Block 1 - Organisational Structure & Process.pdf

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KARNATAKA STATE OPEN UNIVERSITYMANASAGANGOTRI, MYSORE-570006

MB 02ORGANIZATIONAL BEHAVIOUR

BLOCK 1 ORGANIZATIONAL STRUCTURE AND PROCESSES

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First Edition 2009

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Organizational Behavior

Organizational Structure and Processes

Block 1 Organizational Structure and Processes

Unit 1- Organisational Structure and Design: Introduction, rganisational Structure, The Organizational Process, Types of Organisational Structure, Factors Affecting

Organisational Structure, Organisation Design, Key Concepts.

Unit 2- Motivation:Introduction, Objectives of Directing Motivation, Meaning of Motivation, Nature of Motivation, Process of Motivation, Importance of Motivation,

Maslows Needs Hierarchy, McGregers Theory X and Theory Y, Herzbergs Motivation Hygiene Theory.

Unit 3- Organisational Change:Introduction, Motivation, Change Management, Levels Of Resistance, Elements for Change, Struggle for Change, Various Aspects Of

Resistance, Types Of Resistance, Overcoming Resistance, Goals For Change, Affects of Change, Restructuring Organisations, Organisational Health.

Unit 4- Decision Making Process:Decision-Making Process, Deterministic versus Probabilistic Models, Group Decision Making, The Rational Decision-Making Model,

Types of Decisions.

Unit 1Organisational Structure and Design 2

Unit 2Motivation 21

Unit 3Organisational Change 38

Unit 4Decision Making Process 60


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Unit 1 Organisational Structure and Design

Structure

1.1Introduction

1.2Organisational Structure

1.3The Organizational Process

1.4Types of Organisational Structure

1.5Factors Affecting Organisational Structure

1.6Organisation Design

1.7Key Concepts

1.8Summary

1.9Answer To Questions

_____________________________________________________________________


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1.1 Introduction

Every organisation made up of more than one person will need some form of organisational structure. An organisational chart shows the way in which the chain of

command works within the organisation.

The right organizational structure can play an important role in an organization's evolution. This chapter introduces the elements of organizational structure.

Objectives

At the end of this unit, you will be able to:

Define Organisation Structure

Explain the Organisational ProcessList the types of structure

Describe Organisational Design

1.2 Organisational Structure

Other organisations will have different structures. For example most organisations will have a marketing department responsible for market research and marketing

planning. A customer services department will look after customer requirements. A human resources department will be responsible for recruitment and selection of

new employees, employee motivation and a range of other people focused activities. In addition there will be a number of cross-functional areas such as administration

and Information Technology departments that service the functional areas of the company. These departments will provide back up support and training.

Organisational structurerefers to the way tasks are divided up, how the work flows, how this flow is coordinated and the forces and mechanisms that allow this

coordination to occur.

Organisations are structured in different ways:

by function as described above

by regional area - a geographical structure e.g. with a marketing manager North, marketing manager South etc

by product e.g. marketing manager crisps, marketing manager drinks, etc

into work teams, etc.

1.3 The Organizational Process

Organizing, like planning, must be a carefully worked out and applied process. This process involves determining what work is needed to accomplish the goal,

assigning those tasks to individuals, and arranging those individuals in a decision-making framework (organizational structure). The end result of the organizing

process is an organizationa whole consisting of unified parts acting in harmony to execute tasks to achieve goals, both effectively and efficiently.

A properly implemented organizing process should result in a work environment where all team members are aware of their responsibilities. If the organizing process is

not conducted well, the results may yield confusion, frustration, loss of efficiency, and limited effectiveness.

In general, the organizational process consists of five steps

Review plans and objectives.

Objectives are the specific activities that must be completed to achieve goals. Plans shape the activities needed to reach those goals. Managers must examine

plans initially and continue to do so as plans change and new goals are developed.


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Determine the work activities necessary to accomplish objectives.

Although this task may seem overwhelming to some managers, it doesn't need to be. Managers simply list and analyze all the tasks that need to be

accomplished in order to reach organizational goals.

Classify and group the necessary work activities into manageable units.

A manager can group activities based on four models of departmentalization: functional, geographical, product, and customer.

Assign activities and delegate authority.

Managers assign the defined work activities to specific individuals. Also, they give each individual the authority (right) to carry out the assigned tasks.

Design a hierarchy of relationships.

A manager should determine the vertical (decision-making) and horizontal (coordinating) relationships of the organization as a whole. Next, using the

organizational chart, a manager should diagram the relationships.

Check your progress

1. Define Organisational Structure

__________________________________________________________________________________________________________________________________________

2. Explain the Organisational Process

__________________________________________________________________________________________________________________________________________

1.4 Types of Organisational Structure

An organisations structure is often presented as an organisational chart which will show how management is organised vertically with layers of hierarchy and

horizontally by function, product or division. The chart will make clear who is responsible for what, who is responsible to who and who to go to with problems and

queries.

Above: A Traditional Hierarchical Organizational Structure

Managers must make choices about how to group people together to perform their work. Five common approaches functional, divisional, matrix, team, and

networkinghelp managers determine departmental groupings (grouping of positions into departments). The five structures are basic organizational structures, which

are then adapted to an organization's needs. All five approaches combine varying elements of mechanistic and organic structures. For example, the organizational

design trend today incorporates a minimum of bureaucratic features and displays more features of the organic design with a decentralized authority structure, fewer

rules and procedures, and so on.

Functional structure

The functional structuregroups positions into work units based on similar activities, skills, expertise, and resources (see Figure 1 for a functional organizational

chart). Production, marketing, finance, and human resources are common groupings within a functional structure.

As the simplest approach, a functional structure features well-defined channels of communication and authority/responsibility relationships. Not only can this structure

improve productivity by minimizing duplication of personnel and equipment, but it also makes employees comfortable and simplifies training as well.

But the functional structure has many downsides that may make it inappropriate for some organizations. Here are a few examples:

The functional structure can result in narrowed perspectives because of the separateness of different department work groups. Managers may have a hard time

relating to marketing, for example, which is often in an entirely different grouping. As a result, anticipating or reacting to changing consumer needs may be

difficult. In addition, reduced cooperation and communication may occur.

Decisions and communication are slow to take place because of the many layers of h ierarchy. Authority is more centralized.

The functional structure gives managers experience in only one fieldtheir own. Managers do not have the opportunity to see how all the firm's departments work

together and understand their interrelationships and interdependence. In the long run, this specialization results in executives with narrow backgrounds and little

training handling top management duties.

Divisional structure


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Because managers in large companies may have difficulty keeping track of all their company's products and activities, specialized departments may develop. These

departments are divided according to their organizational outputs. Examples include departments created to distinguish among production, customer service, and

geographical categories. This grouping of departments is called divisional structure (see Figure 2 ). These departments allow managers to better focus their resources

and results. Divisional structure also makes performance easier to monitor. As a result, this structure is flexible and responsive to change.

However, divisional structure does have its drawbacks. Because managers are so specialized, they may waste time duplicating each other's activities and resources. In

addition, competition among divisions may develop due to limited resources.


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Matrix structure

The matrix structure combines functional specialization with the focus of divisional structure (see Figure 3 ). This structure uses permanent cross-functional teams to

integrate functional expertise with a divisional focus.

Employees in a matrix structure belong to at least two formal groups at the same timea functional group and a product, program, or project team. They also report to

two bossesone within the functional group and the other within the team.

