organizational behaviour module

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Management Process and Organization Behavior MB0022/ PB 001/MH0026

Contents

Unit 1

Management Process 1

Unit 2

Organizational Behavior 17

Unit 3

Foundation of Organization behavior 33

Unit 4

Learning 41

Unit 5

Value, Ethics and Job satifaction 52

Unit 6

Personality 69

Unit 7

Emotions 83

Unit 8

Perception 96

Edition: Fall 2008


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Contents

Unit 9 Motivation 114

Unit 10

Group Behavior 131

Unit 11

Power and Politics 147

Unit 12

Conflict Management 164

Unit 13

Stress management 176

Unit 14

Organization change 191

Unit 15

Organization Development 205

Edition: Fall 2008

BKID B0665


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Dr. K. Jayakumar

Vice Chancellor

Sikkim Manipal University of Health, Medical, and Technological sciences

Prof. Nandagopal V. B.

Director and Dean

Sikkim Manipal University of Health, Medical, and Technological sciences.

Board of Studies

Dr. T. V. Narasimha Rao

Professor, Manipal Universal Learning

Prof. K. V. Varambally

Director, Manipal Institute of Management,

Manipal

Ms. Vimala Parthasarathy Asst. Professor,. Sikkim Manipal University of

Health,

Medical and Technological studies.

Mr. Shankar Jagannathan Former Group Treasurer

Wipro Technologies Limited, Bangalore

Ms. Sadhana Dash

Senor Manager HR

Microsoft India corporation ( Pvt) limited

Mr. Abraham Mathews

Chief Financial Officer

Infosys BPO, Bangalore

Mr. Pankaj Khanna

Director, HR, Fidelity Mutual Fund

Content Preparation Team Peer Review By

1.Dr. Nilanjan Sengupta M.S. Sadhana DashProfessor, IFIM, Bangalore HR Dept, Microsoft India ( P ) Ltd,

2. Dr. Mousumi Sengupta BangaloreProfessor, IFIM, Bangalore

Edition: Fall 2008This book is a distance education module comprising of collection of learning material for our students.

All rights reserved. No part of this work may be reproduced in any form by any means without permission inwriting from Sikkim Manipal University of Health, Medical and Technological Sciences, Gangtok, Sikkim.Printed and Published on behalf of Sikkim Manipal University of Health, Medical and Technological Sciences,Gangtok, Sikkim by Mr. Rajkumar Mascreen, GM, Manipal Universal Learning Pvt. Ltd., Manipal 576 104.Printed at Manipal Press Limited, Manipal.


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INTRODUCTION

Organizations face multiple challenges and threats today threat to effectiveness, efficiency and

profitability; challenges from turbulent environments, increased competition and constant challenge

to maintain its culture. Individuals in organizations likewise face multiple challenges finding

satisfaction in and through work, fighting obsolescence of ones knowledge and skills, maintaining

dignity and purpose in pursuit of organizational goals.

Unit 1: Management Process

This unit deals with management functions which are as follows. Planning, Organizing, Commanding,

Coordinating , Controlling. However, in recent time, management functions have been regrouped into

four categories, since the managerial tasks have become highly challenging a fluid in nature making

distinctions redundant to a certain extend. The four functions are as follows: Planning , Organizing

,Leading ,Controlling

Unit 2: Organizational Behavior

This unit deals with organizational behavior. OB is a field of study that investigates the impact that

individuals, groups, and structure have on behavior within an organization, then applies that knowledge

to make organizations work more effectively. Specifically, OB focuses on how to improve productivity,

reduce absenteeism and turnover, and increase employee citizenship and job satisfaction

Unit 3: Foundation of Organization behavior This unit deals with organizational Behavior which emphasizes on intellectual capital as represented by

the sum total of knowledge, expertise, and dedication of an organizations workforce

Unit 4:Learning

This unit deals with learning that refers to a process which enhances the knowledge, skill and attitude

(KSA) of individuals, to increase his/her willingness to adopt those newly acquired KSA and to

implement them at the workplace.

