DRIVE-FALL 2013

PROGRAM-MBA
SEMESTER-I
MB0038 Management Process and Organizational Behavior
Q1. (a) A vision statement is a formal statement of what a business wants to be. According to Collins and Porras, a
vision statement should have four parts. What are those four parts?
Answer:
1. The core values:
These are those things very close to your heart that you will not give up at any cost. It can be integrity (for example, I will
never cheat on the taxes I have to pay) or quality (I will never use a lower quality wood), etc. Usually we say that you
should have only 4 to 6 core values. Of course, personal values and business values may differ.
2. Core purpose:
It is the purpose of the organization, for example, to make furniture. This is something that you want to achieve within the
framework of our core values. It gives the achievement orientation to the business and therefore the focus. When we get an
opportunity to expand or sell off and if we are in a decision dilemma, this acts as another light house.
3. The BHAG is about having a goal which qualifies the purpose. For example, to be the best furniture maker in the town
in five years or to be the most well known furniture supplier in India by 2025, etc. We say that BHAG should be big, yet
specific and that your chance of attaining it is only 70%. If the probability of attaining it is more than 70%, perhaps your
BHAG is not big enough and not audacious enough and you have set your goals too low.
4. The vivid description should make the entire vision statement very inspiring to all stakeholders. It should be simple and
easily understandable. For example, Quit India is a very simple statement, but it is very vivid and easily understandable
by all. Let us be very clear that the vision statement is meant for the stakeholders and therefore, the importance of the vivid
and simple statement.
(b) Differentiate between process and tasks (Parts of vision statement, Difference between process and tasks)
Answer:
Processes
Process is a collection of related, structured activities or tasks that produce a specific service or product (serve a particular
goal) for a particular customer or customers. It often can be visualized with a flowchart as a sequence of activities with
interleaving decision points or with a Process Matrix as a sequence of activities with relevance rules based on the data in
the process include the strategic planning process, talent planning, expense and capital budgeting, performance
management systems, product planning
For example, he has to plan and decide the number of tables before deciding on the quantity of wood. Thus at the business
level, some processes come into play. These are planning, organizing, staffing, leading, and controlling. We call them
management processes. In other words, in the management system, these processes convert the input into output (furniture,
profit, growth, etc.).
Tasks (activities)
This is perhaps the most basic unit in an organization. In the example given above, teaching can be a task, cutting wood
can be a task, and making grooves in the wood can be a task. Thus, we have learnt that ever organization has a vision and
mission. To execute the organizational vision we create strategies. Structures, systems and processes help the organization
execute the strategies.
Q2. Planning is called as the cornerstone of management. Define planning and describe the importance of planning.
Explain the types of planning.
(Definition of planning, Importance of planning, Types of planning) 2,3,5
Answer:
Definition and Importance of Planning
Planning (also called forethought) is the process of thinking about and organizing the activities required to achieve a
desired goal. Planning involves the creation and maintenance of a plan. As such, planning is a fundamental property of

intelligent behavior. This thought process is essential to the creation and refinement of a plan, or integration of it with other
plans; that is, it combines forecasting of developments with the preparation of scenarios of how to react to them.
A goal is a desired future state that the organization attempts to reach. Goals are important because an organization exists
for a purpose, and goals define and state that purpose. Goals specify future ends; plans specify the means to do that.
Therefore, planning is about looking ahead. Planning answers six basic questions in regard to any activity:

What needs to be accomplished? What are the alternative routes to it?

When is the deadline?
Where will this be done?
Who will be responsible for it?
How will it get done?
How much time, energy, and resources are required to accomplish this goal?

Planning is important for the following reasons:

