Organisational and

UNIT 9 ORGANISATIONAL CULTURE AND Managerial Ethics

MANAGERIAL ETHOS
Objectives
After studying this Unit, you should be able to:
Understand the nature of the concepts of organisational culture and
organisational climate
Identify some of the factors that contribute to the uniqueness of each
organization
Appreciate the values and the characteristics of managerial ethos
Describe the process through which traditions and customs are maintained in
any organisation
Structure
9.1 Culture or Climate
9.2 Perceived Characteristics of Culture and Climate
9.3 The Dimensions of OC
9.4 Determinants of OC
9.5 Managerial Values and Ethos
9.6 Managerial Ethos: Its Characteristics
9.7 How Culture and Ethos are Maintained
9.8 Summary
9.9 Self-assessment Test
9.10 Key Words
9.11 Further Readings
9.1 CULTURE OR CLIMATE
Every organisation has some characteristics which are common with any other
organisation. At the same time, each organisation has its unique set of
characteristics and properties. This psychological structure of organisation and
their sub-units is usually referred to as Organisational Culture.
For a layman, culture is a commonly experienced phenomenon and many words like,
climate, atmosphere, environment and milieu are often used interchangeably to
describe it. In fact, most of the studies which have tried to measure an organisation's
"Culture" have operationalised it in terms of "Organisation Climate". A couple of
formal definitions of organisation climate are given below for your perusal:
Organisational climate is a relatively enduring quality of the internal environment
that is experienced by the members, influences their behaviour, and can be described
in terms of values of a particular set of characteristics of the organisation (Renato
Tagiuri, 1968).
Organisational climate is the set of characteristics that describe an organisation and
that (a) distinguish one organisation from other organisations; (b) are relatively
enduring over time and (c) influence the behaviour of the people in the organisation
(Forehand & Gilmer, 1964).
Compare these two definitions of "Organisational Climate" with a definition of
"Organisational Culture" as given by Stephen P. Robbins (1986): Organisational
Culture is a relatively uniform perception held of the organisation, it has common
characteristics, it is descriptive, it can distinguish one organisation from another and
it integrates individual, group and organisation system variables.
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Organisational
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9.2 PERCEIVED CHARACTERISTICS OF CULTURE
AND CLIMATE
If you examine closely these sample definitions, you will not only be able to identify
the commonalities but also be able to see that the abstract concept of culture and
operational concept of climate basically refer to the perceived personality of an
organisation in very much the same sense as individuals have personality. Just as you
have a personality -a set of relatively stable traits-so does an organisation. Just as any
culture has some do's and don'ts in the form of totems and taboos which dictate how
each member should behave with a fellow member or an outsider, similarly each
organisation has a culture that influences the behavior of employees towards clients,
competitors, colleagues, supervisors, subordinates and strangers. In this Unit, we
shall be concerned with this relatively stable perceived internal environment of an
organisation, called Organisational Climate or Organisational Culture (OC).
It should be noted that Organisational Culture or Organisational Climate (OC) is the
perceived aspects of an organisation's internal environment, but within the same
organisation there may be very different OCs. This might happen because people
with different length of experience or at different levels of organisation's hierarchy,
may perceive internal environment of an organisation differently. Personal
characteristics such as Values, Needs, Attitudes and Expectations determine the
manner in which an individual is likely to perceive the various aspects of the internal
working environment of the organisation.
Activity A
Based on this-discussion about the concept of Organisational Culture or
Organisational Climate (OC), complete the following sentences:
A The unique set of characteristics which is perceived as internal environment
of an organisation is usually fairly over time.
B OC refers to the perceived. environment of an
organisation.
C Though OC tends to be a shared perception, within the same organisation,
there may beOCs depending upon the
characteristics of the group of persons who perceive it.
D OC influences the.of people in an organisation.
E The concept of organisation culture or organisation climate (OC) allows us to
.one organisation from other organisations.
Answers: A. Stable, B. Internal, C. Different, D. Behaviour, E. Distinguish.
Activity B
Step 1 Think of an organisation of which you are a member and are familiar with its
internal environment. Use five adjectives and adverbs which describe a set of
characteristics of that environment.
Name of the Organisation ...
Its internal environment is ...
.........................................
.....................................................................
.........................................
.....................................................................
.........................................
6 .....................................................................
.........................................
Step 2 Do you find each of these characteristics relatively enduring and stable? Organisational and
Managerial Ethics
Yes [ ] No [ ]
If you have ticked 'NO', try to replace them with more enduring characteristics.
Step 3 Give an example showing how any one of those enduring characteristics of
that organisation has influenced your behaviour towards others.
.........................................
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Step 4 Do you feel that other members of the organisation may not share your
perception and agree with you about any particular quality that you have mentioned
in Step 1.
Yes [ ] No [ ]
If you have tick marked `YES', can you replace that quality of the organisation with
any other enduring characteristic about which other members of the organisation are
also likely to agree?
Step 5 Think of any other organisation with which you are fairly familiar. Do you
feel that the set of characteristics mentioned by you in Step 1 distinguishes your
organisation from the other?
Yes [ ] No [ ]
If you have tick marked 'NO', go back to Step 1 to revise the set of characteristics
which you perceive as typical and fairly stable of your organisation and with which
you are able to distinguish your organisation from other organisation(s).

9.2 DIMENSIONS OF OC
You have seen that OC refers to a set of some commonly experienced stable
characteristics of an organisation which constitutes the uniqueness of that
organisation and differentiates it from others. You might have faced some difficulty
in identifying this set of characteristics because you do not yet know the various
dimensions or factors of OC in which you should look for these characteristics. In the
last two decades, extensive studies have been conducted which have helped us to
identify some key factors of OC. Some of these common dimensions are described
below:
Individual Autonomy: This refers to the individual's freedom to exercise his or her
responsibility. In other words, individual autonomy is the degree to which employees
are free to manage themselves; to have considerable decision making power; and not
to be continually accountable to higher management.
Position Structure: This refers to the extent of direct supervision, formalisation and
centralisation in an organisation. In other words, position structure is the degree to
which objectives of the job and methods for accomplishing it are established and
communicated to the individual by supervisors.
Reward Orientation: This refers to the degree to which an organisation rewards
individuals for hard work or achievement. An organisation which orients people to
perform better and rewards them for doing so, will have an OC characterised by high
ward orientation. 7
Organisational Consideration, Warmth and Support: This refers to the extent of stimulation and
Climate and Change support received by an individual from other organisation members. In other words,
if there is a sense of team spirit among the members of an organisation, the OC is
likely to be perceived as considerate, warm and supportive.
Conflict: This refers to the extent of conflict present between individuals and the
willingness to be honest and open about interpersonal differences.
Progressiveness and Development: This aspect refers to the degree to which
organisation conditions foster the development of the employees, allow scope for
growth and application of new ideas and methods.
Risk Taking: The degree to which an individual feels free to try out new ideas and
otherwise take risks without fears of reprisal, ridicule or other form of punishment,
indicate the risk-taking dimension of OC. This dimension is akin to "cautious" versus
"venturesome" quality of an organisation.
Control: This dimension refers to the degree to which control over the behaviour of
organisational members is formalised. In a highly bureaucratic organisation, control
systems are well defined. In a low-control organisation, most of the controls are self-
regulated, i.e., individuals monitor their own behaviour. You can think of this
dimension as "tightness" versus "looseness" of an organisation.
These eight dimensions account for most of the research findings, but they do not
account for all that we intuitively feel to be present in the "Climate" or "Culture" of an
organisation. For example, you may perceive an organisation culture to be
"paternalistic", or a climate to be "impersonal". Though the fourth OC dimension
(consideration, warmth and support) may cover both these different qualities, yet the
"richness" that you find in the two qualities is not fully reflected in that dimension.
However, the identification of these eight dimensions (which are not absolutely
independent of each other) do help us in mapping and measuring OC.
Before we move on to the next topic on Determinants of OC take the following pair
matching test to check whether you have understood the focus of each dimension.
Activity C
Given below are two columns. The left column lists the dimensions of OC, the right
column lists their major focus. Match each dimension with its corresponding focus.
Dimensions Focus
1 Individual Autonomy A the extent of direct
supervision and formalisation.
2 Position Structure B the extent of socio-emotional
support provided by others.
3 Reward Orientation C the extent of freedom to
experiment with new ideas.
4 Consideration D the scope of growth of self,
other members and
organisation as a whole.
5 Conflict E the degree of check imposed
on behaviour of organisational
members.
6 Progressiveness & Development F the degree of freedom from
accountability to others.
7 Risk-taking G the extent of expression of
differences and blocking of
each other.
8 Control H the extent of incentives
provided for higher effort and
performance.
Answers: 1F, 2A, 3H, 4B, 5G, 6D, 7C, 8E
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 Organisational and
9.4 DETERMINANTS OF OC Managerial Ethics
At the very onset of this topic, it is useful to distinguish between determinants and
dimensions of OC. Determinants are the causes, while dimensions are the
components of OC. You may say, determinants are those which influence whereas
dimensions are those which are influenced.
Although OC refers to the internal environment of an organisation, the nature of OC
is determined by a variety of internal and external factors. One of the basic premises
of organisational behaviour is that outside environmental forces influence events
within organisations. After acknowledging the dynamics of internal as well as
external factors in this section, we will consider in greater detail the following seven
internal factors. You will find these factors as determinants of OC in the following
order:
1 Economic Condition
2 Leadership Style
3 Organisational Policies
4 Managerial Values
5 Organisational Structure
6 Characteristics of Members
7 Organisational Size
Economic Conditions
Several dimensions of OC are influenced by an organisation's position on the
economic cycle. The economic condition of any organisation influences whether its
budget should be "tight" or "loose". In times of prosperity-when budgets are more
loose than tight-the organisation tends to be more adventuresome. On the other hand,
tight budget would lead to an air of caution and conservatism within an organisation.
Few managers are willing to suggest new programmes (probably deserving merit)
when the order from above is to exercise tight control over expenses. So, dimensions
of OC like "Risk-taking", "Control", "Progressiveness and Development" etc. are
directly influenced by economic conditions.
Leadership Style
The leadership style prevailing in an organisation has a profound influence in
determining several dimensions of OC. The influence is so pervasive that you may
often wonder whether OC is a product of the philosophy and practices of prominent
persons in an organisation.
Consider, for example, the results of an experimental study where three organisations
were "created" by simulation. All these three Organisations-A, B and C-were
identical in terms of nature of business, size of the organisation, characteristics of
employees, and initial economic condition. The major difference among these three
organisations was the "leadership style". Organisation A was characterised by
authoritarian style with high power motivation. Organisation 13 was characterised by
democratic style with affiliation motivation. Organisation C was characterised by
goal directed style with achievement motivation. The meaning of - these different
leadership styles and their effects on different dimensions of OC can be seen in Table
1. You will notice that one type of leadership style can
influence more dimensions of OC than another style.
Table-1
Leadership Style of three Simulated Business Firms and their effects on Dimensions of OC

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Organisational
Climate and Change

Organisational Policies
Specific organisational policies can influence a specific dimension of OC to quite an
extent. For example, if the company policy states that layoffs will be used only as a
last resort to cope with business downturn, then it would, in general, foster an internal
environment that is supportive and humanistic.
Similarly if you are working in a company where it is agreed that the first
beneficiaries.; of increased profit would be the employees of that organisation and
shareholders would get second priority, then the OC will be characterised by High
Reward Orientation and probably by High Progressiveness and Development.
Managerial Values
The values held by executives have a strong influence on OC because values lead to
actions and shape decisions. Values add to perceptions of the organisation as
impersonal, paternalistic, formal, informal, hostile or friendly. You will learn more
about managerial values under the topic: Managerial Ethos.
Organisation Structure
The design or structure of an organisation affects the perception of its internal
environment. For example, a bureaucratic structure has an OC much different from a
System 4 organisation. What is a System 4 organisation? According to Rensis Likert,
all organisations can be classified into four major groups, depending upon the way
basic organisational processes are conducted. These major groupings are as follows:
System 1 - Exploitative Authoritative
System 2 - Benevolent Authoritative
System 3 - Consultative
System 4 - Participative
How does one know whether an organisation should be categorised as System 1 or 2
or 3 or 4? It depends on the way following processes are perceived and rated in an
organisation:
Leadership process
Motivation process
Communication process
Decision-making process.
10 Goal-setting process
Control process,
Employees of an organisation rate these processes on a rating scale; asking questions Organisational and
like the following: Managerial Ethics

How much confidence is shown in subordinates?

Where is responsibility felt for achieving organisation goals?
How well superiors know problems faced by subordinates?
How much covert resistance to goals is present?
At what levels are decisions formally made?
Is there an informal organisation resisting the formal one?
Based on the answers to these questions, an organisation can be classified as system 1
or 2 or 3 or 4. A bureaucratic structure is likely to be rated as System 2 or System 3.
A System 4 organisation will have a distinct OC where the main theme would be
strong involvement and self-control of all organisation members at all levels in all
basic organisational processes
Characteristics of Members
Personal characteristics of the members of an organisation also affect the climate
prevailing in the organisation. For example an organisation with well educated,
ambitious and younger employees is likely to have a different OC than an
organisation with less educated, and less upwardly mobile, older employees. The
former might inculcate an environment of competitiveness, calculated risk-taking,
frankness of opinions, etc.
Organisational Size
In a small sized organisation it is much easier to foster a climate for creativity and
innovation or to establish a participative kind of management with greater stress on
horizontal distribution of responsibilities. On the other hand, in a large organisation it
is easier to have a more authoritative kind of management with stress on vertical
distribution of responsibilities. This in turn leads to distinct environments as has been
explained with the help of the concept of System 4 organisation.
We have now studied seven basic determinants of OC. The list is not exhaustive but
these are the basic internal factors determining the internal environment of an
organisation.
Note that OC is not influenced by factors existing within the organisation only.
Societal forces help shape OC as well. To understand societal influences on OC, let
us consider an example in relation to the changing profile of existing and future
employees. You may have noticed at least two changes which are taking place in our
society. First, educational level of employees of all categories is rising. Second,
societal values toward recreational and leisure activities are becoming stronger. The
effect of the first change is in the expectations of employees. People want more
satisfying and fulfilling work which should match their qualifications and abilities.
The impact of the second change is that the passion for non-work is increasing:
people feel less passionate about job performance. So, while one change is pushing
towards increased professionalism, the other change is pulling towards leisure-
orientation. Against these backdrops of societal forces influencing the profiles of the
employees, the content of the job and the organisation processes determine the OC.
To sum up, OC is determined by a variety of internal and external factors where
internal factors are specific to the organisation while external factors refer to a
number of societal forces.
Activity D
Before we move on to the next part on Managerial Ethos, we pause for a while to
check how far you have grasped what has been covered in the last section. Write
`true' or `false' in the space provided against each of the following statements.
1 OC is determined by only internal factors specific to the organisation. ( )
2 Leadership style and structure of an organisation immensely influence ( )
the OC.
3 A System 4 kind of an organisation is more authoritative than a ( )
System 1 organisation. 11
Organisational 4 It is easier to establish participative management in a small sized ( )
Climate and Change
organisation than in a large one.
5 Under tight economic condition, an organisation tends to he ( )
adventuresome.
6 A bureaucratic organisation tends to be either system 1 or system 4. ( )
7 Organisation's policies do not have any effect on the ( )
perceived internal environment of an organisation.
Answers: 1-False, 2-True, 3-False, 4-True, 5-False, 6-False, 7-False.

9.5 MANAGERIAL VALUES AND ETHOS

In the earlier section, we have indicated that the managerial values affect perceived
characteristics of the internal environment of an organisation. At this juncture you
may well ask what some of these values are. How do these values develop? How do
they get transmitted from one generation of managers to another? In this section, we
are going to explain briefly some of these issues.
Ethos refers to habitual character and values of individuals, groups, races, etc.
Managerial ethos is concerned with the character and values of managers as a
professional group. Contemporary managers hold some specific values which affect
work and some of these are: autonomy, equity, security and opportunity.
You may recall that individual autonomy is a very important dimension of OC.
Enlightened managers believe that most people prefer to feel free and to do things as
they like within the constraints imposed by their group. These managers tend to allow
enough latitude to individual employees as long as the use of this freedom does not
violate basic norms of the organisation. In the last two decades, some management
practices have been innovated which are in keeping with this value of autonomy.
Equity refers to justice in rewarding performance. Here again, modern managers
strongly feel that a person must get a reward proportionate to his input. In any case,
deliberate exploitation is to be avoided and as far as possible "fairness" is to be
maintained.
Another highly rewarded value is security, both economic and emotional. Keeping a
person on his toes by making him feel insecure is slowly but steadily getting
discredited as a management philosophy. Even the societies which have practised
"hire and fire" policy are unmistakably shifting towards providing security of job.
Providing enough career advancement opportunities to employees is yet another
contemporary managerial value. For several reasons it may not be possible for many
organisations to create enough vacancies for everybody to advance in their career.
However, modern managers encourage themselves and others to continue growing
through various modes of education, although, it does not necessarily lead to career
advancement. Besides these four values which affect a manager's work, the manager
may have a strong "Work Value". Work Value refers to the worth a person ascribes
to the opportunity of work. If you have a "strong" work value you are going to
identify the worth or value of work to you in more ways than one. You may view
work as an opportunity to: (a) accept challenges, (b) serve others, (c) earn money, (d)
enjoy prestige and status, (e) be creative, or (f) be independent, etc.

9.6 MANAGERIAL ETHOS: ITS CHARACTERISTICS

Apart from these values, the managerial ethos of high order requires certain other
characteristics as well. Let us describe these very briefly to you.
Action goal orientation: Persons with high sense of adequacy have clear goals about
their future and are directed by these goals. They usually do not think their goals in
12 status terms (i.e., what they would like to be) but in activity terms (i.e., what they
would like to do). For example, when a junior manager thinks that he would
like to be the "Chief of Marketing" he is status-goal oriented; but when he thinks that Organisational and
he would like to be influenced the marketing policies of the company, he is action- Managerial Ethics
goal oriented.
Pro-action: Proactive people do things on their own without having to be told by any
one. Such initiative taking behaviour leads to a high level of activity and
experimentation. As contrasted to these people are reactive persons or conformists
who spend most of their lives in doing things that others expect them to do. Reactive
people are other-directed, whereas proactive ones are inner-directed. A superior
managerial ethos requires more of pro-action than reaction.
Internal resources: Managers with high sense of adequacy are aware of their internal
'strength and are guided by these strengths. They are aware of their weaknesses but
this awareness does not deter them from acting positively or to look for opportunities
for continuous self-improvement. They are open to feedback and ready to learn from
experience.
Problem-solving attitude: A superior ethos requires that managers view themselves
as problem solvers, rather than problem-avoiders. These managers have a positive
orientation to problem situations and do not want to run away from problems. They
tend to approach problem situations with optimism because they have internal locus
of control, i.e., a strong belief that they can change the environment through their
own efforts.
Before we move on to the next topic on Socialisation Process (How OC and Ethos
are transmitted), it would be useful if you complete some or all, of the following
suggested exercises.
Activity E
Get acquainted with at least one manager who values "Autonomy" and professes that
he/she practices it, as far as possible. Collect evidence to describe. how does he/she
do it? What has been the experience? Where has he/she faced problems? Prepare a
report.
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Activity F
Discuss with some other managers whether, according to their opinions, there are
some other values which are central to managerial ethos. What are these? How
relevant are these to the Indian situation? Prepare a short write-up.
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Activity G
Identify an organisation which values "opportunity for growth and development"
rather highly. Collect evidences of some organisational practices which support of
negate this value. Make a journalistic report. Try to publish it.
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Organisational Activity H
Climate and Change
Locate a situation where "Equity" principle is grossly violated. Look for the impact
of this violation. Draw some lessons from this situation to develop an insight into the
process of work motivation.
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Activity I

Individually ask a few of your colleagues, "What does work mean to you"? Record
their verbatim responses. Analyse these responses. Make some non-evaluative and
descriptive comment on the nature of their Work Values. Share your observations
with them.
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Activity J

Hold an interview with a manager whom you respect for his/her managerial ethos.
Share with the person the four characteristics of ethos. Get his/her views on those
characteristics. Add any other characteristics of superior ethos which might emerge
out of this interview.
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9.7 HOW CULTURE AND ETHOS ARE MAINTAINED

You may have often experienced that every organisation has its own unique
traditions and customs. Seldom are these traditions and customs explicitly spelt out,
yet, over a period of time, organisations do develop long standing unwritten rules,
regulations and rituals to commemorate special moments, standards for social
etiquette, taboos about what is not to be done or spoken, jargon or special code
language understood only by insiders. These, with a whole lot of other features taken
together, ate generally viewed as the "culture" of an organisation. You May also
have seen that often there is. a uniform perception held about these features of an
organisation.. Sometimes these "images" are fairly stable passing from one
generation to another generation without undergoing much of a change. You might
have wondered how this happens.

14 In this section, we are going to discuss this issue; How does an organisation maintain
uniformity of its traditions and customs?
The process through which the people are indoctrinated to accept the tradition and Organisational and
maintain the homogeneity of ethos and behaviours is termed as socialisation. It is a Managerial Ethics
process of adaptation by which `new' members come to understand the basic values,
norms and customs for becoming `accepted' members of an organisation. Though the
most intense period of socialisation is at the `fresher' stage of entry into an organisation,
the process continues throughout one's entire career in the organisation. This is done to
ensure traditions and to maintain uniformity. The people who do not learn to adjust to the
culture of the organisation become the targets of attack and are often rejected by the
organisation.
Socialisation process has three stages:
Prearrival
Encounter
Metamorphosis
Prearrival: This stage tries to ensure that prospective members arrive at an organisation
with a certain set of values, attitudes and expectations. This is usually taken care of at the
selection stage itself. Selectors try to choose the "right type" of people, who they feel,
will be able to "fit" the requirements of an organisation. Thus an organisation, even
before allowing an outsider to "join", makes an attempt to ensure a proper match which
contributes toward the creation of a uniform culture within the organisation. The views of
the founding fathers of an organisation as well as the ethos of the present top
management influences-consciously or inadvertently the selection of the parameters of
this "proper match".
Encounter: After gaining an entry into the organisation a new member faces an
encounter stage. There is always a possibility of difference between his expectations of
an organisation and the OC. If the expected image and OC matches, then encounter stage
passes off smoothly leading to confirmation of the image. If the imbalance between the
two is acute, the person has usually two choices open. First, he undergoes further
socialisation which detaches him from his previous expectations, replaces these with
another set of expectations and thus helps him get adjusted to the prevailing system.
Second, he drops out due to disillusionment. In both the cases the final result is the same:
the status quo of traditions and customs are maintained.
Metamorphosis: People who had discovered an anomaly between their expectations and
OC, but decided not to drop out, enter into the metamorphosis stage. They must sort out
their problems and go through changes-hence this is called metamorphosis. When this
metamorphosis is complete, the members develop a uniform perception of OC and feel
`comfortable' with the organisation and job. Successful metamorphosis results in the
member's productivity being as per organisation's `norm', `average' commitment and
lowered propensity to leave the organisation. All these are indications of "typical" or
"normative" behaviour.
For a very few persons, the metamorphosis stage may remain incomplete or unsuccessful.
These people, as yet, have not been able to "accept" the OC and thereby remain non-
conformist. This phenomenon is likely to result in atypical behaviour. Sometimes they
continue to `fight' the system, at least for some more time, with zeal and enthusiasm. A
larger number are likely to alienate themselves to soothe their feelings of disappointment.
The process of socialisation is shown in Figure I.'
Figure 1: Socialisation Process and its Impact on OC

15
Organisational Here again, you will be able to see, the results remain the same - organisations
Climate and Change maintain their traditions and customs till the time the fighters win their case.
Sometimes an organisation, anxious to break away from its stifling OC, may choose
to deliberately appoint people without subjecting them to metamorphosis stage so
that they bring organisational change. We shall take up the issue and strategy of
bringing organisation change in a separate unit.
In order to understand some aspects of your organisations culture you may attempt
some or all of the following exercises.
Activity K
Every organisation has some long-standing unwritten rules. All members implicitly
accept and agree to adhere to these rules. You may call these as unwritten code of
conduct. Discuss with some of your colleagues and identify at least five such
unwritten rules of conduct. Analyse the factors which influenced the development of
these unwritten rules.
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Activity L
Rituals refer to ceremonies or series of actions which are performed with some
regularity to observe special occasions (e.g., wearing a particular kind of dress;
observing a particular day of the year; throwing farewell parties to retiring members;
introducing newcomers in a particular way, etc.). Make a list of some rituals
observed in your organisation. Compare this list with somebody elses from some
other organisation. Comment on the uniqueness of your organisations rituals.
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Activity M
Taboos refer to some of the prohibitions imposed on a few patterns of behaviour, i.e.,
the things which one is not supposed to do (e.g., not calling superiors by their first
names, not discussing personal lives of others in public, not coming to the place of
work in an inebriated state, etc.). Make a list of such taboos followed in your
organisation. Avoid including those which you have already mentioned in the earlier
exercise on unwritten rules.
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Activity N Organisational and
Managerial Ethics
Jargon refers to a special language which only the members of the fraternity
understand. This is sometimes referred to as `Code language,' and may include
nicknames for persons, events and processes, etc. Prepare a list of words and
expressions which are peculiar to your group or organisation.
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Activity O
Give an account of the socialisation process of your organisation in the prearrival
stage. What kind of traits in a person are usually favourably considered in the
selection processes? Is there any favourable or unfavourable bias towards a particular
community? Caste? Mother tongue? Schooling pattern? Family background?
Personal appearance? Make a small note.
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Activity P
Describe what happens in the Encounter stage when a person is appointed in your
organisation. What method of training is adopted to familiarise the person with the
customs and practices of the organisation? Is there any formal orientation training or
one has to learn these on the job? Recall your "Encounter" stage. What kind of
expectations did you have before joining it? How did you resolve any difference that
you might have observed between your expectations and experiences after joining.
Prepare a report.
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Activity Q
Locate a person in your organisation who is very different from all others in terms of
his performance or commitment to the job (It could be quite high or quite low). How
does the rest of the organisation relate with this person? Is he isolated? Ignored?
Highly respected? Are people annoyed with him? What do others do to express their
feelings towards him? If possible, hold an interview with the person and try to
discover his perceptions about different dimensions of OC.
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17
Organisational
Climate and Change
9.8 SUMMARY
You have come across a variety of concepts in this unit. Let me help you in
integrating these concepts through a model. You can see (Figure II) that there are
some determinants in the form of Internal and External factors which influence
various dimensions of an organisation's internal environment. These dimensions are
perceived as OC, i.e., characteristics of climate and culture of an organisation. Both
Managerial Ethos and Socialisation Process help maintain OC.

9.9 SELF-ASSESSMENT TEST

1 Distinguish between culture and climate. What difference does this
distinction mean to you as a manager.
2 What is the influence of leadership style on organisational climate?
3 How can traditions and customs be maintained in organisations where
change is the order-whether by design or default?
9.10 KEY WORDS
Action-Goal Orientation: Tendency to think about one's goals in activity terms.
Atypical Behaviour: Actions which are not usually displayed by the majority of
people in any group.
Conflict: The extent to which people oppose and block each other.
Consideration: The extent to which stimulation and help is received by an individual
from others.
Control: The degree to which a check is kept on the behaviour of an individual.
Encounter: A stage of socialisation when a person explores the difference between
his expectations and reality.
Equity: A value of maintaining fairness in receiving a reward in proportion to one's'
contribution.
Ethos: Character and values of an individual or of a group.
Individual Autonomy: The extent of freedom from accountability to others.
Internal Resources: Awareness of one's intellectual and moral strength.
Metamorphosis: A stage of socialisation where adaptation and changes take place.
18 Normative Behaviour; Actions which are usually displayed by majority people in
any group.
OC: A coined term which refers to perceived characteristics of organisational climate Organisational and
and organisational culture. Managerial Ethics

Opportunity: A value which stands for providing enough scope to people to develop
their capacities.
Organisational Climate: Enduring qualities of the internal environment of an
organisation.
Organisational Culture: A relatively uniform perception about a number of features
of an organisation which allows distinction of one organisation from others.
Position Structure: The extent of direct supervision and formalisation.
Prearrival: A stage of socialisation which screens the values, attitudes and
expectations of people before joining an organisation.
Pro-action: An orientation to take initiative and to do things without being told to
do.
Problem-solving Attitude: A propensity to face problems rather than avoiding them.
Progressiveness & Development: The scope for growth of oneself and others.
Reward Orientation: The tendency to provide incentives for higher effort and
performance.
Risk-taking: The extent of freedom given in an organisation to experiment with new
untried ideas.
Security: A value which stands for providing economically, physically and
emotionally safe environment to employees.
Social Forces: The forces in the environment outside an organisation.
Socialisation: A process of adaptation through which the people come to understand
the values, norms and customs of an organisation.
System 4: A type of organisation structure which allows participation and
involvement of all groups in all important processes.
Value: An enduring belief that a specific mode of conduct is personally and socially
preferable to other alternative modes of conduct.
Work Values: Degree of worth a person ascribes to the opportunity of work.
9.11 FURTHER READINGS
Forehand, G.A. & Gilmer, B.V.H. 1964. Environmental variation in studies of
organisational behaviour. Psychological Bulletin, December.

Rao, T.V. & Chattopadhyay, S.N. 1974. A Study of the Perceptions of Organisational
Climate by the Employees of Small Industries. Indian Journal of Industrial
Relations, 10 (1).

Robbins, S.P. 1985. Organisational Behaviour: Cases, Concepts and Controversies,

Prentice Hall of India: New Delhi.

Schneider, B. 1975. Organisational Climate: An Essay, Personnel Psychology, 28.

Schneider, B. & Reichers, A.E. 1983. On the Etiology of Climates. Personnel

Psychology, 36 (2).

Sharma, Baldev R. 1986. Organisational Climate and Employer-Employee Relations

in India. International Management Institute: New Delhi.

Tagiuri, R. 1968. The concept of organisational climate. In Renato Tagiuri and

George H. Litwin (eds.) Organisational Climate, Division of Research,
Graduate School of Business Administration, Harvard University: Boston.

19
 Management of Organisational
UNIT 10 MANAGEMENT OF Conflicts

ORGANISATIONAL CONFLICTS
Objectives
After studying this Unit, you should be able to:
Recognise different types of conflicts
Describe the process of a conflict
Compare and contrast different views about conflict
Appreciate functional and dysfunctional consequences of conflict
Identify the sources of conflict
Decide when and how to stimulate conflict
Diagnose which conflict resolution strategy to use and when.
Structure
10.1 Introduction
10.2 Types of Conflict
10.3 The Process of Conflict
10.4 Different Views About Conflict
10.5 The Impact of Conflict
10.6 Sources of Conflict
10.7 Modes of Conflict Management
10.8 Summary.
10.9 Self-assessment Test
10.10 Key Words
10.11 Further Readings

10.1 INTRODUCTION
Life is a never ending process of one conflict after another. Remember the time when
you were a small child and had to choose between a tricycle and a cricket set or say, a
set of dolls and a new frock for a birthday present. That was probably your first
exposure to a conflict situation. Of course, this is a simplistic example of a conflict,
but has life been the same since? Probably not. Think back and recall how each
succeeding conflict in your life over the years has, been increasingly complex.
Conflict is a theme that has occupied the thinking of man more than any other with
the exception of God and love. Conflict has always been widespread in society but it
is only recently that it has generated a lot of interest and has been the focus of
research and stud We are living in the age of conflict. Everyday the choices available
to us regarding any decision are increasing in number. You may have wanted to
become a manager, an entrepreneur or a computer scientist. On the other hand, your
father might have wanted you to become a doctor, a lawyer or a chartered accountant.
Thus you faced a conflict not only at an intrapersonal level, in terms of the various
choices confronting you, but also at an interpersonal level-your choice vs. your
father's choice of a career for you.
Conflict is not confined at the individual level alone but is manifesting itself more
and more in organisations. Employees have become more vociferous in their
demands for a better deal. Various departments in an organisation face a situation full
of conflicts due to a number of reasons like goal diversity, scarcity of resources or
task interdependence etc.
Management today is faced with the awesome responsibility of ensuring optimum
levels of growth and productivity in an environment that is full of conflicting
situations. A survey suggests that the modern manager spends over 20% of his time
21
Organisational handling one form of conflict or the other. Top and middle level managers in the
Climate and Change same survey have pointed out the importance of conflict management skills. We hope
that the knowledge you will gain from this Unit will equip you better to manage
conflict situations more deftly at your workplace.

