Organization Theory and Management

ASSIGNMENT A
Q1. What do you understand by administrative management theory? How is
it different from scientific management theory?
Answer: Administrative management theory attempts to find a rational way
to design an organization as a whole. The theory generally calls for
formalized administrative structure, a clear division of labor and delegation
of power and authority to administrators relevant to their areas of
responsibilities, on the other hand Scientific management theory is the
systematic study of the relationships between people and tasks for the
purpose o redesigning the work, it deals with analyzing and synthesizing
workflows, its main objective is improving economic efficiency especially
labor productivity.
Q2. Satisfying the claims of shareholders should be the paramount concern
of a company. Discuss the arguments for and against this statement.
Answer:
Interests of shareholders must be the paramount concern of the corporation,
an implication arising from the status of shareholders as being the 'owners'
of the corporation, the corporation being a legal entity comprised of shares
for which shareholders have a proprietary interest in. According to the
authors however, giving primacy to the interests of shareholders in the
context of corporate law and governance does not necessarily involve
undermining or ignoring the interests of other stakeholders such as creditors,
employees and other participants in society. Nor does it mean that the
corporation is simply a legal construct devoid of any social role or influence.
Rather, due to the enormous amount of economic activity for which
corporations are responsible and the vast number of people employed by, or
dependent on the financial success of corporations, the corporation must
inevitably be seen as a social institution. Further, as the authors will argue, if
we go back to basics and recognize that shareholders are individuals, and
each and every aspect of individual activity-including the purchase and
disposal of shares-is guided by the pursuit of personal
Happiness (either explicitly or implicitly), then corporations can give
primacy to the interests of shareholders, and still act in the best interests of
other stakeholders (such as employees, creditors and the community in
general).

Recent empirical studies show that there is (at best) a weak correlation
between personal happiness and levels of material wealth. Corporations can
still give primacy to the interests of shareholders whilst not having to
explicitly set out to maximize profits. Once we appreciate the simple yet
undisputable point that the corporation is just another form of human activity
carried out to assist in the fulfillment of personal happiness, complex
theories of the firm and books and articles pondering over how companies
can manage shareholder interests can be assigned to the dustbin of legal
history.

Q3.Discuss the factors that affect ethical and unethical behavior.

Answer: Individual factors; many individual factors affect a persons ethical
behavior at work, such as knowledge, values, personal goals, morals and
personality.
Values
Values are an individual's judgment or standard of behavior. They are
another individual factor that affects ethical behavior. To some
people, acting in an improper way is just a part of doing business.
Some people's standard of behavior will feel that lying for a business
financial win is not unethical.

Morals
Morals are another individual characteristic that can affect an
individual's ethics. Morals are the rules people develop as a result of
cultural norms and values and are, traditionally, what employees learn
from their childhood, culture, education, and or religion. They are
usually described as good or bad behavior.

Q4. On what grounds can you suggest that all business houses must assume
social responsibility?
An easy way for your company to build its brand, reputation and public
profile
Being socially responsible creates goodwill and a positive image for your
brand. Trust and a good reputation are some of your companys most
valuable assets. You can nurture these important assets by being socially
responsible. When socially responsible program is used properly, it will
open up a myriad of new relationships and opportunities. Not only will your
success grow, but so will your companys culture. It will become a culture
which you, your staff and the wider community genuinely believe in.
Corporate Social Responsibility attracts and retains staff
It is in us all to want to do good (and perhaps be recognized for it). Our
lives become meaningful when we realize our work has made a positive
difference in some way. It makes all our striving worth it. By attracting,
retaining and engaging staff, doing good for others reduces your
recruitment
costs
and
improves
work
productivity.
Customers are attracted to socially responsible companies
Branding business as socially responsible differentiates you from your
competitors. Developing innovative products that are environmentally or
socially responsible adds value and gives people a good reason to buy from
you.
Corporate
Social
Responsibility
attracts
investors
Investors and financiers are attracted to companies who are socially
responsible. These decision-makers know this reflects good management
and
a
positive
reputation.
Corporate Social Responsibility encourages professional (and personal)
growth
staff can develop their leadership and project management skills through a
well-designed corporate social responsibility program. This may be as
simple as team building exercises, encouraging employees to form
relationships with people they would not normally meet.

Corporate Social Responsibility helps to cut business costs

Environmental initiatives such as recycling and conserving energy increase
in-house efficiency and cut costs. Introducing a corporate social
responsibility program gives you a good reason to examine and improve on
spending.

