when Formulating Secondary Plans
Such as plans to:
Buy equipments
Buy materials
Developing Planning Premises Hire & train workers
Assumptions regarding internal or Develop a new product
external environment

Securing co operation &

Identifying Alternatives participation
What are the most promising
alternatives to accomplishing our
objectives
Providing for follow up
Thursday, August 10, 2017 7

Types of Plan
Plans commit individuals, departments, organizations, and the resources of each to specific actions
for the future. Effectively designed organizational goals fit into a hierarchy so that the achievement
of goals at low levels permits the attainment of high‐level goals. This process is called a means‐
ends chain because low‐level goals lead to accomplishment of high‐level goals.
Three major types of plans can help managers achieve their organization's goals: strategic, tactical,
and operational. Operational plans lead to the achievement of tactical plans, which in turn lead to
the attainment of strategic plans. In addition to these three types of plans, managers should also
develop a contingency plan in case their original plans fail.
Operational plans
The specific results expected from departments, work groups, and individuals are the operational
goals. These goals are precise and measurable. “Process 150 sales applications each week” or
“Publish 20 books this quarter” are examples of operational goals.
An operational plan is one that a manager uses to accomplish his or her job responsibilities.
Supervisors, team leaders, and facilitators develop operational plans to support tactical plans (see
the next section). Operational plans can be a single‐use plan or an ongoing plan.
 Single‐use plans apply to activities that do not recur or repeat. A one‐time occurrence, such
as a special sales program, is a single‐use plan because it deals with the who, what, where,
how, and how much of an activity. A budget is also a single‐use plan because it predicts
sources and amounts of income and how much they are used for a specific project.
 Continuing or ongoing plans are usually made once and retain their value over a period of
years while undergoing periodic revisions and updates. The following are examples of
ongoing plans:
 A policy provides a broad guideline for managers to follow when dealing with important
areas of decision making. Policies are general statements that explain how a manager should
attempt to handle routine management responsibilities. Typical human resources policies,
for example, address such matters as employee hiring, terminations, performance appraisals,
pay increases, and discipline.
 A procedure is a set of step‐by‐step directions that explains how activities or tasks are to be
carried out. Most organizations have procedures for purchasing supplies and equipment, for
example. This procedure usually begins with a supervisor completing a purchasing
requisition. The requisition is then sent to the next level of management for approval. The
approved requisition is forwarded to the purchasing department. Depending on the amount
of the request, the purchasing department may place an order, or they may need to secure
quotations and/or bids for several vendors before placing the order. By defining the steps to
22
 be taken and the order in which they are to be done, procedures provide a standardized way
of responding to a repetitive problem.
 A rule is an explicit statement that tells an employee what he or she can and cannot do.
Rules are “do” and “don't” statements put into place to promote the safety of employees and
the uniform treatment and behavior of employees. For example, rules about tardiness and
absenteeism permit supervisors to make discipline decisions rapidly and with a high degree
of fairness.

Tactical plans
A tactical plan 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.
Tactical plans are concerned with shorter time frames and narrower scopes than are strategic plans.
These plans usually span one year or less because they are considered short‐term goals. Long‐term
goals, on the other hand, can take several years or more to accomplish. Normally, it is the middle
manager's responsibility to take the broad strategic plan and identify specific tactical actions.
A strategic plan is an outline of steps designed with the goals of the entire organization as a whole
in mind, rather than with the goals of specific divisions or departments. Strategic planning begins
with an organization's mission.
Strategic plans look ahead over the next two, three, five, or even more years to move the
organization from where it currently is to where it wants to be. Requiring multilevel involvement,
these plans demand harmony among all levels of management within the organization. Top‐level
management develops the directional objectives for the entire organization, while lower levels of
management develop compatible objectives and plans to achieve them. Top management's strategic
plan for the entire organization becomes the framework and sets dimensions for the lower level
planning.
Contingency plans
Intelligent and successful management depends upon a constant pursuit of adaptation, flexibility,
and mastery of changing conditions. Strong management requires a “keeping all options open”
approach at all times — that's where contingency planning comes in.
Contingency planning involves identifying alternative courses of action that can be implemented
if and when the original plan proves inadequate because of changing circumstances.
Keep in mind that events beyond a manager's control may cause even the most carefully prepared
alternative future scenarios to go awry. Unexpected problems and events frequently occur. When
they do, managers may need to change their plans. Anticipating change during the planning process
is best in case things don't go as expected. Management can then develop alternatives to the existing
plan and ready them for use when and if circumstances make these alternatives appropriate.
An Overview of Types of Plan

Business Forecasting

23
Forecasting is an essential element of planning. It means estimating future on a systematic basis.
Almost every business executive makes forecasts of one thing or the other.
The need to foresee future on a systematic basis was very well emphasized by Henry Fayol. He was
of the opinion that the entire planning in business is made up of a series of separate plans, called
forecasts.
‘forecast’ is a prediction of what is going to happen as a result of a given set of circumstances. The
dictionary meaning of ‘forecast’ is ‘prediction, provision against future, calculation of probable
events, foresight, provision’. In business sense it is defined as ‘the calculation of probable events’.
When estimates of future conditions are made on a systematic basis the process is referred to as
forecasting and the figure or statement obtained is known as a ‘forecast’.
The growing competition, rapidity of change in circumstances and the trend towards automation
demand that decisions in business are not to be based purely on guess work rather on careful
analysis of data concerning the future course of events. Forecasting aims at reducing the areas of
uncertainty that surround management decision making with respect to costs, profit, sales,
production, pricing, capital investment and so forth.
Companies must plan their future with business forecasts otherwise they may become things of
past. So far companies operated within a license and permit regime and a sheltered market
forecasting was not considered very useful and liberalization is changing the rules of the game.
With liberalization, the Government has less of a role to play. Companies previously relied on
hunches, political contacts and sketchy plans, but now have to face stiff competition in the domestic
and global markets, and business forecasting is fast gaining importance.

Forecasting is a systematic estimation of future events with the help of in-depth analysis of past and
present events. Forecasting provides a basis for planning. Forecasting includes both assessing the
future and making provision for it. As a result, planning cannot be done without forecasting. Thus,
forecasting is the projection of future events (or conditions) in the environment in which plans
operate. Forecasting aims at understanding various uncertainties and complexities associated with
the environment.
Forecasting provides key information and pertinent facts relating to the future. It is essentially a
technique of anticipation. The forecasting technique involves the use of sophisticated statistical
analysis for the future. Forecasting provides an intellectual basis for formulating various plans.
Techniques of forecasting are used for generating relevant and reliable information to formulate
planning premises. Forecasting is a guessing of future events after considering all the factors that
affect organizational functions.
‘Forecasting is a systematic attempt to probe the future by inference from known facts.’ [L. A.
Allen]
‘Forecasts are predictions (or estimates) of any change in economic phenomena which may affect
business plans.’ [Mc Farland]
‘Forecasting refers to the statistical analysis of the past and current movements so as to obtain clues
about the future pattern of movement.’ [Neter and Wasserman]

Business Forecasting
Need and Significance
Forecasting is an essential element of planning. It means estimating future on a systematic basis.
Almost every business executive makes forecasts of one thing or the other. The need to foresee
future on a systematic basis was very well emphasized by Henry Fayol. He was of the opinion that
the entire planning in business is made up of a series of separate plans, called forecasts.
L. Urwick also visualised the pervasiveness of forecasting in every aspect of business. According to
him, “The man who starts a business is making an assessment of a future demand for its products.
The man who engages staff usually has an eye to future organizational requirements.” Thus,
forecasting is a necessary activity for any business right from its birth.
The importance of forecasting is apparent from the role it plays in planning. Forecasting is an
important part of effective planning. A manager who is planning is also supposed to make some
24
forecasts about the future. A systematic attempt to probe the future by inference from known facts
helps integrate all management planning so that unified overall plans can be developed into which
division and departmental plans can be meshed. Forecasting helps in taking sound policy decisions
which are necessary for the achievement of organisational objectives. By focusing attention on the
future, forecasting assists in bringing unity of purpose in planning.
Forecasting has assumed great importance in the modern business world which is characterised by
growing competition, rapidity of change in environment, fast technological changes and increased
government control.
It offers the following advantages: It helps in effective planning by providing a scientific and
reliable basis for anticipating future operations such as sales, production, inventory, supply of
capital and so on.
The importance of forecasting is apparent from the role it plays in planning. Forecasting is an
important part of effective planning. A manager who is planning is also supposed to make some
forecasts about the future. A systematic attempt to probe the future by inference from known facts
helps integrate all management planning so that unified overall plans can be developed into which
division and departmental plans can be meshed. Forecasting helps in taking sound policy decisions
which are necessary for the achievement of organisational objectives. By focusing attention on the
future, forecasting assists in bringing unity of purpose in planning.
Forecasting has assumed great importance in the modern business world which is characterised by
growing competition, rapidity of change in environment, fast technological changes and increased
government control.
(i) It helps in effective planning by providing a scientific and reliable basis for anticipating future
operations such as sales, production, inventory, supply of capital and so on.
Features of forecasting
i. Concerned with future events – Forecasting is concerned with future events. It is a systematic
effort to peep into the future. It is essentially a technique of anticipation.
ii. Necessary for planning process – Forecasting is necessary for the planning process. It is the basis
for planning. Decisions cannot be taken without the help of forecasting. Therefore, it is an integral
part of the planning process.
iii. Consideration of relevant facts – Forecasting considers all factors which affect organizational
functions. It is a technique to find out the economic, social, and financial factors affecting the
business.
iv. Inference from known facts – Forecasting is a systematic attempt to probe the future by
inference from known facts. It is an analysis of past and present movements so as to arrive at the
conclusion about the future pattern.
v. Art of reading the future – Forecasting is not an exact science. It involves looking ahead and
projecting the future events. It requires the use of scientific, mathematical, and statistical techniques
for reading the future course of events.
vi. Elements of guess-work – Forecasting involves elements of guess-work. Personal observations
help in guessing future events to a great
extent. Estimates for the future are based on the analysis of past and present circumstances.
viii. Development of a business – The development of a business is fully based on forecasting. It
helps the promoter to assess the feasibility of establishing a new business by considering expected
benefits, costs, risks, and uncertainties of the proposed business. The success of business depends
on sound forecasting. Forecasting is of utmost importance in setting up of a new business.
Elements of forecasting:
i. Developing the ground work – The first step in the process of forecasting is its preliminary
preparation. It involves collection of basic information relating to the product, market, competition,
environment of the industry, social factors, political factors, etc. A proper study of these facts helps
in making future estimates.
ii. Estimating future trends – The future can be estimated with the help of past experience and
present performance. The prospects of the future period can be estimated in consultation with the

25
key personnel and it should be communicated to all employees of the organization. The
management has to prepare quantitative estimates of future events with key executives.
iii. Collection of results – Relevant records are to be prepared and maintained to collect the actual
results. Irrelevant information can be avoided while collecting the results. All relevant facts and
figures with regard to actual performance are to be collected and recorded.
iv. Comparing actual results with the estimated results – The actual results are compared with
estimated results to know the deviations. This comparison provides an opportunity to discuss the
deviations, their possible reasons and future trends. The reasons for significant deviations can be
investigated. This helps the management to estimate the future realistically.
MBO
Management by objectives aims to improve the performance of an organization by clearly defining
objectives that are agreed to by both management and employees. According to the theory, having a
say in goal setting and action plans encourages participation and commitment among employees, as
well as aligning objectives across the organization.
Advantages and Disadvantages of Management by Objectives
The benefits include employees taking pride in their work with goals that they know they can
achieve. It also aligns employees with their strengths, skills, and
Decision Making
Decision-making is an integral part of modern management. Essentially, Rational or sound decision
making is taken as primary function of management. Every manager takes hundreds and hundreds
of decisions subconsciously or consciously making it as the key component in the role of a
manager. Decisions play important roles as they determine both organizational and managerial
activities. A decision can be defined as a course of action purposely chosen from a set of
alternatives to achieve organizational or managerial objectives or goals. Decision making process is
continuous and indispensable component of managing any organization or business activities.
Decisions are made to sustain the activities of all business activities and organizational functioning.
Decisions are made at every level of management to ensure organizational or business goals are
achieved. Further, the decisions make up one of core functional values that every organization
adopts and implements to ensure optimum growth and drivability in terms of services and or
products offered.
As such, decision making process can be further exemplified in the backdrop of the following
definitions.
Definition of Decision Making
According to the Oxford Advanced Learner’s Dictionary the term decision making means - the
process of deciding about something important, especially in a group of people or in an
organization.
Decision-making is the selection based on some criteria from two or more possible alternatives.
George R.Terry
A decision can be defined as a course of action consciously chosen from available alternatives
for the purpose of desired result — J.L. Massie
A decision is an act of choice, wherein an executive forms a conclusion about what must be done in
a given situation. A decision represents a course of behavior chosen from a number of possible
alternatives. -— D.E. Mc. Farland
From these definitions, it is clear that decision-making is concerned with selecting a course of
action from among alternatives to achieve a predetermined objective.
Trewatha & Newport defines decision making process as follows:, “Decision-making involves the
selection of a course of action from among two or more possible alternatives in order to arrive
at a solution for a given problem”.
As evidenced by the foregone definitions, decision making process is a consultative affair done by a
comity of professionals to drive better functioning of any organization. Thereby, it is a continuous
and dynamic activity that pervades all other activities pertaining to the organization. Since it is an
ongoing activity, decision making process plays vital importance in the functioning of an

26
organization. Since intellectual minds are involved in the process of decision making, it requires
solid scientific knowledge coupled with skills and experience in addition to mental maturity.
Further, decision making process can be regarded as check and balance system that keeps the
organization growing both in vertical and linear directions. It means that decision making
process seeks a goal. The goals are pre-set business objectives, company missions and its vision. To
achieve these goals, company may face lot of obstacles in administrative, operational, marketing
wings and operational domains. Such problems are sorted out through comprehensive decision
making process. No decision comes as end in itself, since in may evolve new problems to solve.
When one problem is solved another arises and so on, such that decision making process, as said
earlier, is a continuous and dynamic.
Process of Decision Making
Steps in decision making
1. Identification of problems: the first step of decision making is identification of problems. First
of all, managers must identify the problem. The problem has to be found and defined. Symptoms
are identified and problems should be judged, symptoms are not problems. They are warning signs
of problems. So, managers should search for symptoms for identification of problems. Such
symptoms can be falling of sales, profit etc. It is said that problem identified is half solved is
identification of problem should be effective.
2. Analysis of problem: after identification of problems, the problem should be analyzed by the
decision maker. It is the assembly of fact and clarifying it. Relevant information must be collected
and analyzed according to the complexity and nature of problems.
3. Developing the alternative solution: after identification and analysis of problems different
probable solutions have to be developed which is known as developing the alternative solutions.
there may be many alternative past experience, expert opinion, discussions etc which may be
helpful to develop the alternative
4. Evaluation of best alternative: after developing the alternative solution evaluation of best
alternative is done. It is determined that which alternative has how much advantage and
disadvantages. In other words, alternatives are evaluated in so many factors like cost factors, risk ,
benefits, facilities etc. therefore it is very important
5. Selection of best alternative: after evaluating alternative, the best alternative is to be selected
from various alternatives. After developing alternative, the managers should taste each of them by
imagining things that he has already put in effect. He should try to foresee the desirable
consequences of adopting each alternative. It is done for best selection. therefore it is very
important
6. Implementation of best alternative: after selection of finest alternative, it must be used in the
organization effectively. Effectiveness of decisions in achieving the desired goals depends upon its
implementation. It they are not implemented effectively then best results can’t be obtained.
Therefore proper implementation of best alternative is necessary.
7. Review of implementation: it is the last step of decision making process. When the
implementation of best alternative is reviewed, the process of decision making is finished. The
result of implementation should be monitored and evaluated through which effectiveness can be
measured.

27
Importance of decision making
1. Implementation of managerial function: Without decision making different managerial
function such as planning, organizing, directing, controlling, staffing can’t be conducted. In
other words, when an employee does, s/he does the work through decision making function.
Therefore, we can say that decision is important element to implement the managerial
function.
2. Pervasiveness of decision making: the decision is made in all managerial activities and in all
functions of the organization. It must be taken by all staff. Without decision making any kinds of
function is not possible. So it is pervasive.
3. Evaluation of managerial performance: Decisions can evaluate managerial performance.
When decision is correct it is understood that the manager is qualified, able and efficient. When the
decision is wrong, it is understood that the manager is disqualified. So decision making evaluate the
managerial performance.
4. Helpful in planning and policies: Any policy or plan is established through decision making.
Without decision making, no plans and policies are performed. In the process of making plans,
appropriate decisions must be made from so many alternatives. Therefore decision making is an
important process which is helpful in planning.
5. Selecting the best alternatives: Decision making is the process of selecting the best
alternatives. It is necessary in every organization because there are many alternatives. So decision
makers evaluate various advantages and disadvantages of every alternative and select the best
alternative.
6. Successful; operation of business: Every individual, departments and organization make the
decisions. In this competitive world; organization can exist when the correct and appropriate
decisions are made. Therefore correct decisions help in successful operation of business.
Bounded Rationality in Decision Making

28
There are two models related to Decision Making
1) Economic Man Model
2) Administrative Man Model

29
Difference between Economic Man Model and Administrative Man Model

Process of Rational Decision Making

30
Usage of Models
Lesson :- 4

ORGANISING – INTRODUCTION
Organizing is the function of management which follows planning. It is a function in which the
synchronization and combination of human, physical and financial resources takes place. All the
three resources are important to get results. Therefore, organizational function helps in achievement
of results which in fact is important for the functioning of a concern. According to Chester
Barnard, “Organizing is a function by which the concern is able to define the role positions, the
jobs related and the co-ordination between authority and responsibility. Hence, a manager always
has to organize in order to get results.
A manager performs organizing function with the help of following steps:-
1. Identification of activities - All the activities which have to be performed in a concern have
to be identified first. For example, preparation of accounts, making sales, record keeping,
quality control, inventory control, etc. All these activities have to be grouped and classified
into units.
2. Departmentally organizing the activities - In this step, the manager tries to combine and
group similar and related activities into units or departments. This organization of dividing the
whole concern into independent units and departments is called departmentation.
3. Classifying the authority - Once the departments are made, the manager likes to classify
the powers and its extent to the managers. This activity of giving a rank in order to the
managerial positions is called hierarchy. The top management is into formulation of policies,
the middle level management into departmental supervision and lower level management into
supervision of foremen. The clarification of authority help in bringing efficiency in the
running of a concern.
4. Co-ordination between authority and responsibility - Relationships are established
among various groups to enable smooth interaction toward the achievment of the
organizational goal. Each individual is made aware of his authority and he/she knows whom
they have to take orders from and to whom they are accountable and to whom they have to
report. A clear organizational structure is drawn and all the employees are made aware of it.
Principles of Organizing
The organizing process can be done efficiently if the managers have certain guidelines so that they
can take decisions and can act. To organize in an effective manner, the following principles of
organization can be used by a manager.
1. Principle of Specialization

31
 According to the principle, the whole work of a concern should be divided amongst the
subordinates on the basis of qualifications, abilities and skills. It is through division of work
specialization can be achieved which results in effective organization.
2. Principle of Functional Definition
According to this principle, all the functions in a concern should be completely and clearly
defined to the managers and subordinates. This can be done by clearly defining the duties,
responsibilities, authority and relationships of people towards each other. Clarifications in
authority-responsibility relationships helps in achieving co-ordination and thereby
organization can take place effectively. For example, the primary functions of production,
marketing and finance and the authority responsibility relationships in these departments
shouldbe clearly defined to every person attached to that department. Clarification in the
authority-responsibility relationship helps in efficient organization.
3. Principles of Span of Control/Supervision
According to this principle, span of control is a span of supervision which depicts the number
of employees that can be handled and controlled effectively by a single manager. According to
this principle, a manager should be able to handle what number of employees under him
should be decided. This decision can be taken by choosing either froma wide or narrow span.
There are two types of span of control:-
a. Wide span of control- It is one in which a manager can supervise and control
effectively a large group of persons at one time, According to this span, one manager
can effectively and efficiently handle a large number of subordinates at one time.
b. Narrow span of control- According to this span, the work and authority is divided
amongst many subordinates and a manager doesn't supervises and control a very big
group of people under him. The manager according to a narrow span supervises a
selected number of employees at one time.
4. Principle of Scalar Chain
Scalar chain is a chain of command or authority which flows from top to bottom. With a chain of
authority available, wastages of resources are minimized, communication is affected, overlapping
of work is avoided and easy organization takes place. A scalar chain of command facilitates work
flow in an organization which helps in achievement of effective results. As the authority flows from
top to bottom, it clarifies the authority positions to managers at all level and that facilitates effective
organization.
5.Principle of Unity of Command
It implies one subordinate-one superior relationship. Every subordinate is answerable and
accountable to one boss at one time. This helps in avoiding communication gaps and feedback and
response is prompt. Unity of command also helps in effective combination of resources, that is,
physical, financial resources which helps in easy co-ordination and, therefore, effective
organization.
Classification of Organizations
Organizations are basically classified on the basis of relationships. There are two types of
organizations formed on the basis of relationships in an organization.
1. Formal Organization - This is one which refers to a structure of well defined jobs each
bearing a measure of authority and responsibility. It is a conscious determination by which
people accomplish goals by adhering to the norms laid down by the structure. This kind of
organization is an arbitrary set up in which each person is responsible for his performance.
Formal organization has a formal set up to achieve pre- determined goals.
2. Informal Organization - It refers to a network of personal and social relationships which
spontaneously originates within the formal set up. Informal organizations develop
relationships which are built on likes, dislikes, feelings and emotions. Therefore, the
network of social groups based on friendships can be called as informal organizations.
There is no conscious effort made to have informal organization. It emerges from the formal
organization and it is not based on any rules and regulations as in case of formal
organization.
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Relationship between Formal and Informal Organizations
For a concerns working both formal and informal organization are important. Formal organization
originates from the set organizational structure and informal organization originates from formal
organization. For an efficient organization, both formal and informal organizations are required.
They are the two phase of a same concern.
Formal organization can work independently. But informal organization depends totally upon the
formal organization.
Formal and informal organization helps in bringing efficient working organization and smoothness
in a concern. Within the formal organization, the members undertake the assigned duties in co-
operation with each other. They interact and communicate amongst themselves. Therefore, both
formal and informal organizations are important. When several people work together for
achievement of organizational goals, social tie ups tends to built and therefore informal
organization helps to secure co-operation by which goals can be achieved smooth. Therefore, we
can say that informal organization emerges from formal organization.
Line and Staff Organization
Line and staff organization is a modification of line organization and it is more complex than line
organization. According to this administrative organization, specialized and supportive activities
are attached to the line of command by appointing staff supervisors and staff specialists who are
attached to the line authority. The power of command always remains with the line executives and
staff supervisors guide, advice and council the line executives. Personal Secretary to the Managing
Director is a staff official.
MANAGING
DIRECTOR
↓ ↓ ↓
Production Manager Marketing Manager Finance Manager
↓ ↓ ↓
Plant Supervisor Market Supervisor Chief Assisstant
↓ ↓ ↓
Accountant
Foreman Salesman
Features of Line and Staff Organization
1. There are two types of staff :
a. Staff Assistants- P.A. to Managing Director, Secretary to Marketing Manager.
b. Staff Supervisor- Operation Control Manager, Quality Controller, PRO
2. Line and Staff Organization is a compromise of line organization. It is more complex than
line concern.
3. Division of work and specialization takes place in line and staff organization.
4. The whole organization is divided into different functional areas to which staff specialists
are attached.
5. Efficiency can be achieved through the features of specialization.
6. There are two lines of authority which flow at one time in a concern :
a. Line Authority
b. Staff Authority
7. Power of command remains with the line executive and staff serves only as counselors.

DEPARTMENTATION
Departmentalization (or simply departmentation) refers to the grouping of operating tasks into jobs,
the combining of jobs into effective work groups and the combining of groups into divisions often
termed as ‘Departments’.Grouping of activities into departments is necessary part of the process of
setting up organisation, whenever enterprise expands beyond the size that cannot be effectively
managed by one person. Departments and levels emerge from the grouping of activities.

33
According to Koontz and O’Donnell, “A department is a distinct area, division or branch of an
enterprise over which a manager has authority for the performance of specified activities.”
‘In simple words, departmentation is the process of classifying and grouping all the activities of an
enterprise into different units and sub-units. The aim is to facilitate the carrying out of the activities
efficiently for achieving overall results.The management of the enterprise is made more effective
by departmentation. It would have been a very difficult and complicated task to manage a large
undertaking without divisionalisation.

Authority and responsibility

Authority means a formal, institutional or legal power in a particular job, function or position
that empowers the holder of that job, function or position to successfully perform his task.
Responsibility is the obligation of a subordinate to perform a duty, which has been assigned to him
by his superior.

Delegation and Decentralization

DELEGATION- A manager alone cannot perform all the tasks assigned to him. In order to
meet the targets, the manager should delegate authority. Delegation of Authority means
division of authority and powers downwards to the subordinate. Delegation is about entrusting
someone else to do parts of your job. Delegation of authority can be defined as subdivision
and sub-allocation of powers to the subordinates in order to achieve effective results.

DECENTRALISATION-It is a systematic delegation of authority at all levels of

management and in all of the organization. In a decentralization concern, authority in retained
by the top management for taking major decisions and framing policies concerning the whole
concern. Rest of the authority may be delegated to the middle level and lower level of
management.

Basis Delegation Decentralization

Managers delegate some of their function Right to take decisions is shared by top management
Meaning
and authority to their subordinates. and other level of management.

34
 Scope of delegation is limited as superior
Scope is wide as the decision making is shared by the
Scope delegates the powers to the subordinates
subordinates also.
on individual bases.

Responsibility remains of the managers

Responsibility Responsibility is also delegated to subordinates.
and cannot be delegated

Freedom is not given to the subordinates

Freedom of Freedom to work can be maintained by subordinates
as they have to work as per the
Work as they are free to take decision and to implement it.
instructions of their superiors.

Nature It is a routine function It is an important decision of an enterprise.

Delegation is important in all concerns Decentralization becomes more important in large

Need on purpose whether big or small. No enterprises can concerns and it depends upon the decision made by
work without delegation. the enterprise, it is not compulsory.

Grant of The authority is granted by one It is a systematic act which takes place at all levels
Authority individual to another. and at all functions in a concern.

Grant of Authority with responsibility is delegated to

Responsibility cannot be delegated
Responsibility subordinates.

Decentralization is total by nature. It spreads

Degree of delegation varies from concern
Degree throughout the organization i.e. at all levels and all
to concern and department to department.
functions

Delegation is a process which explains It is an outcome which explains relationship between

Process
superior subordinates relationship top management and all other departments.

Delegation is essential of all kinds of

Essentiality Decentralization is a decisions function by nature.
concerns

Delegation is essential for creating the Decentralization is an optional policy at the

Significance
organization discretion of top management.

It is considered as a general policy of top

Withdrawal Delegated authority can be taken back.
management and is applicable to all departments.

Freedom of
Very little freedom to the subordinates Considerable freedom
Action

Decentralization can be called as extension of delegation. When delegation of authority is done to

the fullest possible extent, it gives use to decentralization.

35
 Descriptive Questions

1.Q ‘Management is both an art as well as science.’ Comment

2 Q. Explain various types of managerial skills.
3. Q How Management is different from administration?
4. Q. What is Management? Identify and outline major trends in management since the
beginning of the century.
5 Q. Discuss Taylors Principles of scientific of scientific Management.
6 Q. What was Henri Fayols greatest contribution to management theory ?
7 Q. What do you mean by MBO? Describe its advantages and limitations.
8 Q. Explain the steps involved in the planning process. How can decision be made under
uncertainty?
9 Q. What is decision making? Discuss the process of decision making.
10. Q Distinguish between Delegation and Decentralization? How can decentralization be
made effective?
11. Q Distinguish between: Formal organisation and Informal Organisation.
12. Q In what ways does the organising process shape the organisation? What implications
do these shapes have on the distribution of authority?
13. Q What are the various kinds of Plans? Describe the Purpose and advantage of each.
14. Q ‘Management knowledge is needed in all organisations and all levels of it
“Comment.
15 Q. Discuss briefly the various functions which constitute the process of management.

