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A group is any number of people who:• have a common purpose or objective • interact with each
other to accomplish their objective • are aware of one another • perceive themselves to be part of the
group This is the way Huse and Bowditch (1977) defined a group. You were asked at the beginning as
to how many different groups you belong to. You may see, from the above definition that throughout
our lives, we belong to many different groups. Families are groups, a cricket team is a group, a club is a
group, drama and music organisations are all groups. You can thus apply the concept of group to
various examples of religion, politics, consumer, sports, etc. as the case may be. Types of Groups i)
Formal Groups : These groups are established by the organisation to accomplish specific tasks.
According to Cartwright and Zander (1974) these groups include command groups which consist of
managers and their direct subordinates; and committees and task forces which are created to carry out
specific organisational assignments or activities. Example: In an educational institution there are three
broad formal groups of teachers, students and administration. ii)Informal Groups These groups are
formed within the structure of the organisation but by the members themselves rather than by the
organisation. Sometimes they do not have the, approval )f the management. Basically, informal groups
are formed to satisfy social needs on the job. Sometimes they are formed to perform a task better,
sometimes they are formed to hold production at a certain level. In a rigid system of organisation, these
informal groups meet fairly regularly to cut short the rigid bureaucratic practices of the management.
iii) Primary Groups :Cooley (1911) defined and analysed primary groups as those characterised by
intimate, face-to-face association and cooperation. They are primary in several senses, but chiefly in
that they are fundamental in forming the social nature and ideals of the individuals. Example of
primary group is family and the peer group. Many people use the term small group interchangeably
with primary group iv)Membership Groups : These are the ones to which the individual actually
belongs. Examples: clubs, cooperative societies, workers unions, etc. v) Reference Groups These are
the ones with which an individual identifies or to which he would like to belong. Examples: socially or
professionally prestigious groups with which the individual would like to, belong. vi) The In-groups :
The in-groups represent a clustering of individuals holding prevailing values in a society or at least
having a dominant place in social functioning. Examples: Member of a team, family members. vii) The
Out-groups : The out-groups are the conglomerates looked upon as subordinate or marginal in the
future, Examples: street performers for an office worker, a hawker for a surgeon. Whenever there is a
win-lose situation in a competitive task, members of win or lose group show tremendous in-group
feelings within themselves. Their group, in relation to the other group, is also called an out-group.
in managing the organisation, you have to understand how groups can be made into effective work
groups. The factors that influence the work group effectiveness are norms, cohesion and leadership. Let
us see how each one of them contributes to making the group effective to achieve the objectives of the
organisation.i) Group norms When the group functions for a period of time, to attain certain
objectives, it develops norms or standards of behaviour. A norm is a rule. This tells the individual how
to behave in a particular group. An individual may be a member of a welfare group, a chess club, his
family and his work group. You may like to watch his behaviour in various groups. You will see the
different kinds of behaviour of the same individual in different groups. You may also notice that
sometimes the norm is formal and is accepted by the group that way. For example all members of a
particular work group wear safety glasses while operating on a particular machine. All of them would
do so by accepting this norm. On the other hand, a norm can be informal arising out of interactions and
feelings of the people. All the members of a task group decide to keep their output high by regulating
their pace of work. For example, a number of typists decide to attain a target of fifty pages of neat

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typing everyday. So they do it. The last characteristic of norms is that they allow possible deviations.
An individual who deviates too far gets punished. When the union is on strike, its member attending to
work is punished by being boycotted by the group. Ask yourself the following questions in the position
of a manager.1.What have you understood about norms when you are a formal leader of a group and
when you are a member of other group? 2.Have you understood what the norms of various groups are?
3.Do you know which are the central norms? 4.Do people conform to norms completely? 5.Do people
wait for their leader to speak first in a meeting? 6.Do people come in time for meetings? 7. Is
disagreement allowed? 8.Do people have a common style of clothing? ii) Group cohesiveness This
means the degree to which group members are motivated to remain within the group and consequently
behave in similar ways. A cohesive group also helps the members in their satsifaction of needs and
attainment of goals. Cohesiveness develops out of the activities, interactions and sentiments of the
people. The cohesive group acts as one man to attain its goal. iii) Group leadership As you have
studied in unit 13, leadership is the ability to influence the behaviour of others. Any effective work
group wanting to accomplish its task gaining some sort of social satisfaction and having some sense of
contribution and growth should like to look up to a leader to help reach these goals. Informal leaders
often emerge from the activities, interactions, sentiments of the ongoing group. They may help the
group to accomplish its task or fulfil its social goals. You will always notice that formal task instruction
comes from the supervisor, but informal help comes from the informal leader. Managing Group
In your role as a manager you will do well to remember some useful ways to make your work group
effective. As O'Donnel (1961) suggests you must know the following to manage your group of people
towards attaining the goal.i) Content While having a meeting with your group members try to
understand the subject matter of the task to be performed by the committee. This will help you to see
the problem clearly and solve it to:1.decide about the size of the commitee (having about five to fifteen
members) and include experts in the committee to solve your problem 2.distribute the agenda before
the meeting is held to all the members 3.specify the timings of the meeting 4.encourage persons to
present their ideas and do not encourage them to pick up the first feasible solution to a problem. Allow
them to think of various alternative solutions 5.periodically summarise the discussion and restate the
current position of the committee as to whether the committee has to finally decide on a solution or
only recommend a solution to a higher authority/advise the higher authority. ii) Process This involves
how the content is handled or discussed by the members. Benne and Sheats (1948) describe three
effective ways to approach the group processes. One of the ways the content is handled is by group task
activities. You may initiate, orient the group to its goals, coordinate, give and seek information about
the problem.
Q2 :MANGERIAL VALUES AND ETHOS :Ethos refers to habitual character and values of
individuals, groups, races, etc. Managerial ethos is concerned with the character and values of
managers as a professional group. Contemporary managers hold some specific values which affect
work and some of these are: autonomy, equity, security and opportunity. Equity refers to justice in
rewarding performance. Here again, modern managers strongly feel that a person must get a reward
proportionate to his input. Another highly rewarded value is security, both economic and emotional.
Keeping a person on his toes by making him feel insecure is slowly but steadily getting discredited as a
management philosophy. Even the societies which have practised "hire and fire" policy are
unmistakably shifting towards providing security of job. Providing enough career advancement
opportunities to employees is yet another contemporary managerial value. For several reasons it may
not be possible for many organisations to create enough vacancies for everybody to advance in their
career. However, modern managers encourage themselves and others to continue growing through
various modes of education, although, it does not necessarily lead to career advancement. Besides these

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four values which affect a manager's work, the manager may have a strong "Work Value". Work Value
refers to the worth a person ascribes to the opportunity of work. If you have a "strong" work value you
are going to identify the worth or value of work to you in more ways than one. You may view work as
an opportunity to: (a) accept challenges, (b) serve others, (c) earn money, (d) enjoy prestige and status,
(e) be creative, or (f) be independent, etc. Managerial Ethos and its characteristics : Apart from
these values, the managerial ethos of high order requires certain other characteristics as well. Let us
describe these very briefly to you. Action goal orientation: Persons with high sense of adequacy have
clear goals about their future and are directed by these goals. They usually do not think their goals in
status terms (i.e., what they would like to be) but in activity terms (i.e., what they would like to do). For
example, when a junior manager thinks that he would like to be the "Chief of Marketing" he is status-
goal oriented; but when he thinks that he would like to be influenced the marketing policies of the
company, he is action-goal oriented. Pro-action: Proactive people do things on their own without
having to be told by any one. Such initiative taking behavior leads to a high level of activity and
experimentation. As contrasted to these people are reactive persons or conformists who spend most of
their lives in doing things that others expect them to do. Reactive people are other-directed, whereas
proactive ones are inner-directed. A superior managerial ethos requires more of pro-action than
reaction. Internal resources: Managers with high sense of adequacy are aware of their internal
'strength and are guided by these strengths. They are aware of their weaknesses but this awareness does
not deter them from acting positively or to look for opportunities for continuous self-improvement.
They are open to feedback and ready to learn from experience. Problem-solving attitude: A superior
ethos requires that managers view themselves as problem solvers, rather than problem-avoiders. These
managers have a positive orientation to problem situations and do not want to run away from problems.
They tend to approach problem situations with optimism because they have internal locus of control,
i.e., a strong belief that they can change the environment through their own efforts.
SYSTEMS The major prerequisites of control are two: a plan and a structure.a) Plan: controls must be
based on plan. The more clear and complete the plans are the more effective controls can be; plans
become the standards by which the actions are measured. b) Structure: There is need for a structure to
know where the responsibility rests for deviations and corrective action, if any needed. As in the case
of plans, the more clear and complete the organisation structure is, the more effective control can be.
Controls, to he effective, should share the following basic characteristics: Appropriate: Controls should
correspond to an organisation's plans. Controls designed for a general manager are inappropriate for a
supervisor. Similarly, control systems suitable for a line department may be inappropriate for a staff
department. Strategic: Control should serve a stretegic purpose and provide spotlight on positive and
negative exceptions at critical points. Acceptable: Controls will not work unless people want them to.
They should be acceptable to those to whom they apply. Reliable and objective: Controls should be
accurate and unbiased. If they are unreliable and subjective, people will resent them. Cost-effective:
The benefit from control should be greater than the costs. Control devices should yield tangible
benefits. METHODS OF CONTROL : Arthur Bedeian discusses nine methods of control and
classifies them into three categories based on their frequency, of use: Constantly used controls: Self-
control, group control and policies, procedures and rules. Periodically used controls: Management
Information Systems, External Audits and Budgets. Occasionally used controls: Special reports,
personal observation and project control. The nine methods of control mentioned above (see Fig. III)
are briefly discussed hereunder. Constant Controls Self-control: Managers need to exercise more self-
control to minimise the need for other control methods and making control in the organisation
acceptable and effective. Self-control means giving a fair day's work for a fair day's pay, reporting to
work on time, discharging duties and responsibility properly and respecting the rights of others in the

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organisation. Self-control is more in tune with Theory Y discussed later in the unit on Leadership Styles
and Influence Process in Block 5. Respect for self-control in an organisation can be a motivating factor.
A sense of appreciation for self-control can be promoted among employees through training in
behaviour modification. Group Control: Work groups are a source of control. Group-defined norms
exert greater influence in organisations than the norms that managements may choose to set unilaterally
and thrust on groups. Group norms and group control can aid or hinder formal authority. Organisations
would do well to develop and use group control processes to reinforce formal authority. While in some
organisations group control processes helped increase output and improve quality,, in others they
resulted in restricting output. For group norms to contribute to organisational goals there should be a
climate of trust and openness, a culture of cooperation than confrontation. Quality circle, quality of
worklife programmes and work redesign experiments being taken up in some organisations are
examples that point to organisational thrust toward reinforcing group control processes for achieving
organisational goals through integration of members' interests with those of the organisation.
Policies/Procedures/Rules: These are essentially bureaucratic control mechanisms referred to in the
discussion on control strategies. They reflect past managerial experience and include a variety of
aspects concerning how to make certain decisions, deal with resources, etc.

