2017

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) Define Organisation. Discuss in brief the important typologies of organisations.

-> 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.

Present business system is very complex. The unit must be run efficiently to stay in the competitive world of business. Various jobs are to be performed by persons most suitable for them. First of all various activities should be grouped into different functions. The authority and responsibility is fixed at various levels. All efforts should be made to co-ordinate different activities for running the units efficiently so that cost of production may be reduced and profitability of the unit may be increased.

Characteristics of Organisation:

Different authors look at the word ‘organisation’ from their own angle. One thing which is common in all the viewpoints is that organisation is the establishment of authority relationship among persons so that it helps in the achievement of organisational objectives.

Some of the characteristics of organisation are studied as follows:

1. Division of Work:

Organisation deals with the whole task of business. The total work of the enterprise is divided into activities and functions. Various activities are assigned to different persons for their efficient accomplishment. This brings in division of labour. It is not that one person cannot carry out many functions but specialisation in different activities is necessary to improve one’s efficiency. Organisation helps in dividing the work into related activities so that they are assigned to different individuals.

2. Co-Ordination:

Co-ordination of various activities is as essential as their division. It helps in integrating and harmonising various activities. Co-ordination also avoids duplications and delays. In fact, various functions in an organisation depend upon one another and the performance of one influences the other. Unless all of them are properly co­ordinated, the performance of all segments is adversely affected.

3. Common Objectives:

All organisational structure is a means towards the achievement of enterprise goals. The goals of various segments lead to the achievement of major business goals. The organisational structure should build around common and clear cut objectives. This will help in their proper accomplishment.

4. Co-operative Relationship:

An organisation creates co-operative relationship among various members of the group. An organisation cannot be constituted by one person. It requires at least two or more persons. Organisation is a system which helps in creating meaningful relationship among persons. The relationship should be both vertical and horizontal among members of various departments. The structure should be designed that it motivates people to perform their part of work together.

5. Well-Defined Authority-Responsibility Relationships:

An organisation consists of various positions arranged in a hierarchy with well defined authority and responsibility. There is always a central authority from which a chain of authority relationship stretches throughout the organisation. The hierarchy of positions defines the lines of communication and pattern of relationships.

The important typologies of organisations are:

On the basis of functions, purpose, primary beneficiary, compliance and-authority different scholars have classified organization into four categories.

1. Typologies on the basis of functions or purpose

2. Typologies on the basis of primary beneficiary

3. Typologies on the basis of compliance

4. Typologies on the basis of authority

Typologies on the basis of Functions or Purpose:

Talcott Parsons has classified organisation into four types on the basis of their functions or goal.

These are:

Political Organisation- Political organisation are those organisations which are concerned with attainment of political goals. Legislature and government departments are examples of such organisation. These organisations provide peace and stability in the society.

Economic Organisation- There is various economic organisations in the world. Economic organisations produce goods and make things for economic purposes which are consumed by the society.

Integrative Organisation: Police, judicial counts and social agencies are examples of these integrative organisations. Therefore, these are provided peace and stability in the society by avoiding conflict.

Pattern Maintenance Organisation: These organisations are concerned with the societal continuity through the educational, cultural and religious institutions.

Further Katz and Kahn classified organisation into four types, on the basis of its functions:

Managerial Organisation – Managerial organisation is concerned with coordination, adjudication and control of resources, people and subsystem.

Productive Organisation : Productive organisations stress on the creation of wealth. These are concerned with the .manufacture of goods and provide essential services to the people.

Maintenance Organisation : Schools, church, health and welfare institutions come under these organisations, as they are provided scope and space to the people for their roles in the organisation.

Adaptive Organisation : Universities and research institution are examples of this organisation. It provides opportunities for creation of knowledge, testing and development of theories.

Typologies on the basis of Primary Beneficiary:

On the basis of consumer beneficiary Blau and Scott Classified organisation into four types such as:

Business Organisation : In the business organisation owners of properties are the prime beneficiaries as they are concerned about the returns on investment in the organisation than the nature of output of the organisation.

Service Organisation : Hospitals and educational institutions are the example of these organisations. Here the clients who are served in this field .are the prime beneficiaries.

Commonwealth Organisation : Post-office, police service, military service etc. come under the commonwealth organisation. They perform most of the protective services. Here public is its primary beneficiary.

Mutual Benefit Association : Political parties, trade unions, professional associations and religious bodies are example of these organisations.

Typologies on the Basis of Compliance:

Compliance refers to the manner in which the lower participants in an organisation respond to the authority system of the organisation Amitai Etzioni classified organisation on the basis of compliance.

Here Etzioni identifies three types of power:

Coercive Power – Coercive power is based on the application or the threat of physical sanction.