Multiple Choice Questions:

1.Q Which of the following theory is proposed by McGregor?

a. Theory X and Theory Y
b. Hierarchy of Needs
c. ERG Theory
d. Theory
Ans. A
2 Q. Which of the following is not the management function?
a. Planning
b. Staffing
c. Organizing
d. Grouping
Ans. D
3 Q . The science that focuses on the influence people have on one another is.
a. Psychology
b. Anthropology
c. political science
d. social psychology
Ans. A
4 Q . Determining how tasks are to be grouped is part of which management function?
a. Planning
b. Leading
c. Controlling
d. organizing
Ans. D
5 Q . Most valuable asset in an organization is
a. Land and building
b. Cash and bank balances
36
c. Human being
d. technology.
Ans. C
6 Q Which plan is used to meet a specific situation?
a) Single use plans
b) Standing Plans
c) None of these
Ans. A
7Q First line supervisors are known as
a) Top Level Management
b) Middle level Management
c) Lower level Management
Ans. C
8Q Father of scientific Management_______________
a) Henry Fayol
b) F.W.Taylor
c) Allen
d) None of the above
Ans. B
9 Q. Management is what a manger does_____________.
A. Peter F. Drucker.
B. Terry.
C. Louis Allan.
D. Henry Fayol.
ANSWER: C
10.Q. To manage is to forecast and plan, to organize, to compound, to co-ordinate and to control.
This definition was given by____________.
A. Peter F. Drucker.
B. Henry Fayol.
C. Louis Allan.
D. Terry.
ANSWER: B
11 Q. Management is the art of getting things done through and with an informally
organized_____________.
A. Harold Koontz.
B. Terry.
C. Louis Allan.
D. Henry Fayol.
ANSWER: A
12 Q Father of Administrative management______________.
A. Mary Parkett.
B. Lillian Gilbert.
C. Henry Fayol.
D. Elton Mayo.
ANSWER: C
13 Q Henry Fayol laid down_____________.
A. 12 principles.
B. 13 principles.
C. 14 principles.
D. 15 principles.
ANSWER: C
14 Q F.W. Taylor is associated with________________.
A. Scientific Management.
37
B. Future management.
C. Modern management.
D. Principles of management.
ANSWER: A
15 Q. Management is________________.
A. an art.
B. a science.
C. an art and a science.
D. an art not science.
ANSWER: C
16 Q. Henry Fayol was a French__________________.
A. Industrialist.
B. Writer.
C. Manager.
D. Actor.
ANSWER: A
17 Q. General and Industrial Management was written by_________________.
A. Harold Koontz.
B. Terry.
C. Louis Allan.
D. Hendry Fayol.
ANSWER: D
18 Q. Every subordinate should receive orders from and be accountable to only one superior is
__________.
A. Unity of direction.
B. Unity of command.
C. Centralization.
D. Scalar chain.
ANSWER: B
19 Q. Allotment of work to each worker on the basis of the capacity of an average worker
functioning in the
normal working condition is _____________.
A. social task planning.
B. scientific task planning.
C. not a planning.
D. scientific organizing.
ANSWER: B
20 Q. Study of the movements of both the workers and the machine to eliminate wasteful
movement is
_____________.
A. fatigue study.
B. time study.
C. motion study.
D. work-study.
ANSWER: C
21 Q. A study relating to the fixing of the working hours with rest periods to recoup the energy
while performing in a job is called ____________.
A. fatigue study.
B. time study.
C. motion study.
D. work-study.
ANSWER: A

38
22 Q. The first and foremost function of management is ___________.
A. planning.
B. organizing.
C. controlling.
D. coordination.
ANSWER: A
23 Q. Planning lays down the overall objective, strategies and polices for the total enterprise is
___________.
A. corporate planning.
B. divisions planning.
C. unit planning.
D. department planning.
ANSWER: A
24 Q. Strategic planning is ___________.
A. long term planning.
B. medium term planning.
C. short term planning.
D. annual planning.
ANSWER: A
25 Q. The assumptions about future derived from forecasting and used in planning are known as
_____________.
A. planning premises.
B. freehold premises.
C. business premises.
D. corporate premises.
ANSWER: A
26 Q. Goals, aims, purposes, missions and target is also known as ____________.
A. objective.
B. strategies.
C. policies.
D. rules.
ANSWER: A
27 Q. Contingent plan to meet environmental pressures is ______________.
A. objective.
B. strategies.
C. policies.
D. rules.
ANSWER: B
28 Q. A chronological sequence of steps to be undertaken to enforce a policy and to attain an
objective is known as ___________.
A. objective.
B. strategies.
C. procedures.
D. rules.
ANSWER: C
29 Q. A statement of expected results expressed in numerical terms for a definite period of time in
the future is known as ____________.
A. objective.
B. strategies.
C. procedures.
D. budgets.
ANSWER: D

39
30 Q. The process of establishing a time sequence for the work is known as __________.
A. objective.
B. schedules.
C. procedures.
D. budgets.
ANSWER: B
31 Q. A rigid plan, no scope for discretion __________.
A. rule.
B. schedules.
C. procedures.
D. budgets.
ANSWER: A
32 Q. Specifying the manner of executing policy is known as ________________.
A. objective.
B. schedules.
C. procedures.
D. budgets.
ANSWER: C
33 Q. ____________ is the harmonizing or synchronizing of individual efforts with the purpose of
achieving group goals.
A. coordination.
B. control.
C. decision making.
D. delegation.
ANSWER: A
34 Q. __________ is an obligation to perform certain functions and achieve certain results.
A. responsibility.
B. decentralization.
C. centralization.
D. delegation.
ANSWER: A
35 Q. Plan that establishes a required method of handling future activities is called _________.
A. rules.
B. procedures.
C. policy.
D. methods.
ANSWER: B
36 Q. An identified group of people contributing their efforts towards the attainment of goals is
called an _____________.
A. organization.
B. business.
C. management.
D. department.
ANSWER: A
37 Q. A system of co-operative activities of two or more persons is called __________.
A. department.
B. co-ordination.
C. organization.
D. control.
ANSWER: C
38 Q. Formal authority flows from upwards to downwards in___________.
A. formal organization.
B. informal organization.
40
C. business or organisation.
D. strategic organization.
ANSWER: A
39 Q. Informal authority flows upwards to downwards or horizontally in _____________.
A. formal organization.
B. informal organization.
C. business or organisation.
D. strategic organization.
ANSWER: B
40 Q. Rules, duties and responsibilities or workers are given in writing in______________.
A. formal organization.
B. informal organization.
C. business or organisation.
D. strategic organization.
ANSWER: A
41 Q. Which is created for technological purpose?
A. formal organization.
B. informal organization.
C. business or organisation.
D. strategic organization.
ANSWER: A
42 Q. Which arises from mans quest for social satisfaction?
A. formal organization.
B. informal organization.
C. business or organisation.
D. strategic organization.
ANSWER: B
43 Q. Which type of organization is permanent and stable?
A. formal organization.
B. informal organization.
C. business or organisation.
D. strategic organization.
ANSWER: A
44 Q. Which type of organization gives importance to terms of authority and functions?
A. formal organization.
B. informal organization.
C. business or organisation.
D. strategic organization.
ANSWER: A
45 Q. Which type of organization gives importance to people and their relationships?
A. formal organization.
B. informal organization.
C. business or organisation.
D. strategic organization.
ANSWER: B
46 Q. Which organisational relationship gives a greater job satisfaction and results in maximum
production?
A. formal organization.
B. informal organization.
C. business or organisation.
D. strategic organization.
ANSWER: B

41
Further Readings:
 Prasad, L.M., Management Process and Organisational Behaviour, Sultan Chand & Sons
 Chhabra, T.N. , Management Process and Organisational Behaviour, Sun India
 Aggarwal, P.K., Management Process and Organisational Behaviour, Vrinda Publications
 Robbins, (9th Ed., 2016). Fundamentals of Management: Essentials Concepts and
Applications, Pearson Education.

Key Words :
Management, Management thought, Coordination, Planning, Organising.

Link:
https://www.indiaclass.com/principles-of-management-mcq/

42
 UNIT-II
STAFFING

Lesson :5
INTRODUCTION
Staffing is the managerial function of recruitment, selection, training, developing, promotion and
compensation of personnel. Staffing may be defined as the process of hiring and developing the
required personnel to fill in the various positions in the organization. It involves estimating the
number and type of personnel required. It involves estimating the number and type of personnel
required, recruiting and developing them, maintaining and improving their competence and
performance. Staffing is the process of identifying, assessing, placing, developing and evaluating
individuals at work.

Definition:
According to Koontz and O’Donnell: “The managerial function of staffing involves manuring the
organizational structure through proper and effective selection, appraisal and development of
personnel to fill the roles designed into the structure.” Staffing is defined as, “Filling and keeping
filled, positions in the organizational structure. This is done by identifying work-force requirements
, inventorying the people available, recruiting, selecting, placing, promotion, appraising, planning
the careers, compensating, training, developing existing staff or new recruits, so that they can
accomplish their tasks effectively and efficiently.”

IMPORTANCE OF STAFFING
1. Staffing helps in discovering and obtaining competent and personnel for various jobs.
2. It helps to improve the quantity and quality of the output by putting the right person on the right
job.
3. It helps to improve job satisfaction of employees.
4. It facilitates higher productive performance by appointing right man for right job.
5. It reduces the cost of personnel by avoiding wastage of human resources.
6. It facilitates growth and diversification of business.
7. It provides continuous survival and growth of the business through development of employees.

RECRUITMENT AND SELECTION

Recruiting involves attracting candidate to fill the positions in the organization structure. Before
recruiting, the requirement of positions must be cleared identified. It makes easier to recruit the
candidates from the outside. Enterprises with a favorable public image find it easier to attract
qualified candidates.

Definitions –
1. Mc Fariand, “The term recruitment applies to the process of attracting potential employees of
the company.”
2. Flippo, “Recruitment is the process of searching prospective employees and stimulating them to
apply for the jobs in the organization.” Thus recruitment may be considered as a positive action as
it involves attracting the people towards organization.
Need of recruitment
The need of recruitment may arise due to following situations:
1. Vacancies due to transfer, promotion, retirement, permanent disability or death of worker.
2. Creation of vacancies due to expansion, diversification or growth.

43
METHODS AND SOURCES OF RECRUITMENT:
According to ‘Dunn and Stephens’ recruitment methods can be classified into three categories:
1) Direct Methods: Direct Methods include travelling visitors to educational and professional
institutions, employee’s contacts with public and manned exhibits and waiting lists.
2) Indirect Methods: Indirect Methods include advertising in newspaper radio, in trade and
professional journals, technical journals, brochures etc.
3) Third Party Methods: Third Party Methods includes the use of commercial and private
employment agencies, state agencies, placement offices of the colleges and universities, and
professional association recruiting firms.

SOURCES OF RECRUITMENT
The various sources of recruitment may be classified as
A. Internal sources – Many organizations in India give preference to people within the company
because the best employees can be found from within the organization itself. Under this policy, if
there is any vacancy the persons already working in the organization are appointed to fill it. This
method is followed mostly in Government organizations.

B. External sources or recruitment from outside – Internal sources may not always fulfill the
needs of an organization. Naturally, most of the concerns have to look for the external sources for
recruitment the required number of employees with the requisite qualifications. The external
sources of recruitment include.

1. Direct Recruitment – Many organizations having one separate department called personnel
department to select right employees. For that organization may receive direct applications from the
candidate. The technical and clerical staff is appointed in this way.
2. Recruitment through the jobbers or Intermediaries – In India mostly unskilled or illiterate
workers are recruited through this method. Under this system the intermediary keeps a vital link
between workers and employers. They are always willing to supply the required number of
workers.

3. Recruitment at the factory gate – Mostly unskilled workers are appointed through this method.
Under this system, large number of unemployed workers assemble at the factory gate for
employment. The factory manager, or labor superintendent or some other official may select the
necessary workers.

4. Recruitment through advertisement – This is most common method for recruiting skilled
workers, clerical staff, managerial personnel, technical personnel. The vacancies are advertised in
the popular daily newspapers and applications are invited from the persons having required
qualifications.

5. Recruitment through the recommendation of the existing employees – The existing

employees recommend the suitable names for the employment.

6. Recruitment from colleges or universities or educational institutions – This method is used in

some enterprises or Government department, when the recruitment of persons required for
administration and technical personnel.

7. Recruitment through employment exchange – The workers who want help in finding jobs
make their registration in the nearest employment office where details are recorded. Employment
exchanges are the special offices for bringing together those workers who are in need of
employment.

44
8. Other methods –
i) Badly Control system or Decasualization of labor – It means efforts taken for regularizing the
system or recruitment by means of controlling substitute of badly labor. Under this system, on the
first day of each month, special badly cards are given to a selected number of persons who are
advised to present themselves every morning at the factory when temporary vacancies are filled up
from amount them.
ii) Contract labor – Under this method contractor supplies labors to the industrial enterprises
according to their requirement.

SELECTION:
Selection is the process of choosing the most suitable person for the current position or for future
position from within the organization or from outside the organization. The selection of managers is
one of the most critical steps in the entire process of managing.
PROCESS OF SELECTION
Selection means the taking up the different workers by various acts from the application forms
invited through different sources of internal and externals. According to Dale Yoder, “Selection is
the process in which candidates by employment are divided into two classes those who are to be
offered employment and those who are not.”

SELECTION PROCEDURE:
Selection of workers is regarded as a policy matter. Every enterprise has its own policy for
recruitment. The following procedure is adopted.

1) Receiving and screening the application: After receiving the applications have to be screened.
In this process the applications of candidates without the requisite qualification are rejected.

2) Sending the Blank application form: After preparing the list of candidates suitable for job,
blank application forms will be sent to the candidates. In this application form information should
45
be given about the name and address of the candidate, educational qualification, experience, salary
expected etc.

3) Preliminary Interview: The interviewer has to decide whether the applicant is fit for job or not.
By this interview the appearance, attitudes, behavior of the candidate can be known easily.

4) Administering Tests: Different types of test may be undertaken. Tests are conducted for the
knowledge of personal behavior, efficiency of work and interest. Generally, following types of tests
are conducted.
i) Achievement Test
ii) Aptitude test
iii) Trade Test
iv) Interest Test
v) Intelligence Test etc.
5) Checking References on Investigation of Previous History: Applicants are generally asked to
give names of at least two persons to whom the firm may make a reference.

6) Interviewing: Interview is the most important step in the selection procedure. In interview, the
intimation given in the application form is checked. Interview helps in finding out the physical
appearance and mental alertness of the candidate and whether he possesses the required qualities.
Interviews may be of various kinds these are
1) Direct Interview
2) Indirect Interview
3) Patterned Interview
4) Stress interview
5) Systematic in – depth interview
6) Board of panel interview
7) Group interview
7) Final Selection: On the basic of results of previous interview the candidate is informed whether
he/she is selected for the said post or not.

TRAINING AND DEVELOPMENT

Meaning: Training is an instrument of developing the employees by increasing their skills and
improving their behavior. Technical, managerial skills are needed by the employees for performing
the jobs assigned to the. Training is required to be given to new employees as well as existing
employees. The methods to be used for training and the duration for which training should be given
is decided by the management according to the objectives of the training, the number of persons to
be trained and the amount of training needed by the employees. Training leads to overall personal
development. The major outcome of training is learning. Trainees learn new habits, new skills,
useful information that helps to improve their performance.
Definition:
According to Flippo: “Training is an act of increasing the knowledge and skill of an employee for
doing a particular job.”
IMPORTANCE OF TRAINING AND DEVELOPMENT:
1. Reduction in learning time
2. Better performance
3. Reduced supervision
4. Increases Morale of the employees
5. Facilitates organizational stability and flexibility
6. Develops employees skills, talents, competency
7. Decreased accidents
8. Better use of raw material and other resources
9. Increase in production
46
 Methods of training:

DEVELOPMENT
Development is a continuous process. It is fox for refreshing information knowledge and skills of
the executives. In the case of development, off the job methods are used. It provides wider them
capable to face organizational problems and challenges is a bold manner. Management
development is a planned systematic process of learning. It is designed to induce behavioral change
in individuals by cultivating the mental abilities and inherent qualities through the acquisition and
Understanding of use of new knowledge.
PERFORMANCE APPRAISAL
Performance appraisal is one of the oldest and most accepted universal principles of management. It
refers to all the formal procedures used in working organizations to evaluate the personalities,
contributions and potentials of group members. It is used as a guide by formulating a suitable
training and development programme to improve the quality of performance in his present work.
Performance appraisal is the judgment of an employee’s performance in a job. It is also called as
merit rating. All managers’ are constantly forming judgment of their subordinates and are
continuously making appraisals. It is the systematic evaluations of the individuals with respect to
his performance on the job and his potential for development. The immediate superior is in-charge
of such appraisal. The managerial appraisal should measure both performances in achieving goals
and plans as well as all managerial function such as planning, organizing, leading and controlling.

Objectives of performance appraisal:

1. To help a manager to decide the increase in pay on ground of merits.
2. To determine the future use of an employee
3. To indicate training needs.
4. To motivate the employees to do better in his or her present job.
5. To contribute the growth and development of an employee.
6. To identify employees for deputation to other organizations
7. To help in creating a desirable culture and tradition in the organization.
8. To nominate employees for training programmes.

Lesson :6

MOTIVATION
INTRODUCTION
Motivation is a general term that is applicable to the entire class drives, desires, needs wishes and
similar forces. Motivation is productivity factor in industry. It is the same total managerial science.
Motivating workers is to create desire in the mind of workers for better performance. One can buy
employee’s physical presence at work place for a certain time but cannot buy his willingness to
work. The capacity to work and willingness to work is important to get better results. Hence,

47
motivation is the function of a manger to induce the employees to work willingly, efficiently,
effectively and contribute their best to the achievement of the goals of the organization.

Definition:
Motive: “An inner state that energizes, activates or moves and that directs or channels behavior
towards goals”
According to W.A. Scott: “Motivation means process of stimulating people to action to
accomplishment of desired goals.” Motivation can be defined as: ‘willingness to expand energy to
achieve goals and getting rewards.’

OBJECTIVES OF MOTIVATION
Motivation is one of the primary functions of a manager. He has to motivate his sub-ordinates to
perform their activities at high level & to make positive contribution towards the efficient &
effective achievement of organizational objectives. The work performance of an individual depends
upon motivation as well as his ability and environmental conditions. The performance on the job is
determined by following relationship:

P = F [M, A & E]
P = Performance
M = Motivation
A = Activity
E = Environment

Using this relationship and employee who can achieve high level of desire & ability to perform his
job must be provided with proper material equipment & process. It is the responsibility of the
manager to ensure that all these 3 parts are essential i.e.

Motivation, Activity & Environment.

Motivation aims at creating an environment which will make the personnel of an organization.
1. To take initiative
2. To show dynamism and curiosity
3. To work willingly and co – operatively
4. To work in a disciplined manner
5. To take interest in their work
6. To be dynamic and enthusiastic
7. To be responsible and loyal
8. To take pride in their job
9. To have job satisfaction
10. To have personal and group morale satisfaction and
11. To contribute their best to achieve their personal and organizational objectives.

TYPES OF MOTIVATION
1) Motivation may be positive or negative: - Positive motivation is the process which influences
the employee through rewards. E.g. Bonus, promotion, permanent settlement, increase in working
condition, etc. Negative motivation is based on fear. i.e. fine, discharge, lay-off etc.

2) Motivation may be financial or non-financial: - Financial motivations are those which are
associated with money. It includes wages, salaries, bonus and retirement benefit. Non-financial
motivations are not associated with monetary rewards. It includes ego satisfaction, participation in
the process of decision making, providing good working conditions and providing more
responsibility to them.

48
3) Primary & secondary motivation: - Primary motivation relates to satisfying basic human needs
& secondary motivation relates to social needs & self acquisition.

THEORIES OF MOTIVATION
Maslow’s Need of Hierarchy Theory: - Abraham Maslow was the Pioneer in contributing to a
system of hierarchy of needs. Maslow’s concluded that there are certain needs of employee when
he joins an organization. They have certain expectations from the organization where they are
motivated to satisfy their own needs. The following are important positions advocated by Maslow
about human behavior.
1) Man is a wanting being. Man is a continuously working more & more. What he wants or will
want depend upon what he has. As soon as man’s one need is satisfied another immediately takes
place. It keeps a man to work continuously, demanding more & more.
2) A satisfied need is not a motivator where as an unsatisfied needs work as motivator. Hence a
man works to satisfy his needs.
3) The need of man has hierarchy: - Maslow thinks that a man’s needs are arranged in a series of
level. As soon as the need at lower level is satisfied, a worker is motivated to satisfy another need
in hierarchy.

Different types of needs: -

1) Physiological needs: - It is the lowest level in hierarchy. These needs which are most the
important in the human life must be satisfied by him. It includes food, clothing, housing, air, water,
etc. Physiological needs arise for the survival of human being. Physiological needs are important
for every human being.

2) Safety needs: - Safety needs are known as ‘security needs’. These needs are concerned with
protection i.e. financial security, job security, emotional harm, etc. As soon as physiological needs
are satisfied these needs emerge. It acts as motivating factor.

3) Social needs: - Social needs relates to love, affection & belonging & social security. Every
individual is associated with group members or group of society. He gets affection from his group
members. A man is motivated to satisfy his social needs in following ways by:
1. Establishing a team work, team culture & team spirit.
2. Providing proper training facilities.
3. Conducting frequent meetings with team members.
4. Providing extra activities like social, cultural, sports to encourage the people.
5. Arranging periodical get together & participation with managers.

4) Esteem needs: - It includes two parts i.e. internal esteem & external esteem needs, such as
achievement of respect & status. It can be done in following ways by:
1. Providing higher level of training & better educational facility.
2. Assigning challenging task, high responsibility & position.
3. Delegating some powers to subordinates.
4. Involving sub-ordinates in goal setting & decision making.

5) Self actualization: -
This includes self fulfillment of job growth & achieving once potential. Some methods to satisfy
self actualization needs are: -
1. Involvement of capable people in policy making.
2. Realizing a sense of fulfillment & development.
3. Providing opportunity for involvement.
4. Providing training facility according to capacity.

49
HIERARCHY OF NEEDS

Limitations / Disadvantages of Maslow’s Theory: -

1) It is general expression not specific.
2) The level in the hierarchy are not fixed, the boundaries are overlapping.
3) This approach is related to personal inner action needs. But person does not have any single need
at a time. He has many needs.
These limitations should be kept in the mind by the management while preparing any plan for
motivation. The people are different in their expectation. The same need can not act as a motivating
factor to many people in the same manner.
FREDRICK HERZBERG’S TWO FACTOR THEORY: -
Maslow Hierarchy of need point out about the behavior of the people. Using this as a base,
Herzberg & his associates interviewed 200 engineers & accountants. The engineer & accountant
describe the factors about the feelings. He asked them what are the good times & the bad times on
their jobs. Engineer & accountants brought up the things [bad]. Unfair co policies, poor relationship
with boss, low payment etc. They did not mention about good job experience. They talked about the
opportunities they got for personal growth & development. Then they took interview with the
workers with different industries. The results were same. So he developed 2 factors theory. As per
him a man has two sets of needs:
1. Lower level needs: It denotes hygiene, maintenance or environmental factors which do not
motivate satisfaction, but their absence causes dissatisfaction.
2. Higher level needs: these needs are termed as motivators because they area the real cause of job
satisfaction and they lead to better performance.

50
Herzberg explains his theory with maintenance seeker & motivation seeker. Maintenance seekers
are explained in natural state of motivation. These are important for the growth of the organization.
It mainly satisfies security, psychological, social & esteems needs. In absence of maintenance
factor worker may feel dissatisfied so absenteeism & labor turn over will increase but if they are
present it will act as natural motivating factor. Motivation seekers are explained by him in 6 points
in high state of motivation & job satisfaction. However if these factors are not present, they do not
lead to strong dis-satisfaction. Maintenance seekers are more important in every organization.

Merits: -
1) According to Herzberg one important way to increase job satisfaction is to enhance job
enrichment, job enrichment means more challenging work.
2) Introducing new & more difficult task not handle earlier.
3) Eliminating a layer of supervision.
4) Increased worker’s autonomy & authority.
5) Workers may be given a complete natural unit of work. A natural unit of work helps to increase
identity.
Demerits: -
1) Limited samples: -
A theory is based on a sample of 200 accountants & engineers. The critical question is that these
samples are limited & they are from different occupation.
2) Critical Methodology: -
It suffers from ego defense at work. Motivational & maintenance factors are not completely
described.
McGregor’s Theory of X & Theory of Y: -
According to McGregor’s theory of X & Theory of Y explains the relationship of man & his
behavior. He has explained his theory in 2 terms. They are theory of X & theory of Y. Theory X has
traditional approach where as theory of Y has modern approach. This is Traditional theory of
human behavior. The management has to motivate human beings in the organization.
Theory X:
It involved certain assumptions are follows: -
1. The average human being has an inherent dislike of work & will avoid it.
2. The average human beings are lazy & avoid responsibility.
3. The average human being is not aware about the goals of the organization.
4. The average human being prefers to be directed.
5. Management is responsible for organization. The elements of production are money, machine,
material, people etc.
6. It is the process of directing the people, motivating them & controlling their action by
management.
7. Without any intervention by management people would be passive they must be punished,
controlled or rewarded.
8. He lacks ambitions; avoids responsibility & prefer to be led.
Some assumptions deal with human behavior, human nature. Some assumptions deal with
managerial actions. These all assumptions are negative in their approach. The manager feels that
control is the most appropriate for dealing with subordinates. McGregor believes that these
assumptions about human nature cannot drastically change. There is considerable change.
Theory Y: -
According to McGregor theory of Y has the following assumptions: -
1. The average human being does not inherently dislike work, depending upon controllable
condition work may be a source of satisfaction or punishment.
2. The average human being will excuse self direction, self control.
3. Commitment to objective is the function of reward associated with their achievement the human
being is directed for self actualization.

51
4. The average human being likes to accept the responsibility. Avoidance of responsibility is lack of
ambition for them.
5. Under the modernization & competitive world potential of the workers should be utilized.
Theory Y produces better results because there is no domination. There is no harsh leadership. It is
not optimistic. It is a participative. Theory Y is more realistic so it gives better results than Theory
X. So Theory Y should be used frequently in the organization.
DAVID MCCLELLAND’S THEORY OF MOTIVATION: -
McClelland has made an important contribution in the motivation theory. The need for power is
more important according to him his theory is based on following assumption:
1. Divide needs for power, need for achievement & need for affiliation.
2. Only higher needs are highlighted.
3. Higher needs are classified into 3 types: -
1) Power 2) Achievement 3) Affiliation
4. Taken for granted that lower needs are generally satisfied.
5. Higher level needs are always act as motivating factors.
6. Management must take care of power, achievement & affiliation.
According to McClelland, needs motivate every individual. It acts as high motivators.
McClelland contributes his need aspect into 3 types of needs:-
The need for power: - The need for power is inherent in every individual. This is the need to
dominate influence or control people. Power means authority but authority is not always related to
power. Power can be expert power, reward power, legitimate & coercive power. A person acts as a
dominated when he act as a leader even in small group. The need for power is drive for superiority
over others. Thus need for power is inherent.

The need for affiliation: - The need for affiliation is a social need. It is a motivating factor. It is a
social motive. The sense of affiliation is essential for every individual who is a high performer.
Every human being has social entity, social contact and he involves in social activities. There is
similarity between McClelland affiliation motive & Maslow affiliation needs. Because according to
both, people dominated by affiliation needs are attracted towards job. They must establish a bridge
between such people.

The need for achievement: - He has highlighted the needs for achievement. This is the need for
challenge, success & accomplishment. Higher achievers are motivated for achievement and can
be placed between Maslow esteem needs & self actualization needs. According to McClelland
achievement motive is a desire to make the best performer in the term of standard of excellent. So
that success can be achieved. He has made study on achievement motives & given following
characteristics:
1) Higher achievers want feedback on their performance. They want to know how will they are
doing.
2) High achiever likes to take personal responsibility for finding a solution to problem.
3) High achievers like to take risk for achieving the goals. They want to win in the competition.

Limitation: -
1) Achievement motivation cannot be taught.
2) The evidence supported to this theory is doubtful.
3) The use of projective technique is objection.
4) Achievement training is time consuming & expensive.
5) The theory does not explain the process of motivation & the result of motivation.

THE EXPECTANCY THEORY OF MOTIVATION:

This is a modern expression of what Martin Luther observed centuries ago when he said,
“Everything that is done in the world is done in hope.” The famous psychologist Victor Vroom
says that the people’s motivation towards doing anything will be determined by the value they place
52
on the outcome of their efforts, multiplied by the confidence they have that their efforts will
materially aid in achieving a goal.
The theory is expressed in mathematical terms as:
Force = valence * expectancy
Where
Force = the strength of a person’s motivation
Valence = the strength of an individual’s preference for an outcome
Expectancy = the probability that a particular action will lead to a desired outcome.
One of the great attractions of the Vroom theory is that it recognizes the importance of various
individual needs and motivation. But it is difficult to apply in practice. Despite its difficulty in
application, the logical accuracy of Vroom’s theory indicates that motivation is much more
complex than the approaches of Maslow and Herzberg.