This structure not only increases employee motivation, but it also allows technical and general management training across functional areas as well. Potential

advantages include

Better cooperation and problem solving.

Increased flexibility.

Better customer service.

Better performance accountability.

Improved strategic management.

Predictably, the matrix structure also has potential disadvantages. Here are a few of this structure's d rawbacks:

The two-boss system is susceptible to power struggles, as functional supervisors and team leaders vie with one another to exercise authority.

Members of the matrix may suffer task confusion when taking orders from more than one boss.

Teams may develop strong team loyalties that cause a loss of focus on larger organization goals.

Adding the team leaders, a crucial component, to a matrix structure can result in increased costs.

Team structure

Team structure organizes separate functions into a group based on one overall objective (see Figure 4 ). These cross-functional teamsare composed of members

from different departments who work together as needed to solve problems and explore opportunities. The intent is to break down functional barriers among

departments and create a more effective relationship for solving ongoing problems.

The team structure has many potential advantages, including the following:

Intradepartmental barriers break down.

Decision-making and response times speed up.

Employees are motivated.

Levels of managers are eliminated.

Administrative costs are lowered.

The disadvantages include:

Conflicting loyalties among team members.


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Time-management issues.

Increased time spent in meetings.

Managers must be aware that how well team members work together often depends on the quality of interpersonal relations, group dynamics, and their team

management abilities.

Network structure

The network structure relies on other organizations to perform critical functions on a contractual basis (See Figure 5). In other words, managers can contract out

specific work to specialists.

This approach provides flexibility and reduces overhead because the size of staff and operations can be reduced. On the other hand, the network structure may resultin unpredictability of supply and lack of control because managers are relying on contractual workers to perform important work.

Check your progress

3. What are the various types of organizational structure

__________________________________________________________________________________________________________________________________________

__________________________________________________________________________________________________________________________________________

1.5 Factors Affecting Organisational Structure

Several factors influence the choice of structure:

a) Organizational size

The larger an organization becomes, the more complicated its structure. When an organization is small such as a single retail store, a two-person consulting firm, or a

restaurant its structure can be simple.

b) Organization life cycle

Organizations, like humans, tend to progress through stages known as a life cycle. Like humans, most organizations go through the following four stages: birth, youth,

midlife, and maturity. Each stage has characteristics that have implications for the structure of the firm.

Birth:In the birth state, a firm is just beginning. An organization in the birth stage does not yet have a formal structure. In a young organization, there

is not much delegation of authority. The founder usually calls the shots.

Youth:In this phase, the organization is trying to grow. The emphasis in this stage is on becoming larger. The company shifts its attention from the

wishes of the founder to the wishes of the customer. The organization becomes more organic in structure during this phase. It is during this phase

that the formal structure is designed, and some delegation of authority occurs.

Midlife:This phase occurs when the organization has achieved a high level of success. An organization in midlife is larger, with a more complex and

increasingly formal structure. More levels appear in the chain of command, and the founder may have difficulty remaining in control. As the

organization becomes older, it may also become more mechanistic in structure.

Maturity:Once a firm has reached the maturity phase, it tends to become less innovative, less interested in expanding, and more interested in

maintaining itself in a stable, secure environment. The emphasis is on improving efficiency and profitability. However, in an attempt to improve

efficiency and profitability, the firm often tends to become less innovative. Stale products result in sales declines and reduced profitability.

Organizations in this stage are slowly dying. However, maturity is not an inevitable stage. Firms experiencing the decline of maturity may institute the

changes necessary to revitalize.

c) Strategy

How an organization is going to position itself in the market in terms of its product is considered its strategy. A company may decide to be always the first on the market

with the newest and best product (differentiation strategy), or it may decide that it will produce a product already on the market more efficiently and more cost

effectively (cost-leadership strategy). Each of these strategies requires a structure that helps the organization reach its objectives. In other words, the structure must fit

the strategy.

d) Environment

The environment is the world in which the organization operates, and includes conditions that influence the organization such as economic, social-cultural, legal-

political, technological, and natural environment conditions. Environments are often described as either stable or dynamic.

In a stable environment,the customers' desires are well understood and probably will remain consistent for a relatively long time. Examples of organizations

that face relatively stable environments include manufacturers of staple items such as detergent, cleaning supplies, and paper products.

In a dynamic environment,the customers' desires are continuously changingthe opposite of a stable environment. This condition is often thought of as

turbulent. In addition, the technology that a company uses while in this environment may need to be continuously improved and updated. An example of an


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industry functioning in a dynamic environment is electronics. Technology changes create competitive pressures for all electronics industries, because as

technology changes, so do the desires of consumers.

e) Technology

Advances in technology are the most frequent cause of change in organizations since they generally result in greater efficiency and lower costs for the firm.

Technology is the way tasks are accomplished using tools, equipment, techniques, and human know-how.

Small-batch productionis used to manufacture a variety of custom, made-to-order goods. Each item is made somewhat differently to meet a customer's

specifications. A print shop is an example of a business that uses small-batch production.

Mass production is used to create a large number of uniform goods in an assembly-line system. Workers are highly dependent on one another, as the

product passes from stage to stage until completion. Equipment may be sophisticated, and workers often follow detailed instructions while performing

simplified jobs. A company that bottles soda pop is an example of an organization that ut ilizes mass production.

Organizations using continuous-process productioncreate goods by continuously feeding raw materials, such as liquid, solids, and gases, through a

highly automated system. Such systems are equipment intensive, but can often be operated by a relatively small labor force. Classic examples are

automated chemical plants and oil refineries.

f) Employee skills:Matrix structures are particularly suited to organisations where the employee skill level is high.

g) Leadership style:If the owners of a business wish to keep as much control over their business as possible there will be a narrow span of control whereas those

who wish to motivate their teams may delegate decision-making to others and therefore have a wider span of control.

h) Business objectives: If a company decides to expand quickly, through a merger or acquisition, the span of control will become much wider.

i) External factors:A recession may cause the need to cut back and make many roles redundant. This can result in layers of management being taken out of the

business reducing the chain if command and making the organisation much flatter.

Check your progress

4. State the factors affecting organizational structure

__________________________________________________________________________________________________________________________________________

__________________________________________________________________________________________________________________________________________

1.6 Organisation Design

An organization's structure is defined by its configuration and interrelationships of positions and departments. Organizational designis the creation or change of an

organization's structure. The organizational design of a company reflects its efforts to respond to changes, integrate new elements, ensure collaboration, and allow

flexibility.

Organizing a business is difficult. Once an organization has a plan, the next step is to make it happen. The major characteristics of organizational structure is, in many

ways, like the important parts of a jigsaw puzzleyou pick them out, one by one. In particular, the two basic forms of organizational structure are mechanistic and

organic.

1.7 Key Concepts

Take note of the following key concepts as you work through the reading:

a) Departmentalization

The process of divinding an organiztion into d ifferent working units is called departmentalization. Departmentalization can be done on the following basis

Functional - production, finance

Products- consumer products, industrial products

Customers- civilian, military

Regions or territory- North, South

Divisional - Time, process

b) Span of Control

Span of control is the term for the number of subordinate employees directly accountable to a manager. The larger the number of employees a manager controls the

wider is his span of control. Narrow span: The manager controls six or fewer employees. There is close supervision of the employees, tight control and fast

communication. However, the supervision can be too close, the narrow span means that there are many levels of management, resulting in a possibly excessive

distance between the top and the bottom of an organisation. Wide span: The manager controls more than six employees. Managers are forced to delegate work, and

tasks may be less closely supervised. There are possible problems with the overloading of work and with loss of control. However, there are fewer levels of

management.

c) Downsizing and Restructuring

In a business enterprise, downsizing is reducing the number of employees on the operating payroll. Some users distinguish downsizing from a layoff , with downsizing

intended to be a permanent downscaling and a layoff intended to be a temporary downscaling in which employees may later be rehired. Businesses use several

techniques in downsizing, including providing incentives to take early retirement and transfer to subsidiary companies, but the most common technique is to simply

terminate the employment of a certain number of people.