Utilitarian Power – Utilitarian power is based on control over material resources. Here compliance takes utilitarian approach.

Normative Power – Normative power is based on the allocation of symbolic reward. Here the compliance is moral.

Typologies on the basis of Authority:

Max Weber identified three types of organisations on the basis of exercise of authority:

Traditional Authority : In the traditional authority the followers accept the authority of that person who occupies the traditionally sanctioned position of authority. Relative and feudal lords come under this authority.

Legal or Rational Authority : Here people obey orders of that authorized person who is based on rightness of law.

Charismatic Authority : In this type of organisation authority is based on the personal charisma of the leader or an exceptional quality of the leader. Here there is no separate administrative cadre, not only a group of followers hold posts on the basis of their charismatic qualities.

Organisation is the essential part of human life. Without it, no one can be fully developed. Family is the primary unit of organisation, where men and women live and work together. From birth to death, in each step individual depend upon the various organisations. On the basis of its authority, compliance, consumer beneficiary, function or purpose, various organisations are created to achieve the goal of the individual. Attainment of individual goals is the Primary task of organisation.

(b) What do you mean by System and Contingency Approach? Make an Appraisal of Systems and Contingency Theory.

-> System Approach

In the 1960, an approach to management appeared which try to unify the prior schools of thought. This approach is commonly known as ‘Systems Approach’.

Systems approach is based on the generalization that everything is inter-related and inter­dependent. A system is composed of related and dependent element which when in interaction, forms a unitary whole. A system is simply an assemblage or combination of things or parts forming a complex whole.

One its most important characteristic is that it is composed of hierarchy of sub-systems. That is the parts forming the major system and so on. For example, the world can be considered-to be a system in which various national economies are sub-systems.

In turn, each national economy is composed of its various industries, each industry is composed of firms’ and of course a firm can be considered a system composed of sub-systems sudi as production, marketing, finance, accounting and so on.

Features of Systems Approach:

(i) A system consists of interacting elements. It is set of inter-related and inter-dependent parts arranged in a manner that produces a unified whole.

(ii) The various sub-systems should be studied in their inter-relationships rather, than in isolation from each other.

(iii) An organisational system has a boundary that determines which parts are internal and which are external.

(iv) A system does not exist in a vacuum. It receives information, material and energy from other systems as inputs. These inputs undergo a transformation process within a system and leave the system as output to other systems.

(v) An organisation is a dynamic system as it is responsive to its environment. It is vulnerable to change in its environment.

In the systems approach, attention is paid towards the overall effectiveness of the system rather than the effectiveness of the sub-systems. The interdependence of the sub-systems is taken into account. The idea of systems can be applied at an organisational level. In Appling system concepts, organisations are taken into account and not only the objectives and performances of different departments (sub-systems).

The systems approach is considered both general and specialised systems. The general systems approach to management is mainly concerned with formal organisations and the concepts are relating to technique of sociology, psychology and philosophy. The specific management system includes the analysis of organisational structure, information, planning and control mechanism and job design, etc.

As discussed earlier, system approach has immense possibilities, “A system view point may provide the impetus to unify management theory. By definitions, it could treat the various approaches such as the process of quantitative and behavioural ones as sub-systems in an overall theory of management. Thus, the systems approach may succeed where the process approach has failed to lead management out of the theory of jungle.”

The systems approach assists in studying the functions of complex organisations and has been utilized as the base for the new kinds of organisations like project management organisation. It is possible to bring out the inter-relations in various functions like planning, organising, directing and controlling. This approach has an edge over the other approaches because it is very close to reality. This approach is called abstract and vague. It cannot be easily applied to large and complex organisations. Moreover, it does not provide any tool and technique for managers.

An Appraisal of Systems Approach to Organisation is:-

Though this approach possesses conceptual framework of much higher order as compared to other approaches, it is not a universal theory of organisation. The theory was expected to fulfil these criteria but was not successful in its endeavours. Generally speaking two basic shortcomings exist.

· It is felt that the approach is too abstract. It indicates that various parts of the organization are interrelated; organizations being part of social system are interrelated. What it fails to indicate is to spell out the precise relationships among these. What is required is a statement of what economic forces initiate what social, technical and psychological changes.

· This approach does not provide action framework applicable to all types of organizations. Since modern organizations tend to be quite large, many of action frameworks of systems theory may be quite useful. But then this is not the role of a theory to prescribe actions for a particular category of organizations, rather, the theory should specify the relationships among different variables which can be applied to all organizations.

Contingency Approach

The contingency approach to management is based on the idea that there is no single best way to manage. Contingency refers to the immediate contingent circumstances. Effective organizations must tailor their planning, organizing, leading, and controlling to their particular circumstances. In other words, managers should identify the conditions of a task, the requirements of the management job, and people involved as parts of a complete management situation. The leaders must then work to integrate all these facets into a solution that is most appropriate for a specific circumstance.