EQUITY THEORY:
An important factor in motivation is whether individual perceives the reward structure as being fair.
One way of addressing this issue is through Equity theory, which refers to an individual’s
subjective judgments about the fairness of the reward he gets, relative to the inputs in form of
efforts he puts in, experience and education he makes use of.
J.Stacy Adams has formulated the above concept as under:
Outcome by person outcomes by another person
--------------------------- = ---------------------------------
Inputs by a person inputs by another person
There should be a balance of the outcomes/inputs relationship for one person in comparison with
that for another person. If people feel that they are inequitable rewarded, they may be dissatisfied,
reduce the quantity or quality of output or leave the organization. If people perceive the rewards as
equitable, they probably will continue at the same level of output. If people think that rewards are
greater than what is considered equitable, they may work harder. It is also possible that some may
discount the rewards. One of the problems is that people may overestimate their own contributions
and the rewards are received by others. Employees may tolerate certain inequities for some time.
But prolonged feelings of inequity may result in strong reactions to an apparently minor occurrence.
REINFORCEMENT THEORY:
The psychologist B. F. Skinner of Harvard developed an interesting but controversial technique for
motivation. This approach is called as positive reinforcement or behavioral modification, states that
individuals can be motivated by proper design of their work environment and praise for their
performance. However, the punishment for poor performance produces negative results. Skinner
and his followers analyze the work situation to determine what caused workers to act the way they
do, and then they initiate changes to eliminate troublesome areas and obstructions to performance.
Specific goals are set with worker’s participation and assistance. Prompt and regular feedback of
results is made available and performance improvements are rewarded with recognition and praise.
Even when performance does not equal goals, ways are found to help people and praise them for
the good things they do. It has also been found that it is highly useful and motivating to give people
full information on a company’s problems, especially those in which they are involved. This
technique sounds almost too simple to work and many behavioral scientists and managers are
skeptical about its effectiveness. However, a number of prominent companies have found this
approach beneficial. Perhaps, the strength of this approach is that it is concerned to the
requirements of good management.
TECHNIQUES OF MOTIVATION
1) Money: - Money is a good technique of motivation in any form. Money is important. Money
is an urgent means of achieving a good standard of living. Money as a motivator trends to be less
by offering similar salaries to various managers. It is a monetary revote leads to increase in the
performance. It is the most affecting motivator.

2) Participation: - The right kind of participation yield motivation. It gives people a sense of
53
accomplishment. Workers participation in decision making act as a good motivator.

3) Quality of working life: - QWC This program is a system approach to job decision. It promises
development in the job enrichment. It is a broad approach. It convinces industrial engineering,
organizational theory, sociology, development, motivation & leadership.

JOB ENRICHMENT: -
As job enrichment aims to build a higher sense of challenges & achievement in the existing job, it
can be done by giving workers more freedom in deciding about the methods of working on their
own. The participation of sub-ordinates & interaction between workers make them aware about
how they lead to welfare of the organization, by giving feedback to the employees about their job
performance. While using motivational techniques, a manager should note that job enrichment is
mainly applied to which skill level. Workers may not like to have changes in the basic contents of
their job, and also technical consideration put serious limitations to any attempt job enrichment.
MORALE
Morale is a state of mind. Employees’ morale refers to an attitude of satisfaction with a desire to
continue and strive for attaining the objectives of a unit. Employee’s enthusiasm, desire to obey
orders, willingness to co-operate with co-workers shows good morale. Dissatisfaction,
discouragement or dislike of job reflects low morale. Morale is an intangible factor which is related
to individual & group. It is known as discipline & confidence in relation to job. Morale & morale
building is very important term. Main functions of supervisor are to develop people & create co-
operation. High morale is essential for effectiveness in office, factory, education etc.
Definition:
According to Haimann: “A state of mind and emotions affecting the attitude and willingness to
work which in turn affect individual and organizational objectives.”
IMPORTANCE OF MORALE: -
1. High morale helps management to overcome many labor problems such as labor turnover,
absenteeism & indiscipline.
2. Morale can help to create good industrial relationship.
3. High productivity & good production are direct results of high morale. Higher production can be
attained at minimum cost by reducing wastage of machine, material, time.

BUILDING HIGH MORALE

1. Building effective two way communication: - There should be two way communications
between management & workers. The workers should be kept fully informed about policies of the
organization & effective suggestion should be accepted from the workers. There should be informal
relationship.
2. Human Relation Approach: - It suggests that individual should be treated as human being. No
individual or group is more important than others. Truthful & co-operative relationship should be
created among employees.
3. Management’s attitude: - Morale is contagious in the sense that people learn from each other.
However, the attitude of the management influences the sub-ordinates. Hence manager should
cultivate favorable attitude among the sub-ordinate.
4. Proper Incentive Scheme: - There should be provision for proper incentive scheme including
financial & nonfinancial as well as good working condition factors: The following factors regarding
the work condition help to increase Morale of employees:
a) Fare wage
b) Work environment [conditions of work, medical care, location of factory, condition at work
place, etc.]
c) Security & opportunity to rise [safety, promotion facility, etc]

54
5. Suitable & appropriate welfare measures: - Employees’ welfare schemes such as housing,
medical benefit, educational facility for children, canteen, sports club, credit facility are helpful in
developing positive attitude among employees.
6. Necessary training: - Workers should be given challenging task to perform job enrichment. It
helps to avoid monetary, disinterest, fatigue etc. Their attitude towards work becomes more
positive. The worker should be given proper training so that they may perform these jobs without
translation.
7. Worker participation in management: - Management should allow workers in the process of
decision making. They should consult management in this process. This will help to build Morale.

Morale improvement program should follow the following basic rules: -

1. Respect individual
2. Fare compensation
3. Give financial & non-financial incentives
4. Adopt open door policy
5. Job security
6. Good working condition
MORALE & PRODUCTIVITY
Morale means satisfaction that a person derives from his job. Satisfaction & happiness is reflected
in Morale. If the employee is happy then there is high productivity. Morale is a degree of
willingness to work in the organization. If they feel disappointed then there will be low Morale.
Where Morale is high & productivity is high then organization can achieve goals. High Morale &
high productivity are co-related. Generally it is assumed that Morale & productivity always go hand
in hand. But it is not always so. These are negative relationship also. There are 4 possible ways:
High productivity
High Morale
High productivity
Low Morale
Low productivity
High Morale
Low productivity
Low Morale

1) High productivity & High Morale: - This situation is due to well experienced leader when
workers are motivated in a right spirit with right supervision. Proper motivation is essential factor.
2) High Morale & low productivity: - It is found that men are fully trained at supervisor are not
competent to get work done. In this case workers are happy but productivity is low.
3) Low Morale & low productivity: - In absence of proper motivation Morale & productivity both
are low.
4) Low Morale & high productivity: - This situation happens when management is not co-
operating the workers & management is using punishment technique for getting high productivity
means management is product oriented. There is certain co-relation between Morale &
productivity.
“It is correct to say high Morale lead to high productivity”.

Lesson :- 7

LEADERSHIP
INTRODUCTION
Leadership is the ability to persuade others to seek certain goals. Effective direction is not possible
without leadership. Leadership is a means of direction. It means the activity by the manager for
guidance to his sub ordinates for achieving the goal. The qualities of the leader are natural and
55
inborn. It is an art & science. Leaders must maintain his separate identity. Leadership is a dynamic
process and it involves influence, direction & guidance.

Definitions:
According to Chester Barnard, “Leadership is the quality of the individual whereby he guides the
people on their activities in organized efforts.”
According to Koontz & Donnell, “Leadership is influencing people to follow you & work
willingly for the advancement of common goal.”
Leadership is the process of influencing group activities toward achievement of goals in a given
situation.
Thus the leadership may be defined as
L = F (f, g, w, s)
L = Leadership
F = is a function of (or depends upon)
f = followers
g = goal
w = willingness on the post of followers
s = a given situation

FEATURES OF LEADERSHIP
1. Co-existence: Leadership cannot function in isolation and it cannot be conferred or ordered but
it must be learned.
2. Functional relationship: The relationship between a leader and the followers is functional. It is
not a mere passive status but provides the basis for some definite activity.
3. Situational: Leadership is the interpersonal influence relationship exercised in a situation and
in the abstract. Leadership cannot be same in every situation, but is bound to change according to
need of situation.
4. Communication of interests: There must be a proper communication between a leader and his
followers. He should try to reconcile differences and bring out a workable compromise between the
goals of the organization which he presents.

NATURE/CHARACTERISTICS OF LEADERSHIP
1. Leadership is a personal quality. It is ability to induce subordinates of followers to work with
confidence and zeal towards the achievement of organizational goals. Leadership is the ability to
form a group of followers voluntarily, without the use of coercion.
2. The essence of leadership is followers. It is the willingness of people to follow that makes a
person a leader. People accept a person as their leader when they feel that he can satisfy their needs
and goals.
3. Leadership is a process of interpersonal influence by which one person influences others in a
situation to strive willingly towards the realization of common goals.
4. Leadership involves a community of interests between the leader and his followers. The
objectives of both are one and the same.
5. Leadership is a continuous process of influencing behavior of his followers. An individual is a
leader when he is accepted as a leader by a group of persons and there is communication between
the leader and the group.

6. Leadership is exercised in a particular situation at a given point of time and under a specific set
of circumstances. The effectiveness of leadership depends upon the situational variables. Different
leadership styles will be appropriate under different circumstances. The leadership is a dynamic art.
7 Leadership is a reciprocal relationship. A leader not only influences his group but at the same
time is influenced by it Thus leadership is a psychological process of influencing followers and
providing guidance to them. Leadership is essential to influence people to achieve mutually
compatible objectives. Hence all organizational success can be attributed to leadership.
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PRINCIPLES OF LEADERSHIP
Principles are given by Koontz & Donnell: -
1. Principle of Harmony: - The harmony of the objectives must be followed by proper leader.
They must see that they have understood their personal goals in the organization, to maintain
harmony of objectives in the enterprise.
2. The principle of motivation: - Motivation is not a simple task. The manager is responsible for
this, should make motivational program by:
A) Carefully giving proper reward structure.
B) Looking it from a situational point of view.
3. The principle of supplemental use of informal organization: - The manager should make
proper communication with his sub-ordinates. The informal organization works as an effective tool
in the organization.
4. Principle of maximum clarity in the communication: - When there is no proper
communication then organization can not achieved its goals. Communication must be clear so that
each individual will understood what they want to achieve & he will give proper co-operation.
5. The principle of leadership: - Manager will act as a effecting leader when he knows correctly
the motivating factor & application of it.

IMPORTANCE OF LEADERSHIP
1. Leadership serves as a motive to group efforts. Management has to provide leadership in the
organization in order to get work done by others. Leadership becomes important for teamwork &
co-operation. Manager as a leader can influence any group for achieving goals & high level of
performance.
2. Leadership is an important authority. A manager can exercise authority in managing the
members. Authority helps him for effective leadership. Leadership contains proper direction,
inspiration in people & accomplishment of goals.
3. Leadership provides a basis for co-operation in several ways. Two way communications, man to
man personal relationship, use of participation & creation of opportunity for needed satisfaction are
important. It will lead to
increase understanding.
4. In leadership there is emphasis on human performance. Leadership is needed at all levels of
management from top to bottom. Management is transformed as a social process with leadership
action. It is a social scheme of leadership that to achieve objective with proper utilization of people.

THEORIES OF LEADERSHIP
1. Great man theory of leadership: One of the early notions of leadership, which is still popular in
certain circle, is that leadership is an inborn quality. This is the great man theory of leadership that
asserts that leaders are born and not made. According to this theory, leadership calls for certain
qualities like charm, persuasiveness, commanding personality , high degree of intuition, judgment,
courage, intelligence, aggressiveness and action orientation are such nature that they cannot be
taught or learnt in a formal sense.
In other words, leaders are born or sometimes inherited in family from generation to
generation. It is said that history is nothing but the biographies of great men and women. They
were great leaders of their time because they were inherently endowed with leadership traits and
skills. They were not trained in leadership nor did they acquire any leadership skills in their lives,
such skills were natural to them. They had an instinctive urge to assume leadership and had an
inborn will to achieve greatness and success.
The further implications of the theory that leaders are born and not made are:
1. Leaders are gifts of god to mankind. A measure of divinity is attributed to leaders and their
actions.
2. Everyone cannot aspire to become a leader and to attain greatness.

57
3. The inborn leadership qualities alone are necessary and sufficient for a leader to exercise
influence over his followers and to become successful.
4. Leadership qualities and effectiveness are independent variables. Situational factors like the
nature and needs of followers, the demand of task and the general socio-economic environment
have little or no influence on a leader’s effectiveness.
5. The theory believes that individual can’t be trained for assuming leadership positions and roles.
Leadership qualities cannot be transmitted through education and exposure.
Great Man theory of leadership carries some credibility to the extent that leaders in general and
great leaders in particular have certain mystique about them and are viewed with respect by their
followers.

CRITICISM:
The theory has no scientific base and empirical validity. It is mere a speculative piece of notion.
A moderate view point is that one may not totally rule out the genetic or inborn nature of some
leadership attributes. Just as there are some “precious” and almost born singers, artists and geniuses
in various spheres of activities.

TRAIT THEORY: (Leader Oriented Approach):

This is the traditional theory of leadership. According to this theory a leader is a person having
leader’s special characteristics & traits. It is accepted that a leader is a successful leader because he
has certain qualities. Following qualities must be possessed by leader: -
1. Physical factor such as height, weight, energy, good personality etc.
2. Intelligence
3. Self confidence.
4. Will.
5. Dominance.
6. Cheerfulness.
7. Enthusiasm
8. Alertness

The psychologist has grouped the various traits of the leadership into 4 categories: -
1. Physical
2. Psychological
3. Intellectual
4. Qualities of character
Trait theory mentions the qualities of leaders. These qualities can be developed by experience and
training. Traits are not only inborn but acquired also, but it suffers from following limitations:
1. No room for developing future leaders: - The theory stresses the inborn qualities of an
individual which cannot be developed or acquired.
2. No common or universal trait: - Leadership traits are not common as well as universal like
other principles. It is difficult to mix the traits.
3. Trait of individual cannot be known: - Unless the situation arises and individual faces problem
then only presence or absence of trait is required, otherwise trait remains unknown.
4. Different role require different traits: - Even in the same organization at lower level, a
manager has to maintain contacts with workers so he must possess technical knowledge. Middle
level manager must possess policy making & human relation approaches. Top level manager must
possess decision making skills.

SITUATIONAL THEORY: (Situational Approach): -

Leadership is the product of a situation in a particular group. It is assumed that the trait & skills are
the characteristics of a good leader. These skills will change from group to group and from situation
to situation. A leader in one situation is not necessary a leader in another situation in the same
group so that situation oriented approach displays that leadership is the product of situation in
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particular group. The approach does not believe that the leaders are developed only by trait theory
but proper training & development programs are necessary for the development of future leaders.
An effective leader according to the situational theory is one who understands the fact of situation
& deals with them effectively.

Limitations:-
1. Emphasis on situational aspect: - The situational theory gives much emphasis on situational
aspect & overlooks the qualities needed in a successful leader.
2. Qualities of leader are overlooked: - Leadership becomes effective when leaders have certain
qualities. But this theory has overlooked it.

BEHAVIORAL THEORY: -
This approach is based on simple philosophy. It states that the best way to study leadership is not to
study the trait or qualities he possesses, but to study his behavior. According to this approach it is
important to study the behavior of a leader in a particular situation. This approach concerns with
behavior of a person rather than qualities of leadership. The people by nature are lazy, uncreative,
irresponsible etc. Therefore the leaders must be directive. This approach is based on the assumption
that good leadership is the result of effective role behavior. In Michigan studies it is found that
more time is spent in planning, greater degree of delegation, employee oriented rather than
production oriented. This will help for effective leadership means leadership characteristics are
based on behavioral, situational & group leader interaction. The main limitation of this approach is
that it does not consider time factor which is very important in leadership. A particular behavior
may be effective in one situation & may not be effective in other. Scientific test cannot be applied
for the study of behavioral approach. However questionnaires, observations, interviews are
universally accepted techniques of this approach.

THE FOLLOWERS THEORY:

The Followers theory is also known as “Acceptance Theory.” The followers must accept their
leader and his leadership. This theory believes that leadership is developed on the basis of
acceptance form followers. A study of the characteristics of followers group is also necessary to
understand the nature of leadership. If a leader is successful in leading his group, satisfying them he
is regarded as a good leader. In India, “Followers Theory has dominated the Indian political science
and its impact on the business and industrial relationship”.

MANAGERIAL GRID THEORY:

Managerial Grid as developed by Robert Blake and Jane Mouton, is a graphic model of alternative
combinations of managerial styles or orientations or behaviors on a two dimensional space.
The dimensions are:
 Concern for production
 Concern for people
Thus, in a matrix of nine rows and nine columns, five combinations of styles are as follows:
 1,1 - low concern for production and people born
 1,9 - low concern for production and high concern for people
 9,1 - high concern for production and low concern for people
 9,9 - high concern for people and high concern for production
 5,5 - moderate concern for production and people

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1. Impoverished leadership (1, 1): In this combination, leaders are irresponsible. Their attitude
towards getting things done from and maintaining relationships with people are careless and
confused. Such leaders are little concerned with work and with people.
2. Country club leadership (1, 9): In this combination, the leader takes interest in keeping his
relationship with people friendly and respectable. Such a leader gives importance to people more
than production. Such persons are more human oriented. The group, not the individual is the key
unit in the organization and friendliness and harmony among its members are desired.
3. Task leadership (9, 1): In this combination, leaders takes a dictator’s style and gets the things
done and does not care for maintaining relations with people. His focus is on task performance by
planning and controlling the production environment. Heavy importance is placed on task and task
and job requirements. Human relationships and interactions are minimum. This leader has a very
high degree of production concern and a very low degree of people concern.
4. Middle of the road leader (5, 5): In this combination, leader is well balanced. He does not push
too much in either direction, but achieves a satisfactory balance between the requirements of
production and people. i.e. concern for people and concern for production. This style is labeled as
“firm but fair”. It is based on the assumptions that people work willingly and do as they are told if
the reasons for doing so are explained to them.
5. Team management leader (9, 9): This is regarded as the most effective leadership. An attempt
is made to bring about an integration and harmony between the needs of people and of production.
A highly encouraging organizational climate of commitment, cooperation trust and hope are created
by the leader. It integrates a maximum degree of production concern with maximum degree of
people concern. This approach considers these two approaches as complimentary.

CONCLUSION:
Managerial grid is very useful in identifying and classifying managerial styles. This theory
considers various alternative combinations to suit the situation, task and subordinates. The five
styles have been stated in the graph. In actual practice, a manager has to use combination of these
as demanded by the situation.

PATH GOAL THEORY:

This theory was originally developed by Martin Evans and subsequently refined by Robert House.
The theory is related to the situation/expectancy theories of motivation. According to this theory,
there is a clear relationship between the behavior of the leader and motivation – performance-
satisfaction of the group whom he leads. Members of the group have certain expectations in regard
to the behavior of their leaders. But of course, different groups have different expectations.
Four types of leader behavior based on member expectation may be conceptualized:
1. Directive Leadership: The leader is expected to define the tasks and responsibility of his group
members, set performance and reward norms, clarify the rules and regulations as applicable,
provide guidance advice and instruct as necessary and monitor their performance.
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2. Supportive Leadership: The leader establishes warm interpersonal relationships with the group,
understands and shares their aspirations and feelings showing concern for their welfare and
promotes group cohesiveness.
3. Participative Leadership: The members expect the leader to keep them informed on relevant
tasks, goals and situations, involve them in decision making, solicit their ideas and consult with
them frequently. According to this approach the specific style that works best in determined by two
types of situational variables.
a) Personal characteristics of employees: Internally oriented employees who believe that, they
can control their own behavior prefer leaders having supportive style, while externally oriented
employees who believe that fate controls their behavior prefer directive type leadership.
b) Work environment: Environmental factors include subordinates task, formal authority system
of the organization and the primary workgroup. Any of these environmental factors can motivate or
constrain the employees. When the task is unstructured worker feels that his path to satisfaction is
difficult and hence he likes to be directed. But if workers are working on structured and well
defined tasks, supportive style of leadership is preferred.

EVALUATION
The path goal theory is criticized as follows –
1. It is complicated and hence empirical testing becomes difficult due to methodological
complexities.
2. Further research studies do not support it.
3. It is a post Hoc theory is the sense that some of the research evidence supporting the theory was
also used to construct it.
4. It gives incomplete picture as it provides tentative explanation of leadership styles.
5. The models neglect effects of personal traits that may constrain the selection of leader behavior.
In-spite of these limitation, it is appreciated, because it not only suggests what type of leader may
be effective in a given situation but also explain why he is effective. This theory also provides a
necessary frame work for new research in the field.

DIFFERENT STYLES OF LEADERSHIP

1) Autocratic style: - Under this style of leadership, all decisions are taken by the leader. The
authority & power is vested in the hands of leader. There is no participation by subordinates in
decision making process. Leader never allows his sub-ordinates to think or participate in the
decision making. He gives order & assign task without taking subordinate into confidence.
Normally sub-ordinates dislike this type of leadership.
Advantages: -
1. It provides strong motivation & reward for the leader.
Disadvantages: -
1. It creates low Morale & less confidence in subordinates.
2. Ideas and capabilities of subordinates are not fully utilized.
3. Subordinates will never get an opportunity for development.
Autocratic leadership may be appropriate when subordinates are uneducated, unskilled, lack of
knowledge & experience in modern competitive world. This type of leadership becomes less
desirable for the employees.
2) Democratic style or participative style: - The participative leadership allows an active
participation of the subordinates in the process of decision making. The leaders adopting this style
of leadership always allow participation of his sub-ordinates in the process of decision making. The
leaders follow majority of opinions which are expressed in a group & his decision is always depend
upon these. The relationship between leaders & sub-ordinate is friendly. It creates positive impact
on subordinates. This style of leadership is preferred by the subordinates & managers.

Advantages: -
1. It creates job satisfaction & increases the moral of subordinates.
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2. It develops positive attitude & reduces resistance to change.
3. It helps to think over creative ideas of all sub-ordinates.
Disadvantages: -
1. Participative style is time consuming & delays in decision making.
2. These types do not yield positive results.
3. It requires more communication between subordinates & superiors.
4. When leader is incompetent it will create problems.
This type of leadership is considered to be more effective than autocratic style. It is more useful in
this competitive world as it helps to increase productivity.
3) Free-rein style: - Unlike autocratic style free-rein style falls on other extremes. It includes
complete surrender of decision making power to a group leader. A leader leaves all the control &
decisions with subordinates. Leader leaves all responsibility & most of the work of him to the
group, interference of a leader is very less. It is known as lazy fair & permissive style. In this style a
leader gives complete freedom to his group & sub-ordinate in their work.2. No delay in the process
of decision making.

Advantages: -
1. Maximum development of sub-ordinate.
2. Full utilization of the capacity of sub-ordinate.
3. It creates job satisfaction & increase Morale of sub-ordinate.
4. This style produces good & quick results when sub-ordinates are highly educated & brilliant.
Disadvantages: -
1. Sub-ordinate does not get guidance to leader.
2. It ignores the contribution of leader just as autocratic style where contribution sub-ordinate is
totally ignored.

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QUALITIES OF A LEADER
1. Physical and mental vigor: A leader should be ready to work hard. His physical stamina and
mental vigor to sustain long and irregular hour of work is the most required to be successful.
2. Ability to understand others: A leader should possess emotional feelings such as confidence,
respect, love and faith. He should be able to analyze the problems rationally and logically .the
leader must share with his followers and at the same time must influence them.
3. Quick grasping: A leader should understand human psychology. His grasping of situation
should be quick and decision should also be communicated at the earliest. He should possess
understanding of human behavior, emotions, sentiments, needs, motives etc. This needs maturity of
mind and scientific way of approach.
4. Initiative: The leader must possess certain creative abilities, quality of imagination, invention
and courage to face realities of life boldly.
5. Ability to inspire: The leader must have the knowledge of men working under him. He must be
skillful in handling human relations that helps to inspire subordinates.
6. Ability to communicate: A leader should be good at communication ideas, feelings, decisions,
orders etc. He should be a good and effective speaker, writer so that he will be able to inform,
stimulate and direct his subordinates.
7. Acceptance of responsibility: A reliable leader is one who is prepared to shoulder the
responsibility for the consequences of any steps he takes. He has to be aware of the duties and
obligations associated with the position he holds.
8. Intelligence and technical competence: A leader should possess a thorough knowledge of the
theory and practice of his job. With this quality, he can perform the functions of planning,
organizing, directing and controlling.
9. Motivation: In order to motivate others, one must be well motivated. The desire to lead should
come from within. If a person is forced to do his job under the fear, he would behave like a follower
than a leader.
10. Flexibility: A leader should be ready to absorb and adopt new ideas and views of others as per
demanded by the situation. He should not be critical of others. He should be ready to accept others’
views and alter his decisions. Open-mindedness of a leader makes the leader more identified with
the group.
11. Impressive personality: A leader should have an impressive and pleasing personality. He must
possess cheerful and an optimistic outlook. He must have physical mad mental health in order to
influence others and induce them to work with energy, vigor, energy and creativity.

Managerial Grid
The managerial grid model (1964) is a style leadership model developed by Robert R.
lake and Jane Mouton. This model originally identified five different leadership styles based on
the concern for people and the concern for production. The optimal leadership style in this model is
based on Theory Y.
The grid theory has continued to evolve and develop. The theory was updated with two additional
leadership styles and with a new element, resilience.
In 1999, the grid managerial seminar began using a new text, The Power to Change.

63
The model is represented as a grid with concern for production as the x-axis and concern for
people as the y-axis; each axis ranges from 1 (Low) to 9 (High). The resulting leadership styles are
as follows:
 The indifferent (previously called impoverished) style (1,1): evade and elude. In this style,
managers have low concern for both people and production. Managers use this style to preserve
job and job seniority, protecting themselves by avoiding getting into trouble. The main concern
for the manager is not to be held responsible for any mistakes, which results in
less innovation decisions.
 The accommodating (previously, country club) style (1,9): yield and comply. This style has
a high concern for people and a low concern for production. Managers using this style pay
much attention to the security and comfort of the employees, in hopes that this will
increase performance. The resulting atmosphere is usually friendly, but not necessarily very
productive.
 The dictatorial (previously, produce or perish) style (9,1): in return. Managers using this
style also pressure their employees through rules and punishments to achieve the company
goals. This dictatorial style is based on Theory X of Douglas McGregor, and is commonly
applied by companies on the edge of real or perceived failure. This style is often used in cases
of crisis management.
 The status quo (previously, middle-of-the-road) style (5,5): balance and compromise.
Managers using this style try to balance between company goals and workers' needs. By giving
some concern to both people and production, managers who use this style hope to achieve
suitable performance but doing so gives away a bit of each concern so that neither production
nor people needs are met.
 The sound (previously, team) style (9,9): contribute and commit. In this style, high concern
is paid both to people and production. As suggested by the propositions of Theory Y, managers
choosing to use this style encourage teamwork and commitment among employees. This
method relies heavily on making employees feel themselves to be constructive parts of the
company.
 The opportunistic style: exploit and manipulate. Individuals using this style, which was
added to the grid theory before 1999, do not have a fixed location on the grid. They adopt
whichever behaviour offers the greatest personal benefit.
 The paternalistic style: prescribe and guide. This style was added to the grid theory before
1999. In The Power to Change, it was redefined to alternate between the (1,9) and (9,1)
locations on the grid. Managers using this style praise and support, but discourage challenges to
their thinking.

Behavioral elements

64
Grid theory breaks behavior down into seven key elements:
Element Description
Taking action, driving and supporting
Initiative

Questioning, researching and verifying understanding

Inquiry

Expressing convictions and championing ideas

Advocacy

Evaluating resources, choices and consequences

Decision making

Conflict Confronting and resolving disagreements

resolution
Dealing with problems, setbacks and failures
Resilience

Critique Delivering objective, candid feedback

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 Lesson-8

CONTROLLING
INTRODUCTION
Control is a fundamental managerial function. With the help of controlling, the management
measures the performance of the subordinate units. Controlling is associated with planning. Control
can come into effect only when plans have been adopted and instructions are issued to all affected
by designing the plans to take appropriate actions. The objective of control is to see that everything
is carried out in its predetermined order. Controlling is a continuous process of measuring actual
results of operations of an organization, in comparison with the standards laid down as a guide.
Proper Control smoothen the working of an organization. In the process of delegation control is
complementary. Controlling involves setting up standards of individuals and organizational
performance and measuring actual performance.
Definitions:
According to George Jerry: “Determining what is being accomplished, that is, evaluating the
performance and if necessary applying corrective measures to see that the performance takes place
according to the plans.”
According to Henry Fayol: “Control consists in verifying whether everything occurs in
conformity with the plan adopted, the instructions issued and the principles established.”
According to Koontz and O’Donnell: “Controlling implies measurement of accomplishment
against the standard and the correction of deviations to assure attainments of objectives according
to plans.”
FEATURES OF CONTROL
1) Control is the function of Management: Control is a follow-up action to the other functions of
Management. This function is performed by all the managers in the organization.
2) Control is a continuous process: Control process does not stop anywhere. It involves analysis
of establishment of standards policies and procedure and taking corrective actions.
3) Control is flexible and dynamic process: It involves continuous review of standard of
performance.
4) Control is forward looking: Control is always related to future events as we can’t control past
events. Corrective measures for wastage and production can be taken for future with past reference.
It helps to check individual performance.
5) Planning and Controlling are closely related: Planning is based on control and control on
planning. Control includes setting of standards and measurement of performance. So it is more
important in planning. It helps in establishing new aims, change in structure, staff pattern and
changes in the direction technique.
6) The essence of control is action: Process of control will finish when corrective action is taken.
This action is depending upon setting of standard and comparison of standard with actual.
Deviation has to be controlled and minimum wastage will be achieved.

