ACROPOLIS TECHNICAL CAMPUS, INDORE

FACULTY OF MANAGEMENT

ORGANIZATION BEHAVIOUR

Organizations- Defined

Organizations are sets of people who work together to achieve shared goals.

A consciously coordinated social unit, composed of two or more people, that functions on a relatively continuous basis to achieve a common goal or sets of goals.

A structured social system consisting of groups and individuals working together to meet some agreed- upon objectives.

Organizational Behavior

The field that seeks increased knowledge of all aspects of behavior in organizational settings through the use of the scientific method.

A field of study that investigates the impact that individuals, groups and structure have on behavior within organizations, for the purpose of applying such knowledge toward improving an organizations effectiveness.

Organizational Behavior can be defined as the understanding, prediction & management of human behavior in organizations.

OB is the study of human behavior in organizational settings.

OB refers to the behavior of individuals and groups within organizations and the interaction between organizational members & their external environments.

Introduction to 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.

Elements of Organizational Behavior

Elements of Organizational Behavior: The organization's base rests on management's philosophy, values, vision and goals. This in turn drives the organizational culture which is composed of the formal organization, informal organization, and the social environment. The culture determines the type of leadership, communication, and group dynamics within the organization. The workers perceive this as the quality of work life which directs their degree of motivation. The final outcome are performance, individual satisfaction, and personal growth and development. All these elements combine to build the model or framework that the organization operates from.

Models of Organizational Behavior

There are four major models of Organizational Behavior

Autocratic - 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

Custodial - 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

Supportive - 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

Collegial - 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. The employee need that is met is self-actualization. The performance result is moderate enthusiasm.

Different Approaches to OB

Taylorism and Scientific Management Approach by Frederic Winslow Taylor, (1856-1915) :

Taylor attempted to make a science for each element of work and restrict behavioral alternatives facing worker. Taylor looked at interaction of human characteristics, social environment, task, and physical environment, capacity, speed, durability, and cost. The overall goal was to remove human variability. This involved breaking down each task to its smallest unit and to figure out the one best way to do each job. Then the engineer, after analyzing the job should teach it to the worker and make sure the worker does only those motions essential to the task.

The Human Relations Approach

The Human Relations Approach by Elton Mayo Elton Mayo along with Roethlisberger and Dickinson conducted a study called as Hawthorne Study in the Western Electric Cicero in 1920s, which showed how work groups provide mutual support and effective resistance to management schemes to increase output. The results of the research led researchers to feel that they were dealing with socio-psychological factors that were not explained by classic theory which stressed the formal organization and formal leadership

Douglas McGregor's Theory X and Theory Y

Douglas McGregor's Theory X and Theory Y Douglas McGregor proposed two theories/assumptions, which are very nearly the opposite of each other, about human nature. His first theory was “Theory X”, which is pessimistic and negative; and according to McGregor it is how managers traditionally perceive their workers. Then, in order to help managers replace that theory/assumption, he gave “Theory Y” which takes a more modern and positive approach. He believed that managers could achieve more if managers start perceiving their employees as self-energized, committed, responsible and creative beings.

Weber's Bureaucracy Approach

Weber's Bureaucracy Approach German sociologist Max Weber, observing the organizational innovations of the German leader Bismarck, identified the core elements of the new kind of organization. He called it bureaucracy. The Basic Elements of the Bureaucratic Structure authority is rational and legal; authority should be based on position, not on the person in the position authority stems from the office and this authority has limits as defined by the office positions are organized in a hierarchy of authority organizations are governed by rules and regulations.

Neo Classical Approach

This approach emphasize that Organization is a social system. It is people oriented It’s a behavioral science approach and gives importance to Human Relations It is also known as Theory Y Organizational Behavior plays the role in Human Resource Contingency Systems Productivity.

Historical Development of OB

Koutilya’s Arthashastra states that there was systematic management of human resources during 4 th Century BC itself Minimum wage rate, incentive wage plan concepts were included in Babylonian civilization during 1800 BC Actual development of OB can be traced from beginning of the 19 th Century where condition of workers was miserable Industry Revolution, which happened during 19th Century benefitted employees in terms of increased wages and reduced working hours Robert Owen, Andrew and J N Tata were the pioneers in providing welfare facilities to workers But they were criticized of following do-good-approach.

During Scientific Management Era, Taylor focused on human resource at work, but he wanted to rationalize everything & his sole aim is to get more output from workers Failure of Scientific Management gave birth to human relations movement, which heavily emphasized on employee cooperation and morale 3 contributing factors to human relations movement are; Great Depression, Labour Movement and Hawthorne Studies.

MOTIVATION

INTRODUCTION

Motivation is a problem in the U.S. workforce. Poorly motivated workers express themselves through detrimental behaviors such as absenteeism and high turnover. It is important that motivational theories are understood and applied in the workplace.

MOTIVATION

Motivation: the processes that account for an individual’s intensity, direction, and persistence of effort toward attaining a goal, specifically for OB, toward attaining an organizational goal.

Intensity: how hard a person tries to meet a goal.

Direction: efforts are channeled toward organizational goals.

Persistence: how long a person maintains effort toward a goal.

EARLY THEORIES OF MOTIVATION

A. Maslow’s Hierarchy of Needs Theory. In this, perhaps best known (and least supported) of all motivational theories, Abraham Maslow proposed that there are five levels of human needs. As each of the lower level needs are satisfied, the next unsatisfied need becomes dominant. Satisfied needs no longer motivate, only unsatisfied needs motivate people.

1. Physiological: lower order need, includes hunger, thirst, shelter, sex, and other bodily needs. Lower order needs are satisfied externally, through forces outside of the person.