Unit 5: Value, Ethics and Job satifaction

This unit deals with values which represent basic convictions that a specific mode of conduct or end-

state of existence is personally or socially preferable to an opposite or converse mode of conduct or

end-state of existence.


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Unit 6: Personality

This unit deals with the factors affecting personality development are Heredity, Environment, Culture,

Family, and Situation.

Unit 7: Emotions

This unit deals with Emotion which is used to designate "a state of consciousness having to do with

the arousal of feelings (Websters New World Dictionary)." It is "distinguished from other mental states,

from cognition, volition, and awareness of physical sensation." Feeling refers to "any of the subjective

reactions, pleasant or unpleasant" that one may experience in a situation.

Unit 8: Perception

This unit deals with the three factors that shape perception of an individual are perceiver, target and

situation. An important element in perception is attribution process.

Unit 9: Motivation This unit deals with motivation which is the processes that account for an individuals intensity,

direction, and persistence of effort toward attaining a goal..

Unit 10: Group Behavior

This unit deals with formal and Informal behaviour. Formal groups come into existence for serving a

specific organizational purpose. Individuals behaviors in this type of group is aimed at achieving

organizational goals.

Unit 11: Power and Politics

This unit deals with power which is the ability to make things happen in the way an individual wants,

either by self or by the subordinates. The essence of power is control over the behavior of others

Unit 12: Conflict Management

This unit deals with conflict which occurs whenever disagreements exist in a social situation over

issues (work related or personal). Conflict is a process that begins when one party perceives that

another party has negatively affected, or is about to negatively affect, something that the first party

cares about (Thomas, 1992). Conflict can be either constructive or destructive.

Unit 13: Stress management

This unit deals with stress that has been defined as a physical, mental or emotional response to events

which cause mental or bodily tension. In the modern day life stress is a part and parcel of our lives.


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Unit 14: Organization change

This unit deals with o rganizational change which may be defined as the adoption of a new idea or a

behavior by an organization. It is a way of altering an existing organization to increase organizational

effectiveness for achieving its objectives

Unit 15: Organization Development

This unit deals with o rganization development. OD is a planned approach to improve employee and

organizational effectiveness by conscious interventions in those processes and structures that have an

immediate bearing on the human aspect of the organization .


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References:

Buchanan, D. & Huczynski, A. (1997) Organizational Behaviour: An Introductory Text ,

3rd ed., Prentice Hall, London.

Barnard, C.I. (1938) Functions of the Executive , Harvard University ,Press, Cambridge,

MA.

Pugh, D. (1971) Organization Theory: Selected Readings , Penguin, Harmondsworth.

Ivancevich, J. & Matteson, M. (1998) Organizational Behaviour and Management , 3rd

edn, Irwin, Chicago and London.

Wood, J. (1997) in Dickson, T. & Bickerstaffe, G. (eds.) Mastering Management: The

Definitive Guide to the Foundations and Frontiers of Finance , FT/Pitman Publishing,

London.


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Management Process Unit 1

Sikkim Manipal University 1

Unit 1 Management Process

Structure

1.1 Introduction

Objectives

1.2 Management Functions

Self Assessment Questions1

1.3 Management roles and skills

Self Assessment Questions 21.4 Effective vs. Successful Managerial Activities

Self Assessment Questions 3

1.5 Summary

Terminal Questions

Answer to SAQs and TQs

1.1 Introduction

Organizational behavior (OB) is a field of study that investigates the impact that individuals, groups,

and structure have on behavior within an organization, then applies that knowledge to make

organizations work more effectively (Robbins, 2003). In recent times, we notice the following

changes in the organizational set up:

1. Demise of traditional hierarchical structure

2. Emergence of workforce with different expectations form organizations

3. Advancement of information technology

4. Increasing importance on empowerment and teamwork

5. Concern for work-life balance


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An affective and efficient manager therefore, should focus on two key results. The first is task

performance the quality and quantity of the work produced or the services provided by the work unit

as a whole. The second is job satisfaction how people feel about their work and the work setting.