IMPORTANCE OF CONTROL
1. Basis for future action: A continuous flow of control information provides the basis for future
action. It gives correct action and gives correct picture.
2. Control helps in decision making: The control system helps the management to take right
decision. Follow-up action is essential for successful completion of objective.

66
3. It helps in decentralization: Control helps the top management to get the feedback information
which helps them to ensure that the decision taken at the lower level is helpful for implementation
of policies.
4. Helps in co-ordination: It helps to each member of organization to move towards common goal
with coordinate direction. It provides boundaries for pre determined goals and provide guidance for
each member.
5. It has positive impact on employee: The existence of control system has positive impact on the
behavior of the employee. Employees are cautious because actual results are compared with budged
one.
6. Control helps to point out Managerial weakness: Control is depend upon proper feedback so it
help in to point out managerial weakness.
7. Control should reflect organization pattern: Control should reflect the organization pattern
because it is exercised with managerial position. Each managerial position should be provided with
adequate authority to exercise self control and take corrective actions.
8. Control should be economical: Control must be worth its cost. A small company cannot afford
the extensive control system like large company.
9. Control should be easy to understand: Control system should be simple to understand. This is
necessary for smooth working and effectiveness of the system. The system of control should be
easily understood by the management.
10. Control should indicate corrective action: Control should detect deviation and also suggest
corrective actions promptly.
STEPS IN CONTROL PROCESS
1. Establishment of standards: The first step in control process is the setting up of standards of
measurement. Standards represent criteria for performance. A standard acts as a reference line or a
basis of comparison of actual performance. Standards should be set precisely and preferable in
quantitative terms. Different standards of performance are set up for various operations at the
planning stage. Establishment of standards in terms of quantity, quality and time is necessary for
effective control because it is essential to determine how the performance is going to be appraised.

2. Measurement of performance: The second step is to measure actual performance of various

individuals, groups or units. Management should measure the performance and compare it with the
standards. The quantitative measurement should be done in cases where standards have been set in
numerical terms. This will make evaluation easy and simple. On other cases the performance
should be measured in terms of qualitative factors e.g. performance of industrial relations manager.
His performance can be measured in terms of attitude of workers, frequency of strikes and morale
of workers.
3. Comparing performance with standards: Comparison is easy where standards have been set
quantitatively as in production and marketing. In other cases, where results are intangible and
cannot be measured quantitatively, direct personal observation, inspection and reports are a few
methods used for evaluation. The evaluation will reveal some deviations from the set standards.

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The evaluator should point out the defects or deficiencies in performance and investigate the causes
responsible for these.
4. Taking corrective actions: The final step in the control process is taking corrective actions so
that deviations may not occur again and the objectives of the organization are achieved. This will
involve taking certain decisions by the management, re-planning or redrawing of GOALS or
STANDARDS, reassignment of classification of duties. Thus, control function may require change
in all other managerial functions. If the standards are found to be defective, they will be set up
again by observations. The final test of a control system is to take corrective action at the
correct time.
ESSENTIALS OF GOOD CONTROL
The following are the requirements of effective control.
1. Control should report deviations promptly: The ideal control system detects deviation before
they actually occur. The manager should be provided with information as early as possible.
2. Control should be forward looking: Managerial control is not same as mechanical or electronic
control. It must exist a time lag between recording, reporting and deviation. Those deviations are
predicted well in time and corrective actions are taken before deviations occur.
3. Control must reflect natural and needs of the activity: Control must apply with the help of
budget, break even points, and standard hours whenever necessary.
4. Control should be objective: The control should be definite, objective and verifiable. It should
not be influenced by personality of the superior or subordinate.
5. Control should be flexible: Control is a dynamic process. Plans and Objectives may change
according to the needs of the situation and must adjust it to them.
TECHNIQUES OF CONTROL

Traditional Techniques:
a. Budgetary Control
b. Non budgetary Control
(a) Budgetary Control:
Budgetary control means the supervision of output and expenditure by the provision of budgets
issued to production departments before work is commenced, authorizing the amount of
expenditure to be allowed under each heading. According to W.W. Bigg: “The term Budgetary
Control is applied to a system of management and accounting control by which all operations and
output are forecasted as far ahead as possible and the actual results when known are compared with
the budget estimates.”
Objectives of Budgetary Control:
The general objectives of budgetary control are:
1. To Plan the policy of business.

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2. To co-ordinate the activities of a business.
3. To control each function so that the best possible results are obtained.
The various objectives of budgetary control may be enumerated as follows:
1. Providing an impersonal control of expenditure.
2. Defining the goals of the enterprise and providing long and short period plans for attaining these
goals.
3. Promoting co-operation between executive, in accepting policies and executing plans.
4. Eliminating departmental accumulation of cost and performance data for control purposes.
5. Securing desired performance, both in terms of money, materials, men and physical targets.
6. Helping in determining capital requirements and in controlling the cash position.
(b) Non- budgetary Control Techniques:
1. Personal observation: This is the most effective means of control. Deviations are discovered
much earlier and promptly corrected. It enhances motivation and morale of the employee of the
organization.
2. Statistical data: Data presented in the form of charts, graphs and diagrams provide a quick
understanding of the problem. This technique is applied specifically in the field of quality control.
3. Special reports: Special reports prepared by experts through special investigations, are useful in
specific cases. Sometimes statistical and accounting reports are not satisfactory to control.
4. Ratio analysis: The control of total functioning in an organization becomes possible by an
analysis of the profitability, liquidity and solvency ratios. E.g. the “financial statement analysis”
facilitates diagnosing the suitability of a business venture.
5. Break even analysis: The break-even analysis is an analysis of the inter-relationship between
cost, volume and profit. It is also called as cost volume profit analysis. A break even chart is
prepared for this analysis. This chart presents graphically the relationship between sales and
expenses under different conditions. In other words, it examines the interrelationship of changes in
cost volume and profits. The break even chart shows the break even points, the point of zero profits
and zero losses. It can be expressed in terms of units produced. It serves as a control aid in a
number of ways, as it predicts the profit at different levels of sales or production volumes.
6. Operational Audit: Internal Audit or operational audit is carried out by the special stall of the
operations and accounts of an enterprise, in order to provide overall review of performance. It is
used to check and balance on daily operations.
7. Standard Costing: This technique is often used for cost reduction and cost control. Under
standard costing standards for materials, labor, overheads and other components of total cost are
fixed and actual costs are compared with these standard costs and variances are analyzed to find out
their causes. Standard costing is also used as the basis for budgeting and incentive plans.
Modern Techniques:
1. ABC Analysis: ABC analysis is a method of material control according to value. The basic
principle is that high value items are more closely controlled then the low value items. The
materials are grouped according to the value and frequency of replenishment during a period.
‘A’ Class items : Small percentage of the total items, but having higher values.
‘B’ Class items : More percentage of the total items, but having medium values.
‘C’ Class items : High Percentage of the total items, but having low values.
ABC analysis is popularly known as “Always Better Control”. It is also known as “Control by
Importance and Exception”. It is based on the concept of Selective Inventory Management. In
foreign countries, Bin Cards and Stores Ledger Cards are not maintained for ‘C’ class items. These
are issued directly to the production foreman concerned and controlled through norms of
consumption based on production targets. By doing this, 70% of the effort s required for
maintaining the Bin Cards and Stores Ledger Cards are eliminated. With 30% of the effort, an
organization will be able to exercise control on the 90% of the inventory values. This reduces the
clerical costs and ensures the closer control on costly items in which large amount of capital is
invested. The general procedure for classifying A, B or C items is as under:
1. Ascertain the cost and consumption of each material over a given period of time.
2. Multiply unit cost by estimated usage to obtain net value.
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3. List out all the items with quantity and value.
4. Arrange them in descending order in value i.e. ranking according to value.
5. Ascertain the monetary limits for A, B or C classification.
6. Accumulate value and add up number of items of A items. Calculate percentage
on total inventory in value and in number.
7. Similar action for B and C class items.
2. Management Audit: Management Audit is implied as an attempt to evaluate the performance of
various management functions and processes with a view to improve its efficiency and productivity
on the basis of certain pre-determined acceptable norms or standards. It is an audit, “to examine,
review the various policies and actions of the management on the basis of certain objective
standards”. According to American Institute of Management: “Management Audit is a diagnostic
appraisal process for analyzing goals, plans, policies and activities in every phase of operation to
turnover unsuspected weaknesses and to develop ideas for improvement in areas that has escaped
management attention”. Management Audit as a Control Technique:
1. It involves comprehensive examination of organization or part thereof.
2. It is undertaken to check the operations of management and its effectiveness.
3. Such checking or examination has to be based on commonly accepted standards of objective
nature.
4. Such examination is to be carried on independently by experts in the area.
5. It involves analyzing goals, policies and activities in every phase of management operation.
6. The objective of such examination is to see whether operations of the management are being
carried on in accordance with its plans or objectives or not.
7. It seeks to identify its weaknesses, if any and suggest suitable measures and give
recommendations to bring about necessary improvements.
Benefits of Management Audit:
Management Audit is useful in following main areas:
1. Plans: Auditor can assist in establishing and reviewing the system of planning in the
organization. Management auditor can assist in developing orderly planning system. He helps in
reviewing the progress of planning and evaluating its effectiveness against accepted standards.
2. Decision Making: The management auditor may help in the process of decision making and find
out whether sufficient information is available to the management for the purpose of decision
making.
3. Authority structure: The management auditor may help the management in proper designing of
the authority structure including rendering assistance in strengthening and expending the flow of
information between the responsibility centers.
4. Effective Communication: He can assist the management in establishment of effective
communication network and bring about necessary improvement in this regard.
Scope of Management Audit:
1. Review of objectives, goals, plans and policies.
2. Appraisal of planning.
3. Review of organizational structure.
4. Review of systems and procedures.
5. Review of office operations.
6. Review of management control systems.
7. Review of operations such as purchasing, manufacturing, selling etc.
8. Review of personnel policies.
9. Review of management information system.
10. Appraisal of management decisions.
3. Responsibility Accounting: It is a system of accounting where each departmental head is held
responsible for the performance of his department. Each department is considered as a
responsibility center and its manager is held responsible for the target fixed for his unit.
Responsibility centers are of three types.
A The cost centers
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B Profit centers
C Investment centers
Each center is charged with those costs that are within its control.
4. PERT & CPM: Programme Evaluation and Review Technique (PERT) and Critical Path
Method (CPM) follow the same principle. This method was firstly introduced in American Nevy in
1958. This method has been utilized to produce equipment in Nevy. This is mainly concern with to
reduce process time to produce a particular product. Every work undergoes many processes till
completion stage. Every process requires certain time. According to this technique time required is
being set. It also shows time required for each event. A map is prepared to show the time required
to complete each process. E.g. to complete a work, A, B, C, D, E following events are required.

In the above figure A, B, C, D, E, F are the processes and arrow shows the time require to complete
one even. The starting time and ending time is shown by circles. E.g. C event require 4 days after B
event, but D require 5 days then instead of C, D event is taken place, then time being is saved. The
focus in PERT is on time where as in CPM it is on cost.
5. Return on investment (ROI): It is also called as Rate of Return. This technique can be used for
planning and controlling. It is derived from a ration between the total profit and the total investment
of an organization. Return on investment helps to evaluate the functioning of an organization by
calculating total profit earned so far. Besides profit planning is also useful and suitable for capital
budgeting in particular and for long term investment.
6. Human resource accounting: Most of the control techniques calculate financial performance in
terms of costs, profits, revenues and other factors. However the most important factor is human
resource that is overlooked. The human resource accounting by Likert helps in the calculation of
human resources. It involves:
1. Accounting for people as an organizational resource
2. Involving measurement of the cost incurred in the acquisition and development of human asset.
3. The measurement of economic value of employees to an organization. The value of any
individual or employee is defined in terms of its worth of the various services he is supposed to
provide to the organization. This value is known as “Individual’s Expected Realizable Value.”
7. Management Information System (MIS): For the purpose of efficient control it is necessary to
have adequate, reliable accurate and timely information or feed back or operations. It is the quality
of data that determines the quality of managerial decision. But data need to be processed to make
it information. Electronic Data processing (EDP) devices. Like computer permits economical and
quick storage and processing of huge data. The use of electronic devices has led to the development
of integrated information systems which provide regular flow of information required for decision
making and control. It is known as MIS. Thus MIS is a system that provides relevant information in
the right form and at the right time to different managers for the purpose of planning and control.
MIS is useful is reducing time, cost and energy required for collection, processing and supply of
information to various organizational units. By improving the quality and quantity and timeliness of
information, MIS makes planning and control more efficient & effective.

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 Unit II MCQs with Answers
1. Which of the following is not concerned with staffing?
(a) Recruitment
(b) Selection
(c) Training
(d) Publicity
2. _________ involves planning, acquisition & development of resources necessary for
organizational success.
(a) Human Resource management
(b) Human emphasis
(c) Specialization
(d) Compensation
3. Which of the following is not a process of selection?
(a) Manpower planning
(b) Placement & orientation
(c) Separation
(d) Initiate action
4. ______ refers to careful study of each of each job to determine tasks & responsibility
involved in a job.
(a) Multiplier effect
(b) Human emphasis
(c) Job analysis
(d) Job satisfaction
5. Process of attracting qualified person to apply for the jobs that are open is refer to as
(a) Training
(b) Recruitment
(c) Human resource management
(d) Transfer
6. Which of the following is not a process of selection?
(a) Testing
(b) Checking references
(c) Attitude formation
(d) Medical examination
7. ___________ is increasing Leadership rapidly:
A. Strategy
B. Command
C. Control
D. Getting others to follow
8. Regarding leadership, which statement is false?
A. Leadership does not necessarily take place within a hierarchical structure of an
organisation
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 B. When people operate as leaders their role is always clearly established and defined
C. Not every leader is a manager
D. All of the above
9. __________ are the approaches to the study of leadership which emphasise the
personality of the leader:
A. Contingency theories
B. Group theories
C. Trait theories
D. Inspirational theories
10. The effectiveness of a leader is dependent upon meeting _______ areas of need within
the workgroup:
A.One
B.Three
C.Five
D. None of the above
11. Needs, setting standards and maintaining discipline, and appointing sub-leaders
according to Adair’s approach, called as :
A. Work Functions
B. Task Functions
C. Individual Functions
D. Team Function
12. The Ohio State Leadership Studies revealed ----------------- and initiating structure as
two major dimensions of leadership behavior:
A. Control
B. Communication
C. Collaboration
D. Consideration
13. Motivation is the process by which employees’ efforts at workplace are energized,
directed, and sustained toward attaining a goal.
A. True
B. False
14. Early theories concentrate on what motivates individuals in their work. They include:
A. Maslow’s hierarchy of needs
B. Herzberg’s hygiene and motivator factors
C. Both A&B
D. All of the above
15. Process theories of motivation are driven by a process to measure the strength,
intensity, and reason of motivation among the people. They include:
A. Vroom’s expectancy model
B. McClelland’s motivational needs theory
C. Both A&B
D. None
16. Contemporary theories represent current explanations of employee motivation and
include:
A. Goal-setting theory
B. Reinforcement theory
C. Equity theory
D. Expectancy theory and high-involvement work practices
E. All of the above
17. Demotivated Employee –
A. takes responsibility and shows a commitment to achieving company targets and
goals, as well as interest and concern for the business.
B. has poor timekeeping, high levels of absenteeism and avoids responsibility
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 C. Both A&B
D. None
18. Theories of motivation also help us to improve our understanding of our personal
motivation to work and what we hope to get from our job.
A. True
B. False
19. Controlling function finds out how far __________ deviates from standards.
(a) Actual performance
(b) Improvement
(c) Corrective actions
(d) Cost
20. Which of the following is not a limitation of controlling?
(a) Little control on external factors
(b) Costly affair
(c) Ensuring order & discipline
(d) Difficulty in setting quantitative standards
21. “Planning is theoretical whereas controlling is practical”
(a) True
(b) False
(c) Cannot say
22. Which of the following is not a process of controlling?
(a) Analyzing deviations
(b) Integrates employees efforts
(c) Taking corrective measures
(d) Setting performance standards
23. Which of the following is a traditional technique of managerial control?
(a) Personal observation
(b) Breakeven analysis
(c) Budgetary control
(d) All of the above
24. Write the full form of PERT :-
(a) Performance evaluation report technique
(b) Personnel enquiry retrieving technique
(c) Programme evaluation and review technique.
25. Which of the following statements is true with respect to controlling function?
(a) It is a forward looking function.
(b) Is a backward looking function.
(c) Both (a) and (b)
(d) None of the above
Answers
1. D
2. A
3. D
4. C
5. B
6. C
7. D
8. B
9. C
10. B
11. D
12. D
13. A
14. C
15. C
16. E
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 17. C
18. A
19. A
20. C
21. A
22. B
23. D
24. C
25. C
Subjective Questions :
Q.1 Provide any four limitations of using internal sources of recruitment.

Q.2 Explain in brief the various steps involved in the process of staffing.

Q.3 Explain any four external sources of recruitment. Which of these sources is ideal for a manufacturing
organization?

Q.4 What is the difference between Leadership & Management? Explain the Likert’s System Of Management
Leadership.

Q.5 “Leadership Is Situational” In the light of this statement discuss in brief various theories of Leadership.

Q.6 Name the Various style of Leadership.

Q.7 Describe the Nature of motivation & explain its importance for the success of an enterprise.

Q.8 Enumerate the assumptions of McGregor’s Theory X & Theory Y. Which of these has the wider applicability in
our country.

Q.9 Critically examine the Herzberg’s Motivation Hygiene Theory & compare it the Maslow’s Need Hierarchy
Theory.

Q.10 Explain the meaning, nature, importance of controlling function.

Q.11 Explain the various steps involved process in controlling.

Q.12 “The essence of control is action”. Comment.

Q.13 Are leaders and managers different from each other? What are the basis of Trait theories? What traits are
associated with leadership?
Q.14 Write short notes on :
(a)Techniques of Controlling
(b) Managerial Grid
(c ) Employee Morale

Q.15 Explain why pre-determined standards are necessary for effective managerial control. Does the fact that
management has set standards for crucial aspects of the organization guarantee that control will be effective. Why or
why not?Further Readings:
 Prasad, L.M., Management Process and Organisational Behaviour, Sultan Chand & Sons
 Chhabra, T.N. , Management Process and Organisational Behaviour, Sun India
 Aggarwal, P.K., Management Process and Organisational Behaviour, Vrinda Publications
Key Words :
Staffing, Recruitment, Selection, Leadership styles, Motivation, Controlling

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 UNIT-III

Lesson-9
Organizational Behavior
Organizational Behavior is the study of individuals and their behavior within the context of the
organization in a workplace setting. It is an interdisciplinary field that includes sociology,
psychology, communication and management.
Organizational Behavior (OB) is the study and application of knowledge about how people,
individuals, and groups act in organizations. It interprets people-organization relationships in
terms of the whole person, whole group, whole organization, and whole social system. Its
purpose is to build better relationships by achieving human objectives, organizational objectives,
and social objectives.
Organizational behavior is a field of study that investigates the impact that individuals, groups
and structures have on behavior within an organization, for the purpose of applying such
knowledge towards improving an organization’s effectiveness.
Organizational Behavior is concerned with the study of behavior and attitudes of man in an
organizational settings; the organization’s effect on his perceptions, feeling and actions; and
particularly on his behavior for the achievement of the organization’s purposes.
OB seeks to emphasize the understanding of behavior in organizations so as to develop
competencies in foreseeing how people are likely to behave. This knowledge may then help in
controlling those behaviors that are not befitting the objectives of the organizations.
Features/Nature of Organizational Behaviour
1. A separate field of study - Organizational Behaviour is a separate field of study. Many
researches and analysis have been done in this field. But it is not still accepted as a science.
There is no foundation of basic concepts that may guide its development as a science. Therefore,
it will be appropriate to call it a field of study rather than discipline.
2. It is an applied science - The aim of OB it to solve problems of organizations related with
human behaviour aspect. Therefore, applied researches are concentrated, in place of fundamental
researches. Though many of the researches may be carried in laboratory, but the behaviour of an
individual cannot be analyzed in laboratory. Therefore, Organizational Behaviour is both science
as well as art.
3. Goal Oriented/Oriented towards organizational objectives - Since OB is applied science it
is oriented towards organizational goals. Sometimes there may be conflict of organizational
goals with individual goals. In that case, both the objectives are achieved simultaneously.
4. Interdisciplinary Approach - Organizational Behaviour is interdisciplinary in nature. It is
based on behavioural and social sciences that contributes to the subject. It applies from these
disciplines ideas that will improve the relationships between people and organization.
5. Focus Attention On people - OB focus the attention on people. It is based on the concept that
need and motivation of the people should be given priority. if the people are given proper
environment and working condition, they are creative, independent and capable of achieving
organizational objectives.
6. Normative Science - OB is a normative science. It just not only defines the cause and effect
relationship but also suggests how the results of various researches can be applied to get
organizational results. What acceptable by society is not defines positive science, but it is done
by normative science.
7. A Total system Approach- OB is a total systems approach wherean the living system of an
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 organization is viewed as an enlargement of a man. A system approach is an integrated approach
which takes into account all the variables affecting organizational functioning.
O. B. MODELS
The Autocratic Model
The basis of this model is power with a managerial orientation of authority. The employees in turn
are oriented towards obedience and dependence on the boss. The employee need that is met is
subsistence. The performance result is minimal.
In case of an autocratic model, the managerial orientation is doctorial. The managers exercise their
commands over employees. The managers give orders and the employees have to obey the orders.
Thus, the employees orientation towards the managers/bosses is obedience. Under autocratic
conditions, employees give higher performance either because of their achievement drive or their
personal liking to the boss or because of some other factor.
Evidences such as the industrial civilization of the United States and organizational crises do suggest
that the autocratic model produced results. However, its principal weakness is its high human cost.
The combination of emerging knowledge about the needs of the employees and ever changing
societal values and norms suggested managers to adopt alternative and better ways to manage people
at work. This gave genesis to the second type of models or organizational behaviour.
The Custodial Model
The basis of this model is economic resources with a managerial orientation of money. The
employees in turn are oriented towards security and benefits and dependence on the organization.
The employee need that is met is security. The performance result is passive cooperation.
While studying the employees, the managers realized and recognized that although the employees
managed under autocratic style do not talk back to their boss they certainly think back about the
system. Such employees filled with frustration and aggression vent them on their co-workers,
families and neighbors. This made the managers think how to develop better employee satisfaction
and security. It was realized that this can be done by dispelling employees' insecurities, frustration
and aggression. This called for introduction of welfare programmers to satisfy security needs of
employees. Provision for an on site day-care centre for quality child care is an example of welfare
programme meant for employees. Welfare programmes lead to employee dependence on the
organization. Stating more accurately, employees having dependence on organization may not afford
to quit even there seem greener pastures around. The welfare programmes for employees started by
the Indira Gandhi National Open University (IGNOU), New Delhi are worth citing in this context,
IGNOU, in the beginning provided its employees facilities like house-lease facility, subsidized
transport facility, day-time child care centre in the campus, etc. These made employees dependent on
IGNOU which, in turn, became custodian of its employees.
The basis of this model is partnership with a managerial orientation of teamwork. The employees in
turn are oriented towards responsible behavior and self-discipline.
Although the custodian approach brings security and satisfaction, it suffers from certain flaws also.
Employees produce anywhere near their capacities. They are also not motivated to increase their
capacities of which they are capable. Though the employees are satisfied, still they do not feel
motivated or fulfilled in their work they do. This is in conformity with the research finding that the
happy employees are not necessarily most productive employees. Consequently managers and
researchers started to address yet another question. "Is there better approach/way to manage people?"
The quest for a better way provided a foundation for evolvement to the supportive type of model of
organizational behaviour.
The Supportive Model
The basis of this model is leadership with a managerial orientation of support. The employees in turn
are oriented towards job performance and participation. The employee need that is met is status and
recognition. The performance result is awakened drives.
The supportive model is founded on leadership, not on money or authority. In fact, it is the
managerial leadership style that provides an atmosphere to help employees grow and accomplish
their tasks successfully. The managers recognize that the workers are not by nature passive and
disinterested to organizational needs, but they are made so by an inappropriate leadership style. The
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managers believe that given due and appropriate changes, the workers become ready to share
responsibility, develop a drive to contribute their mite and improve themselves. Thus, under
supportive approach, the management's orientation is to support the employee's job performance for
meeting both organizational and individual goals.
However, the supportive model of organizational behaviour is found more useful and effective in
developed nations and less effective in developing nations like ours because of employee's more
awakening in the former and less one in the latter nations.
The Collegial Model
The collegial model is an extension of the supportive model. As the literal meaning of the work
'college' means a group of persons having the common purpose, the collegial model relates to a team
work/concept. The basic foundation of the collegial model lies on management's building a feeling of
partnership with employee. Under collegial approach, employees feel needed and useful. They
consider managers as joint contributors to organizational success rather than as bosses.
Its greatest benefit is that the employee becomes self-discipline. Feeling responsible backed by self-
discipline creates a feeling of team work just like what the members of a football team feel. The
research studies report that compared to traditional management model, the more open, participative,
collegial managerial approach produced improved results in situations where it is appropriate.
Although there are four separate models, almost no organization operates exclusively in one. There
will usually be a predominate one, with one or more areas overlapping in the other models.
The first model, autocratic, had its roots in the industrial revolution. The managers of this type of
organization operate out of McGregor's Theory X. The next three models begin to build on
McGregor's Theory Y. They have each evolved over a period of time and there is no one "best"
model. The collegial model should not be thought as the last or best model, but the beginning of a
new model or paradigm.
Now, the sum and substances of these four models of organizational behaviour are summarized in
Table 1.1.
Interpretation of Different Models : Various conclusions may be drawn from the study of different
models as follows :
(i) As soon as the understanding of human behaviour develops or social conditions change, the model
is bound to change. No one model is best for all times.
(ii) Models or organizational behaviour are related to hierarchy of human needs. As society advances
on the need hierarchy, new models are developed to serve the higher order needs that is paramount at
that time.
(iii) Present tendency towards more democratic models of organizational behaviour will continue to
develop for long run.
(iv) Different models will remain in use though new model predominates as most appropriate for
general use at any given time as task conditions differ from time to time and organization to
organization.
Table 1.1 : Four Models of Organizational Behaviour