10.2 TYPES OF CONFLICT

Conflict within an Individual
You can locate conflict at various levels. There could be conflict within oneself-the
intrapersonal conflict. Basically, there are three types of such conflicts. You may
have an excellent job offer in a city you are not willing to go to. In such a case, you
are attracted to and repelled by the same object-an approach-avoidance conflict.
Similarly you may be attracted to two equally appealing alternatives like seeing a
movie or going for a picnic-an approach-approach conflict. You may also be repelled
by two equally unpleasant alternatives like the threat of being dismissed if you fail to
report against a friendly colleague who is guilty of breaking the organisation's rules-
an avoidance-avoidance conflict.
Conflict between Individuals
Conflict can also take an interpersonal form. Conflict between individuals takes place
owing to several factors, but most common are personal dislikes or personality
differences. When there are only differences of opinion between individuals about
task-related matters, it can be construed as technical conflict rather than interpersonal
conflict. Of course, technical and interpersonal conflicts may influence each other
due to role-related pressures. The sales manager may put the blame for low sales
volume on the production manager not meeting his production schedule and may
start disliking the production manager as an incompetent person. It is often very
difficult to establish whether a conflict between two parties is due to manifest rational
factors, or it emanates from hidden personal factors.
Conflict between an Individual and a Group
These types of intragroup conflicts arise frequently due to an individual's inability to
conform to the group norms. For example, most groups have an idea of a "fair day's
work" and may pressurise an individual if he exceeds or falls short of the group's
productivity norms. If the individual resents any such pressure or punishment, he -
could come into conflict with other group members. Usually, it is very difficult for an
individual to remain a group-member and at the same time, substantially deviate from
the group norm. So, in most cases, either he conforms to the group norm or quits (or
is rejected by) the group. Of course, before taking any such extreme step, he or the
other group members try to influence each other through several mechanisms leading
to different episodes of conflict (much to the delight of the researchers in this field
called Group Dynamics).
Conflict between Groups within an Organisation
Intergroup conflicts are one of the most important types of conflict to understand, as
typically, an organisation is structured in the form of several interdependent task-
groups. Some of the usually chronic conflicts in most of the organisations are found
at this level, e.g., Union vs. Management, one Union vs. another Union; one
functional area like production vs. another functional area like maintenance; direct
recruits vs. promotees, etc. The newly emerging field of Organisational Politics has
started systematically investigating such types of conflict and in a later section on the
effects of conflict we shall give examples of what happens to groups when their
conflicts are not solved.
Conflict between Organisations
Conflict between organisations is considered desirable if limited to the economic
context only. The laissez-faire economy is based on this concept. It is assumed that
conflict between organisations leads to innovative and new products, technological
22 advancement, and better services at lower prices. However, in this Unit we shall
refrain from probing into this macro-level conflict.
Activity A Management of Organisational
Conflicts
From your own experience, give an example of approach-approach conflict where
you had to choose between two equally attractive goals. Recall another example of
avoidance-avoidance conflict where you had to choose between lesser of two evils:
Cite yet another example of approach-avoidance conflict where you felt quite
ambivalent because both positive and negative incentives were associated with the
same goal.
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Activity B
Recall an interpersonal conflict situation where you found two persons you care
about were in conflict in which anger, hostility, and strong opinions were present,
Outline the triggering events and what exactly happened. What did you do? Did you
become involved and take a position? Or did you attempt to mediate? Or were you
observing to see what happens? Or did you leave the scene because you thought it
was none of your business?
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Activity C
Cite an example of inter-group conflict in the organisation where you work, It can be
an example of lateral conflicts, e.g., between two departments, between line and staff,
between two unions, etc. Or it can be an example of vertical conflict, for example
between union and management. What are the behaviours of the groups from which
you infer that they are in conflict? List these behaviours.
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10.3 THE PROCESS OF CONFLICT
You have just observed that beginning within an individual, conflict can be found on
several levels. The nature of intrapersonal conflict is of very high significance and
the knowledge of mechanisms available to resolve it is immensely important in
improving personal effectiveness, In this Unit; however, our focus will be on
interpersonal, intragroup and intergroup conflicts as these types directly influence
effectiveness of an organisation. 23
Organisational For a conflict to exist it must be perceived by the parties to it. If no one 'is aware of a
Climate and Change conflict then it is generally agreed that no conflict exists. Still, does, a mere
awareness of opposing goals, or differences of option, or antagonistic feelings imply
that there is a conflict? It would be easier for you, to understand conflict, if you view
it as a dynamic process which includes antecedent conditions, cognitive states,
affective states and conflicting behaviour. Have a look at Figure I on the conflict
process and you will be able to describe and analyse conflict between two parties-
individuals, groups or organisations-in a chain of episodes which tend to unfold in a
particular
sequence.

Potential Antagonism
The first stage is the presence of antecedent conditions that create opportunities for
conflict to arise. They need not necessarily lead to conflict and may be present in the
absence-of conflict as well. You may refer to this stage as the source of conflict and
in a later section we shall have a fuller discussion on these antecedent conditions
which might prepare the ground for the onset of the second stage. Some of these
antecedent conditions which we shall discuss refer to scarcity of resources,
heterogeneity of members and diversity of goals, values, perception; degree of
dependence between groups; insufficient exchange of information, etc.
Cognition and Personalisation
The antecedent conditions may or may not lead to conflict. They must be perceived
as threatening if conflict is to develop. The situation may be ignored if it is seen as
minimally threatening. Moreover, if a conflict is perceived, it does not mean that it is
personalised ("felt conflict"). However, if feelings are generated, they tend to
influence perception of the conflict. It is at the felt level, when individuals become
emotionally involved and parties experience feelings of threat, hostility, fear or
mistrust.
Conflictive and Conflict-management Behaviour
Manifest behaviour is the action resulting from perceived and/or felt conflict. At this
stage, a conscious attempt is made by one party to block the goal achievement of the
other party. Such behaviour may range from subtle, indirect and highly controlled
forms of interference to more open forms of aggressive behaviour like strikes, riots
and war. Most conflict-handling behaviours are displayed in several forms like
resignation and withdrawal, appeasement and compromise, confrontation and
collaboration, etc. These behaviours are often referred to as conflict management
styles and stem from .the strategies of conflict stimulation or conflict resolution. In a
later section, we shall discuss in greater detail some of these modes of conflict
management.
Aftermath
24 The interplay between different forms of overt conflict behaviour and conflict
handling strategies of stimulation or resolution influence the consequences. These
consequences (in terms of perforntace. of the group, the level of satisfaction and Management of Organisational
Conflicts
quality of relationship in the involved parties, change of structure and policies etc.) in
turn influence the antecedent conditions and probability of future conflict.
Sometimes, the aftermath sows the seeds of yet another conflict episode in which
case the entire process is repeated.
The four-stage conflict-process model is a very useful framework to understand the
episode of any conflict. On the basis of such a framework you can now define
conflict as the process which begins when A, as one party perceives that B, as the
other party, is making some conscious efforts to frustrate A in pursuing his interest.
Party A and/or B may he an individual and/or group(s).
Activity D
Think about a conflict episode in your workplace between two parties about whom
you have some knowledge. What were the antecedent conditions which allowed the
conflict to arise? How did the two parties respectively perceive the conflict situation?
What were their respective feelings? What manifest behaviour showed that they were
in conflict? How was the conflict managed? What were the consequences? Prepare
an analytical report.
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10.4 DIFFERENT VIEWS ABOUT CONFLICT

At this stage, you might be tempted to ask quite a few questions about the role of
conflict in groups and organisations. Can you avoid all conflicts or are they
inevitable? Is it at all good to have any conflict? Who is primarily responsible in
allowing a conflict to take place?' What should be the role of a manager once it
arises? These are very important questions which people tend to answer in one way
or the other depending upon the views they hold about conflict. The views about
conflict itself are "conflicting". In this section, we shall examine these views and
their impact on management practices.
The Traditional View
The traditional view. prevalent in the 1930s.1940s, regarded all conflicts as harmful
and evil. Conflict was viewed negatively and was associated with violence,
turbulence, agitation, destruction and irrationality. It was believed that conflict
indicated a malfunctioning within the organisation and that the appearance of conflict
was the consequence of the management's failure to bind the employees and the
organisation together and failure to communicate to them the commonality between
the individual and organisation interests. Had the management corrected those lapses,
according to the traditionalists, there would have been no conflict, and the
organisation would have been able to function as a smooth integrated whole. In fact,
Frederick Taylor, the father of "Scientific Management" was of the opinion that if the
principles of scientific management were properly applied, then the age-old conflict
between labour and management would disappear. The traditionalist view offers a
rather simplified approach to conflict. Since all conflict is bad and is to be avoided,
then we need merely isolate the factors that cause conflict and eliminate them.
Research studies have provided evidence to dispute this viewpoint, yet many of us
continue to believe that conflict is unnecessary and is to be always avoided.
The Behavioural View
The, behavioural school of thought argues that conflict is the logical and inevitable
outcome in any organisation and as such should be accepted. The conflict theory was
dominated by the behaviouralist approach from the late I940s through the mid-1970s. 25
Organisational The behaviouralists maintained that since an organisation was composed of individuals and
Climate and Change they had different perceptions of goals and differing values, conflict was bound to arise in
the organisation. Managers of various departments had separate priorities and conflicting
ideas about resource allocation. Hence conflict was the unavoidable outcome. Subordinates
may clash with the manager over whether the work can be accomplished in the given
period of time or not. They might even argue with subordinates at their own level over the
best possible way to do a given job. Thus, according to the behaviouralists, conflict was an
unavoidable outcome but at the same time they believed that conflict need not always be
detrimental. Under some circumstances it could focus on problems and instigate a search
for better and more innovative solutions to problems. Though the behaviouralists conceded
that conflict could lead to more creativity in problem solving and could be beneficial to
organisation under certain conditions, yet they perceived conflict as harmful something to
be resolved once it arose. Their views about human nature were that people are essentially
good; trust, cooperation and goodness are given in human nature. According to the
behaviouralist, the major antecedent conditions which induce aggressiveness and conflict in
people are the faulty policies and structure resulting in distortion and breakdown in
communication. Hence the manager's role in resolving conflict is to restore understanding,
trust and openness between parties.
The interactionist View
The thinking currently prevalent about conflict has been labelled as the interactionist
view. In contrast to the behaviouralist view which merely accepts conflict as
inevitable, the interactionists not only accept conflict but also encourage it. However,
they maintain that conflict must be regulated so that it does not get out of control
producing dysfunctional consequences. The inevitability of conflict results from the
interaction between organisationally imposed struggle for limited rewards (e.g.,
status, responsibility or power) and innate aggressive and competitive instincts in
people. Against this perspective, the interactionists maintain that if harmony, peace,
tranquility and cooperativeness prevail in a situation for a long time, the group is
prone to become nonresponsive to innovation and change. To shake the group out of
its complacency and to make it viable, self-critical and creative, an ongoing
minimum level of conflict must be maintained. Advocates of interactionist view
emphasise that the mission of management is effective goal attainment, not the
creation of harmony and cooperation. So, a manager's task is not to eliminate or
reduce conflict but to manage it in such a manner so that its beneficial effects are
maximised and its negative or harmful aspects are minimised. Such conflict
management may even include stimulation of conflict where absence of conflict may
hamper an organisation's innovation and creativity and thus prevent it from reaching
an optimal level of performance.
Activity E
Test your comprehension of the three views of conflict by checking each of the
following statements as "TRUE" or "FALSE"

26 Answers: (i) T; (ii) F; (iii) T; (iv) T; (v) F; (vi) T; (vii) T

 Management of Organisational
10.5 THE IMPACT OF CONFLICT Conflicts
From the discussions on different views on conflict, what inference do you draw? Inference
could be that conflict can have both positive and negative impact on individuals, groups and
organisations. For example, as a result of intergroup conflict, certain changes occur within
groups and between groups. Some changes have positive effects, others have negative effects.
Let us explore this issue with Edgar Schein (1980) who has compiled a list of changes on the
basis of research findings.
As a result of intergroup conflict some changes that may occur within the groups
involved are:
1 Group cohesiveness increases. The group becomes more closely knit; its members show
greater loyalty.
2 The group becomes task-oriented. Group climate changes from informal to task-oriented
in order to deal with the external threat.
3 Leadership becomes more directive. As the group becomes more task-oriented, the leader
becomes more authoritarian.
4 Organisational structure becomes more rigid. Authority and responsibility
relationships among and between members become more clearly defined.
5 Group unity is stressed. The group demands increasing loyalty and conformity from its
members.
Prolonged group conflicts cause the following changes in relationship between
groups:
1 Groups become antagonistic toward each other. Each group sees the other as an enemy
who interferes with its goal-oriented behaviour.
2 Perceptions are distorted. Each group develops positive perceptions about its own group
and negative perceptions toward the other.
3 Communication ceases to exist. When in conflict members of one group avoid interaction
with members of the other. If they are forced to interact, they tend to show hostility and
aggression towards each other.
4 Groups apply a double standard. Each group clearly sees all the vicious acts of the other
party while remaining blind to the same acts performed by their own group.
From the above two lists of changes within and between groups in conflict, you can
spot a number of negative effects. What about some potential benefits of intergroup
conflicts? Here is such a list:
1 Conflict clarifies the real issue. When people of groups express their concerns and
differences, it helps sharpen the real issue involved in a problem. Without conflict, many
organisational problems go unnoticed and remain unresolved.
2 Conflict increases innovation. Conflict generates a greater diversity of ideas and viewpoints.
Such a diversity can stimulate innovation in organisational practices.
3 Intergroup conflict solidifies the group. When members of a group are faced with an
external enemy, they tend to work together more closely to deal with it. A manager may use
this new cohesion to reduce internal conflicts.
4 Conflict serves as a catharsis. Conflict can provide an outlet through which organisational
members can ventilate their feelings without damaging organisational functioning.
5 Conflict resolution solidifies intergroup relationships. Once group conflict is successfully
resolved, it can solidify the relationships between groups and it may even make the groups
feel closer to each other.
Looking into some of the effects of conflicts you can take a balanced view to
conclude that conflict is inherently neither good nor bad but simply has the potential
to improve or impair an organisation's performance through its consequences.
Conflicts that result in increased organisation performance and help an organisation
to attain its goals may be termed as Functional. On the other hand, conflict that
hinders an organisation's growth and prevents it from achieving its goals can be
termed as Dysfunctional. Thus conflict in certain forms can be functional or
dysfunctional depending upon its nature, intensity, duration and the manner in which
it is handled.
You may ask: How do I know whether a conflict is functional or dysfunctional? On
what criteria should I base my judgment about the value of conflict? 27
Organisational It is true that the demarcation between functional and dysfunctional conflict is neither
Climate and Change clear nor precise. No particular level of conflict can be adopted as acceptable or by
the impact it has on group/unit performance, rather than on a single individual.
criterion for you to base your judgment upon is unit performance. Since a group
exists to achieve certain predetermined goals, the functionality of a conflict can be
measured by the impact it has to group/unit performance, rather than on a single
individual. Figure II shows the relationship between organisational conflict and group
or unit performance.
Figure II: Organisational conflict and unit performance

The figure shows that there is an optimal, highly functional level of conflict at which
the unit's performance is at the maximum. This can happen because at that level of
conflict the group or the unit's internal environment is characterised by self-criticism
and innovativeness. When the conflict level is too low, it is dysfunctional as the unit's
performance is low due to apathy, stagnation, lack of new ideas and
nonresponsiveness of the unit-members to the demands of change. In such a sitution,
a manager may have to resort to stimulating conflicts to make the unit more viable
On the other hand, when the conflict level is too high, it is again dysfunctional, as t
he survival of the group or the unit is threatened owing to diversion of energies away
from performance and goal attainment activities of the members. Chaos and
disruption prevails. Naturally, the most important managerial task becomes how to
resolve the conflict.
Activity F
Recapitulate your experience of an intergroup conflict in your work situation. Refer
to the changes within and between groups listed in this section. Check whether such
changes took place in your experience or not. What additional changes did you
notice? Referring to your group as A and the other as B, narrate the entire
proceedings of the events from the eyes of an outsider in the form of a case.
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Activity G Management of Organisational
Conflicts
Hold a 20-minute discussion with your friends on the issue of functionality of
conflicts. You take the position that conflict can he functional. Collect some
evidences to substantiate your position. Encourage others to hold an opposite view
and prove their position with the help of evidence. After this discussion is over,
reflect and report whether conflict between you and your friends on the issue of
functionality of conflict has been `functional' or not in terms of clarifying the issue!
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Activity H
Locate a workgroup where there is almost no conflict and the group is characterised
by peace and tranquility. Collect some data on this group's performance and the
average performance of all other similar groups but with different degrees of conflict.
Plot the performance of this group against the average performance. Check whether
the relationship between unit performance and absence of conflict suggested in
Figure II is correct. Revise your understanding, if need be.
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Organisational
Climate and Change 10.6 SOURCES OF CONFLICT
In the earlier sections, you have seen that it would be naive to think that conflicts in
an organisation take place simply due to lack of understanding between people. A
large number of potential sources of conflict exist in organisational life as antecedent
conditions and realistic basis for some conflicts. In this section, we shall quickly
review some such sources.
Competition for Limited Resources
Any group exists for the purpose of attaining some goals with the help of available
resources. These resources may be tangible like men, materials, and money or
intangible like power, status or the manager's time. No organisation is capable of
providing all the resources demanded by various units. Resources are limited and
different groups have to compete for these scarce resources and many conflicts arise
from this source.
Diversity of Goals
Groups in organisation have different functions to perform and as such they develop
their own norms and goals. Theoretically the achievement of these goals should
achieve overall organisational goals but, often, in real life the reverse is true. Goals of
one group are incompatible to the goals of another group. Take, for example, a
company which manufactures electric fans that has a seasonal demand. Three
departments marketing, production and finance-are involved. Since the demand for
the product is seasonal, the marketing manager would like to have sufficient stock
during the season. The production department has to gear up its capacity during the
season but because of a tight labour market finds it difficult to hire labour
temporarily and resorts to employ people on a permanent basis. This creates another
problem. The finance manager says that as the storage costs are high it is expensive
to keep stock build up in the slack season, and maintaining the production line during
slack season imposes an additional burden.
This example shows that each department develops its own goals, which may conflict
with another department's goals and one department may try to achieve its goals at
the expense of another. This happens quite often when the reward system is linked to
group performance rather than to overall organisational performance.
Task Interdependence
Groups in an organisation do not function independent of one another. They have to
interact with one another in order to accomplish their tasks. The sales department will
have nothing to sell unless the production people produce goods and goods can not be
produced unless the financial department comes up with the money to buy raw materials.
Thus smooth interaction between various groups is essential for the efficient functioning
of the organisation. Three types of interdependence can cause intergroup conflict-pooled,
sequential and reciprocal. Pooled interdependence
exists when two work groups may not directly interact with each other but are affected by
each other's actions. For example, when one independent product group performs poorly,
all other groups may suffer financially, This can happen when rewards are contingent
upon collective performance.
Sequential interdependence occurs when one group's performance depends on
another group's prior performance. In a construction project, for example, the
excavating team must prepare the foundation before the masons can work on the
building structure. Since the masons depend on the excavators, conflict between the
groups can occur when the excavators' work is delayed.
Reciprocal interdependence occurs when two or more groups are mutually
interdependent in accomplishing their tasks. For example, in developing and
marketing a new product, three major departments (marketing, production and
research) depend on each other to perform their tasks. Information possessed by one
department is needed by another department. For example, the research department
needs market information from the marketing department, and marketing needs
30 research to provide customer services. When one group is unable to meet the
expectations of another group, intergroup conflict usually results.
Differences in Values and Perception Management of Organisational
Conflicts
A lot of conflict is generated within organisations because various groups within the
organisation hold `conflicting' values and perceive situations in a narrow,
individualistic manner. An example that comes readily to mind is that of the
managment-labour conflict. Labour feels that management is exploiting it because in
spite of making a profit, management does nothing for the economic welfare of
labour. On the other hand, management feels that the profits should go to cash
reserves so as to make the company an attractive proposition for investors. Another
example is the conflict between engineering and manufacturing. Engineering lays
stress on technological sophistication and precision and is accused by manufacturing
of designing products that will last for 50 years but that the customers cannot afford.
Similarly, engineering accuses manufacturing of making products of such limited
durability that the company's reputation suffers.
Organisational Ambiguities
As implied, conflict may emerge when two organisational units compete over new
responsibility. Intergroup conflict stemming from disagreement about who has
responsibility for ongoing tasks is an even more frequent problem. Newcomers to
organisations are often struck by the ambiguity that exists about job responsibilities.
Few organisations make extensive use of job descriptions or periodically update the
job descriptions that do exist. Further, it is rare that the manager or employee
consults his own job description. Managerial and staff jobs by their very nature are
difficult to structure tightly around a job description.
Introduction of Change
Change can breed intergroup conflict. Acquisitions and mergers, for example,
encourage intergroup conflict, competition, and stress. When one organisation is
merged into another, a power struggle often exists between the acquiring and
acquired company. An attempt is usually made to minimise conflict by laying out
plans for power sharing before the acquisition or merger is consummated. Frequently,
the acquired company is given representation on the board of directors of the
acquiring company. Nevertheless, power struggles are difficult to avoid.
Nature of Communication
One of the major fallacies abounding about conflict is that poor communication is the
cause of all conflicts. A typical statement is: "If we could just communicate with
each other, we could eliminate our differences". Such a conclusion is not surprising
considering the little time most of us have at our disposal communicating with one
another. At the same time, evidence does suggest that problems in the
communication channel such as noise, distortion, omission and overload do affect the
process of collaboration and lead to misunderstanding. The potential for conflict
increases when either too little or too much communication takes place. Apparently,
an increase in communication is functional upto a point, whereafter it is possible to
overcommunicate with a resultant increase in potential for conflict. Too much
information as well as too little information can lay the foundation for a conflict;
Aggressive Nature of People
Another factor that has a large potential for generating conflict within an organisation
is personality characteristics that account for individual idiosyncracies and
differences. Evidence suggests that certain personality types-for example, individuals
who are highly authoritarian, arrogant, autocratic and dogmatic-lead to potential
conflict. People have a natural need to find an outlet for their aggressive tendencies.
Organisations are sometimes used as arenas for expression of aggression-'blowing off
steam'-leading to conflict.
This discussion on the sources of conflict is intended to emphasise that it is not
possible to design an organisation which will remain conflict-free for all times to
come. Conflict is inevitable. in an organisation as some of these sources will always
remain in any organisation. However, these sources are not to be confused with the
causes of a conflict. A conflict, in ultimate analysis, is caused by perceptions and
feelings people experience when an incompatibility exists between what they want
and what someone 31
Organisational else wants. When perception of incompatibility and feeling of frustration generate
Climate and Change actions. conflict is manifested.
Activity 1
Which sources of conflict have contributed most in the conflict examples that you
have given in your earlier exercises? Is one particular source more recurrent than
others? Could you identify some other sources of conflict so as to make the list more
comprehensive? Prepare a revised list of sources with examples from yours and your
friends' experiences.
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10.7 MODES OF CONFLICT MANAGEMENT
We can now move on to examine the modes through which conflict can be handled
so as to result in optimal unit performance. You have already seen that when conflict
level is too low, the unit performance is also likely to be low and there is a scope for
a perceptive manager to stimulate conflict in order to enhance the performance of the
group. Similarly, when the level of conflict is too high, conflict needs to be resolved
so as to restore high performance and optimal level of conflict. So, in this section, we
shall examine both the strategies of conflict management-stimulation as well as
resolution.
Stimulating Productive Conflict
Most of us since childhood have been taught to avoid conflict and even disagreement,
How many times have you heard the statements "Don't Argue", "Stop fighting" or
"It's better to turn the other cheek"? However, this tendency to avoid conflict is not
always productive and there are times when there is a need to stimulate conflict. In an
interesting experiment, series of groups were formed to tackle a problem. Some
groups contained a planted member to challenge the majority opinion, some groups
did not have. Without fail, all groups that had a planted member came up with a more
perceptive solution than the other groups. However when the groups were asked to
drop a member, all groups that had a planted member chose to drop the dissenting
memher despite clear evidence that the conflict was beneficial. Such resistance to
conflict is what managers have to overcome in stimulating productive conflict.
Robbins (1978) suggested the following as signs where conflict stimulation is
needed:
1 The organisation is filled with "yes men".
2 Employees are afraid to admit ignorance.
3 Compromise is stressed in decision making.
4 Managers put too much emphasis on harmony and peace.
5 People are afraid of hurting the feelings of others.
6 Popularity is given more importance than technical competence.
7 People show great resistance to change.
32 8 New ideas are not forthcoming.
9 There is an unusually low rate of employee turnover
The presence of one or more of these signs is usually an indication of the need for Management of Organisational
conflict stimulation. Once the need has been identified you may adopt one or more of Conflicts
the following techniques:
1 Manipulate Communication Channels
a) Deviate messages from traditional channels
b) Repress information
c) Transmit too much information
d) Transmit ambiguous or threatening information
2 Alter the Organisation's Structure
(redefine jobs, alter tasks, reform units or activities)
a) Increase a unit's size
b) Increase specialisation or standardisation
c) Add, delete or transfer organisational members
d) Increase interdependence between units
3 Alter Personal Behaviour Factors
a) Change personality characteristics of leader
b) Create role conflict
c) Develop role incongruence
These are only a few of the suggestions possible. Depending upon your values and
the organisation's value-system, some of the suggestions may even sound unethical as
you may feel that a desirable end-state does not always justify the questionable
means (like transmitting threatening information). We leave it for you to decide. But
if by stimulating your value-conflict, we become successful in helping you to
understand the important option of conflict stimulation, we shall consider that such
conflicts are functional.
Resolving Interparty Conflict: How and When
You have seen that stimulating conflict is a required mode of conflict management when
groups are characterised by apathy, complacency, non-responsiveness to needed change,
lack of enthusiasm for generating alternatives, etc. Though these symptoms are very
much present in a number of work-units in Indian organisations (and hence calls for
appropriate conflict stimulation interventions), the more commonplace are heightened
manifest conflicts. So, for most practical purposes, you should not only possess the
knowledge of different strategies of conflict-resolution hut should also know when to use
which strategy.
There is no dearth of literature in this area and different authors have given different
taxonomies in reviewing possible conflict resolution strategies. Here we consider
Feldman's (1985) strategies of intergroup conflict-resolution.
The primary dimension along which intergroup conflict-resolution strategies vary is
how openly you as a manager should address the conflict. The chief characteristic of
conflict-avoidance strategies is that they attempt to keep the conflict from coming
into the open. The goal of conflict-defusion strategies is to keep the conflict in
abeyance and to "cool" the emotions of the parties involved. Conflict-containment
strategies allow some conflict to surface, but tightly control which issues are
discussed and the manner in which they are discussed. Conflict-confrontation
strategies are designed to uncover all the issues of the conflict and try to find a
mutually satisfactory solution.
Conflict-avoidance Strategies
Ignoring the Conflict
This strategy is represented by the absence of action. You, as a manager, have often
avoided dealing with dysfunctional aspects of conflict. Unfortunately, when you avoid
searching for the causes of the conflict, the situation usually continues or becomes
worse over time. Although ignoring the conflict generally is ineffective for resolving
important policy issues, there are some circumstances in which it is at least a
reasonable way of dealing with problems. One such circumstance in which ignoring the
conflict is a reasonable strategy is when the issue seems to be symptomatic of other,
more basic conflicts. For example, two groups may experience conflict over the amount
and quality of office space. Such conflicts often reflect more important issues 33
Organisational about relative power and status. Resolving the office space problem would not
Climate and Change address the key issues, and attention could be directed more fruitfully to the more
basic concerns.
Imposing a Solution
This strategy consists of forcing the conflicting parties to accept a solution devised by
a higher-level manager. Imposing a solution does not allow much conflict to surface,
nor does it leave room for the participants to air their grievances, so it also generally
is an ineffective conflict-resolution strategy. Any peace that it does achieve is likely
to be short-lived. Because the underlying issues are not addressed, the conflict
reappears in other guises and in other situations.
Forcing a solution can, however, be appropriate when quick, decisive action is
needed. For instance, when there is conflict over investment decisions, and delays
can be very costly, forcing a solution may be the best strategy available to top
management. Likewise, it may be necessary when unpopular decisions must be made
and there is very little chance that the parties involved could ever reach agreement
(Thomas, 1977). An example of this is when an organisation must cut back on the
funding of programs. It is unreasonable to expect that any department would agree to
cut its staff and expenses for the greater good, yet some hard unpleasant decisions
ultimately must be made.
Conflict-defusion Strategies
Smoothing
One way you can deal with conflict is to try to "smooth it over" by playing down its
extent or importance. You may try to persuade the groups that they are not so far
apart in their viewpoints as they think they are, point out the similarities in their
positions, try to "pat" group members whose feelings have been hurt, or play down
the importance of the issue. By smoothing the conflict, you can hope to decrease its
intensity and avoid escalation or open hostility. Like forcing a solution, smoothing
generally is ineffective because it does not address the key points of conflict.
However, smoothing sometimes can serve as a stop-gap measure to let people cool
down and regain perspective. In the heat of the battle, people may make statements
that are likely to escalate the conflict, and smoothing often can bring the
disagreement back to a manageable level. Smoothing also may be appropriate when
the conflict concerns nonwork issues. For instance, intergroup conflict frequently
occurs between older and younger employees because of their different political
beliefs and moral values. Smoothing can help to defuse the tension so that the
conflict does not spill over into central work issues.
Appealing to Superordinate Goals
You can defuse conflicts by focusing attention on the higher goals that the groups
share or the long-range aims that they have in common. This tends to make the
current problem seem insignificant beside the more important mutual goals.
Finding superordinate goals that are important to both groups is not easy. Achieving
these goals requires cooperation between the groups, so the rewards for achieving the
goals must be significant. The most successful, and most frequently used,
superordinate goal is organisational survival, i.e., if the subunits do not cooperate
sufficiently, the continued existence of the larger organisation itself will be severely
jeopardised.
Conflict-containment Strategies
Using Representatives
One of the strategies you can use to contain conflict is the use of representatives. In
order to decide an issue, you can meet with representatives of the opposing groups
rather than deal with the groups in their entirety. The rationale is that the
representatives know the problems and can argue the groups' points of view
accurately and forcefully.
Although this seems to be a logical way of proceeding, the research on the use of
representatives as a means of solving intergroup conflict is fairly negative.
34
Represntatives are not entirely free to engage in compromise; rather, they must act.
out of loyalty and are motivated to win (or at least avoid defeat) even though a
solution to the intergroup problem may be sacrificed in the process. A representative Management of Organisational
who "gives in" is likely to face suspicion or rejection from group members, so if a Conflicts
representative cannot win, he or she will try to deadlock a solution or at least forestall
defeat.
Although individual representatives have difficulty in negotiating an agreement
because of their fear of rejection by their groups, two situational factors can increase
the effectiveness of this strategy. First, the use of group representatives from each
side can help to overcome individual anxiety about group rejection. The members of
each team can provide mutual support when they need to make concessions in order
to achieve agreement. Also, groups of negotiators may receive broader support and
trust from their respective sides, since each representative may represent a different
constituency or bring a different expertise to the negotiations. Most labour
negotiations involve several representatives of both management and labour.
Resolving conflict through representatives is more effective before positions become
fixed or are made public. After positions become fixed, representatives become even
more intransigent, and "given in" is more likely to be attributed to the personal failure
of the representatives than to situational factors.
Structuring the Interaction
Some managers assume that one way to decrease conflict is to increase the amount of
contact between the groups (if the groups interacted more, they would like each other
better and fight less). In reality, increased interaction can merely add fuel to the fire;
the two groups spend their time looking for additional reasons to reinforce their
negative stereotypes of each other:
However, structuring the interaction between the groups can be effective in resolving
conflict. Providing a framework on how many issues are discussed and the manner in
which they are discussed can facilitate conflict resolution. There are many ways to
structure the interaction between groups to deal with conflict; some of the most
effective strategies include: (a) decreasing the amount of direct interaction between
the groups in the early stages of conflict resolution; (b) decreasing the amount of time
between problem-solving meetings; (c) decreasing the formality of the presentation
of issues; (d) limiting the recitation of historic events and precedents and focusing
instead on current issues and goals and (e) using third-party mediators.
All these strategies allow some conflict to surface but prevent it from getting out of
hand and reduce hardening of the groups' positions. Decreasing the amount of direct
interaction between the groups early in the conflict helps to prevent the conflict from
escalating. Decreasing the amount of time between problem-solving meetings helps
to prevent backsliding from tentative agreements. Decreasing the formality of the
presentation of issues helps to induce a problem-solving, rather than a win-lose
orientation to the conflict. Limiting how far back historically and how widely
precedents can be cited helps to keep the focus on finding a solution to the current
conflict. Finally, a mediator can act as a go-between, who transmits offers and
messages, helps the groups to clarify their positions, presents each group's position
more clearly to the other, and suggests some possible solutions that are not obvious to
the opposing parties.
Structuring the interaction is especially useful in two. situations: (a) when previous
attempts to discuss conflict issues openly led to conflict escalation rather than to
problem solution; and (b) when a respected third party is available to provide and
enforce some structure in the interactions between the groups.
Bargaining
Bargaining is the process of exchanging concessions until a compromise solution is
reached. Bargaining can lead to the resolution of a conflict, but usually without much
openness on the part of the groups involved and without much real problem solving.
Typically, in bargaining each side begins by demanding more than it really expects to
get. Both sides realise that concessions will be necessary in order to reach a solution,
but neither side wants to make the first concession because it may be perceived as a
sign of weakness. Thus, each party signals a willingness to be flexible in exchanging
concessions without actually making an explicit offer; a tacit proposal can be denied
later if it fails to elicit a positive response from the other party. Bargaining continues
until a mutually satisfactory agreement is reached, although such a solution can be 35
Organisational reached without much open discussion of the conflict issues and without much effort
Climate and Change
to solve the underlying problems. Therefore, bargaining often results in a
compromise agreement that fails to deal with the problem in a rational manner and is
not in the long-term interests of either group.
For bargaining to be feasible at all as a conflict-resolution strategy, both parties must
he of relatively equal power. Otherwise, one group simply will impose its will on the
other, and the weaker group will have no means of obtaining concessions from the
stronger one. Bargaining also is more likely to work if there are several acceptable
alternatives that both groups are willing to consider. Otherwise, bargaining is likely
to end in a deadlock.
Conflict-confrontation Strategies
Problem Solving
Problem solving is an attempt to find a solution that reconciles or integrates the needs
of both parties who work together to define the problem and to identify mutually
satisfactory solutions. In problem solving, there is open expression of feelings as well
as exchange of task-related information. Alderfer (1977) summarises the most critical
ingredients in successful problem solving:
1 Definition of the problem should be a joint effort based on shared fact finding
rather than on the biased perceptions of the individual groups.
2 Problems should be stated in terms of specifics rather than as abstract
principles.
3 Points of initial agreement in the goals and beliefs of both groups should be
identified along with the differences.
4 Discussions between the groups should consist of specific, non-evaluative
comments. Questions should be asked to elicit information, not to belittle the
opposition.
5 The groups should work together in developing alternative solutions. If this is
not feasible, each group should present a range of acceptable solutions rather
than promoting the solution that is best for it while concealing other
possibilities.
6 Solutions should be evaluated objectively in terms of quality and acceptability
to the two groups. When a solution maximises joint benefits but favours one
party, some way should be found to provide special benefits to the other party
to make the solution equitable.
7 All agreements about separate issues should be considered tentative until every
issue is dealt with, because issues that are inter-related cannot be settled
independently in an optimal manner.
There are two preconditions for successful, integrative problem solving. The first is a
minimal level of trust between the groups. Without trust, each group will fear
manipulation and may not reveal its true preferences. Secondly, integrative
problem solving takes a lot of time and can succeed only in the absence of pressure
for a quick settlement. However, when the organisation can benefit from merging the
differing perspectives and insights of the two groups in making key decisions,
integrative problem solving is especially needed.
Organisational Redesign
Redesigning or restructuring the organisation can be an effective, inter-group
conflict-resolution strategy. This is especially true when the sources of conflict result
from the coordination of work among different departments or divisions. Unlike the
other strategies discussed so far, you may note, organisational redesign can be used
both to resolve the conflict or to stimulate it.
One way of redesigning organisations is to reduce task inter-dependence between
groups and to assign each group clear work responsibilities (i.e., create self-contained
work-groups) to reduce conflict. This is most appropriate when the work can be
divided easily into distinct projects. Each group is provided with clear project
responsibilities and the resources needed to reach its goals. A potential cost of this
strategy is duplication and waste of resources, particularly when one group cannot
fully utilise equipment or personnel. Innovation and growth also may be restricted to
36 existing project areas, with no group having the incentive or responsibility to create
new ideas.
The other way to deal with conflict through organisational redesign is to Management of Organisational
Conflicts
develop over-lapping or joint work responsibilities (e.g.. integrator roles).
This helps in Management of maximising the use of the different
perspectives and abilities of the different departments. but as you have already
seen, it also tends to create conflict. On the other hand. there may be tasks
(e.g., developing new products) that do not fall clearly into any one
department's responsibilities but require the contributions, expertise, and
corrdination of several. Assigning new-product development to one
department could decrease potential conflict but at a high cost to the quality of
the product. In this case, you might try to sustain task-based conflict but
develop better mechanisms for managing the conflict. For example, providing
"intergrating teams" can facilitate communication and coordination between
the members of interdependent departments.
Activity J
In your organisation there is a conflict between two departmental heads on the
allocation of budget. Department A feels that they should he given additional funds
for its proposed new activities in the offing. Department B objects saving that the`
parity between the departments should not be disturbed.
What do you think is the source of the conflict? What strategy do you recommend?
Why? Prepare a report, share it with another experienced manager and compare your
views with him.
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Activity K
In a hank, there is a conflict between the hank management and the stiff-association
on the ratio of employees to he promoted in vacant positions to those a he recruited
through open competition. The two parties differed markedly on the issue of
proportion of promotees versus direct recruits.
What strategy do you recommend? Contact a person working in a bank. Ask whether
his bank faced the same kind of issue. How was the issue managed? Compare that
strategy with your recommended strategy.
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Activity L
Interview friends who are working in different organisations. Collect as many cases
of successful as well as unsuccessful attempts at resolving conflicts of different ature.
Compare the practices actually followed with your understanding of process of
conflict, sources of conflict and available strategies for conflict management. Prepare
analytical reports putting successful and unsuccessful cases side by side.
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37
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Organisational
Climate and Change 10.8 SUMMARY
In this Unit we have considered mainly various types of inter group conflicts, as these
types are most pervasive and important from the point of view of organisation
effectiveness. In keeping with our emphasis on intergroup conflict, we have defined
conflict as a process which begins when A, as one party, perceives that B as the other
party is making some conscious efforts to frustrate A in pursuing his interests or
goals. Besides intergroup conflicts, there are other types of conflicts as well: Intra-
individual, interpersonal, intergroup and between organisation. In general, conflict
process has four stages of potential antagonism, cognition and personalisation,
conflictive and conflict-coping behaviour, and conflict aftermath. We have examined
three different views on conflict-traditional, behavioural and interactionist. The
current view of conflict is that it is not only inevitable, but could be desirable as well.
Depending upon the nature, intensity, duration and the way it is handled, it could be
functional leading to higher goal attainment or dysfunctional leading to goal failure.
The section on the sources of conflict has focused attention on a number of factors
like competition for limited resources, diversity of goals of different units, task inter-
dependence of different units, differences in values and perception etc. which are
always present in an organisation as the antecedent condition for most of the
conflicts.
There are different modes of managing conflict in an organisation. When a work-
group shows the symptoms of over-emphasising conformity, compromise, consensus,
popularity etc., there may be need for stimulating conflicts by manipulating
communication channels, organisation structure and personal behaviour of the
manager. These techniques are to be used to shake the group up from its slackened
postures.
There are four distinct strategies of conflict resolution because as a manager your
need to know when and how to resolve conflicts. While avoidance and defusion
strategies allow little or no conflict into the open, containment and confrontation
strategies deal with the conflict more openly and thoroughly. Which strategy is most
effective depends on how critical the conflict is to task accomplishment and how
quickly the conflict must be resolved. If the conflict arises from a trivial issue and/or
must be resolved quickly, a conflict-avoidance or conflict-defusion strategy is most
likely to be effective. If the conflict centres around an important work issue and does
not need to be solved in a short period of time, a conflict-containment or conflict-
confrontation strategy is most Iikely to be effective.