OB directs a managers attention to such matters as job satisfaction, job involvement, and

organizational commitment, as well as measures of actual task performance. OB also recognizes the

need for changing behavior, attitude and managerial styles in the context of the above. Hence,

management processes and functions are vital to organizational effectiveness. An understanding of

the basis management functions helps in comprehending the key roles managers need to play to run

organizations effectively.

Learning objectives

The learning objectives of this unit are as follows:

1. Management Functions

2. Management roles and skills

1.2 Management Functions

Follett (1933) defined management as "the art of getting things done through people". [2] One can

also think of management functionally, as the action of measuring a quantity on a regular basis and

of adjusting some initial plan.

Management functions are as follows (Fayol, 1949):

1. Planning

2. Organizing

3. Commanding

4. Coordinating

5. Controlling
http://en.wikipedia.org/wiki/Planhttp://en.wikipedia.org/wiki/Management


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However, in recent time, management functions have been regrouped into four categories, since the

managerial tasks have become highly challenging a fluid in nature making distinctions redundant to a

certain extend. The four functions are as follows:

1. Planning

2. Organizing

3. Leading

4. Controlling

1. Planning

It involves the process of defining goals, establishing strategies for achieving these goals, anddeveloping plans to integrate and coordinate activities. Every organization needs to plan for change

in order to reach its set goal. Effective planning enables an organization adapt to change by

identifying opportunities and avoiding problems. It provides the direction for the other functions of

management and for effective teamwork. Planning also enhances the decision-making process. All

levels of management engage in planning in their own way for achieving their preset goals.

Planning in order to be useful must be linked to the strategic intent of an organization. Therefore,

planning is often referred to as strategic in nature and also termed as strategic planning.

Strategic Planning: Top level managers engage chiefly in strategic planning or long range planning

Strategic planning is the process of developing and analyzing the organization's mission, overall

goals, general strategies, and allocating resources.

The tasks of the strategic planning process include the following steps:

Define the mission:

A mission is the purpose of the organization. Thus, planning begins with clearly defining the mission

of the organization. The mission statement is broad, deconcise, summarizing what the organizationdoes. A mission statement should be short and should be easily understood and every employee

should ideally be able to narrate it from memory. An explicit mission guides employees to work

independently and yet collectively toward the realization of the organization's potential. The mission
http://www.mindtools.com/planpage.htmlhttp://choo.fis.utoronto.ca/FIS/Courses/LIS1230/LIS1230sharma/plan1.htm


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statement may be accompanied by an overarching statement of philosophy or strategic purpose

designed to convey a vision for the future as envisaged by top management.

Conduct a situational or SWOT analysis

A situation or SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis is vital for the

creation of any strategic plan. The SWOT analysis begins with a scan of the external environment.

Organizations need to examine their business situation in order to map out the opportunities and

threats present in their environments. Sources of information may include stakeholders like,

customers (internal and external), suppliers, governments (local, state, federal, international),

professional or trade associations (conventions and exhibitions), journals and reports (scientific,

professional, and trade).

SWOT analysis provides the assumptions and facts on which a plan will be based. Analyzing

strengths and weaknesses comprises the internal assessment of the organization.

For assessing the strengths of the organization the following questions are important :

1. What makes the organization distinctive?

2. How efficient is our manufacturing?

3. How skilled is our workforce?

4. What is our market share?

5. What financing is available?6. Do we have a superior reputation? For assessing the weaknesses of the organization the following questions are important:

1. What are the vulnerable areas of the organization that could be exploited?

2. Are the facilities outdated?

3. Is research and development adequate?

4. Are the technologies obsolete? For identifying opportunities the following elements need to be looked at:

1. In which areas is the competition not meeting customer needs?

2. What are the possible new markets?

3. What is the strength of the economy?

4. Are our rivals weak?
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5. What are the emerging technologies?

6. Is there a possibility of growth of existing market?)

Identifying threats involves the following:

1. In which areas does the competition meet customer needs more effectively?

2. Are there new competitors?

3. Is there a shortage of resources?

4. Are market tastes changing?

5. What are the new regulations?

6. What substitute products exist?

In general terms, the best strategy is one that fits the organization's strengths to opportunities in the

environment.