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 Importance of Organisational Behaviour
Understanding the importance of Organisational Behaviour provides direction to the Organisation.
Organisational behaviour has great significance & relevance in today’s business environment.
Studying OB helps to understand and predict organisational life.
1. Skill Improvement Study of Organisational Behaviour helps to improve skills. This includes the
ability of employees and use of knowledge to become more efficient. Organisational Behaviour
study also improves managers as well as other employees work-skill.
2. Understanding Consumer Buying Behaviour. It also an important part to improve the
marketing process by understanding consumer buying behaviour.
3. Employee Motivation Organisational Behaviour (OB) helps to understand the basis of
Motivation and different ways to motivate employees properly.
4. Nature Of Employees Understanding of personnel and employee nature is important to manage
them properly.With the help of Organizational behaviour, we can understand whether employees or
people are –
o Introvert
o Extrovert
o Motivated
o Dominating
o Other
5. Anticipating Organisational Events The scientific study of behaviour helps to understand and
predict organisational events. For example Annual Business Planning, Demand Management,
Product line management, Production Planning, Resources Scheduling, Logistics etc.
6. Efficiency & Effectiveness Study of organisational behaviour helps to increase efficiency and
effectiveness of the organisation
7. Better Environment Of Organisation OB helps to create a healthy, ethical and smooth
environment in an organisation.
8. Optimum Or Better Utilization Of Resources Study of OB helps to understand employees and
their work style and skill better way.By understanding this, management can train and motivate
employees for optimum utilization of resources.
9. The Goodwill Of Organization Organisational Behaviour helps to improve Goodwill of
organization.
Challenges and opportunities for OB
1. Responding to Globalization
a. Increased foreign assignments: Transferred to your employer’s operating division in
another country, Once there, you’ll have to manage workforce, aspiration from
employees, and attitudes from those you are used to back home
b. Working with People from different cultures: Working with bosses, peers and other
employees who were born and raised in different culture, to work effectively with
them you’ve to understand how their culture, geographic and religion have shaped
them
c. Coping with anti capitalism backlash: “soak the rich” means fine should be charged
with respect of income you earn. Managers at global companies have come to realize
that economic values are not universally transferable, need to modify by managers to
reflect economic values in those countries they’re working.
d. Overseeing movement of jobs to countries with low- cost labour : In a global
economy, jobs tend to flow to places where lower cost provide business firms with a
comparative advantages
e. Managing people During the war on terror : An understanding of OB topics such as
emotions, motivation, communication and leadership can help managers to deal more
effectively with their employees’ fear about terrorism
2. Improving quality and productivity: By using self-directed work teams, streamlining
processes and implementing continuous improvement program must be a model of
manufacturing efficiency.
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 3. Managing workforce Diversity
a) Embracing diversity: The challenge for organization is to make themselves more
accommodating to diverse groups of people by addressing their different lifestyle, family
needs, and work styles.
b) Changing demographics
4. Improving customer service: OB can contribute to improving an organization’ performance
by showing that how employees’ attitude and behavior are associated with customer satisfaction
5. Stimulating innovation and changes:
 Must foster innovation and master the art of change.
 Maintain the flexibility and improve quality.
 To stimulate employees creativity and tolerance to change.
6. Working in networked organizations: Computerization, the internet, and the ability to link
computers within organizations and between organizations have created a different workforce for
many employees-a networked organization. Global working through one link i.e. INTERNET,
technology changes the people to work together and communicate at thousand miles, people can
work from their home and non office locations.
7. Creating a positive work environment: Human strength, vitality, right person appointed at
right place, effort on what good for organization.
8. Improving ethical behaviour:
 Writing and distributing codes of ethics to employees.
 Offering seminars, workshops and training programs on improving OB.
 Provide in house advisors in dealing with ethical issues.
9. Empowerment of Employees:
 Decision making is being pushed down to the operating level.
 Managers give up control, employees control their work themselves, make appropriate
decisions.
 Using of self managed team.
10. Work Life Balance: Flexible Working hours, reporting time, creating opportunities for
employees, job security, design workplace and jobs.
Personality Lesson-10
The term personality is derived from the Latin word persona meaning a mask. Personality
represents the overall profile or combination of stable psychological attributes that capture the
unique nature of a person. Personality is a patterned body of habits, traits, attitudes and ideas of
an individual as these are organized externally into roles and statuses and as they relate internally
to motivation, goals and various aspects of selfhood.
Maddi defines personality as, “A stable set of characteristics and tendencies that determine those
commonalities and differences in the psychological behavior and that may not be easily
understood as the sole result of the social and biological pressures of the moment".
Personality - All our behaviour is somewhat shaped by our personalities. – a dynamic concept
describing the growth and development of a person’s whole psychological system. It is the sum
total of ways in which an individual reacts and interacts with others. Some aggregate whole that
is greater than the sum of its parts
Personality concept
1. Behaviour involves a complex interaction of the person and the situation.
2. Personality represents personal characteristics that lead to a consistent pattern of
behaviour.
3. Personality describes people commonalities and differences.
4. Personality is stable over time.
According to Gordon Allport, “The dynamic organization within an individual of that
psychological system that determine his unique adjustment to his environment.”
Determinants of Personality
• Biological Factors
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 • Cultural Factors
• Family Factors
• Social Factors
• Situational Factors
Biological Factors
1. Heredity
 It refers to physical stature, facial attractiveness, sex, temperament, muscle
composition and reflexes, energy level, and biological rhythms are characteristics
that are considered to be inherent.
• It plays an important part in determining an individual's personality.
• Heredity approach argues that the ultimate explanation of an individual's
personality is the molecular structures of the genes, which are located in the
chromosomes.
 Recent research studies shows that young children lend strong support to the
power of heredity and finding shows that some personality traits may be built into
the same genetic code that affects factors like height and hair color.
2. Brain
• Brain is the second biological approach to determine personality.
• It plays an important role in determining personality.
• Depending on the structure of the brain, an individual’s personality develops.
• Electrical Stimulation of the Brain (ESB) and Split brain psychology results
indicates that a better understanding of human personality and behavior might
come from a closer study of the brain.
• The definite areas of the human brain are associated with pain and pleasure.
3. Physical Features
• It is third biological approach to determine personality.
• It is vital ingredient of the personality, it focus an individual person's external
appearance which also determined the personality.
• Physical features like tall or short, fat or skinny, black or white. These physical
features will be influenced the personal effect on others and also affect self
concept of individual.
• A child’s physical characteristics may be related to approach to the social
environment, to the expectancies of others and their reactions to him.
Cultural Factors
• Cultural factors are also major factors which influence to determine individual
personality.
• It refers to traditional practice, customs, procedure, norms and rules and
regulation followed by the society.
• It significantly influence to individual behavior compare to biological factors.
• Cultural factors determine attitudes towards independence, aggression,
competition, cooperation, positive thinking, team spirit, and a host of the human
being and discharge his/her duties towards valuable responsibilities to society.
• Western culture influence to Indian society. It is best example of the cultural
factors also determine the personality.
Family Factors
• Family factors are also major factors which influence to determine individual personality.
• Family consists of husband and wife and their children's.
• Family role is very important for nurturing and personality development of their children.
• Family will be guided, supervised, take care of all family members, cooperation,
coordination and cooperation in work and also explained the role and responsibilities
towards the family, society and real life.
• Family either directly or indirectly influence to person for development of individual
personality.
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Social Factors
• Social factors are also major factors which influence to determine individual personality.
• It involves the reorganization of individual's in an organization or society.
• It refers to acquiring of wide range of personality by acquiring and absorbed by
themselves in the society or an organization.
• Socialization process is starting from home and extending to work environment in an
organization or society.
• It focuses on good relationships, cooperation, coordination and interaction among the
members in the society or an organization or a family.
In totally, environment factors consist of cultural factors, family factors, and social
factors.
Situational Factors
• Situational factors also influence to determine of personality.
• Situational factors are very important to change the individual behavior in a different
circumstance at different situations, it also influence to personality of individual person.
• In general term, personality is stable and consistent and it does change in different
situations.
• The Interaction of Personality and Situational Factors are outlined:
✓ Strong situational pressures : Personality may not predict behavior (Example:
enforcement of rules )
✓ Weak Situational pressures : Personality may predict behavior (Example: Customer
sales representative )
• A strong situation can overwhelm the effects of individual personalities by providing
strong cues for appropriate behavior.
Personality Traits
From OB point of view, following classification of personality traits is relevant:
1. Big 5 Personality Traits
2. Other personality traits
Big Five Personality Traits
✓ Extroversion: A personality dimension that describes the degree to which someone
is sociable, talkative, and assertive. They seek outward interaction. They are more
successful in sales activities, publicity department, public relations.
✓ Agreeableness: A personality dimension that describes the degree to which
someone is good-natured, cooperative, forgiving, understanding and trusting.
Highly agreeable people are better in developing good working relationship with
coworkers, subordinates, superiors.
✓ Conscientiousness: A personality dimension that describes the degree to which
someone is responsible, careful, disciplined, dependable, persistent, and
achievement oriented. They tend to focus on small numbers of goals at one time.
✓ Emotional stability: A personality dimension that describes the degree to which
someone is calm, enthusiastic, and secure (positive) or tense, nervous, depressed,
and insecure (negative).
✓ Openness to experience: A personality dimension that describes the degree to
which someone is imaginative, artistically sensitive, and intellectual.
Other personality traits
Self Concept and Self esteem: Self concept defines themselves as to who they are and
their identity. Self-esteem denotes the extent to which individuals consistently regard
themselves as capable, successful, important and worthy individuals. Self-esteem is an
important personality factor that determines how managers perceive themselves and their
role in the organization. Individuals with a high self-esteem will try to take on more
challenging assignments and be successful. Thus, they will be enhancing their self-
concept i.e., they would tend to define themselves as highly valued individuals in the
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 organizational system. The higher the self-concept and self-esteem, the greater will be
their contributions to the goals of the organization, especially when the system rewards
them for their contributions.
1. Type A and B Personalities : Type A persons feel a chronic sense of time urgency, are
highly achievement-oriented, exhibit a competitive drive, and are impatient when their
work is slowed down for any reason. Type B persons are easy-going individuals who do
not feel the time urgency, and who do not experience the competitive drive. Type A
individuals are significantly more prone to heart attacks than Type B individuals.
2. Risk Propensity: Risk-propensity is the decree to which an individual is willing to take
chances and make risky decisions. A manager with a high-risk propensity might be
expected to experiment with new ideas and to lead the organization in new directions. In
contrast, a manager with low risk propensity might lead to a stagnant and overly
conservative organization.
3. Machiavellianism: It refers to manipulation of others as a primary way of achieving
one’s goals. An individual tends to be Machiavellian, if he tends to be logical in
assessing the system around, willing to twist and turn facts to influence others, and try to
gain control of people, events and situations by manipulating the system to his advantage
4. Locus of Control: Locus of control means whether people believe that they are in
control of events, or events control them.
Internal Locus of Control: Those who have internal locus of control believe that they
control and shape the course of events in their lives.
External Locus of Control: External locus of control tend to believe that events occur
purely by chance or because of factors beyond their own control.

Perception
Perception is a complex cognitive process and differs from person to person. People's behavior
is influenced by their perception of reality, rather than the actual reality.
Perceptual information is gathered from > Sight > hearing > Touch > taste > smell
“Perception can be defined as a process by which individuals organize and interpret their
sensory impressions in order to give meaning to their environments.”
“Perception includes all those processes by which an individual receives information about his
environment – seeing, hearing, feeling, tasting, and smelling. The study of these perceptional
processes shows that their functioning is affected by three classes of variables – the objects or
vents being perceived, the environment in which perception occurs, and the individuals doing the
perceiving.”
Perception is the process of receiving information about and making sense of the world around
us. It involves deciding which information to notice how to categorize this information and how
to interpret it within the framework of existing knowledge.
Process of Perception
Inputs (Receiving information) Selection (stimuli) Organisation
Information, external factors grouping - closure
objects, events’ internal factors
continuity
People, etc. proximity

similarity

Interpretation Outputs (response)

Perceptual errors Behaviour, actions
attitudes, beliefs,
feelings, etc

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 1. Receiving Information: Information can receive by the sense organs (Eyes, ear, nose,
tongue, skin). Information can be of any person, event or objects.
2. Selection of Stimuli: It is the process of filtering information received by our senses. After
receiving the stimuli from the environment, some are selected for further processing while
others are screened out because it is not possible for a person to select all stimuli which he
sees in the environment. Selection can based on two factors:
a) External factors – size, intensity, contrast, motion, repetition, novelty, familiarity,
Size: The larger the size, the more likely it is to be perceived. The tallest person in the office
will invariably be noticed.
Intensity: The more intense an external factor (bright light, loud noise, high pitch sound etc.)
the more likely it is to be perceived. One may notice that the TV commercials always have
high pitch as compared to normal telecast.
Contrast: External factors that stand out against the background or things that are not which
people expect are more likely to be perceived.
Motion: A moving factor is more likely to be perceived than stationary factor. Films (motion
pictures) attract people more than a static picture.
Repetition: A repeated factor is more likely to be noticed. Marketing managers use this
principle in trying to get attention of the prospective customers.
Novelty and familiarity: Either novelty or familiarity will can attract attention. People
would quickly notice a person riding an elephant on a busy street in Delhi. On the other hand,
one is likely to spot a familiar face in a crowd or a familiar voice even if there is a lot of
noise and confusion.
b) Internal factors – personality, learning, motivation, needs, interest.
Personality: Personality has an interesting influence on what and how people perceive. For
example, conscientious people tend to pay more attention to external environmental cues than
does a less conscientious person. Less conscientious persons are impulsive, careless, and
irresponsible. They see their environment as hectic and unstable which affects the way they make
perceptual selections. On the other hand, more conscientious people organize their perceptions
into neat categories, allowing them to retrieve data quickly and in an organized manner. In other
words, they are careful, methodical, and disciplined in making perceptual selections.
Learning: Learning determines the development of perceptual sets. A perceptual set is an
expectation of a particular interpretation based on past experiences with the same or an
identical object. In organizational settings, past experiences of the managers and employees
influence their perceptions to a great extent.
Motivation: A person’s most urgent needs and desires at any particular time can influence
perception. People perceive things that promise to help satisfy their needs and that they have
found rewarding in the past. Also, according to Pollyanna principle, people process pleasant
event more efficiently and accurately than they do unpleasant events. For example, an
employee who receives both positive and negative feedback during the appraisal meeting
may more easily and clearly remember the positive statements than the negative ones.
3. Organisation: In this step all factors which are noticed are organized in such a form to
interpret and to make sense out of that. The various forms of organizing stimuli are figure-
background, similarity, continuity, proximity, closure.
Figure-ground: Perceived objects stand out as separable from their general background.
Closure: An individual may perceive a whole while one actually does not exists. The
person’s perceptual process closes the gaps that are unfilled by from sensory inputs.
Continuity: An individual tend to perceive continuous lines/patterns. This leads to inflexible
thinking on the part of organizational members (both managers and employees). Thus, only
the obvious, continuous patterns or relationships are perceived.
Proximity: A group of stimuli that are close together will be perceived as a whole pattern of
parts belonging together.
Similarity: The greater the similarity of stimuli, the greater is the tendency to perceive them
as a common group.
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 4. Interpretation: The perceptual inputs that have been organized will have to be interpreted
by the perceiver so that he can sense and extract some meaning of what is going on in the
situation. There are chances of misinterpretation. In interpreting, the perceiver may commit
mistake in perceiving because of several reasons (errors of perception).
5. Responding: These outputs may be in the form of actions like development of attitudes,
opinions, beliefs, impression about the stimuli under consideration.
Errors of Perception
Common perceptual distortions seen in my organization are:
1. Stereotypes and Prototypes
2. Halo Effects
3. Selective Perception
4. Contrast Effects
5. Projections
6. Recency effects
7. First Impression
Stereotyping
When we judge someone on the basis of our perception of the group to which he or she belongs
we are committing a common error of perception called stereotyping.
 Individuals are grouped on the basis of race, gender, education, region, occupation, etc.,
 Inferences are made that all members of the group have the same characteristics
 Expectations on these generalizations are made to interpret the behaviour of individual
members of the groups
 We maintain the stereotypes by exaggerating the frequency of stereotypic behaviours the
others show, inaccurately explaining the behaviours and separating them from our own.
 The 3 more common types of stereotype are on the basis of race, age and sex roles.
Ex: All Muslims are not terrorists.
Halo Effects
Under halo effect, a person is perceived on the basis of a single trait. It generally occurs during
performance appraisal where the supervisor rates an employee on the basis of only one trait e.g.
intelligence, punctuality, cooperativeness appearance etc.
Projection
It is the tendency of seeing one’s own traits in others. Thus, individuals project their own
feelings, personality characteristics attitudes, or motives onto others. Projection may be
especially strong for undesirable traits that the perceivers possess but fail to recognize in
themselves. People whose personality traits include stinginess, obstinacy, and disorderliness tend
to rate others higher on these traits than do people who do not have these traits.
First impression error
The tendency to form lasting opinions about an individual based on initial perceptions. People
may hold a long-term view about a person or thing based on first impression.
Contrast error
People tend to compare among the available resources and thus arrive at a conclusion that might
be far from the objective reality. It occur when an individual is compared to other people on the
same characteristics on which the others rank higher or lower.
Recency effect
When the most recent information dominates perception of others. When a manager evaluates
an employee's performance, the most recent performance dominates so if the last thing the
employee did was sign a big contract with a supplier than the manger will have a very positive
impression of the employee.
Selective Perception
Selective perception is the personal filtering of what we see and hear so as to suit our own needs.
Much of this process is psychological and often unconscious. Have you ever been accused of
only hearing what you want to hear. In fact, that is quite true. We simply are bombarded with too
much stimuli every day to pay equal attention to everything so we pick and choose according to
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 our own needs.
Factors affecting perception

Learning – theories and reinforcement schedules

“Learning is the process by which new behaviors are acquired. It is generally agreed that
learning involves changes in behaviors, practicing new behaviors, and establishing permanency
in the change.” Mitchell

Three theories have been offered to explain the process by which we acquire patterns of
behaviour. These are –
(1) Classical conditioning – Classical conditioning grew out of experiments to teach dogs to
salivate in response to the ringing of a bell, conducted in the early 1900s by Russian
Psychologist sinologist Ivan Pavlov. Four elements are always present in classical
conditioning. These are -
i. Unconditioned stimulus (US) – Like food which invariably causes to react in a certain
way i.e., salivation.
ii. Unconditioned response (UR) – Takes place whenever the US is presented, i.e.,
whenever the dog is given food (US), it salivates.
iii. Conditioned stimulus (CS) – The object that does not initially bring about the desired
response like the sound of the bell.
iv. Conditioned response (CR) – A particular behaviour that the dog learns to produce to
the CS, i.e., Salivation.
1. before conditioning
Meat (US) Salivation (UR); Bell (Neutral stimulus) No response
2. during Conditioning
Meat (US) + Bell (CS) Salivation (UR)
3. after conditioning
Bell (CS) Salivation (CR)
(2) Cognitive Learning Theory: Cognitive theory of learning is based on the cognitive model
of human behaviour. Cognition refers to an individual’s ideas, thoughts, knowledge,
interpretations & understanding about himself & his environment.
Cognitive theorists argue that the learner forms a cognitive structure in memory, preserves
and organizes information about the various events that occur in a learning situation. For
example in his famous pace-learning experiment, Tolman trained a rat to turn right in a “T’
maze in order to obtain food. Then he started the rat from the opposite part of the maze;
according to operant conditioning theory, the rat should have turned right because of past
conditioning. But the rat, instead, turned towards where the food have been placed this
phenomenon forced Tolman to conclude that the rat formed a cognitive map to figure out
how to get the food and reinforcement was not a precondition for learning to take place thus,
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 in learning.
(3) Social Learning theory: Social learning theory combines and integrates both behaviouristic
and cognitive concepts and emphasizes the integrative nature of cognitive, behavioral and
environmental determinants. This theory agrees with some parts of behavioral & cognitive
theories but finds that these theories do not explain the processes and elements there in fully.
It posits that learning can also takes place via modeling.
An attitude describes persons’ enduring favorable or unfavorable cognitive evaluations, feelings,
and action tendencies toward some object or idea. People have attitudes regarding almost
everything such as religion, politics, cloth, music, food. A person’s attitudes settle into a coherent
pattern and to change one may require difficult adjustment in many others. Thus, a company would
be well advised to fit its product into existing attitudes rather than to try changing people’s attitude.
Attitude Definition
Attitudes are evaluation statements either favourable or unfavourable or unfavourable concerning
objects, people or events. They reflect how one feels about something.
Robbins
Attitude Meaning
In simple words, an “attitude” is an individual’s way of looking or an individual’s point of view
at something.
To be more specific, an “attitude” may be defined as the mental state of an individual, which
prepares him to react or make him behave in a particular pre-determined way. It is actually an
acquired feeling.
Attitude is the mixture of beliefs and feelings that people have about situations, specific ideas or
other people.

Components of Attitude
1. Cognitive component
2. Affective component
3. Behavioral component

Components of
Attitude
Cognitive component
Beliefs are the cognitive components of consumer attitude. Cognitive component of attitude is
associated with the value statement. It consists of values, belief, ideas and other information that a
person may have faith in.
Positive brand associations enhance brand equity and are achieved through a number of positioning
strategies. Through brand associations, marketers establish and influence favorable beliefs about a
brand and unfavorable beliefs about competitors.
Example: Quality of sincere hard is a faith or value statement that a manager may have.
Affective component
Affective is the emotive component of consumer attitude. Affective component of attitude is
associated with individual feelings about another person, which may be positive, neutral or
negative.
Three research models describe the determinants of affective response.
 Functional theory of attitude explains that consumers buy as a result of one of four
psychological functions: adjustment, ego defense, value expression, and application of prior
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 knowledge.

 Fishbein model relates consumer beliefs and evaluations to affective response: if beliefs are
strong and desirable, affective responses are positive.
Belief importance model analyses affective responses across competing brands.
Example: I don’t like Sam because he is not honest, or I like Sam because he is sincere. It is an
expression of feelings about a person, object or a situation.
Behavioral component
Intention is the behavioral component of consumer attitude. Behavioral component of attitude is
associated with the impact of various condition or situations that lead to person behavior based on
cognitive and affective components.
Two research models demonstrate the relationship between intention to purchase and actual
purchase and consumption.
 The theories of reasoned action explain purchasing behavior as a direct result of intention,
influenced by attitude toward purchase and by subjective norms.
The theory of trying to consume explains actual consumption behavior of purchasers. It
provides insight into the establishment and maintenance of long-term relationship with
consumers.
Example: I don’t like Sam because he is not honest is an affective component, I, therefore, would
like to disassociate myself with him, is a behavioural component and therefore I would avoid Sam.
Cognitive and affective components are bases for such behaviour. Former two components cannot
be seen, only the behaviour component can be seen. Former is important because it is a base for the
formation of attitude.Vroom’s Attitude Formation
The question often arises, ‘how are the attitudes and subsequent behaviors formed?’ While attitudes
are basically learned over the years, some inherited characteristics do affect such attitudes

Attitude Formation
Experiences
Our personal experiences with people and situations develop our attitude towards such persons and
situations.
Through job experience, people develop attitudes towards working conditions, salaries, supervision,
group dynamics and so on.
Perceptual biases
Perception is the result of a complex interaction of various senses such as feelings, seeing, hearing
and so on and plays an important part in our attitude and behavioural formation.
For example, if a manager perceives a subordinate’s ability as limited, he will give him limited
responsibility. Similarly, we lose many good friends due to our changed perception about them.
Observation of other person attitude
When we like someone, we try to emulate that person’s attitude.
For example, when we are impressed by someone keeping calm under stressful circumstances and
we appreciate such calmness, we might try to do the same.
Association
Our association with the group we belong to strongly influences our attitude. Our close association
with a group would encourage us to be consistent with the attitude of the group.
Personality
Personality is a set of traits and characteristics, habit patterns and conditioned responses to certain
stimuli that formulate the impression that a person makes upon others and this impression is a
function of a person’s attitude.
Theories of Attitude
1. Balance Theory
2. Congruity Theory
3. Affective Cognitive Consistency Theory
4. Cognitive Dissonance Theory
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Balance Theory
Balance Theory is concerned with consistency in the judgement of people and or issues that are
linked by some form of relationship.
There are three elements:
 Person
 Other person
 Impersonal entity
There are two types of relationship to connect these three types of elements
1. The linking relations or sentiments
2. The unit relation
Both linking and unit relations are positive or negative towards any object or person or stimuli etc.
or these three types of elements.
Congruity Theory
Congruity theory is similar to balance theory. The focus of the theory is on changes in evolution of
a source and a concept that are linked by an associative or dissociative assertion. Congruity exists
when a source and concept positively associated have exactly the same evaluation, and when a
source and concept that are negatively associated have exactly the opposite evaluation attached to
him.
Affective Cognitive Consistency Theory
The theory is also called structural because it is concerned with what happens within the
individual when an attitude changes.It is concerned with the consistency between a person’s overall
attitude towards an object or issue and its his beliefs about the relationship.
Cognitive structure means end relationship between the object or issue and the achievement of
desired undesired values of goals.
Cognitive Dissonance Theory It is little-bit similar to affective cognitive theory. The difference
between these two is that the stimuli arise from environment in the first one. Cognitive dissonance
occurs when our actions and our attitudes are in conflict. This dissonance will motivate us to
attempt to return to a state of cognitive consistency, where attitudes and behaviors are congruent.
Relation between Atitude and Behaviour
An attitude refers to a set of emotions, beliefs, and behaviors toward a particular object, person,
thing, or event. Attitudes are often the result of experience or upbringing, and they can have a
powerful influence over behavior. While attitudes are enduring, they can also change.
Reinforcement
Reinforcement can be defined as anything that increases the strength of response & tends to
induce repetitions of the behaviour that preceded the reinforcement. Sometimes, reinforcement is
equated with motivation as reinforcement plays important role in motivation reinforcement is an
environmental event that follows a response. In general, motivation is an internal explanation of
behaviour whereas reinforcement is an external explanation of behaviour.
Principles of Reinforcement
a) Skinner identified two types of reinforcing events - those in which a reward is given; and
those in which something bad is removed. In either case, the point of reinforcement is to increase
the frequency or probability of a response occurring again.
i. Positive reinforcement - give an organism a pleasant stimulus when the operant
response is made. For example, a rat presses the lever (operant response) and it receives a
treat (positive reinforcement
ii. Negative reinforcement - take away an unpleasant stimulus when the operant response
is made. For example, stop shocking a rat when it presses the lever (yikes!)
b) Skinner also identified two types of rein forcers
i. Primary reinforce - stimulus that naturally strengthens any response that precedes it
(e.g., food, water, sex) without the need for any learning on the part of the organism.
These rein forcers are naturally reinforcing.
ii. secondary/conditioned reinforce - a previously neutral stimulus that acquires the ability
to strengthen responses because the stimulus has been paired with a primary reinforce.
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 For example, an organism may become conditioned to the sound of food dispenser,
which occurs after the operant response is made. Thus, the sound of the food dispenser
becomes reinforcing. Notice the similarity to Classical Conditioning, with the exception
that the behavior is voluntary and occurs before the presentation of a reinforce.
Schedules of Reinforcement
There are two types of reinforcement schedules - continuous, and partial/intermittent (four
subtypes of partial schedules)
a) Fixed Ratio (FR) - reinforcement given after every N th responses, where N is the size of the
ratio (i.e., a certain number of responses have to occur before getting reinforcement).
For example - many factory workers are paid according to the number of some product they
produce. A worker may get paid $10.00 for every 100 widgets he makes. This would be an
example of an FR100 schedule.
b) Variable Ratio (VR) - the variable ration schedule is the same as the FR except that the ratio
varies, and is not stable like the FR schedule. Reinforcement is given after every N th response,
but N is an average.
For example - slot machines in casinos function on VR schedules (despite what many people
believe about their "systems"). The slot machine is programmed to provide a "winner" every
average N th response, such as every 75th lever pull on average. So, the slot machine may give a
winner after 1 pull, then on the 190th pull, then on the 33rd pull, etc...just so long as it averages
out to give a winner on average, every 75th pull.
c) Fixed Interval (FI) - a designated amount of time must pass, and then a certain response must
be made in order to get reinforcement.
d) Variable Interval (VI) - same as FI but now the time interval varies.
Lesson - 11
Johari Window
The Johari Window model consists of a foursquare grid (think of taking a piece of paper and
dividing it into four parts by drawing one line down the middle of the paper from top to bottom,
and another line through the middle of the paper from side-to-side). This is shown in the diagram
below:

Using the Johari model, each person is represented by their own four-quadrant, or four-pane,
window. Each of these contains and represents personal information – feelings, motivation, etc. –
about the person, and shows whether the information is known or not known by themselves or
other people.

The four quadrants are:

Open area – “I know, you know.”
Blind Area – “I don’t know what you know.”
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Hidden Area – “I know about it, you don’t know about it.”
Unknown Area – “I don’t know, you don’t know it.”
Transactional Analysis
A system of psychotherapy based on the analysis of transactions and chains of transactions
which occur during treatment sessions.
A theory of personality based on the study of specific ego states.In simple words: Transaction
analysis is a kind of psychotherapy that (among other things) analyses our everyday
communication - why do we say things we say, how do we say them and what made us say
that. It uses simple words such as child, parent and adult (these are the names of our three ego
states) to describe seemingly complicated processes in our mind.
Types of Ego States
Parent
This is our ingrained voice of authority, absorbed conditioning, learning and attitudes from
when we were young. We were conditioned by our real parents, teachers, older people, next
door neighbours, aunts and uncles, Father Christmas and Jack Frost. Our Parent is made up of a
huge number of hidden and overt recorded playbacks. Typically embodied by phrases and
attitudes starting with 'how to', 'under no circumstances', 'always' and 'never forget', 'don't lie,
cheat, steal', etc, etc. Our parent is formed by external events and influences upon us as we grow
through early childhood. We can change it, but this is easier said than done.
Child
Our internal reaction and feelings to external events form the 'Child'. This is the seeing, hearing,
feeling, and emotional body of data within each of us. When anger or despair dominates reason,
the Child is in control. Like our Parent we can change it, but it is no easier.
Adult
Our 'Adult' is our ability to think and determine action for ourselves, based on received data.
The adult in us begins to form at around ten months old, and is the means by which we keep our
Parent and Child under control. If we are to change our Parent or Child we must do so through
our adult.
In other words:
 Parent is our 'Taught' concept of life
 Adult is our 'Thought' concept of life
 Child is our 'Felt' concept of life
Life Positions
 The concept of life positions is another basic idea from transactional analysis theory. Life
positions works with the assumption that we choose very early on in our life, before age 2, a
basic stance towards ourselves and other people. It represents the fundamental stance a
person takes about the essential value he or she perceives in him or herself and other people.
Once a child has taken up a favorite position, they're likely to construct the rest of their world
view to match that life position. One could therefore also see a life position as one of the first
script decisions a person makes.
 Another way of saying the same thing is that our life position is like a set of glasses through
which we see the world. If we end up with gray tinted glasses the whole world will look gray
to us. If they are clear, we can see ourselves and the world as things are, good and bad, but
mostly all sorts of colors and shapes.
 The following diagram is called "The OK Corral" by Franklin Ernst (with some of my own
adaptations). It shows the four basic life positions we can assume:
 1 "'I am ok, you are ok," which is short for "I am ok with myself and with you too."
 2 "I am ok, you are not ok," short for "I am ok, but I can't rely on or trust you. I feel there is
something wrong with other people around me."
 3 "I am not ok, you are ok," short for "There is something fundamentally wrong with me, but
everybody else is ok."
 4 "I am not ok, you are not ok," short for "There is something fundamentally wrong with me
and other people are unreliable, untrustworthy, wrong in some way too."
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  It's easy to see that the best place to come from is "'I am ok, you are ok!"