It helps the management to clarify, focus, and research their businesses or project's development and prospects.
It provides a considered and logical framework within which a business can develop and pursue business.
It offers a benchmark against which the actual performance can be measured and reviewed.
It plays a vital role in helping to avoid mistakes or recognize hidden opportunities.
Type of planning
Planning can be classified from different perspectives.
Based on level (corporate, business and functional plans)
They cover long-term objectives of various businesses and the ways to do these. They are integrated and future oriented.
Sambhavi may consider that they could enter into long-life-packaged bakery products, production of bakery raw materials,
a chain food retail, etc. These are corporate plans. Of course, Sambhavi is small. Take an organization like Tata. They have
over 150 businesses under their corporate headquarters and the plan made for various businesses by the corporate is called
corporate plan. Under the corporate plan, there would be plans how to muster the money, HR, etc.
Based on importance (strategic and operational plan)
A plan that is important and future oriented and forms the hub of fulfilling the vision is, of course, very important and such
plans are called strategic plans. As against this, short-term plans made for the day-to-day functioning such as production,
purchase operation, etc are called operational plans. These plans cover the production, distribution, etc that sustain the
markets.
Based on formal process (formal and informal)
When planning is done as per the steps and documented in a structured way, it is called formal plan and when this is
missing it is called informal plan.
Based on approach (proactive and reactive)
The plans that we make anticipating an incident is called proactive plans and something that we make as a consequence of
an event or action of the competition is called reactive plans. Reactive plans bring us back to the
balance after we have lost it while the proactive plans give us initiative. In other words, we can say that reactive plans are
about survival while proactive is about growth.
Long, medium, and short-term plans
Every organization is required to fulfill some need of the society. If you were the chairman of PWD, your purpose would
be road building and if you were the owner of Sambhavi bakers, your purpose would be to provide good bakery items. In
the latter case, it could be to the people from all over the state, a few districts, etc and the plan would further cover the short
term, medium term, and long term from a time perspective. Usually, we say that short term implies one or two years,
medium term up to 5 years and long term from 8 to 20 years.
Q3. What is meant by span of control? Differentiate between narrow span of control and wide span of control.
What are the factors that influence the span of control? (Meaning of span of control ,Difference between narrow
span of control and wide span of control, Factors that influence the span of control) 2,3,5
Answer: Span of control
Span of control is the term now used more commonly in business management, particularly human resource management.
Span of control refers to the number of subordinates a supervisor has.

In the hierarchical business organization of some time in the past it was not uncommon to see average spans of 1 to 4 or
even less. That is, one manager supervised four employees on average. In the 1980s corporate leaders flattened many
organizational structures causing average spans to move closer to 1 to 10. That was made possible primarily by the
development of inexpensive information technology.
Difference between narrow span of control and wide span of control

Figure 2: Narrow Span and Wide Span of Control

A department may have several homogenous sections of managers, junior managers, and employees. This leads us to the
questions of how many employees should work under a manager, how many managers should work under a senior
manager, then a division head, etc.
Table 1: Advantages and Disadvantages of Narrow Span and Wide Span

There is some optimal limit to the number of subordinate a manager can have. But considering the communication and
control in mind, usually we say that the number should be within a range of seven to ten. This however depends on the
nature of the industry and technology level. In a computerized environment, it is possible to have even 40 to 50 people
under one head. More the number of subordinates under one head, flatter then organization becomes. But keeping the
factors that influence the span of control, a balance has to be struck.
Factors that influence the span of control
The time that a manager gets to spend with the subordinate is the fundamental factor. Based on this, several sub factors
emerge and are discussed below.
Training Wide span demands high level of training while in narrow span, one can manage with less.
Task definition and delegation Wide span demands clear task definition and delegation while this can be much less in a
narrow span.
Well defined plans and repetitive process If the business has these, a wide span is viable, if not a narrow span is
preferred.
Verifiable objectives Wide span demands verifiable objectives and this is much less in narrow span.
Speed of change When the speed of change is high, a wide span may not be practical from a communication perspective
but may not be practical if such changes need close control.
Organization structure, written and oral communication When this is of a higher order, wide span can work well.
Effective interaction and meeting Wide span demands both more than narrow span.