The SWOT analysis is used as a baseline for future improvement, as well as gap analysis.

Comparing the organization to external benchmarks (the best practices) is used to assess current

capabilities. Benchmarking systematically compares performance measures such as efficiency,

effectiveness, or outcomes of an organization against similar measures from other internal or

external organizations.

Set goals and objectives Strategic goals and objectives are developed to fill the gap between current capability and the

mission. They are aligned with the mission and form the basis for the action plans of an organization.

Objectives are also called performance goals. Generally, organizations have long-term objectives for

factors such as, return on investment, earnings per share, etc. It also helps in setting minimum

acceptable standards or common-sense minimums.

Develop related strategies (tactical and operational)

Tactical plans are based on the organization's strategic plan. In turn, operational plans are based onthe organization's tactical plans. These are specific plans that are needed for each task or supportive

activity comprising the whole. Strategic, tactical, and operational planning must be accompanied by

controls to ensure proper implantation of the plans, necessary to maintain competitive advantage in

the said market.


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Monitor the plan

A systematic method of monitoring the environment must be adopted to continuously improve the

strategic planning process. To develop an environmental monitoring procedure, short-term standards

for key variables that will tend to validate and support the long-range estimates must be established.

Feedback is encouraged and incorporated to determine if goals and objectives are feasible. This

review is used for the next planning cycle and review.

2. Organizing -

It involves designing, structuring, and coordinating the work components to achieve organizational

goal. It is the process of determining what tasks are to be done, who is to do, how the tasks are to

be grouped, who reports to whom, and where decisions are to be made. A key issue inaccomplishing the goals identified in the planning process is structuring the work of the organization.

Organizations are groups of people, with ideas and resources, working toward common goals. The

purpose of the organizing function is to make the best use of the organization's resources to achieve

organizational goals. Organizational structure is the formal decision-making framework by which job

tasks are divided, grouped, and coordinated. Formalization is an important aspect of structure. It is

the extent to which the units of the organization are explicitly defined and its policies, procedures,

and goals are clearly stated. It is the official organizational structure conceived and built by top

management. The formal organization can be seen and represented in chart form. An organizationchart displays the organizational structure and shows job titles, lines of authority, and relationships

between departments.

The steps in the organizing process include:

1. Review plans

2. List all tasks to be accomplished

3. Divide tasks into groups one person can accomplish - a job

4. Group related jobs together in a logical and efficient manner

5. Assign work to individuals

6. Delegate authority to establish relationships between jobs and groups of jobs.
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3. Leading -

An organization has the greatest chance of being successful when all of the employees work toward

achieving its goals. Since leadership involves the exercise of influence by one person over others,

the quality of leadership exhibited by supervisors is a critical determinant of organizational success.

Supervisors can learn about leadership through research. Leadership studies can be classified as

trait, behavioral, contingency, and transformational. Earliest theories assumed that the primary

source of leadership effectiveness lay in the personal traits of the leaders themselves. Yet, traits

alone cannot explain leadership effectiveness. Thus, later research focused on what the leader

actually did when dealing with employees. These behavioral theories of leadership sought to explain

the relationship between what the leader did and how the employees reacted, both emotionally and

behaviorally. Yet, behavior can't always account for leadership in different situations. Thus,

contingency theories of leadership studied leadership style in different environments. Transactional

leaders, such as those identified in contingency theories, clarify role and task requirements for

employees. Yet, contingency can't account for the inspiration and innovation that leaders need to

compete in today's global marketplace. Newer transformational leadership studies have shown that

leaders, who are charismatic and visionary, can inspire followers to transcend their own self-interest

for the good of the organization.

Leading involves the following functions:

1.Teambuilding

Rigid department boundaries and fixed teams are giving way to ad hoc squads whose membership

changes with every project. Flexible networks of team-based structures are occurring within and

between companies, as well as across national borders. Competitive arenas require quick decisions

by knowledgeable employees who work close to the source of problems. Teams enable knowledge-

based and innovative decision making. This collaboration is a revolution in the workplace.

