1.1  Definition of terms used in Organization theory and Behaviour


Organization  comprise  of  two  or  more  people  engaged  in  a systematic  and harmonized    effort , persistently over  a period  of time  in pursuit  of goals.

Behavior is defined as what people do which can be observed or measured.

Organizational Behaviour 

Organizational behavior is    a    field    of    study    that    investigates the impact    that individuals, groups and structure have on behavior within   organizations   for   the purpose of    applying    such    knowledge towards    improving    an organization’s effectiveness.


1.2 Elements of Organisational Behaviour

  • People: People make up the internal and social system of the organisation. They consist of individuals and groups. The groups may be big or small; formal or informal; official or unofficial. Groups are dynamic and they work in the organisation to achieve their objectives.
  • Structure: Structure defines the formal relationships of the people in organisations. Different people in the organisation are performing different type of jobs and they need to be (elated in some structural way so that their work can be effectively co-ordinated.
  • Technology: Technology such as machines and work processes provide the resources with which people work and affects the tasks that they perform. The technology used has a significant influence on working relationships. It allows people to do more and work better but it also restricts’ people in various ways.
  • Environment: All organisations operate within an external environment. It is the part of a larger system that contains many other elements such as government, family and other organisations. All of these mutually influence each other in a complex system that creates a context for a group of people.

1.3  Importance of studying organizational behavior

The pace of change in organization is accelerating and transformation is occurring at various work places. Therefore is time for organization, to know   how to combat   change for the

prosperity of organizations. The following are trends that are currently in most organizations;

Trends in current organizations. The following are trends that are currently in most organization.

i. Globalization

Globalization   refers   to economic, social   and cultural connectivity with people   in other   parts   of   the   world. It’s an ongoing process which influences aspects of organizations which   some are advantageous and others are disadvantageous.

Globalization is applauded for increasing organizational  efficiency and providing    a broader  network  to    attract valuable  knowledge  and skills  while  it  also  presents new  challenges  like; competitive  pressures  , market  volatility , longer  working hours, heavier  workloads  and  work  – family  conflict  amongst others.

ii.   Information Technology

The internet and other forms of information technology are changing daily e.g.

  It is  connecting  people  around  the planet  and  allowing  small  businesses  in developing countries  to compete  in global  market place  within   organization.

  It has reshaped the dynamics of organization power and politics.

 It has created new standards for competitive advantage through knowledge management.

  It has brought about telecommunication where employees work from home with a computer connection  to the office

iii. The changing workforce.

Dimension of workforce involves primary and secondary diversity. Primary dimension involve; gender, ethnicity, age, race, sexual orientation, mental/physical qualities that represent    individual’s socialization  and  self  identity .Secondary dimension  involve education, marital status, religion  and  work place. Diversity of this workforce presents both challenges and opportunities in organizations. Opportunities   like ; competitive advantage , reverse of  market  share  among  others  .Challenges  involve    racism, stereotyping conflicts e.t.c

iv. Emerging  Employment  Relationships  The  changing  workforce,  new  information  &  communication  technology  and globalization have fueled substantial changes in employment relationships. Employees face increasing turbulence in their work/employment, where they  perform a variety of work   activities  rather than  hold  specific  jobs   and  are   expected  to continuously learn skills  that  will keep them employed  .This  brings  implications  on job design, organizational loyalty and work stress.

v.  Work Place  Values  And  Ethics  Values represent stable, long-lasting beliefs  about what  is  important  in a  variety  of situation that guide decisions  and action, while  ethics  is  the  study of   moral principles or values that determine whether actions are  right or wrong  and  outcomes are good and bad. Companies are learning   to apply values   in a global   environment and they   are under pressure to abide by ethical values  and  higher  standards  of cooperate  social responsibility.


1.5 Theories of Organisation behaviour


  • Maslow’s Hierarchy of Needs


Figure 3.1: Maslow’s Hierarchy of Needs

  • Needs were categorized as five levels of lower- to higher order needs.
  • Individuals must satisfy lower-order needs before they can satisfy higher order needs.
  • Satisfied needs will no longer motivate.
  • Motivating a person depends on knowing at what level that person is on the hierarchy.
  • Hierarchy of needs
  • Lower-order (external): physiological, safety
  • Higher-order (internal): social, esteem, self-actualization
  • The difference is that higher order needs are satisfied internally while lower-order needs are satisfied externally.
  • McGregor’s Theory X and Y

Douglas McGregor (1960) produced his analysis of the different views about people and how they should be motivated. Theory X is the traditional view that the average human dislikes work and wishes to avoid responsibility and that, therefore, ‘most people must be coerced, controlled, directed, threatened with punishment to get them to put forward adequate effort towards organizational objectives’. In contrast, theory Y emphasizes that people will exercise self-direction in the service of objectives to which they are committed and that commitment to objectives is a function of the rewards associated with their achievement.

  • Herzberg’s Two Factor Theory
  • Job satisfaction and job dissatisfaction are created by different factors.
  • Hygiene factors: extrinsic (environmental) factors that create job dissatisfaction.
  • Motivators: intrinsic (psychological) factors that create job satisfaction.
  • Attempted to explain why job satisfaction does not result in increased performance.
  • The opposite of satisfaction is not dissatisfaction, but rather no satisfaction.

Herzberg Two-Factor theory divides Maslow’s Hierarchy into a lower-level and a higher-level set of needs, and suggests that the best way to provide motivation for an employee is to offer to satisfy the person’s higher-order needs, ego and self-actualization. Herzberg said that lower-order needs, or hygiene factors, are different from higher-order needs, or motivators. He maintains that adding more hygiene factors to the job is a very bad way to motivate because lower-order needs are quickly satisfied.

  1. iv) Hawthorne Studies

Led by Elton Mayo (1939) with a research team from Harvard University who were interested in find out how changes in work environment impact productivity. Four major phases marked Hawthorne Studies;

  • The illumination studies: designed to determine the influence of lighting on worker productivity. No significant difference in productivity
  • The relay assembly test room studies: changes such as incentive plans, rest periods, temperature, humidity, work hours and refreshments. Productivity went up in wide variety of situations
  • The interview program: interviews were held with employees to learn more about the impact of working conditions on productivity. Workers were more interested in talking about their feelings and attitudes
  • The bank wiring room studies: workers were observed in a bank wiring room. It emerged that workers developed norms regarding ‘proper’ level of productivity and exerted pressure on each other to maintain that level.





2.1 Definition of Individual Behaviour

Individual Behaviour defines how individual behave at work and how his/her behavior is influence by others through: attitudes, perception, personality, stress, beliefs and norms or other psychological matters.

Individual behavior also refers to how individual behaves at work place, his behavior is influenced by his attitude, personality, perception, learning and motivating. This also refers to the combination of responses to internal and external stimuli.

2.2 It is  important  first  to  understand  what  makes  people  behave  in the  way by  looking  into  the following  determinants;   

  1. Personality Personality is  the  sum total  of  ways  in which  an  individual  reacts  to  and  interacts with others. Personality describes the growth  and  development  of  a  person’s  whole psychological system.

“Personality  is  defined  as  the   dynamic  organizations  within  the individual of  these psycho-physical  system  that  determine  his  unique  adjustment  to his  environment  “ by  Gordon  Allport.

Personality Determinants  

  1. Heredity

Heredity  refer  to those  factors  that  were  determined  at  conception  e.g.  physical structure   , facial   attractiveness   , gender   , temperaments   , muscles   composition & reflexes  , energy  level  and  biological  rhythms  are  characteristics  that  are  influenced by  biological  parents either  completely  or  substantially.