Q5. What is power? Explain the various sources of power giving suitable
example.
Answer: Power refers to a capacity that A has to influence the behavior of B
so that B does something for her or she would not otherwise do.
Sources of Power:
Coercive Power
Coercive power is derived from a person's ability to influence others via
threats, punishments or sanctions. A junior staff member may work late to
meet a deadline to avoid disciplinary action from his boss. Coercive power
is, therefore, a person's ability to punish, fire or reprimand another
employee. Coercive power helps control the behavior of employees by
ensuring that they adhere to the organization's policies and norms.
Reward Power
Reward power arises from the ability of a person to influence the allocation
of incentives in an organization. In an organization, people who wield
reward power tend to influence the actions of other employees. Reward
power, if used well, greatly motivates employees. But if it's applied through
favoritism, reward power can greatly demoralize employees and diminish
their output.
Legitimate Power
It represents the power a person receives as a result of his or her position in
the formal hierarchy of an organization. An example of legitimate power is
that held by a company's CEO.

Expert Power
Expert power is derived from possessing knowledge or expertise in a
particular area. Such people are highly valued by organizations for their
problem solving skills. People who have expert power perform critical tasks
and are therefore deemed indispensable. Example, just as physicians have
expertise and hence expert power most of us follow the advice our doctor
gives us.
Referent Power
Referent power is derived from the interpersonal relationships that a person
cultivates with other people in the organization. For example if I admire and
identify with you, you can exercise power over me because I want to please
you for example celebrities and sports people.

ASSIGNMENT B

Q1. What is the relationship between Organisation Structure, Organisation

Design and Organisation Culture?
Answer: Organisation structure is the established pattern of relationships
among the components of the organization; it refers to the network of
relationships among individuals and positions in an organization.
Organisation design refers to the process of coordinating the structural
elements of the organizations in the most appropriate manner; organizational
culture is a system of shared meaning within an organization that determines
in large degree how employees act.

Q2.Compare and Contrast Maslows Need Hierarchy theory with that of

Herzbergs Two Factor theory.
Answer:
1. Meaning
Maslows based on the concept of human needs and their satisfaction.
Hertzbergs theory is based on the use of motivators which include
achievement, recognition and opportunity for growth.
2. Basis of Theory
Maslow's theory is based on the hierarchy of human needs. He identified
five sets of human needs (on priority basis) and their satisfaction in
motivating employees.
Hertzberg refers to hygiene factors and motivating factors in his theory.
Hygiene factors are dissatisfies while motivating factors motivate
subordinates. Hierarchical arrangement of needs is not given.
3. Nature of Theory
Maslow's theory is rather simple and descriptive. The theory is based long
experience about human needs.
Hertzberg's theory is more prescriptive. It suggests the motivating factors
which can be used effectively. This theory is based on actual information
collected by Hertzberg by interviewing 200 engineers and accountants.
4. Applicability of Theory
Maslow's theory is most popular and widely cited theory of motivation and
has wide applicability. It is mostly applicable to poor and developing
countries where money is still a big motivating factor.
Herzberg's theory is an extension of Maslow's theory of motivation. Its
applicability is narrow. It is applicable to rich and developed countries
where money is less important motivating factor.
5. Descriptive or Prescriptive

Maslow's theory or model is descriptive in nature.

Herzberg's theory or model is prescriptive in nature.

6. Motivators
According to Maslow's model, any need can act as motivator provided it is
not satisfied or relatively less satisfied.
In the dual factor model of Hertzberg, hygiene factors (lower level needs) do
not act as motivators. Only the higher order needs (achievement,
recognition, challenging work) act as motivators.

Q3.a) What is Human Resource Planning? Explain its Significance.

b) Explain in brief the sources of power?
Answer:
Human Resource planning is the process of anticipating and carrying out the
movement of people in to, within and out of the organization.
Significance of Human Resource planning
Reservoir of Talent. People with requisite skills are readily available
to carry out the assigned tasks.
Prepare People for Future. People can be trained, motivated and
developed in advance and this helps meeting future needs for highquality employees quite easily. Likewise, manpower shortages can
also be met comfortably through proper human resource planning.
Expand or Contract. If the organisation wants to expand its scale of
operations, it can go ahead easily. Advance planning ensures a
continuous supply of people with requisite skills who can handle
challenging jobs easily.
Cut Costs. Planning facilitates the preparation of an appropriate
manpower budget for each department or division, and helps in
controlling manpower costs by avoiding shortages/excesses in
manpower supply.

Succession Planning. Human Resource Planning as pointed out

previously prepares people for future challenges. The stars can be
picked up and kept ready for further promotions whenever they arise.