Rightsizing is downsizing in the belief that an enterprise really should operate with fewer people. Dumb sizing is downsizing that, in retrospect, failed to achieve the

desired effect.

Corporate restructuring is necessary when a company needs to improve its efficiency and profitability and it requires expert corporate management. A corporate

restructuring strategy involves the dismantling and rebuild ing of areas within an organization that need special attention from the management and CEO.


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The process of corporate restructuring often occurs after buy-outs, corporate acquisitions, takeovers or bankruptcy. It can involve a significant movement of an

organizations liabilities or assets.

d) Centralisation versus Decentralisation.

Centralisation is the process by which the activities of an organization, particularly those regarding decision-making, become concentrated within a particular location

and/or group.

Decentralisation is where the decision making responsibility is given to more operational managers, lower down the organisation.

Advantages of Centralised Structure

For Organisations

Advantages of Decentralised Structure

For Organisations

Senior managers enjoy greater control

over the organisation.

Senior managers have t ime to

concentrate on the most important

decisions (as the other decisions can be

undertaken by other people down the

organisation structure.

The use of standardised procedures can

results in cost savings.

Decision making is a form of

empowerment. Empowerment can

increase motivation and therefore mean

that staff output increases.

Decisions can be made to benefit the

organisations as a whole. Whereas a

decision made by a department manager

may benefit their department, but

disadvantage other departments.

People lower down the chain have a

greater understanding of the

environment they work in and the people

(customers and colleagues) that they

interact with. This knowledge skills and

experience may enable them to make

more effective decisions than senior

managers.

The organisation can benefit from the

decision making of experienced senior

managers.

Empowerment will enable departments

and their employees to respond faster to

changes and new challenges. Whereas

it may take senior managers longer to

appreciate that business needs have

changed.

In uncertain times the organisation will

need strong leadership and pull in the

same direction. It is believed that strong

leadership is often best given from

above.

Empowerment makes it easier for people

to accept and make a success of more

responsibility

Check your progress

5. What is organizational Design? Explain its key concepts

__________________________________________________________________________________________________________________________________________

__________________________________________________________________________________________________________________________________________

Self assessment Questions

1. Describe Centralisation versus Decentralisation.

__________________________________________________________________________________________________________________________________________

2. What is Departmentalization?

__________________________________________________________________________________________________________________________________________

3. Explain Traditional Hierarchical Organizational Structure.

__________________________________________________________________________________________________________________________________________

4. Explain Organization Life Cycle.

__________________________________________________________________________________________________________________________________________

1.8 Summary

The working relationships vertical and horizontal associations between individuals and groups that exist within an organization affect how its activities are accomplished

and coordinated. Effective organizing depends on the mastery of several important concepts: work specialization, chain of command, authority, delegation, span of

control, and centralization versus decentralization.

1.9 Answer To Questions

1. See Section 1.2

2. See Section 1.3

3. See Section 1.4

4. See Section 1.5

5. See Section 1.6, 1.7


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Reference:

www.ebsglobal.net/programmes/organisational-behaviour

www.freemba.in/substream.php?stcode=3& =Organisational_Behaviour

Organisational Behaviour: Concepts, Controversies and Applications by Stephen P. Robbins - 1997

Organisational behaviour: individuals, groups and organisation by Ian Brooks - 2006 - 336 pages Previous ed.: 2003.


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Unit 2 - Motivation

Structure

2.1 Introduction

2.2 Objectives of Directing - Motivation

2.3 Meaning of Motivation

2.4 Nature of Motivation

2.5 Process of Motivation

2.6 Importance of Motivation

2.7 Maslows Needs Hierarchy

2.8 McGregers Theory X and Theory Y

2.9 Herzbergs Motivation Hygiene Theory

2.10 Summary

2.11 Answer to Questions


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2.1 Introduction

In this un it we will understand the use of motivation in management context. Motivation is an integral part of direction. No organization can perform its optimum without

self motivated employees. Since motivation influences productivity, supervisors need to understand what motivates employees to reach peak performance. It is not an

easy task to increase employee motivation because employees respond in different ways to their jobs and their organization's practices. Every organization is derived

through this element. This important step can profoundly affect an organisation's success.

2.2 Objectives of Directing Motivation

Selection, training, evaluation and discipline cannot guarantee a high level of employee performance. Motivation, the inner force that directs employee behaviour, also

plays an important role. Highly motivated people perform better than unmotivated people. Motivation covers up ability and skill deficiencies in employees. Such truisms

about motivation leave employers wanting to be surrounded by highly motivated people but unequipped to motivate their employees. Employers and supervisors wanteasily applied motivation models bu t such models are unavailable.

Motivation probably tops the list of complex activities with which labour managers deal. Their intuition suggests an easy answer, "I want everyone around here to be

motivated." They often blame employees for their lack of motivation and performance problems. Employees on the other hand often blame any performance problems

they may have on external factors - their supervisors, equipment, training, co-workers, weather, unrealistic demands made on them, pressures at home, lack of

recognition etc., etc. Despite the conflicting perceptions held by employers and employees, employers must deal with employee motivation.

2.3 Meaning of Motivation

The term motivation has been derived from the word motive. A motive is an inner state that activates energies or moves an individual and channelises his behaviour

towards goals. It reflects an impulse, drive or urge to move in a specific direction to reduce a need. Motives and needs are initiating and sustaining. Drives are what

move individuals to satisfy needs, while goals are the ends towards which behaviour is governed by a myriad of needs which stem from human motives. Motivation is

the art of understanding this motives and satisfying them to d irect and sustain behaviour towards the accomplishment of organizational goals.

Motivation is the set of processes that moves a person toward a goal. Thus, motivated behaviours are voluntary choices controlled by the individual employee. The

supervisor (motivator) wants to influence the factors that motivate employees to higher levels of productivity. Factors that affect work motivation include individual

differences, job characteristics, and organizational practices. Individual differences are the personal needs, values, and attitudes, interests and abilities that people

bring to their jobs. Job characteristics are the aspects of the position that determine its limitations and challenges. Organizational practices are the rules, human

resources policies, managerial practices, and rewards systems of an organization. Supervisors must consider how these factors interact to affect employee job

performance.

2.4 Nature of Motivation

The fore going definitions highl ight the following characteristics of motivation:

Motivation is a psychological concept. It is concerned with the intrinsic forces operating within an individual which impels him to act or not to act in a particular

way. A motive is a personal and internal feeling.

Motivation is a continuous and dynamic process as it deals with human beings which are an ever changing entity modifying itself every moment. Human

needs are unlimited and go on changing continuously. People must at all times be provided with the stimulus to work because the satisfaction of one need

gives rise to another need.

Motivation is a complex and difficult function. In order to motivate people, a manager must understand satisfying mutiliplicity of human needs. But needs are

mental feelings which cannot be described and measured accurately. They are vague and have to be deduced from external behaviour of human beings.