10.9 SELF-ASSESSMENT TEST

1 What is the difference between functional and dysfunctional conflicts? How can
one handle both?
2 Briefly review the process of conflict.
3 Discuss the influence of process on the outcomes in dealing with conflict in
organisations.
4 Is conflict inevitable'? If so, how should one deal with it'?
5 Analyse two instances of inter-departmental conflicts in your organisation.
Examine the changes, if any, you notice in the sources, processes, strategies and
outcomes.

10.10 KEY WORDS

Antecedent Conditions: The source of conflict where cause for conflict exists in an
incipient form, but it need not necessarily lead to actual conflict.
Approach Approach Conflict: Conflict between two equally attractive choices.
Approach-Approach Conflict: Conflict between two equally attractive choices.
repulsion towards the same object.
38 Avoidance-Avoidance Conflict: Conflict between two equally unpleasant choices,
or in choosing the lesser evil.
Avoidance: Withdrawal from or suppressing conflict. Management of Organisational
Conflicts
Bargaining: Is a conflict containment or resolution strategy that involves mutual
compromise and concession.
Behavioural View of Conflict: The belief that conflict is an inevitable outcome in
any group.
Conflict Aftermath: Refers to the consequences that different conflict handling
strategies may have on the antecedent conditions. It may either resolve the conflict or
make for future conflict.
Conflict Handling Behaviour: It refers to the conscious action of one party to the
conflict in checking the other party from reaching his goals.
Conflict Resolution: Refers to the manner in which a manager could address himself
to a conflict situation. The chief modes are avoidance, defusion, containment and
confrontation.
Conflict Stimulation: Refers to a situation when common values are challenged. It
can often be a useful way of re-examining one's position and discovering alternatives.
Confrontation Strategy: Is a strategy designed to uncover all the issues of the
conflict and find a mutually acceptable solution. It can be accomplished through the
openness of problem solving, or through a comprehensive organisation redesign.
Containment Strategy: Is a strategy of controlled conflict management where issues
are selectively discussed through mediating representatives, or by structuring the
interaction patterns or through bargaining.
Delusion Strategy: Attempts to keep conflict in abeyance and cast tempers through
smoothing or by appeal to super-ordinate goals.
Dysfunctional Conflict: Conflict that hinders group performance.
Felt Conflict: Emotional involvement in a conflict creating anxiety, tenseness,
frustration, or hostility.
Functional Conflict: Conflict that supports the goals of the group and improves its
performance.
Goal Diversity: The efficient functioning of every part of an organisation requires
formulation of its own immediate goals, which may or may not be compatible with
overall organisation objectives.
Interactionist View of Conflict: The belief that conflict is not only a positive force
in the group, but that it is absolutely necessary for a group to perform effectively.
Intergroup Conflict: Conflict between the various constituent units of an
organisation such as Unions and Management, between various functional areas, etc.
Interpersonal Conflict: Conflict between various individuals in an organisation
which may stem from personal dislikes, personality differences, or role related
matters.
Intragroup Conflict: Conflict within a group between various individuals due to lack
of consensus or inability to conform to group norms.
Intrrpersonal Contlict: Conflict within the individual, involving a decision
regarding the choice to opt for in any instance of behaviour.
Manifest Conflict: It results from perceived and/or felt conflict. Conflict comes out
into the open and influences action.
Perceived Conflict: Awareness by one or more parties of the existence of conditions
that create opportunities for the rise of conflict. It is different from felt conflict in that
it is not personalised.
Problem Solving: Bringing about change or resolving conflict through interpersonal
discussions; seeks to identify differences.
Smoothing: Conflict defusion by playing down its importance, thereby avoiding
escalation and letting people regain their perspective.
Superordinate Goals: The long range aims or higher goals that are common to all in
an organisation even in a conflict situation.
Task Interdependence:: The mutual inter-connectedness of responsibilities of
various parts of an organisation that is essential for efficient functioning.
Traditional View of Conflict: The view that all conflict must be avoided. 39
Organisational
Climate and Change 10.11 FURTHER READINGS
Alderfer, C.P., 1977. Group and intergroup relations. In J.R. Hackman J.L. Suttle
(Eds.) Improving Life at Work. Goodyear: Santa Monica.
Feldman, D.C., 1985. A taxonomy of intergroup conflict-resolution strategies. In The
1985 Annual: Developing Human Resources, University Associates: San
Diego.
Robbins, S.P., 1978. Conflict management and conflict resolution are not
synonymous terms. California Management Review, Winter.
Schein, E., 1980. Organisational Psychology. Prentice Hall: Englewood Cliffs.
Thomas, K.W., 1977. Toward multidimensional values in teaching: The example of
conflict behaviours. Academy of Management Review, 2.

40
 Managing Change
UNIT 11 MANAGING CHANGE
Objectives
After reading this Unit, you should be able to:
Appreciate why all organisations must change
Differentiate between individual change and organisational change
Describe how an organisation grows
Compare and contrast between degrees and nature of change
Identify the major antecedent conditions for change
Recognise the phases of any change process
Outline different coping strategies for change
Understand the process of resistance to change and means of overcoming
resistance
Devise an appropriate strategy to implement organisational change
Structure
11.1 Introduction
11.2 Nature of Change
11.3 Antecedents of Organisational Change
11.4 The Process of Organisational Change
11.5 Coping Strategies for Change
11.6 Resistance to Change
11.7 Strategies of Implementing Change
11.8 Summary
11.9 Self-assessment Test
11.10 Key Words
11.11 Further Readings
11.1 INTRODUCTION
You are perhaps aware of the axiom that the only certainty in the world is that there
will be change. "The old order changeth, yielding place to new." In this process of
change, the Darwinian principles of adaptation and natural selection are as true for
the corporate world as they are for the animate. If you compare closely, you will find
that in many respects an organisation is akin to a living organism. Just as any living
organism needs to keep harmony with the ever-changing environs for its survival, o
does an organisation need to respond to changes in the market, governments,
creditors, communities, even the weather. `Survival of the fittest' is the unwritten but
the radical rule of this game.
The environment which engulfs an organisation provides the resources and
opportunities for the organisation's existence. At the same time, the environment
itself imposes sanctions determining what an organisation can or cannot do. If an
organisation is to survive, grow and remain prosperous, it must adapt to the demands
of the environment. Since these demands are constantly changing, organisations must
also change.
What are some of the changes which affected almost all organisations in the past few.
decades? A short list is given here, but you can lengthen it from your own
observation of events:
Technological innovations have multiplied; products and know-how are fast
becoming obsolete
Basic resources have progressively become more expensive
Competition has sharply increased
Communication and computers have reduced the time needed to make
decisions
Environmental and consumer interest-groups have become highly influential
The drive for social equity has gained momentum 41
The economic inter-dependence among countries has become more apparent.
Organisational These and scores of other changes compel an organisation to cope with the
Climate and Change environment and become more adaptive. In fact, as a response to the change in the
environment, the attributes of the organisations are changing. Examine some such
continua of attributes towards which more dynamic organisations are shifting:
Direction of Change

From To
Formal Informal
Structured Less structured
Definite Ambiguous
Deterministic Probabilistic
Conservative Opportunistic
What happens when organisations fail to adapt? The answer is unequivocal: They
become extinct. But much before such a catastrophe, you can diagnose the
syndromes of organisational maladjustment. Here is a list of some such syndromes
whose half-serious names are trying to conceal the malady of maladjustment:
Some Syndromes of Organisational Maladjustment
Amoeba: Lack of strong direction from top executives. Not enough structure, order
or guidance leading to activity trap, i.e. doing things without knowing where one is
heading to.
Anarchy: A situational upheaval where leadership, responsibilities, functions and
resources are in dispute.
Buggywhip: Clinging to obsolete products, services and practices which no longer
have potential for sustaining livelihood.
Deadlock: Stand off condition between management and leader of workforce leading
to toxic antagonistic relations between the factions.
Mom & Pop: Small company managers can not/will not help the company grow past
the awkward stage.
Myopia: No future orientation. Little thought to strategy, sense of direction and
advance planning. Live day to day, week to week.
Rat-race: Toxic climate coming from oppressive, primitive, slave-driving policy.
Remote Control: Too much administrative or executive control from the parent
body. Decision making autonomy is seriously impaired.
Rigor Mortis: Conditions of inertia and constricted activity prevail. Primary
organisation value is structure and order.
This illustrative list of syndromes of organisational maladjustment is meant to draw
your attention to the fact that failure to change at-an appropriate time typically results
in some acute or chronic malaise for an organisation eventually forcing it to die.
However, a diagnostic knowledge of when to initiate change and skills of managing
change to a long way to prevent such disasters. This unit is designed to achieve such
purposes.
Activity A
Add a few more points to the list of some changes that have taken place during the
last few decades. For this purpose, interview some senior persons and collect their
views.
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42 .
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Activity B Managing Change
Select any industry (e.g., writing instrument, printing, footwear, clothing fabrics,
container, mechanical transportation etc.) where some technological innovations have
taken place. Gather information regarding how the manufacturers of earlier products
have coped with these changes and prepare a case study.
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Activity C
Locate a workplace where a computer has been installed and is functioning for at
least a year. Interview relevant people to gather some information relating to
problems faced, if any, before introduction of the computer. What aspects of work
are now being handled through the computer? What other changes the organisation
has undergone due to computerisation? Prepare a report.
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Activity D
Show the list of syndromes of the organisational maladjustment to some of your
friends working in different organisations. Ask them if they agree with any particular
combination of syndromes prevailing in their organisations. If they do, collect some
more facts so that you can develop live examples and cases (using hypothetical
names for the real organisation and the real people), illustrating the syndrome.
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11.2 NATURE OF CHANGE

Organisations introduce changes through people. Unless the people are willing to
accept the need and responsibility for organisational change, intended changes can
never be translated into reality. In addition, individuals have to learn to adapt their 43
attitudes and behavioural patterns to constantly changing environments.
Organisational In this section, we are going to focus on three frequently raised issues on the nature
Climate and Change of change. First, can we bring change in an organisation by beginning to change at
the individual level only? Second, does organisational change take place through a
slow unfolding process or through cataclysmic events overturning status quo
arrangements? Third, do we always have to comply to environmental changes, or can
we also initiate change?
Individual Change and Organisational Change
When the issue before you is management of change, it may be useful to note the
difference between individual change and organisational change, although the two
are interwoven. Individual change is behavioural-determined by individual
characteristics of members such as knowledge, attitudes, beliefs, needs, expectations
etc. It is possible to bring about a total change in an organisation by changing
behaviours of individual members through participative-educative strategy. Of
course, the degree of difficulty involved in the change and the time taken to change
will be primarily dependent upon what exactly is your target of change. As Figure I
shows, if your target of change is a person's knowledge, it would not be a very
difficult and time-consuming endeavour. For example, let us assume that you did not
know much about "management of change in an organisation". However, if you
spend a couple of hours on this Unit, you will know several aspects of this topic.
Changing attitudes is usually considered more difficult and time taking when
compared to changing knowledge. For some, organisational change is
beneficial, but for others it is a threat, a signal of danger and a source of fear. Some
view change as a vital life force. Others may perceive it as a disturbance to be
avoided or borne with stolidity and patience. The `attitudes toward change' are
largely dependent on the context of the situation, the nature and the extent of change
and the manner in which changes are initiated and executed, and these attitudes are
more difficult to modify than the knowledge about the change.
Changing individual behaviour is a still more time-taking and difficult task. We
often assume that having enough knowledge and a positive attitude towards
something will naturally result in changing behaviour or modification towards that
direction, but it does not necessarily happen. For example, we know that honesty is
the best policy. We might have favourable attitudes towards people who are honest
and dislike those who are dishonest, but in certain situations we still may act in a less
honest manner. The linkage between attitude and behaviour is not so straight-forward
and for this reason changing behaviour is more difficult than changing knowledge or
attitudes.
You can possibly reason why changing the behaviour of a group is usually a more
prolonged and harder task. Every group has its own dynamics of push and pull which
attempts to neutralise the change in an individual and continuous efforts are
expended to maintain `norm'. Due to this group dynamics, individual member's
"changed behaviour" may revert to earlier normative behaviour so that the status quo
is maintained. However, due to the same reasons of a group's over-riding influence
on individual members, sometimes it may be easier to tackle the group as a whole
rather than trying to change a member's behaviour in an isolated manner.
Bringing total behavioural change in all the groups and members in an organisation
usually entails the most difficult long-range effort. More often than not, it is a slow
painful process to usher in a total cultural change in an organisation.
Figure I: Time and Difficulty involved in Change

44
Figure I is only intended to highlight that it is possible, although difficult and Managing Change
prolonged. to bring about total behavioural change in an organisation starting with its
individual members. However, this is not the only route. It is equally possible to
influence and change the total organisation without focusing at the level Of
individual's change of knowledge, attitude and behaviour. Total organisational change
can be brought about by modifying the organisation's structures, policies, procedures,
techniques etc. These types of change alter prescribed relationships and roles
assigned to members and eventually modify the individual member's behaviour and
attitudes. Thus a focus of through attempts to change the structure, policies,
procedures, techniques, personnel; or it can be both. As these two kinds of changes
are interdependent, the complexity of managing change makes it necessary for you to
understand both the behavioural and non-behavioural approaches to change.
Evolutionary Change and Revolutionary Change
When you compare an organisation with any other open system organism, you can
describe it in terms of its birth, growth, maturity, senility, decline, entropy or death.
Any organisation, like any other organism, passes through these stages and in the
process changes itself from one form to another form. But is this change smooth,
gradual and evolutionary? Or violent, radical and revolutionary? Probably it is both.
Times of tumultuous turbulence surface between the smooth periods of evolution.
Look at the following exhibit on the stages of organisation's change and
development. You will find that in each stage there are some critical concerns and
key issues which must be addressed to and satisfactorily solved. The exhibit also
shows the consequences if he concerns are not met with satisfaction.

In order to meet the critical concerns of each stage, organisations go through some
rapid, visible, shake-ups of their structure, policies, procedures, techniques,
personnel, etc. These changes in calmer moments of steady growth, may be viewed
as revolutionary changes. You will be able to appreciate the difference between the
two degrees of change through yet another model of organisation's growth given by
Larry Greiner (1972). Greiner postulates that as an organisation grows from young to
mature stage, tiny sized to giant size, it passes through five phases of evolution each
of which ends with a period of crisis and revolution. Evolutionary periods are
characterised by the dominant management styles used to achieve growth, while
revolutionary periods are characterised by the dominant problems that must be solved
before growth continues.

45
Organisational
Climate and Change

The first phase of a newly-born organisation is characterised by creating a viable

product in a promising market. The founders, who are usually technically brilliant
and entrepreneurially oriented, manage their endeavours themselves in an ad hoc
manner with little respect to any formal system of communication and control. Their
physical and mental energies are entirely absorbed in making and selling. But as the
organisation starts growing from its tiny embryonic stage, many managerial problems
crop up, forcing the founders to wonder as to who is going to lead the organisation
out of confusion. By the end of the first phase, the crisis of leadership has emerged.
The solution usually lies in locating and installing a strong business; manager who is
acceptable to the founders and who can pull the organisation together.
When leadership crisis forces the founders to relinquish some of their power to a
professional manager, organisational growth is achieved by direction through
systematisation of operating procedures. The manager is usually given a free hand
and zealously accepts most of the responsibility for initiating direction. But the lower
level supervisors are treated merely as functional specialists devoid of any decision-
making authority. In course of growth for the organisatidn, the lower level managers
demand more autonomy in decision-making and the stage is set for the crisis of
autonomy to come to the fore. The second phase of the organisation's growth is
capped by this turmoil for autonomy.
The crisis of autonomy is resolved through the delegation of authority which helps in
gaining expansion through heightened motivation at lower rungs. But one serious
problem that eventually evolves is the loss of top management control over highly
diversified field of operations. The crisis of control emerges at the conclusion of
phase three where field managers run their own shows without aligning plans,
money, technology, or manpower with the rest of the organisation.
In order to achieve more efficient allocation of organisation's limited resources, an
elaborate network of coordinating mechanisms is usually introduced at phase IV of
'the organisation's growth.
The organisation becomes typically much more formalised; rules, regulations and
rigidities increase almost exponentially. For some time, the new systems prove useful
for achieving growth through coordinated efforts. But soon procedure takes
precedence over problem-solving, the chronic conflict between line and staff
becomes acute. The organisation becomes too large and complex to be managed
through formal programmes and rigid systems. Thus begins the crisis of reshape.
The fifth phase of an organisation's growth is characterised by strong inter-personal
collaboration in order to overcome the crisis of redtape and the widespread conflicts
between several subsystems. Developing the team becomes the theme, social contra'
46 and self-discipline take over from formal control, more flexible and behavioural
approaches are adopted to attack the problems of managing a large organisation. What
crisis do you anticipate at this phase of organisation's growth? Nobody seems to Managing Change
know the exact nature of this future shock, as no organisation has traversed so far.
Larry Greiner, the author of this model, feels that some problems may emerge
centering around the psychological saturation of employees who grow emotionally
and physically exhausted by the intensity of teamwork and the heavy pressure for
innovative solution. Do you agree with Greiner?
Reactive and Proactive Changes
'Forces for change arise out of an organisation's interaction with elements in its
external or internal environment. The action of competitors, suppliers, government
units, or public groups may have substantial impacts on change. Social and cultural
factors such as life styles, values or beliefs also lead to important changes. Forces of
change may also arise from within an organisation depending upon different phases
of growth or demands made by different interest groups.
Reactive changes occur when these forces make it necessary for a change to be
implemented. It is passive compliance to the demands. Proactive change takes place
when some forces to change lead an organisation to conclude that a particular change
is desirable and goes about in initiating the change in a planned manner.
The difference between reactive and proactive changes corresponds, by way of
analogy, to that between reflexive behaviour and purposive behaviour. An individual
responds reflexively to a sudden intense light by eye-blinking or pupillary
contraction. This is an immediate, automatic response without any thought. A
purposive response to the same stimulus would mean devising a plan to shield the
eyes or removing the. light. It would require coordination of central nervous system
and psychomotor capacities.
Reactive change, like reflexive behaviour, involves a limited part of the system
whereas proactive change and purposive behaviour coordinate the parts of the system
as a whole. Also, reflexive behaviour and reactive changes share the characterstics of
responding to immediate symptoms, while purposive behaviour and proactive change
respond to underlying forces producing the symptoms.
In this Unit, you are going to be more concerned about the proactive changes than the
reactive ones. Management of change requires foreseeing the need for change and
going about it in a planned sequential manner.
Activity E
Collect examples which show that the knowledge changes do not necessarily lead to
attitude changes, or attitude changes do not automatically lead to behaviour changes.
Similarly, collect a few more examples where total organisational changes were
brought about b modifying an organisation's structures, policies, procedures,
techniques etc. rather than attempting to train individuals,
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Activity F
Try to know the history of an organisation's growth since its inception. Following
Greiner's model, describe the organisation's process of growth and make a forecast
about the nature of crisis the organisation is likely to face in the near future.
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Organisational 11.3 ANTECEDENTS OF ORGANISATIONAL CHANGE
Climate and Change
You can well imagine that there must be many reasons for which organisations
change. In this section we will discuss some such major antecedent conditions which
serve as stimuli for changes to be undertaken in an organisation.
Changing Forces in Internal and External Environment
An organisation changes its structure and practices as a result of the forces from
internal origins as well as from external pressures arising in the environment.
There are two primary aspects of organisational structure-differentiation and
integration. Differentiation is the division of the organisation into subsystems, e.g.
research, sales, production etc. Each differentiated subsystem develops particular
attributes in responding to the requirements posed by its relevant external
environment. However, differentiation requires the integration of these subsystems
to achieve unity of effort and the accomplishment of the organisation's goals.
The more turbulent environment would be associated with a higher degree of
differentiation among the organisation's sub-parts and also a correspondingly high
degree of integrative effort. Similarly, an organisation faced with a stable
environment would have less differentiated subsystems and require fewer integrative
procedures. The success of an organisation depends upon an appropriate amount of
differentiation to cope with the environment and also the right amount of integrative
or coordinating effort. Researches by Lawrence and Lorsch (1967) provide evidence
for such a generalisation. For example, in the plastics industry, facing a turbulent
environment of rapid change in technology and unpredictable customer demand, the
high-performing organisations had the greatest differentiation and integration. In the
standardised container industry, facing a stable environment of unchanging
technology and steady demand, the highest performing organisations had the least
differentiation and consequently the least need for integration.
So, you can see that, depending upon the kind of environment an organisation is
placed in, the organisation has to change its structure. Of course, a certain amount of
organisational change may. occur almost entirely from internal origins. For example,
someone may decide that a particular department is so big, and unwieldy that it
should be split into two separate units. Internal change may also occur in furtherance
of individual or group strategies for self-enhancement or the aggrandizement of
power. For example, a new unit may be established to provide a job for a favoured
relative or to shelve an incompetent, obsolescent but undischargeable manager. But
most internal origins of change are in part self-generated, and in part represent
response to external pressures perceived by the members of an organisation. For
example, a number of companies have set up departments designed to cope with
problems of consumer complaints.
In the beginning of the unit, we have outlined some changes which have taken place
in the last few decades. They represent the external environment forces which
influence organisations. Organisations face the need for both to adapt internally to
external forces and to initiate changes in the external environment. These needs
explain, for example, why companies engage in lobbying for legislation they favour
(external influence, proactive change), but comply when laws not favoured are
passed (internal adaptation, reactive change).
Growth and Decay
You have seen that an organisation's growth presents many problems and
opportunities for change. Decay too poses change problems. It leads to defensive,
restorative changes aimed at survival and the es; ntial resumption of growth.
When growth occurs through internal vigour of pro' 'act lines, services or market
penetration, change is gradual. Change is more extensive when growth occurs from
mergers, acquisitions or exceptionally rapid success of organisational activities.
Mergers and acquisitions are undertaken for many reasons such as consolidating or
48
increasing capital, pooling management talent using facilities more efficiently,
increasing production and marketing capacity and achieving vertical integration.
Changes due to merger and acquisition lead to substantial impacts on people. There is Managing Change
high potential for generating feelings of anxiety, fear of insecurity among all
organisational members from top echelons to rank-and-file workers. Sometimes,
these anxieties, if not properly handled, turn into hostility towards the organisation.
New Personnel
Some change is inevitable because of internal factors such as death, retirement,
transfer, promotion, discharge, or resignation and constantly changing elements in the
external environment. No two managers, you will agree, have the same styles, skills,
or managerial philosophies, or the same personal needs. Managerial behaviour is
always selective, so that a newly appointed manager may favour different
organisational designs, objectives, tasks, procedures and policies than a predecessor.
The new, executive will not be exactly like the previous one, nor even like those
already present. In matters of intelligence, personality and temperament the new
manager may be quite different and still possess the "qualifications for the position".
One of the most frequent reasons for major changes in company structure is a change
of executives at the top. They usually begin by examining the structure below them to
see if it corresponds to their ideas of what will be needed to do their job effectively.
Upon taking over a position at the top, a new manager may make sweeping changes.
Moreover, some who opposed the appointment are likely to resign. The filling of
these top vacancies, particularly where the new person comes in from outside,
presents a strategic opportunity for a re-examination of the entire structure.
Change Agents
Change Agent is the technical term for an organisational member whose role
involves the strategies and procedures for bringing about change. Any individual can
be a change agent at one time or another, but many people have positions, tasks, or
formal roles in which their main assignments involve dealing with change. A change
agent's formal role is primarily to plan and initiate changes rather than to implement
them. Change agents serve as catalysts, interpreters, and synthesists. They often work
quietly behind the scenes to promote change.
An interesting kind of change agent is often referred to as "The Young Turk". Young
Turks are new, usually young employees, eager and ambitious, full of ideas for
improvement, and willing to be a bit pushy, and obnoxious, or at least persistent, in
trying their ideas. Organisations sensing the need for change often deliberately
appoint Young Turks to challenge the status quo. They are not always popular with
colleagues or even their bosses. The best of the Young Turks are those who have real
talent combined with a measure of tact and patience. Do you think Young Turks are
a good idea for initiating organisational change?
Barometers of Declining Effectiveness
Organisations have a number of ways of "taking their pulse" by looking at indicators
from their own information systems. A business firm monitors data on sales,
absenteeism, turnover, scrap rates, manufacturing costs and numerous ratios of
financial measures. Some firms also conduct regular opinion surveys of their work
force. Others have systematic methods of obtaining feedback from customers.
In response to the information obtained through the above methods, the organisations
make the required changes in organisation to maintain the desired level of efficiency.
Change in Corporate Strategy
An organisation may undertake comprehensive changes even when no indicators
would suggest immediate problems in its performance. However, current and past
performance have been based on conditions that organisation officials believe to be
changing. Forecasts of long run trend may prompt a decisions to enter new markets,
to pursue a strategy of growth, to become less dependent on government, to switch
from a centralised to a decentralised structure, or to adopt new technologies. All these
strategic decisions have implications for changing the behaviour of people in their
organisation. Nothing less than a `new order' is required to put such strategies into 49
operational effect.
Organisational Crises
Climate and Change
Not infrequently, the occasion for organisational change is an unforeseen crisis which
makes continuation of the status quo unthinkable. The sudden death of a Chief
Executive Officer, the resignation of key members of a top management team, a
strike by a critically important group of specialised workers, loss of major client or
suppliers on whom the company has been dependent, a drastic cutback in budget,
even spontaneous civil disturbances directed against an organisation force a
reorientation of the corporate posture and initiate a total revamping of policy, practice
and behaviour. Crises create an unstable condition which is likely to become the
stimulus for a thorough-going self-assessment and reform.
Personal Goals
Leaders, interest groups and coalitions have their own goals: to see the company
become more aggressive, to shape the organisation around some distinctive theme, to
cast a particular corporate image, to further some ideology or philosophy. Seldom are
these goals stated in precisely those forms, at least for the record or for public
consumption. More frequently, they are clothed in rationalisations about their
presumed effect on profit and service.
The Domino Effect
The last main source of change is change itself. There is often a domino effect in
which one change touches off a sequence of related and supporting changes, e.g.,
creating a new department may cause the creation of a new managerial or non-
managerial positions or change in assignments within other departments, budgeting
reallocations and office space. Other departments may need to realign their missions,
structure, tasks and staffing.
It is quite common for people to fail to consider the domino effect. Such an oversight
leads to problems of coordination and control, and necessitates effective planning
processes that limit the tendency of individual units to change only in accordance
with their own needs. Before any significant change is made, its possible
consequences must be examined to see whether an undesired chain reaction will
occur.
To appreciate the complexity of the interdependence or domino effect of change, you
need to consider more closely what is included in the work environment. Actually., in
an organisational change, four factors are involved: task, people, technology and
structure. These factors are interrelated and interdependent, a change in one produces
alterations in one or more of the other work environment factors (See Figure III).