2. Safety: lower order need, includes security and protection from physical and emotional harm.

3. Social: upper order need, includes affection, belongingness, acceptance, and friendship. Upper order needs are satisfied internally, that is, from within the person.

4. Esteem: upper order need, includes internal (self-respect, autonomy, and achievement) and external (status, recognition, and attention) esteem factors.

5. Self-actualization: upper order need, defined as the drive to “be all one can be” it includes growth, achieving one’s potential, and self-fulfillment.

McGregor’s Theory X and Theory Y

Douglas McGregor’s theory proposed that there were two basic views of human nature, one essentially negative (Theory X) and the other positive (Theory Y). Which view a manager believed was true would give that manager a pre-set series of assumptions and related behaviors.

Theory X. In this negative view of human nature, workers are basically lazy and need firm guidance. The assumptions related to Theory X are:

a. Work Avoidance . Employees dislike work and so will try to avoid it.

b. Need for Control. Since employees dislike work, they must be coerced, controlled, or threatened with punishment to get them to achieve organizational goals.

c. Avoidance of Responsibility. Workers seek formal direction and dislike taking responsibility.

d. Security is Paramount . Employees value security above all else and display little ambition.

In Maslow’s terms, a Theory X viewpoint means that lower-order needs dominate individual needs. Theory X managers tend to be very directive, are seen as harsh and unbending, and will often be accused of “micro-management.”

2. Theory Y. In this positive view, employees are willing workers who actively seek responsibility. The underlying assumptions are:

a. Work as play. Work is as natural as play or rest.

b. Commitment. When employees are committed, they will exercise self-direction and self-control.

c. Accepting Responsibility. Workers accept, and will even seek, responsibility.

d. Innovation is Common. The ability to make innovative decisions is widely disbursed throughout the population; it does not only exist in the managerial ranks.

Herzberg’s Two-Factor (Motivation-Hygiene) Theory. Frederick Herzberg proposed that an individual’s relation to work is basic and that one’s attitude toward work can very well determine success or failure. In other words, things that people feel good about at work are motivating and those things they don’t feel good about are de-motivating. In his research, Herzberg realized that the opposite of satisfaction is not dissatisfaction; rather there are two different factor scales, one ranging from satisfaction to no satisfaction and the other from dissatisfaction to no dissatisfaction. When he related a number of workplace factors against these

two scales, he realized they were very different concepts. He called the first set of factors motivation factors and the second hygiene factors.

a. Hygiene Factors. These workplace factors, when not met, lead to job dissatisfaction. When they are met, they do NOT lead to job satisfaction, but rather, to a lack of dissatisfaction. So, meeting hygiene factors does NOT increase motivation, it merely placates the workers. Hygiene factors include quality of supervision, pay, company policies, physical working conditions, relations with others, and job security.

b. Motivation Factors. These are intrinsically rewarding factors in the work environment such as promotion and personal growth opportunities, recognition, responsibility, and achievement. Meeting these factors will increase motivation by creating a satisfying work environment.

CONTEMPORARY THEORIES OF MOTIVATION

McClelland's Theory of Needs. David McClelland created a theory based on three needs:

Need for Achievement (nAch): the drive to excel and to achieve in relation to a set of standards.

Need for Power (nPow): the need to make others behave in a way they would not have behaved otherwise.

Need for Affiliation (nAff): the desire for friendly and close interpersonal relationships.

Goal-Setting Theory. This theory studies the effects goal specificity, challenge, and feedback has on performance. The study of goal setting has created the following general rules:

1. Specific goals produce a higher level of output than do generalized goals.

2. Typically, the more difficult the goal, the higher level of performance, assuming that goal has been accepted by the employee. This is because:

a. Difficult goals focus attention on the task and away from distractions.

b. Difficult goals energize employees.

c. Difficult goals tend to make people persist in efforts toward attaining them.

d. Difficult goals force employees to discover strategies to help them perform the task or job more effectively.

3. Feedback is important in goal-setting theory, especially self-generated feedback.

4. The question of whether participative goal-setting increases motivation has not yet been resolved. The assumption is that Instructor Manual: Essentials of Organizational Behavior when employees are involved in setting the goals, they have greater buy-in and therefore will have a higher level of commitment.

Adams' Equity Theory. This view holds that motivation can be affected by the comparisons employees make of their job inputs (effort, experience, education, confidence) and the job's outcomes (salary levels, raises, recognition) relative to the inputs and outcomes of other employees. If the ratios of inputs to outputs are roughly equal between employees, a state of equity is said to exist. The situation is perceived to be fair.

Referent Comparisons. The individuals that the employees compare themselves to (their referents) can vary widely. The four basic comparisons are:

a. Self-Inside: an employee's own experiences in a different position within the current organization.

b. Self-Outside: an employee's experiences in the situation or position outside the current organization.

c. Other-Inside: other individuals within the current organization.

d. Other-Outside: other individuals outside the employee's current organization.

Four Moderating Variables. The selection of which referent to use in comparison will depend upon four moderating variables.

a. Gender . Both genders prefer same-sex comparisons.

b. Lengths of Tenure . Employees with little experience in the current organization will tend to use their own personal experiences, while employees of long tenure will tend to use coworkers as referents.

c. Level in the Organization. Upper-level employees tend to make other-outside comparisons more often than do lower-level employees.

d. Amount of Education or Professionalism. The higher the educational level of the employees, the more likely they are to use other-outside comparisons.

Vroom's Expectancy Theory. This widely accepted explanation of motivation deals with a coupling of three beliefs. The belief that (1) effort will lead to a good performance appraisal, (2) good appraisals will lead to organizational rewards, and (3) organizational rewards will satisfy the employee's personal goals. The relationship between these three beliefs and the strength of the links between them are the focus of this theory.