Moreover, needs are basically subjective. Every person adopts a different approach to satisfy his needs and one particular need may cause d ifferent

behaviour on the part of different people. Human needs are inter-connected and inseparable and it is not possible to divide them into water-tight

compartments.

Motivation is a circular process. Motivation is the result of an interaction between human needs and the incentives offered to satisfy them.

Motivation is different from satisfaction. Motivation is the process of stimulating an individual or a group to take desired action. In other words, motivation is the

drive towards an outcome where as satisfaction refers to the outcome performed by a person.

Motivation is the product of anticipated values from a given course of action and the perceived probability that the action will lead to these values. The

anticipated value is known as valence and it reflects the strength of a persons preference for an outcome in relation to others. The perceived probability is

called expectancy and it refers to the strength of belief that a particular action will result in the desired outcome.

Check your progress

1. What is motivation? Explain nature of motivation

__________________________________________________________________________________________________________________________________________

2.5 Process of Motivation

Three ways of looking at motivation are: needs, rewards and effort. The needs approach stems from the notion that peoples' unsatisfied needs drive their behaviour.

Figure out a person's needs, satisfy the needs and the person will be motivated. For example, a person with a high need to satisfy goals is motivated by production

targets. The rewards approach is based on the expectation that rewarded behaviour is repeated. Giving a person a bonus for excellent performance during a difficult

harvest period encourages the person to make a special effort during the next difficult harvest. The effort approach to motivation is based on the expectation that effort

brings the worker what he or she wants.


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The most effective motivation for employees comes from within each employee, i.e., self-motivation. Possible indicators of self-motivation include: past

accomplishments in school, sports, organizations and work; stated career goals and other kinds of goals; expertise in one or more areas that shows evidence of

craftsmanship, pride in knowledge and abilities, and self-confidence; an evident desire to continue to learn; and a general enthusiasm for life.

Threats, bribery, manipulation and coercion have only limited usefulness beyond the very short-run in changing behaviour in the farm environment. More effective

employer action responds to employee needs, making their work useful to satisfying their needs, helping employees understand the relationship between their

contribution to success of the farm and rewards received, and creating an atmosphere of equity and fairness.

2.6 Importance of Motivation

Motivation is an important part of managing process. A team of highly qualified and motivated employee is necessary for achieving objectives of an organisation. It is

only through motivation process, they contribute maximum for accomplishing objectives. Without motivation, they may not have an urge to maintain or improve their

efficiency. Importance of motivation in management may be judged on the basis of the following factors:

Effective use of resources:In business, all physical resources should be used through human force. Effective and efficient use of these resources depends

upon the ability and readiness of work force. Thus team of highly motivated employees greatly help in making optimum use of available resources for achieving

objectives.

1.

Higher efficiency:Motivation is directly related to the level of efficiency. Highly motivated employees make full use of their energy and other abilities to raise the

existing level of efficiency. They produce more as compared to other employees.

2.

Accomplishment of organizational goals:The process of motivation helps in shaping the working behaviour of the employees and making it desirable for

achieving objectives. Highly motivated employees would make goal directed efforts. They are more committed and cooperative for seeking organizational goals.

3.

Reduced labour turnover and absenteeism:Highly motivated employees are the most important and valuable assets to the organisation. They are more loyal

and sincere therefore they remain punctual and regular in their work schedule and prefer to stay on the job for longer period of time. These factors help in

reducing absenteeism and labour turnover.

4.

Healthy industrial relations:Motivation is considered as a backbone of good industrial relation. Effectively motivated employers get more satisfaction and carry

high morale which makes them more disciplined. In such a situation, the possibilities of under trail disputes and unrest are reduced to minimum and industrial

relation gets improved.

5.

Improved corporate image: Motivation also helps in improving image of organisation. If employees are motivated, they produce more, they maintain self

disciplined productive internal environment in the organisation ultimately gives better impression to the outsiders dealing with the organization and its image is

enhanced.

6.

Check your progress

2. Explain process of motivation

__________________________________________________________________________________________________________________________________________

3. What is the importance of motivation?

__________________________________________________________________________________________________________________________________________

2.7 Maslows Needs Hierarchy

Maslow's Hierarchy of Needsidentifies five levels of needs, which are best seen as a hierarchy with the most basic need emerging first and the most sophisticated

need last. People move up the h ierarchy one level at a time. Gratified needs lose their strength and the next level of needs is activated. As basic or lower-level needs

are satisfied, higher-level needs become operative. A satisfied need is not a motivator. The most powerful employee need is the one that has not been satisfied.

Abraham Maslow first presented the five-tier hierarchy.Level I - Physiological needsare the most basic human needs. They include food, water, and comfort. The organization helps to satisfy employees'

physiological needs by a pay cheque.

Level II - Safety needsare the desires for security and stability, to feel safe from harm. The organization helps to satisfy employees' safety needs by benefits.

Level III - Social needs are the desires for affiliation. They include friendship and belonging. The organization helps to satisfy employees' social needs through

sports teams, parties, and celebrations. The supervisor can help ful fil social needs by showing direct care and concern for employees.

Level IV - Esteem needsare the desires for self-respect and respect or recognition from others. The organization helps to satisfy employees' esteem needs by

matching the skills and abilities of the employee to the job. The supervisor can help fulfil esteem needs by showing workers that their work is appreciated.

Level V - Self-actualization needsare the desires for self-fulfilment and the realization of the individual's full potential. The supervisor can help fulfil

self-actualization needs by assigning tasks that challenge employees' minds while drawing on their aptitude and training.


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2.8 McGregers Theory X and Theory Y

Douglas McGregor in his book, "The Human Side of Enterprise" published in 1960 has examined theories on behaviour of individuals at work, and he has formulated

two models which he calls Theory X and Theory Y.

Theory X Assumptions

The average human being has an inherent dislike of work and will avoid it if he can.

Because of their dislike for work, most people must be controlled and threatened before they will work hard enough.1.

The average human prefers to be directed, d islikes responsibility, is unambiguous, and desires security above everything.2.

These assumptions lie behind most organizational principles today, and give rise both to "tough" management with punishments and tight controls, and "soft"

management which aims at harmony at work.

3.

Both these are "wrong" because man needs more than financial rewards at work; he also needs some deeper higher order motivation - the opportunity to fulfil

himself.

4.

Theory X managers do not give their staff this opportunity so that the employees behave in the expected fashion.5.

Theory Y Assumptions

The expenditure of physical and mental effort in work is as natural as play or rest.1.

Control and punishment are not the only ways to make people work, man will direct himself if he is committed to the aims of the organization.2.

If a job is satisfying, then the result will be commitment to the organization.3.

The average man learns, under proper conditions, not only to accept but to seek responsibility.4.

Imagination, creativity, and ingenuity can be used to solve work problems by a large number of employees.5.

Under the conditions of modern industrial life, the intellectual potentialities of the average man are only partially utilized.6.

Comments on Theory X and Theory Y Assumptions

These assumptions are based on social science research which has been carried out, and demonstrate the potential which is present in man and which organizations

should recognize in order to become more effective.

McGregor sees these two theories as two quite separate attitudes. Theory Y is difficult to put into practice on the shop floor in large mass production operations, but it

can be used initially in the managing of managers and professionals.

In "The Human Side of Enterprise" McGregor shows how Theory Y affects the management of promotions and salaries and the development of effective managers.

McGregor also sees Theory Y as conducive to participative problem solving.