  1. Environment

Environmental factors play a role in shaping personalities .They include; the norms among family, friendship and social groups. These factors determine what individual experience in life.

  1. Situation

These    influences   the   effects   of   heredity   and   environment   on   personality   .An individual   personality   while   generally   stable   and   consistent, does   change   in different situation.

Different   demands   in different   situations   call   forth   different   aspects   of   one’s personality.

Major Personality Attributes Influencing Organization Behaviour

  1. Core self evaluation

These  is  the degree  to which  individuals  like  or  dislike  themselves  whether  they see  themselves  as  capable  and  effective  and  whether  they  feel   they are  in control of   their   environment   or   powerless    over   it .an individual core self evaluation is determined by:

  • Self esteem:- which is the individuals degree of liking or disliking themselves and the degree to which they feel worthy  or  unworthy as  a  person .
  • Locus  of  control :-  which is  the  degree to which  people  believe  that they  are  masters  of their  own  fate.
  • Internals:-Individuals who believe   that they control what happens to them.
  • Externals: -individuals who   believe   that what   happens   to them   is controlled  by  outside  factors  such as luck or chance.
  1. Machiavellianism

Machiavellianism (Mach) is named after Niccolo Machiavelli who wrote on how to gain and use power. Machiavellianism is the degree to which an individual is pragmatic, maintains emotional distance and believes that ends justifies means.

  1. Narcissm

Narcissm is the tendency to be arrogant, have a grandiose sense of self importance, require excessive admiration and have sense of entitlement. Narcissm’s are   not effective especially when dealing with people.

  1. Self monitoring

Self monitoring  refers to an  individual  ability  to   adjust  his/ her  behavior  to external or situational  factors. Individual’s  high  in self  monitoring  show  considerable adaptability  in  adjusting  their  behavior  to external situational  factors.

  1. Risk taking

People differ in their willingness to take chances. This  propensity  to assume  or  avoid risk  has  been  shown  to have  an impact  on how  long  it  takes  managers  to make  a decision  and  how  much  information they  require  before  making their choice. High risk  taking  managers   are  said  to make  more  rapid  decision  compared  to low  risk taking  managers

  1. Type A personality

A  person  with  type  A  personality  is  aggressively  involved  in a chronic, incessant struggle  to  achieve  more  and more  in less  and  less  time  and  if  necessary  against the opposing   efforts   of other   things   or   other   people. Type   A’s   operate   under moderate   to high   levels   of   stress. They   subject   themselves   to more   or   less continuous  time pressure  ,creating  for  themselves  a  life  of  deadlines.

  1. Proactive personality

These  are  people  who  identify  opportunities , show  initiative, take  caution  and persevere  until meaningful change  occurs. They  create  positive  change  in their environment, regardless  or  even  in spite  of  constraints or obstacles .

  1. Values

Values   represent  basic  convictions  that  “ a  specific  mode  of  conduct  or  end  state of  existence  is  personally or  socially  preferable  to an opposite  or  converse  mode  of conduct  or  end  state  of existence .

  • Values contain a judgmental element in that they carry an individual idea as to what is right, good or desirable.
  •  In  organization  behavior  values  are  important  study  because  they  lay on foundation  for  the  understanding  of  attitudes  , perceptions  and  motivation

Sources of value systems  

  • The  values   people  hold  are  essentially established   in their  early  years from parents  , teachers  , friends  and  relatives. However  as  one  grows  up, he gets  exposed  to other  value  systems  and  this  alters some  of  his  values.
  • Values can be  reactive, tribalism, egocentric , conformity, manipulative  Socio centric, existential.
  1. Job satisfaction

Job satisfaction  is  a  pleasurable  or  positive  emotional  state  resulting  from the appraisal  of  one’s  job  or  job  experience .

Source and Consequences   of Job Satisfaction

  1. Pay Wages  are  a  significant  factor  in job satisfaction  .Money  not  only  helps  people to attain  their  basic  needs,  but it  is  instrumental  in providing  upper  level  need satisfaction
  2. Work itself  The  content  of the  work  itself  is  another  major  source  of  satisfaction  .Work should be  challenging  not  boring  and  a  job  that  provides  status.
  3. Promotions Promotional    opportunities   seem to have   a   varying   effect   on job   satisfaction  .This  is  because  promotions  take  a  number  of  different  forms  and  have  a variety  of  accompanying rewards  .
  4. Supervision Supervision is  another  moderately  important  source  of  job satisfaction  .A participative  climate  created  by the  supervision  has  a more  substantial  effect  on workers satisfaction  than it does  in participation  a  specific  decision .
  5. Work group  The nature of work groups will have an effect on job satisfaction. Freindly  co- operative   co-workers   are   a   modest   source   of   job   satisfaction to individual employees.
  6. Working conditions  Working   conditions   are   another   factor   that   have   a   modest   effect   on job satisfaction  e.g.  clean and  attractive  surroundings  for  instance  will enable  the personnel  to find  its  easier  to  carry  out  their jobs.



Learning   is   a   process   in which experience   brings   about   permanent   changes   in behaviour  or  attitudes  .The study  of  learning  has  had  to  concentrate  on  observable changes.

Learning  is  a  process  by which  human  beings  becomes aware  of themselves   and their  environment  and the  need  to adopt  the one  to the  other  in order  to survive, grow  and prosper .

Learning  is  a  process  by which  people  acquire  knowledge  , understanding  skills and  values  and apply  them to solve  problems  throughout  their  daily  life.

Factors affecting learning

Human    learning  is a  complex  process  involving  numerous  internal  and  external factors  . Internal Factors

– Health

– Intellectual capacity

– Motivation

– Special aptitudes

– Temperament

– Personal values

– Past experiences

External factors

– Ability of teacher’s role

– Learning consent

– Teaching   methods

– Feedback of results

– Learning Aids

– Learning context

  1. Perception

Perception  is  a  process  by which  individuals  organize  and  interpret  their  sensory impressions  in order  to  give  meaning  to their  environment .





3.1 Definition of a Group

According to Marvin Shaw, “a group comprises, of two or more persons who interact with one another in such a manner that each person influences and is influenced by each other person’.

Group Behaviour

“Group behavior” refers to the ways people behave in large- or small-group situations.

3.2 Functions of groups in organizations 

i. Distribution and control  of work  

This is  bringing  together  and  controlling  teams  of peoples  with  certain  talents and  abilities.

ii. Delegation  of work  

Organization authority needs to be delegated to leaders of work groups.

iii. Spread  of information  Groups disseminate information better   than individuals.

iv.  Uniting   the organization in  pursuit  of its goals  Organization can use work groups as a means of gaining   the support   of workers for organizations   goals.

v.  Analyzing  and solving  problems  In order to solve problems    and make  policy,  the  organization  can use  high level work groups  made up  of people  with a wide  range   of  talents.

vi.  Conflict  and   resolution  The organization  cannot  resolve  conflicts   of its  employees at an individual  level, because   in large   organizations    there      may be   too many   conflicts    hence   its better done  in groups.

3.3 Types of Groups

In an organization, there are three types of groups, which are as follows:

Functional or formal groups

Functional groups are the groups formed by the organization to accomplish different organizational purposes. According to A L Stencombe, “a formal group is said to be any social arrangement in which the activities of some persons are planned by others to achieve a common purpose”. These groups are permanent in nature. They have to follow rules, regulations and policy of the organization. A formal organizational group includes departments such as the personnel department, the advertising department, the quality control department and the public relations department.