The Three Key Relationships:

1. Effort-Performance Relationship.: Defined as the probability perceived by the individual that exerting a given amount of effort will lead to successful performance.

2. Performance-Reward Relationship.: The degree to which the individual believes that performing at a particular level will lead to the attainment of a desired outcome.

3. Rewards-Personal Goals Relationship.: The degree to which organizational reward satisfy an individual's personal goals or needs and the attractiveness of those potential rewards for the individual.

CASE STUDY

FRUSTATED AT AGE 30

The case is about Bob Wood who is 30 years old. He stated his career working with Accenture as an analyst in 1996, worked as a health-care IT consultant for two other firms and then assumed the post of chief technology officer at claimship.com, a medical claims processor. By 2001, he was earning around $ 80,000 A year. Due to the downturn in economy, he was now earning $ 44,000 as a technology analyst at a hospital. He has a lot of debt on him- $ 23,000 on his college loans, more than $ 4,500 on his credit cards and around 30 more payments on his BMW. He doesn’t have job security.

He is frustrated and feels that his generation got spoiled. They earlier got jobs with unrealistically high pay and switched jobs at their will. However, time changed and now it became tough to get a job and, the jobs now paid nearly half of the amount they used to get earlier.

Questions

Q1.Analyze Bob using the Maslow need hierarchy.

Q2. Analyze Bob’s lack of motivation using organizational justice and expectancy theory.

Q3. If you were Bob’s boss, what could you do to positively influence his motivation?

Q4. What are the implications of this case for employers hiring Generations Xers?

Case Analysis:

Introduction:

Present case is about Bob wood, a 30 year old experienced IT professional. Due to economic downturn his salary got down almost half of the previous one that makes him frustrated in addition to it he has a lot of debt on him. All these circumstances make him to think that his generation got spoiled. Bob needs to be motivated in the present case for a better tomorrow.

Situational Analysis:

In the present situation Bob wood is frustrated as his salary got down due to economic downturn. A lot of debt on bob makes him feel depressed and his motivation level dropped down.

Problem Identification:

Primary Problem: Lack of motivation in Bob is the primary problem which makes him frustrated.

Secondary Problem: Bob salary got half due to economic downturn and lots of debt on bob is the secondary problem in this case.

SWOT Analysis:

Strengths:

Bob wood is experienced IT professional.

Intellectual, bright student

Hardworking with analytical bent of mind.

Weakness:

Lack of motivation

Frustration due to salary decrement

Lot of debt on bob

Opportunities:

Demand of experienced professionals in Job market

New future planning regarding financial assets

Threats:

Increasing interest on debts

Job insecurity

Job market changing dynamics.

Lack of financial support

5 Stages of Group Development

Stage 1: Forming

In the Forming stage, personal relations are characterized by dependence. Group members rely on safe, patterned behavior and look to the group leader for guidance and direction. Group members have a desire for acceptance by the group and a need to be know that the group is safe. They set about gathering impressions and data about the similarities and differences among them and forming preferences for future subgrouping. Rules of behavior seem to be to keep things simple and to avoid controversy. Serious topics and feelings are avoided.

Stage 2: Storming

The next stage, called Storming, is characterized by competition and conflict in the personal-relations dimension an organization in the task-functions dimension. As the group members attempt to organize for the task, conflict inevitably results in their personal relations. Individuals have to bend and mold their feelings, ideas, attitudes, and beliefs to suit the group organization. Because of "fear of exposure" or "fear of failure," there will be an increased desire for structural clarification and commitment. Although conflicts may or may not surface as group issues, they do exist. Questions will arise about who is going to be responsible for what, what the rules are, what the reward system is, and what criteria for evaluation are. These reflect conflicts over leadership, structure, power, and authority.

Stage 3: Norming

In the Norming stage, interpersonal relations are characterized by cohesion. Group members are engaged in active acknowledgment of all members’ contributions, community building and maintenance, and solving of group issues. Members are willing to change theirpreconceived ideas or opinions on the basis of facts presented by other members, and they actively ask questions of one another. Leadership is shared, and cliques dissolve.

The major task function of stage three is the data flow between group members: They share feelings and ideas, solicit and give feedback to one another, and explore actions related to the task. Creativity is high. If this stage of data flow and cohesion is attained by the group members, their interactions are characterized by openness and sharing of information on both a personal and task level. They feel good about being part of an effective group.

Stage 4: Performing

The Performing stage is not reached by all groups. If group members are able to evolve to stage four, their capacity, range, and depth of personal relations expand to true interdependence. In this stage, people can work independently, in subgroups, or as a total unit with equal facility. Their roles and authorities dynamically adjust to the changing needs of the group and individuals. Stage four is marked by interdependence in personal relations and problem solving in the realm of task functions. By now, the group should be most productive. Individual members have become self-assuring, and the need for group approval is past. Members are both highly task oriented and highly people oriented.

Stage 5: Adjourning

The final stage, Adjourning, involves the termination of task behaviors and disengagement from relationships. A planned conclusion usually includes recognition for participation and achievement and an opportunity for members to say personal goodbyes. Concluding a group can create some apprehension - in effect, a minor crisis. The termination of the group is a regressive movement from giving up control to giving up inclusion in the group. The most effective interventions in this stage are those that facilitate task termination and the disengagement process.

