2015

COMMERCE

Course: 102

(Organizational Behaviour and Theory)

Full Marks: 80

Time: 3 hours

The figures in the margin indicate full marks for the questions.

1(a) Discuss the various types of organisation. To what extent sound organisation helps in effective management?

-> An entrepreneur organizes various factors of production like land, labour, capital, machinery, etc. for channelizing them into productive activities. The product finally reaches consumers through various agencies. Business activities are divided into various functions; these functions are assigned to different individuals.

Various individual efforts must lead to the achievement of common business goals. Organization is the structural framework of duties and responsibilities required of personnel in performing various functions with a view to achieve business goals through organization. Management tries to combine various business activities to accomplish predetermined goals.

Types of Organisation

• Formal Organisation
• Informal Organisation

Formal Organisation

In every enterprise , there are certain rules and procedures that establish work relationships among the employees. These facilitate the smooth functioning of the enterprise. Further, they introduce a systematic flow of interactions among the employees. Effectively, all of this is done through a formal organisation .

Notably, the management is responsible for designing the formal organisation in such a way that it specifies a clear boundary of authority and responsibility. Coupled with systematic coordination among various activities, it ensures achievement of organisational goals.

Again, the management builds the formal organisation. It ensures smooth functioning of the enterprise as it defines the nature of interrelationships among the diverse job positions. Additionally, these ensure that the organisational goals are collectively achieved. Also, formal organisation facilitates coordination, interlinking and integration of the diverse departments within an enterprise. Lastly, it lays more emphasis on the work to be done without stressing much on interpersonal relationships.

Advantages

· The formal organisation clearly outlines the relationships among employees. Hence, it becomes easier to rack responsibilities.

· An established chain of commands maintains the unity of command.

· As the duties of each member are clearly defined, there is no ambiguity or confusion in individual roles whatsoever. Further, there is no duplication of efforts which eliminates any wastage.

· In a formal organisation, there is a clear definition of rules and procedures. This means that behaviours and relationships among the members are predictable. Consequently, there is stability and no chaos existing in the enterprise.

· Finally, it leads to the achievement of organisational goals and objectives. This is because there exist systematic and well thought out work cultures and relationships.

Disadvantages

· Decision making is slow in a formal organisation. It is important to realise that any organisational need has to flow through the respective chain of commands before being addressed.

· Formal organisation is very rigid in nature. This means that there prevails perfect discipline coupled with no deviations from the procedures. Hence, this can lead to low recognition of talent.

· Lastly, the formal organisation does not take into account the social nature of humans as it talks about only structure and work. Interestingly, we cannot eliminate this integral part of our nature . Hence, it does not entirely display the functioning of the organisation.

Informal Organisation

It’s easy to understand that if we interact with certain people regularly we tend to get more informal with them. This is because we develop interpersonal relationships with them which are not based solely on work purposes. Rather, these relationships might arise because of shared interests, like if you get to know that your colleague likes the same football club of which you’re a fan of.

As a matter of fact, informal organisation arises out of the formal organisation. This is because when people frequently contact each other we cannot force them into a rigid and completely formal structure. Instead, they bond over common interests and form groups, based upon friendship and social interactions.

Unlike formal organisation, informal organisation is fluid and there are no written or predefined rules for it. Essentially, it is a complex web of social relationships among members which are born spontaneously. Further, unlike the formal organisation, it cannot be forced or controlled by the management.

Also, the standards of behaviour evolve from group norms and not predefined rules and norms. Lastly, as there are no defined structures or lines of communication, the interactions can be completely random and independent lines of communication tend to emerge in informal organisation.

Advantages

· In this type of organisation, communication does not need to follow the defined chain. Instead, it can flow through various routes. This implies that communication in an informal organisation is much faster relative to formal organisation.

· Again, humans are social animals. The needs to socialize exist deep within our existence. The informal organisation ensures that there is socialization within the enterprise. Consequently, members experience the sense of belongingness and job satisfaction.

· Informal organisation, getting true feedbacks and reactions is not easy. Hence, in informal organisation, various limitations of formal organisation is covered up.

Disadvantages

· The informal organisation is random and can result in the spread of rumours. Again, we cannot manage and control informal organisation. Consequently, this may result in chaos within the enterprise.

· It is important to realise that it is not possible to effect changes and grow without the support of the informal organisation. This can work in both ways, for growth or decline of the enterprise.

· To point out again, informal organisation conforms to group standards and behaviours. If such behaviours are against the organisational interests, they can eventually lead to disruption of the organisation.

7 benefits of a sound organization for managing the business effectively:

1. Facilitates administration:

Sound organisation facilitates the achievement of the objectives of an enterprise by providing a framework within which the functions of coordination and control can be per formed effectively. It provides a system of authority and a network for effective communications. It is the means by which common men can do uncommon things. Organisation is a network of decision communica­tion centres in which individual efforts can be coordinated towards group goals.

It integrates the various jobs into an operating system to provide for the accomplishment of the firm’s objectives. Thus, a properly designed and balanced organization structure facilitates both manage­ment and operation of the enterprise. Inadequate organisation may not only discourage but actually preclude effective administration.

2. Encourages growth and diversification:

It is sound organization practices that have enabled enterprises to grow and expand to giant sizes. An organization structure is the framework within which an enterprise grows. Systematic division of work and consistent delegation of authority facilitate taking up of new activities, and meeting new demands. A sound structure provides the necessary flexibility for growth without losing control over the various activities. Balanced emphasis can be put on different activities.

3. Optimum use of new technology:

Optimum use of technological improvements can be made through a sound structure manned with competent employees. In addition, a sound organisation permits optimum utilization of human resources. It permits humane use of human beings by avoiding duplication of work and overlapping of efforts. Sound organisation ensures that every individual is placed on the job for which he is best suited.

4. Stimulates innovation and creativity:

A well-designed organization stimulates creative thinking and initiative on the part of employees. It provides for effective management of change and responds favorably to changes in the environment. By providing well-defined areas of work and clear-cut responsibility, it provides recognition for the professional and the specialist in terms of their achievements.