Sources of Power:
Coercive Power
Coercive power is derived from a person's ability to influence others via
threats, punishments or sanctions. A junior staff member may work late to
meet a deadline to avoid disciplinary action from his boss. Coercive power
is, therefore, a person's ability to punish, fire or reprimand another
employee. Coercive power helps control the behavior of employees by
ensuring that they adhere to the organization's policies and norms.
Reward Power
Reward power arises from the ability of a person to influence the allocation
of incentives in an organization. In an organization, people who wield
reward power tend to influence the actions of other employees. Reward
power, if used well, greatly motivates employees. But if it's applied through
favoritism, reward power can greatly demoralize employees and diminish
their output.
Legitimate Power
It represents the power a person receives as a result of his or her position in
the formal hierarchy of an organization.
Expert Power
Expert power is derived from possessing knowledge or expertise in a
particular area. Such people are highly valued by organizations for their
problem solving skills. People who have expert power perform critical tasks
and are therefore deemed indispensable
Referent Power
Referent power is derived from the interpersonal relationships that a person
cultivates with other people in the organization.

CASE STUDY
Mr. Sreenivas (55) working as manager in Alfa Chemicals, a large scale
industrial establishment engaged in the production of Phosphate and
Sulphur. He has 30 years of experience in Alfa Chemicals. He has an
excellent track record as Manager Human Resources within the
organization. Many times he got 'best employer award' to performance
excellence. His area of expertise in recruitment and selection process, and
performance appraisal has been widely acknowledged.
The Information Technology division of Alfa Chemicals industry once faced
acute shortage of manpower. Mr. Raj, Manager IT division put forward an
immediate requirement of 10 employees in the IT division, to HR
department, starting from junior level to senior level. As and when Mr.
Sreenivas got the letter from Mr. Raj, in his department, he started
processing of it. To get it done, he approached many sources. He had gone
through the data bank of company and considered 100 resumes for
recruitment from it. He also informed the employees and employers of the
organization, in their respective departmental notice board, showing the
immediate requirement of 10 employees to facilitate the internal recruitment
procedures. From the employees and employers of Alfa Chemicals he got
around 150 applications with resumes. In addition to that in order to give an
opportunity to candidates' external to the organization he floated an
advertisement in several daily news papers viz., Times of India, Sakal, and
Indian Express. From external sources he got around 350 applications.
Almost 600 candidates, including internal and external applicants, applied
for 10 vacant posts. To ensure the reliability and dependability of the
process, Sreenivas made his personal scrutiny at all levels, in the recruitment
and selection process. Since the entire department function as a team in HR,
all the members trust each other and extended their valuable contribution in
the recruitment and selection.
The department conducted a preliminary interview in order to made first
screening process and filter the number of applicants. After the first
screening process the HR department reduced the number of applicant list
from 600 to 500 applicants. He conducted a written test and group
discussion and there by further reduces the number of applicants to 300.
These 300 candidates then exposed to one hour psychometric test and out of
which 50 candidates selected for the final interview. From the final
interview, 10 candidates finally selected. The entire process of recruitment
and selection took almost 3 months. The selected candidates list then
forwarded to the top management for the final approval. HR department
informed the candidates that the appointment letters will be sent to those

who are selected for the post.

Sreenivas approached several time to the top management about to get final
approval of list of candidates for the IT department. Sreenivas informed the
IT department also that the delay in the final list announcement as the top
management take some more time. He waited almost 4 weeks. But, no reply
at all. Mr. Raj, the IT manager every day enquired about the latest
information about the final list of the candidates and tentative date of
induction. Sreenivas faced the difficulty to make any comment on the
subject as there was no information from the top management. HR
department had to answer many phone calls from out side and inside the
organization, as recruitment involved candidates from inside and outside.
The employers and employees of the industry, whose relatives got into the
final selection process, became regular visitors of the HR department, asking
for the finalist. Sreenivas called a meeting of HR team members and once
again made a close verification of the entire process. But he couldn't find
any fault in any of the recruitment and selection process. As the time went
on he became more suspicious about the delay in the announcement of the
result.
When the problem becomes so crucial Sreenivas got direction from the top
management to meet Mr. Kartik, General Manager, one of the top officials
in the organization. Mr.Kartik asked the entire process of recruitment and
selection that made on IT professionals. Sreenivas furnished the entire
details of the process in a precise report. Mr. Kartik read the entire report
and soon after made a direct comment that the recruitment and selection
process that for IT professionals need to be cancelled as he observed some
discrepancies in the process made by his department. He further directed
Sreenivas that the vacancies have to be filled through contract basis and no
permanent vacancies to be made in these positions, for one year. Further he
informed Sreenivas that another recruitment process to be done from
external candidates applied and no internal application to be entertained.
Sreenivas couldn't agree with the Mr. Kiran comment on his department's
inefficiency in the recruitment and selection process. For a while he thought
about quitting the organization, as he faced a baseless allegation from the top
management. Till date there is no black mark in his functional
dissemination. On many occasion he helped the industry to find out best
possible solutions in order to tackle the many manpower crisis. Sreenivas
became so depressed and felt quiet unhappy about the decision taken by the
management.
Mr. Sreenivas called an urgent meeting of his subordinates and
communicated the management decision and directives. He shared with the