50
Task refers to the job, which can vary in several ways or dimensions such as variety, Managing Change
autonomy, task identity, feedback, and significance. People includes individuals who
perform or fill various jobs within the organisation. Individuals vary in their attitudes,
motivations and values which influence their perception and evaluation of change.
This can complicate the implementation of change. Technology includes those
methods, techniques, and processes that collectively convert inputs of the
organisation into its outputs. Finally, the structure embraces the job responsibilities
and relationships of organisational members. Structure is reflected in the number of
hierarchical levels, span of control (number of persons supervised), and the way in
which parts are organised and related to one another. Communication, decision, and
power systems are significantly influenced by such structural arrangements.
Organisational changes can be introduced through the alteration of any one of these
four variables or a combination of these factors. One of the pitfalls of organisational
change is focusing upon one of the change factors and failing to gauge its impact
upon other factors, as they are related.
Activity G
Collect a case of organisational change. Identify the internal and external forces
which prompted the change.
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Activity H
Mergers and acquisitions often take place in the Indian corporate scene. When such
attempts are made by big industrial houses, they make news for the public as well.
Stories are published in business magazines. Get hold of such a story and analyse the
before-merger and after-merger scenes.
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Activity I
Get to know a case of corporate succession at the top (change of Chairman, MD,
President etc.). Collect evidence of impact of such change of executives at the top.
Compare this chain of events with the description given in Subsection : New
Personnel.
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Activity J
Business Management Graduates (MBAs) are often hired by some companies to act
as the "Young Turks". Familiarise yourself with such a company or with a person
whose explicit role is to act as a change agent. Learn a little more about the change-
process from their experience as recounted to you.
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Organisational 11.4 THE PROCESS OF ORGANISATIONAL CHANGE
Climate and Change
People change their knowledge, attitude and behaviour when they become
dissatisfied with status quo or when there is a more desirable substitute. A successful
change involves (1) recognising the need for it. (2) learning a new behaviour or
substitute and, (3) feeling comfortable with the "new situation".
This change process was best described by Kurt Lewin when he described the three
stages of change-Unfreezing, Moving and Refreezing (See Figure IV).
Figure IV: Change Process

The three stages of changes will be described shortly, but before you proceed to look
into the phases, you need to become familiar with three more terms which Kurt
Lewin gave us to understand the processof change. These are the concepts of quasi-
static equilibrium, driving forces and restraining forces. At any given point of
time, any pattern of behaviour is a result of equilibrium between two sets of forces-
driving and resisting. The "Present" position is achieved because the strength of
driving forces and resisting forces is equal. If you have to change the present
position, you have to shift the equilibrium (which is not quite stationary, i.e. quasi-
static") by any of the following, means: increasing the driving force, reducing the
resisting forces or by converting a resisting force into a driving force. After you have
disturbed the present state of equilibrium by any one or a combination of the above
mentioned means, a new state of equilibrium will be achieved. This state will remain
for some time as "after-change phenomena as long as nobody disturbs the new found
equilibrium. A clear analysis of what are the driving ("Push forward") or resisting
("Pull backward") forces will help you manage a change better.
Unfreezing
As a practical matter, change does not occur in a vacuum of no prior perspective. To
the extent the new is different from the old and the old-had value to the individuals,
the old patterns of perspective implies a questioning and doubting of existing
assumptions and feelings. For most change which is significant, the unfreezing
requires a loosening of emotional as well as intellectual forces. Unfreezing involves
the following steps:
Recognising the Driving Forces
Recognising major changes in the environment and problems within the organisation
is the first step toward organisational change. Institute managers may recognise these
pressures for change and take corrective action. In many organisations, however, the
need for change may go unnoticed until a major problem strikes. and, it may he too
late to solve it. It is important for people like you to develop keen sensitivity towards
the external as well as internal environment.
Increasing the Driving Forces
Once the need for change is identified, it has to he communicated to people who w he
involved in the changing process. As noted earlier, if members know why the change
52
is needed, they are more likely to adopt it. You can employ the following strategies to
increase the - acceptance of a change.
1 Express the need for change Managing Change
People who will be affected by the change have to y the change is needed. If
they do not, they will hesitate to cooperate in the change process.
2 Communicate the potential benefit
People have a tendency to ask, "what's in it for me?" Unless they feel that the
change will benefit them or that failure to change will hurt them
substantially, they are less likely to cooperate. If no benefits can be
identified, the costs of not changing must at least be understood.
3 Protect the interest of concerned people
People fear change because it may cause them to lose their jobs, income or
status. Assurances of job security, income protection and maintenance of
status can increase the acceptance of change.
4 Get people involved in the process
Participation can help people accept change. Some individuals have a
positive outlook on change and when they participate, the progress of change
is facilitated.
5 Communicate the progress of change
In order to minimise fear of the unknown, the content and progress of change
must be communicated to employees. It is often difficult to know all the
potential consequences and influences of a given change, but, by keeping
employees informed of its progress, management can at least maintain a
climate of trust.
6 Use a respected change agent
The credibility and power of the change agent can facilitate the process of
change. The change agent must be familiar with the technical and
behavioural aspects of a given change and must be someone with an
influence on organisational functioning.
7 Reinforce earlier changes
When an organisation undertakes a large scale change involving a series of
continual modification, it is important for people to see that earlier changes
have been successful.
Managing the Resisting Forces
Most of the strategies designed to increase the driving forces are equally applicable
for reducing resisting forces to change. People resist change because they perceive
that it ' can be harmful to them; thus, it is essential that they be made aware of its
need and benefit. Understanding the reason why people resist change can help you
formulate a plan to reduce the resistance.
Moving
In the moving or changing phase the individual is ready for new behaviour and a
change in perspective. It is important that he or she have an opportunity to build by
experimentation new patterns of behaviour and new assumptions, perceptions and
feelings.
It is a time of trial and error learning, characterised by ambiguity and tentativeness.
The phase is typically one of careful guidance by an authority, of learning the pieces
of a new pattern of behaviour before the whole can be conceived. Moving or change
involves changing the organisational components. Traditionally, organisational
change was thought to mean modifying only one subsystem of an organisation. For
example if there was a change in technology, modifying a task was thought to be
sufficient. In recent years, however, more attention has been paid to larger-scale
organisational changes involving several organisational components. This approach
is based on the view that an organisation is composed of four major components-task,
structure, technology and people and that a change in any one of them requires
changing the others. You are already familiar about this interdependence which was '
discussed in the earlier section on Domino Effect.
Refreezing
The final phase involves the establishment of a new perspective compatible with and
leading to the new desirable behaviour. In effect, the new part of one's total
perspective is now established and integrated so that it fits the whole. This makes it
53
Organisational possible for the new behaviour to be accomplished as a matter of course. This is the
Climate and Change period in which the individual or group begins to enjoy the rewards for the new
behaviour, either extrinsically in the form of social approval, monetary reward and
the like or intrinsically in the form of ego satisfaction, sense of mastery and self-
fulfillment.
In order to continuously reinforce the newly acquired behaviour, the organisation
needs to maintain the organisational fit among various components that are
supportive of such behaviour. Without such organisational compatibility, the
organisation will encounter instability. Since the new found behaviour cannot be
adequately reinforced in an unstable organisational climate, it may soon be
discontinued.
Unsuccessful efforts to induce significant and lasting change in organisational
behaviour can generally be traced to failure in one of the three stages described
above. Either they fail to alter in any significant fashion the forces maintaining old
behaviour; or they fail to offer a clear, satisfying alternative; or they fail to "stamp in"
the new behaviour. Remember, however, that an organisation operating in a complete
dynamic environment may not be able to maintain a level of organisational fits for
long. Since both internal and external components change constantly, organisational
fits cannot exist at one level for a long time. Under this environment you need to
search for organisational fits at different levels. For you the task of performing
organisational change becomes a continuous process, finding a moving equilibrium.
Based on this understanding of the three basic phases of any change process now you
should be able to appreciate the dynamics of successful organisation change. The
success stories of change have taught us that the organisational changes are typically
initiated at the top management level after they are aroused to take action for "setting
things right". They might feel alarmed by a number of distressing symptoms but may
not have clear idea about what the specific problems are. They might still hold on to
their present understanding of the perspective and might engage in reflexive
behaviour. A lot of unfreezing interventions are required at top to facilitate their
diagnosis of problem areas and recognition of specific problems. Only when the
perspective is redrawn with the help of hard data, attempts are made to invent new
tentative solutions and commitments are generated to implement the same This is the
typical trial-and-error changing process where experimentations with new solutions
and search for results continues. Only when enough reinforcements are received from
positive results, are the new practices accepted and a change stabilised.
Activity K
Successful unfreezing often requires something like "shock treatment" where old
ways of coping prove ineffectual. Alternatively there must be serious unambiguous
disconfirming feedback about the efficiency of current behaviour. Recall any
personal incident which helped you to unfreeze and question your previously held
assumptions. Compare your personal experience with the unfreezing process
described in this section.
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Activity L
In your previous activities, you might have collected a case of successful organisation
change. Analyse the case in step-by-step model of dynamics of change phases.
Compare the model with your realistic case and comment to what extent the model is
confirmed or disconfirmed.
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54 .
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11.5 COPING STRATEGIES FOR CHANGE Managing Change

Organisations depend on the environment for their survival. So they need to manage
their external dependence and protect their core technology from disruptive external
influences.
Every organisation develops its own technology whereby inputs are subjected to
people and/or machine processes and subsequently become the outputs for the
organisation. Before resorting to any change in core technology, all organisations
attempt to protect it. You as a manager can attempt to protect the core technology of
your organisation by several methods. You may seek to buffer environmental
changes on both the input and output side of your organisation's operations. Buffering
on the 'input side may be achieved by stockpiling materials acquired in an irregular
market and their steady utilisation in the production process. You may buffer on the
output side by maintaining warehouse or distribution inventories. You may
anticipate change in the demands of the products and services of your organisation
and subsequently modify production schedule on the basis of new forecasts. When
such anticipation or modification is not possible you can attempt to level the demand
fluctuations through levelling techniques like offering inducements in the form of
special sales in slow
periods.
The more the organisation is dependent on external environment, the more vulnerable
it is. There are again three ways in which organisations can manage their external
dependence: Adaptation, Avoidance and Control.
Adapting to External Changes
The adaptive strategy takes the marketing approach to environmental demands. It
usually starts with an assessment of the needs of the market place and then produces
goods and services to meet these. As discussed by Schein (1965), the strategy
involves the following sequence of activities in the adaptive-coping cycle:
1 Sensing a change in the internal or external environment;
2 Importing the relevant information about the change into those parts of the
organisation that can act on it;
3 Changing activities inside the organisation according to the information
obtained;
4 Stabilising internal changes while reducing or managing undesired by-
products;
5 Exploring new products, services, or methods that are more in line with the
originally perceived changes in the environment; and
6 Obtaining feedback on the success of the change through further sensing of
the state of the external environment and the degree of integration of the
internal environment.
From these stages of the cycle, Schein indicates four conditions for successful
coping, conditions that are very similar to the ultimate criteria of organisational
health (1) ability to take in and communicate information reliably and validly; (2)
internal flexibility and creativity to make the changes that are demanded by the
information obtained; (3) integration and commitment to the goals of the
organisation, from which comes the willingness to change; and (4) an internal climate
of support and freedom from threat.
Avoiding External Dependence
An organisation can reduce external dependence in a number of ways:
a) Finding an environmental niche
This can be done by selecting specific environmental domains with little or no
competition, no restrictive regulations, but plenty of suppliers and customers. Indeed,
his is too ideal to be realistic, but some innovative companies keep other
organisations out of competition and maintain monopolistic positions in the market.
b) Reducing dependence through diversification
To the extent that an organisation depends on a limited number of outsiders for its
needed resources and outputs, the degree of its dependence on them increases. The 55
'organisation can reduce this dependences through diver' uiation. The organisations
Organisational may cultivate alternate sources of suppliers or acquire new sources of supply and
Climate and Change distribution or expand its product lines for this purpose.
c) Developing mutual dependence
When people or organisations depend on each other for survival or for positive
exchange relationships, one party may not take an arbitrary action against the other
because of fears of repercussions. However when one party is more dependent on the
other, an imbalance in their exchange relationship is created. This stronger party can
take an action against the dependent one without being challenged. In order to avoid
such one-sided dependence, the dependent party may have to diversify its
dependence or increase the other party's dependence on it. Such a necessity for
mutual dependence is vividly demonstrated in international power politics.
Controlling Environmental Forces
Organisations can reduce their external dependence by controlling the forces in the
environment that, in turn, control their behaviours. These forces may include
competitors, suppliers, customers, legislative bodies and unions. Many tactics can be
employed, of which some are:
a) Create an organisational structure with a large number of boundary spanners,
who interact with the environmental forces. Creating a public relations department or
project group is an example.
b) Appoint individuals from external elements who can establish personal
linkages to those who control the environment; for example companies that rely on
defence contracts may appoint ex-service officers to provide such personal linkages.
c) Create or participate in trade associations. They reduce competition among
their members and allow them to control their environments jointly. Many
professional organisations protect their members' interests through such organised
effort.
d) Lobby the legislative and regulatory agencies to create favourable
environments for an industry or organisation. This is the reason why an army of
lobbyists operates in Delhi and in state capitals.
Other devices can be used to control the environment as well. These include such
tactics as price fixing, forcing out competitors, false advertising and bribes. However,
these methods are mostly illegal or against contemporary social norms and values.
For this reason, not many respectable organisations use such tactics explicitly or
extensively.
11.6 RESISTANCE TO CHANGE
From its inception, the study of organisational change has noted the fact that many
participants respond with dogged resistance to altering the status quo. Since the
industrial revolution began, workers have at times sought, occasionally in extremely
violent fashion, to block the introduction of new technology. Supervisors and lower
level managers have balked at large scale projects in job redesign and job
enrichment; even low level employees, the presumed beneficiaries of such projects,
have fought such changes. Divisional managers have fought pitched battles against
realignment of corporate structure. Even the proposal by a course coordinator to
adopt a different text book is capable of touching, off a frenzy of defensive tactics to
resist change.
Such behaviour may be either overt or covert. Overt resistance may take the form of
employees deliberately failing to do the things necessary for successful change or
simply being unenthusiastic about the change. The absence of overt resistance does
not mean that resistance is not present, as resistance may be hidden from direct
observation. Covert resistance can be more detrimental to change than open
resistance because it is harder to identify and eliminate.
Watson (1966) has suggested that there are at least two sets of factors which explain
the process of resistance. One set relates to the personality and the other relates to the
social system.
56
In case of the personality related factors one can include the following:
Homoeostasis or the tendency of the organisation to maintain an equilibrium. Managing Change
Because of this tendency all change related phenomena are resisted.
Habit : Since change entails a conflict with established habits, it tends to be resisted.
Primacy: The way in which a situation is first encountered and the difficulties are
overcome tends to be firmly established. This becomes an established behaviour
tendency.
Selective perception and retention : Human beings have a tendency to perceive and
retain those aspects of their environment which are cognitively consonant. An
individual does not like to read or hear views which contradict his own opinions.
Many a good idea 'is rejected as a theory which would not work in the practical
situation.
Dependence: Since childhood an individual learns to he dependent on adults, or on
others for comfort and security. This tendency does not allow him to take the
initiative and accept innovation and change.
Super ego: This represents individual moral codes of ethics that decide the 'dos' and
dont's of society. It provides an internalised code of control which may induce a high
sense of conformity.
Self-distrust : Due to the various super ego pressures a sense of self-distrust may
sometimes be developed. The puritanical views may ultimately create a sense of self-
distrust and to be 'good' is to accept the status quo ante.
Insecurity and regression : It is almost a universal human tendency to seek refuge
in the past when the going gets rough. The frustration-regression sequence hampers
the acceptance of change when the change is needed most.
In case of the causes of resistance to change in social system, the following factors
have been identified:
Conformity to norms: The norms in a social system are similar to habits in the
individual. They indicate the expected ways of behaving. These include time
schedules, modes of dress, forms of address to colleagues and indications of
company. loyalty etc.
Systemic and cultural coherence : Generally a social system is made up of several
component elements. When the system needs to be changed, relationships between
elements have to be altered. Since changes in a diode or triode may unleash a series
of changes elsewhere in two systems. the resistance may come about from the other
elements.
Vested interests : In the social system, it is not uncommon to observe the resistance
emanating from individuals whose economic or prestige interests are at stake.
The sacrosanct : Certain beliefs and ideals are held sacred by the members of an
organisation or a social system. Changes relating to these ideals are resisted the most.
Cultural taboos represent a special class of events which are prescribed for members
and serve the same function as "super ego".
Rejection of "Outsiders" : It is customary to suspect and show hostility to outsiders
or "the others". In scientific researches also it has been observed that certain projects
are not acceptable if they are perceived as sponsored by outside agencies and not
evolved from within.
To conceptualise resistance to change as a rational response to the threat of losing
security, status, autonomy, and investment in the status quo leads naturally to the
consideration of organisational change as a political process. Indiviudals, interest
groups, and coalitions favouring change presumably stand to gain either because of
their identification with measures that render the organisation more effective, or
because they derive personal gain through greater status, perquisites, prestige,
automony and the like. Since some people stand to lose, or at least believe that to be
the case, they will defend the status quo. What strategies and tactics will unfold?
Both sides will seek early on to appeal to the uncommitted-those who have no strong
feelings for or against the change, either because they may be largely unaffected or
because they cannot decide whether the outcomes to them are, on balance, positive or
negative. Appeals to this group may take the forms of lobbying, distortion,
propaganda, persuasion, cashing in credits from old favours, implied threats, appeals 57
to loyal and friendship, or mixtures of all of the above.
Organisational You will usually find that winning over thc uncommitted is a necessary but not
Climate and Change sufficient condition for actually ushering in a change programme. Frequently the
resisters, even if a small minority, will include in their ranks critically placed
individuals or groups who, even if not able to block change, have the potential for
sabotaging it when put into operation. Successfully implemented change requires
some means of coopting these groups. This usually necessitates substantial
modifications of the originally proposed programme.
One means of accommodating resisters is to invite their participation in the
planning, design and process of carrying out programmes. Numerous experiments
and experiences demonstrate that when members are allowed participation in
planning the installation of new production methods, they show less resistance to
learning and adopting new methods. Participative forums give affected parties a
sense of ego-identification with the proposed changes leading to a commitment to see
the change effectively implemented. It also provides sufficient exposure to
information about the nature and consequences of the change so that the anxiety out
of uncertainty is reduced.

11.7 STRATEGIES OF IMPLEMENTING CHANGE

Ask any experienced manager how organisational change should he implemented and
likely to get an earful. Most managers who have been responsible for implementation
have developed personal perspective consisting of assumption and ,g feelings about
how change should be introduced. These philosophies fall into camps,-either "tops-
down" or "bottoms-up".

The Tops-down Strategy

The advocates of this strategy believe that, in general, people resist changes and
require direction and structure for their well being as well as to work efficiently and
effectively. The basic psychological contract between employees and management, it
is assumed, is one in which the employee provides work, effort and commitment and
expects in return pay, benefits, and a clear definition of what is expected to be done.
It follows that it is the management's responsibility to design the changes it deems
appropriate and to implement these thoroughly but quickly by directives from the top.

The Bottoms-up Strategy

The advocates of this approach profess what to them is a more enlightened view of
human nature. They argue that people welcome change and the opportunity to
contribute to their own productivity, especially if the change gives, them more
variety in their work and more autonomy. These managers assume people have a
psychological contract which includes an expectation that they be involved in
designing change as well as in implementing it. Commitment to change, they say,
follows from involvement in the total change process and is essential to successful
implementation.
Which is more correct? Is the question of correctness the right question to ask? What
is your philosophy of change?
If your answer to the question was, in effect, "the correct strategy of change depends
on the circumstances", you are in agreement with the currently very popular
contingency school.

Contingency Approach

According to the contingency school, the choice of an appropriate strategy and the
implementation diagnosis consists of assessing eight independent variables or factors
in the organisations. These are shown in the upper part of Figure V, where each
variable is given a continuum of potential values. Based on the diagnosis which
58 evolves, the basic implementation strategy will consist of selecting values along the
continua for the three dependent variables as shown at the bottom of Figure V.
Once the values of these variables have been located, and if the answers to the Managing Change
diagnostic for the independent variables fall towards the left of the continuum, then
the implementation strategy would also be leftwards. On the other hand, if the values
of variables tend towards the right side of continuum then the implementation
strategy would also be rightwards. Thus, for example, if there is very little time
available, the crisis or need for change is clear to all, it is a small organisation, and so
on, the appropriate change strategy is tops-down, directive, and fast.
Figure V: Variables for diagnosis and strategy setting of Implementation of organisational change.

Diagnostic (independent) variables

1. Time available ..Short ..Long
2. Clarity of crisis or need for change..Clear to all
..Clear to few
3. Size of organisation ..Small..Large
4. Effects of existing controls and incentives ..Encourage
initiative ..Encourage focus
5. Organisational concentration of relevant
knowledge..Concentrated at top
..Concentrated at bottom
6. Expectations of people regarding involvement in implementation
..None ..Extensive
7. Potential resistance ..Small..Great
8. Total power base of change
agent..Great..Small
Implementation strategy (dependent) variables
1. Pace..Fast..Slow
2. Use of power..Tops-down..Bottoms-up
3. Management
style..Directive..Participative
So, whenever you are faced with a problem of managing change, assess the situation
mentally and depending upon your diagnosis of the situation you can proceed to the
task of implementing change with reasonably greater probability of success.
Activity M
Think of the implementation of an organisational change (e.g., new administration
procedure, computer system, or other technology etc.) which you have experienced.
Using the checklist of diagnostic variables given in Figure V, indicate what the
situation was for each variable. What does the analysis suggest as to the appropriate
method of implementation? How did this differ from the actual method of
implementation?
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. 59
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Organisational Activity N
Climate and Change
Collect a case where implementation of a change programme met with so much
resistance that the attempt had to be given up. Make a post mortem analysis of the
failure by commenting on the factors behind resistance, process of change and
strategy of implementation. Had you been in charge of the implementation, what else
would you have done?
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Final Activity
Go back to the learning objectives of this Unit and Check for. yourself how many of
these objectives you have attained.

11.8 SUMMARY
We have discussed about the nature of change: individual and organisational;
evolutionary and revolutionary; and, reactive and proactive. Several forces influence
changes in internal and external environment of organisations. These changes in turn
influence the effectiveness of organisations and require a change in corporate
strategy. The process of organisational change involves three stages-unfreezing,
moving and refreezing. Understanding these three basic phases is necessary to cope
with change and manage the external dependence of organisations through
adaptation, avoidance and control.

11.9 SELF-STUDY EXERCISES/QUESTIONS

1 What are the major forces for change that confront organisation?
2 Discuss the process of organisation change and the strategies to cope with it.
3 Distinguish between:
a) Individual change and organisational change
b) Evolutionary change and revolutionary change
c) Reactive and proactive change

11.10 KEY WORDS

Adaptive-coping Cycle: The attributes of an organisation change in order to help it
cope with changes in the environment.
Amoeba Syndrome: Lack of strong direction from top executives, not enough
structure, order or guidance leading to activity trap. Doing things without knowing
where one is leading.
60 Anarchy Syndrome: A situational upheaval where leadership responsibilities,
functions and resources are in dispute.
Bottoms-up Strategy: A change implementation strategy which assumes that Managing Change
employees welcome change and should be involved in imitation of change.
Buggywhip Syndrome: Clinging to obsolete products, services and practices which
no longer have potential for sustaining its livelihood.
Change Agents: Members of an organisation whose role involves strategies and.
procedures for inducing change in the organisation.
Deadlock Syndrome: Stand off condition between management and leader of work'
force leading to antagonistic relation between the factions.
Diagnostic Variables: Are the eight independent factors which need to be assessed
before the strategy for implementing change is decided upon.
Differentiation: Division of the organisation into specialised subsystems to cope
with various demands imposed upon by the environment.
Domino Effect: A situation where one change sets off other changes in an
organisation owing to interdependence of various subsystems.
Driving Forces: These are pressures or the needs for change which demand
corrective action, which must be perceived by every manager.
Evolutionary Change: In course of time, every organisation exhibits change which
is slow, smooth and gradual from birth to maturity to decline and may be even death.
Growth Phases: An organisation, like a living organism passes through various
stages of growth such as birth, maturity, decline and death.
Integration: Refers to the unity of purpose and commonality of wider goals that
holds the diverse and specialised subsystems of an organisation together.
Moving Phase: This phase involves actual change in the various components, for
subsystems of an organisation.
Mom and Pop Syndrome: Small company managers can not/will not help the
company grow past the awkward stage.
Myopia Syndrome: No future orientation, little thought to strategy, sense of
direction and advance planning.
Proactive Change: Change that anticipates a desired state of affairs. It contrasts with
reactive change as purposive behaviour contrasts with reflexive behaviour.
Purposive Response: It is a response to a stimulus that involves planning and
coordination of effort with respect to the goal in mind.
Rat-race Syndrome: Toxic climate coming from oppressive, primitive, slave driving
policy.
Reactive Change: Change that is initiated in response to needs as force generated by
the organisation's interaction with the environment.
Reflexive Response: it is the immediate, spontaneous, automatic and unthinking
reaction to a stimulus.
Refreezing Phase: It involves reinforcing newly generated changes through a
process of countering instability and ensuring compatibility between various
subsystems.
Remote Control Syndrome: Too much administrative or executive control from the
parent body. Decision-making autonomy is seriously impaired.
Resisting Forces: Personality and social system related factors that generate
responses which tend to check onset of change.
Revolutionary Change: Every now and then, there emerges a crisis situation in an
organisation, which necessitates a rapid, visible, radical shake up in its structure,
policies, procedures or personnel.
Rigor Mortis Syndrome: Conditions of inertia and constricted activity prevail.
Primary organisation value is structure and order.
Tops-down Strategy: A change implementation strategy that believes in change
coming by way of directives from top management as being entirely appropriate.
Unfreezing Phase: This initiates the change process. It leads to recognising the need
for change after having questioned existing value suppositions.
Young Turk: Is a type of change agent who is young, dynamic, pushy, persistent and 61
ambitious. His new ideas tend to challenge status quo.
Organisational 11.11 FURTHER READINGS
Climate and Change
Greiner, 1972. Evolution and revolution as organisations grow, Approved Business
Review, July-August.
Lawrence, P.R. & Lorsch. J.W., 1967. Organization and Environment: Managing
Differentiation and Integration, Harvard Graduate School of Business
Administration: Boston.
Schein, E.H., 1965. Organisational Psychology, Prentice-Hall: Englewood-Cliffs.
Watson, G. 1966. Resistance to Change. In : Goodwin Watson (Ed.), Concepts for
Social Change, CPEDS: Washington, D.C.

62
UNIT 12 ORGANISATION Organisational Structure
and Design
STRUCTURE AND DESIGN
Objectives
The objectives of this unit are to:
understand the basic elements of an organisation structure
differentiate between formal and informal organisation structures
appreciate the various factors impinging upon the design of an organisation
structure
familiarise you with different types of organisational structures and the
advantages and disadvantages of each
develop an understanding of the issues involved in designing a service
organisation
Structure
12.1 Introduction
12.2 Organisation Structure and Chart
12.3 Formal and Informal Organisations
12.4 Factors Influencing the Choice of Structure
12.5 Degree of Decentralisation
12.6 Line and Staff Relationships
12.7 Specialisation of Work
12.8 Span of Control and Levels of Management
12.9 Differentiation of Tasks and Activities within an Organisation
12.10 Matrix Structure
12.11 Network Structure
12.12 Integration of Organisational Tasks and Activities
12.13 Designing Structure for a Service Organisation
12.14 Summary
12.15. Key Words
12.16 Further Readings
12.1 INTRODUCTION
Organising is the formal grouping of activities and resources for facilitating attainment
of specific organisational objectives. It is possible to achieve objectives without
formally organising, but there is likely to be great wastage of resources and time.
Organising ensures that objectives are achieved in the shortest possible time, in an
orderly manner, with maximum utilisation of the given resources.
In the context of a firm, its people, machines, building, factories, money, and credit
available for use are the resources at its disposal. All these resources are limited.
Your role as a manager is to organise all these resources, so that there is no confusion,
conflict, duplication or wastage in achieving your organisation's objectives. You will
be required to allocate to each person his role, designation and position in the
organisation, his responsibility for achieving specific objectives and authority for
utilising the resources assigned to him, and the higher authority to whom he has to
periodically report his progress. In this unit, we will take up all these issues for
discussion, dwelling at some length on the various types of organisation structure that
you can choose from to suit your company's specific objectives.

12.2 ORGANISATION STRUCTURE AND CHART

Organisation structure refers to the formal, established pattern of relationships
amongst the various parts of a firm or any organisation. The fact that these 5
relationships are formal implies that they are deliberately specified and adopted and
do not evolve on their own. Of course, it may sometimes happen that given an unusual
Organisational Structure and situation, new working relationships may evolve and which may later be adopted as
Process representing the formal structure.

The second key word in our definition of structure is `established'. Only when
relationships are clearly spelled out and accepted by everyone, can they be
considered as constituting a structure. However, this does not mean that once
established, there can be no change in these relationships. Changes may be necessary
with passage of time and change of circumstances, but frequent and erratic changes
are to be avoided. A structure can be based on relationships only if they exhibit a
certain degree of durability and stability.

The formal relationships in an organisation are those as described in an organisation

chart. Figure I presents a typical chart for a company engaged in manufacturing. The
boxes in the chart represent the various important positions in the organisation. The
title of the position in the box, viz., manager purchase or manager marketing,
indicates the activities of that position. The distance of the box from the top indicates
its position in the hierarchy. The closer the position to the top, the higher its status
and vice-versa. The lines joining the various positions represent the formal reporting
relationships, usually between a superior and a subordinate.

Figure I : Organisation Chart for a Manufacturing Company

6
The organisation chart is a rather abstract illustration of the structure. To get a more
complete picture, the chart may be supplemented by job descriptions of each Organisational Structure
position. The job description gives in detail the activities and responsibilities and Design
expected of the person occupying the position.

Both the organisation chart and job description are simplified abstractions of the
actual situation. In reality there are many more positions and relationships than
indicated in the organisation chart. The degree of authority a superior has over his
subordinate is also not indicated in the chart, nor is the relationship between two
managers at an equal level reflected in the organisation chart.

Despite all these limitations, the organisation chart is an extremely useful tool in
understanding and designing the structure. The structure of an organisation, unlike
that of a physical, mechanical or biological system, is not visible; Therefore, it can
only be understood by a representative model and by observing its behaviour.

Activity A

Draw the organisation chart of your company. Clearly mark your position in the
structure and draw the lines depicting the reporting relationships between you and
your immediate boss and immediate subordinate.

The elements of an organisation structure are:

i) the network of formal relationships and duties, i.e. the organisation chart
plus the job descriptions,

ii) the manner in which various tasks and activities are assigned to different
people and departments (differentiation),

iii) the manner in which the separate activities and tasks are coordinated
(integration),

iv) the power, status, and hierarchical relationships within the organisation
(authority system),

v) the planned and formalised policies, procedures and controls that guide the
activities and relationships (administrative system), and

vi) the flow of information and communication network.

The network of formal relationships has already been discussed. Before we get into a
detailed description of the specific elements of an organisation structure, it would be
useful to differentiate between formal and informal organisations and the factors 7
affecting the design of structure.
Organisational Structure and
Process
12.3 FORMAL AND INFORMAL ORGANISATIONS
If you and your colleagues decide to meet every Saturday evening for one hour and
form a recreation club to play chess and carrom, you are meeting in an informal
organisation. However, when the same group of your colleagues meets to review
tilt last quarter's performance and plan for the next three months it is in the context of
a formal organisation. Thus, while the informal organisation is spontaneous, the
formal organisation is the result of a deliberate and planned effort to pattern
activities and relationships in a specific manner to facilitate achieving the specified
objectives. A formal organisation is the result of explicit decision-making, deciding
how people and activities should be related to one another. However, there is no such
decision-making involved in an informal organisation which may simply evolve
over time.
In the context of a business organisation, both the formal and the informal
organisations operate together to form the total organisation. The formal structure
delineates specific departments, activities, people and their reporting relationships.
The informal structure refers to the social groups or friendships which people
working together may form.
A most important aspect of the informal organisation is the informal
communication network or `grapevine' as it is more commonly known. If you
analyse the communication network in your organisation, you would realise the
amount of information you gather from official circulars, memos and speeches is
rather insignificant compared to what you unofficially learn from your colleagues,
your subordinates and even your peons. The grapevine constitutes an extremely
important component of the organisational information system. How often you have
been able to avert a crisis much before it actually erupted because the information
about the impending crisis was conveyed to you by the grapevine?
Besides the grapevine, the other rnanifestation of the informal organisation is the
formation of groups which may spontaneously evolve when the formal organisation.
is slow to respond to changing external and internal forces. But sometimes these
informal groups may also work against the formal organisation. This may happen
when an informal group of workers may force other workers to lay down tools, or
work to rule or generally pose impediments in the path of progress.
Sometimes the norms and work ethics evolved by the informal organisation take
precedence over the official norms. The head of the market research division of a
large multi-national company involved in manufacturing and marketing a wide
range of consumer products, would always spend three to four hours every
Saturday morning in office, even though Saturday was officially a holiday.
Observing that the departmental head worked on a holiday, his immediate
subordinates also felt obliged to be in office every Saturday. The manager did not
expect it from his subordinates, but the latter felt that by doing so they would be
creating a favourable image for themselves in the eyes of their boss which would
help them in their promotion within the formal organisation.
Similarly, you would find informality evolved values operating within the
parameters of the formal organisation. These values may relate to dress,
employment of women, employment of members of a minority community, etc., In
understanding the structure of an organisation, you must understand the important
role played by the informal organisation within the formal organisation.
Activity B
List all the informal organisations in which you regularly participate. What are the
activities undertaken by these informal organisations?
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8 ........................................................................................................
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12.4 FACTORS INFLUENCING THE CHOICE OF Organisational Structure
STRUCTURE and Design

As a manager, it is your job to design a structure that will best suit the specific
requirements of your organisation. Designing an organisation structure is a
continuous process. What seems to be the ideal design today may tomorrow prove to
be totally ineffective. It is your task as a manager to be continually improving the
structure of your organisation. Any change in factors which impinge upon the design
of an organisation will necessitate a change in the structure to suit the new conditions.
Impact of Environment
The first factor affecting the design of your organisation structure is the environment.
An organisation is continuously interacting with its environment in terms of drawing
inputs from it and providing it its outputs. All organisations operate within an
environment which comprises economic, social, cultural, political and legal sub-
systems. A change in any of these sub-systems may force you to change the design of
your structure. Change in Government regulations regarding foreign equity
participation in India made it imperative for the most foreign owned companies to
dilute their holdings and become more national in character. Increasing awareness
about personal rights and social pressure on maintaining the natural state of
environment have forced many companies to set up Personnel Welfare Departments
and instal expensive equipment to neutralise the toxic effluents generated in their
manufacturing process. You might have-noticed that banks have instituted a process
by which public complaints can be tackled at the highest level. Some of the bank
managers and chairmen even set aside specific timings when they give a personal
hearing to individual grievances.
Business organisation are very much in the public eye today. Generally speaking, the
more responsive your organisation is to the changes in the environment, the more
favourable will be its public image and greater the chances of its survival and success.
You have not only to ensure that appropriate changes are made, but equally important
these changes must be perceived by both the public and the Government.
Impact of Technology
The second factor affecting the structure of your organisation is the technology that
you have adopted. To begin with, each pair of shoes was made by a single cobbler
who. probably spent four to five days on the entire process. With the concept of
specialisation and division of work, organisations, instead of being designed around
individual craftsmen, were structured on the basis of different people doing only a
specialised part of the entire process of shoe-making. This concept was further
refined with the introduction of automation and assembly lines. Now with the
introduction of computerisation and robots, new structural designs are once again
emerging. Entire plants are manned by a single operator who controls the operations
through computers. Major human inputs are needed in designing computer controls
and software rather than in performing repetitive jobs.
These technological changes affect not only the large firms but also the smaller ones.
In India, in a large number of medium and small scale companies, simple routine
functions such as preparing payroll, invoicing and ledger maintenance have been
computerised. Such small changes also necessitate redefining jobs and redesigning
existing departments to suit the new technological process. Today the greatest impact
of technology is on the manner in which people collect, receive and use information.
In many companies full-fledged Management Information System departments have
been set up in response to the explosion in information technology.
Impact of Psychosocial Characteristics
The changing psychosocial characteristics of the workers is the third factor impinging
upon the design of the organisation structure. Greater demand for leisure time led to the
introduction of the five, and in some places, even the four-day week. Our country has 9
also recently adopted a five-day week. Greater awareness about worker rights and
use of more militant means to earn those rights have led to the widespread formation
Organisational Structure and
Process
of trade unions in almost every organisation. Some companies have had to redesign
their structure in order to give a formal recognition to the unions.
The three factors that we have discussed so far are external to the organisation and its
management. However, there are some attitudes and values of the management
which have a critical bearing on the structure of an organisation. Most important of
these are the management's attitude towards the issues of decentralization and
delegation of authority and the role and function of line and staff personnel. Also
affecting the organisation structure are the scalar principle and span of control.