Leadership

Leadership can be defined as a process by which one individual influences others toward the attainment of group or organizational goals. Three points about the definition of leadership should be emphasized. First, leadership is a social influence process. Leadership cannot exist without a leader and one or more followers. Second, leadership elicits voluntary action on the part of followers. The voluntary nature of compliance separates leadership from other types of influence based on formal authority. Finally, leadership results in followers' behavior that is purposeful and goal-directed in some sort of organized setting. Many, although not all, studies of leadership focus on the nature of leadership in the workplace.

Leadership should be distinguished from management. Management involves planning, organizing, staffing, directing, and controlling, and a manager is someone who performs these functions. A manager has formal authority by virtue of his or her position or office. Leadership, by contrast, primarily deals with influence. A manager may or may not be an effective leader. A leader's ability to influence others may be based on a variety of factors other than his or her formal authority or position.

In the sections that follow, the development of leadership studies and theories over time is briefly traced.

Historical Leadership TheoriesLeadership Theory

Time of Introduction

Major Tenets

Trait Theories 1930sIndividual characteristics of leaders are different than those of nonleaders.

Behavioral Theories

1940s and 1950s

The behaviors of effective leaders are different than the behaviors of ineffective leaders. Two major classes of leader behavior are task-oriented behavior and relationship-oriented behavior.

Contingency Theories

1960s and 1970s

Factors unique to each situation determine whether specific leader characteristics and behaviors will be effective.

Leader-Member Exchange

1970sLeaders from high-quality relationships with some subordinates but not others. The quality of leader-subordinates relationship affects numerous workplace outcomes.

Charismatic Leadership

1970s and 1980s

Effective leaders inspire subordinates to commit themselves to goals by communicating a vision, displaying charismatic behavior, and setting a powerful personal example.

Substitutes foe Leadership

1970sCharacteristics of the organization, task, and subordinates may substitute for or negate the effects of leadership behaviors.

HISTORICAL DEVELOPMENT

Three main theoretical frameworks have dominated leadership research at different points in time. These included the trait approach (1930s and 1940s), the behavioral approach (1940s and 1950s), and the contingency or situational approach (1960s and 1970s).

TRAIT APPROACH.

The scientific study of leadership began with a focus on the traits of effective leaders. The basic premise behind trait theory was that effective leaders are born, not made, thus the name sometimes applied to early versions of this idea, the "great man" theory. Many leadership studies based on this theoretical framework were conducted in the 1930s, 1940s, and 1950s.

Leader trait research examined the physical, mental, and social characteristics of individuals. In general, these studies simply looked for significant associations between individual traits and measures of leadership effectiveness. Physical traits such as height, mental traits such as intelligence, and social traits such as personality attributes were all subjects of empirical research.

The initial conclusion from studies of leader traits was that there were no universal traits that consistently separated effective leaders from other individuals. In an important review of the leadership literature published in 1948, Ralph Stogdill concluded that the existing research had not demonstrated the utility of the trait approach.

Several problems with early trait research might explain the perceived lack of significant findings. First, measurement theory at the time was not highly sophisticated. Little was known about the psychometric properties of the measures used to operationalize traits. As a result, different studies were likely to use different measures to assess the same construct, which made it very difficult to replicate findings. In addition, many of the trait studies relied on samples of teenagers or lower-level managers.

Early trait research was largely atheoretical, offering no explanations for the proposed relationship between individual characteristics and leadership.

Finally, early trait research did not consider the impact of situational variables that might moderate the relationship between leader traits and measures of leader effectiveness. As a result of the lack of consistent findings linking individual traits to leadership effectiveness, empirical studies of leader traits were largely abandoned in the 1950s.

LEADER BEHAVIOR APPROACH.

Partially as a result of the disenchantment with the trait approach to leadership that occurred by the beginning of the 1950s, the focus of leadership research shifted away from leader traits to leader behaviors. The premise of this stream of research was that the behaviors exhibited by leaders are more important than their physical, mental, or emotional traits. The two most famous behavioral leadership studies took place at Ohio State University and the University of Michigan in the late 1940s and 1950s. These studies sparked hundreds of other leadership studies and are still widely cited.

The Ohio State studies utilized the Leader Behavior Description Questionnaire (LBDQ), administering it to samples of individuals in the military, manufacturing companies, college administrators, and student leaders. Answers to the questionnaire were factor-analyzed to determine if common leader behaviors emerged across samples. The conclusion was that there were two distinct aspects of leadership that describe how leaders carry out their role.

Two factors, termed consideration and initiating structure, consistently appeared. Initiating structure, sometimes called task-oriented behavior, involves planning, organizing, and coordinating the work of subordinates. Consideration involves showing concern for subordinates, being supportive, recognizing subordinates' accomplishments, and providing for subordinates' welfare.

The Michigan leadership studies took place at about the same time as those at Ohio State. Under the general direction of Rensis Likert, the focus of the Michigan studies was to determine the principles and methods of leadership that led to productivity and job satisfaction. The studies resulted in two general leadership behaviors or orientations: an employee orientation and a production orientation. Leaders with an employee orientation showed genuine concern for interpersonal relations. Those with a production orientation focused on the task or technical aspects of the job.

The conclusion of the Michigan studies was that an employee orientation and general instead of close supervision yielded better results. Likert eventually developed four "systems" of management based on these studies; he advocated System 4 (the participative-group system, which was the most participatory set of leader behaviors) as resulting in the most positive outcomes.

One concept based largely on the behavioral approach to leadership effectiveness was the Managerial (or Leadership) Grid, developed by Robert Blake and Jane Mouton. The grid combines "concern for production" with "concern for people" and presents five alternative behavioral styles of leadership. An individual who emphasized neither production was practicing "impoverished management" according to the grid. If a person emphasized concern for people and placed little emphasis on production, he was terms a "country-club" manager.