5. Encourages good human relations:

In a sound organisation every individual is assigned the job for which he is best suited. The assignment of right jobs to right persons improves job satisfaction and interpersonal relations. Well-defined jobs and clear lines of authority and respon­sibility help to establish cordial relations between management and workers.

6. Ensures continuity of enterprise:

Sound organisation helps in the continuity of management by providing scope for the training and development of future management. An effective organisation provides avenues for development and promotion through extensive delegation and decentralization of authority.

7. Fosters coordination:

Sound organisation facilitates order and cohesiveness in the enterprise. Division of labour, better utilization of technology and human talent, etc. help to improve the efficiency and quality of work. By providing clear channels of communication among the members of the organisation, it facilitates coordination.

Thus, sound organisation is the backbone or foundation of effec­tive management. “Organizing is the process by which a manager brings order out of chaos, removes conflicts between people over work or res­ponsibility, and establishes an environment suitable for teamwork.’

(b) What are the various approaches to organisational analysis? What are the components involved in systems analysis?

-> Organizational analysis or more commonly Industrial analysis is the process of reviewing the development, work environment , personnel, and operation of a business or another type of association. This review is often performed in response to crisis, but may also be carried out as part of a demonstration project, in the process of taking a program to scale, or in the course of regular operations. Conducting a periodic detailed organizational analysis can be a useful way for management to identify problems or inefficiencies that have arisen in the organization but have yet to be addressed, and develop strategies for resolving them.

Organizational analysis focuses on the structure and design of the organization and how the organization’s systems, capacity and functionality influence outputs. Additional internal and external factors are also accounted for in assessing how to improve efficiency. Undertaking an organizational analysis is helpful in assessing an organization’s current well-being and capacity, and deciding on a course of action to improve the organization’s long-term sustainability. A restructuring of an Organization may become necessary when either external or internal forces have created a problem or opportunity for improvement in efficiency and effectiveness.

Approaches to organisational analysis:-

It is essential to develop a perspective understanding about organizations because human behaviour and organization behaviour are influenced by the people in an organization and its specific characteristics. The formal study and understanding of organizations first formed expression over the last 100 years or so. Although organizations are as old as civilization, organizations theory is of comparatively recent origin. Theories appeared as business organizations increased in size and complexity. Different theories were products of different times.

The classical organizations were pioneered by F.W. Taylor and Henri Fayol. Based on expression at the shop level, Taylor stressed the need for a scientific approach to focus mainly on micro aspects like individual workers, foremen, work processes. Faylor turned his attention to general administration and described macro aspects of organizations with main focus on principle and practice for better performance. Bureaucracy as a concept was first developed by Max Weber presents a descriptive and scholarly point of view of organizations.

Let us consider in detail different approaches to organization theory and streams of Classical theory.

i. Division of labour (refers to division of work)

ii. The scalar or functional process (refers to flow of authority and responsibility within the framework of organizational structure)

iii. Structure (refers to logical culmination of authority and responsibility)

iv. Span of control (refers to number of subordinates supervised by a manager).

2(a) “Authority is the legitimized power that is linked to each position within the organisation.” Discuss.

-> Authority is the legitimate power which one person or a group possesses and practices over another. The element of legitimacy is vital to the notion of authority and is the main means by which authority is distinguished from the more general concept of power .

Power can be exerted by the use of force or violence . Authority, by contrast, depends on the acceptance by subordinates of the right of those above them to give those orders or directives .

The types of political authority were first defined by Max Weber in his essay ” Politics as a Vocation ” and his other writings in 1919-1920. In this essay he emphasized that the political authority that controlled the state can be composed of the following types of authority, or what is called in German, Herrschaft.

Traditional authority : Power legitimized by respect for long-established cultural patterns.

Charismatic authority : Power legitimized by extraordinary personal abilities that inspire devotion and obedience.

Rational-legal authority : Also known as bureaucratic authority , is when power is legitimized by legally enacted rules and regulations such as governments.

Max Weber , in his sociological and philosophical work, identified and distinguished three types of legitimate domination (Herrschaft in German, which generally means ‘domination’ or ‘rule’), that have sometimes been rendered in English translation as types of authority, because domination is not seen as a political concept in the first place. Weber defined domination (authority) as the chance of commands being obeyed by a specifiable group of people. Legitimate authority is that which is recognized as legitimate and justified by both the ruler and the ruled. Legitimated rule results in what Weber called the monopoly over the use of coercive violence in a given territory. ^[4] In the modern world, such authority is typically delegated to police and the court system.

Weber divided legitimate authority into three types:

· The first type discussed by Weber is legal-rational authority . It is that form of authority which depends for its legitimacy on formal rules and established laws of the state, which are usually written down and are often very complex. The power of the rational-legal authority is mentioned in the constitution. Modern societies depend on legal-rational authority. Government officials are the best example of this form of authority, which is prevalent all over the world.

• The second type of authority, traditional authority , derives from long-established customs, habits and social structures. When power passes from one generation to another, it is known as traditional authority. The rule of hereditary monarchs furnishes an obvious example. The Tudor dynasty in England and the ruling families of Mewar in Rajasthan (India) are some examples of traditional authority.
• The third form of authority is charismatic authority . Here, the charisma of the individual or the leader plays an important role. Charismatic authority is that authority which is derived from the leader’s claims to a higher power or inspiration that is supported by his or her followers. Examples in this regard can be NT Rama Rao , a matinee idol, who went on to become one of the most powerful Chief Ministers of Andhra Pradesh .