Specialists When there are a greater number of specialists at the upper level, a wide span is preferable. If the number of
specialists is more at the lower level, then a narrow span can work better.
Task simplicity If the task is simple, a wide span is viable.
Competency of managers With highly competent managers, a wide span works well.
Subordinate readinesss If the subordinates are mature and are willing to assume responsibility, a wide span works well.
Need for balance Ideally keeping these factors in mind, one has to balance between narrow and wide span of control.
Q4 Define Organizational behavior. What are the various approaches to Organizational behavior? (Definition of
OB, Approaches to OB) 2, 8
Answer: Definition of OB:
Organizational behavior is a field of study that investigates the impact that individuals, groups and structures have on
behavior within an organization for the purpose of applying such knowledge towards improving an organization's
effectiveness. It is an interdisciplinary field that includes sociology, psychology, communication, and management; and it
complements the academic studies of organizational theory.
Approaches and Importance of OB
Modern approach to organizational behavior
There are four main approaches to organizational behavior. They are:
Human resources approach
Contingency approach
Productivity approach
Systems approach
Let us now study each approach in detail.
Human resources approach
The human resources approach is concerned with the growth and development of people towards higher levels of
competency, creativity and fulfillment. People are the central resource in any organisation. Hence it tries to create a work
climate for improved abilities. This approach is also known as 'supportive approach' because the manager's primary role
changes from control of employees to providing an active support for their growth and performance.
Contingency approach
It implies that different situations require different behavioral practices for effectiveness. Hence each situation must be
analyzed carefully to determine the significant variables that exist in order to establish the more effective practices. This
approach ensures or at least encourages analysis of each situation prior to action. Thus it helps to use all the current
knowledge about people in the organization in the most appropriate manner.
Productivity approach
In this approach, the output per unit input is considered. Besides, economic inputs and outputs, we need to have human and
social inputs and outputs in workplace, is the premise of this approach.
Systems approach
We have already seen the systems approach. It means that the organization 'people' employ 'technology' in performing the
'task' that they are responsible for, while the 'structure' of the organization serves as a basis for coordinating all their
different activities.
Q5. Perception is the way we see and interpret things. Explain the importance of such perception. What are the
factors
affecting
perception?
(Importance
of
perception,
Factors
affecting
perception)
4,6
Answer:
The relationship between perception and organizational behavior stems from the role that the perception of an employee
regarding factors in an organization influence the manner in which he or she reacts or performs in the organization. This
process of perceiving something is a truly complicated one that is often shaped by individual preconceived notions
regarding certain factors. As such, it is possible for two people to look at the same object and still manage to perceive it in
wholly different ways.
Importance
Perception affects the planning because the goals set depend on our perception of the world and the employees and
their ability to achieve them.

The way we organize, i.e., flat versus hierarchical, depends on our perception of the competence of the employees
and business needs. You will find the same industry having different organizational set up because of this.
The ways we select staff is often fully based on perception and once we select, the way we manage their
performance, reward and promote them and treat them are also heavily dependent on perception.
Business leaders make an effort to change the perception of the employees to bring about change.
The controls that we put in place are based on our perception of the competence and sincerity of the employees.
Reasons for most workplace stress and conflict are differing perception and biases in perception.
Hence knowing about perception is very important.
Factors affecting perception
Factors that affect perception are:
Perceiver related factors
Target related factors
Situation related factors
Perceiver related factors
Peoples attitude, motives, interests, experiences and expectations affect perception. Attitude and motives. Attitudes are
evaluative statements (whether spoken in words or otherwise) about objects, people and events. The manager in our case
was making statements about the need to adhere to procedures while the assistant manager about the need to please
customers. Motives are strong drives that we have for taking an action. The motive of the manager could be to assert his
position and could be drawn from his ego needs. The reply of the assistant manager could be for defending his actions and
later quitting perhaps due to his drive to satisfy his ego. As a result they perceive the same service manual differently.
Interests-Interest is a natural inclination to talk, participate or perform a task. So, when you are interested in pleasing
customers you see things differently and when you are interested in adhering to discipline (both
are, of course, required), you perceive things differently.
Experiences-Experiences hard wire our brains. It is possible that the assistant manager would have had good experience
from the customer reaction when he serves in a way that is different from the manual and it is equally possible that the
manager would have been from an organization where systems and discipline are strict.
Expectations-The assistant manager expects the customers to be pleased when he serves them in a particular way and
therefore he expects the manager to accept this mode, while the manager expects the assistant manager to follow the
manual and therefore perceives the same situation differently.
Self-concept-Another factor that can affect social perception is the perceivers' self-concept. An individual with a positive
self-concept tends to notice positive attributes in another person.
Moods-Moods can have a strong influence on the way we perceive someone. We think differently when we are happy than
we do when we are depressed and perhaps the comment of the assistant manager could have been due to moods.
Cognitive structure-Cognitive structure, an individual's pattern of thinking, also affects perception. Some people have a
tendency to perceive physical traits, such as height, weight and appearance more readily. Others tend to focus more on
central traits or personality dispositions. Those with high cognitive complexity are able to perceive multiple characteristics
of another person rather than just a few and are therefore better decision makers.
Target related factors-These are novelty, motion, sound, size, background and proximity. We see how these are used in
business especially advertisements. Rakhi used to bake a cake for birthday of every one of her employees. This is novelty
because employers dont do it. Had the manager talked to this assistant manager softly but firmly in his room the sound,
background and proximity would have been more appropriate for the advice rather than on the shop floor.
Situation related-Time, work setting, work tradition, nature of word and social setting are important factors in a work
situation that affect perception. The manager admonished his assistant manager with long experience during the peak work
time, it was done against a work setting that focus on total customer satisfaction if not literal pampering of the customers,
which was Sambhavis tradition, the nature of work too was service and the attraction was kid care and merchandise, which
makes the service very different from a standard eatery or even a good restaurant. Hence the work setting too was very
different.
Q6. Give the definition and importance of motivation. Describe Maslows hierarchy of needs theory. (Definition of
motivation, Importance of motivation, Maslows hierarchy of needs theory) 2,3,5
Answer:
Definition and Importance of Motivation