12.5 DEGREE OF DECENTRALISATION

Centralisation refers to the concentration of authority and decision-making in one
single position in the organisation. In a one-man enterprise, the entrepreneur makes
all the decisions and all the authority and decision-making power is vested in him.
With the expansion of business, it may no longer be possible for one man to control all
the operations and may become necessary for him to delegate some responsibility and
authority to another person. Delegation implies that you are acting on behalf of your
boss by virtue of the power which he has given to you. The greater the delegation of
power the greater is the extent of decentralisation in the organisation.
You will find that some companies, even though physically very large, have highly
centralised structures. All decisions are taken by the top management, with the
middle and operating level managers having little or no say in running the show. On
the other hand, you may find that even in a relatively small organisation, there is
greater delegation of power and the structure is very decentralised. The degree of
decentralisation in an organisation is partly a manifestation of the top management's
attitude. Some managers do not like to delegate even the smallest task to their
subordinates. There may be a variety of reasons for this. Doing all the tasks himself
may give the manager a great sense of power, or he may feel that the subordinate is
incompetent and may commit mistakes.
Total centralisation, however, is never desirable as it may bog down the manager in
routine, trivial tasks and leave him no time for planning the company's future. An
effective manager would decide the issue of centralisation versus decentralisation on
the basis of the requirements of the situation rather than his own personal bias.
Decentralisation is effective when:
Conditions in each market are so different that only a high degree of adaptation
to local conditions will lead to success. Multi-national companies with
subsidiaries in many different countries are a typical example
Success depends on the quick response to the information and conditions
generated at the local level. Companies dealing in stocks and shares or
international currencies require speedy response to the fluctuating prices for
getting the best returns
Active participation of people in the planning and implementation of objectives
is conducive to good performance. An engineering company manufacturing
electrical switching equipment sells mainly to the State Electricity Boards
(SEB) through the tender system. Each tender requires close ntonitoring and
personal follow up at each stage till the final award is made. Realising that
personal rapport with individual SEB is important, the company has fully
decentralised local offices in each city where the SEB is located.
The introduction of computers and real time information has influenced the concept
of centralisation in an organisation. Information may be generated at the factory, but
it is instantaneously transmitted to the decision-maker (even if he is located 10,000
kms away) for suitable action. Information may be processed and used at the place
where it is generated or it may simply be passed on to another location for use in
decision-making. Real time information can lead to greater centralisation or
decentralisation.
10
The degree to which a term decentralises its structure depends on the requirements of
its unique situation. Also. a firm may not decentralise all its operations, but go in for
only partial decentralisation. Functions which facilitate local adaptation, quick Organisational Structure
decision-making in response to local changes and strengthen worker participation and Design
should certainly be decentralised. On the other hand, functions involving economics
of scale, utilisation of specialised knowledge and involving huge sums of money may
remain centralised. Finally, the degree of decentralisation also depends on the
availability of competent and reliable people to head the independent operations.

12.6 LINE AND STAFF RELATIONSHIPS

The role of line and staff personnel is the other issue to be decided in the context of
designing your organisation structure. Traditionally, any function which directly
contributed to the organisation's objectives was viewed as a line function. Staff
functions were those which helped line functions to perform more effectively.
However, an important point to note about line and staff is that in the former there is a
direct relationship of command from superior to subordinate while in the latter the
relationship is more advisory in nature. There are some traditional principles which
have greatly influenced the concept of organisation structures. The most important of
these are specialisation of work, scalar principle and span of control.

Activity C

Evaluate the organisation of your company in terms of whether it is a highly

centralised or decentralised structure. If you were made the chairman of the
company, what kind of a structure would you adopt? Describe in detail the functions
which you would centralise and those you decentralise.
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12.7 SPECIALISATION OF WORK

A very basic and traditional principle of organising is to break down a task or process
into smaller, more manageable tasks which call for utilisation of special skills. This
concept of work specialisation aid division of labour was the forerunner of assembly
lines. This is indeed a useful principle in so far as it allows a worker to concentrate on
that activity at which he is most proficient. But in many situations, this concept has 11
been carried too far and Jobs of workers have become so fragmented and trivial that a
worker's job may be reduced to putting a screw on a bolt and simply tightening it.
Organisational Structure and Scalar Principle
Process
Scalar principle and unity of command are two closely related principles. The
scalar principle states that authority should flow in a straight line from the superior
to the subordinate in a hierarchical manner. The principle of unity of command
states that ideally each subordinate should have only one superior. These two
principles establish the basic hierarchical nature of an organisation.
12.8 SPAN OF CONTROL AND, LEVELS OF
MANAGEMENT
Closely related to the concept of hierarchical structure are the concepts of span of
control and levels of management. Let us understand these with the help of an
example.
In 1975 Mrs. Das, a housewife living in Bombay, started making garlic chilly sauce
at home and selling it to her close friends, relatives and neighbours. The sauce
became quite popular and Mrs. Das began receiving many orders, including two
from the nearby Chinese restaurants. Unable to cope with so much work she hired
Indrani as an assistant. This was the first step in delegating authority and creating
another level of management. Existing customers now had to deal with Indrani as
Mrs. Das herself concentrated on preparing the sauce and tapping potential new
customers.
A year later Mrs. Das hired one girl to help in the kitchen, two girls to assist her in
making sales calls and one office assistant for Indrani. Now authority had to be
delegated in the kitchen as well as in making sales calls and hence two levels of
management were created in the kitchen and sales. The new office assistant
reported only to Indrani, who in turn reported to Mrs. Das and thus there were three
levels of management in administration. Span of control refers to the number of
people a manager has to control. Now Mrs. Das's span of control extended to four
people (Indrani, one kitchen assistant, two sales assistants) and Indrani's span of
control was restricted to only one. By 1980, the small sauce making enterprise had
shifted to a shed in the nearby industrial estate, with a full-fledged production
facility consisting of 10 people and a sales team of 16 girls, divided into 4 territorial
teams supervised by a sales manager and an office administration set up of 25
people.
Mrs. Das's organisation as it evolved is shown in figures II, III, IV, and V.
Starting out with a relatively flat organisation where Mrs. Das was in direct contact
with all her customers and suppliers, her organisation had acquired many levels of
management and a vertical structure by 1980.
As an organisation adds on levels of management it becomes vertical and the span
of control at each level becomes narrow. In a flat organisation,.the span of control
is relatively wider and levels of management are few. The flow of information in a
flat organisation is fast and there is greater individual satisfaction and it is the ideal
structure for conducting research and development and new product development
groups.
There is a great deal of controversy regarding the optimum number of people a
manager can effectively manage or the ideal span of control. The important factor
is not the number of people whose work a manager has to control but the number of
people he actually has to work with. On paper the marketing president may have 30
area sales managers under his span of control. But since he does not have to
interact with them individually more than once in six months, and all other
interactions including the regular reports are through the vice-president (sales), the
system works well. In practice, there is no `ideal' span; it will vary from individual
to individual and from one organisation to another.
Similarly there is no hard and fast rule governing the levels of management. Too
many levels only add unnecessary complexity because decisions, information and
instructions must go through too many channels. Each organisation has to find its
12 own ideal balance.
Organisational Structure
and Design

13
Organisational Structure and
Process
12.9 DIFFERENTIATION OF TASKS AND
ACTIVITIES WITHIN AN ORGANISATION

The various, multifaceted tasks and activities of an organisation have to be divided

into smaller, manageable components to facilitate efficient achievement of
objectives. The most common basis for differentiation and division are function,
product, location and customer. In recent times the two types of organisation
structures which have evolved are the matrix organisation and the network
organisation.
Differentiation by Function
The grouping of activities according to the type of function performed is the most
commonly used structure. You would find this not only being widely used in business
organisation but also in non-commercial organisation such as hospitals, universities
etc.
The functional structure is most suited when an organisation is dealing with a single
product or service. The activities can easily be segmented into similar,
complementary activities such as production, marketing, finance, purchase etc.
Depending on the nature of the organisation and its scope of activities, the functions
it has to perform may differ vastly from those of another organisation. For instance,
one company which undertakes both manufacturing and marketing may have
departments engaged in purchase, production, marketing and finance. If it is selling a
product such as TV or refrigerator it may also have an after-sale-service department.
On the other hand, a company which is an ancillary to a parent company may have
only departments for purchase, manufacturing and finance. Since it is selling its
entire production to the mother company there is no need for a marketing department.
Figure VI shows a typical functional structure.
The most important advantage of functional structure is that it allows for
specialisation of work, thus ensuring the most efficient utilisation of human resources.
The other benefit of this form of departmentalisation is that there is concentration of
authority and responsibility in the top man, thus ensuring that there are no conflicts
arising from different authorities. The hierarchical line of responsibility is very
clearly delineated.
The major disadvantage of the functional structure is that functional specialists often
lose sight of the overall organisational objectives and work for narrow, functional
objectives rather than organisational objectives. The other major problem associated
with this type of structure is that of co-ordination amongst so many functional
departments each with its unique set of constraints and problems.

Figure VI: Functional Organisation

14
Differentiation by Product
Organisational Structure
and Design
As a company moves from a single product or service to manufacturing a wide
range of products it may find that the functional structure is no longer effective.
This is especially true if the products are very different from each other in
terms of the technology, raw material and manufacturing process used and the
final product. In such a situation, the company may then have to adopt a
structure which revolves around individual products or product lines. Figure VII
illustrates one such organisation structure.

Companies such as Hindustan Lever (manufacturing and marketing uetergents,

toiletries, chemicals, and agro-based products) Richardson Hindustan with its
range of Vicks products, Clearasil cream and soap have structures revolving
around different products. The extent of differentiation would vary from one
company to another. One company may club all its toilet soaps, detergents, and
washing powders in one product line, while another may differentiate between
toilet soaps and detergents or even between individual toilet soaps if they cater
to distinct market segments or have a very different raw material base.

The main advantages of using a product based organisation structure are that it
facilitates optional utilisation of specialised machinery and technological
processes, permits greater co-ordination, where specialised customer service is
required, and enables product managers to be responsible for the profit
generation of their department. Johnson & Johnson manufactures and markets a
wide range of specialised surgical sutures and accessories as well as a range of
products for children. Product based departmentalisation ensures that the two
major product lines operate as independent profit divisions since there is almost
no commonality in terms of the manufacturing process, marketing skills and
market segments served.

Figure VII: Product Organisation

The biggest disadvantage of this type of structure is that it leads to duplication

of managerial manpower thus leading to higher costs. It also requires a strong 15
leader to control the various product groups so that they do not become
alienated from the overall organisational objectives.
Organisational Structure and Differentiation by Location
Process
When an organisation is departmentalised on the basis of location of different tasks
and activities, then the organisation is geographically organised. Figure VIII shows
the organisation structure of Food Corporation of India in which the functions and
activities are differentiated on the basis of four different zones

The biggest advantage of differentiating the functions geographically is that it

allows for maximum utilisation of local resources and talents, as well as speedy
decision-making in response to changes in local conditions. In fact, where the
participation of local people is essential to the success of the organisation. as in
voluntary and social organisations, a geographic differentiation is ideal. The
problems associated with this type of structure relate to problems of top management
control and require a large number of executives with general management skills to
head the various area operations.

Figure VIII: Geographical Organisation

16
Differentiation by Type of Customers
Organisational Structure
and Design
Another kind of possible grouping is by the type of customer served. A Delhi based
company manufacturing electronic typewriters and desk top photocopiers had
organised its sales force on the basis of its two product lines. Its major customer
segments were Government organisations (public sector companies, ministries,
departmental undertakings, public libraries etc.) and private sector companies. The
company was not very successful in its marketing efforts. Investigation revealed that
the same customer (organisation) was being visited by two different salesmen (one
each for typewriter and copier) resulting in unnecessary duplication of effort and
time. Moreover, the Government and private sector organisations each had a very
different set of criteria governing their decision to purchase. The sales approach
which succeeded in a private sector company could not be similarly applied to a
government set-up. The company then re-organised its sales force into two teams,
one catering to the government sector and the other to the private sector, with each
team having responsibility for both the product lines. With the reorganised structure
the company was able to make a dent in the highly competitive market.

12.10 MATRIX STRUCTURE

The matrix structure is a combination of the product and functional organisation and
is usually created for executing a project which requires the skilled services of a
functional man as well as the specialised knowledge of a product man. Large turn-
key projects in specialised fields require a matrix structure. Figure IX illustrates a
matrix structure.

The distinguishing characteristic of a matrix structure is that it operates under a dual

authority. A person is accountable to two bosses at the same time, one his usual boss
and the other his boss for the duration of the project. Obviously the problems
emanating from this type of structure relate to conflicting roles and authority arising
out of an ambiguous demarcation of authority and responsibility.

Figure IX: Matrix Organisation

17
Organisational Structure and
Process
12.11 NETWORK STRUCTURE
When an organisation needs to control other organisations or agencies whose
participation is essential to the success, a network structure is organised. In this, the
main organisation creates a network of relevant agencies and it influences in different
ways.

Network structure is mostly used in non-business organisations which have socio-

political objectives. For instance, the State Industrial Development Corporation
(SIDC) may resort to a network structure in their objective to establish an industrial
estate. In this the SIDC may act as the lead agency and involve the State Electricity
Board, Local Municipal Authorities, Land Development Authority, Authorities for
Water & Sewage Control, P&T Department for communication facilities,
appropriate authorities for building roads etc. The SIDC would also need to establish
a network with people who would ultimately be using the industrial estate to know
their requirements in terms of specification and special needs. It would also use the
services of an advertising agency to promote the industrial estate and attract
maximum number of entrepreneurs. For the construction of sheds and factories the
SIDC may have to utilise the services of private construction agencies

Thus, a network structure envisages the utilisation of a number of different services

offered by different agencies. There is need to coordinate the different inputs and
synchronise them towards the ultimate objective.

Activity D

What is the basis of differentiation of tasks and activities in your organisation? On

the basis of the above discussion, can you suggest three definite improvements in
the organisation structure which would enhance its effectiveness?

12.12 INTEGRATION OF ORGANISATIONAL

TASKS AND ACTIVITIES
Having designed your organisation's structure to suit the specific needs of your
company and its environment on the basis of most efficient grouping, you now have
to ensure that these differentiated groups are integrated towards the common
organisational objectives. Generally speaking, the more differentiated and
specialised are the activities, the greater the need for coordination and integration.
This is because there is danger of these specialised groups getting isolated and start
viewing each other as rivals rather than companions in pursuit of the same goal.

Have you ever witnessed .a situation where departments belonging to the same
organisation vigorously fight each other over the allocation of annual funds? Think
of our country as one big organisation and the States and Union Territories as its
differentiated groups. Do you think they are well integrated towards the common
goal of national economic development?
18
The basis for integration is provided by the three elements of an organisational
structure, namely authority, administration and communication network.
Integration through Authority
Organisational Structure
The hierarchical relationships in an organisation define the status of each position in and Design
relation to the others and the power that goes with that position. The basis for the
hierarchical relationship is that the superior has authority over the subordinate in
terms of assigning him work and the latter, in turn, is obliged to obey the superior.
Hierarchical relationships facilitate integration because they ensure that all activities
are ultimately placed under one authority and thus are linked together. The top
position becomes the centre for all coordination. In a small organisation, with a
single product line, integration and coordination from one central position is certainly
feasible. But if you consider large organisations with operations spread over many
geographical areas, product lines running into hundreds and employing thousands of
people, it is no longer physically possible for one person to coordinate all the tasks
and activities. In such situations, .the hierarchical structure has to be supported by the
administrative structure and communication network.
Integration through Administration
"A great deal of coordinative effort in organisation is concerned with a horizontal
flow of work of a routine nature. Administrative systems are formal procedures
designed to carry out much of this routine." (Joseph A. Hitterer, The Analysis of
Organisations, 1973).
Every organisation has its own administrative procedures and systems. These relate
to almost every aspect of organisational life. The procedure for selecting new
recruits, calculation and mode of overtime, travel, medical and other allowances, the
system of memos and movement of a file from one department to another for
decision-making are all illustrations of administrative procedures. The larger the
organisation, generally, the more formally prescribed and numerous are its
administrative procedures.
How administrative procedures help in integrating different departments and
different levels within an organisation can easily be understood by an illustration. In
a typical organisation, at the end of the corporate year, each individual, say a
salesman, would fill his own assessment of his performance. The salesman's
immediate boss would fill in a Confidential Report (CR) on his performance. The
salesman's own assessment and the CR would both be given over to the Personnel
Department which may add information from its records on the number of years the
salesman has been with the company, his starting salary and designation, number of
promotions and increments and bonus received, any loans outstanding against his
name etc. This complete file would then go to the manager marketing, who would in
consultation with the general manager decide on the salesman's next promotion and
increment in accordance with the established salary structure.
Thus, the administrative procedure for deciding promotions involves sharing of
information between different levels in the same department (Marketing) and.
between different departments (Marketing, Personnel and General Administration).
Integration through Communication
In the previous illustration, the bases for taking a decision about the salesman's
promotion were his own assessment report and his boss' Confidential Report (CR).
Both these are representatives of the means of communication used in an
organisation. Minutes of meetings,, circulars, notices, progress reports, monthly in-
house newsletters are all specific tools of the communication network of an
organisation.
Just as manpower, raw material and machines are the resources of an organisation, so
is information. Information regarding the development of a new technology by a rival
company, or the introduction of a new model of refrigerator are vital pieces of
information which can drastically affect the future course of action for a company.
But information is highly perishable. If not communicated to the right person at the
right time it has little value.
19
Information may be received at one level in the organisation but utilised at another.
Salesmen and other field staff are usually the eyes and ears of any organisation. They
Organisational Structure and
Process
gather bits and pieces of vital information. But to be useful, these disjointed
information pieces must he immediately communicated to the brain of the
organisation i.e. the managers who will analyse and act upon the information. Just
as market information moves upwards within the organisation, decisions have to be
communicated downwards. A decision regarding change in the distribution network
ii made at the top, but implemented by people in the field. Therefore, there is need
for communication networks which provide for transmission of information both up
and down the hierarchical structure. Similarly, networks should be available for
exchange of information at the horizontal level.

Computers and many other technical improvements have resulted in organisation's

increased ability to collect, process, analyse and transmit vast amounts of
information Organisations today have greater access to an almost unbelievable
array of information.

In the final analysis, however, it is not so much the access to sophisticated

technology which an organisation has that determines the efficiency or efficacy of
its communication network but rather the stance and attitude of the top
management in encouraging its people to talk with each other and share more
information.

Activity E

List the various official means of communicating information in your organisation.

How effective are these in integrating the various departments and different levels
of management? Can you think of some more such means of communication which
your company can adopt?

12.13 DESIGNING STRUCTURE FOR A SERVICE

ORGANISATION
The distinguishing characteristic of a service organisation is that it does not
produce any physical or tangible product, but instead it provides a service which may
in some cases be almost totally intangible. Dry-cleaning, after sales maintenance
for your TV and air-conditioner, health clubs, municipal corporations, banks,
universities etc. are all organisations which provide service. A health club's service
can be described in terms of tangible and specific gadgets and equipment which it
has. However, the behaviour of the staff towards its clients also forms an extremely
important part of health club's service, but is intangible. In many cases, it is the
intangible part which is more important in attracting and retaining customers.

In dealing with service organisations, therefore, you should lay emphasis on efficient
service as well as friendly and courteous behaviour. In highly undifferentiated
organisations such as Nationalised Banks, personalised and friendly service can
become a basis for distinguishing the organisation.

The other important variable in organising service institution is to correctly identify

the service which the organisation is providing to the customer and the activities
needed to be undertaken to maintain and improve the service.

The telephone department provides a communication service to its customers. To

maintain and improve its service, it has to ensure smooth operations of existing
20 telephones, provide for new equipment, procurement and installation. Figure X
illustrates the organisation structure of Mahanagar Telephone Nigam Ltd., Delhi.
Organisational Structure
and Design

21
Organisational Structure and
Process
12.14 SUMMARY
In this unit we have discussed various issues involved in structuring your
organisation. You have a variety of designs.to choose from, but no one design as it
is, can prove to be a perfect fit for an organisation. You would always need to
modify and adopt a strucfural design`according to the specific objectives of your
organisation, the environmental factors'such as political, legal,.cultural and social
conditions, and your own attitude as a,manager towards the issues of centralisation
of power and delegation of responsibility.
Whatever be the structure you decide upon for your organisation, you must always
keep in mind the basic principles of defining and describing jobs, differentiating
them to form manageable parts, and then integrating them to achieve the common
goals.

12.15 KEY WORDS

Structure: Formal and established pattern of relationship in an organisation. The
relationship includes people, tasks and activities.
Environment: The business environment of a firm comprising economic, social,
political, cultural, legal and geographic factors which critically affect the working
of organisation.
Centralisation: The concentration of power and authority. This may be concentrated
in a person or a group of persons in the organisation.
Delegation: The sharing or handing over of authority and responsibility to a
subordinate.
Line Functions: Those functions in an organisation which are perceived tobe
directly contributing to the organisation's objectives.
Staff Functions: Functions which are advisory or auxiliary in nature but do not
directl contribute towards the organisational objectives.
Scalar Principle: The chain of direct authority relationship from superior to
subordinate within the organisation.
Principle of Division of Work: That principle by which work is organised into
smaller jobs allowing people to undertake only specialised activities thus ensuring
efficiency i the use of labour.
Organisation Chart: The depiction of specific positions in an organisation, their
state within the organisation and the reporting relationship between a subordinate
and his superior.
Differentiation: The process by which the tasks and activities of an organisation are
segmented into smaller groups. The basis for differentiation may be function,
product, location or customer.
Integration: The process by which differentiated groups are pulled together to
contribute towards the common organisational objectives. Hierarchical control,
administrative procedures and communication networks are the processes used for
integration.
Geographical Structure: The organisation structure in which activities and tasks are
grouped together on the basis of their location in a geographical zone or territory.
Functional Structure: The organisation structure wherein activities and tasks are
observed into smaller groups on the basis of their belonging or contributing to a
particular function such as manufacturing, marketing, finance etc.
Product Structure: An organisation in which activities and tasks are grouped on the
basis of individual products or product lines.
Matrix Structure: Used generally for project execution which requires the services
of skilled functional people and the specialised knowledge of product specialists.
22 Matrix structure is a combination of the functional and product structures and its
distinguishing characteristic is dual authority.
Network Structure: A structure in which one organisation acts as the `lead'
organisation and creates a network of many other external organisations whose Organisational Structure
services the lead organisation utilises in fulfilment of its objectives. and Design

Principle of Span of Control: The principle which states that there is a limit in each
managerial position on the number of persons which can be effectively controlled.

12.16 FURTHER READINGS

Kast, F.E. and Rosenweig, J.E. 1985. Organisation and Management: A System and
Contingency Approach, McGraw-Hill Book Company: New York.

Koontz, H. and O'Donnell, C. 1976. Management: A System and Contingency

Analysis of Managerial Function. Mc Graw-Hill, Kogakusha Ltd.: Tokyo.

Paul, S. 1983. Strategic Management of Development Programmes, Management

Development Services No. 19, International Labour Organisation: Geneva.

23
 Delegation and Interdependent
UNIT 16 DELEGATION AND Coordination

INTERDEPARTMENT
COORDINATION
Objectives
The objectives of this unit are to:
clarify the process, problems and prerequisites of delegation
distinguish between delegation, decentralisation and centralisation as they
relate to authority
identify the problems of and approaches to interdepartmental coordination
Structure
16.1 Delegation of Authority
16.2 Elements of Delegation
16.3 Informal Delegation
16.4 The Problems in Delegation
16.5 Prerequisites of Effective Delegation
16.6 Centralizations and Decentralisation
16.7 Coordination
16.8 Warnings on Interdepartmental Conflict
16.9 Approaches to Coordination
16.10 Summary
16.11 Self-assessment Test
16.12 Key Words
16.13 Further Readings

16.1 DELEGATION OF AUTHORITY

The process by which authority passes from one managerial level to another is known
as delegation. As organisations grow in size and complexity, no one person can
perform all the tasks or exercise all the authority that is needed to accomplish goals.

Delegation of authority is not the same as division of work. As Henry Fayol says,
"Division of work permits reduction in the number of objects to which attention and
effort must be directed and has been recognised as the best means of making use of
individuals and of groups of people".

Delegation of authority denotes the superior vesting decision-making power in his

subordinate. No one can delegate an authority which he himself does not have.

Delegation is one of the most important skills a manager must possess. The
overworked managers are often those who do not know how to delegate. For they
lack the skill to get results through others. An individual can perform limited work in
a day, all by himself. But through delegation-through dividing his load and sharing
his responsibilities with others-he can accomplish much more. No manager and no
organisation can run smoothly and effectively without delegation.

16.2 ELEMENTS OF DELEGATION

The number of delegation marks the effectiveness of the manager and influences the 63
relationship between the superior and the subordinate.
Organisation Structure and
Delegation is the process where a manager divides the work assigned to him so as to
Processes get help from others in accomplishing the same. It involves the following four steps
that are indivisible:

the determination of results expected

the assignment of tasks
the delegation of authority for accomplishing these tasks
the exaction of responsibility for their accomplishment
Looked at differently, these four steps have three elements: responsibility, authority
and accountability. Delegation is the entrustment of responsibility and authority to
another and the creation of accountability for performance. Let us briefly consider
these three elements.
Responsibility: Responsibility refers to the activities which must be performed to carry
out the task assigned. Responsibility can be delegated.
Authority: Authority refers to the powers and rights entrusted to enable performance
of the task assigned or delegated. Certain authority is imperative to shoulder a given
responsibility. In organisations people derive authority mainly from two sources:
position and personal. Position authority is related to powers of decision-making,
reward and punishment. Personal authority refers to the expert knowledge and certain
qualities which are part of the personality of an individual manager. Position
authority can be delegated, but not personal authority. Authority could be formal or
informal. Here we refer to formal authority that is clear, structured and
communicated to all.
Accountability: Accountability is the obligation to carry out responsibility and
exercise authority as per established standards or norms. It is an obligation to account
for, and report upon, the discharge of responsibility or use of authority.
Accountability can not be delegated. The person who delegates continues to be
responsible to his superior for what he had delegated as well.
Since accountability cannot be delegated, the accountability of superiors for the acts
of their subordinates is absolute. By the same token, we see that the delegatee is
accountable to the delegator to the extent he is delegated responsibility and authority
For example, if the line managers are not given the responsibility to train the
operators, they cannot beheld accountable for the operators proficiency.
While accountability always moves upward, responsibility and authority move
downward in a hierarchy. A person can be accountable only to one superior for
delegated responsibility and authority. Accountability is easy to establish if the
standards and measures of performance are predetermined.
16.3 INFORMAL DELEGATION
So far we have discussed about formal delegation in the exercise of authority defined
by organisational role. Formal delegation is effective to the extent of the acceptance
and respect for formal authority.
Informal delegation occurs because people want to do something, not because they
are told to do. It cuts red tape. It is something that is not formally required to be done.
When there is problem in the exercise of formal authority, informal delegation may
become handy.
Bottom-up-delegation: Delegation takes place, in fact, not to the extent delegated, but
to the extent that the subordinate is willing to carry out the orders received. It may be
possible to enforce willingness to do the job itself, but not to comply with the
standards of performance established by supervisor. In large organisations, informal
group leaders, without formal authority, assume authority to restrict output and
workers accept such informal delegation. The people in the group will bring down
production to the level they consider fair rather than comply with the orders of their
superior.
64 Lateral Delegation: In modern organisations, few jobs are independent and teamwork
may result in members of a group entrusting, informally, their responsibility and
authority to others in the group at their level. The process of entrustment that Delegation and Interdependent
occurs when teamwork develops among members of a group is called lateral Coordination
delegation.

16.4 THE PROBLEMS IN DELEGATION

We shall examine here four key problems in delegation:
What to delegate?
How much to delegate?
How far down to delegate?
How to deal with employees resistance to accept delegation?
What to Delegate?
If a manager does not delegate, he will end up doing what his subordinates must be
doing. If he delegates what he should be doing himself, his leadership position would
be in jeopardy and there would be conflict among subordinates.
The first step in effective delegation is for the manager to analyse his job and to
determine, in principle, what he should or should not delegate. The following points
help in this regard:
No manager can effectively delegate responsibility and authority for initiating and
making final decisions on planning, organising, coordinating and controlling the
activities and positions that report to him. Such responsibilities and authorities should
be reserved for his own performance.
A large part of the work in every. management position consists of activities that are
routine and repetitive. These lend themselves readily to delegation. Once delegated
these form the main tasks that the subordinates perform.
How much to Delegate?
Usually the dilemma is how much authority to delegate than that of responsibility. A
salesman appointed to sell the products of the company should have the authority to
approach customers in the name of the company, offer them the products for sale at
certain price and assure growth and delivery.
Beyond this minimum authority, the supervisor should decide on other matters, if
any, that arise like whether the salesman can rent a car for commuting, whether the
salesman can hire people to assist him, whether the salesman can offer discounts or
credit. The authority of the salesman can on each of these probable issues needs to be
clarified preferably before he is asked to shoulder the responsibilities. While one
can have rules and procedures laid down for routine questions that arose in the past,
as and when new questions crop up prompt decisions need to be taken.
There is a popular misconception that "authority should always be delegated equal to
responsibility". But people with responsibility for coordination and control, usually
withhold a part of the authority and delegate only such authority as is
commensurate with responsibility.
How far down to Delegate?
To what levels in a hierarchy can responsibility and authority be delegated? People
who do the work should have the responsibility. Those with responsibility should
have commensurate authority. Taken together, it means that it is necessary to
delegate authority to all those who do the work at the operating levels.
How to deal with Employee Resistance?
Employee may resist accepting delegated authority for a variety of reasons:
lack of proper job information
lack of skills, training, supportive tools and equipment or self-confidence
uncertain about the authority vis-a-vis responsibility
lack of proper reward or sense of personal gain for the individual 65
inertia and avoidance
Organisation Structure and
Managers have the formal authority to direct others, and can invoke reward and
Processes punishment systems to enforce this format authority. But to exercise informal
authority to delegate, they should earn the confidence and respect of their
subordinates.
To be sure it is imperative that managers check what their subordinates are capable of
doing and remove the aforementioned inhibiting factors.
16.5 PREREQUISITES FOR EFFECTIVE
DELEGATION
Delegation is an art, not a science. It depends on the personality, skills and attitudes
concerning two actors: delegator (one who delegates) and delegatee (one who was
delegated). The following are some of the essential prerequisites for effective
delegation.
a) Climate of openness, trust and confidence among employees at all levels and a
culture of team work and cooperation.
b) The two psychological hurdles in delegation, namely lack of faith in the
competence of subordinates and fear that the subordinates may outshine them
deter managers from delegating. The managers should not have any feeling of
insecurity that by delegating they would be making themselves redundant.
c) Goals should be established and made clear: Every person in an organisation
should know what his contribution to the organisation is. In accomplishing his
goals, he can formulate the objectives of delegation too so that delegation is done
with a purpose and becomes effective. The machine operator may not be happy
with running the machine. He would be happy to know how the outcome of his
effort contributes to organisational purpose.
d) People who carry out work should have clearly defined responsibility and
authority: Job descriptions or position guides should clearly state the objectives,
responsibilities, relationships and limits of authority of each position. Clear
definition of responsibility and authority at each position eliminates the scope for
confusion that duplication and overlap in entrustment of duties would cause.
e) Motivation is important because the manager who wants to delegate should be
able to motivate people to do what he wants done, willingly and enthusiastically.
As Louis Allen puts it, "Motivation is the moving force in delegation".
f) Make delegation complete: Delegation is supposed to reduce a manager's
workload. But, if not properly done, it may increase the workload. There are
often problems as to whether, at what stage and how often should the subordinate
check back with his boss. The problem can be resolved if (i) the assignment is
clear cut, (ii) subordinate is told how the assignment will be coordinated and
motivated by the boss, (iii) the boss specifies to the subordinate at what stage, in
what form and how often he should provide him with feedback on the progress
and (iv) the boss provides counselling and guidance. Once an assignment is
delegated the boss should intervene only to provide guidance but not withhold his
approval for specific actions involved in completing the task. To delegate
complete assignment or task requires certain sense of faith and self-control on the
part of boss in not intervening but giving counsel and advice. Likewise, the
subordinate should exercise discipline in making choice of a course of action in
carrying out the task. Delegating complete tasks relieves managers from detail
and provides opportunities to subordinates to learn to be independent and feel a
sense of fulfilment in work.
g) Train: Managers should help in preparing their subordinates to accept
delegation. Such' need is all the more felt in case of subordinates who show a
tendency to depend on the bosses than be independent. Managers should,
therefore, carefully identify the weaknesses; develop potential and attitudes
conducive to accepting and making a success of delegated authority. Training in
delegation should include appraisal of current performance, counselling for
improvement and coaching on the job.
h) Establishment controls: Even after delegation the manager continues to be
accountable. So there is need for him to control without limiting the effectiveness
of delegation. The more complete is the delegation the more comprehensive
66 should the system of control be.
Self-control is the best in establishing controls for delegation. The person to whom Delegation and Interdependent
responsibility and authority are delegated should participate in setting standards that Coordination
are to measure his performance so that he can understand and accept them. He
should also be able to measure and evaluate his own p e r f o r m a n c e if the control
systems are `auto' and `transparent'; thus it is easy to achieve control without limiting
the effectiveness of delegation.

Activity A

How Well Do You Delegate?

You can get a good idea of whether you are delegating as much as you should by
responding to the following items. Answer as accurately and frankly as possible.