History has witnessed several social movements or revolutions against a system of traditional or legal-rational authority started by Charismatic authorities. According to Weber, what distinguishes authority from coercion , force and power on the one hand, and leadership, persuasion and influence on the other hand, is legitimacy. Superiors, he states, feel that they have a right to issue commands; subordinates perceive an obligation to obey. Social scientists agree that authority is but one of several resources available to incumbents in formal positions. For example, a Head of State is dependent upon a similar nesting of authority. His legitimacy must be acknowledged, not just by citizens, but by those who control other valued resources: his immediate staff, his cabinet, military leaders and in the long run, the administration and political apparatus of the entire society.

Authority can be created expressly when public entities act publicly, using the same means to communicate the grant of authority to their agents that they use to communicate this to third parties, apparent authority describes the situation when a principal has placed restrictions on an agent that are not known to a third party, and restrictions on government agents are accomplished in the open, through laws and regulations. In this setting, all parties concerned is assumed or supposed to know the laws and regulations of government.

Recently the concept of authority has also been discussed as a guiding principle in human-machine interaction design.

(b) When does a bureaucratic organization suffer from serious problems? Suggest whether it is feasible to design an organization free from bureaucratic elements.

-> Bureaucracy usually refers to a system in which selected officials take the decisions instead of the elected professionals and representatives. We find divided opinions on the advantages and disadvantage of the bureaucratic system. But most of the general public is clearly against it because of its numerous problems and shortcomings.
John Stuart Mill, the famous philosopher and political economist, believed that bureaucracy had some specific benefits. But even he claimed that its negatives far outweigh the positives. Bureaucracy, which is also commonly referred as red tape , complicates things by excessively following prescribed methods to the letter. It actually kills the basic concept of having a structured framework in the first place – the purpose of which was to speed things up.

Here are the 5 biggest problems of bureaucracy:

1. Rigidity Stampedes Creativity:

The whole bureaucratic system is formed around rigid rules and regulations. This excessive form of rigid structures stampedes creativity and restricts growth. In all types of officialdom there is always adamant, inflexible and unaccommodating. Furthermore, bureaucracy requires everything to follow a given system, which diminishes any chances of creativity and out-of-the-box solutions.

With the modern-world changing fast and evolving in light of new challenges, this rigidity of bureaucracy is a big problem for any organization or government.

2. Impersonal:

According to Max Weber’s theory of bureaucracy , it all works within a structure that does not have enough room for human emotions, satisfaction, needs and values. It is impersonal in nature and neither cares for the consumers nor the employees working around.

In a bureaucratic system, the fixed rules and regulations of an organization are more important than any individual’s emotions, values or needs. It is one of the biggest shortcomings of bureaucracy, which makes it one of the most disliked forms of administration.

3. Customer Dissatisfaction:

Although bureaucracy claims to have a framework to organize things, but the by-products of it makes it all the more difficult to manage things quickly and efficiently. There are a lot of paperwork, files, registrations and processes in a bureaucratic system. This makes dealing with customers or consumers more troublesome, complex and problematic.

For example, if a consumer complains about a product or service, he requires immediate redemption and action on his complain. The consumer does not want to get bogged down with filing procedures, structured hierarchy and complex systems.

4. Slower Decision Making:

As you know that a bureaucratic system runs in accordance with its structure and set mechanics of officialdom , it significantly slows down the decision-making processes. Bureaucracy most often fails to quickly respond to the ever-changing competitive world. It cannot react to business changes, consumer complaints and demand-and-supply needs as quickly as some of the other competitors can do.

This is one of the reasons that we see unnecessary delays in a bureaucratic system. Today’s world requires fast-paced decisions and instant reactions – something that bureaucracy will always fail to comply with.

5. Limits Capabilities of Employees:

Last, but not the least, limiting capabilities of its employees is one of the biggest drawbacks and problems of bureaucracy. You must know that a bureaucratic system believes in heavy departmentalization and division of job responsibilities. Although compartmentalization may bring some advantages, but on the other hand, it significantly limits the potential and capabilities of the employees.

The job compartmentalization does not allow an employee to work beyond its delegated responsibilities. This not only limits the personal growth and motivation of the employee, but it also confines the overall productivity level of the organization.

A bureaucracy is an organization, whether publicly or privately owned, made up of several policymaking departments or units. People who work in bureaucracies are informally known as bureaucrats. While the hierarchical administrative structure of many governments is perhaps the most common example of a bureaucracy, the term can also describe the administrative structure of private-sector businesses or other non-governmental organizations, such as colleges and hospitals.

In an ideal bureaucracy, the principles and processes are based on rational, clearly-understood rules, and they are applied in a manner that is never influenced by interpersonal relationships or political alliances.

However, in practice, bureaucracies often fail to achieve this ideal. Thus, it’s important to consider the pros and cons of bureaucracy in the real world.

The hierarchical structure of bureaucracy ensures that the bureaucrats who administer the rules and regulations have clearly-defined tasks. This clear ” chain of command ” allows management to closely monitor the organization’s performance and deal effectively with problems when they arise.

The impersonal nature of bureaucracy is often criticized, but this “coldness” is by design. Applying rules and policies strictly and consistently reduce the chances that some people will receive more favorable treatment than others. By remaining impersonal, the bureaucracy can help to ensure that all people are treated fairly, without friendships or political affiliations influencing the bureaucrats who are making the decisions.

Bureaucracies tend to demand employees with specialized educational backgrounds and expertise related to the agencies or departments to which they are assigned. Along with ongoing training, this expertise helps to ensure that the bureaucrats are able to carry out their tasks consistently and effectively. In addition, advocates of bureaucracy argue that bureaucrats tend to have higher levels of education and personal responsibility when compared to non‐bureaucrats.

While government bureaucrats do not make the policies and rules they implement, they nevertheless play an integral part in the rule-making process by providing essential data, feedback, and information to the elected lawmakers .

Due to their rigid rules and procedures, bureaucracies are often slow to respond to unexpected situations and slow to adapt to changing social conditions. In addition, when left with no latitude to deviate from the rules, frustrated employees can become defensive and indifferent to the needs of the people who deal with them.