Conversely, a person who emphasized a concern for production but paid little attention to the concerns of subordinates was a "task" manager. A person who tried to balance concern for production and concern for people was termed a "middle-of-the-road" manager.

Finally, an individual who was able to simultaneously exhibit a high concern for production and a high concern for people was practicing "team management." According to the prescriptions of the grid, team management was the best leadership approach. The Managerial Grid became a major consulting tool and was the basis for a considerable amount of leadership training in the corporate world.

The assumption of the leader behavior approach was that there were certain behaviors that would be universally effective for leaders. Unfortunately, empirical research has not demonstrated consistent relationships between

task-oriented or person-oriented leader behaviors and leader effectiveness. Like trait research, leader behavior research did not consider situational influences that might moderate the relationship between leader behaviors and leader effectiveness.

CONTINGENCY (SITUATIONAL) APPROACH.

Contingency or situational theories of leadership propose that the organizational or work group context affects the extent to which given leader traits and behaviors will be effective. Contingency theories gained prominence in the late 1960s and 1970s. Four of the more well-known contingency theories are Fiedler's contingency theory, path-goal theory, the Vroom-Yetton-Jago decision-making model of leadership, and the situational leadership theory. Each of these approaches to leadership is briefly described in the paragraphs that follow.

Introduced in 1967, Fiedler's contingency theory was the first to specify how situational factors interact with leader traits and behavior to influence leadership effectiveness. The theory suggests that the "favorability" of the situation determines the effectiveness of task- and person-oriented leader behavior.

Favorability is determined by (1) the respect and trust that followers have for the leader; (2) the extent to which subordinates' responsibilities can be structured and performance measured; and (3) the control the leader has over subordinates' rewards. The situation is most favorable when followers respect and trust the leader, the task is highly structured, and the leader has control over rewards and punishments.

Fiedler's research indicated that task-oriented leaders were more effective when the situation was either highly favorable or highly unfavorable, but that person-oriented leaders were more effective in the moderately favorable or unfavorable situations. The theory did not necessarily propose that leaders could adapt their leadership styles to different situations, but that leaders with different leadership styles would be more effective when placed in situations that matched their preferred style.

Fiedler's contingency theory has been criticized on both conceptual and methodological grounds. However, empirical research has supported many of the specific propositions of the theory, and it remains an important contribution to the understanding of leadership effectiveness.

Path-goal theory was first presented in a 1971Administrative Science Quarterly article by Robert House. Path-goal theory proposes that subordinates' characteristics and characteristics of the work environment determine which leader behaviors will be more effective. Key characteristics of subordinates identified by the theory are locus of control, work experience, ability, and the need for affiliation. Important environmental characteristics named by the theory are the nature of the task, the formal authority system, and the nature of the work group. The theory includes four different leader behaviors, which include directive leadership, supportive leadership, participative leadership, and achievement-oriented leadership.

According to the theory, leader behavior should reduce barriers to subordinates' goal attainment, strengthen subordinates' expectancies that improved performance will lead to valued rewards, and provide coaching to make the path to payoffs easier for subordinates. Path-goal theory suggests that the leader behavior that will accomplish these tasks depends upon the subordinate and environmental contingency factors.

Path-goal theory has been criticized because it does not consider interactions among the contingency factors and also because of the complexity of its underlying theoretical model, expectancy theory. Empirical research has provided some support for the theory's propositions, primarily as they relate to directive and supportive leader behaviors.

The Vroom decision-making model was introduced by Victor Vroom and Phillip Yetton in 1973 and revised by Vroom and Jago in 1988. The theory focuses primarily on the degree of subordinate participation that is appropriate in different situations. Thus, it emphasizes the decision-making style of the leader.

The Vroom-Yetton-Jago model has been criticized for its complexity, for its assumption that the decision makers' goals are consistent with organizational goals, and for ignoring the skills needed to arrive at group decisions to difficult problems. Empirical research has supported some of the prescriptions of the theory.

The situational leadership theory was initially introduced in 1969 and revised in 1977 by Hersey and Blanchard. The theory suggests that the key contingency factor affecting leaders' choice of leadership style is the task-related maturity of the subordinates. Subordinate maturity is defined in terms of the ability of subordinates to accept responsibility for their own task-related behavior. The theory classifies leader behaviors into the two broad classes of task-oriented and relationship-oriented behaviors. The major proposition of situational leadership theory is that the effectiveness of task and relationship-oriented leadership depends upon the maturity of a leader's subordinates.

Situational leadership theory has been criticized on both theoretical and methodological grounds. However, it remains one of the better-known contingency theories of leadership and offers important insights into the interaction between subordinate ability and leadership style.

RECENT DEVELOPMENTS

Although trait, behavioral, and contingency approaches have each contributed to the understanding of leadership, none of the approaches have provided a completely satisfactory explanation of leadership and leadership effectiveness. Since the 1970s, several alternative theoretical frameworks for the study of leadership have been advanced. Among the more important of these are leader-member exchange theory, transformational leadership theory, the substitutes for leadership approach, and the philosophy of servant leadership.

LEADER-MEMBER EXCHANGE THEORY.

Leader-member exchange (LMX) theory was initially called the vertical dyad linkage theory. The theory was introduced by George Graen and various colleagues in the 1970s and has been revised and refined in the years since. LMX theory emphasizes the dyadic (i.e., one-on-one) relationships between leaders and individual subordinates, instead of the traits or behaviors of leaders or situational characteristics.

The theory's focus is determining the type of leader-subordinate relationships that promote effective outcomes and the factors that determine whether leaders and subordinates will be able to develop high-quality relationships.