Periodic Controls : Management Information Systems: A Management Information System is a

mechanism designed to collect, combine, compare, analyse and disseminate data in the form of
information. External Audits: The annual financial audit by an outside accounting firm is one form of
external audit, mainly of the finances of an organisation. In the case of public sector units, such an
audit is performed by Comptroller and Auditor General also. Budgets: Budgets are plans that deal with
the future allocation and utilisation of various resources to different enterprise activities over a given
period of time. Occasional Controls : Special Reports: These have a special role. Special reports can
be commissioned by an organisation when its normal control systems point to the need for detailed
investigation or study of a particular operational aspect. When major policy decisions of strategic
importance are taken, special reports may be commissioned. These include situations where the
organisations find the need for overcoming the existing difficulties, modernisation, expansion,
diversification, merger, acquisition etc. Personal Observation: Managers can know what is happening

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in an organisation by relying on information provided by others as also by finding out for them. First
hand knowledge has to be critical to be effective. Project Controls: Various methods have been
developed for controlling specific enterprise projects. The best example is the network analysis using
the PERT tool. PERT is an acronym for Programme Evaluation and Review Technique.
Q4 :Book 1 – Unit 4. MANAGEMENT SKILLS
Planning skills: * being able to think ahead;* ability to forecast future environmental trends
affecting the organization; * ability to state organizational objectives;* ability to choose strategies that
will help in attaining these objectives with respect to future trends; * ability to arrive at performance
standards or yardsticks for monitoring the implementation of these strategies.Use computer to plan.
Organizing skills: * Ability to analyses and describe various organizational jobs. * Ability to
select, train and induct people in jobs. * ability to draw working links i.e define authority and span of
control amongst people. * ability to change these working links when ever there are major changes in
the environment and technology or strategy in the organization.
Leading skills:(PIC)Leading people requires that the leader must understand the values,
personality, perception and attitudes of these people. As an individual you act differently from
another individual because of your values, personality, perception and attitudes. This is a very
important factor to be understood in relation to the other person who may be your superior or
subordinate. Let us carry out the following activity in order to understand each of these factors.
Controlling skills:The skill of controlling consists of actions and decisions which managers
undertake to ensure that the actual results are consistent with desired results.
Decision making skills:Decision-making skills are present in the planning process. They
pervade all other areas such as organizing, leading and controlling. Whether it is a routine or non-
routine decision you have to (1) identify and define the problem (2) develop alternative decision (3)
select the decision which will solve the problem and (4) implement that decision.

Book 1 – Unit 4. MANAGEMENT SKILLS AT Various Levels(PIC)

These skills refer to the personal ability put to use by the manager in specific position that he or she

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holds in the organizational hierarchy. Katz (1974) talks of three types of skills that are recognized by all
managers. These are the technical, the human and the conceptual skills. The use of these skills differs
for various levels of managers. Let us understand the skills first and then see how much each skill is
used at various levels of managerial hierarchy and what importance each has in the career growth of a
manager. 1.Technical skills:It is the ability to work with resources in a particular area of expertise. A
surgeon. Technical skill implies an understanding of, and proficiency in, a specific kind of activity
particularly the one involving methods, processes, procedures or techniques 2.Human Skills:Human
skill is the manager's ability to work effectively as a group member and to build cooperative effort
within the team he leads. Every managerial level requires managers to interact with other people,
whereas technical skill is primarily concerned with working with things (processes or physical objects).
The human skill can be developed without any formalized training for some. Many others to be
individually aided by their immediate superiors who themselves should possess the human skill in
order to be able to impart that. An important part of the procedure is the self-examination of the
individual's own concepts and values which may enable him to develop more useful attitudes about
himself and about others. With this change in attitude, there may also develop some active skill in
dealing with human problems. 3.Conceptual Skills:This skill means the ability to see the organization
as a whole and it includes recognizing how the various functions of the organization depend on one
another. It also makes the individual aware how changes in any one part of the organization affect all
the others. It extends to visualizing the relationship of the individual business to the industry, the
community and the political, social and economic forces of the nation as a whole. Thus the manager
gains insight into improving the overall welfare of the total organization.
Like human skill, conceptual skill must be a part of the executive's make-up of the personality.
Conceptual skill compared to technical and human skills is more important at the top level of
management. At the first level, one has relatively few factors to consider. Technical skill is responsible
for many of the great advances of modem industry. It is indispensable to efficient operation. It has the
greatest importance at the lower level of administration.

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In the models of decision making, you must have observed that any systematic approach to decision
making starts with a proper definition of the problem. You will often experience that a problem well
defined is a problem half-solved because the proper definition helped you to search at relevant place for
promising alternatives. You would also agree that a "fair" approach to decision-making demands that
parameters (for judging alternatives which are sometimes referred to as "criteria", "level of aspiration",
"decision rules", etc.) should be explicitly developed before the alternatives are generated and not after.
Identification of Alternatives :Generation' of a reasonable number of good alternatives is usually no
problem. Occasionally, however, developing a variety of good alternatives can be a complex matter
requiring creativity, thought, and study. Three means for generating alternatives are particularly well-
known. These are brainstorming, syntactics, and nominal grouping.
Brainstorming: Developed by Alex F. Osborn, brainstorming is the oldest and best known technique
for stimulating creative thinking. A group process, where the members are presented with a problem
and are asked to develop as many solutions as possible in a free environment. Brainstorming is
governed by four important rules: 1.Freewheeling' is welcome. The wilder the idea the better. It is
easier to `tame down' than to `think up' ideas. 2.Quantity is wanted. The greater the number of ideas,
the greater the likelihood of an outstanding solution. 3.Combination and improvement are sought. In
addition to contributing ideas of their own, group members suggest how ideas of others can be
improved, or how two or more ideas can be combined into still another idea. Brainstorming, however,
is not without limitations. It is usually most effective when a problem is simple and specific. In
addition, brainstorming sessions are time-consuming and, therefore, can be costly. Finally,
brainstorming often produces superficial solutions. This latter limitation, of course, can be overcome by
selecting group members who are familiar with at least one aspect of the problem being considered.
Synectics: Developed by William J.J. Gordon, synectics is a more recent and formalised creativity
technique for the generation of alternative solutions. A method of generating alternatives by combining
diverse and apparently irrelevant ideas. The term synectics is derived from a Greek word meaning "the
fitting together of diverse elements." The basic intent of synectics is to stimulate novel and even bizarre
alternatives through the joining together of distinct and apparently irrelevant ideas.
Nominal Grouping: Developed by Andre Dellbecq and Andrew-Van de Ven, nominal grouping differs
from both brainstorming and synectics in two important ways. Nominal grouping does not rely on free
association of ideas, and it purposely attempts to reduce verbal interaction. From this latter
characteristic a nominal group derives its name; it is a group "in name only". Stage 1: Seven to ten
individuals 'with different backgrounds and training are brought together and familiarised with a
selected problem such as, "What alternatives are available for achieving a set of of ,objectives?"Stage
2: Each group member is asked to prepare a list of ideas in response to the identified problem, working
silently and alone. Stage 3: After a period of ten to fifteen minutes, group members share their ideas,
one at a time, in a round-robin manner. A group facilitator records the ideas on a blackboard or flip
chart for all to see. The round-robin process continues until all ideas are presented and recorded. Stage
4: A period of structured interaction follows in which group members openly discuss and evaluate each
recorded idea. At this point ideas may be reworded, combined, deleted, or added.Stage 5: Each group
member votes by privately ranking the presented ideas in order of their perceived importance.
Following a brief discussion of the vote, a final secret ballot is conducted. The group's preference is the
arithmetical outcome of the individual votes. This concludes the meeting.

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Creative Thinking: There are many ways of searching for information and alternatives in problem
solving. Effective managers use all of their capacities-analytic and creative, conscious and
subconscious-and seek both individual and group involvement in this stage of decision making process.
Like the decision' making process itself, the creative process also has three stages .