It is part of the manager's job to exercise authority, and there are cases in which this is the only method of achieving the desired results because subordinates do not

agree that the ends are desirable.

The situation in which employees can be consulted is one where the individuals are emotionally mature, and positively motivated towards their work; where the work is

sufficiently responsible to allow for flexibility and where the employee can see her or his own position in the management hierarchy. If these conditions are present,

managers will find that the participative approach to problem solving leads to much improved results compared with the alternative approach of handing out

authoritarian orders.

Once management becomes persuaded that it is under estimating the potential of its human resources, and accepts the knowledge given by social science

researchers and displayed in Theory Y assumptions, then it can invest time, money and effort in developing improved applications of the theory.

McGregor realizes that some of the theories he has put forward are unrealizable in practice, but wants managers to put into operation the basic assumption that:

Staff will contribute more to the organization if they are treated as responsible and valued employees.

Check your progress

4. What is Maslows hierarchy of needs?

5. Explain McGregers Theory X and Theory Y

__________________________________________________________________________________________________________________________________________

2.9 Herzbergs Motivation Hygiene Theory


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Frederick Herzberg, contributed to human relations and motivation two theories of motivation as follows:

Hygiene Theory

Motivation

Herzbergs' first component in his approach to motivation theory involves what are known as the hygiene factors and includes the work and organizational environment.

These hygiene factors include:

The organization

Its policies and its administration

The kind of supervision (leadership and management, includ ing perceptions) which people receive while on the job

Working conditions (including ergonomics)

Interpersonal relations

Salary

Status

Job security

These factors do not lead to higher levels of motivation but without them there is dissatisfaction.

The second component in Herzbergs' motivation theory involves what people actually do on the job and should be engineered into the jobs employees do in order todevelop intrinsic motivation with the workforce. The motivators are

Achievement

Recognition

Growth / advancement

Interest in the job

These factors result from internal instincts in employees, yielding motivation rather than movement.

Both these approaches (hygiene and motivation) must be done simultaneously. Treat people as best you can so they have a minimum of d issatisfaction. Use people so

they get achievement, recognition for achievement, interest, and responsibility and they can grow and advance in their work.

Therefore, the hygiene and motivation factors can be listed as follows:

Hygiene factors

Company policies and administration

Supervision

Working conditions and interpersonal relations

Salary, status and securityMotivators

Achievement

Recognition for achievement

Interest in the task

Responsibility for enlarged task

Growth and advancement to higher level tasks

Effects on Individuals of Working Environment

The working environment has an effect on individuals as follows:

It will provide at least sufficient for his basic needs and often much more. For example, 50 years ago in the United Kingdom, food and shelter were a person's

basic needs. Today, most families will consider that the basic needs also include a car, television, overseas holiday, etc.

It may or may not p rovide adequate security. Again, most individuals seek a secure job, there are others including some men on oil rigs, who seek high pay for a

limited period but with limited security.


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It provides an individual with an identity. As a member of an organization, he carries out a specific function.

It also gives the worker comradeship, freedom from boredom, and an interest during his working life.

It also provides self-fulfilment for individual where consideration has been g iven to ensure that the job is creative and gives job satisfaction.

It provides the individual with status. There is a status in all jobs. Providing the job content is investigated to make the work more interesting.

Effects on Work Groups of Working Environment

Rensis Likert has already described how the various management styles in an organization can affect the groups in an organization.

Whilst the working environment will affect individuals, it will undoubtedly have a greater effect on working groups, since whilst an individual may have certain needs, he

will not obtain those needs if the working environment does not provide the needs of the working group.

The working group is the instrument of society through which in large measure the individual acquires his attitudes, opinions, goals and ideals; it is also one of the

fundamental sources of discipline and social controls.

Therefore, the working environment has an effect on groups as follows:

It will affect the morale of the group.

It will determine whether the group achieves the objectives set by the organization.

It will determine whether the degree of cooperation provided by the group

It will motivate the group to give of their best.

It will determine whether the human relations within an organization are good or bad.

It will also affect the relations between management and trade unions.

Check your progress

6. Explain Herzbergs Motivation Hygiene Theory

______________________________________________________________

__________________________________________________________________________________________________________________________________________

Self assessment Questions

1. How working environment affects the work groups in the organization?__________________________________________________________________________________________________________________________________________

2. Explain objectives of motivation.

__________________________________________________________________________________________________________________________________________

3. Explain the Hygiene factors of Hertzbergs Theory.

__________________________________________________________________________________________________________________________________________

2.10 Summary

This unit emphasized on motivation and it different shades. The only way you can find out what truly motivates your staff is:

Asking your employees what motivates them

Monitoring the changes in work levels as a result of your motivational philosophyOnce you know what makes your employees tick you can formulate a management style which will assist to motivate your staff. For many employers or managers this

task is simple, but for many it has been continuous learning process.

2.11 Answer to Questions

See Section 2.3 and 2.4

See Section 2.5

See Section 2.6

See Section 2.7

See Section 2.8

See Section 2.9

Reference:


www.nwlink.com/~donclark/leader/leadob.html


Organisational Behaviour: Concepts, Controversies and Applicationsby Stephen P. Robbins - 1997

Organisational behaviour: individuals, groups and organisationby Ian Brooks - 2006 - 336 pages Previous ed.: 2003.


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Unit 3 Organisational Change

Structure

3.1Introduction

3.2Motivation

3.3Change Management

3.4Levels Of Resistance

3.5Elements for Change

3.6Struggle for Change

3.7Various Aspects Of Resistance

3.8Types Of Resistance

3.9Overcoming Resistance

3.10Goals For Change

3.11Affects of Change

3.12Restructuring Organisations

3.13Organisational Health

3.14Summary

3.15Answer To Questions

______________________________________________________________


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3.1 Introduction

In a knowledge-powered environment it is an organisations ability to successfully cope with change that gives it a competitive edge.

Objectives


Define Change management

List the elements of change

State the types of resistance

Define Restructuring organisations

3.2 MotivationCritical to success is the ability to motivate employees with people-friendly HR policies and bring synergies in individual and organisational goals.

Motivation means different things to different employees. Money is often the biggest motivator, more so at lower levels in an organisations hierarchy. For some,

chances of moving ahead in a chosen career, and reaching positions of power and influence are major motivators. Motivation helps to achieve goals, gain a positive

perspective and build self-esteem and capability.

Demotivators

Employees feel demotivated because of inadequate infrastructure, outdated equ ipment and entrenched attitudes amongst others.

Motivators

An improved rewards and recognition system

More interesting work

More efficient bosses

Greater participation and challenges

More opportunities for development

They can be ascertained through performance appraisals, informal conversations, and attitude surveys. It is however crucial to cultivate a climate of honesty, openness

and trust.

On the job

Convey concern: Convey to employees the organisations concerns and intention.

Extend support: Make the staff understand the levels of support they can expect from the organisation.

Earn respect: Earn respect by setting an example.

Cash, low on the list: Studies reveal that cash incentives and fringe benefits motivate new employees more than existing employees.

Focus on individual growth: Consider policies and incentives that positively affect work, promotion, reward and recognition, effective participation, and employee

involvement.

3.3 Change Management

Feedback is one of the most valuable elements in the motivation cycle. An organisation will do well to constantly feel the pulse of employees as it transits through the

trauma of change.