According to LMX theory, leaders do not treat all subordinates in the same manner, but establish close relationships with some (the in-group) while remaining aloof from others (the out-group). Those in the in-group enjoy relationships with the leader that is marked by trust and mutual respect. They tend to be involved in important activities and decisions. Conversely, those in the out-group are excluded from important activities and decisions.

LMX theory suggests that high-quality relationships between a leader-subordinate dyad will lead to positive outcomes such as better performance, lower turnover, job satisfaction, and organizational commitment. Empirical research supports many of the proposed relationships (Steers et al., 1996).

TRANSFORMATIONAL LEADERSHIP THEORIES.

Beginning in the 1970s, a number of leadership theories emerged that focused on the importance of a leader's charisma to leadership effectiveness. Included within this class of theories are House's theory of charismatic leadership, Bass's transformational leadership theory, and Conger and Kanungo's charismatic leadership theory.

These theories have much in common. They all focus on attempting to explain how leaders can accomplish extraordinary things against the odds, such as turning around a failing company, founding a successful company, or achieving great military success against incredible odds. The theories also emphasize the importance of leaders' inspiring subordinates' admiration, dedication, and unquestioned loyalty through articulating a clear and compelling vision.

Tranformational leadership theory differentiates between the transactional and the transformational leader. Transactional leadership focuses on role and task requirements and utilizes rewards contingent on performance. By contrast, transformational leadership focuses on developing mutual trust, fostering the leadership abilities of others, and setting goals that go beyond the short-term needs of the work group.

Bass's transformational leadership theory identifies four aspects of effective leadership, which include charisma, inspiration, intellectual stimulation, and consideration. A leader who exhibits these qualities will inspire subordinates to be high achievers and put the long-term interest of the organization ahead of their own short-term interest, according to the theory. Empirical research has supported many of the theory's propositions.

CULTURE:

Point 1 – Introduction

This sets the context for the lecture. Originally an anthropological term, culture refers to the underlying values, beliefs and codes of practice that makes a community what it is. The customs of society, the self – image of its members, the things that make it different from other societies, are its culture. Culture is powerfully subjective and reflects the meanings and understandings that we typically attribute to situations, the solutions that we apply to common problems. The idea of a common culture suggests possible problems about whether organizations have cultures. Organizations are only one constituent element of society. People enter them from the surrounding community and bring their culture with them. It is still possible for organizations to have cultures of their own as they possess the paradoxical quality of being both ‘part ’ of and ‘apart’ from society. They are embedded in the wider societal context but they are also communities of their own with distinct rules and values.

Point 2 – Organizational culture and strategic management

Culture has long been on the agenda of management theorists. Culture change must mean changing the corporate ethos, the images and values that inform action and this new way of understanding organizational life must be brought into the management process. There are a number of central aspects of culture: There is an evaluative element involving social expectations and standards; the values and beliefs that people hold central and that bind organizational groups. Culture is also a set of more material elements or artifacts. These are the signs and symbols that the organization is recognized by but they are also the events, behaviours and people that embody culture. The medium of culture is social interaction, the web of communications that constitute a community. Here a shared language is particularly important in expressing and signifying a distinctive organizational culture.

Point 3 – Culture and Success

Deal and Kennedy (1982) argue that culture is the single most important factor accounting for success or failure in organizations. They identified four key dimensions of culture:

1. Values – the beliefs that lie at the heart of the corporate culture.

2. Heroes – the people who embody values.

3. Rites and rituals – routines of interaction that have strong symbolic qualities.

4. The culture network – the informal communication system or hidden hierarchy of power in the organization.

Peters and Waterman (1982) suggest a psychological theory of the link between organizational culture and business performance. Culture can be looked upon as a reward of work; we sacrifice much to the organization and culture is a form of return on effort. Kanter (1989) refers to the paradox implicit in linking culture with change. On the surface culture has essentially traditional and stable qualities, so how can you have a ‘culture of change?’ Yet this is exactly what the innovative organization needs.

Point 4 – Culture and the management of change

If real change is to occur in organizations rather than cosmetic or short – lived change, it has to happen at the cultural level. Corporate culture has many powerful attractions as a lever for change. The problem is how to get a hand on the lever. Firstly, cultures can be explicitly created – you have to be aware of what it takes to change an existing culture. The ability of companies to be culturally innovative is related to leadership and top management must be responsible for building strong cultures. Leaders construct the social reality of the organization, they shape values and attend to the drama and vision of the organization. Culture is frequently counter posed to formal rationality – in this sense culture helps to resolve the dilemma of bureaucracy; formal procedures are necessary for business integrity but they also stifle autonomy and innovation The period from the mid 70s has been one of growing uncertainty for firms and in response to a changing environment and business crises adaptable cultures that are responsive to change have become vital. Morgan (1977) focuses on the whole organization, the cultivation of harmonious relations at all levels, the merging of individual with common goals and a reliance on worker responsibility (Japanese approaches) as success factors in organizational culture.

Point 5 – Exploring organizational culture

Attempts to define organizational culture have adopted a number of different approaches. Some focus on manifestations – the heroes and villains, rites, rituals, myths and legends that populate organizations. Culture is also socially constructed and reflects meanings that are constituted in interaction and that form commonly accepted definitions of the situation. Culture is symbolic and is described by telling stories about how we feel about the organization. A symbol stands for something more than itself and can be many things, but the point is that a symbol is invested with meaning by us and expresses forms of understanding derived from our past collective experiences. The sociological view is that organizations exist in the minds of the members. Stories about culture show how it acts as a sense - making device. Culture is unifying and refers to the processes that bind the organization together. Culture is then consensual and not conflictual. The idea of corporate culture reinforces the unifying strengths of central goals and creates a sense of common responsibility. Culture is holistic and refers to the essence – the reality of the organization; what it is like to work there, how people deal with each other and what behaviours are expected. All of the above elements are interlocking; culture is rooted deep in unconscious sources but is represented in superficial practices and behaviour codes. Because organizations are social organisms and not mechanisms, the whole is present in the parts and symbolic events become microcosms of the whole.