Evaluation of Alternatives :Evaluation of various identified possible courses of action constitutes the
second step of decision-making. Having identified a `reasonable' number of alternatives as a manager
you should now be in a position to judge the different courses of action which have been isolated. Each
alternative must be evaluated in terms of its strengths and weaknesses, benefits and costs, advantages
and disadvantages in achieving organisational goals. Since there are usually both positive and negative
aspects of every alternative, most evaluations involve a balancing or trade-off of anticipated
consequences. Needless to say, such assessments should be as objective as possible.
Selection of an Alternative :Once appropriate alternatives have been identified and evaluated, you
must select the one alternative with the greatest perceived probability of meeting organizational
objectives. Of course, it is entirely possible that the decision maker may be made to go back and
identify other alternatives if none are judged to be acceptable.
Implementation of Decision :Once a plan (course of action) has been selected, appropriate actions
must be taken to assure that it is implemented. Implementation is crucial to success of an enterprise.
Indeed, it is considered by some to be the key to effective planning. The best plans in the world are
absolutely worthless if they cannot be implemented. The activities necessary to put plans into operation
must be skillfully initiated. In this respect, no plan is better than the actions taken to make it a reality.
With selection of a course of action, you must make detailed provisions for its execution. You must
communicate the chosen course of action, gather support for it, and assign resources to see that it is
carried out. Development of a sound means of implementation is every bit as important as the decision
as to which course of action to pursue. All too often, even the best plans fail as a result of being
improperly implemented.
INDIVIDUAL VERSUS GROUP DECISION MAKING You are perhaps aware that in recent times
most of the decisions in any large organisation are usually taken by a group of people (e.g., Board of
Directors, Committees, Task-force, etc.) rather than by a single individual manager, however, brilliant,
bright or powerful the manager may be. Perhaps from your own experience, you are also aware of
some of the obvious advantages and disadvantages of group decision making like the one given below:
(PIC)However, what we know about the impact of the groups in decision making process has been

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summarised by Harrison (1975) in the following way: In establishing objectives, groups are typically
superior to individuals in that they possess greater cumulative knowledge to bring to bear on problems.
In identifying alternatives, individual efforts are important to ensure that different and perhaps unique
solutions are identified from various functional areas that later can be considered by the group. In
evaluating alternatives, group judgement is often superior to individual judgement because it brings
into play a wider range of viewpoints. In choosing an alternative, involving group members often
leads to greater acceptance of the final outcome. In implementing the choice, individual responsibility
is generally superior to group responsibility, Regardless of whether decisions are made individually or
collectively, individuals perform better in carrying out the decision than groups do.

Based on a series of studies on managerial decisions making behaviour, Vroom and Yetton (1973)
found evidence in support of the following propositions:
Managers tend to be more participative when the quality of the decision is important.
Managers tend to be more participative when subordinate acceptance of the decision is critical
for its effective implementation.
Managers tend to be more participative when they trust their subordinates to focus on
organisational rather than personal goals and when conflict among subordinates is minimal.
Managers tend to be less participative when they have all the necessary information to make a
high quality decision.
Managers tend to be less participative when the immediate problem is well structured or where
there is a common solution that has been applied in similar situations in the past.
Managers tend to be less participative when time is limited and immediate action is required.
Risky Shift Phenomenon:Contrary to the popular belief that groups are usually more conservative
than individuals there is abundant evidence to support the proposition that groups make riskier
decisions than individuals do. There are four possible reasons. First, risk takers are persuasive in
getting more cautious companions to shift their position. Second, as members of a group familiarise
themselves with the issues and arguments they seem to feel more confident about taking, risks. Third,
the responsibility for decision making can be diffused across members of the group. Fourth, there is
the suggestion that in our culture people do not like to appear cautious in a public context.

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Groupthink:Closely related to the risky-shift, but more serious, is the phenomenon known as
`groupthink'. This phenomenon, first discussed by Janis (1971), refers to a mode of thinking in a group
in which the seeking of concurrence among members becomes so dominant that it over-rides any
realistic appraisal of alternative course of action. The concept emerged from Janis' studies of high level
policy decisions by government and business leaders. By analysing the decision process leading up to
each action, Janis found numerous indications pointing to the development of group norms that
improved morale at the expense of critical thinking. One of the most common norms was the tendency
to remain loyal to the group by continuing to adhere to policies and decisions to which the group was
already committed, even when the decisions proved to be in error.
Elbing (1978) has identified several roadblocks that can impede managerial effectiveness in arriving at
the most suitable decision:1.The tendency to evaluate before one investigates. Early evaluation
precludes inquiry into a fuller understanding of the situation.2.The tendency to equate new and old
experiences. This often causes managers to look for what is similar rather than what is unique in a new
problem.3.The tendency to use available solutions, rather than consider new or innovative ones.4.The
tendency to deal with problems at face value, rather than ask questions that might illuminate reasons
behind the more obvious aspects of the problem.5.The tendency to direct decisions toward a single
goal. Most problems involve multiple goals that must be handled simultaneously.6.The tendency to
confuse symptoms and problems.7.The tendency to overlook unsolvable problems and instead
concentrate on simpler concerns.8.The tendency to respond automatically or to act before thinking.
In case you are a member or leader of any decision making group, you would like to overcome the
emergence of a groupthink mentality in groups and organisations. Taking your cue from Janis you can
now formulate several strategies to overcome the barriers:1.Group leaders can encourage each member
to be a critical evaluator of various proposals. 2.When groups are given a problem to solve, leaders can
refrain from stating their own position and instead encourage open enquiry and impartial probing of a
wide range of alternatives. 3.The organization can give the same problem to two different independent
groups and compare the resulting solutions. 4.Before the group reaches a final decision, members can
be required to take a respite at intervals and seek advice from other wings of the organization before
returning to make a decision. 5.Outside experts can be invited to group meetings and encouraged to
challenge the views of group members. 6.At every group meeting, one member could be appointed as a
devil's advocate to challenge the testimony of those advocating the majority position: 7.When
considering the feasibility and effectiveness of various alternatives, divide the group into two sections
for independent discussions and compare results. 8.After deciding on a preliminary consensus on the
first choice for a course of action, schedule a second meeting during which members of the group
express their residual doubts and rethink the entire issue prior to finalizing the decision and initiating
action. -In other words, if groups are aware of the problems of groupthink, several specific and
relatively simple steps can be taken to minimise the likelihood of falling victim to this problem. As you
already know, recognising the problem represents half the battle in the effort to make more effective
decisions in organizational settings.
Conflict is a theme that has occupied the thinking of man more than any other with the exception of
God and love. Conflict has always been widespread in society but it is only recently that it has
generated a lot of interest and has been the focus of research and stud We are living in the age of
conflict. Everyday the choices available to us regarding any decision are increasing in number. You
may have wanted to become a manager, an entrepreneur or a computer scientist. On the other hand,
your father might have wanted you to become a doctor, a lawyer or a chartered accountant. Thus you

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faced a conflict not only at an intra personal level, in terms of the various choices confronting you, but
also at an interpersonal level-your choice vs. your father's choice of a career for you.
Types of Conflicts : Conflict within an Individual : You can locate conflict at various levels. There
could be conflict within oneself-the intrapersonal conflict. Basically, there are three types of such
conflicts. You may have an excellent job offer in a city you are not willing to go to. Conflict between
Individuals : Conflict can also take an interpersonal form. Conflict between individuals takes place
owing to several factors, but most common are personal dislikes or personality differences. When there
are only differences of opinion between individuals about task-related matters, it can be construed as
technical conflict rather than interpersonal conflict. Conflict between an Individual and a Group :
These types of intragroup conflicts arise frequently due to an individual's inability to conform to the
group norms. For example, most groups have an idea of a "fair day's work" and may pressurise an
individual if he exceeds or falls short of the group's productivity norms. If the individual resents any
such pressure or punishment, he -could come into conflict with other group members. Conflict
between Groups within an Organisation
Intergroup conflicts are one of the most important types of conflict to understand, as typically, an
organisation is structured in the form of several interdependent task-groups. Some of the usually
chronic conflicts in most of the organisations are found at this level, e.g., Union vs. Management, one
Union vs. another Union; one functional area like production vs. another functional area like
maintenance; direct recruits vs. promotees, etc. Conflict between Organisations Conflict between
organisations is considered desirable if limited to the economic context only. The laissez-faire economy
is based on this concept. It is assumed that conflict between organisations leads to innovative and new
products, technological advancement, and better services at lower prices.
IMPACT OF CONFLICTS : conflict can have both positive and negative impact on individuals,
groups and organisations. Edgar Schein (1980) who has compiled a list of changes on the basis of
research findings. As a result of intergroup conflict some changes that may occur within the groups

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involved are: 1 Group cohesiveness increases. The group becomes more closely knit; its members
show greater loyalty. 2 The group becomes task-oriented. Group climate changes from informal to
task-oriented in order to deal with the external threat. 3 Leadership becomes more directive. As the
group becomes more task-oriented, the leader becomes more authoritarian. 4 Organisational structure
becomes more rigid. Authority and responsibility relationships among and between members become
more clearly defined. 5 Group unity is stressed. The group demands increasing loyalty and conformity
from its members. Prolonged group conflicts cause the following changes in relationship between
groups: 1 Groups become antagonistic toward each other. Each group sees the other as an enemy
who interferes with its goal-oriented behaviour. 2 Perceptions are distorted. Each group develops
positive perceptions about its own group and negative perceptions toward the other. 3 Communication
ceases to exist. When in conflict members of one group avoid interaction with members of the other. If
they are forced to interact, they tend to show hostility and aggression towards each other. 4 Groups
apply a double standard. Each group clearly sees all the vicious acts of the other party while
remaining blind to the same acts performed by their own group.
From the above two lists of changes within and between groups in conflict, you can spot a number of
negative effects. What about some potential benefits of intergroup conflicts? Here is such a list: 1
Conflict clarifies the real issue. When people of groups express their concerns and differences, it
helps sharpen the real issue involved in a problem. Without conflict, many organisational problems go
unnoticed and remain unresolved. 2 Conflict increases innovation. Conflict generates a greater
diversity of ideas and viewpoints. Such a diversity can stimulate innovation in organisational practices.
3 Intergroup conflict solidifies the group. When members of a group are faced with an external
enemy, they tend to work together more closely to deal with it. A manager may use this new cohesion
to reduce internal conflicts. 4 Conflict serves as a catharsis. Conflict can provide an outlet through
which organisational members can ventilate their feelings without damaging organisational
functioning. 5 Conflict resolution solidifies intergroup relationships. Once group conflict is
successfully resolved, it can solidify the relationships between groups and it may even make the groups
feel closer to each other.
Looking into some of the effects of conflicts you can take a balanced view to conclude that conflict is
inherently neither good nor bad but simply has the potential to improve or impair an organisation's
performance through its consequences. Conflicts that result in increased organisation performance and
help an organisation to attain its goals may be termed as Functional. On the other hand, conflict that
hinders an organisation's growth and prevents it from achieving its goals can be termed as
Dysfunctional. Thus conflict in certain forms can be functional or dysfunctional depending upon its
nature, intensity, duration and the manner in which it is handled.
We can now move on to examine the modes through which conflict can be handled so as to result in
optimal unit performance. You have already seen that when conflict level is too low, the unit
performance is also likely to be low and there is a scope for a perceptive manager to stimulate conflict
in order to enhance the performance of the group. Stimulating Productive Conflict Most of us since
childhood have been taught to avoid conflict and even disagreement, How many times have you heard
the statements "Don't Argue", "Stop fighting" or "It's better to turn the other cheek"? However, this
tendency to avoid conflict is not always productive and there are times when there is a need to
stimulate conflict. The presence of one or more of these signs is usually an indication of the need for
conflict stimulation. Once the need has been identified you may adopt one or more of the following
techniques:1 Manipulate Communication Channels a) Deviate messages from traditional channels b)
Repress information c) Transmit too much information d) Transmit ambiguous or threatening
information 2 Alter the Organisation's Structure (redefine jobs, alter tasks, reform units or activities)