The contingency approach to management assumes that there is no universal answer to many questions because organizations, people, and situations vary and change over time. Often there is no one right answer when managers ask: “What is the right thing to do? Should we have a mechanistic or an organic structure? A functional or divisional structure? Wide or narrow spans of management? Tall or flat organizational structures? Simple or complex control and coordination mechanisms? Should we be centralized or decentralized? Should we use task or people oriented leadership styles? What motivational approaches and incentive programs should we use?” Thus, the answer depends on a complex variety of critical environmental and internal contingencies.

The contingency theory is similar to situation theory in that there is an assumption that no simple way is always right. Situation theory, however, focuses more on the behaviours that the leader should use. The contingency theory takes a broader view that includes contingent factors about leader capability and also includes other variables within the situation.

Factors that influence the contingency theory are numerous. These include the following:

• The size of the organization
• How the firm adapts itself to its environment
• Differences among resources and operations activities
• Assumption of managers about employees
• Strategies
• Technologies being used.
• An Appraisal of Contingency theory

Though the Contingencies Theory is an improvement on many of the prevailing theories, still it is not without limitations.

(a) Complexity and Confusion- The variables referred to in the theory are so many and diverse that adapting the organization to them is nearly impossible. Moreover, the variables and their relative importance are themselves different in nature in respect of a specific organization.

(b) Neglect of the Power of Personality- The organizational approach and management style depend a lot on the personality of the manager. A good manager can turn a bad situation to his advantage while an inefficient manager fails to reap any benefit from a favourable circumstance.

(c) Limited Dimension of Empirical Support- Empirical studies have generally centred round the impact of technological, cultural and economic environments on the organization’s behaviour are not only numerous but also multifarious.

Systems concept provides us with a macro-micro- macro paradigm for the study of organizations, involving a relatively high degree of generalization. Contingency views tend to be more concrete and emphasis more on specific characteristics and patterns of interrelationships among sub-systems.

2(a) What are the indicators of Power? Discuss the various ways of uses and outcome of Power.

-> It is difficult to tell when power is being used. Those who use power are not visible. People tend to resist the use of power when they see themselves being influenced in a way that is contrary to their own desires. However, if the attempt to influence appears to be legitimate and rational we are more willing to comply and subject ourselves to the wishes of others.

Frequently, individuals who are using power fail to recognize what they are doing. They honestly feel they are exerting rational influence that can be justified for legitimate reasons other than their personal wishes. They sincerely think their influence is rational rather than political. There is often considerable disagreement about when power is actually being used.

The indicators of Power are:

1) Determination of power – The capacity to use and of the bases of power: reward power, coercive power, reference power, legitimate power, or expert power.

2) Consequences of power – Budget allocations, win-loss record in debated issues, ability to authorize exceptions to policy, authority to hire and fire others.

3) Symbols – Size, location, and furnishings of one’s office. Invitations to attend social events and seating at those events.

4) Reputation – Comments by others acknowledging one’s power. Seeking one’s advice

5) Representation on committees – The number and status of committee memberships; boards of directors, advisory councils. Presidential task forces and executive committee.

Various ways of uses and outcome of Power:

Legitimate Power

Power that is given to a person based on their position or role is known as legitimate power (or positional power). It’s determined by the hierarchy of the organization; junior manager’s report to senior managers and senior manager’s report to directors. Other than being promoted, there’s not much you can do directly to get more legitimate power. Increasing some of your other types of power – mainly referent and expert power – leads to having more legitimate power. Legitimate power can’t be faked: in order for it to be wielded, the person claiming the power has to have earned it legitimately.

Reward Power

Tied in closely with legitimate power, reward power is the ability that one holds to dole out incentives and compensation in an organization. This includes salary raises and bonuses, praise, recognition, and promotion. Reward power that is used fairly can be highly motivating to employees. They’ll do more and better things by going for the rewards with the knowledge that they are achievable. However, if the rewards are given out unfairly and favouritism is used, this will demotivate them and make reward power less legitimate.

Coercive Power

Coercive power can be scary: it’s what sets in the fear of being punished for poor performance and keeps us coming in early and staying at the office late. People who wield coercive power can influence others’ behaviour by their ability to threaten and punish others. These actions might include demotion, firing, and reprimanding, but can also be less concrete and abusive in the form of social ostracizing and shaming. A good dose of coercive power keeps employees in line, and with good management doesn’t need to be used often or severely. The mere knowledge that it’s there is usually enough.