Point 6 – Classifying cultures?

One way of exploring cultures is to classify them into types.

1. Role Cultures – are highly formalized, bound with regulations and paperwork and

authority and hierarchy dominate relations.

2. Task Cultures – are the opposite, the preserve a strong sense of the basic mission of the

organization and teamwork is the basis on which jobs are designed.

3. Power Cultures – have a single power source, which may be an individual or a corporate group. Control of rewards is a major source of power.

Handy points out that these types are usually tied to a particular structure and design of organization. A role culture has a typical pyramid structure. A task culture has flexible matrix structures. A power culture has web – like communications structure. Cultural analysis brings to centre stage a rich vein of behaviours and stands on its head much of the conventional wisdom about organizations. Stories, legends, rituals and heroes are key elements of organizational functioning and may actually serve more important objectives than formal decision making. We need to consider in more depth the different ways in which culture has been used in organization study. Wilson and Rosenfield (1990) distinguish two schools of thought:

1. The analytical school stresses the context and history of the organization and how culture acts as a socializing force controlling the behaviour of members.

2. The applicable school view culture in terms of commitment to central goals and as a means of managing successful organizational change.

Point 7 – Managing culture?

Corporate culture is really a kind of image for the company which top management would like to project. The image of the organization differs according to where you view it. Even in companies with strong cultures the social distance between senior management and shop floor reality can be very wide. Cultures are hardly planned or predictable; they are the natural products of social interaction and evolve and emerge over time. So is it valid to allow such a notion of culture to give way to a version of managed consensus? Pettigrew believes that cultures can be shaped to suit strategic ends. He has in mind the idea that organizations have the capacity to transform themselves from within. Even if cultures can be managed is this necessarily a good thing? Willmott (1993) has fashioned a tough challenge to what he calls corporate culturalism. This is the tendency for culture to be promoted as a device for increasing corporate effectiveness.

Conclusion

Culture spans the range of management thinking and organizational culture has been one of the most enduring buzzwords of popular management. Why? What is the appeal of the concept? Organizational culture is apparently unifying and this strongly appeals to management ’s concern with projecting an image of the organization as a community of interests. Perhaps most importantly culture penetrates to the essence of an organization – it almost analogous with the concept of personality in relation to the individual and this acute sense of what an organization is – its mission, core values – seems to have become a necessary asset of the modern company. There is the vexed question of whether or not organizational culture can be managed. Academics interested in understanding and analyzing culture tend to say no. While there may be no definitive answer to the question, the critical and the managerial sides of the debate and inform and renew each other so it remains important to explore both.

Conflict & Negotiation:

A Definition of Conflict

1. There are several common themes which underlie most definitions:

The parties to it must perceive conflict.

Commonalties in the definitions are opposition or incompatibility and some form of interaction.

2. We define conflict as “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.”

This describes that point when an interaction “crosses over” to become an inter-party conflict.

It encompasses the wide range of conflicts that people experience in organizations.

Transitions in Conflict Thought

A. The Traditional View

. This early approach assumed that all conflict was bad. Conflict was synonymous with such terms that reinforced its negative connotation. By definition, it was harmful and was to be avoided.

. This view was consistent with the prevailing attitudes about group behavior in the 1930s and 1940s. Conflict was seen as a dysfunctional outcome resulting from poor communication, a lack of openness and trust between people, and the failure of managers to be responsive to their employees.

B. The Human Relations View

1. Conflict is a natural occurrence in all groups and organizations. Since it was natural and inevitable it should be accepted.

2. It cannot be eliminated and may even contribute to group performance.

3. The human relations view dominated conflict theory from the late 1940s through the mid-1970s.

Conflict Process:

Stage I: Potential Opposition or Incompatibility

A. Stage I: Potential Opposition or Incompatibility

Semantic difficulties are a result of differences in training, selective perception, and inadequate information.

The potential for conflict increases when either too little or too much communication takes place.

The channel chosen for communicating can have an influence on stimulating opposition.

2. Structure

The term structure includes variables such as size, degree of

specialization, jurisdictional clarity, member-goal compatibility, leadership styles, reward systems, and the degree of dependence.

Size and specialization act as forces to stimulate conflict. The larger the group and more specialized its activities, the greater the likelihood of conflict.

The potential for conflict is greatest where group members are younger and turnover is high.

The greater the ambiguity in responsibility for actions lies, the greater the potential for conflict.

The diversity of goals among groups is a major source of conflict.

A close style of leadership increases conflict potential.

Too much reliance on participation may also stimulate conflict.

Reward systems, too, are found to create conflict when one member’s gain is at another’s expense.

Finally, if a group is dependent on another group, opposing forces are stimulated.

3. Personal variables

Include individual value systems and personality characteristics. Certain personality types lead to potential conflict.

Most important is differing value systems. Value differences are the best explanation for differences of opinion on various matters.

B. Stage II: Cognition and Personalization

1. Antecedent conditions lead to conflict only when the parties are affected by and aware of it.

2. Conflict is personalized when it is felt and when individuals become emotionally involved.

3. This stage is where conflict issues tend to be defined and this definition delineates the possible settlements.

4. Second, emotions play a major role in shaping perceptions.

Negative emotions produce oversimplification of issues, reductions in trust, and negative interpretations of the other party’s behavior.