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a) Increase a unit's size b) Increase specialisation or standardisation c) Add, delete or transfer
organisational members d) Increase interdependence between units 3 Alter Personal Behaviour
Factors a) Change personality characteristics of leader b) Create role conflict c) Develop role
incongruence These are only a few of the suggestions possible. Depending upon your values and the
organisation's value-system, some of the suggestions may even sound unethical as you may feel that a
desirable end-state does not always justify the questionable means (like transmitting threatening
information). Resolving Interparty Conflict: How and When ? You have seen that stimulating
conflict is a required mode of conflict management when groups are characterised by apathy,
complacency, non-responsiveness to needed change, lack of enthusiasm for generating alternatives, etc.
Though these symptoms are very much present in a number of work-units in Indian organisations (and
hence calls for appropriate conflict stimulation interventions), the more commonplace are heightened
manifest conflicts. So, for most practical purposes, you should not only possess the knowledge of
different strategies of conflict-resolution hut should also know when to use which strategy. The primary
dimension along which intergroup conflict-resolution strategies vary is how openly you as a manager
should address the conflict. CONFLICT-AVOIDANCE STRATEGIES : Ignoring the Conflict This
strategy is represented by the absence of action. You, as a manager, have often avoided dealing with
dysfunctional aspects of conflict. Unfortunately, when you avoid searching for the causes of the
conflict, the situation usually continues or becomes worse over time. Although ignoring the conflict
generally is ineffective for resolving important policy issues, there are some circumstances in which it
is at least a reasonable way of dealing with problems. Imposing a Solution This strategy consists of
forcing the conflicting parties to accept a solution devised by a higher-level manager. Imposing a
solution does not allow much conflict to surface, nor does it leave room for the participants to air their
grievances, so it also generally is an ineffective conflict-resolution strategy. Any peace that it does
achieve is likely to be short-lived. CONFLICT-DEFUSION STRATEGIES : Smoothing One way
you can deal with conflict is to try to "smooth it over" by playing down its extent or importance. You
may try to persuade the groups that they are not so far apart in their viewpoints as they think they are,
point out the similarities in their positions, try to "pat" group members whose feelings have been hurt,
or play down the importance of the issue. By smoothing the conflict, you can hope to decrease its
intensity and avoid escalation or open hostility. Like forcing a solution, smoothing generally is
ineffective because it does not address the key points of conflict. Appealing to Superordinate Goals
You can defuse conflicts by focusing attention on the higher goals that the groups share or the long-
range aims that they have in common. This tends to make the current problem seem insignificant
beside the more important mutual goals. Finding superordinate goals that are important to both groups
is not easy. Conflict-containment Strategies : Using Representatives : One of the strategies you can
use to contain conflict is the use of representatives. In order to decide an issue, you can meet with
representatives of the opposing groups rather than deal with the groups in their entirety. Structuring
the Interaction Some managers assume that one way to decrease conflict is to increase the amount of
contact between the groups (if the groups interacted more, they would like each other better and fight
less). In reality, increased interaction can merely add fuel to the fire; the two groups spend their time
looking for additional reasons to reinforce their negative stereotypes of each other:There are many
ways to structure the interaction between groups to deal with conflict; some of the most effective
strategies include: (a) decreasing the amount of direct interaction between the groups in the early stages
of conflict resolution; (b) decreasing the amount of time between problem-solving meetings; (c)
decreasing the formality of the presentation of issues; (d) limiting the recitation of historic events and
precedents and focusing instead on current issues and goals and (e) using third-party mediators. All
these strategies allow some conflict to surface but prevent it from getting out of hand and reduce
hardening of the groups' positions. Bargaining :Bargaining is the process of exchanging concessions

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until a compromise solution is reached. Bargaining can lead to the resolution of a conflict, but usually
without much openness on the part of the groups involved and without much real problem solving.
Typically, in bargaining each side begins by demanding more than it really expects to get.
Q7 : Book 2 – Unit 8 – MBO Processes :
The term MBO was coined by Peter Drucker more than 25 years ago. Drucker used the term. in a very
broad sense to connote not just a specific tool, but rather an approach or philosophy of management.
There are three steps involved in the MBO process. These are setting objectives in each key result
area, action planning, and performance review. Setting Objectives : Key result areas are usually more
durable than objectives. While KRAs delineate the' broad areas within which the organisation must
focus its. attention, the objectives represent the specific results expected to be' achieved within these
KRAs. Thus the first step is to identify the KRAs and pin responsibility for results with specific
managerial positions. Making people responsible for KRAs is a very critical step for translating MBO
theory into practice. KRAs and the persons responsible for them must be identified at the level of the
entire organisation as well as each functional area. Having identified KRAs, the next step is to set
objectives within them. At the organisational level, these will be the corporate objectives. Action
Planning: Planning enables the objectives to be turned into reality. If objectives describe the `what',
plans describe the `how' or the way in which the objectives are to be achieved. Managers are paid to
achieve certain objectives. The objectives can be achieved only if the manager converts them into
specific action plans spelling out the various steps or activities to be performed and the specific time
within which these must be performed. 1.There are four broad steps involved in every action plan: 2
Choosing strategies which are appropriate to the objectives 3. Assigning responsibility for achieving
the objectives 4. Allocating resources for achieving the objectives 5. Scheduling specific activities to
achieve maximum utilisation of resources. There are many techniques which are extremely useful in
planning. Some of the more common ones are Activity Networks, Decision Trees, Milestone Charts,
Programme Evaluation and Review Technique (PERT), and Critical Path Method (CPM). Depending
on the specifics of your plan you can use the appropriate technique to make them more useful.
Performance Review : Regular performance review is one of the main features of MHO. In the
absence of a review system the MBO system cannot function. In the MBO process, the focus of the
performance review is on: 1. performance 2. improvement 3. future corrective 4.action 5. frequency of
reviews 6. self-appraisal.(PIC)


which can simply be introduced at a moment's notice. MBO involves people who have their own fixed
ideas, attitudes, values and perception which can make the MBO implementation a very complex affair.
The prerequisites of a successful MBO are:• Evaluation:[The first step is to evaluate what you expect
from MBO. The most commonly made mistake is that MBO is visualised either very narrowly as a just
another appraisal system or as merely another way of tackling the problem of writing job descriptions
or it is visualised as a solution to all problems. This leads to unrealistic expectation from MBO. To
avoid this, it is best, first of all, to evaluate the existing organisational performance, culture,
management style, systems of planning, controlling and monitoring and then decide upon the specific

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needs which can be fulfilled by MBO. It must be remembered that MBO is a powerful tool which can
be used for improving the entire organisational performance, provided there is clarity about the
expected results. ]• Preparation:[The next step is to prepare the people for accepting MBO. Human
nature always resists change. The best way to overcome this resistance is to disseminate maximum
information about M130 and educate the concerned key people about its expected benefits. ]• Top
management support[For MBO to be successfully implemented it is important that it has the full
backing and support of the top management. In the process of implementation, there may be some
redefining of objectives which in turn may lead to jobs being redefined, restructured or even totally
scrapped in some cases.]• Time horizon and[MBO means change which implies upheaval and
disturbances. Just as some people can accept and adapt to change quicker than others; similarly one
organisation's adaptability to change is different from that of another. Depending on its personality and
attitude towards change (whether it is resistant or highly flexible) each organisation has to decide upon
the rate of change which it can withstand ]• Proper entry point
The benefits of MBO : accruing from MBO can be discussed in terms of the specific benefits to the
subordinate, the superior and the organisation:i) Benefits to subordinates include greater role clarity,
measurement of performance and increased job satisfaction. W hen specific objectives have been
agreed upon, the subordinate knows exactly what he has to achieve and can plan his various activities
towards this end. Role and goal clarity ensure that there is no wastage of scarce organisational
resources, on the one hand and single minded dedication to achievement of objectives on the other."
Job satisfaction emanates from the feelings of having done a job well to the best of your capability as
well as public recognition and approval for it. The former is possible only when there are specific
objectives while the latter can occur only if there is a system of review and reward. A worker or
manager who derives satisfaction from his job will work harder in order to improve his performance
while a dissatisfied, discontented manager will make a negative contribution. Thus MBO can serve to
bring about a change and put people on the self-propelling cycle of role clarity, increased job
satisfaction and increased productivity. ii)Benefits to Superiors: The benefits accruing to the
subordinate will, of course, also accrue to the superiors. But besides these, the other specific benefits
for superiors are that MBO motivates subordinates, strengthens superior-subordinate relationship, and
provides an objective appraisal method. MBO is based on the concept of participation and this leads to
greater motivation. Setting objectives implies that both the superior and the subordinate have to sit
across the table and openly discuss their respective roles, work, obstacles and competencies. Such
candid discussion always leads to increased mutual trust and confidence in each other and provides an
enduring bond to the relationship. The only thing that matters is results. People are retained by
organisations to produce results and not because they are sociable, soft spoken, introverted or possess
any other such personality characteristic which has no bearing on their competence or capability. iii)
Benefits to the organisation: MBO focuses on managerial effectiveness as a central value in the entire
organisation. And this emphasis permeates down to the lowest level, influencing each manager and
worker. This shows up in all the decisions which each manager makes and the overall performance of
the organization is improved. Secondly, MBO with its focus on objectives improves concentration and
coordination of managerial effort. There is maximum utilisation of resources and conflicting pulls in
opposite directions are avoided. Thirdly, the periodic review in MBO helps identify advancement
potential of workers and managers. It also helps in identifying workers-who are under-utilised or not
making the full contribution. Lastly, MBO creates many centres of accountability as against one
centralized accountability point. It is not only the managing director or proprietor who is accountable
for producing the desired results but each manager is responsible for achieving the agreed-upon
objectives. Thus MBO leads to greater decentralization in terms of setting and achieving objectives.