I am not ok, you are ok I am ok, you are ok

(Therefore the best I can do is to get away (Therefore you and me can get on with
from others or hide myself) being open with each other)

DEPRESSIVE POSITION GOOD LIFE POSITION

I am not ok, you are not ok I am ok, you are not ok
(Therefore there is no hope. I can never be (Therefore I best get rid of you to be ok)
ok nor could you give me what I need) PARANOID POSITION

FUTILE POSITION

Applications of T.A
Stroking – Stroking is defined as any act of recognition for another. People seek stoking in their
interaction with others. It applies to all type of recognition, such as physical, verbal and eye
contact between people. Strokes may be positive, negative, or mixed.
Positive strokes, when they are received contribute to a person's sense being OK.
Negative stokes hurt physically or emotionally and make us feel OK about ourselves. There also
is a difference between conditional and unconditional strokes. Conditional strokes are offered to
employees if they perform correctly or avoid problems. A Regional manager may promise" I will
give you a choice posting if you achieve the targets of advances, deposits and recovery and turn
around the branch". Unconditional strokes are presented without any connection to behaviour,
although they may make a person feel good (for example, "you're a good officer").
Benefits of TA – Organizations that have used TA approach were found moderately successful
training in TA can give employees fresh insights into their own personalities, and it also can help
them to understand why others sometimes respond as they do. A major benefit is improved
interpersonal communication. Employees in organization can sense when crossed
communication occurs and then take steps to restore complementary communication, preferably
in the Adult-to-Adult pattern. The result is a general improvement in interpersonal transactions.
Relationship between attitude and behavior
Attitude and behavior are two quite different things. Attitude is a person's inner thoughts and
feelings, while behavior is usually an outward expression of attitude, but the two are not always
related. The association between attitudes and behaviors intrigues researchers. Attitude
enactment is not as simple as thinking positively to produce positive results. The degree to which
our behavior matches our attitudes has to do with relevance, personality factors, and social
context.
For instance, psychopaths are people whose attitudes are composed of low morality. However,
this does not mean that they always commit immoral acts. Psychopaths are usually intelligent, so
they know that even though there will be no moral consequences for them, there will still be
legal consequences to deal with. This knowledge, in addition to their attitude, governs their
behavior.
When a person's attitude and behavior differ, dissonance will likely result, and a change in
attitude or behavior will be the probable outcome.

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Keywords:
Organizational Behaviour, Personality, Perception, Theories
REFRENCES:
Books:
1. Prasad, L.M.; Organizational Behaviour, Sultan Chand & Sons, 2003.
2. 2. Stephen P., Robbins; Organizational Behaviour; “Prentice Hall of India Pvt. Ltd.”, New Delhi,
2003
3. Khanka, S.S.; Organizational Behaviour, Sultan Chand and Sons, New Delhi.
4. Chhabra, Ankur; Organizational Behaviour, Sun India’s,2009.
5. Robbins, Stephen P. 2010. Organizational Behaviour. New Delhi: Prentice-Hall.
6. Anderson, M., 2004. The Power of Attitude, Thomas Nelson.

MCQ
1. Organisational behaviour is_______
a) A science
b) An art
c) A science as well as an art
d) None of the above
2. Scope of Organizational Behaviour does not include ______
a) Leadership
b) Perception
c) Job Design
d) Technology
3. In present context, challenges for Organizational Behaviour are _____
a) Employee expectation
b) Workforce diversity
c) Globalization
d) All of the above
4. The Last Phase of Perceptual Process is __________.
An Action
a) An Interpretation
b) An Organization
c) An Objective
5. A situation, wherein a perceiver tends to see in others the traits he himself possesses, is
called _________
A. Repetition
B. Contrast
C Rejection
D. Projection
6. ________ is not a perceptual error.
A. Projection
B. Proximity
C. Halo
D. Contrast
7. An Individual’s ___________ consists of emotional, physical & psychological
characteristics.
A. Perception
B. Motivation
C. Personality
D. Interpretation

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 8. Through the process of perception ________ sensory inputs are processed and
interpreted.

A. Soft
B. Hard
C. Woven
D. Raw
9. A Loud noise or bright light is described as the _______ of the external type of factors
affecting perception.
A. Location
B. Proximity
C. Intensity
D. Size
10. ________ is concerned with the initial contact between organisms and their physical
environment.
A. Stimuli
B. Sensation
C. Response
D. Unconditioned Stimuli
11. Job Rotation is an example of __________ principle of the external factors influencing
perceptual process of an individual.
A. Familiarity
B. Repetition
C. Novelty
D. Satisfaction
12. In __________ perceptions are based on a certain category to which people belong to.
A. Halo Effect
B. Contrast Effect
C. Projection
D. Stereo Typing
13. Perception is a unique __________ of a situation and not an exact recording of it.
A. Acceptance
B. Interpretation
C. Reception
D. Derivation
14. Organizational Behavior is basically _____________ approach.
A An Uni-Disciplinary
B. Multi-Disciplinary
C. An Inter-Disciplinary
D. A Behavior-Disciplinary
15. ___________ is not included in perceiver’s characteristics influencing perception.
A. Attitude
B. Size
C. Motives
D. Personality
16. Perception as a sequential process is _____________.
A. Organization, Selection, Interpretation
B. Interpretation, Organization, Selection
C. Selection, Organization, Interpretation
D. Selection, Interpretation, Organization
17. _______ is a principle which refers to filling up the gap, when people are faced with
incomplete information.
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A. Grouping
B. Closure
C Figure-Ground
D. Simplification
18. __________ is the study of societies to learn about human beings and their activities.
A. psychology
B. Social psychology
C. Anthropology
D. Sociology
19. The contribution of Psychology in the field of learning, motivation, personality,
perception, Individual decision making etc. facilitate the study & understanding of _________
A. group
B. individual
C. organizational system
D. Human relations
20. Which behavioral science is the study of people in relation to their fellow human beings ?
A. Anthropology
B. Sociology
C. Social Psychology
D. Political Science
21. __________ is the sum total of ways in which an individual reacts and interacts with
others.
A. Learning
B. Motivation
C. Perception
D. Personality
22.In the Johari Window, the information about yourself that you don't know but others do is
your
A) Blind self
B) Hidden Self
C) Unknown self
D) Open
23. A sensor organ that detects information used in the perceptual process is:
A) Eye
B) Ear
C) Skin
D) All of these
24. The first step in the perception process is
A) Selection
B) Organisation
C) Interpretation
D) Response
25. Johari Window was created by
A) Joseph Luft and Harrington Ingham
B) Joseph Luft, Harrington Ingham, and Carl Jung
C) Joseph Luft and Harry Ingham
D) Maslow and McGregor
Long Answer Questions
1. What is personality? Describe factors affecting it.What are the determinants of personality?
2. Discuss the Big 5 trait theory. "People believe that biological factors are important in
determining the personality of a person ". Comment.
3. Distinguish between Type A and Type B personality. Besides the Big 5, what other personality
traits are relevant to OB?
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4. Under what conditions do you think extraverts make more effective leaders than introverts? What
unique abilities of introverts make them more effective in some situations?
5.What is Johari window? How can we assess personality using it?
6. Write Shortnotes on:
1. Halo effect 2. Stereotyping 3. Importance of perception 4. Selective perception 5. Negative
motivation
7. What is the concept of perception? How is it formed? Does perception about a person affect his/
her behaviour towards that individual? How?
8. Can anyone control the way they perceive others? If yes, suggest the ways to make it possible.
9. Describe the determinants of perception. "Perception affects the working style and behaviour of
an employee ". Comment.
10. What is stereotyping? How does it affect the perception about an employee?
11. Explain the meaning of perception. Discuss various steps of the perceptual process
12. Explain the concept of Johari window in detail with examples.
13. Explain the attribution theory of perception. What are the perceptual errors made by the
individuals.
14. Write short notes on
a. Ego States.
b. Reinforcement schedules.
15.Explain the meaning and features of organizational behavior.
16. Discuss various challenges and opportunities of organizational behavior.

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 UNIT-4

CHAPTER 12:-

Group Behavior and Team development: Concept of group and group dynamics, Stages of
group development, Theories of group Formation: Concept of group V/S Team, Types of
team, Building and managing effective teams.
A group consists of two or more persons who interact with each other consciously for the
achievement of certain common objectives. The members of the group are inter-dependent and are
aware that they are part of a group. It can be defined as several individuals who come together to
accomplish a particular task or goal.
“To put it simply they are units composed of two or more persons who come into contact for a
purpose and who consider the contact meaningful”. Theodore M. Mills
“A group is a collection of individuals who have relations to one another that make them
interdependent to some significant degree. As so defined, the term group refers to a class of social
entities having in common the property of interdependence among their constituent
members”. Dorwin Cartwright and Alvin Zander (1968: 46)
“Descriptively speaking, a psychological group is defined as one that is psychologically significant
for the members, to whom they relate themselves subjectively for social comparison and the
acquisition of norms and values, that they privately accept membership in, and which influences
their attitudes and behavior”. John C Turner
“A group exists when two or more people define themselves as members of it and when its
existence is recognized by at least one other.” Rupert Brown
To be called a group, an aggregation of persons must satisfy the following conditions;
 People must interact with one another.
 People must be psychologically aware of one another
 People should perceive themselves to be a group.
Every job in the organization is interdependent and every task requires the co-operation of more
than one individual. Groups facilitate this cooperation. It also helps to solve complex problems
which are difficult to solve individually.
The nature of group formation is as follows: (Michael K McCuddy, 2003)
1. Achievement of Task Performance: In group formation, participants try to share their tasks
equally or optimally based on skills and abilities. Additionally, they enforce their own time targets
for the completion of tasks.
2. Positive Participant Satisfaction: It is the perception of participants that in group work they feel
more satisfied and hence have positive experience for the same.
3. Group Continuity: Because members feel more satisfied in group, they prefer to continue with
group formation for tasks or problem on a long term basis.
4. Combined Effort: Group formation motivates combined effort of every participant. With this,
the group’s total achievement is greater than the sum of achievement when worked individually.
5. Helps in Unclear Problem Definition: Group formation helps to solve complex problems or
tasks as many brains are ready to solve, coordinate the tasks by their own innovative ways.
6. Chance for lazy participants: Some cases in group formation, some participants work less hard
than they would do in individual approach. This situation arises because individual contributions go
unnoticed in groups.
7. Improvement of overall participants’ performance: Every participant working style is
affected by one another's presence. It positively gets affected when one is skilled in doing the task
else not.
Group Dynamics: The social process by which people interact face-to-face in small groups is
called groups dynamics. Group dynamics refers to the attitudinal and behavioral characteristics of a
group. Group dynamics concern how groups form, their structure and process, and how they

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function. Group dynamics are relevant in both formal and informal groups of all types. The group
develops its goals clearly and furnishes suggestions to its members for the accomplishment of its
goals .
Types of Groups
Two types of groups coexist in every organization .These are
(1) Formal Group
(2) Informal group
(1) Formal Group: formal groups are part of the organization structure. They are created
deliberately by the management to perform the assigned duties. These groups are
characterized by clear-cut authority-responsibility relationships; the pattern of
communication is also well defined. Rules are laid down to regulate the behavior of group
members .Example are Command Groups, Task Groups, and committee and quality
team.etc.
Command Groups: Command groups are specified by the organizational chart and often consist of
a supervisor and the subordinates that report to that supervisor. An example of a command group is
an academic department chairman and the faculty members in that department.
Task Groups: Task groups consist of people who work together to achieve a common task.
Members are brought together to accomplish a narrow range of goals within a specified time
period. Task groups are also commonly referred to as task forces. The organization appoints
members and assigns the goals and tasks to be accomplished. Examples of assigned tasks are the
development of a new product, the improvement of a production process, or the proposal of a
motivational contest. Other common task groups are ad hoc committees, project groups, and
standing committees. Ad hoc committees are temporary groups created to resolve a specific
complaint or develop a process. Project groups are similar to ad hoc committees and normally
disband after the group completes the assigned task. Standing committees are more permanent than
ad hoc committees and project groups. They maintain longer life spans by rotating members into
the group.
Functional Groups: A functional group is created by the organization to accomplish specific goals
within an unspecified time frame. Functional groups remain in existence after achievement of
current goals and objectives. Examples of functional groups would be a marketing department, a
customer service department, or an accounting department.
(2) Informal Group: In contrast to formal groups, informal groups are formed naturally and in
response to the common interests and shared values of individuals. They are created for
purposes other than the accomplishment of organizational goals and do not have a specified
time frame. Informal groups are not appointed by the organization and members can invite
others to join from time to time. Informal groups can have a strong influence in
organizations that can either be positive or negative. For example, employees who form an
informal group can either discuss how to improve a production process or how to create
shortcuts that jeopardize quality. Informal groups can take the form of interest groups,
friendship groups, or reference groups.
Interest Groups: Interest groups usually continue over time and may last longer than general
informal groups. Members of interest groups may not be part of the same organizational department
but they are bound together by some other common interest. The goals and objectives of group
interests are specific to each group and may not be related to organizational goals and objectives.
An example of an interest group would be students who come together to form a study group for a
specific class.
Friendship Groups: Friendship groups are formed by members who enjoy similar social activities,
political beliefs, religious values, or other common bonds. Members enjoy each other's company
and often meet after work to participate in these activities. For example, a group of employees who
3form a friendship group may have an exercise group, a softball team, or a potluck lunch once a
month.
Reference Groups: A reference group is a type of group that people use to evaluate themselves.
According to Cherrington, the main purposes of reference groups are social validation and social
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comparison. Social validation allows individuals to justify their attitudes and values while social
comparison helps individuals evaluate their own actions by comparing themselves to others.
Reference groups have a strong influence on members' behavior. By comparing themselves with
other members, individuals are able to assess whether their behavior is acceptable and whether their
attitudes and values are right or wrong. Reference groups are different from the previously
discussed groups because they may not actually meet or form voluntarily. For example, the
reference group for a new employee of an organization may be a group of employees that work in a
different department or even a different organization. Family, friends, and religious affiliations are
strong reference groups for most individuals.
Formal Organization: By the term formal organization, we mean a structure that comes into
existence when two or more people come together for a common purpose, and there is a legal &
formal relationship between them. The formation of such an organization is deliberate by the top
level management. The organization has its own set of rules, regulations, and policies expressed in
writing. The basic objective of the establishment of an organization is the attainment of the
organization’s goal. For this purpose, work is assigned, and authorities are delegated to each
member and the concept of division of labor and specialization of workers are applied and so the
work is assigned on the basis of their capabilities. The job of each is fixed, and roles,
responsibilities, authority and accountability associated with the job are clearly defined. In addition
to this, there exists a hierarchical structure, which determines a logical authority relationship and
follows a chain of command. The communication between two members is only through planned
channels.
The basic characteristics of formal organization are as follows:
 Organization structure is laid down by the Top management to achieve organizational goals
 Organization structure is based on division of labor and specialization to achieve efficiency
in the operations.
 Organization structure concentrates on the jobs to be performed and not the individuals who
are to perform these jobs
 Formal organization does not take into consideration the sentiments of organizational
members
 The authority and responsibility relationship created by the organization structure are to be
honored by everyone. The position in the organizations hierarchy determines the relative
status of the incumbent.
 Types of formal organization structure
 Line Organization
 Line and Staff Organization
 Functional Organization
 Project Management Organization
 Matrix Organization
Informal Organization: An informal organization is formed within the formal organization;
that is a system of interpersonal relationships between individuals working in an enterprise, that
forms as a result of people meet, interact and associate with one another. The organization is
created by the members spontaneously, i.e. created out of socio-psychological needs and urge of
people to talk. The organization is featured by mutual aid, cooperation, and companionship
among members.
In an informal organization, there are no defined channels of communication, and so members
can interact with other members freely. They work together in their individual capacities and
not professional. There is no defined set of rules and regulations that govern the relationship
between members. Instead, it is a set of social norms, connections, and interaction. The
organization is personal i.e. no rules and regulations are imposed on them, their opinions,
feelings, and views are given respect. However, it is temporary in nature, and it does not last
long.
The salient features of Informal organization are as follows:

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  Informal relations are unplanned. They arise spontaneously
 Formation of informal organization is a natural process
 Informal organization reflects human relationships
 Informal organization are based on common taste, problem, language, religion, culture
etc.
 The membership of informal organization is voluntary. At the same time, a person may be a
member of a number of informal groups.
BASIS FOR FORMAL INFORMAL ORGANIZATION
COMPARISON ORGANIZATION
Meaning An organization type in An organization formed within the formal
which the job of each member organization as a network of interpersonal
is clearly defined, whose relationship, when people interact with each
authority, responsibility and other, is known as informal communication.
accountability are fixed is
formal organization.
Creation Deliberately by top Spontaneously by members
management.
Purpose To fulfill, the ultimate To satisfy their social and psychological
objective of the organization. needs.
Nature Stable, it continues for a long Not stable
time.
Communication Official communication Grapevine
Control mechanism Rules and Regulations Norms, values and beliefs
Focus on Work performance Interpersonal relationship
Authority Members are bound by All members are equal.
hierarchical structure.
Size Large Small
Clique: A clique of those people who have frequent interactions and observe certain norms and
standards. Its purpose is to gain and control power. The number of members of a clique is restricted
to five or six organizational members .Some members of a clique may also form another group
which may even consists of some persons who are not members of the organization. Thus this
group known as sub-clique is partially external to the organization.
Dalton has identified three types of cliques as follows:
 Vertical clique: It consists of people working in the same department drawing membership
regardless of ranks. For example, Superior may be a member in a group consisting mainly
of subordinates. Such group cutting across hierarchical lines develops because of the earlier
acquaintance of people or because the superior is dependent upon his subordinates foe some
formal purposes.
 Horizontal clique: It consists of people of more or less same rank and working in the same
unit. This is the commonest kind of informal group. The members have certain common
interest for those achievements they follow certain norms and standards.
 Mixed or random clique: Such a group draws members from different ranks, departments
and physical locations that come together for a common purpose. The members may be
residing in the same locality and travelling by the common bus, or they may be members of
the common club.
Stages of Group Formation: A team cannot be expected to perform well right from the time it is
formed. Forming a team is just like maintaining a relationship. It takes time, patience, requires
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support, efforts and members often go through recognizable stages as they change from being a
collection of strangers to a united group with common goals.Bruce Tuckman presented a model of
five stages Forming, Storming, Norming, and Performing in order to develop as a group.

Orientation (Forming Stage): The first stage of group development is the forming stage. This
stage presents a time where the group is just starting to come together and is described with anxiety
and uncertainty. Members are discreet with their behavior, which is driven by their desire to be
accepted by all members of the group. Conflict, controversy, misunderstanding and personal
opinions are avoided even though members are starting to form impressions of each other and gain
an understanding of what the group will do together.
Typical consequences of the forming stage include achieving an understanding of the group's
purpose, determining how the team is going to be organized and who will be responsible for what,
discussion of major milestones or phases of the group's goal that includes a rough project schedule,
outlining general group rules that includes when they will meet and discovery of what resources
will be available for the group to use. At this stage, group members are learning what to do, how
the group is going to operate, what is expected, and what is acceptable.
Power Struggle (Storming Stage): The second stage of group development is the storming stage.
The storming stage is where dispute and competition are at its greatest because now group members
have an understanding of the work and a general feel of belongingness towards the group as well as
the group members. This is the stage where the dominating group members emerge, while the less
confrontational members stay in their comfort zone. Questions around leadership, authority, rules,
policies, norms, responsibilities, structure, evaluation criteria and reward systems tend to arise
during the storming stage. Such questions need to be answered so that the group can move further
on to the next stage.
Cooperation and Integration ( Norming Stage): In this stage, the group becomes fun and
enjoyable. Group interaction are lot more easier, more cooperative, and productive, with weighed
give and take, open communication, bonding, and mutual respect.If there is a dispute or disruption,
it’s comparatively easy to be resolved and the group gets back on track.Group leadership is very
important, but the facilitator can step back a little and let group members take the initiative and
move forward together.
Synergy (Performing Stage): Once a group is clear about its needs, it can move forward to the
third stage of group development, the norming stage. This is the time where the group becomes
really united. At this stage, the morale is high as group members actively acknowledge the talents,
skills and experience that each member brings to the group. A sense of belongingness is established
and the group remains focused on the group’s purpose and goal.
Members are flexible, interdependent, and trust each other. Leadership is distributive and members
are willing to adapt according to the needs of the group.
Closure (Adjourning Stage):This stage of a group can be confusing and is usually reached when
the task is successfully completed. At this stage, the project is coming to an end and the team
members are moving off in different directions.

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 This stage looks at the team from the perspective of the well-being of the team instead of the
perspective of handling a team through the original four stages of team growth.
Different Theories of Group Formation:
There are four theories which explain why the groups are formed. These include:
 Propinquity Theory
 Homan’s Theory
 Balance Theory
 Exchange Theory
1. Propinquity Theory: The most basic theory explaining affiliation is propinquity. This
interesting word simply means that individuals affiliate with one another because of spatial or
geographical proximity. In an organization employees who work in the same area of the plant or
office or managers with offices close to one another would more probably form into groups than
would those who are not physically located together. There is some research evidence to support
the propinquity theory and on the surface, it has a great deal of merit for explaining group
formation. The drawback of this theory is that it is not analytical and does not begin to explain
some of the complexities of group formation. Some more theoretical and practical reasons need to
be explored.
2. Homan’s Theory: According to George C. Homans, “The more activities persons share, the more
numerous will be there interactions and the stronger will be their shared activities and sentiments,
and the more sentiments people have for one another, the more will be their shared activities and
interactions.”It is a very comprehensive theory and based on activities, interactions and Homan’s
theory is based on sentiments. These three elements are directly related to each other. The
members’ activities interactions and of a group share activities and interact with one another not
just because of physical proximity but also to accomplish group goals.
The key element is interaction because of which they develop common sentiments for one another.
These sentiments gradually get expressed through the formation of informal groups. If any
disturbance is caused to any of the three-activities, interactions and sentiments, it is likely to disturb
all the others.
Their relationships are shown in the following figure:

3. Balance Theory: Another very comprehensive theory is a Balance Theory of group formation.
This theory as proposed by Theodore Newcomb states that “Persons are attracted to one another on
the basis of similar attitudes towards commonly relevant objects and goals. Once a relationship is
formed, it strives to maintain a symmetrical balance between the attraction and the common
attitudes. If an imbalance occurs, attempts are made to restore the balance. If the balance cannot be
restored, the relationship dissolves.”Thus, the balance theory is additive in nature in the sense, that
it introduces the factor of balance to the propinquity and interaction factors. There must be a
balance in the relationship between the group members for the group to be formed and for its
survival. The following -figure shows the balance theory.
Individual (A) will interact and form a relationship/group with individual (B) because of common
attitudes and values (C). Once this relationship is formed, the participants strive to maintain a

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symmetrical balance between the attraction and the common attitudes. If an imbalance occurs, an
attempt is made to restore the balance. If the balance cannot be restored, the relationship dissolves.

4. Exchange Theory: This theory is based on reward-cost outcomes of interactions. To be attracted

towards a group, a person thinks in terms of what he will get in exchange of interaction with group
members. A minimum positive level (rewards greater than costs) of an outcome must exist in order
for attraction or affiliation to take place. Rewards from interactions gratify needs while costs incur
anxiety, frustrations, embarrassment or fatigue. Propinquity, interaction and common attitudes all
have roles in the exchange theory.
GROUP DEVELOPMENT
As applied to group development, group dynamics is concerned with why and how groups develop.
There are several theories as to why groups develop. A classic theory, developed by George
Homans, suggests that groups develop based on activities, interactions, and sentiments. Basically,
the theory means that when individuals share common activities, they will have more interaction
and will develop attitudes (positive or negative) toward each other. The major element in this
theory is the interaction of the individuals involved.
Social exchange theory offers an alternative explanation for group development. According to this
theory, individuals form relationships based on the implicit expectation of mutually beneficial
exchanges based on trust and felt obligation. Thus, a perception that exchange relationships will be
positive is essential if individuals are to be attracted to and affiliate with a group.
Social identity theory offers another explanation for group formation. Simply put, this theory
suggests that individuals get a sense of identity and self-esteem based upon their membership in
salient groups. The nature of the group may be demographically based, culturally based, or
organizationally based. Individuals are motivated to belong to and contribute to identity groups
because of the sense of belongingness and self-worth membership in the group imparts.
Group dynamics as related to development concerns not only why groups form but also how. The
most common framework for examining the "how" of group formation was developed by Bruce
Tuckman in the 1960s. In essence, the steps in group formation imply that groups do not usually
perform at maximum effectiveness when they are first established. They encounter several stages of
development as they strive to become productive and effective. Most groups experience the same
developmental stages with similar conflicts and resolutions.
According to Tuckman's theory, there are five stages of group development: forming, storming,
norming, performing, and adjourning. During these stages group members must address several
issues and the way in which these issues are resolved determines whether the group will succeed in
accomplishing its tasks.
Forming: This stage is usually characterized by some confusion and uncertainty. The major goals
of the group have not been established. The nature of the task or leadership of the group has not
been determined (Luthans, 2005). Thus, forming is an orientation period when members get to
know one another and share expectations about the group. Members learn the purpose of the group
as well as the rules to be followed. The forming stage should not be rushed because trust and
openness must be developed. These feelings strengthen in later stages of development. Individuals
are often confused during this stage because roles are not clear and there may not be a strong leader.