2. Consensus Building

Top performance demands the joint effort of many people, working together toward a common goal.

When an individual works together with others, effectiveness grows, creating greater productivity for


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all involved. Together, employees can do more than the collective efforts of each individual working

alone.

3. Selecting

Selecting competent, high-performing employees capable of sustaining their performance over the

long run is a competitive advantage. The selection process consists of forecasting employment

needs, recruiting candidates, interviewing applicants, and hiring employees.

4. Training

After employees are selected, they enter an orientation program to be formally introduced to their

jobs. Orientation sets a tone for new employees' work by describing job-related expectations and

reporting relationships. Employees are informed about benefits, policies, and procedures. Specific

duties and responsibilities and performance evaluation are clarified. During orientation, the

supervisor has the opportunity to resolve any unrealistic expectations held by the employee. Training

refers to improving an employee's knowledge, skills, and attitudes so that he or she can do the job.

All new employees (or current employees in new jobs) should be trained. Cross training prepares an

employee for a job normally handled by someone else. Also, training is advisable when new

processes, equipment or procedures are introduced into the workplace.

Training starts with an organization analysis . By focusing on strategy and examining sales

forecasts and expected changes in production, distribution and support systems, employers can

determine which skills will be needed and to what degree. A comparison with current skill levels is

used to estimate staff and training needs. Task analysis identifies the elements of current or future

tasks to be done. Personal needs analysis involves asking employees and managers, either in an

interview or in a self-administered questionnaire, to analyze their training needs. In general,

agreement between managers and employees tends to be low, so it is important that both parties

agree to decisions about the training of employees.

4. Controlling

It involves monitoring the employees behavior and organizational processes and take necessary

actions to improve them, if needed. Control is the process through which standards for performance
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of people and processes are set, communicated, and applied. Effective control systems use

mechanisms to monitor activities and take corrective action, if necessary.

There are four steps in the control process. They are as follows:

Step 1. Establish Performance Standards. Standards are created when objectives are set during the

planning process. A standard is any guideline established as the basis for measurement. It is a

precise, explicit statement of expected results from a product, service, machine, individual, or

organizational unit. It is usually expressed numerically and is set for quality, quantity, and time.

Tolerance is permissible deviation from the standard.

Step 2. Measure Actual Performance. Supervisors collect data to measure actual performance to

determine variation from standard. Written data might include time cards, production tallies,

inspection reports, and sales tickets. Personal observation, statistical reports, oral reports and written

reports can be used to measure performance. Management by walking around, or observation of

employees working, provides unfiltered information, extensive coverage, and the ability to read

between the lines. While providing insight, this method might be misinterpreted by employees as

mistrust. Oral reports allow for fast and extensive feedback. Computers give supervisors direct

access to real time, unaltered data, and information. On line systems enable supervisors to identify

problems as they occur. Database programs allow supervisors to query, spend less time gathering

facts, and be less dependent on other people.

Step 3. Compare Measured Performance Against Established Standards. Comparing results with

standards determines variation. Some variation can be expected in all activities and the range of

variation - the acceptable variance - has to be established. Management by exception lets operations

continue as long as they fall within the prescribed control limits. Deviations or differences that exceed

this range would alert the supervisor to a problem.

Step 4. Take Corrective Action. The supervisor must find the cause of deviation from standard. Then,

he or she takes action to remove or minimize the cause. If the source of variation in work

performance is from a deficit in activity, then a supervisor can take immediate corrective action and

get performance back on track.


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Types of Control

Controls are most effective when they are applied at key places. Supervisors can implement controls

before the process begins (feed forward), during the process (concurrent), or after it ceases

(feedback).

Feed forward controls focus on operations before they begin. Their goal is to prevent anticipated

problems. An example of feed forward control is scheduled maintenance on automobiles and

machinery.