The hierarchical structure of bureaucracies can lead to internal “empire-building.” Department supervisors may add unnecessary subordinates, whether through poor decision-making or in order to build their own power and status. Redundant and non-essential employees quickly reduce the organization’s productivity and efficiency.

Absent of adequate oversight, bureaucrats with decision-making power could solicit and accept bribes in return for their assistance. In particular, high-level bureaucrats can misuse the power of their positions to further their personal interests.

Bureaucracies (especially government bureaucracies) are known to generate a lot of “red tape.” This refers to lengthy official processes that involve submitting numerous forms or documents with many specific requirements. Critics argue that these processes slow down the bureaucracy’s ability to provide a service to the public while also costing taxpayers money and time.

Examples of Bureaucracy

Examples of bureaucracies can be found everywhere. State departments of motor vehicles, health maintenance organizations (HMOs), financial lending organizations like savings and loans, and insurance companies are all bureaucracies that many people deal with regularly.

In the U.S. government’s federal bureaucracy, appointed bureaucrats create rules and regulations needed to efficiently and consistently implement and enforce the laws and policies made by the elected officials. All of the approximately 2,000 federal government agencies, divisions, departments, and commissions are examples of bureaucracies. The most visible of those bureaucracies include the Social Security Administration, the Internal Revenue Service, and the Veterans Benefits Administration.

3(a) Compare and contrast theory “X” and theory “Y”. What are the implications of these theories on managerial practices?

-> Motivation implies the act of stimulating or inspiring subordinates to pursue the desired course of action. It is something that makes people act or behave in a particular manner. Based on the premises concerning human behaviour, Prof. Douglas McGregor put forward a theory of motivation, called as theory X and theory Y. Theory X is a conventional approach to motivation, based on negative assumptions. On the other extreme, Theory Y is diametrically opposite to theory X which shows the modern and dynamic approach to individuals and relies on the assumptions that are practical in nature.

Definition of Theory X

Theory X is a traditional model of motivation and management. It takes into consideration, the pessimistic behaviour of an average human being, who is less ambitious and inherently lazy. Authoritarian management style is applied by the management, where the managers closely monitor and supervise each employee.

The premises on which theory X relies are listed below:

· By nature, an individual is indolent and will avoid work, to the extent possible.

· The average individual is unambitious, doesn’t like responsibilities and prefers supervision.

· He/She is self-oriented and unconcerned about organisational objectives.

· The employee resists change and gives the highest priority to job security.

· He/She is not very clever and can easily be deceived.

On the basis of above assumptions, it is concluded that the management is held responsible for organising resources, for the firm, with the aim of economic gain. Next, the management directs the efforts of the employees and motivate and control their actions, to make them work as per the needs of the organisation. Further, they must be monitored, persuaded, rewarded and punished, or else they will remain idle.

Definition of Theory Y

Theory Y is a modern approach on motivation, put forward by McGregor. It uses the participative style of management and assumes that workforce is self-directed and enjoys the work assigned to them, in the accomplishment of organisational objectives. According to the theory, employees are the most precious asset to the company. Given below are the major assumptions of this model:

1. The employees usually like work and are natural like play and rest. The performance of the work is discretionary and provides a sense of fulfilment, if meaningful.

2. He/She can deploy self-control and self-motivation, in the pursuance of organisational objectives.

3. The rewards in relation to the achievement lead to commitment towards objectives.

4. An average worker, do not escape responsibility; rather he/she seeks it.

5. The capabilities and calibre of the employees are underutilised, who possess unlimited potential.

Based on these assumptions, it can be deduced that management is held responsible for arranging the resources with the aim of achieving economic and social ends. Further, the employees are not indolent by nature, but they behave so, because of experience. Moreover, it is the management’s duty to create such an environment for the employees to help them achieve their goals.

Implications of Theory X and Theory Y in managerial practices are:

Quite a few organizations use Theory X today. Theory X encourages use of tight control and supervision. It implies that employees are reluctant to organizational changes. Thus, it does not encourage innovation.

Many organizations are using Theory Y techniques. Theory Y implies that the managers should create and encourage a work environment which provides opportunities to employees to take initiative and self-direction. Employees should be given opportunities to contribute to organizational well-being. Theory Y encourages decentralization of authority, teamwork and participative decision making in an organization. Theory Y searches and discovers the ways in which an employee can make significant contributions in an organization. It harmonizes and matches employees’ needs and aspirations with organizational needs and aspirations.

In 1960, Douglas McGregor formulated Theory X and Theory Y suggesting two aspects of human behaviour at work, or in other words, two different views of individuals (employees): one of which is negative, called as Theory X and the other is positive, so called as Theory Y. According to McGregor, the perception of managers on the nature of individuals is based on various assumptions.

Theory X

1. An average employee intrinsically does not like work and tries to escape it whenever possible.

2. Since the employee does not want to work, he must be persuaded, compelled, or warned with punishment so as to achieve organizational goals. A close supervision is required on part of managers. The managers adopt a more dictatorial style.

3. Many employees rank job security on top, and they have little or no aspiration/ ambition.

4. Employees generally dislike responsibilities.

5. Employees resist change.

6. An average employee needs formal direction.

Theory Y

1. Employees can perceive their job as relaxing and normal. They exercise their physical and mental efforts in an inherent manner in their jobs.

2. Employees may not require only threat, external control and coercion to work, but they can use self-direction and self-control if they are dedicated and sincere to achieve the organizational objectives.

3. If the job is rewarding and satisfying, then it will result in employees’ loyalty and commitment to organization.

4. An average employee can learn to admit and recognize the responsibility. In fact, he can even learn to obtain responsibility.

5. The employees have skills and capabilities. Their logical capabilities should be fully utilized. In other words, the creativity, resourcefulness and innovative potentiality of the employees can be utilized to solve organizational problems.

Thus, we can say that Theory X presents a pessimistic view of employees’ nature and behaviour at work, while Theory Y presents an optimistic view of the employees’ nature and behaviour at work. If correlate it with Maslow’s theory, we can say that Theory X is based on the assumption that the employees emphasize on the physiological needs and the safety needs; while Theory X is based on the assumption that the social needs, esteem needs and the self-actualization needs dominate the employees.