Referent Power

Even if you don’t have any granted power in an organization, you can still influence others’ behaviour and decision-making. Referent power is the ability to influence others because they respect, admire, or like you. There are many ways to earn referent power at work. Especially if you are new to an organization, you can start building social capital right away by saying “yes” when people ask you to do things. Never say, “No, that’s not my job” – especially to your boss. It’s OK to say no when you really can’t do something – just say, “No, but…” and give another solution. Also, befriend others with referent power – find the influential people in your organization, be part of the “in” crowd and others will respect you.

Expert Power

Expert power is another way to earn respect and influence independently of the hierarchy of your organization. With expert power, you have the ability to influence others because of recognized talent , abilities, and knowledge. The key to gaining expert power is to know your job: be conscious of what you need to know to do your job well and build those skills. Cross-training is another way to gain expert power – you won’t just know your job, but others’ jobs as well. Look for opportunities in your skillet and offer to do things in areas that you’re skilled in to gain more expert power.

Cultivate Your Own Powers

As you can see, the different types of power come from different sources – some are inherent in the hierarchy of an organization, while others are earned by demonstrated social and practical skills . Anyone, even the lowest on the totem pole, can gain influence and power in an organization. Building your referent and expert powers leads to respect and influence, and can also lead to promotion and sources of legitimate, reward, and coercive powers. In this sense, referent and expert powers are the building blocks of organizational influence.

(b) Discuss the type and extent of the authorities you would prefer to delegate as a manager.

-> If all organisational activities, strategic and routine, could be managed by the top executives, the need for formal organisation structure with functional departments, staffed with people of different calibre, carrying out different activities would not have arisen. Since it is not possible, because of physical and mental limitations, for one person to perform all activities with respect to all functional areas, it becomes necessary that he gives part of his work load to subordinates along with commensurate authority to carry out the assigned task.

Every type of task cannot be assigned to subordinates. Managers have to choose between tasks that can be performed by subordinates and those which have to be carried out by them only. Thus, the entire workload is divided into units; part is assigned to subordinates with authority to carry out the assigned task. This division of work and its assignment to people down the scalar chain is called delegation. “Delegation is a process the manager uses in distributing work to the subordinates.”

Management is the art of getting things done through others which is possible if they delegate the authority and responsibility. Delegation is an important skill that manager must have to effectively manage his organisation. Allen puts it very aptly, “How well a manager delegates determines how well he can manage.” Delegation creates healthy atmosphere in the organisation. Companies identify capabilities of managers by judging their skills in how effectively they get the work done by the process of delegation.

Delegation has the following features:

1. Delegation is a process – Managers delegate tasks to subordinates in a sequential order of steps.

2. On-going process – Delegation is a continuous process. Managers continue to delegate tasks and get them delegated by their superiors to achieve the organisational goals.

3. It is an art, not science – When delegator delegates to subordinates, it does not necessarily mean that subordinates will perform those tasks well. There is no cause and effect relationship between the task assigned and their actual performance. Delegation is, thus, not a science. It is the art of how and what manager delegates to subordinates.

4. Delegation of authority and not accountability – Managers can only delegate work and authority to perform that work to subordinates. Delegation does not mean that managers are not accountable to their superiors for the task assigned to subordinates. They remain accountable for the tasks assigned to subordinates and are answerable to their superiors for its performance.

5. Necessary organisational activity – Managers cannot avoid delegation. They cannot perform all the tasks themselves. They have to master the art of delegation that is, how to delegate and what to delegate. Corporate performance is judged by how good the managers are in getting the work done through others by the process of delegation.

6. It has different forms – Delegation can take different forms. It can be downward, upward or lateral.

The process of delegation involves the following steps:

1. Determine the Goals:

The first step of delegation is to establish the goal or objective of the position/post so that the person determines the need for delegation. If delegation is initiated in the sales department, the objective should be made clear; sales promotion or sales retention.

2. Define Responsibility:

Once requirement of the job is defined, responsibility of different individuals is determined in terms of tasks assigned to them. This helps them to know their bosses and subordinates to whom they can issue instructions.

3. Define Authority:

The job having been assigned, authority is given so that people can discharge responsibilities related to that job.

4. Motivate Subordinates:

The duty of manager does not end by delegating authority and responsibilities to subordinates. He makes sure that subordinates willingly contribute to the job assigned so that organisational goals can be optimally achieved. Managers motivate the subordinates to work with zeal and enthusiasm. They use financial and non-financial (participative decision-making, recognition etc.) incentives to motivate the subordinates.

5. Hold Accountability:

Whatever the nature and extent of delegation, managers continuously monitor the activities of subordinates to review their progress and provide guidance, whenever necessary. They hold them accountable for the work assigned but remain ultimately accountable to their superiors for successful completion of the task and its coordination with the overall organisational work.