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Storming: In this stage, the group is likely to see the highest level of disagreement and conflict.
Members often challenge group goals and struggle for power. Individuals often vie for the
leadership position during this stage of development. This can be a positive experience for all
groups if members can achieve cohesiveness through resolution. Members often voice concern and
criticism in this phase. If members are not able to resolve the conflict, then the group will often
disband or continue in existence but will remain ineffective and never advance to the other stages.
Norming: This stage is characterized by the recognition of individual differences and shared
expectations. Hopefully, at this stage the group members will begin to develop a feeling of group
cohesion and identity. Cooperative effort should begin to yield results. Responsibilities are divided
among members and the group decides how it will evaluate progress.
Performing:Performing, occurs when the group has matured and attains a feeling of cohesiveness.
During this stage of development, individuals accept one another and conflict is resolved through
group discussion. Members of the group make decisions through a rational process that is focused
on relevant goals rather than emotional issues.
Adjourning: Not all groups experience this stage of development because it is characterized by the
disbandment of the group. Some groups are relatively permanent (Luthans, 2005). Reasons that
groups disband vary, with common reasons being the accomplishment of the task or individuals
deciding to go their own ways. Members of the group often experience feelings of closure and
sadness as they prepare to leave.
GROUP STRUCTURE
Group structure is a pattern of relationships among members that hold the group together and help
it achieve assigned goals. Structure can be described in a variety of ways. Among the more
common considerations are group size, group roles, group norms, and group cohesiveness.
GROUP SIZE
Group size can vary from 2 people to a very large number of people. Small groups of two to ten are
thought to be more effective because each member has ample opportunity to participate and
become actively involved in the group. Large groups may waste time by deciding on processes and
trying to decide who should participate next. Group size will affect not only participation but
satisfaction as well. Evidence supports the notion that as the size of the group increases, satisfaction
increases up to a certain point. In other words, a group of six members has twice as many
opportunities for interaction and participation as a group of three people. Beyond 10 or 12
members, increasing the size of the group results in decreased satisfaction. It is increasingly
difficult for members of large groups to identify with one another and experience cohesion.
GROUP ROLES
In formal groups, roles are usually predetermined and assigned to members. Each role will have
specific responsibilities and duties. There are, however, emergent roles that develop naturally to
meet the needs of the groups. These emergent roles will often replace the assigned roles as
individuals begin to express themselves and become more assertive. Group roles can then be
classified into work roles, maintenance roles, and blocking roles.
Work roles are task-oriented activities that involve accomplishing the group's goals. They involve a
variety of specific roles such as initiator, informer, clarifier, summarizer, and reality tester. The
initiator defines problems, proposes action, and suggests procedures.
The informer role involves finding facts and giving advice or opinions. Clarifiers will interpret
ideas, define terms, and clarify issues for the group. Summarizers restate suggestions, offer
decisions, and come to conclusions for the group. Finally, reality testers analyze ideas and test the
ideas in real situations.
Maintenance roles are social-emotional activities that help members maintain their involvement in
the group and raise their personal commitment to the group. The maintenance roles are harmonizer,
gatekeeper, consensus tester, encourager, and compromiser. The harmonizer will reduce tension in
the group, reconcile differences, and explore opportunities. Gatekeepers often keep communication
channels open and make suggestions that encourage participation. The consensus tester will ask if
the group is nearing a decision and test possible conclusions. Encouragers are friendly, warm, and

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responsive to other group members. The last maintenance role is the compromiser. This role
involves modifying decisions, offering compromises, and admitting errors.
Blocking roles are activities that disrupt the group. They make take the form of dominating
discussions, verbally attacking other group members, and distracting the group with trivial
information or unnecessary humor. Often times the blocking behavior may not be intended as
negative. Sometimes a member may share a joke in order to break the tension, or may question a
decision in order to force group members to rethink the issue. The blocking roles are aggressor,
blocker, dominator, comedian, and avoidance behavior. The aggressor criticizes members' values
and makes jokes in a sarcastic or semi-concealed manner.
Blockers will stubbornly resist the group's ideas, disagree with group members for personal
reasons, and will have hidden agendas. The dominator role attempts to control conversations by
patronizing others. They often interrupt others and assert authority in order to manipulate members.
Comedians often abandon the group even though they may physically still be a part. They are
attention-getters in ways that are not relevant to the accomplishment of the group's objectives. The
last blocking role, avoidance behavior, involves pursuing goals not related to the group and
changing the subject to avoid commitment to the group.
Role ambiguity concerns the discrepancy between the sent role and the received role. Supervisors,
directors, or other group leaders often send (assign) roles to group members in formal groups.
Group members receive roles by being ready and willing to undertake the tasks associated with that
role. Ambiguity results when members are confused about the delegation of job responsibilities.
This confusion may occur because the members do not have specific job descriptions or because the
instructions regarding the task were not clear. Group members who experience ambiguity often
have feelings of frustration and dissatisfaction, which ultimately lead to turnover.
Role conflict occurs when there is inconsistency between the perceived role and role behavior.
There are several different forms of role conflict. Inter-role conflict occurs when there is conflict
between the different roles that people have. For example, work roles and family roles often
compete with one another and cause conflict. Intra-role conflict occurs when individuals must
handle conflicting demands from different sources while performing the tasks associated with the
same role.
GROUP NORMS
Norms are acceptable standards of behavior within a group that are shared by the members of the
group. Norms define the boundaries of acceptable and unacceptable behavior. They are typically
created in order to facilitate group survival, make behavior more predictable, avoid embarrassing
situations, and express the values of the group. Each group will establish its own set of norms that
might determine anything from the appropriate dress to how many comments to make in a meeting.
Groups exert pressure on members to force them to conform to the group's standards. The norms
often reflect the level of commitment, motivation, and performance of the group.
Performance norms determine how quickly members should work and how much they should
produce. They are created in an effort to determine levels of individual effort. They can be very
frustrating to managers because they are not always in line with the organization's goals. Members
of a group may have the skill and ability to perform at higher levels but they don't because of the
group's performance norms. For example, workers may stop working a production machine at 20
minutes before quitting time in order to wash up, even though they produced fewer items that day
than management intended.
Reward-allocation norms determine how rewards are bestowed upon group members. For example,
the norm of equality dictates equal treatment of all members. Every member shares equally so
rewards are distributed equally to everyone. Equity norms suggest that rewards are distributed
according to the member's contribution. In other words, members who contribute the most receive
the largest share of the rewards. Members may contribute through effort, skill, or ability. Social
responsibility norms reward on the basis of need. Members who have special needs therefore
receive the largest share of the reward.
The majority of the group must agree that the norms are appropriate in order for the behavior to be
accepted. There must also be a shared understanding that the group supports the norms.
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Exhibit
Role Ambiguity and Role Conflict
It should be noted, however, that members might violate group norms from time to time. If the
majority of members do not adhere to the norms, then they will eventually change and will no
longer serve as a standard for evaluating behavior. Group members who do not conform to the
norms will be punished by being excluded, ignored, or asked to leave the group.
GROUP COHESIVENESS
Cohesiveness refers to the bonding of group members and their desire to remain part of the group.
Many factors influence the amount of group cohesiveness. Generally speaking, the more difficult it
is to obtain group membership the more cohesive the group. Groups also tend to become cohesive
when they are in intense competition with other groups or face a serious external threat to survival.
Smaller groups and those who spend considerable time together also tend to be more cohesive.
Cohesiveness in work groups has many positive effects, including worker satisfaction, low turnover
and absenteeism, and higher productivity. However, highly cohesive groups may be detrimental to
organizational performance if their goals are misaligned with organizational goals. Highly cohesive
groups may also be more vulnerable to groupthink. Groupthink occurs when members of a group
exert pressure on each other to come to a consensus in decision making. Groupthink results in
careless judgments, unrealistic appraisals of alternative courses of action, and a lack of reality
testing. It can lead to a number of decision-making issues such as the following:
 Incomplete assessments of the problem,
 Incomplete information search,
 Bias in processing information,
 Inadequate development of alternatives, and
 Failure to examine the risks of the preferred choice.
Evidence suggests that groups typically outperform individuals when the tasks involved require a
variety of skills, experience, and decision making. Groups are often more flexible and can quickly
assemble, achieve goals, and disband or move on to another set of objectives. Many organizations
have found that groups have many motivational aspects as well. Group members are more likely to
participate in decision-making and problem-solving activities leading to empowerment and
increased productivity. Groups complete most of the work in an organization; thus, the
effectiveness of the organization is limited by the effectiveness of its groups.
Determinants of group Behavior:
Group Behavior in an organization is quite complex. Group Behavior is influenced by a number of
factors which can be classified as follows:
 External Factors
 Group Member’s Resourcces
 Group structure
 Group Processes
 Group Tasks

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Group and External Factors: There are generally several groups in an organization. Each group is
a system of the organization. It interacts with other sub-systems and the organization system. The
organization system influences the groups through corporate strategy, organization structure, rules
and regulations, organizational culture, physical work environment such as layout, lighting, interior
decoration, seating arrangement, temperature, etc.
Group Members Resources: Group performance depends,to considerable extent, on the member
resources which comprise
(1) Abilities: The performance of a group may be influenced by the task relevant and
intellectual abilities of each of its members. Research evidence indicates that individuals,
who hold crucial abilities for attaining the group’s task tend to be more involved in group
activity, generally contribute more, are more likely to emerge as the group leaders, and are
more satisfied if their talents are effectively utilized by the group. The correlation between
abilities of members and group performance is subject to the impact of such variables as
size of the group, the nature of the task, the actions of its leader and the level of intra group
conflict or cooperation.
(2) Personality Characteristics: The personality traits of group members can shape group
attitudes and behavior. The attributes that have a positive connotation tend to be positively
related to group productivity, morale and cohesiveness. These include traits such as
sociability, self –reliance, and independence .In contrast, negatively evaluated traits such as
authoritatarianism, dominance and manipulation tend to have adverse effect on group
performance in the long run.
Group structure: work groups are not unorganized mobs. They have a structure that shapes the
behavior of members and makes it possible to explain and predict a large proportion of individual
behavior within the group as well as the performance of the group itself.
I. Formal leadership: almost every work group has a formal leader. He or she is
typically identified by titles such as unit or department manager, etc. this leader
can play an important part in the group's success. The leader is responsible for
the direction and goal accomplishment of the group and can reward or punish
individual members when they do not comply with directions, orders or rules of
the group. The leader has the power to make the group members comply with
directives because he has the organization's support.
II. Roles: a set of expected behavior patterns attributed to someone occupying a
given position in a social unit.
a) Role identity: certain attitudes and behavior consistent with a role. These
attitudes and behaviors create role identity.
b) Role perception: an individual's view of how he or she is supposed to act
in a given situation.
c) Role expectations: how others believe a person should act in a given
situation.
d) Role conflict: a situation in which an individual is confronted by divergent
role expectations.

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 III. Norms: norms are acceptable standards of behavior within a group, which are
shared by the group's members.
Common classes of norms
a) Performance norms: it explains how hard members should work, how to
get the job done, their level of output, appropriate levels of tardiness and
the like.
b) Appearance norms: it explains how to appear yourself
c) Social arrangement norms: these norms primarily regulate social
interactions within the group.
d) Allocation of resources norms: these norms cover things like pay
assignment of difficult jobs, and allocation of new tools and equipment.
IV. Status: status is a socially defined position or rank given to groups or group
members by others.
V. Size: the size of a group affect the group's overall behavior but the effect
depends on what dependent variables you look at. One of the most important
findings related to the size of a group has been labeled social loafing.Social
loafing is the tendency for individuals to expend less effort when working
collectively than when working individually.
VI. Composition: most group activities require a variety of skills and knowledge.
Given this requirement it would be reasonable to conclude that heterogeneous
groups-those composed of dissimilar individuals-would be more likely to have
diverse abilities and information and should be more effective.
Group processes: group processes refer to the communication patterns used by members, group
decision processed, leader behavior, power dynamics, and conflict interactions. Group processes are
significant as they can create outputs greater than the sum of their inputs because of the effect
of synergy. The term 'synergy' is drawn from biology that refers to an action of two or more
substances that results in effects that is much more the summation of the individual substances.
Group Tasks: groups are created to accomplish some tasks. Group tasks can range from simple to
complex tasks. Simple tasks are routine and standardized in nature whereas complex tasks tend to
be novel and non-routine. Generally, the more complex task, the more group will benefit from
discussion among members on various alternatives. Of the task is simple, the search for alternatives
and thus discussion between group members would be limited.
Group performance and satisfaction tend to be more on complex tasks than when are simple. This is
because of three reasons:
 The group task requires members to take initiative and use a variety of high-level skills.
 Complex task is perceived as meaningful.
 Task accomplishment would increase the prestige of the group.
Group Cohesiveness:
Group cohesiveness is one of the characteristic features of the groups, which is very important from
behaviouristic point of view. Cohesiveness is the degree to which the group members are attracted
to each other and are motivated to stay in the groups. Cohesiveness defines the degree of closeness
that the members feel with the groups. It is understood as the extent of liking each member has
towards others in the group and how far everyone wants to remain as a member of the group.
“Cohesiveness refers to the extent of unity ‘in the group and is reflected in members’ conformity to
the norms of the group, feeling of attraction for each other and wanting to be co-members of the
group.” Attraction, cohesiveness and conformity are all intertwined. The more the members feel
attracted to the group, the greater will be the group cohesiveness. The greater the cohesiveness, the
greater the influence of the group members to persuade one another to conform to the group norms.
The greater the conformity, the greater the identity of the members to the group and the greater the
group cohesiveness.
Group cohesiveness has only positive consequences.

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1. More Participation:
Higher the degree of group cohesiveness, closer will be the interpersonal relationships among the
members. As a result members will participate actively in group affairs and activities. As the
members consider the group as their own, just like a family, they will help other members of the
group in times of need which will further strengthen their bonds. The turnover of members will be
very low. If possible, all the members attend the group meetings and group activities and take
active part in discussions relating to preparing of strategies for achieving individual and group
goals.
2. More Conformity:
One of the factors which influence cohesiveness is similarity of attitudes and values. As a result,
members tend to like each other and perceive themselves as similar. These characteristics lead
members to be relatively dependent on the group for satisfaction and, thus, they are susceptible to
being influenced. For example, if any member is getting involved in organisational politics for
enhancing his personal goals, the group might put social pressure on him and make him comply
with the group norms.
3. More Success:
Cohesiveness and success are mutually dependent upon each other. Cohesiveness makes the goal
achievement easier and goal achievement adds to success. The reason for this relationship is that
higher degree of cohesiveness leads to high degree of communication, participation and conformity
to group norms. Such coordinated efforts result in agreement about the goals to be achieved, the
methods of achieving them and finally achieving the final goals.
4. More Communication:
Members of cohesive groups communicate with each other more than the members of non-cohesive
groups. Because the members share common ideologies, goals, backgrounds or attitudes, they are
inclined to greater communicativeness. Such communication is reinforcing as it tends to foster and
cement positive social relations as well as depth in personal relationships.
5. More Personal Satisfaction:
Members of cohesive groups are more satisfied as compared to members of non-cohesive groups.
Thus is understandable because if members are not satisfied they will leave the group and join some
other group. Members are more satisfied due to so many factors which include friendliness, respect,
support, achievement, protection and a feeling of security.
6. High Productivity:
Cohesiveness may contribute to increased productivity because:
(i) People in cohesive groups experience fewer work related anxieties and tensions
(ii) Highly cohesive groups tend to have lower absenteeism and turnover and
(iii) Cohesiveness decreases productivity differences among groups.
Concept and Nature of Team:
A team becomes more than just a collection of people when a strong sense of mutual commitment
creates synergy, thus generating performance greater than the sum of the performance of its
individual members.One of the many ways for a business to organize employees is in teams. A
team is made up of two or more people who work together to achieve a common goal.
Teams offer an alternative to a vertical chain-of-command and are a much more inclusive approach
to business organization; Teams are becoming more common in the business world today. Effective
teams can lead to an increase in employee motivation and business productivity.
The team can be defined by following ways too:
 A group of people who compete in a sport, game, etc., against another
 A group of people who work together.
 A group of two or more animals used to pull a wagon, cart, etc.
 A number of persons forming one of the sides in a game or contest.
 A number of persons associated in some joint action a team of experts.
Characteristics of Effective Teams
While no team exists without problems, some teams particularly those who have learned to counter
negative team dynamics seem to be especially good at preventing many issues.
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 We have put together a list of what may be considered as the most essential ingredients for creating
effective teams:
 Ideal Size and Membership.
 Fairness in Decision-Making.
 Creativity.
 Accountability.
 Purpose and Goals.
 Action Plans.
 Roles & Responsibilities.
 Information Sharing.
 Good Data.
 Meeting Skills and Practices.
 Decision Making.
 Participation.
 Ground Rules.
 Clear Roles.
 Accepted Leadership.
 Effective Processes.
 Solid Relationships.
 Excellent Communication.
Ideal Size and Membership
The team should be the minimum size needed to achieve the team’s goals and include members
with the right mix of skills and talents to get the job done.
Fairness in Decision-Making
Ideally, teams will make decisions by consensus. When consensus is not feasible, teams will use
fair decision-making procedures that everyone agrees on.
Creativity
Effective teams value original thinking and will produce new and unique approaches to
organizational problems.
Accountability
Members must be accountable to each other for getting their work done on schedule and following
the group’s rules and procedures.
Purpose and Goals
Every team member must clearly understand the purpose and goals for bringing this particular
group of individuals together.
Action Plans
Help the team determine what advice, assistance, training, materials, and other resources it may be
needed.
Roles & Responsibilities
Teams operate most efficiently if they tap everyone’s talents. All members understand their own
duties and know who is responsible for what.
Information Sharing
Effective discussions depend upon how well information is passed between team members –
hoarding information cannot be tolerated. A proliferation of new technologies has made this easier
than it has ever been.
Good Data
With information sharing comes the requirement for good data. Teams that use good data for
problem-solving and decision making have a much easier time arriving at permanent solutions to
problems.
Meeting Skills and Practices
All team members must commit to a common method for conducting meetings. There is no ‘best’
method, but everyone must be on the same page.

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 Decision Making
This is really a subset of the ‘Skills & Practices’. There is no ‘one way’ to reach a decision, but it
must be a recognized path and transparent to all team members.
Participation
Since every team member has a stake In the group’s achievements, everyone should participate in
discussions and decisions, share a commitment to the team’s success, and contribute their talents.
Ground Rules
Groups invariably establish ground rules (or “norms”) for what will and will not be tolerated within
the group. Many members will want to skip the laying of ground rules, but in the long run
investment up front will head off major issues down the road.
Clear Roles
How we apportion the team purpose will in large measure determine the- team synergy. High-
performing teams leverage individuals’ different roles against collective work products.
Therefore, it is essential that every team member is clear about his or her own role as well as the
role of every other team member. Roles are about the design, division, and deployment of the work
of the team. While the concept is compellingly logical, many teams find it challenging to
implement. There is often a tendency to take role definition to extremes or not to take it far enough.
Accepted Leadership
High-performance teams need competent leadership. When such leadership is lacking, groups can
quickly lose their way. Whereas a common, compelling task might be the biggest contributor to
team effectiveness, inadequate team leadership is often the single biggest reason for team
ineffectiveness.
In most organizational settings, it is the leader who frames the team purpose and facilitates
discussions on its meaning and nature. The vision, commitment, and communication of the leader
govern the optics through which individual team members see the team purpose and become
aligned to it.
Effective Processes
Teams and processes go together. It would never occur to a surgical team, construction crew, string
quartet, or film crew to approach tasks without clearly defined processes. The playbook of a
football team or the score sheet of a string quartet clearly outlines the necessary processes.
Business teams have processes as well, which might include solving problems, making decisions,
managing a meeting, or designing a product.
Solid Relationships
One of the biggest misperceptions in the world of teams and teamwork is the belief that to work and
communicate effectively, team members must be friends.
In fact, the diversity of skills, experience, and knowledge needed to divide tasks effectively almost
precludes high levels of friendship, which is most often based on commonality — of the way
people think, their interests, or beliefs.
Excellent Communication
Communication is the very means of cooperation. One of the primary motives of companies
choosing to implement teams is that team-based organizations are more responsive and move faster.
A team cannot move faster than it communicates.
Fast, clear, timely, accurate communication is a hallmark of high levels of team performance. High-
performance teams have mastered the art of straight talk; there is little motion wasted through
misunderstanding or confusion.
Types of Team
There are various types of teams and their functions and objectives are also different. The types of
teams are discussed are below:
 Executive Team,
 Command Team,
 Project Teams,
 Advisory Teams,
 Work Teams,
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 Action Teams,
 Sports Teams,
 Virtual Teams,
 Work Teams,
 Self-Managed Team,
 Parallel Teams,
 Management Teams,
 Managed Team.
Executive Team
An executive team is a management team that draws up plans for activities and then directs these
activities.
An example of an executive team would be a construction team designing. Blueprints for a new
building, and then guiding the construction of the building using these blueprints.
Command Team
The goal of the command team is to combine instructions and coordinate action among
management. In other words, command teams serve as the “middle man” in the task.
For instance, messengers on a construction site, conveying instructions from the executive team to
the builders would be an example Of a command team.
Project Teams
A team used only for a defined period of time and for a separate, Concretely definable purpose
often becomes known as a project team. This category of teams includes negotiation, compassion
and design team subtypes.
In general, these types of teams are multi-talented and composed of individuals with expertise in
many different areas. Members of these teams might belong to different groups, but receive an
assignment to activities for the same project.
Advisory Teams
Advisory teams make suggestions about a final product. For instance, a quality control group on an
assembly line would be an example of an advisory team. They would examine the products
produced and make suggestions about how to improve the quality of the items being made.
Work Teams
Work teams are responsible for the actual act of creating tangible products and services. The
actual workers on an assembly line would be an example of a production team, whereas
waiters and waitresses at a diner would be an example of a service team.
Action Teams
Action teams are highly specialized and coordinated teams whose actions are intensely focused on
producing a product or service. A football team would be an example of an action team. Other
examples occur in the military, paramedics, and transportation (e g., a flight crew on an airplane).
Sports Teams
A sports team is a group of people which play sports, often team sports together. Members include
all players (even those who are waiting their turn to play) as well as support members such as a
team manager or coach.
Virtual Teams
Developments in information and communications technology have seen the difference of the
virtual work team. A virtual team is a group of people who work interdependently and with shared
purpose across space, time, and organizational boundaries using technology to communicate and
collaborate.
Virtual team members can be located across a country or across the world, rarely meet face-to-face,
and include members from different cultures.
Work Teams
Work teams (also referred to as production and service teams) are continuing work units
responsible for producing goods or providing services for the organization. Their membership is
typically stable, usually full-time, and well-defined. These teams are traditionally directed by a
supervisor who mandates what work is done, who does it, and in what manner is it executed.
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Self-Managed Team
Self-managed work teams (also referred to as autonomous work groups) allow their members to
make a greater contribution at work and constitute a significant competitive advantage for the
organization.These work teams determine how they will accomplish the objectives they are
mandated to achieve and decide what route they will take to complete the current assignment.
Self-managed work teams are granted the responsibility of planning scheduling, organizing,
directing, controlling and evaluating their own work process.
Parallel Teams
Parallel teams (also referred to as advice and involvement teams) pull together people from
different work units or jobs to perform functions that the regular organization is not equipped to
perform well.
These teams are given limited authority and can only make recommendations to individuals higher
in the organizational hierarchy.
Management Teams
Management teams (also referred to as action and negotiation teams) are responsible for the
coordination and direction of a division within an institution or organization during various
assigned projects and functional, operational and/or strategic tasks and initiatives.
Management teams are responsible for the total performance of the division they oversee with
regards to day-to-day operations, a delegation of tasks and the supervision of employees.
Managed Team
Managed groups sometimes also work together as a team on a single, focused objective or task. In
such groups, people may come from diverse background, with each bringing a specialized skill to
the team.

Differences between Groups and Teams

Groups Teams
Individual accountability. Individual and mutual accountability.

Individuals come together to Frequently come together for discussion, decision

share perspectives. making, problem-solving, and planning.
Focus on individual goals. Focus on team goals.
Produce individual work Produce collective work products.
products.
Define individual roles, Define individual roles, responsibilities, and tasks
responsibilities, and tasks. to help the team do its work; often share and rotate
them.
Concerned with one’s own Concerned with the outcomes of everyone and
outcome and challenges. challenges the team faces.
Purpose, goals, approach to work Purpose, goals, approach to work shaped by the
shaped by the manager. team leader with team members.
The leader dominates and The leader acts as a facilitator.
controls the group.
The leader is apparent and will The members have active participation in the
conduct the meeting. discussions and eventual outcome.
The leader usually assigns work The team members decide on the disbursements of

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 to the members. work assignments.
Groups do not need to focus on Teams require the coordination of tasks and
specific outcomes or a common activities to achieve a shared aim.
purpose.
Individuals in a group can be Team members are interdependent since they bring
entirely disconnected from one to bear a set of resources to produce a common
another and not rely upon the outcome.
fellow members at all.
Groups are much more Team members’ individual roles and duties are
informal roles do not need to be specified and their ways of working together are
assigned and norms of behavior defined.
do not need to develop.
Common factors that lead to an effective Team
Many studies have been conducted in an attempt to isolate the factors that contribute most directly
to team success. Common items identified include careful composition, information sharing, clear
direction and measurable goals for accountability, sufficient resources, integration and
coordination, flexibility and innovativeness, and the stimulation of openness to learning.
Here focus on 4 major factors of an effective team:
1. Supportive Environment.
2. Skills and Role Clarity.
3. Super Ordinate Goals.
4. Team Rewards.
Supportive Environment
Teamwork is most likely to develop when management builds a supportive environment for it.
Creating such an environment involves encouraging members to think like a team, providing
adequate time for meetings, and demonstrating faith in members’ capacity to achieve.
Supportive measures such as these help the group take the necessary first steps toward teamwork.
Since these steps contribute to further cooperation, trust, and compatibility, supervisors need to
develop an organizational culture that builds these conditions.
Skills and Role Clarity
Team members must be reasonably qualified to perform their jobs and have the desire to cooperate.
Beyond these requirements, members can work together as a team only after all the members of the
group know the roles of all the others with whom they will be interacting.
When this understanding exists, members can act immediately as a team on the basis of the
requirements of that situation, without waiting for someone to give an order. In other words, team
members respond voluntarily to the demands of the job and take appropriate actions to accomplish
team goals.
Super Ordinate Goals
A major responsibility of managers is to try to keep the team members oriented toward their overall
task. Sometimes, unfortunately, an organization’s policies, record-keeping requirements, and
reward systems may fragment’ individual efforts and discourage teamwork.
Team Rewards

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 Another element that can stimulate teamwork is the presence of team rewards. These may be
financial, or they may be in the form of recognition. Rewards are most powerful if they are valued
by the team members, perceived as possible to earn, and administered contingent on the group’s
task performance. In addition, organizations need to achieve a careful balance between encouraging
and rewarding individual initiative and growth and stimulating full contributions to team success.
Innovative (nonfinancial) team rewards for possible behavior may include the authority to select
new members of the group, make recommendations regarding a new supervisor, or propose
discipline for team members.
4 Key components of effective team:
The key components making up effective teams can be subsumed into 4 general categories:
1. Work Design: The first category is work design.
2. Composition: The second relates to the team’s composition.
3. Context: Third are the resources and other contextual influences that make teams effective.
4. Process: Finally, process variables reflect those things that go on in the team that influences

the effectiveness.

Team Developments Models

The Punctuated Equilibrium Model
According to this model, research has specifically found that:
(i) The first meeting sets the group’s directions
(ii) The first phase of group activity is one of inertia
(iii) A transition takes place at the end of the first phase which occurs exactly when the group has
used up half its allotted time.
(iv)The transition initiates major changes.
(v) A second phase of inertia follows the transition.
(vi)The group’s last meeting is characterized by markedly accelerated activity.
These findings are shown in the following diagram:

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The first meeting sets the group’s direction. The behavioural patterns and assumptions through
which the group will approach its project emerge in this meeting. Once set, these directions become
‘written in stone’ and are unlikely to be reexamined throughout the first half of the group’s life.
This is a period of inertia; that is the group tends to stand still or becomes locked into a fixed course
of action.
Phase 1, the group is incapable of acting on any new insights which may be gained by it. At the
end of Phase 1, transition takes place and is characterized by a burst of changes, dropping of old
patterns, and adoption of new perspectives. The transition sets the stage for Phase 2.
Phase 2 is a new equilibrium or period of inertia. In this stage, the group executes plans created
during the transition period. The group’s last meeting is characterized by a final burst of activity to
finish its work.
To use the terminology of five stage group development model, in the punctuated-equilibrium
model, the group begins by combining the forming and norming stages then goes through a period
of low performing, followed by storming, then a period of high performing and finally adjourning.
Bruce Tuckman Team Development Model
The Forming – Storming – Norming – Performing team development model was first proposed by
Bruce Tuckman in 1965, who maintained that these phases are all necessary and inevitable in order
for the team to grow, to face up to challenges, to tackle problems, to find solutions, to plan work,
and to deliver result.This team development model has become the basis for subsequent models.Just
as infants develop in certain ways during their first months of life, many experts argue that groups
develop in a predictable manner.
The Five-Stage Team Development Model
One of the most popular team development models identifies five stages (See Figure Below)
through which groups develop into effective teams:

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 THE FIVE-STAGE TEAM DEVELOPMENT MODEL
Forming.During this initial stage the members get acquainted with each other and
understand the scope of the project. They begin to establish ground rules by trying to find out
what behaviors are acceptable with respect to both the project (what role they will play, what
performance expectations are) and interpersonal relations (who’s really in charge).
This stage is completed once members begin to think of themselves as part of a group.
Storming.As the name suggests, this stage is marked by a high degree of internal conflict.
Members accept that they are part of a project group but resist the constraints that the
project and group put on their individuality.
There is conflict over who will control the group and how decisions will be made. As these
conflicts are resolved, the project manager’s leadership becomes accepted, and the group moves to
the next stage.
Norming. The third stage is one in which close relationships develop and the group demonstrates
cohesiveness. Feelings of camaraderie and shared responsibility for the project are heightened.
The norming phase is complete when the group structure solidifies and the group establishes a
common set of expectations about how members should work together.
Performing. The team operating structure at this point is fully functional and accepted.
Group energy has moved from getting to know each other and how the group will work
together to accomplishing the project goals.
Adjourning. For conventional work groups, performing is the last stage of their team
development. However, for project teams, there is a completion phase. During this stage, the
team prepares for its own disbandment.
The Five-Stage Team Development Model Implications
This team development model has several implications for those working on project teams.
 The first is that this team development model provides a framework for the group to
understand its own development. Project Managers have found it useful to share the model
with their teams. It helps members accept the tensions of the storming phase, and it directs
their focus to moving toward the more productive phases.
 Another implication of the five-stage team development model is that it stresses the
importance of the norming phase, which contributes significantly to the level of productivity
experienced during the performing phase. Project managers, as we shall see, have to take
active role in-shaping group norms that will contribute to ultimate project success.
How to use this knowledge
Team Selection
Competence and potential will always be the first criteria for selection of individual team members,
often followed by availability. However, if you want a high performing team then attention should
be put onto the individuals working preferences to ensure cultural fit and balance.
This can be done in a number of ways including psychometric profiling – MBTI, TMS etc there are
many tools available. Selection should not be the based wholly on a profile but it is very useful
when trying to choose between equally competent candidates.
Understanding Motivation
Motivation is important to ensure that individuals operate on a basis of commitment rather than
compliance, illustrated by the Y model. Compliance usually results in the bare minimum standard
and is often reluctantly given and short term. Commitment however results in individuals being
engaged and willing to give their very best for the sake of the project.
Based on Maslow’s Hierarchy of needs it is important to create an environment where individuals
are able to experience the top 2 levels: Esteem and Self-actualization.
 Esteem: Self esteem, Confidence, Achievement, Respect for Others, Respect by Others
 Self Actualization: Morality, Creativity, Spontaneity, Problem Solving, Lack of Prejudice,
Acceptance of Facts