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Q 8 : Mangerial processes Book 1 – Unit 3.MANAGEMENT PROCESSES
Planning :1.Making choices 2.Committing resources 3. A time horizon .Planning is the most
basic and pervasive process involved in managing. It means deciding in advance what actions to take
and when and how to take them.Planning is needed, firstly for committing and allocating the
organisation's limited resources towards achieving its objectives in the best possible manner and,
secondly for anticipating the future opportunities and problems.
To ensure that a plan is effective and succeeds in achieving its objectives, it must have the following
components: 1.Planning must start from the top. 2.Planning must be flexible. 3.In the short-run 4.Plans
are good
Organizing :Organizing refers to the formal grouping of people and activities to facilitate
achievement of the firm's objectives. Issues for discussion here are the types of organization
structure[Structure refers to the specific manner in which people are grouped. An organisation can
group its people on the basis of the various functions (such as production, personnel, finance,
marketing), geographical territories or around specific products or product lines (such as detergents,
toiletries, basic chemicals, agro-products, as in case of Hindustan Lever Limited) ], degree of
centralization[Centralisation refers to the point or level where all decision-making authority is
concentrated. One-man enterprises; such as a small bread and butter stores, vegetable vendor, ], levels
of management, span of control, delegation of authority, unity of command, line and staff relationship,
and staffing.
Staffing: Directing: Co-Ordinating: Motivating and Leading : Decision Making
Controlling:Planning and controlling go hand in hand. There can be no control without a plan
and plans cannot be successfully implemented in the absence of controls. Controls provide a means of
checking the progress of the plans and correcting any deviations that may occur along the way. There
are three basic steps involved in designing a control process. 1.Establishment of standards:
2.Measurement of performance: 3.Correcting deviation is a traditional and widely used control process.
Apart from this a company may use historical statistical data, or break-even analysis to control its
operations. By the use of mathematics, many sophisticated control techniques are also possible. These
pertain to implementing control for inventory management, distribution logistics and project or
programme management. Some of these such as Programme Evaluation and Review Technique
(PERT), Critical Path Method (CPM) will be dealt with in detail in the subsequent units.
Self-Concept: What am I? Mankind is unique because only a human being has the capacity for
thinking about hi or her behaviour and appearance. Each person has an attitude toward himself or
herself and this attitude comprises the self or self-concept. The self-concept has three aspects-beliefs,
feelings and behaviours. The belief component represents the content of the self. This is illustrated by
such thoughts as "I am intelligent, sociable, sincere, overweight" etc. The feeling component about
one's self is reflected in feelings of self-worth or in general as `I'm O.K.' or `I'm not O.K.' Finally, the
behavioural component is the tendency to act toward one's self in a self-deprecating c self-enhancing
manner. you achieve a stable interpersonal environment by maintaining a consistent relationship
between your self-concept and your beliefs about how others behave and feel toward you with regard to
your self-concept. In order to maintain your interpersonal environment and to maximise congruence or
harmony, you (like any other individual) actively use certain mechanisms to stabilise
interactions:1.Misperception: When the actual expectations of others are not congruent with your self-
concept or behaviour, you may simply misperceive how others see you.2.Selective Interaction: You
may choose to interact with those persons with whom you can most readily establish a congruent state.
3.Selective Evaluation of the Other Person: You maximise congruency by favourably evaluating
those who behave congruently towards you and devaluate those who do not. 4.Selective Evaluation of

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Self: You maximise congruency by altering the values placed on various aspects of your self-concept so
that the aspects that are in agreement with the perception of your own behaviour and those of others arc
most highly evaluated. 5.Response Evocation: You, intentionally or unintentionally, behave in a way
that results in others' behaving toward you in a congruent fashion. A person in interaction controls the
cues provided to others to ensure that he or she will be categorised in certain ways and not in any
unexpected way. The mechanisms, mentioned above, are some of the means used by any person to
protect one's self-concept and maintain an interpersonal environment. Interpersonal Needs: What do
you want from me? People need people, but for what? Schutz (1966) maintains that there are three
interpersonal needs-inclusion, control and affection-that cause one, to establish and maintain relations
with others. These needs are defined as follows: Inclusion--the need for interaction and association.
1.Control --the need for control and power. 2.Affection--the need for love and affection. Individuals
differ, however, in the strength of their interpersonal needs. For each interpersonal need, there are two
behavioural aspects--expressed and wanted. Expressed behaviour is the behaviour that we initiate
toward others., whereas wanted behaviour is the behaviour we want or prefer from others toward us.
The development of successful working relationships takes time. No one can cultivate such a
relationship with another person without going through a long arduous process that usually takes
months or years to develop. The development of a working relationship occurs in the following
sequences:1.The initial contact produces a set of impressions and attitudes in each towards the other. A
favourable mutual impression is needed to develop a long-term relationship. 2.A positive impression
opens the door for a long-term working relationship. When this occurs, the interacting parties develop a
set of mutually agreeable expectations regarding their roles, performance and relationships. 3.The
interacting parties make continuous attempts to meet each other's expectations. Failure to carry out this
psychological contract will probably terminate the relationship. 4.Mutual trust and influence develop as
a result of meeting the psychological contract, and these ensure the continuation of the relationship.
four stages of developing interpersonal relationship: 1. Forming first impressions 2. Developing mutual
expectations 3. Honouring psychological contracts 4. Developing trust and influence.
Forming First Impressions First impressions, though often inaccurate, are lasting impressions. First
impressions are lasting because they influence the way in which people see subsequent data about the
perceived object or person. So, whether or not first impressions are correct, it is important for us to
make favourable impressions on other people. Initial impressions do not guarantee long-term
relationships, but they are essential for entering into enduring relationship with others. Many studies
have shown that much of the groundwork for subsequent relationships with others is laid in the very
first stage of socialisation 1.Poise: One should maintain composure by being diplomatic and
personable. Nervousness disturbs one's poise. 2.Articulation: One should speak naturally and fluently,
use proper language and add deep tones in the voice to create an impression of maturity.
3.Conservative Dress: Conservative dress in classic styles are appropriate for a business engagement
such as job interview. Extremes in fashion should be avoided. 4.Positive Attitude: Without being a
naive optimist, one should show a positive outlook towards life, for people generally prefer a prudent
optimist to a pessimist. 5.Knowledgeability: Learning something about the organisation and its
products, services and people before an interview demonstrates one's interest. 6.Thoughtfulness: One
should be alert and responsive, yet weigh each question before responding. A hasty response can be
seen as indicative of immaturity or lack of wisdom. 7.Self-confidence: In order to make other people
have confidence in him or her, the person needs to appear self-confident. An erect posture, head held
high and an assertive tone of voice can help show self-confidence with requisite humility. Developing
Mutual Expectations : When people are mutually impressed, they are more likely to enter into a long-
term relationship.' When this happens, they develop certain expectations about each other. In work

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organisations, managers may expect new employees to be competent, productive, reliable and loyal and
to conform to organisational norms. New employees, on the other hand, expect their superiors to be
fair, supportive and considerate of their needs. Honouring Psychological Contracts : An effective
interpersonal or work relationship cannot develop and be maintained unless the participants are willing
to honour their psychological contracts. Each party expects the other to be faithful in the relationship,
not to take arbitrary actions and to be honest with him or her. The character-based expectations
include: 1.Integrity: Maintaining personal and moral honesty in the relationship. 2. Motive: Having
good intentions and acting in good faith. 3.Consistency: Showing consistency in behaviour. 4.
Openness: Levelling and being honest with another person. 5.Discretion: Maintaining confidences. --
The competence-based expectations include: 1. Technical competence: Having the ability to perform
the assigned task. 2. Interpersonal competence: Being able to maintain effective interpersonal
relationships. The judgment-based expectations include: 1. Business sense: Making good business
judgment. 2. Interpersonal judgment: Making an accurate perceptual judgment of other people.
Developing Trust and Influence :The result of meeting the psychological contract is an increased
level of trust and influence. When the parties to the contract are able to meet their mutual expectations,
the relationship produces mutual trust and favourable sentiment. The more satisfactory the association
becomes, the greater the influence the parties have on each other. Since the relationship is fulfilling, the
parties will continually rely on it to satisfy their needs. This dependency permits them to exert
influence on each other.
We shall examine here four key problems in delegation:
• What to delegate?• How much to delegate? • How far down to delegate? • How to deal with
employees resistance to accept delegation? What to Delegate? If a manager does not delegate, he
will end up doing what his subordinates must be doing. If he delegates what he should be doing
himself, his leadership position would be in jeopardy and there would be conflict among subordinates.
The first step in effective delegation is for the manager to analyse his job and to determine, in principle,
what he should or should not delegate.A large part of the work in every. management position consists
of activities that are routine and repetitive. These lend themselves readily to delegation. Once delegated
these form the main tasks that the subordinates perform. How much to Delegate? Usually the dilemma
is how much authority to delegate than that of responsibility. A salesman appointed to sell the products
of the company should have the authority to approach customers in the name of the company, offer
them the products for sale at certain price and assure growth and delivery. There is a popular
misconception that "authority should always be delegated equal to responsibility". But people with
responsibility for coordination and control, usually withhold a part of the authority and delegate only
such authority as is commensurate with responsibility. How far down to Delegate? To what levels in
a hierarchy can responsibility and authority be delegated? People who do the work should have the
responsibility. Those with responsibility should have commensurate authority. Taken together, it means
that it is necessary to delegate authority to all those who do the work at the operating levels.
How to deal with Employee Resistance? Employee may resist accepting delegated authority for a
variety of reasons: 1.lack of proper job information 2 .lack of skills, training, supportive tools and
equipment or self-confidence 3. uncertain about the authority vis-a-vis responsibility 4.lack of proper
reward or sense of personal gain for the individual 5. inertia and avoidance .
Delegation is an art, not a science. It depends on the personality, skills and attitudes concerning two
actors: delegator (one who delegates) and delegatee (one who was delegated). The following are some
of the essential prerequisites for effective delegation.
a) Climate of openness, trust and confidence among employees at all levels and a culture of team work