Understanding Resistance

Resistance is the reaction towards the unknown that unsettles one from a predictable and comfort zone. It is a force that slows or stops movement. In fact, the reaction

to resistance hinders change often leading to arguments, opposition and threats. Little wonder that nearly two-thirds of all major changes in organisations fail.


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3.4 Levels Of Resistance

Level 1 - Information stage

Resistance at this stage comes from:

Lack of information1.

Disagreement with the idea itself2.

Lack of exposure3.

Confusion4.

Level 2 - Reactions to change

At this stage, emotional and physiological reactions to change prevail. Blood pressure rises, adrenaline flows, pulse increases and one is fearful that he will l ose face,friends or job.

Resistance may come from fear over a perceived:

Loss of power, control, status or respect1.

Feeling of incompetence or isolation2.

Sense that they can't take on anything else (too much change)3.

Level 3 - Bigger than the current change

This is the domain of cultural, religious and racial differences. In other words, people may not resist the idea itself but whom you represent or because of their

relationship with you. They often wonder why the other group can't see reality as it is.

Resistance at this level may come from:

Personal history of mistrust

Significant disagreement over values

Transference. The person being resisted represents someone else such as a mother or father or some significant member.

The challenge of resistance comes from the fact that all change is limited to Level 1 or the information stage. If taken a b it farther, this may help accept change easier

and better.

Check your progress

1. What is Change Management?

__________________________________________________________________________________________________________________________________________

2. State various levels of resistance for change

__________________________________________________________________________________________________________________________________________

3.5 Elements for Change

Change an Omnipresent entity in our lives! It is constant, everywhere and also accelerating. The only way to cope up with this whirlwind is to adapt to it. In fact,

adaptability is inherent to human nature and with our very first breath; we learn to adapt, a continuous process for the rest of our lives, each hour bringing in a new

change.

Likewise, change is an also an integral part of organisational growth and essential for its survival. The question here, however, is not whether to change but when and

how it can be brought in successfully. Ironically, man, whose second nature is adaptability resists changes in work environment and of course sometimes at home too.

Thus to manage and implement change fruitfu lly, is a crucial matter. Managers need to be equipped with their most logical arguments and persuasive skills to support

it. To be able to hand le such situations, it is pertinent to know the nature of and responses to work changes.

Nature of work change

It can be defined as any alteration that occurs in the work environment. Change, immaterial of which part in the organisation is undergoing it, effects the whole

organisation. It demands that employees make dramatic adjustments either directly or indirectly. Thus it is a human as well as a technical problem. A word of caution,

though, to the staunch advocates of change, repeated changes might lead to pressures that cause a breakdown in the organisation.

Organisations achieve a state of equilibrium, i.e., a balance between opposing forces. In such a state people coexist, perform their jobs and know what to expect next.

When changes harbour in, employees are required to readjust. If they fail to do so, the organisation becomes unbalanced and attains disequilibrium. This leads to

chaos in the system and the managers are faced with the daunting task of handling this unsavoury situation. The manager dons two roles in such situations- proactive

and reactive. He introduces changes- anticipates events, initiates change and takes control of the organisations destiny- a proactive role. Apart from this, he has to

restore and maintain the equilibrium that the change upsets. Here the manager assumes a reactive role wherein he responds to events, adapts to change and dealswith the consequences of change.

Change is of two types- minor and major. The daily changes are predictable and come under the minor category, where the employees need not make drastic

adjustments. The equilibrium, in such situations is reached readily. Major changes like hostile takeovers, buyouts and subsequent organisational restructuring,

reengineering, naturals disaster like oil spills and gas leaks, take a longer time to reach a new equilibrium. The onus is on the managers to guide the employees

through the emotional shock that usually accompanies such changes.

Responses to change

A fact evident in any organisation that brought in changes time and again is that there can never be a direct adjustment to change. It develops th rough each

employees attitude to respond to change and interpreted according to his or her attitudes. In other words, the way a person feels about change determines how he

responds to it. These feelings are again a result of personal history and work environment. Personal history includes biological processes, background and social

experiences away from home. Work environment reflects how a group reacts to codes, patterns and norms.


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Another kind of response that is also observed in matters of change is the group response. People belonging to a group show their attachment by joining in a

uniformed response to change. This response may sometimes result in walkouts, strikes and demands. Basically, they respond in a we are all in this together attitude.

The group also tries to maintain equilibrium in an attempt to return to its normal life. This results in a counter pressure within the group, which is a self-correcting

measure. Such self-correcting measures to restore balance whenever change comes in are called homeostasis.

Footnote

Changes come in with some costs, which are not just economic, but also are psychological and social.

Economic:Costs associated with change need to be analysed. The cost-benefit should be considerable and the benefits should always be greater than the costs.

Psychological:These costs are also referred to as psychic costs as change affects the inner self or psyche of the employee. Costs of this nature can be debilitating

as they may also affect the physical health of the employee.

Check your progress

3. Explain elements of change management

__________________________________________________________________________________________________________________________________________

3.6 Struggle for Change

People are often at the centre of change, an undeniable fact. Another fact to be comprehended is that they also resist change, especially in an organisation.

Resistance to work by an employee may manifest as discredit, delay or prevent the implementation of a work change. Employees feel the need to resist as they feel it

is a threat to their security, social interaction, status, competence or sometimes self-esteem.

However, resistance is a positive attribute. It provides stability and predictability to an organisations behaviour and if it were not for resistance, OB would assume a

confused uncertainty. It can also be a source of functional conflict. The negative side of the coin is that resistance hinders adaptation and progression. Resistance can

either be obvious, immediate, hidden or deferred. Of all these, hidden resistance is dangerous as it leads to loss of motivation and loyalty, increased errors and

absenteeism. Hidden resistance can surface after weeks, months or sometimes years later and th is is precisely why it could be dangerous. All the above-cited reasons

make one inquisitive as to the various aspects of resistance.

3.7 Various Aspects Of Resistance

Sources of resistance

There are two sources for resistance- individual and organisational. Each has its own reasons for resistance.

Individual resistance:This is within people and stem out from our perceptions, personalities and needs. There are five reasons for this kind of resistance:

Habit:Man is a creature of habit and to cope up with the various complexities, he relies on habit. Thus when confronted with change, he tends to resist it.

Security:People perceive change as a threat to their security.

Economic factors:Common assumption is that change may lower the pay cheques. A change in ones own routine task leads to fear of not being able to perform the

new task efficiently.

Uncertainty:Change substitutes unknown to known.

Selective perception:People hear what they want to hear and perceive what they want to. They ignore the information that challenges the world they have created.

Organisational resistance:All organisations actively resist change and the evidence is all around you. There are eight major sources of organisational resistance:

Structural inertia: There are in-built mechanisms of stability in every organisation. For example, the process of recruitment, wherein appl icants are hired and trained to

fit into the organisation is one such mechanism. When change sets in, namely outsourcing the hiring activity to a consultant it is this structural inertia that

counterbalances to sustain stability.

Limited focus of change:Change in one subsystem of an organisation affects other subsystems, too.

Group inertia:Even if individuals are ready to accept change, group norms prevent them from accepting it.

Threat to expertise:Organisations have specialised groups, which perform tasks with their expertise. Change is often perceived as threat to such expertise.

Threat to power:Change in the decision-making authority is a threat to long-established supervisors and middle managers.

Threat to resource allocations:There are groups in an organisation, which control resources. Change is perceived as a threat to such groups in the reallocation of

budgets.