Task group

Tasks groups are the groups formed by an organization to accomplish a narrow range of purposes within a specified time. These groups are temporary in nature. They also develop a solution to a problem or complete its purpose. Informal committees, task forces and work teams are included in task groups. The organization after specifying a group membership, assigns a narrow set of purposes such as developing a new product, evaluating a proposed grievance procedure, etc.

Informal group

Informal groups are the groups formed for the purposes other than the organizational goals. Informal groups form when individuals are drawn together by friendship, by mutual interests or both. These groups are spontaneous. According to Keith David, “the network of persons and social relations which is not established or required form an informal organization”. These are the groups formed by the employees themselves at the workplace while working together. The organization does not take any active interest in their formation. Informal groups are of following types:

  • Interest group: Interest groups are the groups formed to attain a common purpose. Employees coming together for payment of bonus, increase in salary, medical benefit and other facilities are the examples of interest groups
  • Membership group: Membership groups are the groups of individuals’ belonging to the same profession and knowing each other. For example, teachers of the same faculty in a university.
  • Friendship group: Friendship groups are the groups of individuals belonging to same age group, having similar views, tastes and opinions. These groups can also be formed outside the plant or office and can be in the form of clubs and associations.
  • Reference group: Reference groups are the group where individuals shape their ideas, beliefs, values etc. They want support from the group.

3.4 Stages of Group Formation

New     groups   are  constantly  being  formed  in  all  walks  of life .These  may be  formal units,  committees    working    parties,  project         teams       e.t.c. To  deal    with  the  new development    or innovations or arising from   a reorganization  of existing    work  patterns. They may also be informal   group based around   new friendships and interest.

Stage 1 Forming  

The first   stage   of   group   development   is concerned   with    finding   out the   nature   of situation   with which   the group   is faced  and what   forms   of behavior   and  interaction are  appropriate.  Members  will      test  out  attitude      and  behavior      to  establish      their acceptability as ground     rules for accomplishing    the   task and   getting along with   other members.  Competing    powerful    personalities      can    lend    to      problems    in    early development  explorations  of  what  is  acceptable  within  the group.

Stage 2 Storming  

Leading    on from  the forming stage  in which   certain   ground rules   are explored  , it is likely  that  there will  be a stage   of  conflict  and disagreement   as   methods  of  operations and patterns of behavior start to be   firmed  up .This   where  different   opinions    and styles emerge with competing  sub-groups,  challenges   for leadership  , rebellions  against control and resistance  to the  demands  of meeting  task  requirements. A degree of compromise is necessary here in order to allow consensus to emerge.

Stage 3 Norming  

As  resistance   is overcome   and conflicts    patched   up, groups   move    into the norming stage   whereby   they   establish   norms of    attitudes   and behavior   which   the   mutually accepted  for the task performance  and  interaction .Individual members  begin  the  process of internalizing  those   norms  and  identifying  with  group  ,building  group  cohesion.

Members   roles   start   to be   clarified and   accepted    at this   stage   .The role    of leader should  be clearly  established. the  establishment   of  consensus  brings recognition   of the value  and different  potential  contributions   of individuals    and this results to cooperation and mutual  support from group  work.

Stage 4 Performing  

This is  the final  stage  in development   and it  represents   the  position  where  the group energy   is now  available  for  effective  work, completing   task  and maintaining the group. The   established  norms     now   support     the goals   of the   group   and roles   becomes functional ,thus  allowing  constructive  work  in  relation  to tasks .

3.5 Factors that determine the  behavior  of groups  and how successful  they  are  

  1. Size

The sizes of the group   will affect how the group works   together and tasks completed.

  1. Leadership /management style  

It  can affect  the performance  of the  group  -It involves  the organization  and directions’  of the group  to  achieve its goals .

iii.  Cohesiveness  

If the group is   not cohesive it will tend to be ineffective.

  1. Motivation of group  members  

The commitment  of members to the goals and tasks  of the group are  a key determinant of successful   performance.

  1. Norms of groups

This   includes belief   systems, attitudes and values of the group, that influence   behavior.

  1. Group /team roles  

Effective  groups  need  members  to carry  out  a variety  of   roles  in order  that goals   and tasks  of  group   many  be  achieved .

vii .The environment  

The   work environment   will have a direct bearing on the group and its performance.

viii. The group task

This  includes  the  task  that  groups  are  asked  to  complete  , how  important  they  are and  how  urgent  and  how the  results  help the  company  achieve  its objectives.



4.1Definition of Conflict Management

Conflict is defined as an interactive process manifested in incompatibility, disagreement, or dissonance within or between social entities (i.e., individual, group, organization, etc.).

Conflict can also be defined as the process in which one party perceives that its interests are being opposed or negatively affected by another party.

Conflict management does not necessarily imply avoidance, reduction, or termination of conflict. It involves designing effective strategies to minimize the dysfunctions of conflict and enhancing the constructive functions of conflict in order to enhance learning and effectiveness of an organization.

4.2 Types of Conflict

These four types of conflict may be described as follows:

  • Intrapersonal Conflict

This type of conflict is also known as intraindividual or intrapsychic conflict. It occurs when an organizational member is required to perform certain tasks and roles that do not match his or her expertise, interests, goals, and values.

  • Interpersonal Conflict

This is also known as dyadic conflict. It refers to conflict between two or more organizational members of the same or different hierarchical levels or units. The studies on superior–subordinate conflict relate to this type of conflict.

  • Intragroup Conflict

This is also known as intradepartmental conflict. It refers to conflict among members of a group or between two or more subgroups within a group in connection with its goals, tasks, procedures, and so on. Such a conflict may also occur as a result of incompatibilities or disagreements between some or all the members of a group and its leader(s).

  • Intergroup Conflict

This is also known as interdepartmental conflict. It refers to conflict between two or more units or groups within an organization. Conflicts between line and staff, production and marketing, and headquarters and field staffs are examples of this type of conflict. On special type of intergroup conflict is between labor and management.

4.3 Causes of Conflict in organisations

  • limited resources
  • Communication problems
  • Differences in interests and goals
  • Different perceptions, attitudes and lack of clarity about responsibilities
  • Task interdependence

4.4 Advantages and Disadvantages of Conflict

Conflict can have both positive and negative consequences. On the positive side, conflict can bring energy to a competition and focus participants on the task at hand. It can also increase group cohesion and stimulate open discussion of issues. On the negative side, conflict can cause participants to lose sight of common goals and focus on winning at all costs. In addition, it can lead to distorted judgments and a lack of cooperation. Finally, the losers in a conflict feel demoralized and lose motivation; this loser effect harms long-term relationships and overall organizational performance.