team members that the management had greater dissatisfaction on the

recruitment and selection process done by the department. He enquired that
any one made any mistake in the process. All members denied the
probability of any mistake. As there were clear norms and regulations
related to each step and there was no dual command, they found no
possibility of creeping errors in the selection process. In the meeting he
informed his subordinates that the management freezes the appointment
process for IT professionals and asked for external recruitment on contract
basis. It was shocking news to members. They asked several questions to get
a proper clarification from Sreenivas. As Mr. Sreenivas himself unaware of
the reasons behind management decision, he informed his subordinate his
inability to give a proper reply in this regard. Sreenivas also informed this
matter to Mr. Raj.
During the evening hours, in the same day, Sreenivas got a call from Mr.
George, one of his senior-level Managers, with whom he had friendly and
informal relationship. Mr. George asked Srinivas to come to his cabin. As
per the call Mr. Sreenivas met George in his cabin. George enquired about
his family and many unofficial matters in the informal interaction. Half an
hour later, Mr. George enquired about the recruitment and selection process
of IT professionals. He shared with George all those things happened with
top management. Leaving aside the informal interaction, George initiated
formal discussion with Sreenivas. He told Sreenivas that the selected list of
IT professionals consisted two names, Mr. Avdesh and Mr. Praveen, they are
the relatives of two trade union leaders of the organization. The management
felt that being the relatives of two trade union leaders, in the long run, they
could be a threat to organization. It may create an image that the trade
unions still have a control over the decision making process in organization.
Further, the hold of trade union may expand if this selection process
materializes. Mr. Geroge informed Sreenivas that management didn't have
any doubt about the dependability and exactness of the recruitment
processes that HR departmentr did.
George further informed Sreenivas that as per the intimation from top
management he called Mr. Sreenivas and briefed about the undercurrents of
this episode. The entire news was shocking to Mr. Sreenivas. He didn't know
that the management decision had this much of undercurrents. After hearing
entire story Sreenivas become so silent and returned to his cabin.
While sitting inside his cabin, he made a silent comment that, "what a
useless effort.

Questions
1. What are the undercurrents of selection process in Alfa Chemicals?
Answer .The selected list of IT professionals consisted two names, Mr.
Avdesh and Mr. Praveen, they are the relatives of two trade union leaders of
the organization.
2. How management decision justifies management effort in the
maintenance of harmonious industrial relation?
Answer. The management freezes the appointment process for IT
professionals and asked for external recruitment on contract basis.
3. Do you believe that as HR Manager, Mr. Sreenivas failed to gather direct
and indirect information about the candidates?
Answer .Mr Sreenivas collected all information that was required.
4. How 'cancellation of appointment' decision that affect the moral of
organizational members?
Answer .Organizational members lost trust in the decision making of
management.
5. How you interpret the dilemma of HR managers have to face in such kind
of situations.
ANSWER

- HR Managers inability to comment because of no information from top

management.
- Difficulties in responding to the inquiries made about the selection from
prospective candidates.
- The HR Manager may have uncertainty over the selection process he
administered.
6. What would be your decision if you have to face such situation?
Answer. Follow management decision
7. Do you believe that trade unions have 'quota' in appointments?
Answer. No

8. How the decision affect the reduction of wastages and improvement of

resources.
ANSWER
- It increased the wastages and loss of resources because more money and
resources have been used in recruitment and selection process. Another
recruitment and selection would require more money, time and resources again.
This would lead to increased wastage and reduction in resources.

9. Is the decision reflecting management fear towards trade union or

inability to develop a congenial industrial relationship within the
organization?
Answer. Management decision reflects inability to develop a congenial
industrial relationship within the organization
10. How you interpret the silence of Mr. Sreenivas?
Answer. That he wasted his effort in the processes of selection while
management had other information they did not reveal.

ASSIGNMENT C
1B
11 B
21 A
2C
12 B
22 A
3B
13 C 23 A
4C
14 A 24 C
5A
15 B
25 B
6B
16 C 26 A
7C
17 C 27 B
8B
18 A 28 C
9B
19 C 29 C
10 B
20 A 30 A

31 C
32 B
33 B
34 B
35 C
36 A
37 B
38 A
39 A
40 C