Change politics:People rise to higher positions by developing skills and behavioural patterns favoured by the organisation. Change is a serious threat to their status

and position and to top it all, they are expected to implement it.

Indifference of senior management: Many senior managers give their verbal support to change, but lack in response when it comes to resources, time and personal

involvement.


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Who is responsible?

Change agents are primarily responsible for any change within the organisation. Can be managers or non-managers, employees or outside consultants. The most

favoured are outsiders who can challenge the organisation's conventional wisdom. Doubtless to say, outsiders offer objective perspective than the insiders, but are

handicapped with inadequate understanding of the organisation, its history, culture, operating procedures and personnel. Thus it is advisable also to have an internal

champion for the change program to succeed.

Traits of the change agent

Promote change actively and enthusiastically.

Build support for change within the organisation.

Overcome resistance.

Innovative.

Self-confident.

Persistent.

Energetic.

Willing to take a risk.

3.11 Affects of Change

It affects structure, technology, physical setting and people.

Structure

Changing conditions demand organisational structural changes and the change agent needs to comply with it. Structural changes involve making alterations in

authority relations, coordination mechanisms, job design or similar structu ral variables.

Organisational structure defined in terms of its degree of complexity, formalisation and centralisation is a prime target for change. For instance a horizontal organisation

may undergo a drastic change in order to become a flat organisation. Actual structural design can also be modified. Redesigning of jobs or schedules, job descriptions

redefined, jobs enriched or introduction of flexible work hours are all part of change options that an agent may consider.

Technology

Civilisation is in a constant flux as far as technology is concerned. Automation, computerisation and introduction of new equipment, tools or methods are the major

technological changes that mankind has experienced in the 20th century.

Automation is a technological change that replaces men with machines. Industries that are affected by automation in India are the automobile and textile areas. Maruti

Udyog and Hindustan Motors are examples in automobile industry where automation changed the face of the organisation. Likewise, Mafatlal and Arvind Mills, giants in

textile industries brought in sweeping changes through automation.

Computerisation, the most important technological change of this century, changed the face of every organisation. Supermarkets with computerised checkout

counters, Internet, the information provider with the click of a button, and the magic wand of computerisation touched many other fields.

Physical setting

Whatever changes happen to the physical setting, they do not have any impact on organisational or individual performance. Change in physical setting typifies

changes to the workspace layout, taking into consideration work demands, formal interaction requirements and social needs.

People

Change has the greatest impact on people. Change agents have the crucial responsibility of helping individuals and groups to work more effectively on the eve of

change. This involves changing the attitudes and behaviours of organisational members through processes of communication, decision-making and problem solving.

The critical question now is how does one go about implementing change in organisations and why at times change fails miserably.

3.12 Restructuring Organisations

Organisations today in the competitive world have no option but change. However, change should not be restricted to a unit or a functional group but must trickle down

from the CEO to the shop floor employee. New wave restructuring exemplifies a commitment to change.

Restructuring must be implemented after careful thought and consideration, since it affects communication, organisational structure as well as recruitment and

retention. Basic concepts underlying restructuring

Focus on tangible and significant change

Change is not merely day-to-day adjustments. It has a trickle down effect. At every level, employees must learn to adapt. Restructuring efforts must encompass

changes designed to help the organisation refocus, evolve and adapt. The senior management must be proactive and focus on tangible, significant change to

surmount both internal and external business challenges.

Establish a unifying theme

Every change initiated, must be integrated with the organisations goal. Employees must be able to visualise the end through the progressive series of integrated

changes. Internal and external efforts need to be harnessed effectively, to translate into smaller goals, wherein employees consider "what is in it for me ". The message

will be passed on effectively only if the communications channels are unclogged and grapevine used effectively

Actions to be taken

Communications must be detailed enough to give employees a clear understanding of their part in the larger framework of restructuring. Performances targets, tasks,

and expectations of employees and employers should be clearly defined. The success of any restructuring programme rests on involvement.


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Effective Execution

Implementation requires time and concerted effort across the organisation. Deadlines must be met while restructuring, and managers must be made accountable.

Effective execution communicates a sense of decisiveness and commitment. The restructuring is sustainable only if it enables changes in compensation, new skill

requirements, career path and expectations.

Organisations can effectively implement change by using New wave restructuring to retain their competitive edge.

Check your progress

7. What are the affects of change?

__________________________________________________________________________________________________________________________________________

3.13 Organisational Health

Organisational health is the latest buzzword in business circles. This involves corporate culture, commitment, ethics, employee morale and organisational stress. In

healthy organisations, managers find committed and loyal employees with high morale. In other words, healthy organisations are those, where people like to come to

work and are proud to be a part of.

Diagnosing ill health

A checklist of symptoms:

Declining profits and productivity

Increasing absenteeism

Decision-making by the top management

Disregard for organisational reputation and ethical behaviour

Low employee morale and motivation

Barriers to communication

Lack of commitment and trust among employees, goal setting, mentoring and development programmes

Assessing health

This assesses employee perceptions and includes critical examination of eleven organisational dimensions:

Communication: Adequate communication typifies a healthy organisation. Facilitating communication among co-workers and between managers and

subordinates is essential. The communication process needs to be friendly, two-way and across all levels of the organisation. Apart from written documents,

personal interactions need to be encouraged.

Participation and involvement: Employees at all levels should be involved in decision-making process. Employee ownership in decisions aids efficient

implementation of measures.

Commitment: Trust cultivates organisational health. A sense of pride among employees about the place of work results in commitment. This, in turn, leads to a

willingness to attend work-related meetings.

Morale: Employee morale is reflected in the friendly atmosphere where employees interact with each other, both professionally and personally. This gives them

enough motivation to perform their jobs enthusiastically.

Organisational reputation: Positive reputation of the organisation is a reflection of organisational health. Employee involvement in improving relationships with the

community is critical for such reputation.

Ethics: A positive ethical behaviour can be facilitated by an employee-developed code of ethics. This would create value to "character" and remove unwanted

"politics" from the organisation.

Performance recognition: When employees are encouraged and supported to attain their potential, they feel valued and appreciated.

Goal alignment: Departmental goals are usually achieved in a healthy organisation. Employees can identify the focus of their departments and set the goals

accordingly.

Leadership: Leaders have well perceived working relationships with people at the top, peers and subordinates. They are generally friendly and approachable and

contribute significantly to organisational health.

Development: Employee development is an essential component of organisational health. Formal development and training programmes are mandatory.

Accordingly, planning, execution and participation need to be facilitated.

Resource utilisation: Appropriate use of resources is a measure for organisational health. Employee perception about shared resources results in goal

achievement.

Managers well trained to assess employee perception should be able to identify the specific areas that require improvement for optimal organisational health. This

exercise enables employees to enjoy a healthy organisational environment and help the company to prosper.

Corporate Sickness

Anyone associated with a sick unit at some point of his career knows how it leads to frustration and a sense of helplessness.

The problem is compounded by the fact that the malady could not be diagnosed in time. To do this effectively, one must begin with the symptoms. Next, the causes

need to be identified and then a prescription recommended for putting the organisation back on its feet.

Doctoring a corporate sickness

The recovery process comprises a few steps:

1) Getting started

2) Assessing the extent of sickness

3) Choosing the right treatment and using it and

4) Periodic check-ups.


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Getting started:As doctors do, an organisation first recognises the problem or symptoms that led to the decline in productivity, quality or market share, drop or

disappearance of projects and increased absenteeism or turnover.