McGregor views Theory Y to be more valid and reasonable than Theory X. Thus, he encouraged cordial team relations, responsible and stimulating jobs, and participation of all in decision-making process.

(b) Define Perception. Explain the perceptual process. What is the influence of perception on behaviour?

-> Perception is the process of selecting, organizing and interpreting or attaching meaning to events happening in the environment. Perception is the intellectual terms by which a person acquires the information from the environment, organizes it and obtains the meaning from it. Perception basically refers to the manner in which a person experiences the world. Perception is the process by which people interpret; experiences process and use stimulate materials in the environment so that they satisfy their needs.

Perception is an intellectual process of transforming sensory stimuli to meaningful information. It is the process of interpreting something that we see or hear in our mind and use it later to judge and give a verdict on a situation, person, group etc.

It can be divided into six types −

• Of sound − the ability to receive sound by identifying vibrations.
• Of speech − the competence of interpreting and understanding the sounds of language heard.
• Touch − Identifying objects through patterns of its surface by touching it.
• Taste − the ability to receive flavour of substances by tasting it through sensory organs known as taste buds.
• Other senses − they approve perception through body, like balance, acceleration, pain, time, sensation felt in throat and lungs etc.
• Of the social world − It permits people to understand other individuals and groups of their social world. Example − Priya goes to a restaurant and likes their customer service, so she will perceive that it is a good place to hang out and will recommend it to her friends, who may or may not like it. Priya’s perception about the restaurant is good.

Perception process is the different stages of perception we go through. The different stages are −

• Receiving
• Selecting
• Organizing
• Interpreting

Receiving:-

Receiving is the first and most important stage in the process of perception. It is the initial stage in which a person collects all information and receives the information through the sense organs.

Selecting:-

Selecting is the second stage in the process. Here a person doesn’t receive the data randomly but selectively. A person selects some information out of all in accordance with his interest or needs. The selection of data is dominated by various external and internal factors.

• External factors −The factors that influence the perception of an individual externally are intensity, size, contrast, movement, repetition, familiarity, and novelty.
• Internal factors −The factors that influence the perception of an individual internally are psychological requirements, learning, background, experience, self-acceptance, and interest.

Organizing:-

Keeping things in order or say in a synchronized way is organizing. In order to make sense of the data received, it is important to organize them.

We can organize the data by −

· Grouping them on the basis of their similarity, proximity, closure, continuity.

· Establishing a figure ground is the basic process in perception. Here by figure we mean what is kept as main focus and by ground we mean background stimuli, which are not given attention.

· Perception constancy that is the tendency to stabilize perception so that contextual changes don’t affect them.

Interpreting:-

Finally, we have the process of interpreting which means forming an idea about a particular object depending upon the need or interest. Interpretation means that the information we have sensed and organized is finally given a meaning by turning it into something that can be categorized. It includes stereotyping, halo effect etc.

The influence of perception on behaviour:

Perception is the result of processing of information received by individuals regarding various events around them. It involves the organization of inputs through a dynamic inner process which shapes all that comes in from the outside environment.

This information processing approach rests on the assumption that a person’s perceptions of another person are based on the information available about the person and how one uses this information. Various researches on perception revealed that quite often a perceiver uses his or her own race or sex stereotypes to assume certain things about another person.

The individual, while perceiving the world, provides a picture that expresses his or her own individual view of reality. This may differ from the reality. The study of the difference between the perceptual world and the real world is of great significance in organizational behaviour.

Perception, as we have defined, is a generic term for the complex sensory control of behaviour. It is inferred from a hypothetical internal event of unspecified nature, controlled largely by external stimulation and variables such as habit and drive.

Therefore, it is appropriate to state that people tend to perceive what they expect to perceive. This is the primary reason why different individuals perceive the same situation in different ways. Understanding of the perceptual process helps us to understand why individuals behave in the way they do.

4(a) Define Motivation. Indicate how management can successfully motivate people taking clues from Vroom’s Valence Expectancy model.

-> Motivation is an important factor which encourages persons to give their best performance and help in reaching enterprise goals. A strong positive motivation will enable the increased output of employees but a negative motivation will reduce their performance. A key element in personnel management is motivation.

According to Likert, “It is the core of management which shows that every human being gives him a sense of worth in face-to face groups which are most important to him….A supervisor should strive to treat individuals with dignity and a recognition of their personal worth.”

Motivation is a psychological phenomenon which generates within an individual. A person feels the lack of certain needs, to satisfy which he feels working more. The need satisfying ego motivates a person to do better than he normally does.

1. Motivation is an inner feeling which energizes a person to work more.

2. The emotions or desires of a person prompt him for doing a particular work.

3. There are unsatisfied needs of a person which disturb his equilibrium.

4. A person moves to fulfil his unsatisfied needs by conditioning his energies.

5. There are dormant energies in a person which are activated by channelizing them into actions.

Types of Motivation:

When a manager wants to get more work from his subordinates then he will have to motivate them for improving their performance. They will either be offered incentive for more work, or may be in the space of rewards, better reports, recognition etc., or he may instil fear in them or use force for getting desired work.

The following are the types of motivation:

1. Positive Motivation:

Positive motivation or incentive motivation is based on reward. The workers are offered incentives for achieving the desired goals. The incentives may be in the shape of more pay, promotion, recognition of work, etc. The employees are offered the incentives and try to improve their performance willingly.

According to Peter Drucker, the real and positive motivators are responsible for placement, high standard of performance, information adequate for self- control and the participation of the worker as a responsible citizen in the plant community. Positive motivation is achieved by the co-operation of employees and they have a feeling of happiness.