6. Train Subordinates:

Despite the authority commensurate with responsibility, subordinates may not be able to effectively carry out the delegated tasks. Managers, therefore, organise training programmes to enhance their knowledge on the tasks assigned.

7. Establish Control:

Specific standards of performance are framed so that subordinates can assess their performance against standards, control their activities and coordinate them with goals of the organisation.

Factors:

1. Willingness of Subordinates:

The degree of delegation will depend upon the willingness of subordinates to accept responsibility.

If the subordinates are shy of bearing greater responsibility then executive will not be able to delegate authority.

The willingness of subordinates to accept additional responsibility is essential for the process of delegation.

2. Manager’s Attitude:

The delegation not only depends upon the willingness of subordinates to share additional work but will also be determined by the attitude of the manager. The manager should be ready to delegate and the subordinate should be willing to accept it.

If the attitude of the managers to concentrate all powers in his hands only then he will not delegate his authority an autocratic manager will not like to share his powers with others while a democrat manager will encourage his subordinates to work independently. The attitude of the manager is an important factor in determining the delegation of authority.

3. Desire to Dominate:

Sometimes executives are in the habit of dominating others. They will not like to delegate authority to others. They will keep every important work with them and take even minor decisions themselves. Such executives will not encourage subordinates by giving them authority to work independently. The desire to dominate resists executives from delegation of authority.

4. Quantum of Work:

The delegation of work also depends upon the quantum of work. If work is small then there will be no need to delegate. When the work increases the need for delegation arises. More the quantum of work greater will be the degree of delegation.

5. Confidence in Subordinates:

The delegation is also determined by the confidence which superior has in his subordinates. If the subordinates are not considered worthy of taking decisions independently then there will be no delegation. On the other hand, if superior has full confidence in the capacity of his subordinates then he will delegate more and more authority and will utilize the subordinates to the maximum.

3(a) Discuss the determinants of Organisational Behaviour. Why should organisations give importance in understanding human behaviour?

-> The study of Organizational Behaviour (OB) is very interesting and challenging too. It is related to individuals, group of people working together in teams. The study becomes more challenging when situational factors interact. The study of organizational behaviour relates to the expected behaviour of an individual in the organization.

No two individuals are likely to behave in the same manner in a particular work situation. It is the predictability of a manager about the expected behaviour of an individual. There are no absolutes in human behaviour. It is the human factor that is contributory to the productivity hence the study of human behaviour is important. Great importance therefore must be attached to the study.

Researchers, management practitioners, psychologists, and social scientists must understand the very credentials of an individual, his background, social framework, educational update, impact of social groups and other situational factors on behaviour.

Managers under whom an individual is working should be able to explain, predict, evaluate and modify human behaviour that will largely depend upon knowledge, skill and experience of the manager in handling large group of people in diverse situations. Pre-emptive actions need to be taken for human behaviour forecasting.

The value system, emotional intelligence, organizational culture, job design and the work environment are important causal agents in determining human behaviour. Cause and effect relationship plays an important role in how an individual is likely to behave in a particular situation and its impact on productivity.

An appropriate organizational culture can modify individual behaviour. Recent trends exist in laying greater stress on organizational development and imbibing a favourable organizational culture in each individual. It also involves fostering a team spirit and motivation so that the organizational objectives are achieved.

There is a need for commitment on the part of the management that should be continuous and incremental in nature.

The determinants of the organizational behaviour are as under:

There are three major factors that affect OB. The working environment being the base for all three factors, they are also known as the determinants of OB. The three determinants are −

• People
• Structure
• Technology

People:

An organization consists of people with different traits, personality, skills, qualities, interests, background, beliefs, values and intelligence. In order to maintain a healthy environment, all the employees should be treated equally and be judged according to their work and other aspects that affect the firm.

Example − A company offers campus placement to trainees from different states like Orissa, Haryana, Arunachal Pradesh and many more. However, during and after training, all trainees are examined only on the basis of their performance in the tasks assigned.

Organizational Structure:

Structure is the layout design of an organization. It is the construction and arrangement of relationships, strategies according to the organizational goal.

Example − Organizational structure defines the relation of a manager with employees and co-workers.

Technology:

Technology can be defined as the implementation of scientific knowledge for practical usage. It also provides the resources required by the people that affect their work and task performance in the right direction.

Example − Introduction of SAP, big data and other software in the market determines individual and organizational performance.