How to Test Your Delegation

67
Organisation Structure and 16.6 CENTRALISATION AND DECENTRALISATION
Processes
Centralisation and decentralisation are extensions of delegation. Delegation refers
mainly to entrustment of responsibility and authority from one person to another.
Downward transfer of responsibility and authority at individual level is referred to as
delegation and when the same is done organisation-wide in a systematic way it is
known as decentralisation. Decentralisation refers to systematic delegation of
authority in an organisation. An organisation is considered centralised to the degree
that authority is not delegated, but concentrated at higher levels of management. In
juxtaposition, to the degree that authority is delegated, an organisation is considered
decentralised. As Henry Fayol puts it, "Everything that goes to increase the
importance of the subordinate's role is decentralisation, everything which goes to
reduce it is centralisation".
The terms centralisation and decentralisation are meaningful only in a relative sense.
No organisation can operate on a completely decentralised basis since all authority to
make decisions would rest at the lowest managerial levels and make it difficult to
achieve coordination. Similarly, except very small firms, no organisation can be
completely centralised. It is appropriate to recall the experience of two of the largest
automobile corporations in the U.S. The Ford Motor Company, at one time, was said
to have suffered due to centralisation while the General Motors suffered due to
decentralisation. This example bears out the impracticability of complete
centralisation or complete decentralisation.
Factors Influencing Centralisation
An organisation or a manager needs to have some reserve authority to integrate the
efforts in an organisation and achieve the desired degree of coordination and control
required to accomplish the specific goals.
Centralisation also facilitates personal leadership when the company is small, to
provide for integration and uniformity of action, and to handle emergencies.
Factors Influencing Decentralisation
Decentralisation becomes important and imperative when an organisation grows
bigger. The main purpose of decentralisation is to ease the burden of top executives.
The warning signals that point to a need for decentralisation can be had from the
problems in planning and control of operations, neglect of proactive strategies in
preference to routine fire-fighting operations, proliferation of personal staff around
top executives and mushrooming of committees. Decentralisation also facilitates
diversification and divisionalisation and is in fact a necessary accompaniment, if not
a prerequisite.
Decentralisation also encourages and motivates managers to better performance
because it affords them opportunities to take more important decisions, gives them
the flexibility and autonomy in their functioning.
How to Decentralise?
Clearly, as organisations grow, expand or diversify, the need for decentralisation
increases. The moot question then is, How to decentralise?
The first step in decentralisation, though it may sound paradoxical, is centralisation.
As in the case of delegation, here again, there is need for some reserve authority for
coordination and control at the nerve centre of the organisation, i.e., the corporate
headquarters. Planning, overall guidance and direction for each subunit or division or
department of the organisation need to be formulated, coordinated and controlled at
the headquarters.
If the organisational activities are somewhat homogeneous (say, confined to one
industry such as automobiles) it is relatively easy to develop sound policies and
control systems for all the decentralised work units or profit centres in the
organisation. But when the organisation is highly diversified and deals in a variety of
68 businesses such as engineering, textiles, tea and chemicals, it is difficult to develop
uniform policies and
control systems for all the work units or profit centres. Thus the design of the Delegation and Interdependent
administrative structure should take into account the needs of the organisation and of Coordination
its operating units as competitive units in their own markets.
Effective decentralisation requires a balance of the necessary centralisation of
planning, organisation, coordination and control, while decentralised units should
be developed as autonomous business units operating as individual profit centres,
with provision for effective coordination and communication. The central
management team should have a well-established system for measuring, recording,
and reporting operating results.
16.7 COORDINATION
Organising involves not only division of jobs into separate work units through
division of labour, decentralisation and delegation, but also relating the work units-
be they divisions or departments-to ensure that they pull together and work in
harmony. Linking or relating various parts and activities of an organisation to one
another is known as coordination. In the smallest of the smaller organisations where
all activities are performed by one or two persons in just one unit, there is little need
for coordination. But, as activities spread and organisations grow large and
complex the need for coordination becomes imperative and assumes greater
significance. Lack of coordination is a common complaint against most large
organisations. "The right hand does not know what the left hand is doing" is an oft
heard reaction among employees, customers and suppliers. Lack of coordination
results in break-down of operations, delays, wastages and frustrations.
One example of lack of coordination is the case of an organisation with different
divisions operating on the same site. One of the divisions was found to be
auctioning raw materials as scrap while another had been buying similar materials
from the market at a premium. In another case, while the factory had to cut down
production for want of storage space to stock finished goods at the plant, there was
shortage in the market for the same product.
Why is Coordination a Problem?
Any organisation will have certain objectives. People are grouped in an
organisation, usually, into separate departments such as production, finance,
marketing, personnel, etc. Each department is allocated different tasks. One deals
with production of goods and another deals with their distribution. One department
may plan, a second may develop new products and a third carries out actual
production. There are a number of service functions such as finance, maintenance,
materials, personnel, etc., each with a different task, though all are collectively
directed to accomplish the organisational goals. The process of internal
specialisation and task differentiation grows with the overall size of the
organisation. Over the years, modern organisations acquired centrifugal tendencies,
with individuals and departments straining to pursue different paths toward
functional autonomy. As a sequel, loyalty of managers today is generally more
toward their own specialisation or department than to the organisation. Within the
departments there may be a high degree of homogeneity and commitment to the
functional tasks but the more such homogeneity and commitment the greater the
problems in achieving integration between and among departments.
Such problems accumulate and aggravate in situations where allocation of different
objectives, targets and resources to departments caused perceptual difficulties and
misunderstanding. Sometimes the reactive approaches of top management may '
reinforce the centrifugal tendencies and quest for functional autonomy than promote
what is known in current management literature as "superordinate goals" that
promote and preserve awareness of an overriding organisational objective. For
example, in one organisation the Chairman of a company issued directives to plant
managements that they should stop overtime payments with immediate effect. Three
months later, when the Chairman noticed that overtime is still being paid in some
departments he issued another directive, this time to the finance department, not to
make overtime payments even if the time managers authorise such payments. This 69
new directive strained the relations between finance and production departments.
Organisation Structure and
When each of the several departments in an organisation have different objectives to
Processes follow, some of them at least may conflict with those of other departments in the day
to day operations. The vigorous pursuit of sectional objectives continues if reward
systems encourage such behaviour.

The conflict between sales and production in a British company with six sales
departments and 18 different plants was studied by A.J.M. Sykes and J. Bates. There
was constant conflict between the production side, which wanted to limit the range of
products in order to increase the volume of output for each one and reduce unit costs,
and the sales department, which sought to force production to comply with the
consumer's preferences regardless of the merits of standardisation. Among different
sales departments also there was conflict with each department competing for earliest
possible delivery date for its customers disregarding the system of priorities laid
down by the company. The company intended to give priority to export orders as also
to certain large and important customers. The sales clerks had been recruited from
production and they were able to organise preferential treatment for their `own'
customers through informal deals with the production staff.

To overcome the above problems, the company had set up a Sales Organisation
Liaison Department (SOLD) between sales and production, as shown in Fig. I.
SOLD's main functions were to secure information and production capacity and sales
requirements, to formulate a comprehensive price policy, and to maintain statistics,
producing reports for the Chairman and the Board. Detailed instructions were drawn
up for how SOLD was to operate. For instance,. orders to plants are to be allocated
based on Plant's capacity to meet delivery schedules as required by customers.
Establishing a new department for coordination and laying down new procedures
helped to achieve inter-departmental coordination.

Figure I: An Example of Coordination between Sales and Promotion Departments

The communication system before SOLD

Source: Sykes, AJM and Bates, J (1962), `Study of conflict between formal company policy
70 and the interests of informal groups'. Sociological Review, November, pp. 313-327.
 Delegation and Interdependent
16.8 WARNINGS ON INTERDEPARTMENTAL Coordination
CONFLICT
Common warning signs of interdepartmental conflict include the following:
a) Persistent conflict between departments: When the same matters of conflict
keep recurring between or among departments, conflict becomes embedded and
persistent. If this is not diagnosed and dealt early enough, the departments
involved start accepting it as normal and the outcomes arising out of such
conflict tend to he taken for granted.
b) Proliferation of committees: While committees are constituted in organisations
to bring about effective coordination on important issues affecting more than one
department, their proliferation may paradoxically reveal the basic weakness in
the organisation, viz., lack of coordination. Proliferation of coordination
committees fudge inter-departmental disputes and delay the resolution of inter-
departmental conflict.
c) Overloading of top management: One common tendency among departmental
heads is to expect the general manager or the chief executive to intervene in
matters requiring coordination between departments. If issues are not resolved
often enough by departmental heads among themselves, the top management will
be preoccupied more with such matters than deal with their main function of
policy, planning and relationships with important constituents outside the
organisation. Top management overload is another sign of inadequate
coordination.
d) The ritual of `red tape': Coordination can take place through use of formal
procedures. For example, the procedure may require that the two concerned
departments should consult each other on certain specified matters. But managers
may not follow this or take it seriously. When procedures are not followed or cut
short, problems may aggravate. The purpose of adhering to procedures is not to.
perpetuate the red tape as a ritual. Where procedures are redundant or
inappropriate, they need to be modified, than being ignored.
e) Empire-building: Once coordination is provided at a level higher than the
departments, the persons performing the role of coordinators may like to
perpetuate the institution of coordination and strengthen their role by consciously
endeavouring to avoid direct cooperation and coordination among departments.
Where coordination seeks to monopolise and block initiatives at departmental
level to achieve harmony in goals and actions at peer level, the writing on the
wall is clear.
f) Complaints from constituents: Lack of inter-departmental coordination leads to
unsatisfactory performance and affect the quality of service and relations
between the organisation and its constituents like the customers, suppliers,
Government etc. When different departments of an organisation provide
conflicting information, it affects the credibility of the organisation.
A simple exercise which can help to pinpoint the areas of difficulty is to request the
managers and members of the units to complete a form of the kind shown in Figure
II. This particular design was originally developed for use in an investigation of an
airlines, and Figure II gives an example of a completed form in which a respondent
has scored the relationships shown. In his perception, coordination between Flight
operations and In-Flight services is posing serious problems. The form, however, can
be adapted to suit any type of organisation. Analysis of the response helps to
understand where there are shared perceptions and where problems of coordination
exist and whether there is a large measure of agreement across the organisation on
the location of the problematic horizontal working relations. If respondents are also
asked to give examples of the performance problems/failings arising from the lack of
coordination, the data may provide a useful basis to work toward resolving problems
and achieving effective coordination.
Activity B
Adapt the format given in Figure II to suit your organisation. All that you have to do
is to replace the names of operating units in the Figure with those in your
organisation. Use the same pattern for scoring of relationships. Select the statement 71
which you feel is most descriptive of relations between each of the units, even if you
are not directly involved in them.
Organisation Structure and
Processes

72
 Delegation and Interdependent
16.9 APPROACHES TO COORDINATION Coordination

Interdepartmental cooperation and coordination are imperative for the success of any
organisation. Coordination is easy, if the degree of differentiation among different
departments is less. Successful companies evolve effective mechanisms and
procedures to strike a balance between the requisite degree of differentiation and
requisite degree of inter-dependence among departments/functions.

James D. Thompson classified internal interdependence of work units/functions into

three types: Pooled indirect interdependence, sequential (one-way) inter-dependence
and reciprocal (two-way) interdependence as shown in Fig, III.

Pooled Indirect Interdependence is a situation where the activities of different

departments or divisions are not directly dependent on each other. For example, as
shown in Fig III the advertising department is essentially independent from shipping
and receiving department. Yet, they are inter-dependent in the sense that each is part
of the same enterprise. Failure of either could threaten the entire company and thus
other departments. Each department makes a discrete contribution to the organisation
and is, in turn, supported by it. The degree of coordination required here is minimum.

In cases where the outputs from one department become the inputs for the other,
sequential (one-way) interdependence exists. This type of interdependence occurs in
process industries. The example shown in Panel B of Fig. III is that of a brewery.
Here greater degree of coordination is required in the sequence in which the process
occurs.
Figure III: Types of Internal Interdependence

Source: Bedeian, A.G. 1986, Management, Dryden Press : New York

Reciprocal (two-way) interdependence occurs when output from one becomes input
for the other and vice-versa. Such two-way interdependence occurs between
maintenance and operations units. The example shown here (Panel C of Fig. III) is
that of an airline. Here close coordination is needed because problems in either will
be ' quickly felt by the other.
James Thompson lists three main categories of integrative mechanisms to achieve
coordination:
a) Integration through. standardisation. This involves establishing rules or procedures
that channel the actions of each job, holder or department into a direction 73
consistent with the actions of others.
Organisation Structure and
b) Plans and schedules can be established to integrate the actions of separate units.
Processes Integration through planning is somewhat more flexible than standardisation in
that the plans can be modified quickly.
c) Integration can also occur through "mutual adjustment" This involves
transmission of information directly between people and the mutual adjustment
of their actions in the light of that information.
The traditional bureaucratic approach which is common to most of our organisations
relies heavily on coordination through standardisation and planning. Three
mechanisms are available for the purpose. Firstly, an elaborate system of rules and
procedures is worked out to deal with recurrent problems. Secondly, non-routine
problems are handled by referring up to the hierarchy. Where matters\of policy and
procedure require some deliberation, committee meetings are held. These committee
meetings are scheduled at regular intervals in stable conditions. They ate also held at
short notice, if the need arises.

The advantage of a bureaucratic system is that it operates smoothly and effectively in

normal and predictable conditions. But it is inadequate to meet the requirements of an
organisation in an ever changing turbulent environment. Often managers complain,
"If we had to go through the formal channels, we would never be able to get things
done on time". This could well be an exaggeration. Carefully structured bureaucratic
systems of formal coordination minimise the dependence on informal systems. There
is need for a balance rather than excessive reliance on formal or the informal system.

John Child lists the various forms of coordination through lateral relationships as
below in order of increasing sophistication, difficulty in design and overhead cost.
Usually managements adopt the more sophisticated mechanisms as additions to
rather than simply substitutes for those mentioned higher up the list:
a) Bring about direct contact between managers or employees who share a problem.
b) If departments are required to have a substantial amount of contact, one or more
of their staff will have special responsibility to liaise with their counterparts in
the other departments.
c) In case of special situations or problems where several departments need to
conflict until the matter is resolved, temporary task forces would be set up to deal
with it, with members from those departments.
d) If such inter-departmental problems recur, permanently constituted task forces or
committees provide the coordination.
e) If lateral relationships become a problem, a coordinating department such as the
SOLD discussed above may be created to perform the task of coordinating.
f) Another method of coordination is through creation of product managers in
multi-product organisations with overall, responsibility to coordinate operations
required to market, develop, produce and service a product.
g) The most elaborate method is to establish a matrix organisation. Here, an attempt
is made to combine integration of personnel within functionally specialised
departments with their integration around a common contribution to products.
Van de Ven et al discuss three principal modes of coordination :
Impersonal mode, i.e., coordination through setting programmes and procedures
Personal mode, i.e., coordination through feedback
Group mode, i.e., committee, task force, meetings, etc.
The choice of the modes is dependent upon conditions of certainty, problems of inter-
dependence and size of work units (in terms of number employed). As uncertainty
increases, group mode becomes appropriate since coordination requires discussions
at lateral levels in a hierarchy. As inter-dependence increases, there is greater need
74 for personal and group modes. As the organisation grows large and complex, the
structure needs to be more formal with greater stress on impersonal mode.
Whatever be the approach, wherever the organisation chooses to vest a manager in Delegation and Interdependent
a coordination role, it should ensure that he is given proper authority. Only then can Coordination
the exercise influence meaningfully over departmental heads. There should be
clarity about the role, responsibilities, authority and accountability. The
coordinators should be non-controversial and acceptable to the departments or
groups they are called upon to coordinate. Coordinators should have the resources
and staff.

For effective inter-functional coordination and integration of departments with

different goals and criteria of performance, there is need for a climate of openness
and trust, the inter-personal relationships among employees, and the careful
cultivation of open confrontation for resolving conflict through a process of mutual
adjustment than aggression. Before inter-functional conflict reaches a point where it
affects organisational performance, organisations should initiate such organisation
development programmes as would promote teamwork and cooperation. The
people in the organisation need to realise that, "united we stand, divided we fall".
This can occur, not so much by zealously cultivating narrow loyalties to one's
function and specialisation, but by developing superordinate goals for the entire
organisation.

16.10 SUMMARY
We observed that delegation is one of the most important skills a manager must
possess. It has three elements: responsibility, authority and accountability. There is
need for balancing formal and informal delegation and the latter should reinforce
the former. The key problems in delegation include: what, how and how far to
delegate? It is important to deal with employee resistance to delegation through
counselling and guidance. We observed the distinction between delegation,
decentralisation and centralisation. We also noted the factors influencing
centralisation and decentralisation and the approach to decentralisation.

In the latter part of the unit, we have examined the problem of inter-functional
coordination, analysed the warning signs of conflict and studied the various
approaches to coordination.

16.11 SELF-ASSESSMENT TEST

1. Prepare a job description for your boss, yourself and your subordinate. See
what part of the job of your boss can be delegated to you and how much of your job
you can delegate to your subordinate. Also discuss the why and how of it.
2. What are the merits and prerequisites of delegation.
3. Give an example each to illustrate the following statements: Accountability is
indivisible. Delegation is not the same as decentralisation.
4. Discuss the importance of coordination. Give one example each (other than
those mentioned in the text) of the three types of internal inter-dependence among
work units.
5. What are the warning signs of lack of coordination? Give one example each.
6. Give four examples of different forms/modes of coordination.

16.12 KEY WORDS

Accountability: Obligation to account for, and report upon the discharge of
responsibility and/or use of authority.
Authority: Powers and rights entrusted to enable performance of task assigned.
Centralisation: Concentration of authority at higher levels of management.
Coordination: Linking or relating various parts and activities of an organisation to 75
one another.
Organisation Structure and
Delegation: Entrustment of responsibility and authority from one person to another.
Processes
Decentralisation: Systematic delegation of authority in an organisation-wide
context.

Profit Centre: A work unit (department or division) which is held accountable for
the profit it earns and the loss it sustains.

Responsibility: Activities which must be performed to carry out the task assigned.

16.13 FURTHER READINGS

A l l e n , L.A. 1958. Management and Organisation, McGraw-Hill: Auckland.

Bedeian, A.G. 1986. Management, Dryden Press: New York.

Child, J. 1984. Organisation : A Guide to Problems and Practice, Harper & Row:
London.

Pugh, D. 1979. Effective Coordination in Organisation, Advanced Management

Journal, Winter.

Sykes, A.J.M. and Bates J., 1962. Study of Conflict Between Formal Company
Policy and the Interest of Informal Groups, Sociological Review, November.

Thompson, J.D. 1967. Organisations in Action, McGraw-Hill: New York.

Van De Ven, A.H. et al. 1976. "Determinants of Coordination Modes within

Organisations", American Sociological Reviews, April.

Walker, A.H. and Lorsch, J.W. 1968. "Organisational Choice: Product vs.
Function. Harvard Business Review, November-December.

76
 Managerial Communication
UNIT 13 MANAGERIAL
COMMUNICATION

Objectives
The purpose of this unit is to explain:
the meaning and purpose of communication
the process of communication
the media and channels of organisational communication
the intentional or unintentional barriers that prevent organisational
communication to be effective
what a manager should do to make his communication effective
Structure
13.1 Communication: Meaning and Purpose
13.2 Importance of Communication
13.3 Communication Process
13.4 Verbal and Non-verbal Communication
13.5 Channels of Communication
13.6 Barriers to Communication
13.7 Making Communication Effective
13.8 Summary
13.9 Self-assessment Test
13.10 Key Words
13.11 Further Readings
13.1 COMMUNICATION: MEANING AND PURPOSE
Communication refers to sharing of ideas, facts, opinions, information and
understanding. Simply stated, communication can be said to be the passing of
information and understanding from one person to another. It will be seen that
there are at least three elements involved here, the sender at one end, the
receiver at the other, and in between is the message or information that is to be
passed on from one end to the other. The information is passed from the sender
to the receiver, and the knowledge of its effects is passed from the receiver to
the sender in the form of a feedback. Whether the effect produced is the desired
one will depend upon how well the receiver understands the meaning of the
information. Communication can, therefore, be aptly said to be the
transmission of meaning.

13.2 IMPORTANCE OF COMMUNICATION

One of the important roles of the manager is the informational role wherein a
manager seeks information from his peers, subordinates and others about
anything relating to their jobs and responsibilities. He is at the same time a
disseminator of information about his job and the organisation to those who are
concerned with it. As such a considerable part of his time is devoted to
receiving or disseminating information, i. e. in communication inside or
outside the organisation. Some of the studies made in the USA show that
between 40 to 60 per cent of the work time in a typical manufacturing plant is
involved in some phase of communication. Further, the top and middle level
managers typically devote 60 to 80 per cent of their total working hours to
communicating.

According to Peter Drucker, good communication is the foundation for sound

management. The managerial functions of planning, organising, directing and
controlling depend on communication in an enterprise. For planning to be realistic,
it is essential that it is based on sound information which is not possible without a
good system of communication existing in an enterprise. The latest developments in the
25
Organisational Structure and
Process
market may not be communicated to the planners, making their future plans totally
meaningless. Adaptation to external environment on which rests the survival of the
business may not be possible without good communication. Again in order to reach the
objectives, it is necessary that leadership is exercised, decisions made, efforts
coordinated, people motivated and operations controlled. Each of these functions
involves interaction with the people in the organisation and leads to communication
The important fact of organisational life for a manager is communication, and his
success will depend upon how effectively he can communicate with others in the
organisation; in other words, how successfully he can put his ideas across to those
who work with him and thereby, persuade others to work in the direction of the
achievements of goals of the organisation.

Let us take a relevant example. What is our objective in preparing lessons like
these Simply stated, it is to put across your mind the essence of managerial
functions and enable you to understand how these can be discharged effectively.
In other words, we are trying to communicate to you the concepts of
management, and whether we have been successful in meeting our objective
will depend upon the extent to which you a able to `understand' what we are
trying to communicate to you. Communication, therefore, aims at developing
understanding.

13.3 COMMUNICATION PROCESS

The simplest model of the communication process can be:

Sender > Message..> Receive

The model indicates the essential elements of communication, viz., the sender
and 1 receiver, and the message that is exchanged between them. If any one of
the three elements is missing, communication does not take place.

However, the process of communication is a much more complex phenomenon

consisting of at least five elements which are subject to various influences. The
mod can be put as follows:
Figure I: Model of Communication Process

F E E D BA C K
We shall see briefly what the various elements of this model mean.

Source

In this model the first element is the source of the communication from where
the communication originates. The source or sender can be a person, a number
of persons, or even a machine. The sender initiates communication because he
has sc need, thought, idea or information that he wishes to convey to the other
person, persons or machine. If, for example, an accidental fire has broken out in
a part of godown of the factory, the security officer (source) will need to
convey the messa e e immediately to the fire station , (receiver). Fire alarm
26 (machine) will do the same ur place of the security officer.
Encoding Message Managerial Communication
The next element in the process is that of encoding the information to be transmitted
Encoding enables the thoughts to be put in the form of symbols. Normally language
provides the symbols that are used in the transmission of thoughts to another person.
However language is not the only means to convey the thoughts, needs or
information. There are non-verbal means, e.g., gestures, which provide another form
tnrough which thoughts can be transmitted. The more complex the ideas, needs or
information to be communicated, the more complex becomes the process of encoding
them. While an involuntary shriek may adequately convey the degree of alarm felt by
the victim, even a carefully worded statement or letter may fail to convey the
essential purpose of the communication. This can happen if the language or symbols
used convey different meanings to the sender and the receiver.
Encoding of the thoughts produces a message which can be either verbal or non-
verbal. Verbal message is in the form of words and language, while non-verbal would
be in the form of body gestures like wink, smile, grunt, frown, wave of hand, etc.
Channel
The next element in the process of communication is the channel through which the
communication is transmitted. It is the link that joins the sender and the receiver. The
most commonly used channels are sight and sound. In the organisational
environment, the channel could take the form of face-to-face conversation, written
memos, telephonic exchanges, group meetings, etc. Outside the organisation, the
channels could be letters or circulars, magazines, radio programmes or TV shows,
etc. For communication to be effective the channel used should be appropriate for the
message as well as the receiver. For an urgent message telegram, telephone or radio
would be the appropriate channel. Again, the channel chosen would be influenced by
the consideration as to whom the message is being directed.
Activity A
List the various channels of communication that you use while communicating with

Decoding
Decoding and understanding the message constitute the last two elements in the
process of communicating from sender to receiver. The receiver in the first instance
receives the message and decodes it, that is to say, interprets and translates it into
thoughts, understanding and desired response. A successful communication occurs
when the receiver decodes the message and attaches a meaning to it which very
nearly approximates the idea, thoughts or information the sender wished to transmit.
Decoding and understanding are affected by several factors. For example, a receiver
cannot decode a message which is in a language not known to him. This applies to
symbols also. The same symbol may carry a different meaning to the receiver. Again,
the receiver's past experience, as well as his expectations colour the meaning that is
attached to the message. All this tends to bring about a divergence between the
`intended' meaning and `perceived' meaning.
In order that this does not happen, it is necessary to develop greater degree of
homogeneity between the sender and the receiver, both of whom have their own
fields of experience. The field of experience constitutes an individual's attitudes,
experience, knowledge, environment, and socio-cultural background. The greater the 27
overlap of the source and receiver's fields of experience, the greater the probability of
Organisational Structure and
Process
successful communication. In other words, they have things in common that facilitate
better communication. An individual engaged in communication with another person
of a significantly different educational or cultural background will have to put in
greater effort to ensure successful communication. A model of communication
credited to Wilbur Schramm illustrates this point.

The greater the overlap of the two persons' fields of experience, the higher is the
probability of successful communication. The shaded area shows the overlap.

Feedback

Response and feedback complete the two-way process of communication. It is

through the feedback that the source (sender) comes to know if his message was
correctly received and understood. In case it is found that the message has been
received incorrectly, it is possible to make corrections subsequently if response is
timely.

Sender's efforts to communicate are aimed at eliciting the desired response. However,
a communication may result in producing any of the three outcomes: a desired change
may occur, an undesired change may occur or no change may take place. We consider
communication as successful only when it produces the desired response.

Noise

Surrounding the entire spectrum of communication is the noise that affects the
accuracy and fidelity of the message communicated. Noise is any factor that disturbs,
confuses or otherwise interferes with communication. It can arise at any stage in the
communication process. The sender may not be able to encode the message properly or
he may not be properly audible. The message may get distorted by other sounds in the
environment. The receiver may not hear the message, or comprehend it in a manner
not entirely intended by the sender of the message. The channel also may create
interference by 'filtering', i.e. allowing some information to pass through and
disallowing others. In any case, there is so much of noise or interference in the entire
process that there is every possibility of the communication being distorted. We will
see later in this unit why distortion takes place and what can be done to minimise the
distortion of communication.

13.4 VERBAL AND NON-VERBAL COMMUNICATION

A communication in which words are used can be called verbal communication.
Communication over long distance takes place usually through verbal
communication. As an adjunct-to this is the non-verbal communication which refers to
the use of `body language' in communicating ideas from the sender to the receiver.
Non-verbal communication most often takes place unconsciously, and it may either
fortify or supplement the verbal communication, or may at times negate the very
28 purpose of verbal communication.
Let us examine each of these one by one. Managerial Communication
The main characteristics of verbal communication is the use of words, either written
or spoken.
Written communications include personal letters, memoranda, policy and procedure
manuals, and notices placed on the notice boards.
Examples of oral. communications are conferences, committee meetings, telephone
conversation, loudspeaker announcements, etc.
Both written and oral communication have their merits and demerits.
A written communication has the advantage of being easily verified and of being
more precisely defined if there arises a need for subsequent correction. Spoken
messages cannot always be verified so easily.
Secondly, because a written communication is likely to be a permanent record, we
are more particular in making it precise and accurate.
Thirdly, lengthy and complicated messages are better understood if they are put in
writing. It would be difficult to understand and retain a lengthy message if it were
only in oral form.
Together with these advantages, written communications have some drawbacks also.
Some of these are:
Firstly, it is a slower method of communication if we consider the total amount of
time involved from the formulation of idea by the sender to the understanding of the
idea by the receiver. A written communication competes with all other written
material that reaches the desk of an executive. As such there can be a gap between
the time when a communication reaches the manager's desk and the time when he
reads it. Moreover, if clarifications are needed because the message is not clear to the
receiver, further delay would take place.
Secondly, despite the fact that a greater degree of preciseness is aimed at while
preparing a written communication, there is always a possibility of ambiguity or lack
of clarity creeping in leading to misunderstanding on the part of the receiver.
Clarifications naturally mean delay.
Lastly, over-reliance on written communication can lead to too much of paper-work
in the organisation. This not only consumes time, money and energy, but also
indicates a lack of trust among the employees of the organisation. It has been
observed that when trust is low and suspicions are high in an organisation, an over-
reliance on written communication is likely to occur.
Oral Communication
Although an organisation cannot function without written communications of various
kinds, yet by far the greater percentage of information is communicated orally. It has
been observed that managers spend 60 to 80 per cent of their work time in oral
communication. Oral communication has the merit of being more rapid. Generally,
the spoken word is a quicker and less complicated way of getting one's ideas across
another person. Again, it offers the potential of two-way information flow, and
therefore less possibility of misunderstanding the communication. The creation of a
less formal atmosphere and generation of fellow feelings are the additional
advantages brought about through oral communication.
However, the oral communication is not entirely free from defects. It is less effective
as a means of presenting complicated and lengthy data. It is also subject to
misinterpretation and the effects of barriers arising from interpersonal relationships.
Can you determine which of the two, oral or written; is a better means of
communication? You will see that the choice between the two is, generally speaking,
determined by the situation. However, the use of both together will very often
strengthen and reinforce a message.
Take your own case. The material in your hand is the written communication which 29
will be fortified subsequently through oral communication in the contact classes or
Organisational Structure and educational TV programmes. The two together, we hope, will further increase your
Process understanding of the concepts and application of management.
Choosing Your Words
You have read earlier that communication refers to the transmission of meaning from
the sender to the receiver. Such transmission takes place through the use of symbols,
whether verbal or non-verbal. In verbal communication the symbol is a word. In order
that the transmission of meaning takes place it is important that the particular symbol
(word) used must create within the mind of the receiver the same image which was in
the mind of the sender of the communication. It is only then that the basic purpose of
communication which is to influence the behaviour of the receiver will be achieved. It
has been found that words do not necessarily have commonly understood meanings.
The abstract words like "participation" or "democracy" or "satisfactory" suffer from
the difficulty that different people are likely to attach different meanings to these
words. The greater the use of such abstract words, the bigger the difficulty in bringing
about an understanding of the message and a change in behaviour through
communication.
Keith Davis in his well known book "Human Behaviour at Work: Organisational
Behaviour", has suggested a few guidelines for making verbal communication more
effective. These are:
Use simple words and phrases.
Use short and familiar words.
Use personal pronouns (such as "you") whenever appropriate.
Give illustrations and examples.
Use short sentences and paragraphs.
Use active verbs such as in "The manager plans".
Economise on adjectives.
Express thoughts logically and in a direct way.
Avoid unnecessary words.
Use of Body Language
In determining the effectiveness of communication, in the sense of effecting a change
in behaviour, non-verbal communication has an important role to play. Experts in the
field of human communication have found that, in a typical message between two
persons, only about 7 per cent of the meaning or content of the message is carried by
the actual words being used. Another 38 per cent of the message is carried by one's
tone of voice (which includes pacing, timing, pauses, accents). The major part of 55
per cent of the content of the message is in non-verbal form, in other words, in the
form of our physical attitude going along with our verbal message. The physical
attitude is also referred to as body language.
Non-verbal communication can take place with our actions or with our body gestures.
For example, a manager who pounds his fist on the table while announcing that from
now on participative management will be practised in his organisation creates a
credibility gap between what he says and what he practises. A manager who says that
he believes in an open door policy for all his employees but is busy with his own files
while an employee is giving him certain suggestions towards improvement in work
environment, is making non-verbal communication quite in conflict with his verbal
communication. In such situations the non-verbal message is the stronger one and the
verbal message will cease to be effective.
Body gestures that "communicate" may relate to your handshake, your smile, your
eye-contact, your posture while standing or sitting, your facial expression while
listening, the shrug of your shoulders, indeed, the movement of any part of your body.
You must, therefore, be watchful of your body language so that it does not contradict
your verbal message. This is indeed difficult because the body language is so
involuntary that we are not even aware of it.
Some of the non-verbal actions which assist communication include:
Maintaining eye contact
Occasionally nodding the head in agreement
30 Smiling and showing animation
 Leaning towards the speaker Managerial Communication
Speaking at a moderate rate, in a quiet tone
Some of the non-verbal actions that impede the communication are:
Looking away or turning away from the speaker
Sneering or using other contemptuous gestures
Closing your eyes
Using an unpleasant tone of voice
Speaking too slow or too fast
13.5 CHANNELS OF COMMUNICATION

An organisation structure provides channels for the flow of information on which the
decisions of the organisation will be based. As such an organisation can be described
as the network of communication channels. These channels can be either
intentionally designed, or they may develop of their own accord. When a channel is
intentionally prescribed for the flow of communication in the organisation, we call it
a formal channel, and the communication passing through that channel as formal
communication. On the other hand, when communication takes place through
channels not intentionally designed, in other words, outside the formal channels, such
channels are referred to as informal channels, and the communication as informal
communication.
Formal Communication
An organisation chart shows the direction of formal communication flow in an
organisation. It identifies the various transmitters and receivers, and the channels
through which they must communicate. The authority relationships indicate the
direction of communication flow in an organisation. A formal communication takes
place between a superior and subordinate in the form of instructions and directions
Such a flow takes place in the downward direction.
Another formal communication takes place between subordinate and superior when
reporting on performance is made by the subordinate. Since the subordinate initiates
communication to the superior, the flow is upward. We call this upward
communication. The upward communication can take the form of progress reports,
budget reports, profit and loss statements, requests for grants, etc.
Again formal communication may take place between one division of an organisation
and another. This could be either lateral or diagonal. There is substantial formal
communication between production foreman and maintenance foreman, or, between
production manager and quality control manager. Formal communication may pass
across organisational levels also: for example, communication between line and staff
units takes place very frequently across organisational levels. Such communication
helps tremendously in the coordination of activity.
Finally, formal communication may also arise between the organisation and outside
parties, e.g., suppliers, customers, Government, etc. This may happen when the
management is required to provide information on certain aspects of working of the
organisation. Communication of this kind is usually one-way.
Networks in Formal Communication
You have seen earlier how the formal organisational structure prescribes the channels
through which communication flows take place. These channels are designed to keep
the flow of information in an orderly manner and to protect the higher level managers
from an overload of unnecessary information. However, the way in which these
channels are designed and work can affect the speed and accuracy of information as
well as the task performance and satisfaction of members of the group. As such,
managers have to think of how best to design the organisational structure and the
communication network which meets the requirements of the situation.
Some research in the design of communication networks has been carried out which
31
indicates their relative merits for use in different situations. Although these networks
Organisational Structure and can assume many forms, the most frequently discussed are four, known as the wheel,
Process chain, `Y', and circle, shown in the diagram below:

These forms can well be looked at as an organisational structure made up of five

members.
The circle network represents a three-level hierarchy in which there is
communication between superiors and subordinates, with cross communication at the
operative level.
The chain can represent a five-level hierarchy, in which communication can take
place only upward and downward, and across organisational lines.
The wheel or star represents an administrator and four subordinates with whom he
interacts. There is no interaction among the subordinates.
In the Y network two subordinates report to the superior. It may be regarded as a
four-level hierarchy.
To test the effect of various communication structures, a series of experiments
involving simple as well as complex problems were conducted. The studies
demonstrated that network centrality was the critical feature that determined whether
a particular communication pattern was effective and satisfying to the members for a
particular type of task. An index of relative centrality was developed for this purpose
in order to determine who occupied the central position in each network. It was found
that `Y' and `star' networks are highly centralised, with C occupying the central
position. The `circle' and `chain' networks were found to be decentralised with no
member being able to influence all other members.
Further experiments to determine how performance and attitudes were affected by
different communication networks showed that centralised networks performed faster
and more accurately than decentralised networks, provided tasks were comparatively
simple. For complex tasks, however, the decentralised networks were comparatively
quicker and more accurate.
The emergence of a leader and the satisfaction of group members was also affected by
the centrality of networks. In centralised groups whether the tasks were simple or
complex, one person who occupied the central position by virtue of the control of
information emerged as the leader. In decentralised networks no one position could
emerge as the leadership position.
As far as the satisfaction of group members is concerned, it was found to be higher in
decentralised networks in all types of tasks. Satisfaction was higher in the `circle',
highest in the `chain', lower in `Y' and the least in the `star' pattern. The reason for
higher satisfaction in decentralised networks was that members of those networks
could participate in problem-solving.
These experiments have certain implications for the design of organisational structure
and the-communication network:
Firstly, an organisation with mostly routine, simple tasks is likely to work more
efficiently with a formally centralised network of communication, while more
complicated tasks would require decentralised networks.