4.5 Methods of handling conflicts in an organisation

  • Clarification of goals and objectives: The clarification and continual refinement of goals and objectives, role definitions and performance standards will help to avoid misunderstandings and conflict. Focusing attention on super ordinate goals that are shared by the parties in conflict may help to defuse hostility and lead to more cooperative behaviour.
  • Resource distribution: Although it may not always be possible for managers to increase their allocated share of resources, they may be able to use imagination and initiative to help overcome conflict situations – for example, making a special case to higher management; greater flexibility to transfer funds between budget headings; delaying staff appointments in one area to provide more money for another area.
  • Human resource management policies and procedures: Careful and detailed attention to just and equitable HRM policies and procedures may help to reduce areas of conflict. Examples are: job analysis, recruitment and selection, job evaluation; systems of reward and punishment; appeals, grievance and disciplinary procedures; arbitration and mediation; recognition of trade unions and their officials.
  • Non-monetary rewards: Where financial resources are limited, it may be possible to pay greater attention to non-monetary rewards. Examples are: job design; more interesting, challenging or responsible work; increased delegation or empowerment; flexible working hours; attendance at courses or conferences; unofficial perks or more relaxed working conditions.
  • Development of interpersonal/group process skills: This may help to encourage a better understanding of one’s own behaviour, the other person’s point of view, communication processes and problem-solving. It may also encourage people to work through conflict situations in a constructive manner.
  • Group activities: Attention to the composition of groups and to factors which affect group cohesiveness may reduce dysfunctional conflict. Overlapping group membership with a ‘linking-pin’ process, and the careful selection of project teams or task forces for problems affecting more than one group, may also be beneficial.
  • Leadership and management: A more participative and supportive style of leadership and managerial behaviour is likely to assist in conflict management – for example, showing an attitude of respect and trust; encouraging personal self-development; creating a work environment in which staff can work co-operatively together. A participative approach to leadership and management may also help to create greater employee commitment.






5.1 Meaning of stress

Stress: A state of mental or emotional strain or tension resulting from adverse or demanding circumstances.

Employees stress: is a growing concern for organizations today. Stress can be defined as a lively circumstance in which people face constraints, opportunities, or loss of something they desire and for which the consequence is both unpredictable as well as crucial. Stress is the response of people to the unreasonable/excessive pressure or demands placed on them.

Stress is not always negative. It may also bring out the best in individuals at times. It may induce an individual to discover innovative and smarter way of doing things. This positive dimension of stress is called as enstress. But usually, the term stress has a negative implication and this negative aspect of stress is termed as distress. For instance – When a subordinate is harassed or warned by his superior, unhappiness of unsuitable job, etc. We can say that “Stress causes some people to break, and other to break records.”

5.2 Causes of work stress

The factors leading to stress among individual are called as stressors. Some of the factors/stressors acting on employees are-

  1. Organizational factors- With the growth in organizational stress and complexity, there is increase in organizational factors also which cause stress among employees. Some of such factors are-
    1. Discrimination in pay/salary structure
    2. Strict rules and regulations
    3. Ineffective communication
    4. Peer pressure
    5. Goals conflicts/goals ambiguity
    6. More of centralized and formal organization structure
    7. Less promotional opportunities
    8. Lack of employees participation in decision-making
    9. Excessive control over the employees by the managers
  2. Individual factors- There are various expectations which the family members, peer, superior and subordinates have from the employee. Failure to understand such expectations or to convey such expectations lead to role ambiguity/role conflict which in turn causes employee stress. Other individual factors causing stress among employees are inherent personality traits such as being impatient, aggressive, rigid, feeling time pressure always, etc. Similarly, the family issues, personal financial problems, sudden career changes all lead to stress.
  3. Job concerning factors- Certain factors related to job which cause stress among employees are as follows-
    1. Monotonous nature of job
    2. Unsafe and unhealthy working conditions
    3. Lack of confidentiality
    4. Crowding
  4. Extra-organizational factors- There are certain issues outside the organization which lead to stress among employees. In today’s modern and technology savvy world, stress has increased. Inflation, technological change, social responsibilities and rapid social changes are other extra-organizational factors causing stress.

5.3 Consequences of stress in an organisation

  • High absenteeism
  • High labour turnover
  • Poor time keeping
  • Poor performance and productivity
  • Low morale
  • Poor motivation
  • Increased employee complaints
  • Increased ill-health, accidents and incidents reports

5.4 Ways of managing stress in an organisation

Organizational strategies for managing stress

  1. Encouraging more of organizational communication with the employees so that there is no role ambiguity/conflict. Effective communication can also change employee views. Managers can use better signs and symbols which are not misinterpreted by the employees.
  2. Encourage employees’ participation in decision-making. This will reduce role stress.
  3. Grant the employees greater independence, meaningful and timely feedback, and greater responsibility.
  4. The organizational goals should be realistic, stimulating and particular. The employees must be given feedback on how well they are heading towards these goals.
  5. Encourage decentralization.
  6. Have a fair and just distribution of incentives and salary structure.
  7. Promote job rotation and job enrichment.
  8. Create a just and safe working environment.
  9. Have effective hiring and orientation procedure.
  10. Appreciate the employees on accomplishing and over-exceeding their targets.

Individual strategies for managing stress

  1. The employees should make a “to-do” list daily, prioritize the acts in the list and plan the acts accordingly. Take regular breaks during work to relax you. By effective time management, the employees can achieve their targets timely and can meet work pressures and, thus, avoid stress.
  2. Do hard work. Strive to achieve your goals but do not do it to the harm of family, health, or peer.
  3. Indulge in physical exercises. It helps in effective blood circulation, keeps you fit, diverts mind from work pressures.
  4. Encourage a healthy lifestyle. Take a regular sleep, have plenty of water, have healthy eating habits. Promote relaxation techniques such as yoga, listening music and meditation.
  5. The employees should have optimistic approach about their work. They should avoid connections with negative approach employees.
  6. The employees should have emotional intelligence at workplace. They should have self-awareness, self-confidence and self-control at workplace.
  7. The employees should build social support. They should have close connections with trustworthy peer who can listen to their problems and boost their confidence level. This social network will help the employees to overcome stress.
  8. Employee counselling is a very good strategy to overcome employee stress. Through counselling, employees can become aware of their strengths and how to develop those strengths; their weaknesses and how to eliminate them; and they can develop strategies for changing their behaviour. Employees are also given career counselling which helps in reducing their ambiguities with regard to career.
  9. Find a fun way to release stress, such as, cracking jokes, playing tennis, golf, etc.
  10. Do not remain pre-occupied with yourself. Turn your focus outwards. Help others. This will release some stress.





6.1 Definition of Change Management

Change simply refers to alteration in the existing conditions of an organization. One meaning of managing change refers to the making of changes in a planned and managed or systematic fashion. The aim is to more effectively implement new methods and systems in an ongoing organization. The changes to be managed lie within and are controlled by the organization.

6.2 Types of Change

There are seven types of change: incremental, transformational, strategic, organizational, systems and processes, cultural, and behavioural.

Incremental Change

Incremental change is gradual change. It takes place in small steps. At the strategic level James Quinn (1980) coined the phrase ‘logical incrementalism’ to describe how organizations develop their change strategies. He suggested that organizations go through an iterative process that leads to incremental commitments that enable the enterprise toexperiment with, and learn about, an otherwise unknowable future.

Transformational Change

Transformation, according to Webster’s Dictionary, is: ‘A change in the shape, structure, nature of something’. Transformational change is the process of ensuring that an organization can develop and implement major change programmes so that it responds strategically to new demands and continues to function effectively in the dynamic environment in which it operates. Organizational transformation may involve radical changes to the structure, culture and processes of the organization. This may be in response to competitive pressures, mergers, acquisitions, investments, disinvestments, changes in technology, product lines, markets, cost reduction exercises and decisions to downsize or outsource work. Transformational change may be forced on an organization by investors or government decisions. It may be initiated by a new chief executive and top management team with a remit to ‘turn round’ the business.

Strategic change

Strategic change is concerned with broad, long-term and organization-wide issues. It is about moving to a future state that has been defined generally in terms of strategic vision and scope. It will cover the purpose and mission of the organization, its corporate philosophy on such matters as growth, quality, innovation and values concerning people (employees and customers), and the technologies employed. This overall definition leads to specifications of competitive positioning and strategic goals for achieving competitive advantage and for product-market development. These goals are supported by policies concerning marketing, sales, customer service, product and process development, and human resource management.