Organisations give importance in understanding human behaviour:

It is very essential to understand human behaviour in today’s world as the existence of the organisation depends on the employees/individuals. Without understanding human behaviour it is very difficult to work in an organisation. In order to understand human behaviour let us see how the perception of human being has changed from time to time. All organisations are composed of individuals, with different personality, attitudes, values, perception, motives, aspirations and abilities. The main reason to understand behaviour is that individuals are different. No two individuals are similar. In the early studies, theories of organisation and management treated people as though they were the same; scientific management was based on the similarities among workers, not the differences. In contrast, modern theories of human behaviour are based upon the differences among people and how those differences can affect the organisation. Individual differences are many for example some employees are motivated to work and some are not. This can be due to several reasons, and can be known by further reading the unit. Before we proceed to understand human behaviour, it is better to know what the term `behaviour’ means. Behaviour can be defined as a response/s which is observed directly/indirectly. Direct observation is possible by studying the responses of people to a work environment. Indirect observations are decision 5 Social Processes and Issues 6 making processes and attitudes, in terms of results or how people describe them verbally. Human behaviour is very much unpredictable. In behaviour we cannot assume one set pattern of behaviour. Levitt classified behaviour as: (i) Caused behaviour, (ii) Motivated behaviour, (iii) Goal oriented behaviour. From these observations it can be understood that behaviour is a dependent factor. By understanding behaviour one can predict, direct, change and control behaviour of individuals or group. There are generally four basic assumptions regarding nature of people: individual differences, a whole person, caused behaviour (motivation) and value of the person (human dignity). In an organisational set up it is essential for managers to understand behaviour. As they are constantly with people, interacting with them in terms of communication (either written or oral) in terms of work (either by specifying the work and getting things done). Understanding past behaviour is important for developing effective human skills, and it also provides a framework for predicting behaviour. It also gives an idea to managers as to how behaviour is similar in certain circumstances and changing in changing environmental conditions. Another skill which an effective manager or leader needs is the ability to direct, change and control behaviour. Managers have to understand that there are-going to be individual differences among the employees, as no individual is similar to other. Each individual is unique by themselves. Then one has to understand that each individual has to be taken care of as a whole person by taking care of his needs as well as training and making him up to date in terms of work. Ultimately human beings have to be treated with respect only then you can expect effective performance. With the following descriptions you will be able to understand the concept better.

(b) “Theory X and Theory y are concerned with the nature of people.” How does the job situation affect the application of this theory? What are its implications?

-> 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 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.

4(a) Make a comparison between Herzberg’s two factors Theory and Maslow’s Need Hierarchy Theory.

-> Motivation implies the process of encouraging people to act in order to attain the desired objectives. It is something that stimulates an individual to keep doing the act already initiated. In this context, Abraham Maslow, a renowned psychologist, highlighted the elements of the theory of motivation, in a classic paper released in 1943. His theory is based on human needs and its fulfilment.

Abraham Maslow is an American psychologist, who introduced the popular ‘Need hierarchy theory’ on motivation. The theory emphasizes the urge to satisfy needs of people working in the organization.

The theory is divided into two categories, i.e. growth needs and deficiency needs, which are further, sub classified into five needs, within each individual, represented in the shape of a pyramid. The theory is based on the premise that human needs are in proper sequence, wherein psychological need is at the bottom, and self-actualisation needs are at the top level. Other needs, i.e. safety needs, social needs and esteem needs are in the middle. It infers that higher level needs cannot evolve until the lower level needs are not satisfied. As the needs of human beings are unlimited, whenever one need is satisfied, another need take its place. Moreover, an unsatisfied need is the motivator which governs the behaviour of the individual.

On the other hand, Frederick Herzberg is an American psychologist, who coined out the concept of job enrichment and two-factor theory on motivation based on rewards and incentives. He attempted to shed more light on the concept of work motivation.

Frederick Herzberg is a behavioural scientist, who developed a theory in the year 1959 called as the two-factor theory on motivation or motivation-hygiene theory.

Herzberg and his associates carried out interviews of 200 persons including engineers and accountants. In that survey, they were asked about the components of job that make them happy or unhappy, and their answers made it clear that it was the working environment that causes unhappiness or dissatisfaction.

As per the theory, hygiene factors are essential to keep a reasonable level of satisfaction among employees. Such factors do not actually result in satisfaction, but their absence causes dissatisfaction, that is why, they are known as dissatisfies. Secondly, motivational factors are inherent to the job, and so the increase in these factors will lead to the rise in the satisfaction level, while the decrease does not cause dissatisfaction in employees.

Key Difference between Maslow and Herzberg’s Theory of Motivation

The basic points of difference between Maslow and Herzberg’s theory of motivation can be summed up as under:

1. Maslow’s Theory is a general theory of motivation which expresses that the urge to satisfy needs is the principle variable in motivation. In contrast, Herzberg’s Theory on motivation reveals that there are some variables existing at the workplace that results in job satisfaction or dissatisfaction.