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and cooperation.b) The two psychological hurdles in delegation, namely lack of faith in the
competence of subordinates and fear that the subordinates may outshine them deter managers from
delegating. The managers should not have any feeling of insecurity that by delegating they would be
making themselves redundant. c) Goals should be established and made clear: Every person in an
organisation should know what his contribution to the organisation is. In accomplishing his goals, he
can formulate the objectives of delegation too so that delegation is done with a purpose and becomes
effective. The machine operator may not be happy with running the machine. He would be happy to
know how the outcome of his effort contributes to organisational purpose. d) People who carry out
work should have clearly defined responsibility and authority: Job descriptions or position guides
should clearly state the objectives, responsibilities, relationships and limits of authority of each
position. Clear definition of responsibility and authority at each position eliminates the scope for
confusion that duplication and overlap in entrustment of duties would cause. e) Motivation is
important because the manager who wants to delegate should be able to motivate people to do what he
wants done, willingly and enthusiastically. As Louis Allen puts it, "Motivation is the moving force in
delegation". f) Make delegation complete: Delegation is supposed to reduce a manager's workload.
But, if not properly done, it may increase the workload. There are often problems as to whether, at what
stage and how often should the subordinate check back with his boss. The problem can be resolved if
(i) the assignment is clear cut, (ii) subordinate is told how the assignment will be coordinated and
motivated by the boss, (iii) the boss specifies to the subordinate at what stage, in what form and how
often he should provide him with feedback on the progress and (iv) the boss provides counselling and
guidance. Once an assignment is delegated the boss should intervene only to provide guidance but not
withhold his approval for specific actions involved in completing the task. To delegate complete
assignment or task requires certain sense of faith and self-control on the part of boss in not intervening
but giving counsel and advice. Likewise, the subordinate should exercise discipline in making choice of
a course of action in carrying out the task. Delegating complete tasks relieves managers from detail and
provides opportunities to subordinates to learn to be independent and feel a sense of fulfilment in
work.g) Train: Managers should help in preparing their subordinates to accept delegation. Such' need
is all the more felt in case of subordinates who show a tendency to depend on the bosses than be
independent. Managers should, therefore, carefully identify the weaknesses; develop potential and
attitudes conducive to accepting and making a success of delegated authority. Training in delegation
should include appraisal of current performance, counselling for improvement and coaching on the job.
h) Establishment controls: Even after delegation the manager continues to be accountable. So there is
need for him to control without limiting the effectiveness of delegation. The more complete is the
delegation the more comprehensive should the system of control be.
The word style is the way in which the leader influences followers. Let us have a look at the various
studies that help us to understand the leadership styles. Hawthorne Studies :Mayo and Roethlisberger
did a series of studies from 1924 to 1932 in an electricity company, at Illinois, in USA. These studies
are known as Hawthorne Studies. One phase of these studies aimed at finding out if changes in
illumination, rest period and lunch breaks can affect the productivity of the workers. It was found to the
surprise of the researchers that less light, shorter and fewer rest periods and shorter lunch breaks
resulted in increased productivity. And once all these changes; were eliminated and the normal working
conditions were resumed, it was also seen that the workers' productivity and the feeling of being
together went up. Theory X and Y : McGregor (1960) categorised leadership styles into two broad
categories having two different beliefs and assumptions about subordinates. He called these Theory X
and Theory Y. The Theory X style of leaders believe that most people dislike work and will avoid it
wherever possible. Such leaders feel they themselves are a small but important group, who want to lead

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and take responsibility, but a large majority of people want to be directed and avoid responsibility.
Therefore, this style of leadership exercises strong controls and direction and wherever necessary
punish people if they do not do the work. If people do the work as desired, they may even get monetary
or other rewards. Theory Y leaders assume that people will work hard. and assume responsibility if
they can satisfy their personal needs and the objectives or goals of their organisation. Iowa Leadership

In 1939 Lippitt and White under the direction of Lewin, did a study on three different styles of
leadership in the task performance of ten-year old boys in three groups. The authoritarian leader of the
group was very directive. He did not allow any participation. He was concerned about the task and told
the followers what to do and how to do it. He was friendly while praising the performance of the
individual member and was impersonal while criticising the individual member. In the other group, the
democratic leader encouraged discussion with the group and allowed participation in making decisions.
Michigan Studies on Leadership Styles : Likert (1961) at University of Michigan Survey Research
Centre identified two major styles of leadership orientations-employee orientation and production
orientation. The employee oriented style of the leader emphasises the relationship aspect of the jobs of
the individual. Such a leader takes interest in every one and accepts the individuality and personal
needs of the individual. He has complete confidence and trust in all matters in his subordinates. His
subordinates feel free to discuss things about their jobs with their superior. He always asks subordinates
for ideas and opinions and always tries to make constructive use of them. Ohio State Studies on
Leadership Styles : Stogdill (1957) at the Bureau of Business Research at Ohio State University
initiated ‘a series of researches on leadership in 1945. He, along with his colleagues, studied leader
behaviour in numerous types of groups and situations by using a Leader Behaviour Description
Questionnaire (LBDQ). The studies were conducted on Air Force Commanders and members of
bomber crews, officers, non-commissioned opersonnel, civilian administrators in the Navy Department,
manufacturing supervisors, executives, teachers, principals and school superintendents and leaders of
various civilian groups. They did not have any satisfactory definition of leadership. They also did not
think leadership is synonymous with `good' leadership. The LBDQ was administered in a wide variety
of situations and surprisingly two dimensions of, leadership continually emerged from the study: one is
`consideration' and the other is ‘initiating structure’. Scientific Manager's Style : Taylor (1911)
stressed the best way of doing a job. He emphasised the importance of having management and labour
work in harmony to maximise profits. The basis of his scientific management was technological in
nature. It was felt that the best way to increase output was to improve the techniques or methods used
by workers. Therefore, profit can be maximised by using a systematic and scientifically based approach
to the study of jobs. Taylor was not trained as a manager He relied on scientific study of time and
movement spent and used for a job to improve the performance of the worker. According to the
scientific managerial style, management of a work organisation must be divorced from human affairs
and emotions and people have to adjust to the management and not management to the people. Various
studies reflecting different styles of functioning of a leader have been stated above, which highlight
how the leader simultaneously pays attention to the: a) task to be accomplished by the group, and b)
needs and expectations of the group and its individual members.
Q 12 : Channels of communications and controll systems:
CHANNELS OF COMMUNICATION : An organisation structure provides channels for the flow of
information on which the decisions of the organisation will be based. As such an organisation can be
described as the network of communication channels. These channels can be either intentionally
designed, or they may develop of their own accord. When a channel is intentionally prescribed for the
flow of communication in the organisation, we call it a formal channel, and the communication passing

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through that channel as formal communication. Formal Communication
An organisation chart shows the direction of formal communication flow in an organisation. It
identifies the various transmitters and receivers, and the channels through which they must
communicate. The authority relationships indicate the direction of communication flow in an
organisation. Networks in Formal Communication (PIC : Wheel , Y , chain and circle): You have
seen earlier how the formal organisational structure prescribes the channels through which
communication flows take place. These channels are designed to keep the flow of information in an
orderly manner and to protect the higher level managers from an overload of unnecessary information.
However, the way in which these channels are designed and work can affect the speed and accuracy of
information as well as the task performance and satisfaction of members of the group. As such,
managers have to think of how best to design the organisational structure and the communication
network which meets the requirements of the situation. Informal communication : Communication
that takes place without following the formal lines of communication is said to be informal
communication. This channel is not created by management and is usually not under the control of
management. An informal system of communication is generally referred to as the `grapevine' because
it spreads throughout the organisation with its branches going out in all directions in utter disregard of
the levels of authority and linking members of the organisation in any direction. The informal
communication arises as a result of employee needs for information which are not met by the formal
channels. It has been observed that problems relating to work and unfavourable reactions to various
organisational practices are transmitted through informal communication. Since the channels are
flexible and establish contacts at personal levels among members of organisation at different
hierarchical levels, the grapevine spreads information faster than the formal system of communication.
The characteristics of grapevine have been summarised by Keith Davis as follows: a) People talk most
when the news is recent. b) People talk about things that affect their work. c) People talk about people
they know. d) People working near each other are likely to be on the same grapevine.
e) People who contact each other in the chain of procedure tend to be on the same grapevine.
The major prerequisites of control are two: a plan and a structure.a) Plan: controls must be based on
plan. The more clear and complete the plans are the more effective controls can be; plans become the
standards by which the actions are measured. b) Structure: There is need for a structure to know
where the responsibility rests for deviations and corrective action, if any needed. As in the case of
plans, the more clear and complete the organisation structure is, the more effective control can be.
Controls, to he effective, should share the following basic characteristics: Appropriate: Controls
should correspond to an organisation's plans. Controls designed for a general manager are inappropriate
for a supervisor. Similarly, control systems suitable for a line department may be inappropriate for a
staff department. Strategic: Control should serve a stretegic purpose and provide spotlight on positive
and negative exceptions at critical points. Acceptable: Controls will not work unless people want them
to. They should be acceptable to those to whom they apply. Reliable and objective: Controls should be
accurate and unbiased. If they are unreliable and subjective, people will resent them. Cost-effective:
The benefit from control should be greater than the costs. Control devices should yield tangible
METHODS OF CONTROL : Arthur Bedeian discusses nine methods of control and classifies them
into three categories based on their frequency, of use: Constantly used controls: Self-control, group
control and policies, procedures and rules. Periodically used controls: Management Information
Systems, External Audits and Budgets. Occasionally used controls: Special reports, personal
observation and project control. The nine methods of control mentioned above (see Fig. III) are briefly
discussed hereunder. Constant Controls Self-control: Managers need to exercise more self-control to

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minimise the need for other control methods and making control in the organisation acceptable and
effective. Self-control means giving a fair day's work for a fair day's pay, reporting to work on time,
discharging duties and responsibility properly and respecting the rights of others in the organisation.
Self-control is more in tune with Theory Y discussed later in the unit on Leadership Styles and
Influence Process in Block 5. Respect for self-control in an organisation can be a motivating factor. A
sense of appreciation for self-control can be promoted among employees through training in behaviour
modification. Group Control: Work groups are a source of control. Group-defined norms exert
greater influence in organisations than the norms that managements may choose to set unilaterally and
thrust on groups. Group norms and group control can aid or hinder formal authority. Organisations
would do well to develop and use group control processes to reinforce formal authority. While in some
organisations group control processes helped increase output and improve quality,, in others they
resulted in restricting output. For group norms to contribute to organisational goals there should be a
climate of trust and openness, a culture of cooperation than confrontation. Quality circle, quality of
worklife programmes and work redesign experiments being taken up in some organisations are
examples that point to organisational thrust toward reinforcing group control processes for achieving
organisational goals through integration of members' interests with those of the organisation.
Policies/Procedures/Rules: These are essentially bureaucratic control mechanisms referred to in the
discussion on control strategies. They reflect past managerial experience and include a variety of
aspects concerning how to make certain decisions, deal with resources, etc.