Organizational change

Organizational change deals with how organizations are structured and, in broad terms, how they function. It involves identifying the need to reconsider the formal structure of organizations, which Child (1977) has defined as comprising ‘all the tangible and regularly occurring features which help to shape their members’ behaviour’. Organizational change programmesaddress issues of centralization and decentralization, how the overall management task should be divided into separate activities, how these activities should be allocated to different parts of the organization, and how they should be directed, controlled, coordinated and integrated.

Systems and Processes

Changes to systems and processes affect operations and impact on working arrangements and practices in the whole or part of an organization. They take place when operating methods are revised, new technology is introduced or existing technology is modified.

Cultural Change

Cultural change aims to change the existing culture of an organization. Organizational or corporate culture is the system of values (what is regarded as important in organizational and individual behaviour) and accepted ways of behaviour (norms) that strongly influence ‘the way things are done around here’. It is founded on well-established beliefs and assumptions.

Behavioural Change

Behavioural change involves taking steps to encourage people to be more effective by shaping or modifying the ways in which they carry out their work. Organizations depend on people behaving in ways that will contribute to high performance and support core values. They must recognize that people at work often have discretion on the way they do their work and the amount of effort, care, innovation and productive behaviour they display.

6.3 Change Process

The following are the three stages of change according to Lewin’s Change Model:


The focus of this stage is to make organization open to change. In doing so individuals are encouraged to replace old behaviors and attitudes with those desired by management. Managers also need to devise ways to reduce the barriers to change during this stage.


The focus of this stage is in providing employees with new information, new behavioral models, or new ways of looking at things. The purpose is to help employees learn new concepts to implement change. Role models, mentors, experts, benchmarking organization against world-class organizations and training are useful mechanisms to facilitate change.


Re -freezing

The focus of this stage is stabilizing the change during refreezing by helping employees integrate the changed behavior or attitude into their normal way of doing things. This is accomplished by first giving employees the chance to exhibit the new behaviors or attitudes. Once exhibited, positive reinforcement is used to reinforce the desired change. Additional coaching and modelling are also used at this point to reinforce the stability of the change.

6.4 External Factors that Trigger Change in an Organization

External forces for change originate outside an organization. There are four key external forces for change:

  • Demographic Characteristics: These include age, education, skill level and gender of employees. Organizations need to effectively manage these characteristics in order to receive maximum contribution and commitment from their employees.
  • Technological Advancements: Both manufacturing and service organizations are increasingly using technology as a means to improve productivity and market competitiveness.
  • Market Changes: The emergence of a global economy is forcing Indian organizations to change the way they do business. Organizations are entering into new partnerships with their suppliers in order to deliver higher quality products at lower prices.
  • Social and Political Pressures: These forces are created by social and political events. Personal values affect employee’s needs, priorities and motivation. Therefore, managers need to adjust their managerial style according to the changing employee values. Political events also create substantial change in an organization. Although it is difficult for organizations to predict changes in political forces, many organizations hire lobbyists and consultants to help them detect and respond to social and political changes.

6.5 Internal Factors that Trigger Change in an Organization

Internal forces for change come from inside the organization. This may come from both human resource problems and managerial behavior.

  • Human Resource Problems: These problems stem from employee perceptions about their work environment and conflict between an employee and organization needs. Organizations might respond to these problems by using the various approaches to job design by implementing realistic job previews and by reducing employees’ role conflict, stress, work overload and ambiguity.
  • Managerial Behavior: Excessive interpersonal conflict between managers and their subordinates is a sign of implementing an immediate change. Inappropriate leader behavior such as inadequate direction and support are the cause of conflict between managers and their subordinates.
  • Nature of Change: Organizations introduce changes through people. Unless the people are willing to accept the need and responsibility for organizational change, intended changes can never be translated into reality. In addition, individuals have to learn to adapt their attitudes and behavioral patterns to constantly changing environments.

6.6 Resistance to Change

Although organizations initiate changes in order to adjust to the changes in their environments but people sometimes resist them. Therefore, managers need to recognize the manifestations of resistance both in themselves and in others, if they want to be more effective in supporting change.

6.6.1 Individual Resistance

Some common reasons for individual resistance to change within organisations include the following:

  • Selective perception: People’s own interpretation of stimuli presents a unique picture or image of the ‘real’ world and can result in selective perception. This can lead to a biased view of a particular situation, which fits most comfortably into a person’s own perception of reality, and can cause resistance to change.
  • Habit: People tend to respond to situations in an established and accustomed manner. Habits may serve as a means of comfort and security, and as a guide for easy decision-making. Proposed changes to habits, especially if the habits are well established and require little effort, may well be resisted.
  • Inconvenience or loss of freedom: If the change is seen as likely to prove inconvenient, make life more difficult, reduce freedom of action or result in increased control, there will be resistance.
  • Economic implications: People are likely to resist change which is perceived as reducing either directly or indirectly their pay or other rewards, requiring an increase in work for the same level of pay or acting as a threat to their job security. People tend to have established patterns of working and a vested interest in maintaining the status quo.
  • Security in the past: There is a tendency for some people to find a sense of security in the past. In times of frustration or difficulty, or when faced with new or unfamiliar ideas or methods, people may reflect on the past. There is a wish to retain old and comfortable ways.
  • Fear of the unknown: Changes which confront people with the unknown tend to cause anxiety or fear. Many major changes in a work organisation present a degree of uncertainty. For instance a person may resist promotion because of uncertainty over changes in responsibilities or the increased social demands of the higher position.

6.6.2 Organisational Resistance

Some of the main reasons for organisational resistance against change are as follows:

  • Organisation culture: Recall that the culture of an organisation develops over time and may not be easy to change. The pervasive nature of culture in terms of ‘how things are done around here’ also has a significant effect on organisational processes and the behaviour of staff. An ineffective culture may result in a lack of flexibility for, or acceptance of, change.
  • Maintaining stability: Organisations, especially large-scale ones, pay much attention to maintaining stability and predictability. The need for formal organisation structure and the division of work, narrow definitions of assigned duties and responsibilities, established rules, procedures and methods of work, can result in resistance to change. The more mechanistic or bureaucratic the structure, the less likely it is that the organisation will be responsive to change.
  • Investment in resources: Change often requires large resources which may already be committed to investments in other areas or strategies. Assets such as buildings, technology, equipment and people cannot easily be altered.
  • Past contracts or agreements: Organisations enter into contracts or agreements with other parties, such as the government, other organisations, trade unions, suppliers and customers. These contracts and agreements can limit changes in behaviour – for example, organisations operating under a special licence or permit, or a fixed-price contract to supply goods/services to a government agency.
  • Threats to power or influence: Change may be seen as a threat to the power or influence of certain groups within the organisation, such as their control over decisions, resources or information. For example, managers may resist the introduction of quality circles or worker-directors because they see this as increasing the role and influence of non-managerial staff, and a threat to the power in their own positions.