32 Secondly, the problem-solving objectives of speed and flexibility cannot be achieved

by the same pattern of communication. Rather, speed in problem-solving can be
achieved at the expense of flexibility, and vice-versa. As such the communication Managerial Communication
pattern should be designed with reference to the objective that is regarded as most
important.
Thirdly, the pattern that leads to highest average morale and greatest flexibility in
adapting to changed conditions is the one in which there are a large number of active
participants in decision-making process.
Lastly, access to information is an important source of power in organisations.
We were so far explaining to you the communication patterns that are made use of
for formal communication in an organisation. You are, of course, aware that along
the formal organisation exists another organisation known as informal organisation
which has its own channels for communication. We shall now have a look at the
informal communication and its channels.
Informal Communication
Communication that takes place without following the formal lines of
communication is said to be informal communication. This channel is not created by
management and is usually not under the control of management. An informal system
of communication is generally referred to as the `grapevine' because it spreads
throughout the organisation with its branches going out in all directions in utter
disregard of the levels of authority and linking members of the organisation in any
direction.
The informal communication arises as a result of employee needs for information
which are not met by the formal channels. It has been observed that problems relating
to work and unfavourable reactions to various organisational practices are transmitted
through informal communication. Since the channels are flexible and establish
contacts at personal levels among members of organisation at different hierarchical
levels, the grapevine spreads information faster than the formal system of
communication. As has been pointed out in the unit on Planning and Organising,
about 10 to 40 per cent of employees receive information (or misinformation) about
the organisation and its members through informal channels of communication.
In contrast to the formal communication which moves on slowly from one person at
one hierarchical level to another at the next hierarchical level; the grapevine transmits
information from one person to a group of persons much more rapidly in a cluster
chain arrangement. The cluster chain is made up of individuals who act as
information sources. Each individual passes the information to several others, some
of whom repeat the message to others. Some of those who receive the message may
not pass on the information to others but the information may lead to a change in
their thinking on the subject and may sometimes affect their behaviour as well. The
following diagram illustrates the cluster chain network of informal communication.
Figure: III

33
Organisational Structure and
Process
Though it has been found that informal communication carries accurate information
about three-fourths of time, yet there are strong possibilities of its communications
being distorted. This happens because of the process of `filtering' whereby each
member of the cluster chain acting as a kind of filter passes on only that part of
communication which he regards as important. The receiver is left to fill in the gaps
and complete the story according to his own imagination. This naturally leads to a
very great distortion of the real situation and may at times cause serious problems in
the organisation.

The characteristics of grapevine have been summarised by Keith Davis as follows:

a) People talk most when the news is recent.

b) People talk about things that affect their work.

c) People talk about people they know.

d) People working near each other are likely to be on the same grapevine.

e) People who contact each other in the chain of procedure tend to be on the same
grapevine.

You have seen that the grapevine is a fast and a substantially accurate channel of
communication. It has tremendous capacity to carry information both helpful and
harmful to the formal organisation. In most cases it carries information which the
formal channel may not or will not carry. The manager's responsibility, therefore, lies
in utilising the positive aspects of the informal channels of communication and in
minimising the negative aspects of this channel.

In order to do this, what the manager can do is to identify the members of the
organisation who usually seek and spread information. It is possible that different
individuals are active at different times but usually it will be found that some
individuals tend to be more active carriers of information than the others. After
identifying such people a manager can use them as sounding boards. If it is discovered
that misleading rumours are circulating, it may be a desirable policy on the part of the
manager to release the official information in order to clarify the situation. At times
management may even find the informal communication channel more useful in
transmitting information than the formal channel. A common method of using
informal communication is by `planned leaks', or strategically planned `just between
you and me' remarks, which would obviously reach all parts of the organisation much
more quickly than any kind of communication through formal channels.

Activity B

Identify various types of communication networks found in your organisations. Which

is the most effective one? Why?
...
...
...
...
...
...
...
...
...
...
...
...
...
34 ...
13.6 BARRIERS TO EFFECTIVE Managerial Communication
COMMUNICATION
By now you are familiar with what communication is. You will recollect that in the
earlier part of this unit, communication has been defined as the transmission of
meaning or understanding. Yet by far, most of the communication in organisations or
between persons fails to satisfy this criterion. Communication quite often fails to
convey the meaning or develop an understanding of the communication sufficient
enough to bring about a change in the behaviour of the recipient. According to Peter
Drucker, "We have more attempts at communications today, that is, more attempts to
talk to others, and a surfeit of communication media yet communication has proved
as elusive as the Unicorn. The noise level has gone up so fast that no one can really
listen any more to all that babble about communications. But clearly there is less and
less of communicating. The communication gap within institutions and between
groups in society has been widening steadily-to the point where it threatens to
become an unbridgeable gulf of total misunderstanding." (Management Tasks,
Responsibilities and Practices p. 481.)
One of the biggest dangers in communication is to assume that communication has
taken place. Most of us indeed make a great effort in formulating ideas, and finding
appropriate words for communicating them to others. In organisations, too, much
money and energy is used to develop its system of communication. And yet, if you
try to assess how far the system has led to effective. communication in terms of the
desired response, you will be surprised at the results. There is a fifty-fifty chance of
the communication not being understood to the degree you would be satisfied with.
This has been proved by a number of experiments and observations made by
communication specialists. There is a story from the army which tells of an instruction
starting at one end of the line as `Send reinforcements' and ending up at the other end
of the line as `send three shillings and six pence'.
You can perhaps test it yourself. Try to recollect the news items of the previous
evening's news telecast or broadcast. How many items can you recollect? Most likely
less than half!
These examples indicate what happens to most of the communications between
persons or within organisations. It is not only important that a communication be
sent, it is much more important that it be understood. When an understanding of the
communication does not take place, we can hardly expect a desired change in the
behaviour of the receiver. What causes a failure of communication?
The failure in communication arises because of certain blockages or barriers between
the sender and the receiver. In order to make a communication effective, it must be
ensured that these barriers are removed. What the commercial media men these days
try to achieve is to overcome the barriers and reach the target audience. What kind of
barriers interfere with the effectiveness of communication? In the paragraphs that '
follow, we shall discuss the various reasons which either prevent the communication
from reaching the receiver or distort it in such a manner that it ends up either as non-
communication or as miscommunication. Since a manager has to use communication
as a means of getting the work done through his subordinates, he must ensure that
barriers are minimised and effective communication takes place.
The barriers that interfere with the understanding of the, communication are of three
kinds: semantic, psychological and organisational. We shall discuss them one by one.
Semantic Barriers
Most of the difficulties in communication arise because the same word or symbol
means different things to different individuals. Perhaps you remember what happened
to Shiny Abraham at the recent (1986) Asian Games at Seoul. Despite coming first
by a very wide margin in the 800 m. race, she was disqualified and lost her gold
medal for having crossed the track at the place where she should not have done.
According to her she mistook the symbol, i.e. the colour of the flag. Whereas in our
country the red flag indicates danger, in South Korea white flag is used for the same
purpose. Misinterpreting the white flag which had been put up at that point, she 35
crossed the track at the wrong place and suffered a setback.
Organisational Structure and Words, which are in reality symbols representing a thing, an action or a feeling, can
Process have several meanings. As explained earlier, words which represent concrete things,
e.g. car or house, tend to be understood in the same way, while abstract words like
merit, effectiveness or responsibility, tend to be interpreted by different persons in
different ways. Difficulty in understanding may arise even in the case of ordinary
words which have different contextual meanings. Lately such difficulties are being
experienced increasingly by people working in international development field. One
such problem arose in interpreting the meaning of the word `steps'. In a training
programme of health workers relating to the family health in Jamaica when a
question "What are some of the steps that a mother should take to make sure that her
baby keeps healthy?" was asked, it was found that there was no response to it. The
trainees who were accustomed to only one meaning of the word `steps' based on their
experience, could not just make any sense of the question.
Semantic difficulty may arise because of unfamiliarity with words, for example, a
word of some foreign language of which the receiver has no knowledge. A technical
word may also create such a problem-it may be beyond the ability of the receiver to
understand it.
In order to make it effective, a communication must be put into words which are
appropriate to the environment and mental framework of the receiver. This ensures
the communication to be grasped properly and implemented effectively. A very
interesting example of a communication made effective by the use of words
appropriate to the environment in which they were used is provided by the following
incident that took place in one of the. agricultural states of the USA.
A proposal for raising the salaries of the faculty members of an agricultural college
was under discussion. The farmers' bloc was totally against giving the raise to the
college teachers-they could not see why they should pay those college teachers
$5,000 a year just for talking 12 or 15 hours a week. Faculty representatives made no
headway in their negotiations until one of them who had some farming experience,
got an inspiration.
"Gentlemen", he told the members of the administrative body, "a college teacher is a
little like a bull. It's not the amount of time he spends. It's the importance of what he
does!"
The faculty members got the raise.
Semantic barrier may further be created by body language being inconsistent with the
verbal communication. A manager who praises the honesty and sincerity of his
subordinate in a sarcastic tone creates doubts in the minds of the subordinate as to the
course of action he should adopt in a given situation in future. The same kind of
barrier is created by a divergence between the verbal language and the action
language of the superiors. When action and language are used jointly, the actions
often have more powerful influence on other's actions than do words. A management
may, for example, profess its belief in being guided solely by the merit of employees
while making promotions. Yet if employees observe that in actual practice
promotions are made on considerations other than merit, the management's professed
policy is bound to be affected by a semantic barrier-it is not likely to communicate
anything, only the actions will communicate and what they communicate will be
contrary to what had been said in so many words.
Psychological Barriers
Psychological barriers are the prime barriers in inter-personal communication. The
meaning that is ascribed to a message depends upon the emotional or psychological
status of both the parties concerned. As such the psychological barriers may be set up
either by the receiver or the sender of the message.
You have already seen that the effectiveness of any communication depends upon the
perception of the right meaning of the message on the part of the receiver. However
the perception of meaning is very much affected by the mental frame of the receiver
al the time the message is received. Emotions which dominate our mood at the time,
e.g., anger, anxiety, fear, happiness, etc., will affect our interpretation of the message.
36 The phrases `viewing with coloured glasses' or `seeing with jaundiced eyes' explain
vividly how our inner feelings may vitiate our perception of the message or the
situation. Past experience of the receiver in such situations would also lead to the Managerial Communication
same effect. The same thing may happen when different individuals interpret the
same event or situation. For example, take the case of a supervisor watching a group
of employees resting and gossiping on the lawns. How will this situation be
perceived?
To the supervisor who believes that employees are basically lazy, the situation
communicates to him that they are playing truant with their work, and therefore
should be given more work to do and disciplined.
To the supervisor who believes that his workers are self-motivated and are sincere
workers, the situation communicates that they are enjoying a well-earned rest.
To the supervisor who is personally insecure, the situation communicates that they are
conspiring against him.
You will, therefore, see that a particular kind of situation, event, happening or words
and symbols are capable of being interpreted by different people in different ways
according to their own psychological states. A receiver who is suspicious or hostile,
either as a consequence of his feeling of insecurity or because of his past experience
with the sender of the communication, is more likely to start `reading between the
lines' and ascribe a distorted meaning to the message.
To the receiver's mind a communication gets tied up with the personality of the source.
This is what some people call the halo effect. Thus if we receive a message from a
person we admire, we are more likely to agree with it and act accordingly. On the
other hand, our immediate reaction will be one of disagreement with a message that
has been received from a person we do not like or trust. Thus our perception of
meaning of the communication is coloured by our own value judgments about the
source of the communication.
A receiver of the communication suffers from another problem which psychologists
refer to as cognitive dissonance. Since an individual tends to be fed with too much of
information from different sources, which is commonly the case in an organisational
setting, he becomes selective in receiving and responding to the communications. He
is most likely to `hear' only those messages that conform to his own beliefs, attitudes
and judgement. Communications that conflict with his own viewpoint tend to be
ignored. Often the `other' point of view may not only be ignored, it might indeed be
regarded as unfriendly or even hostile. If this happens frequently, subordinates may
start questioning whether their superior really wants to hear the `bad' news, i.e.,
opinions contrary to his own. As a consequence, much of the unfavourable news in an
organisation would never get reported to higher levels until the problem has assumed
the form of a crisis.
One common phenomenon with all communications is the effect of filtering. This
effect is produced when the communication passes through a large number of persons.
Each individual through whom the information is passed interprets facts differently,
judges from his own point of view what is important or relevant, and passes it on
with his own interpretations, with the result that the original communication gets
altered in the process. The process of filtering involves a biased choice of what is
communicated, on the part of either the sender or the receiver. Thus filtering refers to
the process of `selective telling' or `selective listening'. For example, a subordinate
may tell the boss what he (the boss) wants to hear. Similarly, though several factors
affecting productivity in the organisation may have been identified by the staff, yet
the manager may hear and respond only to those factors that fit his preconceived
view of the situation. In either case selectivity is introduced in the process of
communication leading to a distortion in communication.
Organisations are particularly prone to the effect of filtering. In large organisations
where there are several levels through which a communication must pass, filtering
takes place at each level. In order to save the time of the busy executive and to save
him from information overload, it is common in organisations for subordinates to
prepare notes or abstracts of the communication before passing it on to the superior.
The higher information has to travel the higher is the degree of abstraction, with the
possibility that significant pieces of information may be entirely missed or their
significance diluted or distorted. The larger the number of filtering points in an
organisation the greater is the chances of distortion. This may happen even outside 37
Organisational Structure and an organisation when communication is passed on verbally from one to another, as in a
Process grapevine.
Organisational Barriers
Organisations provide a formal framework through which communication is designed
to flow. The structuring of the flow itself tends to act as a barrier against freer flow of
communication between persons and levels in the organisation. Rules may prescribe
how communications are to move from one level to another in upward or downward
directions. Not only is there a possibility of delay in the communication reaching its
destination, but also there is every possibility of communication getting distorted
through the process of filtering described in the previous paragraphs. It has been
found that when information is channelled through different levels of organisation, it
became altered as people interpreted facts differently. In an organisational setting this
can be a very big problem since senior level executives who work through others have
to depend more and more on the information and interpretations of their subordinates.
Critical information that has lost its criticality because of the actions of the intervening
levels may jeopardise the position of the manager as well as the organisation itself.
It has been observed that the upward communication is particularly subject to the
influence of filtering in large organisations. Upward communication serves
essentially two purposes in an organisation. First, it helps in coordinating and
controlling the activities of the organisation. Second, it enables the superior to
appraise the performance of his subordinates. While the former does not create ony
problems, the latter has behavioural implications. It is human nature to show one's
performance in a better light than what it actually is. This tendency of an individual
naturally brings about a filtering through conscious or unconscious altering,
withholding or interpreting facts to be transmitted upward.
Dependency syndrome of the subordinate heightens the tendency to filter
information. In a superior-subordinate relationship, the subordinate is, generally
speaking, dependent on the superior for his advancement. Studies show that the
greater the dependency of the subordinate on his superiors for the satisfaction of his
needs, the more his tendency to filter information of an unfavourable kind. It has
been found that subordinates are generally unwilling to communicate unfavourable
information when they feel that their superior has the power to punish them in some
way. Only positive aspects of performance are likely to be communicated upwards.
Another barrier in organisational setting is created by the superior-subordinate
relationship itself which develops a distance between the two. People are more
comfortable in communicating with persons of similar status as their own.
Communication with persons of higher or lower status is likely to be formal and
reticent rather than informal and free. The distance between the superior and
subordinate and the difficulty in freer communication between them tends to be
heightened through status symbols which might be used to show the hierarchical status
of the person concerned. Status symbols within an organisation may be in the form of
separate parking space, separate bathrooms, separate refreshment rooms, cabins with
stylised furniture, carpets, etc. Such symbols accentuate the distance between the
different hierarchical levels and tend to widen the communication gap. Perhaps you
may have read that among the several characteristics of Japanese style of management
is the removal of status symbols. For example, under the Japanese system there are no
separate cabins for managers, uniforms for workers and managers are the same, they
eat the same menu in the same cafeteria. All these are intended to reduce the distance
between the workers and the managers, and bring about a better understanding of the
problems of the organisation which is the chief objective of organisational
communication.
You have read in the last few pages about the problems that crop up in communicating
with others, whether inside or outside the organisation. These problems create an
interference in the process of sharing of the meaning of a communication, and thus
block its effectiveness. As a manager you will be continuously required to make use
of your communication abilities in the performance of your job. Since your success
as a manager will be judged in terms of the results that you produce, the effectiveness
of your communication is, therefore, of prime importance to you. We shall explain to
38 you in a few paragraphs below what you can do to make your communications
effective.
Activity C Managerial Communication

Identify the barriers that prevent the effectiveness of communication. What can both: of
you do to remove these barriers between you and your boss ?

13.7 MAKING COMMUNICATION EFFECTIVE

In order to make your inter-personal communication more effective, the following are
some of the points that you should bear in mind:

Use direct, simple language and avoid words which can have ambiguous
meanings:

Keep the receiver (audience) in mind while choosing the words and phrases. Your
communication will be effective if the words you use are appropriate for the level of
receivers for whom the communication is aimed at.

If you look through history, you will find that the great messages have been simple
and short. Moses had only ten commandments and they hardly add up to sixty words,
and the 17 Rock Edicts of Ashoka are equally brief and to the point.

Use face-to-face communication: Face-to-face communication allows more accurate

feedback to be achieved through two-way communication. Generally speaking,
people express themselves more freely while talking rather than through writing.
Face-to-face communication permits a manager to see and understand the non-verbal
signs also.

Use feedback: Feedback enables the sender to judge whether his ideas have been
received in the manner as they were originally intended. Most often it is assumed that
communication has taken place because a notice has been put on the notice board, or
an order issued. You must devise ways to separate fact from distortion.

Listen with understanding: The biggest block to interpersonal communication is said

to be the inability to listen intelligently, understandingly and skillfully to another
person. We tend to confuse listening with hearing, which is a physical process.
Listening actually is much more than hearing, it involves understanding. Real
communication takes place when the listener truly hears and understands the position
and intent of the speaker. Most managers are, however, poor listeners. Apart from
other reasons for poor listening performance, the main reason is the discrepancy in
the speeds of speaking and of listening. While an average person can speak at the rate
of 150 words per minute, one can listen and think at the rate of over 1,000 words per
minute. The difference obviously leaves idle time for the mind to wander about and
lose some part of the message that is sought to be conveyed. In order to be a successful 39
manager you must attempt to develop your listening ability by utilizing your idle time
Organisational Structure and
Process
in projecting yourself into the mind of the other party and understanding the
factual and emotional content of the message, without making any attempt at
criticising, approving or disapproving it until after you have fully heard and
understood the remarks. The empathetic listening, as it is called, vastly improves
the understanding of both the parties, bringing in its wake improved
interpersonal relationship in the organisation.
Create constructive environment for the expression of ideas: If you can create a
climate in which people can be confident that what they say will be listened to
with sympathy and considered constructively, you can be sure of a successful
and creative communication. This is, however, possible only in an environment
of trust which has to be generated by management through its policies and
actions.
Be careful about your non-verbal communication: Because you hold a status
higher than your subordinates, your gestures are observed and `felt' by your
subordinates. Your body language, therefore, must be supportive of your
communication through words. One of the powerful means of communication
are your actions which speak louder than words. If you expect your
communication to be effective, ensure that your actions are consistent with your
words.
Develop and use organisational structures which minimise the chances of
filtering the communication: Decentralisation of authority and broadening of
span of control can be attempted to reduce the levels in the organisation and
minimise the authority filters.
The American Management Association has developed a set of ten suggestions
for improving communication, referred to as "The Ten Commandments of Good
Communication". Briefly, these suggestions are:
1. Clarify before attempting to communicate.
2. Examine the purpose of communication.
3. Understand the physical and human environment when communicating.
4. In planning communication, consult others to obtain their support, as well
as the facts.
5. Consider the content and the overtones of the message.
6. Whenever possible, communicate something that helps, or is valued by
the receiver.
7. Communication, to be effective, requires following up.
8. Communicate messages that are of short-run and long-run importance.
9. Actions must be congruent with communication.
10. Be a good listener.

13.8 SUMMARY
Communication is the transfer of information from one person to another.
Successful communication is much more than mere transfer of information-it is
the transfer of meaning and understanding between two persons.
Communication has paved the way for modern civilisation and good
communication is the foundation for sound management. No managerial activity
is possible without communication of some kind, and the major part of a
manager's working time is devoted to communicating.
Communication is accomplished through a process in which the sender encodes
an idea which is transmitted through a channel to a receiver who decodes the
message and gains an understanding of the idea of the sender. The reverse
process of feedback also follows the same pattern. During the entire process,
interference is created by `noise' which can lead to distortion of the
communication.
Communication takes place either orally or in writing. It could be just one-way
or two-way, which allows the sender and receiver to interact with each other. A
two-way communication is regarded better, as it brings about understanding
40 through clarity of the message. In an organisation, communication may take
place in several directions-upward, downward, lateral and diagonal.
Words either written or oral convey a very small part of the communication: most of it Managerial Communication
is transmitted through non-verbal gestures. A manager ought to be careful lest his
non-verbal gestures contradict his verbal message.

Communication within an organisation flows either through formally designed

authority channels or through informal channels spontaneously formed and cutting
across authority levels. Informal channels can have both positive and negative sides.
Cluster chain network of informal communication permits a rapid flow of information
through the formation of a grapevine. Formal communication is transmitted through
several kinds of networks. The choice of a network will depend upon considerations of
the complexity of a task, speed in decision-making in order to adapt to a change, and
the satisfaction of members desired.

Interference in communication is caused by semantic, psychological and

organisational barriers. In order to achieve effectiveness in communication, managers
should consciously try to lower these barriers.

13.9 SELF-ASSESSMENT TEST

1. Why is effective communication important to the manager?
2. Explain the elements of the communication process.
3. What is `noise' in communication? What factors in the organisational
environment cause noise?
4. What purposes are served through vertical communication?
5. What problems are encountered in vertical communication?
6. Why is informal channel of communication called, a grapevine? Should
managers use the grapevine or rely on formal channels?
7. Explain the significance of body messages in communication effectiveness.
8. Explain the statement, "Words are symbols and meaning exists in the mind".
9. Think of a situation at home or at work, and identify communication problems
you observed or experienced.

13.10 KEY WORDS

Communication: The process of transmitting or receiving abstractions such as ideas or
beliefs through the use of symbols and language.

Communication Networks: Patterns of channels of communication.

Communication Barriers: Physical, psychological and organisational hindrances

resulting into ineffective communication.

Grapevine: A very powerful informal communication channel.

13.11 FURTHER READINGS

Baskin and Aronoff, 1980. Interpersonal Communication in Organisations, Goodyear
Publishing: Santa Monica.
Davis, 1975. Human Behaviour at Work, Tata McGraw-Hill: New Delhi.
Hampton, Summer and Webber, 1973. Organisational Behaviour and the Practice of
Management, Scott, Foresman: Glencove.
Myers and Myers, 1982. Managing by Communication: An Organisational Approach,
McGraw International: Tokyo.
41
 Organisational Structure
UNIT 14 PLANNING PROCESS and Design

Objectives
The objectives of this unit are to:
understand the managerial process of planning
introduce the various methods of formulating plans
develop an understanding of planning framework
develop insights into the planning practices in Indian enterprises
Structure
14.1 Planning as an Activity
14.2 Strategic and Operational Planning
14.3 Formulating a Plan
14.4 Planning Framework
14.5 Planning Practices in Indian Organisations
14.6 Summary
14.7 Self-assessment Test
14.8 Key Words
14.9 Further Readings

14.1 PLANNING AS AN ACTIVITY

Planning is a household word today. Perhaps there is no sphere of activity where
`Planning' is not used in one context or the other these days. Though planning as an
instrument of aiming at future has been in vogue in business since a long time, its use at
the macro-level for the gearing up of operations of Government towards the
attainment of certain targets is of recent origin. Our Five Year Plans are an example of
macro-level planning for the achievement of targets aimed at increasing the standard
of living of our people.

Planning, thus, means having a view of the future and deciding in advance where we
would like to be and what is to be done in order to reach there.

Planning starts with the definition of the objectives and the formulation of the
specific goals or targets to be achieved. Goals are derived from the analysis of
existing situation of an organisation and once defined provide a sense of direction to
all managerial activities. In order to achieve the goals, specific plans are drawn up.
Objectives, goals or targets provide answer to the question, "Where is the
organisation heading to?.

Planning is essentially concerned with the future. Since future conditions are
unknown, forecasts or estimates must be made to provide a basis for planning. You
will appreciate that better forecasts lead to better planning for future. While most
forecasts are made intuitively or on the basis of experience, mathematical tools have
seen developed to make more accurate forecasts.

Planning is done by managers at all levels of organisation. You will see that all
managers plan though the character and breadth of planning may differ at different
levels of organisation. For example, while an Assistant Engineer at a work-site plans
for the accomplishment of work at his site from day to day or for two or three days in
advance, the Chief Project Manager must plan for the whole project over a larger
period of time. Similarly, a multinational company's top management must plan over a
longer time frame for a world-wide market. 43
Organisational Structure and
Process
Planning is a means to some end as such involves choices among alternatives-
alternative goals, alternative programmes and alternative means of achievement.
What alternative to choose gives rise to decision-making which every manager will
be required to do.
Question: Do you plan your day? How?
Do you plan for your holidays/vacations? How? Why?
Have you actively participated in the planning of some big event like the Annual
Function of your college or the marriage of a female relative of yours? Recapitulate
how the event was planned.
If you have given thought to the above questions, you must have sensed the need for
planning any activity whatsoever. Planning is considered important because it-
i) attempts to offset uncertainty by foreseeing the future and bringing about
preparedness for the happenings in future. In this way, it minimises the chances
of mistakes,
ii) focuses attention on the objectives or goals of the organisation and their
attainment,
iii) leads to economy in operation through the selection of the best possible course
of action,
iv) helps in controlling the activities by providing measures against which
performance can be evaluated,
v) helps in coordinating the operations of an enterprise since a well-considered
plan embraces and unifies all the divisions of an enterprise.
Activity A
As a manager, identify various planning activities that you are involved in.
1.
2.
3.
4.
5.
6.
7.
8.

14.2 STRATEGIC AND OPERATIONAL PLANNING

As already explained above, a plan provides a view of the future by defining the
goals or targets of the organisation. By themselves the targets would have no
meaning unless a time limit is fixed for their attainment, e.g. our Five Year Plans
indicate the targets to be attained by the end of the respective plan period viz., five
years.
In terms of planning horizon, planning can be of two kinds:
1. Strategic Planning, also known as long-range planning,. has two important
elements-first it covers a longer period of time which may extend from five to
twenty or more years. A capital intensive industry, e.g., a public utility service, or
a company dealing in international markets must necessarily plan for a longer
period. Strategic planning also takes into consideration the totality of activities
of the enterprise. In other words it refers to planning for the total, enterprise
over a longer duration. Planning for a duration of fifteen, twenty or more years
is also known as perspective planning.
2. Operational Planning, tactical planning or short-range planning usually extends
over a period of one year and is more detailed. While strategic plans indicate the
44 activities to be undertaken or goals to be achieved in general terms, and are an
instrument of planning and control in the hands of top management; operational
 plans are prepared in more specific terms. These plans are directly concerned Organisational Structure
with operations and deal with the various functional areas of the enterprise and Design
like production, marketing, finance, research and development, etc. They
guide lower levels of managers in their day to day activities and serve as a
yardstick for measuring their performance.

The following table explains the distinction between operational and strategic
planning.
Operational Strategic
Planning Planning
Focus Operating Problems Longer-term Survival
Development
Objective Present Profits Future Profits
Constraints Present Resources Future Resources
Environment Environment
Rewards Efficiency, Stability Development of Future
Potential
Information Present Business Future Opportunities
Organisation Bureaucratic/Stable Entrepreneurial/Flexibl
Leadership Conservative Inspires Radical
Problem Solving Reacts, Relies on Past h
Anticipates, Finds New
Experience Approaches
Low Risk High Risk
Source: Bernard Taylor; Strategies for Planning: Long Range Planning (August 1975) Quoted
by Stoner, Management (Prentice Hall, New Delhi) Page 102.

You should remember that the long-range plans and short-range plans are not
mutually exclusive. They overlap and, in fact, an operational plan is a part of the
strategic plan in the sense that it contributes to the attainment of some part of the
objectives or goals laid down in the strategic plan.
All too often the relationship between the operational plan and strategic plan may
be forgotten, and policies may be framed under operational plan which may prove
unfavourable for the attainment of long-term goals. For example, the longterm plan
may aim at increasing labour productivity per hour by 50%. However, the operational
plan aimed at cost reduction might lead to the curtailment of expenditure on
manpower development, which in the long run may actually decrease productivity
rather than increase it.

14.3 FORMULATING A PLAN

Preparing a plan is a step by step exercise. Generally speaking the following four
steps will be involved in planning for an enterprise.
1. Perception of opportunities
2. Establishment of goals
3. Appraisal of planning premises
4. Exploring of action paths and selection of a course of action.
Perception of opportunities
The first step for you to take while planning is to be aware of the opportunities. As
you have studied earlier, plans determine a course of action to be adopted `today' in
order to obtain the desired results `tomorrow'. In order that planning is regarded as
effective, it must anticipate and meet the conditions as they develop in future.
Forecasting, therefore, is a prerequisite to planning which simply stated, means
making an intelligent estimate of the conditions that will exist during the plan period. 45
Organisational Structure and For example, a demand forecast, which shows the level of demand of a particular
Process product over a period of time, is the first step towards production and sales planning in
an enterprise.
Quite often existing problems themselves induce managers to search for
opportunities. A dealer in fashion goods confronted with the problem of falling sales
and profit levels will himself be driven to seek new opportunities. Planning requires
realistic diagnosis of opportunities.
Establishment of goals
The second step for you is to establish goals which are to be achieved during the
specified period. This implies the establishment of goals for the whole enterprise as
also for each of its sub-units. Whatever the goal-profits, sales, market s h a r e - i t is
better if it is measureable because later you will use these goals to evaluate the
performance of the unit or its managers. Various kinds of budgets and cost standards
provide a means of establishing the standards.
Appraisal of planning premises
Premises refer to the factors in the environment that affect the achievement of goals.
Government policy is one of those factors which can have significant impact either
favourable or unfavourable on any plan formulated by an enterprise. Take for
example a recent change in the Government policy regarding the conversion of
debentures into equity. Until recently a conversion of debentures into equity was
permissible under certain conditions. A large business house which had taken
recourse to such conversion in the past and benefited by it, had planned for new
projects banking upon the conversion of a new series of debentures into equity.
Almost an overnight ban on such conversion into equity by the Government not only
created a crisis situation for that enterprise in respect of the financing of the new
projects but it also led to the erosion of confidence of investors in the future plans of
the company. As a result the market prices of equity share of the company severely
declined. You must have guessed that this is the story of Reliance'.
Planning in any organisation rests on several premises, in other words, on
assumptions about the expected environment conditioning the plan. Obviously a
change in any one or more assumed conditions will necessitate an alteration in the
plans. Such assumptions relate to factors which may affect the plans either from
within the enterprise or from outside. Accordingly, planning premises may be
grouped as external or internal.
A brief description of some of the factors that influence the formulation of the plan by
an enterprise will follow later.
Explore and determine action paths
The final step in the planning function is to explore and evaluate alternative plans of
action, and determine a specific action plan.
Once the goals have been established and the factor or factors affecting the plans
taken care of, actual action plan in the form of programmes and budgets are
formulated.
A programme shows:
a) major steps required to reach an objective,
b) organisational unit or person responsible for each step, and
c) sequence and timing of each step.
A programme may be accompanied by a budget which indicates the financial
resources allocated by the organisation for the implementation of the plan. Actually
in order to achieve the overall goals of the organisation, a number of activites will
have to be performed, each activity having a separate programme and a separate
budget within the overall programme and budget. The system under which budgets
are used for purposes of planning is known as the Budgetary Planning System.
46 We shall go into some details about the role of budgets in a business enterprise. You
should, however, remember that budgets in addition to serving as a tool for planning
also serve as a tool for control. This means that at .the appropriate time, your Organisational Structure
performance will be appraised in relation to the budget which had guided you so far. and Design
Budget therefore, is-an instrument of control also.

Activity B

Request your senior manager to procure a copy of the corporate plan of your
company. Read it carefully and summarise some of the important programmes of
your company.

14.4 PLANNING FRAMEWORK

As previously stated planning rests on premises about the expected environmental
conditions. Such premises are classified into two categories-

a. Extrenal, i.e. Business Environment

b. Internal premises can be several, e.g., capital investment made; approved sales
forecasts; values and beliefs of top management and the policies adopted; and the
given organisational structure.

Business Environment refers to the totality of economic, political, social, cultural

and technological conditions that affect the formulation of plans of any organisation.
Since the environment is primarily looked upon from the point of view of its impact
on the demand for the product or services offered by the organisation, changes in the
environment may have favourable or unfavourable consequences for the
organisation. A rise in per capita income may signify more disposable income and
indicate more purchasing power in the hands of consumers. On the other hand,
political instability has an undesirable impact on the plans of a business enterprise.