Positive feelings increase the tendency to see potential relationships among the elements of a problem, to take a broader view of the situation, and to develop more innovative solutions.

C. Stage III: Intentions

1. Intentions are decisions to act in a given way.

2. Why are intentions separated out as a distinct stage? Merely one party attributing the wrong intentions to the other escalates a lot of conflicts.

3. One author’s effort to identify the primary conflict-handling intentions is represented in

Cooperativeness—“the degree to which one party attempts to satisfy the other party’s concerns.”

Assertiveness—“the degree to which one party attempts to satisfy his or her own concerns.”

C. Stage III: Intentions (cont.)

4. Five conflict-handling intentions can be identified.

Competing: When one person seeks to satisfy his or her own interests, regardless of the impact on the other parties to the conflict

Collaborating: When the parties to conflict each desire to fully satisfy the concerns of all parties. The intention is to solve the problem by clarifying differences rather than by accommodating.

Avoiding: A person may recognize that a conflict exists and want to withdraw from it or suppress it.

Accommodating: When one party seeks to appease an opponent, that party is willing to be self-sacrificing.

Compromising: When each party to the conflict seeks to give up something, sharing occurs, resulting in a compromised outcome. There is no clear winner or loser, and the solution provides incomplete satisfaction of both parties’ concerns.

5. Intentions provide general guidelines for parties in a conflict situation. They define each party’s purpose, but they are not fixed.

They might change because of reconceptualization or because of an emotional reaction.

However, individuals have preferences among the five conflict-handling intentions.

It may be more appropriate to view the five conflict-handling intentions as relatively fixed rather than as a set of options from which individuals choose to fit an appropriate situation.

D. Stage IV: Behavior

E. Stage V: Outcomes

F. Negotiation

G. Bargaining Strategies

1. There are two general approaches to negotiation: distributive bargaining and integrative bargaining

2. Distributive bargaining

An example of distributive bargaining is buying a car:

a. You go out to see the car. It is great and you want it.

b. The owner tells you the asking price. You do not want to pay that much.

c. The two of you then negotiate over the price.

Its most identifying feature is that it operates under zero-sum conditions. Any gain I make is at your expense, and vice versa.

The most widely cited example of distributive bargaining is in labor-management negotiations over wages.

The essence of distributive bargaining is depicted in Exhibit 14-6.

a. Parties A and B represent two negotiators.

b. Each has a target point that defines what he or she would like to achieve.

c. Each also has a resistance point, which marks the lowest outcome that is acceptable.

d. The area between these two points makes up each one’s aspiration range.

E. As long as there is some overlap between A and B’s aspiration ranges, there exists a settlement range where each one’s aspirations can be met.

When engaged in distributive bargaining, one’s tactics focus on trying to get one’s opponent to agree to one’s specific target point or to get as close to it as possible.

3. Integrative bargaining

An example: A sales rep calls in the order and is told that the firm cannot approve credit to this customer because of a past slow-pay record.

a. The next day, the sales rep and the firm’s credit manager meet to discuss the problem. They want to make the sale, but do not want to get stuck with uncollectable debt.

b. The two openly review their options. c. After considerable discussion, they agree on a solution that meets both

their needs. The sale will go through with a bank guarantee that will ensure payment if not made in 60 days.

This example operates under the assumption that there exists one or more settlements that can create a win-win solution.

In terms of intra-organizational behavior, all things being equal, integrative bargaining is preferable to distributive bargaining.

Because integrative bargaining builds long-term relationships and facilitates working together in the future, it bonds negotiators and allows each to leave the bargaining table feeling victorious.

Distributive bargaining, on the other hand, leaves one party a loser. It tends to build animosities and deepens divisions.

Why do we not see more integrative bargaining in organizations? The answer lies in the conditions necessary for this type of negotiation to succeed.

a. Parties who are open with information and candid about their concernsb. A sensitivity by both parties to the other’s needsc. The ability to trust one anotherd. A willingness by both parties to maintain flexibility

H. The Negotiation Process

1. A simplified model of the negotiation process

2. Preparation and planning:

Do your homework. What is the nature of the conflict? What is the history leading up to this negotiation? Who is involved, and what are their perceptions of the conflict? What do you want from the negotiation? What are your goals?

You also want to prepare an assessment of what you think the other party to your negotiation’s goals are.

a. When you can anticipate your opponent’s position, you are better equipped to counter his or her arguments with the facts and figures that support your position.

Once you have gathered your information, use it to develop a strategy.

Determine your and the other side’s Best Alternative To a

Negotiated Agreement (BATNA).

a. Your BATNA determines the lowest value acceptable to you for a negotiated agreement.

b. Any offer you receive that is higher than your BATNA is better than an impasse.

3. Definition of ground rules:

Who will do the negotiating? Where will it take place? What time constraints, if any, will apply?

To what issues will negotiation be limited? Will there be a specific procedure to follow if an impasse is reached?

During this phase, the parties will also exchange their initial proposals or demands.

4. Clarification and justification:

When initial positions have been exchanged, explain, amplify, clarify, bolster, and justify your original demands

This need not be confrontational.

You might want to provide the other party with any documentation that helps support your position.

5. Bargaining and problem solving:

The essence of the negotiation process is the actual give and take in trying to hash out an agreement.

Concessions will undoubtedly need to be made by both parties.

6. Closure and implementation:

The final step—formalizing the agreement that has been worked out and developing any procedures that are necessary for implementation and monitoring

Major negotiations will require hammering out the specifics in a formal contract.

For most cases, however, closure of the negotiation process is nothing more formal than a handshake.

References:

Robbins,13th Edition, Organizational Behaviour.