2. Negative Motivation:

Negative or fear motivation is based on force or fear. Fear causes employees to act in a certain way. In case, they do not act accordingly then they may be punished with demotions or lay-offs. The fear acts as a push mechanism. The employees do not willingly co-operate, rather they want to avoid the punishment.

Though employees work up-to a level where punishment is avoided but this type of motivation causes anger and frustration. This type of motivation generally becomes a cause of industrial unrest. In spite of the drawbacks of negative motivation, this method is commonly used to achieve desired results. There may be hardly any management which has not used negative motivation at one or the other time.

Vroom’s Valence Expectancy model:

Motivation is essential when faced with any task in life. In or out of the workplace, it is hard to commit yourself to work on a given task without the proper motivation. For instance, it may be difficult to convince yourself to exercise, unless you have the motivation of losing weight. With a clear goal in front of you (weight loss), your mind may be more willing to commit to an activity that will be difficult (exercise).

The concept is the same in the workplace. As an owner or manager, you need to make sure that your employees can expect positive outcomes when they commit to working hard all day long. Without the expectancy of a reward in some form of fashion, it is unlikely that your team will commit to putting in the effort needed to produce great work. This might seem like somewhat of an obvious point, but it is critical to the health and longevity of your business.

In Vroom’s Expectancy Theory, it is stated that individuals are going to select their behaviors based on the outcomes that they expect as a result of those behaviors. As a simple example, imagine one of your employees arriving for work in the morning. As the day begins, they have two basic options – they can choose to work hard all day long, going above and beyond what is expected in order to help the company grow. Or, alternatively, they can do just enough to get by, meeting their requirements but going no further. Which path are they going to choose?

Most likely, they are going to select the path that makes the most sense for them as an individual based on the rewards available. If the rewards for working hard and working just hard enough to get by are exactly the same, most people are going to choose to do as little as possible. After all, what is their motivation to work harder? Only when rewards that are proportional to the effort given are available will your employees truly have motivation to strive for their best.

There are three variables laid out within this theory – Expectancy, Instrumentality, and Valence. Below, we will look at each of these three variables in greater detail.

The expectancy that one has in their job relates to how much they believe that their effort will result in a desired performance goal. In other words, if you set goals for your team to reach, they should believe that working hard is going to allow them to reach those goals successfully. There needs to be a direct correlation between effort and success with regard to performance. If your employees believe that they won’t be able to reach their goals no matter how hard they work – whether those goals are too difficult or there are too many factors out of their control – they are unlikely to give a full effort each and every day.

For you as a manager, it is important to clearly think about the goals you lay out in front of your team members. These goals should lead to high expectancy – a belief that effort is going to translate to success. If the goals you map out are not achievable for any number of reasons, they will fail to motivate your team properly.

5(a) What criteria are used for judging the effectiveness of an organisation? How does the degree of integration of goals affect organisational accomplishment?

-> Organizational effectiveness can be defined as the efficiency with which an association is able to meet its objectives. This means an organization that produces a desired effect or an organization that is productive without waste. Organizational effectiveness is about each individual doing everything they know how to do and doing it well; in other words organizational efficiency is the capacity of an organization to produce the desired results with a minimum expenditure of energy, time, money, and human and material resources. The desired effect will depend on the goals of the organization, which could be, for example, making a profit by producing and selling a product. An organization, if it operates efficiently, will produce a product without waste. If the organization has both organizational effectiveness and efficiency, it will achieve its goal of making a profit by producing and selling a product without waste. In economics and the business world, this may be referred to as maximizing profits.

The main measure of organizational effectiveness for a business will generally be expressed in terms of how well its net profitability compares with its target profitability. Additional measures might include growth data and the results of customer satisfaction surveys.

Highly effective organizations exhibit strengths across five areas: leadership, decision making and structure, people, work processes and systems, and culture. For an organization to achieve and sustain success, it needs to adapt to its dynamic environment. Evaluating and improving organizational effectiveness and efficiency is one strategy used to help insure the continued growth and development of an organization.

Measuring organizational effectiveness can be an inexact science, since each individual entity will have a different list of criteria and priorities to weight and consider through self-assessment. Understanding a company’s level of organizational effectiveness is important for several reasons: it serves as a check-in to see how well internal procedures are meeting an initial vision, it provides investors, donors, or employees with an idea of the company’s strengths, and it highlights areas of ineffectiveness that can be the focus of improvements.

In many cases, a business’ success or failure cannot be measured by financial performance as well. Even a company that is currently making a profit may be ineffective if it is failing to meet the core values of its mission statement, attract and retain talented workers, and plan for the next generation of projects.

Organizational effectiveness measures the big-picture performance of a business, across a broad range of criteria. Financial performance, long-term planning, internal structure, and adherence to core values may all be critical components in understanding organizational effectiveness.

To get a clear idea of an organization’s effectiveness, it is important to create a clear list of criteria to assess. No two organizations will have the same list of criteria, which is why many for-profit and non-profit groups measure effectiveness through self-assessment. Employees and company personnel are often in the best position to intimately understand the needs, goals, and performance of their company. Self-assessment of effectiveness can also help company personnel reconnect with the initial mission of an organization. By working creatively to invent new business strategies for areas of ineffectiveness, workers may develop a stronger sense of loyalty, purpose, and dedication to the job.

Since organizational effectiveness is difficult to express in a concrete formula, a company may choose to state the results of an assessment through specific goals achieved or desired. Turning up areas of ineffectiveness can also be tremendously beneficial to an organization. Areas that need improvement give a company a concrete strategy for the future, and allow workers, shareholders, donors, or customers to get excited about the improvements coming down the pipeline. Treating current weaknesses as a road map for future changes is a great way to increase effectiveness.

The expert consensus is that the three criteria for judging organizational strengths and weaknesses are (1) past performance of the company, (2) comparison of actual performance against specific goals and targets, (3) comparison of company performance against competitor performance.

Past performance: Past performance analysis shows important information about capabilities and resource use, but it does not show if past performance was executed at the expected level; it measures use but it does not measure under-performance. Measurable statistics in the areas of financial ratios, employee performance trends, production efficiency, and quality control data quantify organizational performance strengths and weaknesses.