6.7 Overcoming Resistance to Change

The following methods of overcoming-resistance to change are as follows:

  • Participation: Participation is generally considered the most effective technique for overcoming resistance to change. Employees who take part in planning and implementing change are better able to understand the reasons for the change than those who are not involved. They become committed to the change and make it work. Employees who have the opportunity to express their own ideas and to understand the perspectives of others are likely to accept change gracefully. It is a time consuming process.
  • Education and Communication: Educating employees about the need for and the expected results of an impending change help reduce their resistance. Managers should maintain an open channel of communication while planning and implementing change. However, it is also a time consuming process.
  • Facilitation of Change: Knowing ahead of lime that employees are likely to resist change then the manager should do as much as possible to help them cope with uncertainly and feeling of loss. Introducing change gradually, making only necessary changes, announcing changes in advance and allowing time for people to adjust to new ways of doing things can help reduce resistance.
  • Force-Field Analysis: In almost any situation where a change is being planned, there are forces acting for and against the change. In force-field analysis, the manager list each set of forces and then try to remove or minimize some of the forces acting against the change.
  • Negotiation: Where someone or some group will clearly lose out in a change and where that group has considerable power to resist, there negotiation is required. Sometimes it is a relatively easy way to avoid major resistance.
  1. vi) Manipulation and Cooperation: This is followed when other tactics will not work or are too expensive. It can be quick and inexpensive; however, it can lead to further problems if people feel manipulated.



7.1 Definition of Power

Power is easy to feel but difficult to define. It is the potential ability of a person or group to influence another person or group. It is the ability to get things done the way one wants them to be done. Both formal and informal groups and individuals may have power; it does not need an official position or the backing of an institution to have power.At a broad level, power can be interpreted in terms of control or influence over the behaviour of other people with or without their consent.

7.2 Sources of Power

  • Legitimate Power

A person’s position within organization provides him with legitimate power. The organization gives managers the power to direct the activities of their subordinates. Legitimate power is similar to formal authority and hence it can be created, granted, changed or withdrawn by the formal organization. The structure of the organization also identifies the strength of the legitimate authority by position location. For instance, higher-level positions exercise more power than lower-level positions in a classical hierarchical organizational structure. Organizations vary in how much legitimate power they grant to individuals. In such organizations, everyone knows who has the most power and few people challenge the power structure.


  • Reward Power

This type of power is the extent to which one person has control over rewards that are valued by another. The greater the perceived values of such rewards, the greater the power. Organizational rewards include pay, promotions and valued office assignments. A manager who has complete control over such rewards has a good deal of power. Manager who uses praise and recognition has also a good deal of power.

  • Coercive Power

People have coercive power if they have control over some form of punishment such as threat of dismissal, suspension, demotion or other method of embarrassment for the people. Perhaps, a manager can cause psychological harm also lo an employee. A manager‘s coercive power increases with the number and severity of the sanctions over which the manager has control. Although the use of coercive power is often successful in the short run, it tends to create resentment and hostility and therefore is usually detrimental to the organization in the long run.

  • Expert Power

It is more of personal power than organizational power. Expert power is that influence which one wields as a result of one’s experience, special skill or knowledge. This power occurs when the expert threatens to withhold his knowledge or skill. Since any person who is not easily replaceable has more power as compared to those who are easily replaceable. If the sub-ordinates view their superior as competent, and knowledgeable, naturally they will obey and respect the superior. To the extent, that a low-ranking worker has important knowledge not available to a superior, he is likely to have more power.

  • Referent Power

A person who is respected by certain others for whatever reason has referent power over those people. A person with referent power may have charisma and people who respect that person are likely to get emotionally involved with the respected person and identify with, accept and be willing to follow him or her. People with referent power are often imitated by others with the star’s actions, attitudes and dress. This imitation reflects the rising star’s power over the imitations.

7.3 Advantages and Disadvantages of Power

Power is necessary in an organization because it helps managers fulfill their leadership responsibilities; it also helps all employees influence others in pursuit of organizational and personal goals. Two key benefits are the ability to inspire commitment (as a reaction to expert or referent power) and the ability to reduce uncertainty for others in the organization. Empowerment leads to other benefits, such as support for creativity and reduction of bureaucratic obstacles. The main disadvantage is the potential for misuse and abuse, which can harm individuals and the organization.

7.4 Politics in Organizations

Organizational politics are activities that allow people in organizations to achieve goals without going through formal channels. Whether political activities help or hurt the organization depends on whether the person’s goals are consistent with the organization’s goals. In the rational model of organizations, people are assumed to manage logically, based on clear information and well-defined goals.

7.5 Factors Influencing Political Behavior

  • Ambiguous Goals

When the goals of a department or the entire organization are ambiguous then there is more room available for playing politics. Some people may use the ambiguity to manipulate the situation for their benefit.

  • Scarce Resources

When resources are scarce, people have the tendency to use political behavior to make sure that they get the biggest possible share of the resource.

  • Changes in Technology and Environment

Organizational effectiveness is largely a function of the organization‘s ability to appropriately respond to external environment which is highly dynamic and generally unpredictable as well as adequately adopt to complex technological developments. Thus, political behavior is increased when the internal technology is complex and when external environment is highly volatile.


  • Non-Programmed Decisions

Sometimes, the companies have to make a lot of non-Programmed decisions on certain issues. These decisions are not based on clear standards and precedents, because such issues involve many factors and variables that are complex in nature. Hence decisions are taken on intuition, bunch and guesses and all these subjective feelings can be affected by political behavior.

  • Organizational Change

Whenever there are changes in the organizational structure and policies, peoples in powerful positions have the opportunity to play politics. These changes may include restructuring of a division or creating a division, personnel changes, introducing a new product line and all these changes influence political behavior when various individuals and groups try to control the given situation.

7.6 Techniques of Political Behavior

  • Controlling information: One technique of political behavior is to control the dissemination of critical information to others. The more critical the information and fewer the people who have it, the stronger is political power base of those who possess these information.
  • Controlling lines of communication: Controlling lines of communication is another political technique related to the flow of information. People who have some control over lines of communication can yield considerable political power. For example, the secretary may have considerable power in deciding who sees the boss and who does not at a given time. She may use this power in favoring those whom she likes and frustrating those against whom she may have it grudge.
  • Controlling agenda: Controlling the agenda also gives a person power over information. The person who controls a meeting’s agenda, for instance, may consistently put a particular item last on the list and then take up time so that meeting adjourns before considering the item.
  • Using outside experts: The opinions of outside experts and consultants often curry much weight in organizations and many consultants can be swayed by political interests. Consultants know who is paying them and even honest consultants are likely to give opinions consistent with those of their employer. Hence, hiring an outside consultant can be a clever political move.
  • Image building: Image building is creating positive impression reflected by the personality, appearance and style. Some of the factors that enhance a preferred image consist of being well dressed, having a pleasant smile, being attractive, honest, sociable and loyal to the organizational interests. In addition, always project an image of competence and self-assurance.
  • Building coalitions: Building coalitions or alliance is another technique of gaining political power. It is necessary to have the alliance with the right people. Coalition building can become simply a matter of quid pro quo: I will support you if you will support me.




8.1: Meaning of organizational 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.

 8.2 Meaning of organizational goals

These are goals are the objectives, aims or purposes which are to be achieved by an organisation over varying periods of time. Goals are the result of planning which is related to future

Importance of these goals has been described under the following heads:

1. Focus Attention of Individuals and Groups to Specific Activities and Efforts of Organisations:

When organisation’s goals are known to individuals and group, it will help them in channelizing their activities towards attaining organisation’s goals. In other words the goals prescribe the course of action to individuals and groups which will be helpful and complementary to the achievement of organisation’s goals.

2. Provide a Source of Legitimacy to Action by Members:

Once this course of action has been decided for the individuals and the groups within the framework of organisational goal, it will promote legitimacy and justification to individual’s or group’s actions and decisions.