Once such serious problems are observed, one has to decide the course of action and resources required to fix the problem. Often, for a quick fix, an organisation

sends its members to attend seminars and host training programmes to address the problem. Nevertheless, since this doesn't address the root of the problem, the

problem continues to persist. This leads to indifference. After a while, employees start expecting nothing from the management and cynicism sets in.

For the best results, however, employees must implement recommendations made by the management or by outside resources. The external resource must

necessarily be neutral, knowledgeable in team assessment and capable of giving guidance.

Assess breadth of the problem and identify causes: Use surveys to determine the breadth and depth of your organisation's symptoms. The former can be divided into:

Symptoms within just a few groups: These causes concern the goals, roles and relationships within a team.

Intra and intra-group symptoms: Issues that cause negative effects between teams such as a disagreement over responsibilities, allocation of scarce resources and

power conflicts are the focus of attention here.

Pan-organisation symptoms: Such illnesses could be the result of organisational structure, compensation, management style, performance appraisal, and employee

selection process, authority or communication patterns, among others.

In fact, the more widespread the organisational sickness, the greater is the possibility of these being the causes.

Choose treatments and use them

Treating intra-group problems: If problems within a group exist, they can be treated by clarifying roles, setting goals, solving problems and training in small group

skills.

Treatments for inter-group problems:Peace can be restored within such groups by inter-group teambuilding, where members discuss their problems and arrive at a

solution; establishing cross-functional teams to deal with "bridge" issues that cut across organisational lines.

Treatments for changing organisation-wide, systems issues: These include changing the organisational structure to be more customer-based, changing market focus

and the organisation's strategic plan, among others.

Periodic evaluation

Organisational health must be aligned with established measures of success, and checkups ought be conducted periodically.

Change is an also an integral part of organisational growth and essential for its survival. The question here, however, is not whether to change but when and how it

can be brought in successfully. Ironically, man, whose second nature is adaptability resists changes in work environment and of course sometimes at home too. Thus

to manage and implement change fru itfully, is a crucial matter. Managers need to be equipped with their most logical arguments and persuasive skills to support it. To

be able to handle such situations, it is pertinent to know the nature of and responses to work changes.

Check your progress

8. Write a short note on Organisational Health

Self Assessment Questions

1. Define Goals for Change.

__________________________________________________________________________________________________________________________________________

2. Explain Corporate Sickness.

__________________________________________________________________________________________________________________________________________

3. Describe Restructuring Organisations

__________________________________________________________________________________________________________________________________________

4. How resistance is good for change?

__________________________________________________________________________________________________________________________________________

3.14 Summary

Change is of two types- minor and major. The daily changes are predictable and come under the minor category, where the employees need not make drastic

adjustments. The equilibrium, in such situations is reached readily. Major changes like hostile takeovers, buyouts and subsequent organisational restructuring,

reengineering, naturals disaster like oil spills and gas leaks, take a longer time to reach a new equilibrium. The onus is on the managers to guide the employees

through the emotional shock that usually accompanies such changes.


1. See Section 3.3

2. See Section 3.4

3. See Section 3.5

4. See Section 3.7

5. See Section 3.7

6. See Section 3.8


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7. See Section 3.9

8. See Section 3.12

Reference:



Organisational Behaviour: Concepts, Controversies and Applicationsby Stephen P. Robbins - 1997

Organisational behaviour: individuals, groups and organisationby Ian Brooks - 2006 - 336 pages Previous ed.: 2003.


27/34

Unit 4 Decision Making Process

Structure

4.1 Introduction: Decision-Making Process

4.2 Factors Affecting Decision Making

4.3 Group Decision Making

4.4 Decision-Making Models

4.5 Types of Decisions

4.6 Summary


______________________________________________________________


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4.1 Introduction: Decision-Making Process

Organisations, many a times have to make rational decisions unwillingly. The timing and aptness of these decisions determine the existence of the organisation. As

people differ from one another so do their decision-making skills and styles. The decision-maker's style and characteristics can be classified as:

The thinker, the cowboy (snap and uncompromising),

Machiavellian (ends justifying the means),

The historian (how others did it)

The cautious.

On a daily basis a manager makes many a decision. Some of these decisions are routine and inconsequential, while others have drastic impacts on the operations of

the organisation. Some of these decisions impact the financial condition of the organisation. In our increasingly complex world, the task of decision-makers is becomingmore challenging with each passing day.

Objectives


Define decision- making process

Explain group decision making

Describe rational decision making process

A decision-maker must respond quickly to events in this fast-paced economy. In addition, he must sometimes incorporate, a bewildering array of choices and

consequences into his decision. Routine decisions are often made quickly, perhaps unconsciously without a need for a detailed process of consideration. However, for

more complex and important managerial decisions, it is necessary to take time to decide systematically.

An effective model needs to be evolved by organisations to help managers make the right decision.

The decision-making process involves the following steps:

Define the problem.1.

Identify limiting factors.2.

Develop potential alternatives.3.

Analyze the alternatives.4.

Select the best alternative.5.

Implement the decision.6.

Establish a control and evaluation system.7.

1. Define the problem

The decision-making process begins when a manager identifies the real problem. The accurate definition of the problem affects all the steps that follow; if the problem

is inaccurately defined, every step in the decision-making process will be based on an incorrect starting point. One way that a manager can help determine the true

problem in a situation is by identifying the problem separately from its symptoms.

The most obviously troubling situations found in an organization can usually be identified as symptoms of underlying problems. (See Table 1 for some examples of

symptoms.) These symptoms all indicate that something is wrong with an organization, but they don't identify root causes. A successful manager doesn't just attack

symptoms; he works to uncover the factors that cause these symptoms.


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2. Identify limiting factors

All managers want to make the best decisions. To do so, managers need to have the ideal resources information, time, personnel, equipment, and supplies and

identify any limiting factors. Realistically, managers operate in an environment that normally doesn't provide ideal resources. For example, they may lack the proper

budget or may not have the most accurate information or any extra time. So, they must choose to satisficeto make the best decision possible with the information,

resources, and time available.

3. Develop potential alternatives

Successful problem solving requires thorough examination of the challenge, and a quick answer may not result in a permanent solution. Thus, a manager should think

through and investigate several alternative solutions to a single problem before making a quick decision.

One of the best known methods for developing alternatives is through brainstorming, where a g roup works together to generate ideas and alternative solutions. The

assumption behind brainstorming is that the group dynamic stimulates thinking one person's ideas, no matter how outrageous, can generate ideas from the others in

the group. Ideally, th is spawning of ideas is contagious, and before long, lots of suggestions and ideas flow. Brainstorming usually requires 30 minutes to an hour.

4. Analyze the alternatives

The purpose of this step is to decide the relative merits of each idea. Managers must identify the advantages and disadvantages of each alternative solution before

making a final decision.

Evaluating the alternatives can be done in numerous ways. Here are a few possibilities:

Determine the pros and cons of each alternative.

Perform a cost-benefit analysis for each alternative.

Weight each factor important in the decision, ranking each alternative relative to its ability to meet each factor, and then mul tiply by a probability factor to provide

a final value for each alternative.

Regardless of the method used, a manager needs to evaluate each alternative in terms of its

FeasibilityCan it be done?

EffectivenessHow well does it resolve the problem situation?

ConsequencesWhat will be its costs (financial and nonfinancial) to the organization?

5. Select the best alternative

After a manager has analyzed all the alternatives, she must decide on the best one. The best

Block 1 - Organisational Structure & Process.pdf

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