Comparison of actual performance with specific goals and targets: This criterion is used to measure performance and under-performance (a category the criterion of past performance does not measure). The company’s organizational objectives, vision statement, and mission statement play key roles in measuring actual performance against desired performance in relation to goals and targets. Assessment is made of every area of performance measuring (a) performance compared to organizational goals stating desired outcomes and outputs at all levels and (b) how resources and capabilities are used in relation to fulfilling mission and vision statements, including such areas as resources in customer service.

Comparison of company performance against competitor performance: This criterion is used to measure company performance, or under-performance, in the marketplace they compete in. Assessing what competitors are doing can lead to identifying which strengths and weaknesses can be used to develop the company’s own long-term competitive advantage. The tools for gaining information for a comparison with competitors include surveys, subjective opinions of company leaders and consultants, annual reports, professional meetings, and association newsletters.

In actual practice, no organisation and individual has completely opposite or completely compatible goals. We can say that some integration is always there between the individual and organisational goals. In this context, HARRY LEVINSON advocated the process of reciprocation. The process of fulfilling mutual expectations and satisfying mutual needs in the relationship between a man and his work organisation is conceptualized as a process of reciprocation. It is a complementary process in which the individual and the organisation seem to become a part of each other.

The person feels that he is a part of the organisation and concurrently, he is a symbol personifying the whole organisation. There are two models based on the reciprocation or the integration process through which the goals are integrated.

One such model is:

(a) Fusion process and the other is

(b) Inducement contribution process.

(a) Fusion Process:

The fusion process is based on the assumption that individual goals and organisational goals are not totally opposing. There is, generally, an interaction between these two.

This interaction leads to two sub processes:

(i) Socialization and

(ii) Personalization.

According to E.W. Bakke and Chris Argyris, “as a result of socialisation, individuals are made into agents of the organisation and/or the informal groups. The process by which the individual is made into an agent of the formal organisation is called the formal socialising process and by which he is made an agent of the informal group is called the informal socialising process. And it is through personalisation process that the individual achieves his personal goal of self actualisation and by which organisation and informal groups are made into agencies for the individual.”

Both socialisation and personalisation processes occur simultaneously in the organisations.

If both are not coherent, two situations will arise i.e.

(i) If the organisational goals are being achieved without contributing much towards the fusion process is based on the achievement of individual goals, it means that socialisation process is occurring much strongly.

(ii) If the individual satisfies his needs from work without totally opposing giving much to the organisation, personalisation process is operating much strongly.

Individuals, formal organisations and informal groups interact with each other to achieve a balance of equilibrium called fusion by Bakke and Argyris. The aim of the fusion process is to “establish and maintain for the organisation an internal and external integration which will at least leave its capacity to perform its functions unimpaired and at best will improve that capacity.

Operation of this process indicates that the organisation to some degree remakes the individual and individual to some degree remakes the organisation. Thus, it maintains the integrity of the organisation in the face of the divergent interests of individuals, groups, other organisation, itself, which each hope to realize through its contact with the other. The higher the fusion score better is the result for both the individual and the organisation.”

(b) Inducement-Contribution Process:

Another process for the integration of individual and organisational goals was developed by James G. March and Herbert A. Simon. Their inducement-contribution process concentrates on those intellectual processes which tend to lie at the heart of large scale organisations.

The basic characteristics of this process are as follows:

(i) Each organisational member gets inducements for the contributions made by him to the organisation.

(ii) Each member will continue to give his contributions so long as inducements are more or equal to contributions (assuming that the member is in a position to value both contributions and inducements).

(iii) The contributions from various members (and groups) are the source through which the organisation produces inducements for the members.

(iv) The organisation will continue to give inducements or receive contributions so long as contributions are sufficient to give inducements.

Both the fusion process and the inducement-contribution process emphasize that higher level of balance between the organisational and individual goals will bring higher satisfaction to organisational members and which in turn will lead to better organisational results.

(b) “Persistence to change is a normal part of the process of change.” Discuss. What techniques would you use in overcoming such resistance?

-> In today’s world, change is the only constant that surrounds us. In business, it’s no different. For employees, this can be difficult to manage and upsetting. When striving for a successful transformation we must consider the different perceptions of those initiating change, implementing it, and being impacted by it.

There are two facets to organizational transformation. The first is operational (or technical) and the second is social. Understanding the difference between the two is critical to managing resistance to change in an organization.

Within the organizational context, operational change can be explained as what we do and how we do it. For example, in an auto manufacturer a production worker may use a manual spanner to fit wheels to an axle. If that worker is then given a technologically advanced tool to do the job, that change is operational. Instead of using his strength to tighten the nut on the bolt, the worker uses different skills. He must learn these skills, but the operation is the same – fixing the wheel to the axle.

In such transformation, you may also witness social change – the way the worker interacts with others and the relationships they have. It is this type of change that evokes the most severe resistance to change.

Let’s consider that the auto worker is asked to do things differently. This involves him learning a new skill. However, the reporting line and responsibility remain unchanged. The worker is responsible for his routine. He remains responsible for reporting issues. He continues to liaise with the department’s manager. The only thing that is really changing is that the worker must learn a new technical skill to do the job he has always done. This may cause some resistance to change among those who are unsure of their ability to develop new skills, but there is no resulting social change.

Now, let’s consider that the worker is not only required to do things differently but also must adhere to imposed working routines and has a new line of report – to a supervisor rather than the senior manager as before. This is a social change that completely alters the perspective of the worker

In their work on resistance to change theory, John P. Kotter and Leonard A. Schlesinger concluded that there are four common situations in which people’s resistance to change germinates and grows:

1. Self-interest

2. Misunderstanding and lack of trust

3. Different evaluations

4. Low tolerance for change

Using our example of change, we can see how different types of resistance to change develop.