2. Maslow’s theory is descriptive, whereas the theory propounded by Herzberg is simple and prescriptive.

3. The basis of Maslow’s theory is human needs and their satisfaction. On the other hand, the Herzberg’s theory relies on reward and recognition.

4. In Maslow’s theory, there is a proper sequence of needs from lower to higher. Conversely, no such sequence exists in the case of Herzberg’s theory.

5 Maslow’s theory states that unsatisfied needs of an individual act as the stimulator. As against, Herzberg’s theory reveals that gratified needs govern the behaviour and performance of an individual.

6. The needs of an individual are divided into two categories i.e. survival/deficiency needs and growth needs as per Maslow. On the classified into Hygiene and motivator factors.

7. In Maslow’s theory, any unsatisfied need of an individual serves as the motivator. Unlike in the case of Herzberg, only higher level needs are counted the motivator.

(b) What do you mean by Control? Discuss about the behavioural implications of Control.

-> Control is a primary goal-oriented function of management in an organisation. It is a process of comparing the actual performance with the set standards of the company to ensure that activities are performed according to the plans and if not then taking corrective action.

Every manager needs to monitor and evaluate the activities of his subordinates. It helps in taking corrective actions by the manager in the given timeline to avoid contingency or company’s loss.

Controlling is performed at the lower, middle and upper levels of the management.

Features of Control

§ An effective control system has the following features:

§ It helps in achieving organizational goals.

§ Facilitates optimum utilization of resources.

§ It evaluates the accuracy of the standard.

§ It also sets discipline and order.

§ Motivates the employees and boosts employee morale.

§ Ensures future planning by revising standards.

§ Improves overall performance of an organization .

§ It also minimises errors.

Controlling and planning are interrelated for controlling gives an important input into the next planning cycle. Controlling is a backwards-looking function which brings the management cycle back to the planning function. Planning is a forward-looking process as it deals with the forecasts about the future conditions.

Process of Controlling

Control process involves the following steps as shown in the figure:

§ Establishing standards: This means setting up of the target which needs to be achieved to meet organisational goals eventually. Standards indicate the criteria of performance.

Control standards are categorized as quantitative and qualitative standards. Quantitative standards are expressed in terms of money. Qualitative standards, on the other hand, include intangible items.

§ Measurement of actual performance: The actual performance of the employee is measured against the target. With the increasing levels of management, the measurement of performance becomes difficult.

§ Comparison of actual performance with the standard: This compares the degree of difference between the actual performance and the standard.

§ Taking corrective actions: It is initiated by the manager who corrects any defects in actual performance.

Controlling process thus regulates companies’ activities so that actual performance conforms to the standard plan. An effective control system enables managers to avoid circumstances which cause the company’s loss.

Types of control

There are three types of control viz.,

Feedback Control : This process involves collecting information about a finished task, assessing that information and improvising the same type of tasks in the future.

Concurrent control : It is also called real-time control. It checks any problem and examines it to take action before any loss is incurred. Example: control chart.

1. Predictive/ feed forward control: This type of control helps to foresee problem ahead of occurrence. Therefore action can be taken before such a circumstance arises.

The behavioural implications of Control are:-

Managers must recognize several behavioural implications in the process of control and its implementation. Although an effective control system should aid in employee motivation, it can also have negative effects on employee morale and performance.

These negative effects can be seen in situations where managers exert excessive control over other people and their activities. This can be considered as misuse of power by the employees and this in turn would negatively affect their morale.

Accordingly, control system should be made as fair and as meaningful as possible and must be clearly communicated to all employees. It will be easier for the employees to accept control if they had participated in the formulation of the control system and process of implementation.

In addition, timely feedback and objective and realistic appraisal will get positive worker response. The control system and performance evaluation must be consistent with organizational goals, policies and culture.

Some of the behavioural implications of control are as follows:

1. Control affects individual freedom. Hence, it is common for individuals to resist certain controls if such controls put constraints on their freedom.

2. Control carries certain status and power implications. For example, a quality control inspector may carry more power than a line supervisor and this may be resented.

3. When controls are based upon subjective and personal judgements as against quantified performance, standards and appraisals, these may create interpersonal or intergroup conflicts within the organization.

4. Excessive number of controls may limit flexibility and creativity.

This may lead to low levels of employee satisfaction and personal development.

5. Controls may influence the generation of invalid and inaccurate information. For example, if the top management habitually reduces budget requests when reviewing them (a control activity), then the lower management, when proposing a new budget or a new project may overstate the cost of resources needed. Similarly, managers may set objectives lower than what are attainable so that a higher output will look better at performance appraisal time.