Periodic Controls : Management Information Systems: A Management Information System is a

mechanism designed to collect, combine, compare, analyse and disseminate data in the form of
information. External Audits: The annual financial audit by an outside accounting firm is one form of
external audit, mainly of the finances of an organisation. In the case of public sector units, such an
audit is performed by Comptroller and Auditor General also. Budgets: Budgets are plans that deal with
the future allocation and utilisation of various resources to different enterprise activities over a given
period of time. Occasional Controls : Special Reports: These have a special role. Special reports can
be commissioned by an organisation when its normal control systems point to the need for detailed
investigation or study of a particular operational aspect. When major policy decisions of strategic

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importance are taken, special reports may be commissioned. These include situations where the
organisations find the need for overcoming the existing difficulties, modernisation, expansion,
diversification, merger, acquisition etc. Personal Observation: Managers can know what is happening
in an organisation by relying on information provided by others as also by finding out for them. First
hand knowledge has to be critical to be effective. Project Controls: Various methods have been
developed for controlling specific enterprise projects. The best example is the network analysis using
the PERT tool. PERT is an acronym for Programme Evaluation and Review Technique.
Q 13 : Johari Window and Bounded Rationality :
A Johari window is a cognitive psychological tool created by Joseph Luft and Harry Ingham in 1955[1]
in the United States, used to help people better understand their interpersonal communication and
relationships. It is used primarily in self-help groups and corporate settings as a heuristic
exercise.When performing the exercise, subjects are given a list of 56 adjectives and pick five or six
that they feel describe their own personality. Peers of the subject are then given the same list, and each
pick five or six adjectives that describe the subject. These adjectives are then mapped onto a
grid.Charles Handy calls this concept the Johari House with four rooms. Room 1 is the part of
ourselves that we see and others see. Room 2 is the aspects that others see but we are not aware of.
Room 3 is the most mysterious room in that the unconscious or subconscious part of us is seen by
neither ourselves nor others. Room 4 is our private space, which we know but keep from others. The
concept is clearly related to the ideas propounded in the Myers-Briggs Type Indicator program, which
in turn derive from theories about the personality first explored by psychologist Carl Jung.

BOUNDED RATIONALITY: A decision-maker has neither the time and space nor the ability to
arrive at an optimal solution and many individuals may not seek to optimize at all. The idea of bounded
rationality is that individuals strive to be rational having first greatly simplified the choices available.
Thus, instead of choosing from every location, the decision-maker chooses between a small number.
The result may be that decision-makers become satisficers; they accept a satisfactory solution which is
good enough for their purposes rather than finding the optimum answer. Early work on the theory of
bounded rationality is associated with H. A. Simon (1956). Bounded rationality is a school of thought
about decision making that developed from dissatisfaction with the “comprehensively rational”
economic and decision theory models of choice. Those models assume that preferences are defined
over outcomes, that those outcomes are known and fixed, and that decision makers maximize their net
benefits, or utilities, by choosing the alternative that yields the highest level of benefits (discounted by

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costs). The subjective expected-utility variant of rational choice integrates risk and uncertainty into the
model by associating a probability distribution, estimated by the decision maker, with outcomes. The
decision maker maximizes expected utility. Choices among competing goals are handled by
indifference curves— generally postulated to be smooth (twice differentiable)—that specify
substitutability among goals. A major implication of the approach is that behavior is determined by the
mix of incentives facing the decision maker. A second implication is that adjustment to these incentives
is instantaneous; truemaximizers have no learning curves. Like comprehensive rationality, bounded
rationality assumes that actors are goal-oriented, but bounded rationality takes into account the
cognitive limitations of decision makers in attempting to achieve those goals.
Q 14 : Culture and climate :
Every organisation has some characteristics which are common with any other organisation. At the
same time, each organisation has its unique set of characteristics and properties. This psychological
structure of organisation and their sub-units is usually referred to as Organisational Culture. For a
layman, culture is a commonly experienced phenomenon and many words like, climate, atmosphere,
environment and milieu are often used interchangeably to describe it. In fact, most of the studies which
have tried to measure an organisation's "Culture" have operationalised it in terms of "Organisation
Climate". A couple of formal definitions of organisation climate are given below for your perusal:
Organisational climate is a relatively enduring quality of the internal environment that is experienced
by the members, influences their behaviour, and can be described in terms of values of a particular set
of characteristics of the organisation (Renato Tagiuri, 1968). Organisational climate is the set of
characteristics that describe an organisation and that (a) distinguish one organisation from other
organisations; (b) are relatively enduring over time and (c) influence the behaviour of the people in the
organisation (Forehand & Gilmer, 1964). Just as any culture has some do's and don'ts in the form of
totems and taboos which dictate how each member should behave with a fellow member or an outsider,
similarly each organisation has a culture that influences the behavior of employees towards clients,
competitors, colleagues, supervisors, subordinates and strangers. In this Unit, we shall be concerned
with this relatively stable perceived internal environment of an organisation, called Organisational
Climate or Organisational Culture (OC).It should be noted that Organisational Culture or
Organisational Climate (OC) is the perceived aspects of an organisation's internal environment, but
within the same organisation there may be very different OCs.
Changing Forces in Internal and External Environment. An organisation changes its structure and
practices as a result of the forces from internal origins as well as from external pressures arising in the
environment. There are two primary aspects of organisational structure-differentiation and integration.
Differentiation is the division of the organisation into subsystems, e.g. research, sales, production etc.
Each differentiated subsystem develops particular attributes in responding to the requirements posed by
its relevant external environment. However, differentiation requires the integration of these
subsystems to achieve unity of effort and the accomplishment of the organisation's goals. The more
turbulent environment would be associated with a higher degree of differentiation among the
organisation's sub-parts and also a correspondingly high degree of integrative effort. Similarly, an
organisation faced with a stable environment would have less differentiated subsystems and require
fewer integrative procedures. The success of an organisation depends upon an appropriate amount of
differentiation to cope with the environment and also the right amount of integrative or coordinating
effort. Researches by Lawrence and Lorsch (1967) provide evidence for such a generalisation. They
represent the external environment forces which influence organisations. Organisations face the need
for both to adapt internally to external forces and to initiate changes in the external environment.

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These needs explain, for example, why companies engage in lobbying for legislation they favour
(external influence, proactive change), but comply when laws not favoured are passed (internal
adaptation, reactive change). Growth and Decay : You have seen that an organisation's growth
presents many problems and opportunities for change. Decay too poses change problems. It leads to
defensive, restorative changes aimed at survival and the es; ntial resumption of growth. When growth
occurs through internal vigour of pro' 'act lines, services or market penetration, change is gradual.
Change is more extensive when growth occurs from mergers, acquisitions or exceptionally rapid
success of organizational activities. New Personnel : Some change is inevitable because of internal
factors such as death, retirement, transfer, promotion, discharge, or resignation and constantly changing
elements in the external environment. No two managers, you will agree, have the same styles, skills, or
managerial philosophies, or the same personal needs. Managerial behaviour is always selective, so that
a newly appointed manager may favour different organisational designs, objectives, tasks, procedures
and policies than a predecessor. The new, executive will not be exactly like the previous one, nor even
like those already present. Change Agents :Change Agent is the technical term for an organisational
member whose role involves the strategies and procedures for bringing about change. Any individual
can be a change agent at one time or another, but many people have positions, tasks, or formal roles in
which their main assignments involve dealing with change. A change agent's formal role is primarily to
plan and initiate changes rather than to implement them. Barometers of Declining Effectiveness
:Organisations have a number of ways of "taking their pulse" by looking at indicators from their own
information systems. A business firm monitors data on sales, absenteeism, turnover, scrap rates,
manufacturing costs and numerous ratios of financial measures. Change in Corporate Strategy : An
organisation may undertake comprehensive changes even when no indicators would suggest immediate
problems in its performance. However, current and past performance have been based on conditions
that organisation officials believe to be changing. Forecasts of long run trend may prompt a decisions to
enter new markets, to pursue a strategy of growth, to become less dependent on government, to switch
from a centralised to a decentralised structure, or to adopt new technologies. Crises :
Not infrequently, the occasion for organisational change is an unforeseen crisis which makes
continuation of the status quo unthinkable. The sudden death of a Chief Executive Officer, the
resignation of key members of a top management team, a strike by a critically important group of
specialised workers, loss of major client or suppliers on whom the company has been dependent, a
drastic cutback in budget, even spontaneous civil disturbances directed against an organisation force a
reorientation of the corporate posture and initiate a total revamping of policy, practice and behaviour.
Personal Goals : Leaders, interest groups and coalitions have their own goals: to see the company
become more aggressive, to shape the organisation around some distinctive theme, to cast a particular
corporate image, to further some ideology or philosophy. Seldom are these goals stated in precisely
those forms, at least for the record or for public consumption. THE DOMINO EFFECT : The last
main source of change is change itself. There is often a domino effect in which one change touches off
a sequence of related and supporting changes, e.g., creating a new department may cause the creation
of a new managerial or non-managerial positions or change in assignments within other departments,
budgeting reallocations and office space. Other departments may need to realign their missions,
structure, tasks and staffing. It is quite common for people to fail to consider the domino effect. Such
an oversight Task refers to the job, which can vary in several ways or dimensions such as variety,
autonomy, task identity, feedback, and significance. People includes individuals who perform or fill
various jobs within the organisation. Individuals vary in their attitudes, motivations and values which
influence their perception and evaluation of change. This can complicate the implementation of change.