Concurrent controls apply to processes as they are happening. Concurrent controls enacted while

work is being performed include any type of steering or guiding mechanism such as direct

supervision, automated systems (such as computers programmed to inform the user when they have

issued the wrong command), and organizational quality programs.

Feedback controls focus on the results of operations. They guide future planning, inputs, and

process designs. Examples of feedback controls include timely (weekly, monthly, quarterly, annual)

reports so that almost instantaneous adjustments can be made.

The following diagram represents an integrated model connecting all the above-mentioned functions

of management.

The management process (adopted from Terry, 1972)

Planning Organizing Directing Controlling Resources

HR,Financial,Informationaletc.

Goalachievement


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1. In recent time, management functions have been regrouped into ____________ categories.

2. Training starts with an ___________________ analysis.

1.3 Management roles and skills

Managerial Roles

According to Mintzberg (1973), managerial roles are as follows:

1. Informational roles

2. Decisional roles

3. Interpersonal roles

1. Informational roles: T his involves the role of assimilating and disseminating information as and

when required. Following are the main sub-roles, which managers often perform:

a. Monitorcollecting information from organizations, both from inside and outside of the

organization

b. Disseminatorcommunicating information to organizational members

c. Spokespersonrepresenting the organization to outsiders

2. Decisional roles: It involves decision making. Again, this role can be sub-divided

in to the following:

a. Entrepreneurinitiating new ideas to improve organizational performance

b. Disturbance handlerstaking corrective action to cope with adverse situation

c. Resource allocatorsallocating human, physical, and monetary resources

d. Negotiator negotiating with trade unions, or any other stakeholders
http://www.bola.biz/mintzberg/refs.html


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3. Interpersonal roles : This role involves activities with people working in the organization. This

is supportive role for informational and decisional roles. Interpersonal roles can be categorized

under three sub-headings:

a. FigureheadCeremonial and symbolic role

b. Leadershipleading organization in terms of recruiting, motivating etc.

c. Liaisonliasoning with external bodies and public relations activities.

Management Skills

Katz (1974) has identified three essential management skills: technical, human, and conceptual.

Technical skills : The ability is to apply specialized knowledge or expertise. All jobs require some

specialized expertise, and many people develop their technical skills on the job. Vocational and on-

the-job training programs can be used to develop this type of skill.

Human Skill : This is the ability to work with, understand and motivate other people (both individually

and a group). This requires sensitivity towards others issues and concerns. People, who are

proficient in technical skill, but not with interpersonal skills, may face difficulty to manage their

subordinates. To acquire the Human Skill, it is pertinent to recognize the feelings and sentiments of

others, ability to motivate others even in adverse situation, and communicate own feelings to others

in a positive and inspiring way.

Conceptual Skill : This is an ability to critically analyze, diagnose a situation and forward a feasible

solution. It requires creative thinking, generating options and choosing the best available option.


1. Ceremonial and symbolic role of a manager is called __________________.

2. Vocational and on-the-job training programs can be used to develop _______________ skill.


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1.4 Effective vs. Successful Managerial Activities

Luthans (1988), on the basis of his study, found that all managers engage in four managerial

activities.

1. Traditional management This activity consists of planning, decision making, andcontrolling. The average manager spent 32 percent of his or her time performing this

activity, whereas successful managers spend 13% and effective managers spend 13% of

their time in this activity.

2. Communication This activity consists of exchanging routine information and processingpaperwork. The average manager spent 29 percent of his or her time performing this

activity while successful manager spends 28% and effective managers spend 44% of their

time in this activity.

3. Human resource management This activity consists of motivating, disciplining,managing conflict, staffing, and training. The average manager spent 20 percent of his or

her time performing this activity, while successful manager spends 11% and effective

managers spend 26% of their time in this activity.

4. Networking This activity involves socializing, politicking, and interacting with outsiders.The average manager spent 19 percent of his or her time performing this activity, while

successful manager spends 48% and successful manages spend 11% of their time in this

activity.

It was found that successful managers spent more time and effort in socializing, interacting and

networking. They did not spend much time to the traditional management activities or to the humanresource management activities (Luthans, 1988).

organizational behaviour module

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