3. Serve as a Standard of Performance:

Goals provide a measure of individual’s or group’s performance. They may help the organisation members to evaluate the level of their performance in the perspective of organisation’s goals.

4. Affect the Structure of Organisation:

Goals and structure are intimately related to each other. The relationship among people in the form of authority and responsibility or the positions to be created at different levels has to be decided on the basis of organisational goals. In other words, what the organisation proposes to do will be determined by the organisational setup it will structure. Similarly, it will be the structure also which will influence the goals.

5. Provide Clues about the Nature and Character of Organisation:

The nature and character of an organisation may be known by its goals. For instance, the goal of maintaining the quality of product without much regard to return on investment may help the outsider to hold the organisation and its members in very high esteem.

8.3 Types of organizational goals

Strategic goals-Strategic goals are stated in general terms.They are developed in view of the mission of the organization.They outline overall organizations goals relating to different dimensions of their business like profit making,product development,resources allocation,human resource development,research priorities, and so on.These are therefore,organization set strategic goal.The board of directors and the top management of the organization set strategic goals.While setting such goals,they seek inputs from staff specialist and middle managers.Strategic goals,they seek inputs from staff specialists and middle managers.Strategic goals,thus,indicate the real in tensions of an organization.The executive management of an organization of an organization usually determines the strategic goals.These top leaders scan the external environment for opportunities or threats to the organization aim is to match internal strengths and weakness to changes in the external environment in order to create new opportunities.

Tactical or intermediate goals-Tactical or intermediate goals are set to translate the strategic goals into action. These goals involve the middle level managers. Compared with strategic goals, these goals have a some what shorter time span, and more specific and concrete focus .The focus of tactical goals is on how to open rationalize actions necessary to achieve the strategic goals.

Operational goals-Operational goals are set for lower-level management. The main concern here is with shorter term issues associated with intermediate or tactical goals. The supervisory level staff members are responsible for develop in and implementing operational goals that will meet the tactical goals. Activities and resources are assigned to individuals and groups to carry out some portion of the operational goals. The operational goals affect employees day to-day-activities.

Note: Setting such goals is done by following a popular technique called SMART, which implies:

  • Specific – a goal that is focused on the overall vision of your organization,
  • Measurable – that which can be quantified and checked for efficacy,
  • Achievable – a goal that is attainable,
  • Realistic – that which is feasible as well as viable,
  • Time Bound – a goal that has a specified time within which it should be achieved.


8.4 Process of measuring organizational performance

Planning is central to good program design and effective measurement. Program logic can be used to assist planning. This includes:

  1. defining or selecting outcomes
  2. defining impacts
  3. identifying outputs
  4. identifying resources.


Indicators must:

  • measure performance
  • refer to a result rather than being descriptive
  • be well-defined, relevant and informative
  • be within the control or influence of Directorates
  • be available, timely and cost-effective
  • be comparable with a benchmark or previous results over time.

Conduct program in line with program logic.

Monitor performance. Data considerations include:

  • gathering relevant data by set timeframes
  • ensuring the data is accurate, comprehensive and comparable.

Reporting must:

  • explain the difference between planned performance and actual performance
  • provide a picture of overall performance
  • provide an unbiased and complete picture
  • identify assumptions, gaps and variances
  • present information clearly and concisely
  • provide explanations of assumptions, gaps and variances.

Evaluate and modify. If performance measurement indicates that the program or strategy is not effective, evaluate the program or strategy and consider modifying it.




9.1 Definition of Organization Culture


Culture is shared meaning, understanding  and  sense making  .

The   shared   beliefs,   values   and   expectations   held   by   individual   also   constitute organization culture.


  Organization   culture   can   therefore   said   to be   the   essential   collection   of shared values   which   provide   both   explicit   and implicit   sign   post   to preferred  behavior  in the  organizations.

9.2 Importance of culture in an organisation

  1. It creates distinction between one organization and others.
  2. It conveys a sense of identity for organizations members.

iii. It  facilities  the  generation  of  commitment  to  something  larger  than one’s individual  interest.

  1. It enhances the stability of social system.

9.3 Characteristics of Organization Culture  

  1. Innovation and risk taking The degree to which  employees  are  encouraged  to be  innovative  and  take  risk.
  2. Attention to  detail The  degree  to which  employees  are  expected  to  exhibit  precision  ,analysis and  attention   to detail .

iii. Outcome  orientation  The degree  to which  management  focuses  on  result  or  outcomes  rather  than  on the techniques  and  processes  used  to achieve  those  outcomes.

  1. People orientation The  degree  to which  management  decisions  take  into  consideration  the effect  of outcomes  on  people  within  organization.
  2. Team orientation The degree to which work activities are organized around teams rather than individuals.
  3. Aggressiveness The degree to which people are aggressive and competitive rather than easy going

vii. Stability  The  degree  to which  organizational  activities  emphasize  maintaining  the  status  quo in contrast to growth.

viii. Norms  Standard to behavior   exist including guidelines on how much work to do .

  1. Dominant values These   are   those   values   that   the   organizations   advocates   and   expects  from the participants  in an  organization  e.g.  High quality, low absenteeism and high efficiency.
  2. Rules These are strict guidelines related to getting along in the organization.

9.4 Creating an Ethical Organization Culture

1. Be a visible role model

Employees  will  look  to top  management  behavior  as  bench  mark  for  defining appropriate  behavior.

2. Communicate   ethical expectations

Ethnical ambiguities can be minimized by   creating and disseminating an organizational code of ethics. It  should state  the  organization’s  primary  values  and  ethical  rules that  employees  are expected  to  follow.

3. Provide ethical training

Set up   seminars   ,workshops   and   ethical training   programs   .Use   the training sessions   to   reinforce   the   organization’s   primary   values, rules   and   standard   of conduct  .

4.  Visibility rewards to ethical acts and punish unethical ones

Performance  appraisals  of managers  should  include a  point  by point  evaluation  of how   his   or   her   decisions   measure   up   against   the organization   code   of   ethics .People who act ethically should be visibly rewarded for their behavior and unethical  acts  should be  punished .

5. Provide protective mechanisms

The  organization  needs  to provide  formal  mechanisms  so that  employees  can discuss ethical dilemmas  and  report  unethical  behaviour  without  fear  of   reprimand.

Creating a Culture

A  culture  is  created basically by  a  founder  or  top-level  manager  who  forms  a  core group  that  shares  a  common vision .

Stage I

i. Recruitment of like minded individuals  These people will be attracted instinctively to the founder’s visions and aims.

ii. The development  of groups  norms  These are likely to be strongly influenced by founders in the formative stages

iii.     Statement  of  espoused  values  The founders  or  initiators  will  have  the greatest  influence  on these  values  in the early stages  , subsequently, the   organizations  leadership  must  demonstrate  to other stakeholders  that  what  is saying  truly  believes  and not  accordingly .

iv. Production  of  mission  statement  These  provides  visible  evidence  of espoused  values  and  norms  and  the  platform for  the  organization’s  relationships  with  various  stakeholders.