6. Controls can be resented by employees if they have no control over the situation. For example, if a professor’s performance is appraised over the number of publication of books and research articles, but he is not afforded the freedom of time to do so because of heavy teaching loads and excessive committee work, then it can result in frustration which may be detrimental to the entire control system. Similarly, a manager will become highly frustrated if his performance evaluation is based upon profits achieved by his department but he does not have the authority and control to make operational changes such as hiring and firing of workers.

7. The control system must be synchronized to create a balance among all affecting and inter-connected variables. The standards should complement each other and not contradict each other. For example, a control system which emphasizes increased sales as well as reduction in advertising expenditure at the same time may seem contradictory to the marketing manager and thus may be frustrating for him.

5(a) What is Organisational Effectiveness? Explain the various approaches or models of organisational effectiveness.

-> 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 various approaches or models of organisational effectiveness are:

The approaches are:

1. Systems Resources Approach

2. Goal Approach

3. Internal Functioning Approach

4. Strategic Constituencies Approach.

1. Systems Resources Approach:

This approach to organisational effectiveness focus on inputs that is, on the extent to which the organisation can acquire the resources it needs. This perspective attributes effectiveness to organisations that exhibit low performance or productivity, so long as they are able to acquire the necessary resources.

2. Goal Approach:

The approach focuses on the organisation’s outputs — that is, on the degree of goal attainment achieved by the organisation. Since there are often conflicts between financial and participant goals there is need for trade-off among the various goals of the organisation in order to achieve balanced performance.

3. Internal Functioning Approach:

This approach deals more narrowly with the internal mechanisms of the organisation. The focus is on minimising strain, integrating individuals and the organisation and conducting smooth and efficient operations. An organisation that focuses primarily on maintaining employee satisfaction and morale, minimising conflict and being efficient subscribes to this view.

4. Strategic Constituencies Approach:

This approach focuses on the groups that have a stake in the organisation such as suppliers, lenders, participants, customers and others who are directly and indirectly influenced by the company. According to this view, effectiveness is the extent to which the organisation satisfies the demand and expectations of all these groups. As in the goal approach, trade-offs are essential.

The strategic constituencies approach is most closely related to feedback process. It is through feedback that the organisation learns how well it has met the demands and the expectations of its strategic constituencies.

(b) How do you distinguish between Formal and Informal Communication? Explain how barriers to communication can be overcome.

-> Formal and informal communication both is important and effective. Formal communication strictly follows rules and regulation prescribed by organization. On the contrary, Informal communication does not maintain any rule and regulation.

Formal and Informal communication both can be effective communication for an organization if the Management can handle those properly. Although Informal communication is out of control of Management. But strategic planning may help to make it fruitful for organizational purpose. However, Differences between Formal communication and Informal communication can show on the following aspects:

9 Important Measures to Overcome the Barriers of Communication:

(1) Clarify Ideas before Communication:

The person sending the communication should be very clear in his mind about what he wants to say. He should know the objective of his message and, therefore, he should arrange his thoughts in a proper order.

(2) Communicate According to the Need of the Receiver:

The sender of the communication should prepare the structure of the message not according to his own level or ability but he should keep in mind the level, understanding or the environment of the receiver.

(3) Consult Others before Communication:

At the time of planning the communication, suggestions should be invited from all the persons concerned. Its main advantage will be that all those people who are consulted at the time of preparing the communication plan will contribute to the success of the communication system.

(4) Be Aware of Language, Tone and Content of Message:

The sender should take care of the fact that the message should be framed in clear and beautiful language. The tone of the message should not injure the feelings of the receiver. As far as possible the contents of the message should be brief and excessive use of technical words should be avoided.

(5) Convey Things of Help and Value to the Listener:

The subject matter of the message should be helpful to the receiver. The need and interest of the receiver should specially be kept in mind. Communication is more effective in such a situation.

(6) Ensure Proper Feedback:

The purpose of feedback is to find out whether the receiver has properly understood the meaning of the information received. In the face-to- face communication, the reaction on the face of the receiver can be understood.

But in case of written communication or some other sort of communications some proper method of feedback should be adopted by the sender.

(7) Consistency of Message:

The information sent to the receiver should not be self- contradictory. It should be in accordance with the objectives, policies, programmes and techniques of the organisation. When a new message has to be sent in place of the old one, it should always make a mention of the change otherwise it can create some doubts.

(8) Follow up Communication:

In order to make communication effective the management should regularly try to know the weaknesses of the communication system. In this context effort can be made to know whether to lay more stress upon the formal or the informal communication would be appropriate.

Similarly, suggestions can be invited in respect of the medium of communication (oral, written and gestural) to know as to which medium would be more effective and appropriate.

(9) Be a Good Listener:

It is the essence of communication that both the sender and the receiver should be good listeners. Both should listen to the each other’s point of view with attention, patience and positive attitude. A sender can receive much relevant information by being a good listener.