1. Self-interest

When someone believes they may lose something valuable as a result of the change, they are likely to resist the change. People focus on their own self-interests ( every stakeholder has their own agenda ) and not the best interests of the organization. Eventually this develops into group resistance to change.

In our example, the worker is losing his direct relationship with ‘the boss’. He feels that his voice is no longer heard, because of the new reporting line put in place. The worker will come up with reasons why the new way of doing things will not work, and small errors and any downtime will be blamed on the change.

2. Misunderstanding and lack of trust

A lack of understanding about the implications of the change is also a driver of resistance to change. An existing lack of trust between the manager initiating change and the workers expected to implement it exacerbates this misunderstanding.

For example, if the auto worker believes that the new technology he is being asked to use will reduce the time it takes to do the job, he may believe that his job is threatened – or that he will lose overtime and experience a cut in earnings – no matter what the manager says. Trust is crucial when making organizational change .

3. Different evaluations

This situation arises when people assess the impacts of transformation differently to their managers or others who initiate the change.

In our example, it may be that the manager initiating the change has access to information that the workers don’t have. The reorganization of reporting lines may be needed because of the need for closer collaboration with the engineering department. However, the workers on the shop floor view the change as another (unnecessary) layer of management and are suspicious that the supervisor’s real role is to micromanage the department as it prepares for redundancies.

4. Low tolerance for change

Some people fear change because they worry that they cannot develop the skills and abilities needed. This is particularly true of projects that require rapid change – the bigger and faster the change, the harder it is for people to come to terms with.

In the book ‘ The Planning of Change’ , authors Warren G. Bennis, Kenneth D. Benne, and Robert Chin also discuss how personality affects individual ability to cope with change – a theme that also runs through Peter Drucker’s theories on management .

Techniques uses in overcoming such resistance are:

1. Communication and education

Common issues that cause resistance to change include fear of the unknown and a misunderstanding of why change is needed.

People will only accept change if they believe the risk of doing nothing is higher than the risk of changing direction. Similarly, if people don’t understand why change is needed, they will question why you are changing something that they believe works well.

Communication and education about the change should begin before it is initiated. This will help your people to rationalize the change, and ensure that individuals and teams receive adequate information to make positive judgements.

2. Participation

A lack of belief that the organization can make effective change leads to resistance to change. Likewise, when people aren’t consulted and change is forced upon them, there is likely to be more resistance. This is especially the case if people believe their jobs will be at risk.

It is critical that the stakeholders and those implementing change are involved in its design. A collaborative effort will engage people in the change, and in the identification of potential issues and solutions. People are far less likely to resist change that they have helped to create.

Many studies have shown that participation has wide-ranging positive effects during periods of organizational change. For example, a 2011 study ( Change Recipients’ Reactions to Organizational Change: a 60-Year Review of Quantitative Studies ) found that participation reduces resistance to change and leads to positive effects such as change readiness and acceptance, a sense of competence, a sense of control and better trust. Participation will reduce the stress that snaps your people’s desire to change .

Another participative strategy is to employ socialization, putting people before practice and ensuring that shared values crush resistance to change .

3. Support

Organizational transformation is usually accompanied by a change to routines, taking people out of (long-established) comfort zones. This may also lead to exhaustion, especially if the organization is subject to frequent change or business evolution .

Even if people appear to be accepting of change, it may be that they are simply resigned to it. They must be given the support needed to enable new skills to be developed and ensure that change burnout does not become a reality.

Support requires managers to develop their emotional intelligence and connect with their people. Offering adequate support is also time-consuming, requiring trained managers and leaders to employ coaching tactics to be most effective when managing change in an organization.

4. Agreement

Resistance to change is also precipitated when people feel they will be negatively affected by its consequences. This may be because of a perception that their earnings or career potential will be harmed or that the rewards of the change are not worth the effort required.

To combat this type of resistance to change, an organization may consider offering incentives. Such incentives may include extra pay, improved benefits, or offering structured career plans. This strategy requires negotiation to reach agreement. The drawback is that such agreements can be expensive and do not guarantee engagement with change.

5. Co-opting

People become connected to the way that things have always been done. There are often strong emotional connections to processes and procedures that employees may have been at least partly responsible for developing. To bond with the old may require a Herculean effort.

One strategy is to co-opt those who may be most resistant to change into central roles in the implementation of change initiatives. This can gain the support of would-be resistors relatively cheaply, though it does come with a caveat – placing people who are deemed to be resistant to change in such positions could give them a position from which to influence greater resistance across a wider audience.

6. Coercion

Sometimes it is necessary to coerce people into accepting change. This is often the case where people feel they cannot learn the new skills needed or if they feel that change is a temporary fad that will be reversed.

Techniques for implementing change include wielding the threat of disciplinary action while insisting that people fall into line with required behaviours and actions. If speed of change is critical, coercion may be the only viable option.

A major drawback of this strategy is that it does not remove resistance to change, which may continue to bubble under the surface and result in a destructive atmosphere at a later date (particularly if the proposed transformation does not produce at least the outcomes promoted by the initiator of change).

7. Tactics to overcome resistance to change

Having identified the causes (or potential causes) of resistance to change in your workplace and the strategic approaches that your organization should take to overcome this resistance, the next step is to consider specific tactics and techniques for reducing resistance to change that your organization and its managers can utilize to eventually eliminate that resistance.

Leadership is an organizational imperative when managing change, and leaders who inspire a cultural shift in their staff have the greatest success in managing resistance to change in an organization.

In a 2013 PwC survey , nearly two-thirds of staff surveyed felt that a top leader is in charge of change management, and almost half felt that top leaders should be in charge of cultural change.

The good news here is that the same number of people felt that cultural change is also their responsibility.

The bad news is that only 14% saw any responsibility for change management falling on their shoulders. The harsh reality is that effective change is determined by having in place a corporate culture conducive to continual transformation. It is here that inspirational leadership in flat hierarchical structures is, perhaps, at its most potent.