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THE PROCESS OF ORGANISATIONAL CHANGE : People change their knowledge, attitude and
behaviour when they become dissatisfied with status quo or when there is a more desirable substitute. A
successful change involves (1) recognising the need for it. (2) learning a new behaviour or substitute
and, (3) feeling comfortable with the "new situation". This change process was best described by Kurt
Lewin when he described the three stages of change-Unfreezing, Moving and Refreezing (PIC).

The three stages of changes will be described shortly, but before you proceed to look into the phases,
you need to become familiar with three more terms which Kurt Lewin gave us to understand the

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processof change. These are the concepts of quasi-static equilibrium, driving forces and restraining
forces. At any given point of time, any pattern of behavior is a result of equilibrium between two sets
of forces-driving and resisting. The "Present" position is achieved because the strength of driving
forces and resisting forces is equal. A clear analysis of what are the driving ("Push forward") or
resisting ("Pull backward") forces will help you manage a change better. Unfreezing : As a practical
matter, change does not occur in a vacuum of no prior perspective. To the extent the new is different
from the old and the old-had value to the individuals, the old patterns of perspective implies a
questioning and doubting of existing assumptions and feelings. Recognizing the Driving Forces :
Recognizing major changes in the environment and problems within the organisation is the first step
toward organisational change. Institute managers may recognise these pressures for change and take
corrective action. Increasing the Driving Forces
Once the need for change is identified, it has to he communicated to people who w he involved in the
changing process. As noted earlier, if members know why the change is needed, they are more likely to
adopt it. You can employ the following strategies to increase the - acceptance of a change. 1.Express
the need for change People who will be affected by the change have to y the change is needed. If they
do not, they will hesitate to cooperate in the change process. 2. Communicate the potential benefit
People have a tendency to ask, "what's in it for me?" Unless they feel that the change will benefit them
or that failure to change will hurt them substantially, they are less likely to cooperate. If no benefits can
be identified, the costs of not changing must at least be understood. 3. Protect the interest of concerned
people People fear change because it may cause them to lose their jobs, income or status. Assurances of
job security, income protection and maintenance of status can increase the acceptance of change. 4. Get
people involved in the process Participation can help people accept change. Some individuals have a
positive outlook on change and when they participate, the progress of change is facilitated. 5
Communicate the progress of change In order to minimise fear of the unknown, the content and
progress of change must be communicated to employees. It is often difficult to know all the potential
consequences and influences of a given change, but, by keeping employees informed of its progress,
management can at least maintain a climate of trust. 6. Use a respected change agent
The credibility and power of the change agent can facilitate the process of change. The change agent
must be familiar with the technical and behavioural aspects of a given change and must be someone
with an influence on organisational functioning. 7.Reinforce earlier changes
When an organisation undertakes a large scale change involving a series of continual modification, it is
important for people to see that earlier changes have been successful. 8. Managing the Resisting
Forces Most of the strategies designed to increase the driving forces are equally applicable for reducing
resisting forces to change. Moving :In the moving or changing phase the individual is ready for new
behaviour and a change in perspective. It is important that he or she have an opportunity to build by
experimentation new patterns of behaviour and new assumptions, perceptions and feelings. Refreezing
: The final phase involves the establishment of a new perspective compatible with and leading to the
new desirable behaviour. In effect, the new part of one's total perspective is now established and
integrated so that it fits the whole. This makes it possible for the new behaviour to be accomplished as
a matter of course. This is the period in which the individual or group begins to enjoy the rewards for
the new behaviour, either extrinsically in the form of social approval, monetary reward and the like or
intrinsically in the form of ego satisfaction, sense of mastery and self-fulfillment.
FORMAL AND INFORMAL ORGANISATIONS : If you and your colleagues decide to meet every
Saturday evening for one hour and form a recreation club to play chess and carrom, you are meeting in
an informal organisation. However, when the same group of your colleagues meets to review tilt last
quarter's performance and plan for the next three months it is in the context of a formal organisation.
Thus, while the informal organisation is spontaneous, the formal organisation is the result of a

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deliberate and planned effort to pattern activities and relationships in a specific manner to facilitate
achieving the specified objectives. A formal organisation is the result of explicit decision-making,
deciding how people and activities should be related to one another. However, there is no such
decision-making involved in an informal organisation which may simply evolve over time. In the
context of a business organisation, both the formal and the informal organisations operate together to
form the total organisation. The formal structure delineates specific departments, activities, people and
their reporting relationships. The informal structure refers to the social groups or friendships which
people working together may form. A most important aspect of the informal organisation is the
informal communication network or `grapevine' as it is more commonly known. Similarly, you would
find informality evolved values operating within the parameters of the formal organisation. These
values may relate to dress, employment of women, employment of members of a minority community,
etc., In understanding the structure of an organisation, you must understand the important role played
by the informal organisation within the formal organisation.
MATRIX STRUCTURE : The matrix structure is a combination of the product and functional
organisation and is usually created for executing a project which requires the skilled services of a
functional man as well as the specialised knowledge of a product man. Large turnkey projects in
specialised fields require a matrix structure. Figure IX illustrates a matrix structure. The distinguishing
characteristic of a matrix structure is that it operates under a dual authority. A person is accountable to
two bosses at the same time, one his usual boss and the other his boss for the duration of the project.
Obviously the problems emanating from this type of structure relate to conflicting roles and authority
arising out of an ambiguous demarcation of authority and responsibility.
The simplest model of the communication process can be:Sender ……… > Message………………..>
Receive. The model indicates the essential elements of communication, viz., the sender and 1 receiver,
and the message that is exchanged between them. If any one of the three elements is missing,
communication does not take place.However, the process of communication is a much more complex
phenomenon consisting of at least five elements which are subject to various influences. The mod can
be put as follows:

Source : In this model the first element is the source of the communication from where the
communication originates. The source or sender can be a person, a number of persons, or even a
machine. The sender initiates communication because he has sc need, thought, idea or information that
he wishes to convey to the other person, persons or machine. If, for example, an accidental fire has
broken out in a part of godown of the factory, the security officer (source) will need to convey the
messaee immediately to the fire station, (receiver). Fire alarm (machine) will do the same ur place of
the security officer. Encoding Message : The next element in the process is that of encoding the
information to be transmitted Encoding enables the thoughts to be put in the form of symbols.
Normally language provides the symbols that are used in the transmission of thoughts to another
person. However language is not the only means to convey the thoughts, needs or information.
Channel : The next element in the process of communication is the channel through which the
communication is transmitted. It is the link that joins the sender and the receiver. The most commonly
used channels are sight and sound. In the organisational environment, the channel could take the form
of face-to-face conversation, written memos, telephonic exchanges, group meetings, etc. Decoding :
Decoding and understanding the message constitute the last two elements in the process of
communicating from sender to receiver. The receiver in the first instance receives the message and
decodes it, that is to say, interprets and translates it into thoughts, understanding and desired response.
A successful communication occurs when the receiver decodes the message and attaches a meaning to

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it which very nearly approximates the idea, thoughts or information the sender wished to transmit.
Feedback : Response and feedback complete the two-way process of communication. It is through the
feedback that the source (sender) comes to know if his message was correctly received and understood.
In case it is found that the message has been received incorrectly, it is possible to make corrections
subsequently if response is timely. Noise : Surrounding the entire spectrum of communication is the
noise that affects the accuracy and fidelity of the message communicated. Noise is any factor that
disturbs, confuses or otherwise interferes with communication. It can arise at any stage in the
communication process. The sender may not be able to encode the message properly or he may not be
properly audible.
Mission:The mission is the very reason and justification for the existence of a firm. Mission is always
defined in terms of the benefits the firm provides to its customers and not in terms of any physical
dimensions of the firm or its products. If there were no customers there would be no firm. Thus the
starting point for, defining the mission of any business is its customer. Since the customer exists outside
the business, the mission must be defined from the outside. The firm must ask the questions "What is
our business?" and "What should it be?" but seek the answer from the customer's viewpoint. The
important thing is to identify the not-so-obvious, but the perceived benefit or value which the customer
is actually seeking when buying the product. Correct identification of the real benefit or value to the
customer will help the firm to answer the question "What is our business?"However, long a definition
of mission may remain valid without any change, it must be remarked that the concept of mission is
dynamic and not static. It must change over time with changes occurring in the environment. These
may relate to changes in technology, social structure, tastes, fashion, etc.
Objectives:Once the mission and scope of a firm have been defined by the top management the next
logical step is to translate them into action. This can be done by breaking down the business mission
into smaller, workable objectives for managers down the line. These objectives relate to the long-run
and are described as open ended attributes (described in terms of maximizing or optimizing or
minimizing rather than in any specific quantitative terms) which a firm seeks to fulfill in pursuance of
its mission. Objectives reflect the `action' orientation of the mission which, in contrast, is expressed in
relatively abstract terms. Objectives form the basis for work and provide a yardstick for measuring
performance. Objectives may be set for different levels: for the corporate level, business level,
divisional level and individual level. Obviously, objectives set for one level will not be identical with
those set for another level, but they must certainly be compatible .with each other and seek the
fulfillment of the firm's mission. In certain government and public sector undertakings, profit is
sometimes ignored and the emphasis is laid on providing an essential service at a subsidized rate. Most
transport corporations providing bus and train facilities within a city usually run at a loss.

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