Stage 2

These  comprise  of habit  and  tradition  building  activities,  aimed  at embedding  the culture  in the  day   to day  activities  of  the  organizations  by  means  of  procedural and  ritualistic  measures such as:

i. The  introduction  of appropriate  communication  systems  and  decision  making to assist  integration

ii. The   installation   of   organizational   procedures   and   rules   which   promotes integration  by setting  standards  for members  to follow.

iii.     Promotion  of  organization  symbols  Battle  flags  national  emblems  demonstrates  the  unity  of  the  organization which  come  to  embody  a  certain  reputation  e.g.  Red Cross.

iv. Development of key rituals, helps  to establish  the organizations  ethos’s  i.e.-  the part  of  culture  to do with  organization  climate. v. The  production  of  policy  statements  on the  key  issues  .These  lay  the  basis for  relations with  stakeholders.


9.4 Types of Organisational Culture

Handy describes four main types of organisational cultures: power culture; role culture; task culture; and person culture.

  • Power Culture

Power culture depends on a central power source with rays of influence from the central figure throughout the organisation. A power culture is frequently found in small entrepreneurial organisations and relies on trust, empathy and personal communications for its effectiveness. Control is exercised from the centre by the selection of key individuals. There are few rules and procedures, and little bureaucracy. It is a political organisation with decisions taken largely on the balance of influence.

  • Role Culture

Role culture is often stereotyped as a bureaucracy and works by logic and rationality. Role culture rests on the strength of strong organisational ‘pillars’ – the functions of specialists in, for example, finance, purchasing and production. The work of, and interaction between, the pillars is controlled by procedures and rules, and co-ordinated by the pediment of a small band of senior managers. Role or job description is often more important than the individual and position power is the main source of power.

  • Task Culture

Task culture is job-oriented or project-oriented. In terms of structure the task culture can be likened to a net, some strands of which are stronger than others, and with much of the power and influence at the interstices. An example is the matrix organisation. Task culture seeks to bring together the right resources and people, and utilises the unifying power of the group. Influence is widely spread and based more on expert power than on position or personal power.


  • Person Culture

Person culture is where the individual is the central focus and any structure exists to serve the individuals within it. When a group of people decide that it is in their own interests to band together to do their own thing and share office space, equipment or clerical assistance then the resulting organisation would have a person culture. Examples are groups of barristers, architects, doctors or consultants. Although it is found in only a few organisations many individuals have a preference for person culture, for example university professors and specialists. Management hierarchies and control mechanisms are possible only by mutual consent. Individuals have almost complete autonomy and any influence over them is likely to be on the basis of personal power.

9.5 The Components of Culture

  • Values

Values are beliefs in what is best or good for the organization and what should or ought to happen. The ‘value set’ of an organization may only be recognized at top level, or it may be shared throughout the business, in which case it could be described as ‘value-driven’.

The stronger the values the more they will influence behaviour. This does not depend upon their having been articulated. Implicit values that are deeply embedded in the culture of an organization and are reinforced by the behaviour of management can be highly influential, while espoused values that are idealistic and are not reflected in managerial behaviour may have little or no effect. When values are acted on they are called ‘values in use’. Some of the most typical areas in which values can be expressed, implicitly or explicitly, are: performance; competence; competitiveness; innovation; quality; customer service; teamwork; care and consideration for people.

Values are translated into reality (enacted) through norms and artefacts. They may also be expressed through the media of language (organizational jargon), rituals, stories and myths.

  • Norms

Norms are the unwritten rules of behaviour, the ‘rules of the game’ that provide informalguidelines on how to behave. Norms tell people what they are supposed to be doing, saying,believing, and even wearing. They are never expressed in writing if they were, they would be policies or procedures. They are passed on by word of mouth or behaviour and can be enforced by the reactions of people if they are violated. They can exert very powerful pressure on behaviour because of these reactions; we control others by the way we react to them.

Norms refer to such aspects of behaviour as:

  • how managers treat the members of their teams (management style) and how the latter relate to their managers;
  • the prevailing work ethic, eg ‘work hard, play hard’, ‘come in early, stay late’, ‘if you cannot finish your work during business hours you are obviously inefficient’, ‘look busy at all times’, ‘look relaxed at all times’;
  • Status; how much importance is attached to it; the existence or lack of obvious status symbols.
  • Artefacts

Artefacts are the visible and tangible aspects of an organization that people hear, see or feel and which contributes to their understanding of the organization’s culture. Artefacts can include such things as the working environment, the tone and language used in e-mails, letters or memoranda, the manner in which people address each other at meetings, in e-mails or over the telephone, the welcome (or lack of welcome) given to visitors and the way in which telephonists deal with outside calls. Artefacts can be very revealing.

  • Management Style

Management style is the approach managers use to deal with people. It is also called ‘leadership style. There are many styles of leadership, and leaders can be classified in extremes as follows: Autocratic, Democratic, Laissez-faire, Bureaucratic, and Expert Leadership.

Most managers adopt an approach somewhere between the extremes. Some will vary it according to the situation or their feelings at the time, others will stick to the same style whatever happens. A good case can be made for using an appropriate style according to the situation, but it is undesirable to be inconsistent in the style used in similar situations. Every manager has his or her own style but this will be influenced by the organizational culture, which may produce a prevailing management style that represents the behavioural norm for managers that is generally expected and adopted.

9.6 Influences on the Development of Culture

The culture and structure of an organisation develop over time and in response to a complex set of factors. We can, however, identify a number of key influences that are likely to play an important role in the development of any corporate culture. These include: history; primary function and technology; goals and objectives; size; location; management and staffing; and the environment.

  • History: The reason, and manner in which, the organisation was originally formed, its age, and the philosophy and values of its owners and first senior managers will affect culture. A key event in the organisation’s history such as a merger or major reorganisation, or a new generation of top management, may bring about a change in culture. Corporate history can be an effective induction tool to assist a growth programme, and to help integrate acquisitions and new employees by infusion with the organisation’s culture and identity.
  • Primary function and technology: The nature of the organisation’s ‘business’ and its primary function have an important influence on its culture. This includes the range and quality of products and services provided the importance of reputation and the type of customers. The primary function of the organisation will determine the nature of the technological processes and methods of undertaking work, which in turn also affect structure and culture.
  • Goals and objectives: Although a business organisation may pursue profitability, this is not by itself very clear or a sufficient criterion for its effective management. For example, to what extent is emphasis placed on long-term survival or growth and development? How much attention is given to avoiding risks and uncertainties? Or how much concern is shown for broader social responsibilities? The organisation must give attention to objectives in all key areas of its operations. The combination of objectives and resultant strategies will influence culture, and may itself be influenced by changes in culture.
  • Size: Usually larger organisations have more formalized structures and cultures. Increased size is likely to result in separate departments and possibly split-site operations. This may cause difficulties in communication and inter-departmental rivalries with the need for effective co-ordination. A rapid expansion, or decline, in size and rate of growth, and resultant changes in staffing will influence structure and culture.
  • Location: Geographical location and the physical characteristics can have a major influence on culture – for example, whether an organisation is located in a quiet rural location or a busy city centre. This can influence the types of customers and the staff employed. It can also affect the nature of services provided, the sense of ‘boundary’ and distinctive identity, and opportunities for development.
  • Management and staffing: Top executives can have considerable influence on the nature of corporate culture.However, all members of staff help to shape the dominant culture of an organisation, irrespective of what senior management feel it should be. Culture is also determined by the nature of staff employed and the extent to which they accept management philosophy and policies or pay only ‘lip service’. Another important influence is the match between corporate culture and employees’ perception of the psychological contract.
  • The environment: In order to be effective, the organisation must be responsive to external environmental influences. For example, if the organisation operates within a dynamic environment it requires a structure and culture that are sensitive and readily adaptable to change. An organic structure is more likely to respond effectively to new opportunities and challenges, and risks and limitations presented by the external environment.


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