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 Anchors to illustrate that individuals are motivated by different things – power, authority, making a
difference, being the best, security, challenge etc. Money is not the highest motivator for many
people.
Team Building
Team building is a collective term for various types of activities used to enhance social relations
and define roles within teams, often involving collaborative tasks. It is distinct from team training,
which is designed by a combine of business managers, learning and development/OD (Internal or
external) and an HR Business Partner (if the role exists) to improve the efficiency, rather than
interpersonal relations.
Many team-building exercises aim to expose and address interpersonal problems within the group.
Team building is one of the most widely used group-development activities in organizations. A
common strategy is to have a "team-building retreat" or "corporate love-in," where team members
try to address underlying concerns and build trust by engaging in activities that are not part of what
they ordinarily do as a team.
Types of Team Building
1. Activity-Based
Activity- based team building allows your team to bond as they work together to achieve a common
goal. This type of team building is often designed to take your team out of their normal comfort
zone to explore various environments and challenges. Activity-based team building can be very
rewarding as teams learn to work together and trust one another. This type of team building can be
broken down into two sub-categories.
 Physical Activities – Physical activities get your team out of their everyday environment
and simultaneously get them up and moving. If you have an active group and you would like to
bring out their competitive side, a physical activity is a perfect fit. Common physical activity
options include sporting games such as dodgeball, kickball, softball, bowling, golf, laser tag,
canoeing, go kart races, trampoline parks, and scavenger hunts.
 Intellectual Activities – Challenge your team to think strategically and work together
towards a common goal with an intellectual activity. Opposed to focusing on physical ability,
intellectual or problem-solving activities focus on the thought processes of your team. Most
problem-solving activities are designed to bring a team’s working dynamics to life. In turn, teams
can acknowledge strengths and weaknesses to work on as they move forward. Escape the room
challenges, board game tournaments, brain teasers, and puzzles are just a few examples of
intellectual activities.
2. Skill-Based
This type of team building is tied directly to your team’s performance and is meant to teach your
team a skill that they can immediately implement into their everyday lives. Sales, leadership,
negotiation, and conflict management training are all examples of skill-based team building.
Another example is personality based training. This unique training can teach your team about
themselves as individuals and about their colleagues as they learn to use one personality styles to
work more effectively together.
3. Value-Based
Tie your team building activity into your organizations’ corporate social responsibility initiatives
through value-based team building. Team members bond over the memorable experience of giving
back to those in need. This type of team building is philanthropic in nature and provides your team
with a memorable experience. The team will leave with a sense of achievement and an
understanding that they can work together to do something great. Spend time cooking a meal at a
local shelter, run a toy or food drive and drop the donation off together, or build and donate
bicycles to your local youth organization!
4. Team Bonding
In the today’s busy world, you can often find team members who just want the opportunity to relax
(especially after a busy time or stressful project). Social networking gives teams the opportunity to
relax and helps colleagues build stronger working relationships. Allow your team to get to know
each other more personally by giving them a team bonding experience. These types of team
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building activities are often just for fun and do not develop a specific skill. Take the team to a great
restaurant or local pub to enjoy music and drinks.
Twelve Cs for Team Building
Executives, managers and organization staff members universally explore ways to improve
business results and profitability. Many views team-based, horizontal, organization structures as the
best design for involving all employees in creating business success.No matter what you call your
team-based improvement effort: continuous improvement, total quality, lean manufacturing or self-
directed work teams, you are striving to improve results for customers. Few organizations,
however, are totally pleased with the results their team improvement efforts produce. If your team
improvement efforts are not living up to your expectations, this self- diagnosing checklist may tell
you why. Successful team building, that creates effective, focused work teams, requires attention to
each of the following.
•Clear Expectations: Has executive leadership clearly communicated its expectations for the
team's performance and expected outcomes? Do team members understand why the team was
created? Is the organization demonstrating constancy of purpose in supporting the team with
resources of people, time and money? Does the work of the team receive sufficient emphasis as a
priority in terms of the time, discussion, attention and interest directed its way by executive leaders?
•Context: Do team members understand why they are participating on the team? Do they
understand how the strategy of using teams will help the organization attain its communicated
business goals? Can team members define their team's importance to the accomplishment of
corporate goals? Does the team understand where its work fits in the total context of the
organization's goals, principles, vision and values?
•Commitment: Do team members want to participate on the team? Do team members feel the team
mission is important? Are members committed to accomplishing the team mission and expected
outcomes? Do team members perceive their service as valuable to the organization and to their own
careers? Do team members anticipate recognition for their contributions? Do team members expect
their skills to grow and develop on the team? Are team members excited and challenged by the
team opportunity?
•Competence: Does the team feel that it has the appropriate people participating? (As an example,
in a process improvement, is each step of the process represented on the team?) Does the team feel
that its members have the knowledge, skill and capability to address the issues for which the team
was formed? If not, does the team have access to the help it needs? Does the team feel it has the
resources, strategies and support needed to accomplish its mission?
•Charter: Has the team taken its assigned area of responsibility and designed its own mission,
vision and strategies to accomplish the mission. Has the team defined and communicated its goals;
its anticipated outcomes and contributions; its timelines; and how it will measure both the outcomes
of its work and the process the team followed to accomplish their task? Does the leadership team or
other coordinating group support what the team has designed?
•Control: Does the team have enough freedom and empowerment to feel the ownership necessary
to accomplish its charter? At the same time, do team members clearly understand their boundaries?
How far may members go in pursuit of solutions? Are limitations (i.e. monetary and time resources)
defined at the beginning of the project before the team experiences barriers and rework? Is the
team’s reporting relationship and accountability understood by all members of the organization?
Has the organization defined the team’s authority? To implement its plan? Is there a defined review
process so both the team and the organization are consistently aligned in direction and purpose? Do
team members hold each other accountable for project timelines, commitments and results? Does
the organization have a plan to increase opportunities for self-management among organization
members?
•Collaboration: Does the team understand team and group process? Do members understand the
stages of group development? Are team members working together effectively interpersonally? Do
all team members understand the roles and responsibilities of team members? team leaders? team
recorders? Can the team approach problem solving, process improvement, goal setting and
measurement jointly? Do team members cooperate to accomplish the team charter? Has the team
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established group norms or rules of conduct in areas such as conflict resolution, consensus decision
making and meeting management? Is the team using an appropriate strategy to accomplish its
action plan?
•Communication: Are team members clear about the priority of their tasks? Is there an established
method for the teams to give feedback and receive honest performance feedback? Does the
organization provide important business information regularly? Do the teams understand the
complete context for their existence? Do team members communicate clearly and honestly with
each other? Do team members bring diverse opinions to the table? Are necessary conflicts raised
and addressed?
•Creative Innovation: Is the organization really interested in change? Does it value creative
thinking, unique solutions, and new ideas? Does it reward people who take reasonable risks to make
improvements? Or does it reward the people who fit in and maintain the status quo? Does it provide
the training, education, access to books and films, and field trips necessary to stimulate new
thinking?

Effective Team Management

1. Be transparent
Transparent working environments have been found to make teams more accountable, happy and
creative. Transparent environments help to develop a feeling of mutual respect between team
members and team leaders. Via open and consistent communication, transparent and authentic
workplaces help employees to feel secure in their positions. In turn, team members feel freer to
contribute ideas and suggestions, enhancing creativity.

2. Keep communicating
The basis of a cooperative and productive team is good communication. The aim is to create an
environment in which team leaders feel able to provide honest and constructive feedback, and
team members feel confident to voice concerns and communicate with one another. For teams with
members working remotely, Google Hangouts can provide an ideal way to ensure some face-to-
face time is achieved

3. Provide valuable feedback

Providing feedback to team members is one of the best ways you can support them to develop
professionally and personally. Even if you have no negative feedback to give, make sure to hold
regular opportunities to check-in. This way, you can provide advice on how you feel your team
members are progressing and could grow further. If there are any areas of work that you feel could
be improved, these discussions also provide a good opportunity to share your constructive
feedback.

4. Encourage collaboration
On your team, there will likely be a whole bunch of diverse skills. Make sure these different skill
sets are utilized by ensuring everyone is aware of ongoing projects. That way, team members can
jump in to collaborate wherever they feel they can bring value.

5. Trust your team to do their job

Companies hire competent staff for a reason and effective team management shouldn’t mean
micro-management. If you’ve hired staff for a specialist area like programming, you need to know
when to just leave them to do their job.

6. Prevent team burn-out

As a team leader, you’re in a great position to set positive boundaries of work, play, and relaxation.
It is the responsibility of employers to set the precedent about when and where team members
should be switching off from work entirely. This could mean, for example, by not expecting team
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members to check emails after working hours. Of course, this can be difficult. Particularly in teams
where members work flexibly and might prefer to start early or work late, to save time elsewhere.
However, encouraging team members to set themselves some working limits, to sleep well
and avoid burn-out, is important.

Chapter 13
Organization Culture and Change Management
Organizational culture is the collection of values, expectations, and practices that guide and inform
the actions of all team members. Think of it as the collection of traits that make your company what
it is. A great culture exemplifies positive traits that lead to improved performance, while a
dysfunctional company culture brings out qualities that can hinder even the most successful
organizations.
Don’t confuse culture with organizational goals or a mission statement, although both can help
define it. Culture is created through consistent and authentic behaviors, not press releases or policy
documents. You can watch company culture in action when you see how a CEO responds to a
crisis, how a team adapts to new customer demands, or how a manager corrects an employee who
makes a mistake.
Qualities of a great organizational culture
Every organization’s culture is different, and it’s important to retain what makes your company
unique. However, the cultures of high-performing organizations consistently reflect certain qualities
that you should seek to cultivate:
 Alignment comes when the company’s objectives and its employees’ motivations are all
pulling in the same direction. Exceptional organizations work to build continuous
alignment to their vision, purpose, and goals.
 Appreciation can take many forms: a public kudos, a note of thanks, or a promotion.
A culture of appreciation is one in which all team members frequently provide
recognition and thanks for the contributions of others.
 Trust is vital to an organization. With a culture of trust, team members can express
themselves and rely on others to have their back when they try something new.
 Performance is key, as great companies create a culture that means business. In these
companies, talented employees motivate each other to excel, and, as shown above, greater
profitability and productivity are the results.
 Resilience is a key quality in highly dynamic environments where change is continuous. A
resilient culture will teach leaders to watch for and respond to change with ease.
 Teamwork encompasses collaboration, communication, and respect between team
members. When everyone on the team supports each other, employees will get more done
and feel happier while doing it.
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  Integrity, like trust, is vital to all teams when they rely on each other to make decisions,
interpret results, and form partnerships. Honesty and transparency are critical components of
this aspect of culture.
 Innovation leads organizations to get the most out of available technologies, resources, and
markets. A culture of innovation means that you apply creative thinking to all aspects of
your business, even your own cultural initiatives.
 Psychological safety provides the support employees need to take risks and provide honest
feedback. Remember that psychological safety starts at the team level, not the individual
level, so managers need to take the lead in creating a safe environment where everyone feels
comfortable contributing.
CONFLICT:
The word “conflict” tends to generate images of anger, fighting, and other ugly thoughts that
leave people bruised and beaten. Conflict isn’t uncommon in the workplace, and it isn’t
always good. But it isn’t always a bad thing, either.
Conflict is a perception—meaning it only really exists if it’s acknowledged by the parties that are
experiencing it. If Teresa and Heitor have a heated discussion about the path the company should
take to win more customers, but they walk away from the disagreement unfazed and either don’t
think about the issue again or think the issue is resolved, then no conflict exists. If Teresa and
Heitor both walk away feeling that their ideas weren’t heard by the other, that the other is wrong,
that the other needs to come around to a better point of view . . . then conflict exists.
Teresa’s and Heitor’s situation could be viewed as a competition rather than conflict. Some people
use competition and conflict interchangeably; however, while the terms are similar, they aren’t
exactly synonymous. Competition is a rivalry between two groups or two individuals over an
outcome that they both seek. In a competition there is a winner and a loser. Teresa might want to
attract more customers by a direct mail campaign and Heitor may be championing a television
campaign. They may be competing for a finite amount of marketing budget, and if Heitor’s idea is
rewarded, then he is the competition’s winner. Teresa is the loser. They may shake hands after the
fact, shrug it off and go on to compete another day.
Conflict is when two people or groups disagree, and the disagreement causes friction. One party
needs to feel that the other’s point of view will have a negative effect on the final outcome. Teresa
may feel strongly about direct mail campaigns because she’s done several with great results. Heitor
may feel television is the way to go because no one reads their mail anymore—it just gets thrown
out! Each of them may feel that the other’s approach is a waste of the marketing budget and that the
company will not benefit from it. Teresa will jump in and prevent Heitor from trying to further his
goal for television advertising, and Heitor will do the same to Teresa.
Conflict can be destructive to a team and to an organization. Disadvantages can include:
 Teams lose focus on common goals
 Winning eclipses any other goals of the group
 Judgement gets distorted
 There is a lack of cooperation
 Losing members lack motivation to continue participation
But if managed well, conflict can be healthy and spark creativity as parties try to come to
consensus. Some of the benefits of conflict include:
 High energy
 Task focus
 Cohesiveness within the group
 Discussion of issues
Managing Change:
WHAT IS ORGANIZATIONAL CHANGE?
Organizational change is a process in which an organization is changing their process,structure, procedures, and
strategies, methods of operations or technological changes whichaffects the operations of the internal environment
within the organization. Organizationalchanges can be permanent changes done inside the organization or a change
for a specifictime period.
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What Is Organizational Change? - Theory & Example | Study.com. 2015
Increasing performance of an organization is the main focus of an organizationalchange
(Goodman and Rousseau, 2004).
The resistance to change has generally beenaccepted as an important element that can create an impact on the
productivity of anorganizational adjusted efforts
(Sikora, Beaty and Forward, 2004).
Unluckily, several corporations be unsuccessful to achieve the consequences of changefrom the time when their
employees resist
(Ness and Cucuzza, 1995).
That resistance tochange is undesirably associated to change consequence seems to be unquestionablydefinite. But,
practically recognized saying is that employees resisting to change has lately arisen under test
(Jansen, 2000).
Usually organizational change is in concern of going through a revolution. This can be asmall change in the
operations of the management such as:
Adding a new employee,
Modifying a program,
Implementing a new technology etc.Or a huge change implemented such as
Change in mission of the organization,
Restructuring operations,
Huge changes in technology,
Merging of organizations and partnerships,
Re-engineering programs etc.
Organizational changes shouldn’t be done for the sake of change. It follows a strategy
to achieve some overall goal. Usually organizational changes are triggered by exterior environmental forces.

REASONS FOR THE RESISTANCE TO ORGANIZATIONAL CHANGE

Individual Change:
Some reasons for individual resistance for change with in the organizational management includes.
SELECTIVE PERCEPTION
Selective perception is a result of presenting an exceptional image of the real world based on the clarifications and
understandings of situations in terms of the individual
management’
s view. This is the main reason to create an unfair view of a specific circumstance of an organizational change. This
kind of observation of an employee canfit very easily to their own view of reality which can cause resistance to
change.Example: Trade Unionist is most likely to have a typecast view of the organizational management as an
undependable team so that they compete against any management changes. Managers of the organization who are
aware of various theories and ideas will classify such employees as: they are previously trained and no need to be
worried or that they are of no practical worth to the organizations and are unwanted.
HABIT
Management and employees have a tendency to answer back to circumstances in a well-known and familiarized
way. Habits of employees may serve as a means of comfort and security which provides a guidance for easy decision
making of the management. Itis not easy for the management to change the habits of employees easily to get used to
new organizational changes. Example: Increase in work hours employees will resist to adopt to this change for there
as on that of habit, it tough to amend to the new times.

SECURITY IN THE PAST

There is an inclination for particular employees to cling into a sense of safekeeping int he earlier procedures. When
the employees are at a times of frustrating and a difficult situation while facing with new and unexperienced concepts
and procedures the employees will seek help from the past. Employees will tend to maintain old and familiar ways.
Example: in Government organizations, executives habitually have a tendency of using well-known and traditional
mechanisms which are tried and trusted procedure.

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INCONVENIENCE OR LOSS OF FREEDOM
There will be resistance if the employees or the officials see the particular as an inconvenient technique which will
make the work life more problematic by dropping the free will of action of the employee.

ECONOMIC IMPLICATIONS
Employees are more likely to resist the organizational changes if they find that their compensation or rewards are
bargained directly or indirectly which will bring more effort with an unchanged payment level. People have a
tendency to create patterns of functioning and an assigned concentration in maintaining the position quo.

FEAR OF UNKNOWN
Changes which challenge employees with the unfamiliar techniques have a tendency to give rise to anxiety. Various
changes in an organization creates an amount of uncertainly for the employees. Example: Introduction of new
technology or a new technique of working. An employee at this situation will resist using of new implementation’s
due to uncertainty over the new technique and added duties and responsibilities.

ORGANIZATIONAL RESISTANCE
Some reasons for individual resistance for change with in the organizational management includes 06 factors.

ORGANIZATIONAL CULTURE
The culture of an organization develops and changes over time. The unescapable
nature of the culture is “how things are done around here” has an important impact on
the organizational operations and performances of the staff. An unproductive and moretraditional culture will create
lack of suppleness for the approval of an organizationalchallenge.

MAINTAINING STABILITY
The formal organizational structure with a divided work load which gives insufficientdefinition of duties and
responsibilities assigned with rules, procedures and workingconditions will increase the resistance of employees for
organizational change. Amachine-like governmental organizational structure is very resistant for
organizationalchange.
Resistance to change, Management and Organizational behavior, 2005, p. 914
Example:cloke and Goldsmith refer to. ‘The command and control relationship between managers and
employees of the organization generates blindness that creates frustration and reduce the likelihood for organizational
change’.
INVESTING IN RESOURCES
Organizational changes may consume a large amount of resources which can beinvested in other functional areas and
strategies. Implementing of new assets such asnew technology, machinery and employees will consume a high
amount of resources.Example: car manufacturing in a socio-technical approach will not be affordable by anordinary
organization.

MANAGEMENT OF ORGANIZATIONAL CHANGE

Employees are resistant to change. Therefore it is the responsibility of the managementto understand the reasons and
nature of their resistance and trigger clear descriptivestrategies for the employees to be comfortable with
organizational changes. Asuccessful management change is the very important as a managerial responsibility
foreconomic performances and competitiveness. Innovative ideas of the managementshould not be harmed by the
resistance to change of employees of the organization.
When managing change in organization it is very important to make all the levelsof management and employees
of the organization to agree for a commonchange without conflicts.
The management of the organization should clearly communicate the vision ofthe organization to the employees
and the mission they are going to achievethrough the organizational change. This reflect a strong executive leadership
ofthem managers.
Along with the organizational change a strategy should be implemented toeducate the employees about their day
to day activates after the organizationalchange.

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It is the responsibility of the management to measure the degree of success ofthe specific organizational change.
And they should have an idea for bothsuccessful and unproductive results.

Organizational Change Management (OCM) –

Christensen and Over dorf creates an agenda for managers to understand the types of changes the organizations
are capable of and incapable of handling. Below three points explain the three elements affecting the organizational
responses to various types of change that an organization is capable of handling or cannot
Resources
–resources with a high quality will upsurge an organization’s probability of
surviving with change.
Processes
– process includes the arrangements of Planning making relations, organization of resources, communication and
employees which are used to convert resources into commodities.
Values
–values includes the moralities and ethics that the employees set and permit them to judge whether a certain
procedure is attractive or marginal
Cross-cultural proficiency helps managers connect with their foreign counterparts. Seasoned
managers attest to the importance of a deep knowledge of culture and language in international
business. Managers can achieve effective cross-cultural interaction by keeping an open mind,
being inquisitive, and not rushing to
conclusions about others’ behaviors. Experienced managers acquire relevant facts, skills, and
knowledge to avoid offensive or unacceptable behavior when interacting with foreign cultures.
They undergo cultural training
that emphasizes observational skills and human relations techniques. Skills are more
important than pure information because skills can be transferred across countries, while
information tends to be country specific. Various resources are available to managers for
developing skills, including videotape courses, cross-cultural consultants, and programs offered by
governments, universities, and training institutes. Planning that combines informal mentoring from
experienced managers and formal training through seminars and simulations abroad
and at home go far in helping managers meet cross-cultural challenges. Although every culture is
unique, certain basic guidelines are appropriate for consistent cross-cultural success. Let’s
review three guidelines managers can follow in preparing for successful cross-cultural encounters.

Guideline 1
Acquire factual and interpretive knowledge about the other culture, and try to speak their
language. Successful managers acquire a base of knowledge about the values, attitudes, and
lifestyles of the cultures with which they interact. Managers study the political and economic
background of target countries—their history, current national affairs, and perceptions about other
cultures. Such knowledge facilitates understanding about
the partner’s mindset, organization, and objectives. Decisions and events become
substantially easier to interpret. Sincere interest in the target culture helps establish trust and
respect, laying the foundation for open
and productive relationships. Even modest attempts to speak the local language are welcome.
Higher levels of language proficiency pave the way for acquiring competitive advantages. In the
long run, managers who can converse in multiple languages are more likely to negotiate
successfully and have positive business interactions
than managers who speak only one language.

Guideline 2
Avoid cultural bias. Perhaps the leading cause of culture-related problems is the
ethnocentric assumptions managers may unconsciously hold. Problems arise when managers
assume that foreigners think and behave just like the folks back home. Ethnocentric assumptions
lead to poor business strategies in both planning and execution. They distort communications with
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foreigners. Managers new to international business often find the behavior of a foreigner hard to
explain. They may perceive the other’s behavior as odd and perhaps improper. For example, it
is easy to be offended when our foreign counterpart does not appreciate our food, history, sports,
or entertainment, or is otherwise inconsiderate. This situation may interfere with the
manager’s ability to interact effectively with the foreigner, even leading to communication
breakdown. In this way, cultural bias can be a significant barrier to successful interpersonal
communication. A person’s ownculture conditions how he or she reacts to different values,
behavior, or systems. Most people unconsciously assume that people in other cultures experience
the world as they do. They view their own culture as the norm—everything else may seem strange.
This is known as the self-reference criterion—the tendency to view other cultures through the
lens of one’s own culture. Understanding the self-reference criterion is a critical first step to
avoiding cultural bias and ethnocentric reactions. Critical incident analysis (CIA) refers to an
analytical method for analyzing awkward situations in cross-cultural interactions by developing
empathy for other points of view. It is an approach to avoiding the trap of self-reference criterion in
cross-cultural encounters. Critical incident analysis encourages a more objective reaction to
cultural differences by helping managers develop empathy for other points of view.
Guideline 3
Develop cross-cultural skills. Working effectively with counterparts from other cultures requires an
investment in your professional development. Each culture has its own ways of carrying out
business transactions, negotiations, and dispute resolution. Cross-cultural proficiency is
characterized by four key personality traits:
 Tolerance for ambiguity—the ability to tolerate uncertainty and apparent lack of clarity in
the thinking and actions of others.
 Perceptiveness—the ability to closely observe and appreciate subtle information in the
speech and behavior of others.
 Valuing personal relationships—the ability to recognize the importance of interpersonal
relationships, which are often much more important than achieving one-time goals or
winning arguments.
 Flexibility and adaptability—the ability to be creative in devising innovative solutions, to
be open-minded about outcomes, and to show grace under pressure.

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MCQs
Q.1. How do you describe a work group that comprises workers with demarcated tasks and
distant line managers?
a) Dependent
b) Independent
c) Interdependent
d) Collaborative
Ans . B
Q.2.Which of the following is not a norm?
a. Participation
b. Hunger
c. Positive Attitude
d. Confidentiality
Ans. B
Q.3. Which of the following is an exception to the Confidentiality norm?
a. When a peer shares something really juicy and you feel like you have to tell
somebody
b. When harm could be done to a PAL
c. When something is shared with you in confidence
d. When a peer asks you a question about somebody else
Ans. A
Q.4. Which group development stages finds members being more tolerant of each other and
accepting of the diverse perspectives and personalities that each member brings to the group
a. Forming
b. Storming
c. Norming
d. Performing
Ans. C
Q.5. During which group development stage would the group evaluate the product and the
lessons learned?
a. Storming
b. Norming
c. Performing
d. Adjourning
Ans. D
Q.6. During the storming stage,
a. Team members learn to cooperate and support one another while establishing
patterns of communication and behavior.
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 b. The group is preparing to disband or is facing major changes in its mission,
membership, or environment. Members often regress to unproductive team
behaviors
c. The team functions at its highest level of productivity and the focus of each
member shifts from individual to group concerns
d. Marked by conflict within the group as team members push boundaries and
challenge authority in attempt to clarify the team’s goals, values, and norms.
Ans. A
Q.7. During the adjourning stage,
a) The team is marked by conflict within the group as team members push boundaries and
challenge authority in attempt to clarify the team’s goals, values, and norms
b) The team functions at its highest level of productivity and the focus of each member
shifts from individual to group concerns
c) The group is preparing to disband or is facing major changes in its mission,
membership, or environment. Members often regress to unproductive team
behaviors
d) Team members learn to cooperate and support one another while establishing
patterns of communication and behavior.
Ans. C
Q.8 . “------------ are social inventions for accomplishing goals through group efforts”

a. Organization
b. Leadership
c. Behavior
d. Management
Ans. A
Q9. Which of the following is/are the key features of organization
a. Social invention
b. Accomplishing goals
c. Group efforts
d. All of these
Ans. D
Q.10. A study of human behavior in organizational settings is
a. Individual behavior
b. Group behavior
c. Organizational behavior
d. None of these
Ans.E
Q.11. Scientific Management approach is developed by
i. Elton Mayo
ii. Henry Fayol
iii. F.W. Taylor
iv. Maslow
Ans. C
Q.12.Who proposed “ bureaucratic structure” is suitable for all organization
a. Elton Mayo
b. Henry Fayol
c. F.W. Taylor
d. Max Weber
Ans. D
Q.13. “Hawthrone experiment” which was a real beginning of applied research in OB
was conducted by
a. Elton Mayo
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 b. Henry Fayol
c. F.W. Taylor
d. Max Weber
Ans. A
Q.14. Process or administrative theory of organization is being given by
a. Elton Mayo
b. Henry Fayol
c. F.W. Taylor
d. Max Weber
Ans. B
Q.15. Whose concept states that interpersonal and human relations may lead to
productivity
a. Elton Mayo
b. Henry Fayol
c. F.W. Taylor
d. Max Weber
Ans. B
Q.16.Today’s organization are
a. Open system
b. Closed system
c. Open as well as closed
d. None of these
Ans. A

Q.17. Today’s managers understand that the success of any effort at improving quality and
productivity must include _____.
a. Quality management programs
b. Customer service improvements
c. Employee's participation
d. Manufacturing simplification
Ans. C
Q.18. Which of the following would be least likely to pose a barrier to cross-cultural
communications?
a. Tone difference
b. Word connotations
c. Political correctness
d. Differences among perceptions
Ans. C
Q.19. Which of the following theory is proposed by Clayton Alderfer?
a. Theory X and Theory Y
b. Hierarchy of Needs
c. ERG Theory
d. Theory
Ans.C
Q.20.Concept of MBO was introduced by:
a. Peter. F.Drucker
b. Mary Parker
c. Henry Fayol
d. Philip Kotler
Ans.A

Q.21. While managing political behaviours in organization, the manager requires

discouraging:
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 a. Negotiation
b. Relationships
c. Self interest
d. Dialogue
Ans. B

Q.22.People with which type of personality trait commonly make poor decisions because
they make them too fast?
a. Type As
b. Type Bs
c. Self-monitors
d. Extroverts
Ans. A

Q. 23.Which of the following is an environmental force that shapes personality?

a. Gender
b. Height
c. Experience
d. Brain size
Ans. C
Q.24. Factors other than satisfaction that impact one’s decision to leave a current job
include all of the following EXCEPT:
a. Labour market conditions
b. Length of tenure with the organization
c. Organizational citizenship behavior
d. Expectations about alternative job opportunities
Ans. A
Q.25. . Which of the following leadership behaviours are identified by the path-goal
theory?
a. Supportive, employee-oriented, laissez-faire and participative
b. Achievement-oriented, supportive, humanistic, and directive
c. Participative, achievement-oriented, directive, and supportive
d. Directive, participative, supportive, and laissez-faire
Ans. C
Long Answer type questions:
Q.1.State three important functions performed by groups in an organization.
Q.2. How groups prove useful in socialization of new employees?
Q.3. How groups facilitate task accomplishment?
Q.4. How random or mixed cliques are formed?
Q.5. List ways in which formal groups act as a useful tool to the organization.
Q.6. Explain the concept of friendship group and reference group.
Q.7. Explain group stages and their main characteristics.
Q.8. How does a formal group facilitate individual development?
Q.9. Write important features of forming stage of a group.
Q.10. What characterizes the norming stage of group formation?
Q 11.What happens to be the main focus of members during the performing stage of group
formation?
Q.12.List any four important features of the storming stage of group formation.
Q.13. State the salient features of:
a. Norming stage of group formation OR
b. Performing stage of group formation
Q.14. Explain the term ‘adjournment’ in the context of group formation stage.
Q.15. Name different stages of group formation and write the characteristics of every stage.
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Glossary/Key Words
Group, Team, Organizational Culture, Managing Change, Group Conflicts

References and Suggested Readings:

 Robbins(2019)“Organizational Behaviour ”,Pearson Education.
 Aswathappa(2018) “Organizational Behavior”, Himalaya publishing house
 J. W.TMH (2019) “Organizational Behavior: Human Behavior”, WorkNewstrom,

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