Motivation is one of the most important factors determining organizational efficiency. All organizational facilities will go
to waste in absence of motivated people to utilize these facilities effectively. Every superior in the organization must
motivate its subordinates for the right types of behavior. The performance of human beings in the organization is dependent
on the ability in the motivation. Rensis Likert called motivation as" the cost of the management".
Motivation is important to an individual because:
Motivation helps to achieve personal goals.
Motivation gives job satisfaction.
Motivation helps in self-development of individual.
An individual would always gain by working with a dynamic team.
Similarly, motivation is important to a business because:
The more motivated the employees are, the more empowered the team is.
The more is the team work and individual employee contribution, more profitable and successful is the business.
During period of change, there is more adaptability and creativity.
Motivation leads to an optimistic and challenging attitude at work place.
In general, motivation has the following benefits:
Puts human resources into action and enables organizations to coordinate its physical and financial resources to
achieve its goals.
Improves efficiency by increasing productivity and decreasing cost.
It leads to innovation because of the desire to do a job better and accomplish a challenge.
It leads to best possible utilization of resources.
It creates a co-operative work environment where high degree of coordination is achieved and reduces the cost of
controls.
It makes them goal oriented and therefore makes them capable of delivering even in the absence of close
supervision.
Maslows hierarchy of needs theory
According to this theory, proposed by Maslow (1943), human beings have wants and desires which influence their
behavior. Only dissatisfied needs can influence behaviour. The needs follow an order of importance (called hierarchy) and
when a lower need is satisfied, he has a need to satisfy a higher level need. Maslow created the following five hierarchies1. Physiological Includes hunger, thirst, shelter, sex, and other bodily needs. So if the workplace does not fulfill these, an
individual will not be motivated. If he gets these, he will need the next hierarchy.
2. Safety Includes security and protection from physical and emotional harm and therefore he looks for safer working
place, and does not want to be threatened or abused in the workplace.
3. Social Includes affection, belongingness, acceptance, and friendship in the workplace and if he gets this, he will be
happy to work hard. Workplaces which guarantee this motivate them. We saw in the Hawthorne experiments, how social
relationship led to higher productivity.
4. Esteem Includes internal esteem factors, such as, self-respect, autonomy, and achievement; and external esteem
factors, such as status, recognition, and attention. So, when we set goals, supports him to achieve it and rewards him for it,
it fulfills his esteem needs and also other needs because of the money he gets as a result which he can use to fulfill the
other needs such as buying a house (safety), giving a party (social) or donating for charity (self esteem or self
actualization).
5. Self-actualization The drive to become what one is capable of becoming; includes growth, achieving ones potential,
and self-fulfillment.
Theory X and Theory Y
More than stating what motivates, this theory identifies the disposition that a manager takes and the consequent actions
which impacts motivation. Thus, some managers assume that employees are inherently lazy and will avoid work and
therefore put in close supervision to counter it. Others assume otherwise i.e., employees are ambitious, self motivated,
anxious to accept greater responsibility, and exercise self-control, self-direction, autonomy and empowerment and hence
they act accordingly. The former uses punitive measures to get results while the latter uses positive measures for the same
results. But those following Theory X have to develop elaborate directives and controls which cost a lot and the
organization loses competitiveness in comparison to those following theory Y though the latter runs the risk of low
productivity. Modern reality shows that Theory X is far less efficient than Theory Y though both focus on driving people to
action.