The Government policies of regulation and control as also of taxation, and providing
or withdrawing incentives all affect the future planning by a business enterprise.
What can be produced or sold by a business may be subject to Government controls.
The difficulty in business planning arises because it is impossible to forecast the
character and effect of such controls. Again in an industry where technological
changes are many and rapid, planning on the basis of old technology will spell doom
for the enterprise. In order to succeed, managers today are expected to keep
themselves abreast of technological changes taking place in the industry and plan the
industry on that basis

Capital Investment Committee

Business enterprises today need large capital investment and an investment once
made in fixed assets tends to have long-run influence on its future plan as the
investment made cannot be recouped except through use.

While developing plans, you should first assess carefully your own resources and
commitments made, and adjust the plans i n such a manner that the existing resources
47
are more productively utilised.
Organisational Structure and
Process
Sales forecasts, which are a projection of expected sales over a period of time, provide
a framework on which plans of most enterprises are based. Since sales give rise to
revenues which sustain the enterprise, business enterprises tend to attach a great deal
of importance to the framing of such forecasts. A forecast of rising sales over a long-
term would indicate the need for the expansion of the facilities. On the other hand, a
decline should alert the management to look into the causes of decline and initiate
corrective actions.
Generally speaking, making a sales forecast is a two-step process:
1. Make industry-wise demand forecast.
2. Make sales forecast for a specific company.
For example, if you are in automobile business producing two-wheelers, first
estimate the total demand for two-wheelers by types and then estimate your market
share and the demand for the two-wheeler you are producing or intend to produce.
There are several methods of making demand forecasts and sales projections which
you will study elsewhere.
It will be interesting for you to know that some of the most interesting and important
contributions in management science are associated with the planning function.
Values and Policies of Top Management
The plans formulated and action taken by managers in an organisation are immensely
affected by the values attached to alternative courses of action and policies pursued in
each case. Value defines what is `good' and what is `not good'. A top management
holding a `good' belief is not likely to plan for something, which they regard as `not
good'. A case in point is a monthly magazine `Kalyan' devoted to the propagation of
religious literature. It has been the basic policy of the top management of that
magazine not to accept any advertisements. While planning for increased revenue
advertisements are never considered as an alternative source.
Organisational Structure
Plans are implemented through an organisational structure which consists of people
arranged in a hierarchy, each one responsible for the performance of a specific task in
coordination with others. Quite often it may be found that a particular plan drawn up
cannot be satisfactorily implemented simply because the structure is such that while
on the one hand there is duplication of effort, on the other hand, there is nobody to
look after another part of the job.
In almost every kind of large-scale enterprise, examples can be found where well-
conceived strategic plans were thwarted by an organisational structure that delayed
the execution of the plans or gave priority to wrong set of considerations. While
drawing up a plan, you should give attention to the needs of the organisation not only
in terms of the number and kind of personnel required but also to the change in the
organisational structure required for the effective implementation of the plan.

14.5 PLANNING PRACTICES IN INDIAN

ORGANISATIONS
Several researchers have looked into the planning practices in Indian enterprises.
Some of these studies are reported here:
Richman and Copen (1972)
Virtually all of the medium-sized and larger companies surveyed established at least
some quantitative objectives or targets on an annual or short-term basis. These
generally include profitability, sales and production objectives. Most also had some
kind of growth objectives and some general guidelines to help determine those areas
in which the firm would concentrate or expand its efforts. However few defined
longer-term objectives clearly.
48 Only one of the Indian firms surveyed, a drug producer, did a truly thoughtful job of
developing a long-term growth and development model. It identified explicitly a
desirable position to strive for several years in the future and designed specific Organisational Structure
strategies to reach it. This firm established specific three and five-year goals for and Design
market share and profitability.
In general, planning processes and plans at firms studied in India focused on the short
run, and in particular on short-term projections of monthly, weekly and daily
operating data. Planning documents consisted mostly of sales forecasts and some
kind of operating budgets. However, these were prepared more for control purposes
than for future planning. The only planning activity found in most of the major firms
was the translation of a sales forecast into requirements of imported raw materials
and the ordering and stockpiling of these items. In only a few cases were accurate
forecasts of capital requirements or productive capacities made.
Bhatia (1981)
This research study on the objectives of a sample of 65 out of the 251 giant companies
listed by Research Bureau of Economic Times, revealed that only 45 per cent of these
have explicitly defined objectives and 55 per cent do not have expressed objectives.
Moreover out of those which have specified their objectives 17 per cent feel that their
objectives are confidential and not to be divulged.
The above evidence indicates that the Indian business organisations, specially the
large-sized, do realise the need and urgency of planning their operations over longer
periods of time. Many however, still consider planning over longer periods a waste of
effort primarily because of a larger measure of uncertainties prevailing in the Indian
environment.
The Section 14.7 at the end of this unit contains an extract from the chairman's speech
of a fairly large Indian company which is indicative of how Indian business look at
the planning function and how they proceed to take advantage of the opportunities
available in the environment.
You should read it carefully and answer the questions given at the end.

14.6 SUMMARY

Let us now summarise the ideas contained in this section. The function of
management starts with planning and organising. A plan defines the goals which are
to be attained during a specified period of time in future. Planning involves a vision
of the future. The process of planning, therefore, is a mental exercise involving a
choice among alternative goals, programmes and means of achievement. Every
manager in an organisation has a role in planning though the character and breadth of
planning might differ from manager to manager.
A plan encompasses a period of time in which it is expected that the goals would be
attained. This period known as planning horizon can be short or long. A short-term
plan generally covers a period of one year and is detailed and much more specific
than a long-term plan in defining the goals or targets. The process of formulating a
long-term plan is known as strategic planning through which an organisation defines
its long-term goals.
In formulating a plan a number of sequential steps are involved. In the first place, you
have to look for the opportunities. Scanning the environment and forecasting will
enable you to perceive the opportunities that exist. Secondly, you specify the goals
that you would like to attain during the planning horizon in measurable terms.
The third step involves an appraisal of those premises on which planning of an
organisation rests. Such premises can be external to the enterprise or internal to it. In
general the economic, socio-cultural and technological environment tends to
influence from outside what managers will plan and how. Among the internal
premises, i.e. factors that influence the plan from within are the capital investment
which has already been made or committed, the forecast of sales which has been
approved as the basis for planning the values and beliefs of top management, and the 49
capabiiity of the organisational structure of the company.
Organisational Structure and
Process
The final step in planning is to lay down an action plan in terms of programmes and
budgets with specific targets.
Research studies relating to planning functions in Indian business generally indicate a
low importance given to this function. Though sales forecasting and budgeting is
common, long-term planning is done by only few large enterprises.

14.7 SELF-ASSESSMENT TEST

Perspective Planning in Mahindra Ugine Steel Co. Ltd.

The following passages are extracted from the statement of the chairman of Mahindra
Ugine Steel Co. Ltd. at its annual general meeting in 1971. These extracts will
provide you an idea of the importance attached to a perspective (long-term) plan for
an enterprise and also of some of the factors which condition the planning of a
business enterprise.
"I am happy to advise you that in furtherance of our plans to expand the capacity of
your Plant and to achieve maximum economies of scale your Company has been able
to submit a comprehensive plan to the Government for enlargement of the productive
capacity upto 60,000 tonnes of finished Tool, Alloy and Special Steels per annum In
planning the expanded capacity of our plant we shall strive to achieve maximum
diversification of the end-products consistent with a favourable capital-output ratio
For this, we have to constantly strive to expand our operations and diversify
our product-mix so that the goals are met or even exceeded.
The observations about our sales and the outlook for our Company prompts me to
discuss briefly the developments and trends in our own industry and share some
thoughts on perspective planning. Planning today is a universally accepted exercise
for one and all. It involves looking as far ahead as the data on our hands and our
vision permit. In the life of a corporation this means a ,close study of all the factors that
shape its progress and influence it decisively. There are several such factors and one
such all-important factor, external to the organisation that could provide the
guidelines for future growth is the assesssment of the potential market. I attach
overriding importance to a sincere, honest and realistic attempt to size up the
approximate if not the exact requirements of a given product for a given year in the
planning and creation of manufacturing capacity.
Your Company is vitally interested in making projections of its own growth with the
help of macro-projections of the demand for Mild, Alloy and Special Steels released
by various Government and semi-Government agencies. During the last decade there
has been several such macro-projection . The last estimates of demand for Steel
have come from NCAER. Most of the studies work out the potential demand with the
.help of the end-use method which is a simple but down to earth technique to assess
the short-term as well as long-term demand in developing countries. The recent
estimates of NCAER also utilise the same method.
In the latest study of the demand for Steel, the NCAER has taken full account of (a)
all the major steel consuming sectors, (b) requirements of such consumers, (c)
increase in demand due to export of Steel, (d) Steel content of machinery and
engineering goods to be exported, (e) possible reduction in demand due to
substitution of Steel by items such as plastics, asbestos, cement, aluminium, etc. in
such products as motor cars, railway rolling stock, ship-building, pipes and tubes, (f)
Price elasticity of Steel demand and (g) Steel content of imported products and so on.
The main assumption underlying the end-use method is firstly that the targets for
various industries obtained from research organisations like the Planning
Commission or those of NCAER itself, would be achieved. Experience tells us that
this has not always been a correct assumption and plan targets for even the major
steel consuming sectors get elasticised. Also in several industries there have been
shortfalls in respect of the attainment of targets. As you can see for yourselves, such
shortfalls may result in over-estimation of the requirements. Conversely, where
50 targets are exceeded, which is not often the case, the forecast of requirements for a
particular industry turn out to be under-estimates.
Secondly, the success of the end-use method is largely conditioned by the accuracy Organisational Structure
of the norms that relate the Steel industry to the Steel consuming industry by and Design
indicating the input co-efficient. Such norms are known to change with technological
progress and innovations and there have been several occasions in the past when
estimates have gone haywire on account of unrealistic norms having been adopted.
For instance, the norms employed by the Perspective Planning Division in its 1965
estimate of the requirements of Alloy and Special Steels have been replaced by the
NCAER which has employed its own norms for various industries. The end-use
method thus assumes that the impact of technological changes would be minimal, if
not nil on the norms of consumption of Steel. Naturally to obtain more accurate
figures at the end of such an exercise, the final estimates are adjusted upward to
provide for such findings of changes in various consuming sectors. In order to make
the macro-projections meaningful for the producers to plan and expand their
capacity, it is essential that norms are kept under review and at the end of every year
or so the Associations of Consumers and Producers should get together and see that
any significant changes in the norms are reflected in the demand figures and
necessary adjustments and/or corrections are made on the overall demand
projections. By such an exercise the year to year projection of demand would be
rendered more realistic and would provide a workable basis to determine the gap
between demand and availability.

With these considerations regarding the merits and demerits of the end-use technique
in mind, let us consider the recent studies in demand estimates with special reference
to the products of our own industry viz. Alloy and Special Steels. There have been as
many estimates of demand for Alloy and Special Steels as there are for other Steels
also. As against about 300,000 tonnes for 1973-74 and 430,000 tonnes for 1978-79.
estimated by the Steering Group of the Steel Ministry in 1968 and incorporated in the
Fourth Five Year Plan document, the latest study of the Council provides for 434,000
tonnes for 1975 and 817,000 tonnes for 1980.

The estimates of the Steering Committee as revised by the Technical Wing of the
Steel Ministry have now become available. Accordingly the demand for Alloy and
Special Steels has been revised upwards from 300,000 tonnes to 400,000 tonnes for
1973-74 and from 430,000 tonnes to 590,000 tonnes for 1978-79. What is of interest
to your Company as a producer of Alloy Constructional Steel in these varying
estimates is that for 1973-74 the estimates of both the Technical Wing and the
NCAER arrive at almost the same figure, but for a difference of only about 2,000
tonnes. The marginal divergence, however, turns out to be sizable in the estimates for
the end of the Seventies. As against the Technical Wing's estimate of 178,700 tonnes
for 1978-79, the Council Places the demand for Alloy Constructional Steel at
239,906 tonnes for 1980.

It is now accepted that the assessment of the Technical Wing has been rather
conservative and that the Council's studies despite certain limitations are more
realistic. A message that emerges loud and clear from these studies is that even after
the schemes for expansion or setting up of new units on green sites which are now
under consideration are successfully implemented by the end of the decade, there
would still be a gap, probably substantial rather than marginal between requirements
and actual production.

All said and done the numerous estimates referred to above need to be further
processed and worked upon for purposes of drawing meaningful conclusions that
guide us in deciding about future investments in the creation of new Alloy Steel
capacity and in determining the ideal product-mix for your or other plants. The
breakdown of such broad aggregates into categories, grades, shapes, surface finish
i.e. black or bright, etc. is a pre-condition for successful corporate planning. Quite a
few snap judgments, I am afraid, have already been made based on broad aggregate
demand resulting in duplication of capacity of the same size ranges. And
circumstances may force us to amend them, it not reverse such decisions. In this
context, I would emphasize that before a final sanction is issued for creation of fresh 51
capacity, adequate thought is given to the point whether such fresh capacity should
Organisational Structure and
Process
come about through new units on green sites or through expansion of existing units
or both. These considerations weigh very heavily in favour of the second proposition.
Expansion would firstly help creation of new capacity faster; it would involve lower
capital investment; and finally what is important, it would help the existing units to
achieve economies of scale.

It is high time that a master perspective plan for the speedy expansion of Steel
capacity in the country is drawn up and Government and industry jointly and single-
mindedly work for the crystallisation of such plans. This exercise has to be followed
by clearer thinking about the future needs.

A corporate or industrywise perspective plan considers not only the market potential
for a product but also the derivative demand for essential inputs to be supplied by the
feeder and ancillary industries. Only such an assessment of the requirements and
availability of raw materials would give meaning and content to the perspective
plan.

Questions:
What factors influence the planning in MUSCO?
How does Government policy influence planning in MUSCO?
What method of making future forecasts is referred to in these passages? What are its
elements ? How accurately can be the forecasts arrived at through this method? Find
out from the books listed below what the other methods of demand forecasting are.

14.8 KEY WORDS

Strategic Planning: Planning activity undertaken keeping in mind the long-term future
of an organisation.
Operational Planning: Planning activities related to day to day functioning of an
organisation.

14.9 FURTHER READINGS

Lawrence, Paul and Jay Lorsch, 1967. Organisation and Environment: Managing
Differentiation and Integration, Harvard Business School: Cambridge.
Etzioni, A. 1961. Complex Organisations, Holt, Rinehart and Winston: New York.
Koontz, O'Donnell, and Weihrich, 1982. Essentials of Management, Tata McGraw-
Hill: New Delhi.
Stoner, J.A.F. 1982. Management, Prentice Hall: New Delhi.
Richman & Coper, 1972. International Management and Economic Development, Tata
McGraw-Hill: New Delhi.
Bhatia, M.L. 1981, Corporate Objectives, Indian Management, September.

52
 Controlling
UNIT 15 CONTROLLING
Objectives
The purpose of this unit is to:
understand the nature and purpose of control
examine the prerequisites and characteristics of control
describe the control process
analyse the methods and managerial strategies of control
Structure
15.1 What is Control?
15.2 The Prerequisites and Characteristics of Effective Control Systems
15.3 The Control Process
15.4 Control as a Feedback System
15.5 Methods of Control
15.6 Policies and Design Choices in Control
15.7 Strategies of Control
15.8 Summary
15.9 Self-assessment Test
5.10 Key Words
15.11 Further Readings

15.1 WHAT IS CONTROL?

Control is the process of assuring the efficient accomplishment of enterprise
objectives. In the turbulent environment faced by management, control is necessary
to anticipate problems, measure performance against standards, take corrective
actions for deviations from plans and if necessary, modify plans.

The term control may have some nagative connotations for some. But, in the
management process, it is a facilitating function aiding the organisation to
accomplish the set objectives. To draw an analogy, it is like a thermostat in an air-
conditioning system.

The primary responsibility for exercising control rests with every manager charged
with the execution of plans. As Henry Fayol said, "In an undertaking, control consists
in verifying whether everything occurs in conformity with the plans adopted, the
instructions issued and principles established. Its object is to point out weaknesses
and errors in order to rectify them and prevent recurrence. It operates on everything,
things, people, and actions". It is wrong to assume that only top management has the
responsibility for control and that there is little need for control at lower levels of
management. While the scope for control may vary to some extent depending upon
the position of an employee in the hierarchy, all those who have responsibility for the
execution of plans need to exercise control too.

15.2 THE PREREQUISITES AND CHARACTERISTICS

OF EFFECTIVE CONTROL SYSTEMS
The major prerequisites of control are two: a plan and a structure.

a) Plan: controls must be based on plan. The more clear and complete the plans
are the more effective controls can be; plans become the standards by which
the actions are measured.

b) Structure: There is need for a structure to know where the responsibility rests
for deviations and corrective action, if any needed. As in the case of plans, the
more clear and complete the organisation structure is, the more effective
control can be. Controls, to he effective, should share the following basic 53
characteristics:
Organisational Structure and
Process
Appropriate: Controls should correspond to an organisation's plans. Controls
designed for a general manager are inappropriate for a supervisor. Similarly, control
systems suitable for a line department may be inappropriate for a staff department.
Strategic: Control should serve a stretegic purpose and provide spotlight on positive
and negative exceptions at critical points.
Acceptable: Controls will not work unless people want them to. They should be
acceptable to those to whom they apply.
Reliable and objective: Controls should be accurate and unbiased. If they are
unreliable and subjective, people will resent them.
Cost-effective: The benefit from control should be greater than the costs. Control
devices should yield tangible benefits.
15.3 THE CONTROL PROCESS
The control process involves three steps: (a) establishing standards, (b) measuring
performance against these standards, and (c) reinforcing success/correcting
deviations.
a) Establishing Standards: Standards mean criteria of performance. Standards
may be of many kinds and include verifiable goals set in qualitative or quantitative
terms. An organisation can establish standards in such areas as
Profitability
Productivity
Market Share
Worker Performance
Innovation
Social Responsibility
Standards can be based on past performance, managerial judgment or scientific
analysis. Standards are used to measure performance and judge success or failure.
b) Measuring of Performance: Essentially, it is a comparison between "what
is" and "what should be" the performance. Ideally, measurement should be done on a
forward-looking basis to predict probable deviations from standards rather than
merely be used as a post mortem exercise. To the extent prediction becomes possible,
control becomes effective because appropriate actions can be taken well in advance
of their actual occurrence.
c) Reinforcing Success/Correcting Deviations: When plans and organisation
structures are clear, it is easy to reinforce success and avoid failures. When deviations
are noticed or apprehended based on warning signs, the reasons can be analysed and
appropriate corrective actions taken promptly.

15.4 CONTROL AS A FEEDBACK SYSTEM

Management control is usually viewed as a feedback system. This is seen more
clearly by looking at the process involved in control system, as shown in Fig. I.
Control is more than a matter of establishing standards, measuring performance and
correcting for deviations. To initiate corrective action, there should be a programme
(or a plan of action) which needs to be implemented and monitored as to whether
such implementation will give the desired performance.
Figure 1: Feedback System in Control Process

54
Source: Koontz Harold (1981), "Management". Aukl a nd McGraw-Hill.
In the simple feedback system there is a time lag in the control process. The old Controlling
notion is to look at planning as looking forward and control as looking backward. But
good management requires future-directed control where it is possible to get
feedback somewhat ahead of actual happening than after the event. As Harold
Koontz observed, "Since the past cannot be changed, effective control should be
aimed at preventing present and future deviations from plans". Computers make it
possible now to get feedback on a real-tine basis, i.e., as of now or on a here-and-now
basis. Where there are time lags in a system, corrective steps should be taken on a
proactive basis predicting or anticipating efforts. As such, effective control systems
should seek to overcome the deficiency of common or simple feedback systems to be
modified as `feedforward systems'. Feedforward systems monitor inputs into a
process to ascertain whether the inputs are as planned; if they are not, the inputs, or
perhaps the process, are changed in order to ensure the desired action. As shown in
Fig. II a feedforward control system is really one of feedback. The only difference is
that the information feedback is at the input side of the system so that corrections can
be made before the system output is affected.

Figure II: Comparisons of Simple Feedback and Feedforward Systems:

15.5 METHODS OF CONTROL

Arthur Bedeian discusses nine methods of control and classifies them into three
categories based on their frequency, of use:

Constantly used controls: Self-control, group control and policies, procedures and
rules.

Periodically used controls: Management Information Systems, External Audits and

Budgets.

Occasionally used controls: Special reports, personal observation and project

control.

The nine methods of control mentioned above (see Fig. III) are briefly discussed
hereunder.

Constant Controls

Self-control: Managers need to exercise more self-control to minimise the need for
other control methods and making control in the organisation acceptable and
effective. Self-control means giving a fair day's work for a fair day's pay, reporting to
work on time, discharging duties and responsibility properly and respecting the rights
of others in the organisation. Self-control is more in tune with Theory Y discussed
later in the unit on Leadership Styles and Influence Process in Block 5. Respect for
self-control in an organisation can be a motivating factor. A sense of appreciation for
self-control can be promoted among employees through training in behaviour
modification. 55
Organisational Structure and
Process
Group Control: Work groups are a source of control. Group-defined norms exert
greater influence in organisations than the norms that managements may choose to
set unilaterally and thrust on groups. Group norms and group control can aid or
hinder formal authority. Organisations would do well to develop and use group
control processes to reinforce formal authority. While in some organisations group
control processes helped increase output and improve quality,, in others they resulted
in restricting output. For group norms to contribute to organisational goals there
should be a climate of trust and openness, a culture of cooperation than confrontation.
Quality circle, quality of worklife programmes and work redesign experiments being
taken up in some organisations are examples that point to organisational thrust
toward reinforcing group control processes for achieving organisational goals
through integration of members' interests with those of the organisation.

Figure Nine Methods of Control and Their Frequency of Use

Source: Bedian-A G-(1986), "Management", New York, Dryden Press, p. 553.

Policies/Procedures/Rules: These are essentially bureaucratic control mechanisms

referred to in the discussion on control strategies. They reflect past managerial
experience and include a variety of aspects concerning how to make certain
decisions, deal with resources, etc. If the policies, procedures and rules are properly
formulated, clearly communicated and implemented consistently throughout the
organisation, they can be effective in controlling individual and work group
behaviour.

Periodic Controls

Management Information Systems: A Management Information System is a

mechanism designed to collect, combine, compare, analyse and disseminate data in
the form of information. As such, management information systems link the various
decision-making centres within an enterprise and serve a useful function in providing
feedback for control purposes.

External Audits: The annual financial audit by an outside accounting firm is one
form of external audit, mainly of the finances of an organisation. In the case of public
sector units, such an audit is performed by Comptroller and Auditor General also.
Forward looking progressive private companies have in the past sought to have a
social audit, not for evaluating financial performance, but to find out whether and
how well they have been discharging their social obligations. An example is the case
of Social Audit conducted in Tata Steel in the late 1970s.
56
Budgets: Budgets are plans that deal with the future allocation and utilisation of Controlling
various resources to different enterprise activities over a given period of tittle
Budgets help establish plans and also serve as the basis for measuring or evaluating
the standards of performance. Budgetary control is a good example of bureaucratic
control strategy (discussed separately in this unit).
Occasional Controls
Special Reports: These have a special role. Special reports can be commissioned by
an organisation when its normal control systems point to the need for detailed
investigation or study of a particular operational aspect. When major policy decisions
of strategic importance are taken, special reports may be commissioned. These
include situations where the organisations find the need for overcoming the existing
difficulties, modernisation, expansion, diversification, merger, acquisition etc.
Special reports vary in content and style depending upon the purpose. They could be
prepared internally by managers in the organisation or by consultants or outside
institutions. Special reports are a valuable method for controlling in turbulent
environments, warranting changes in products and markets, technology and
production processes, organisational structure, etc.
Personal Observation: Managers can know what is happening in an organisation by
relying on information provided by others as also by finding out for them. First hand
knowledge has to be critical to be effective. The importance of personal observation
is best illustrated by Arthur Bedeian through his reference to the ill-fated ITT effort
to build a giant wood/cellulose plant in Canada. The resulting $320 million loss could
probably have been averted if someone had just gone to Canada and looked at the
trees, which grew to no more than an uneconomical 3 inches in diameter.
Project Controls: Various methods have been developed for controlling specific
enterprise projects. The best example is the network analysis using the PERT tool.
PERT is an acronym for Programme Evaluation and Review Technique. It is a
diagram showing the inter-relationships between the events and activities that
comprise a project. It is a detailed, easy-to-communicate means for determining
current status of a project, stimulate alternative plans and schedules and controlling
activities.
15.6 POLICIES AND DESIGN CHOICES IN CONTROL
Organisations have three options in exercising control:
centralisation or delegation
formal or informal
direct or indirect
Preferences for one or a mix of all options are matters of judgment. Judgment in
turn could be based on theory, practice or premonition. Each option has relevance in
a particular situation. Here we shall briefly consider the three options mentioned
above.
Centralisation or Delegation
The concepts of centralisation, decentralisation and delegation were discussed in the
previous unit, `Delegation and Interdepartmental Coordination.
Centralisation is an approach where control is exercised by the chief executive or the
top management group (comprising a few individuals). Others in the lower rungs of
hierarchy cannot act on their own or use their discretion. Thus, functional autonomy
will be lacking at operating levels.
Delegation, on the contrary, manifests transfer of decision-making authority
downward and outward within the formal structure. For example, in a multiplant
situation, plant managers may take decisions without having to seek prior consent of
head office on financial matters involving a sum of not more than Rs.2 lakhs in each
transaction. This is an instance of delegation of financial powers. If a transaction
involves an expenditure of Rs 2.5 lakhs, the plant manager will have to refer to the
head office which exercises control over the decision. Sometimes, decision-making 57
power is transferred downwards in a hierarchy prescribing limits on the scope and t
Organisational Structure and type of decisions. For example, a branch manager is allowed to spend upto Rs 5000
Process per month on consumables, without referring upwards for approval, so long as it falls
within the monthly budget. Here although the decision-making power is transferred,
overall control is incorporated into the arrangement. Where delegation occurs in an
organisation-wide context, it becomes decentralisation.
Centralised Control:
makes it easier to coordinate the activities of various subunits/departments in an
organisation.
seeks to achieve balance among various functions because the top management
can be expected to have a broad organisation-wide perspective.
proves more useful because control will be in the hands of senior, experienced
top executives.
is necessary to meet extraordinary situations.
is economical since duplication in activities and resource use can be avoided.
Delegation and decentralisation too have positive features:
they relieve the top management from overload.
motivate individuals to give better performance due to opportunities for
individual freedom, discretion and control.
contribute to the personal and professional development of managers.
people at operating levels are more knowledgeable about the dynamics in
decision-making situations and can be expected to take appropriate actions to suit
local conditions. This is particularly true in the case of large and widely dispersed
units.
affords prompt actions and provides flexibility.
As seen above, both are beneficial, but each one is appropriate for specific conditions
and situations. The option is to be exercised at two levels:
in respect of different types of decisions which vary in importance.
the contingencies and capabilities of managers in the total context of the
organisation.
Strategic decision-making and control can be centralised. Routine operational matters
can be delegated and decentralised. Large organisations with widely dispersed units
find a greater need for delegation.
Formal or Informal
Formalisation refers to establishing written policies, procedures, rules etc. which
prescribe the do's and dont's. As organisations grow, formalisation grows.
Formalisation renders activities more predictable in a desired direction and facilitates
coordination and control. In large organisations where it is no longer possible to
retain high degree of centralised control, formalisation helps to retain consistency and
continuity by restraining the negative effects of delegation and decentralisation.
Formalisation is appropriate for large organisations operating in conditions of
stability. But, in today's fast changing environments, complete formalisation may not
be desirable and practicable. Excessive formalisation vitiates the climate for initiative
and employee freedom in performance, results in employee resistance and may even
become counterproductive.
Formalisation can be effective insofar as policies, procedures and rules are flexible
enough and reviewed periodically to make them appropriate to current changing
situation.
Direct or Indirect
There are two ways of controlling. One way is to supervise subordinates' activities
closely, trace deviations to the persons responsible and get them to correct their
practices. This is called indirect control The other way is to develop high quality
managers who will properly understand and apply managerial principles, functions,
techniques and philosophy, make few mistakes and initiate corrective actions,
58
wherever necessary, themselves. This is called direct control. The higher the quality
of managers and their subordinates, the less will be the need for indirect controls.
Exercising close supervision through indirect controls adds to overhead costs and Controlling
reduces employee motivation. Modern management practices call for a greater degree
of self control (which in effect means direct control) by those who perform work.
With the revolution in information technology using computers, control can be
exercised through real-time information, i.e., gathering information on what is
happening as events are occurring. This made it easy for organisations to combine
direct controls with indirect controls. But here indirect control is exercised not
through close personal supervision, but through modern technology and hence
several of the negative features of close personal supervision of superiors such as
infringement on freedom of operation and subjectivity in evaluation are avoided.
Direct control hastens corrective actions, lightens the burden caused by indirect
control and subordinates feel less concerned about superior's subjectivity in rating
their performance because in indirect control one would feel a close relationship
between performance and measurement.
15.7 STRATEGIES OF CONTROL
John Child discusses four control strategies as listed in Figure IV.
Figure IV: Four Strategies of Control in Organisation
Each strategy will utilise one or more of the features listed
1 Personal centralised control
1. centralised decision-making
2. direct supervision
3. personal leadership: founded upon ownership or charisma, or technical
expertise
4. reward and punishment reinforce conformity to personal authority
2 Bureaucratic control
1. breaking down of tasks into easily definable elements
2. formally specified methods, procedures and rules applied to the conduct of
tasks
3. budgetary and standard cost-variance accounting controls
4. technology designed to limit variation in conduct of tasks with respect to pace,
sequence and possibly physical methods
5. routine decision-taking delegated within prescribed limits
6. reward and punishment systems reinforce conformity to procedures and rules
3 Output control
1. jobs and units designed to be responsible for complete outputs
2. specification of output standards and targets
3. use of `responsibility accounting' systems
4. delegation of decisions on operational matters: semi-autonomy
5. reward and punishment linked to attainment of output targets
4 Cultural control
1. development of strong identification with management goals
2. semi-autonomous working: few formal controls
3. strong emphasis on selection, training and development of personnel
4. rewards oriented towards security of tenure and career progression
Source: Child, J. (1984) "Organisation: A Guide to Problems and Practice" p. 159.
a) Personal centralised control: Strategy is usually found in small owner-managed
enterprises. Control is centralised in the proprietor or chief executive who combines
his rights of ownership with his unique personal qualities and expertise. Ht. such a
system reward and punishment are based more on loyalty to leader than competence.
The system makes it easy to breed favouritism and distorts feedback so vital for
59
Organisational Structure and control.
Process
b) Bureaucratic control: Strategy is the most common feature in large organisations
in both private and public sectors, besides Government. The main thrust of
bureaucratic control strategy is to ensure predictability through the specification of
how people in the organisation shall behave and carry out their work. Formalisation
in the sense of written definitions of jobs and procedures is the most characteristic
feature of the bureaucratic control strategy. Division of work in modern industrial
organisations lends itself to simplification and standardisation.

The focus in highly bureaucratic organisations is to seek compliance and `keeping

your nose clean'. Rules, then, become more important than goals. Compliance results
in job security and other benefits and non-compliance leads to sanctions and
punishments.

The accounting control systems are perhaps the best examples of bureaucratic control
strategy. One advantage of bureaucratic control strategy is that the delegation
becomes easy in such systems. Managers can easily delegate without losing control
over what is going on so long as such delegation occurs within formalised limits to
discretion.

c) Output control: Strategy is appropriate in case of activities where it is easy to

identify tasks which are complete in themselves and their outcomes measureable in
definite terms. Common criteria of achievement, applied to individuals or groups,
product lines and whole units respectively, are quantity of items processed, value
added, profitability, etc. Once outputs or criteria for overall achievement have been
identified, it is possible for management to specify output standards and targets.
Reward and punishment systems can he linked with actual performance vis-a-vis
standards and targets. Measurement is the most important activity in the job of a
manager. It is also one of the weakest areas. Output control strategy becomes
relatively difficult to apply in office jobs and where the relationship between effort
and outcome is not easy to establish. In production jobs, on the other hand, output
control is easy and effective. Once output standards are agreed upon mutually by the
management and work group or individual work, it is easy to grant semi-autonomy to
the worker or work group and hold the worker or work group responsible for the
output. Thus output control strategy too, like bureaucratic control strategy, facilitates
delegation and at the same time is free of the negative features of bureaucratic
control.

One major problem with output control strategy, however, is the possible resistance
from work groups for improving the methods of working, norms of output, etc. Thus,
it can even stand in the way of introducing technological changes and introduction of
improvements based on work study and work simplification. The other major and
practical problem is related to establishing suitable and agreeable measures of output.

d) Cultural control: Strategy refers to an approach of maintaining control by

ensuring that members of an organisation accept as legitimate, and willingly comply
with, the managerial requirements. This requires strong professional identification
and high degree of loyalty to the organisation. To the extent that employees and
subordinates in any organisation accept management's right to give executive
instructions, one may say that a degree of cultural control already exists. This is
reinforced further through conscious efforts to develop this pragmatic effort into a
more enthusiastic support for management's purposes and organisational goals. As
John Child says, "Cultural control combined with personal autonomy to follow
strongly internalised norms of competence and conduct has long been the mark of the
professional". Professionals resent administrative controls. They accept controls
comparable with the mode of self-control within agreed cultural parameters worked
out through discussion and negotiation. Experiments in `autonomous work groups',
`quality circles' and `quality of work life programmes' are examples in this direction.
60
Cultural control fosters closer identification with organisation and induces high
degree of motivation towards result oriented behaviour.
 Controlling
15.8 SUMMARY
We have observed that control is the process of assuring the efficient
accomplishment of enterprise objectives. It is the primary responsibility of every one
who has responsibility for execution of plans. Controls should be based on plans and
there is need for a structure to know where the responsibility lies. Controls should be
appropriate, strategic, acceptable, objective and cost-effective.
The control process involves three steps: establishing standards, measuring
performance and reinforcing success or correct deviations. Controls can be constant,
periodic or occasional. As a matter of policy organisations may prefer control to be
centralised or dispersed and delegated, formal or informal and direct or indirect.
Large organisations need delegation, certain amount of formalisation and direct
control systems. The control strategies can be classified as personal and centralised,
bureaucratic, output oriented or cultural. The appropriateness of strategies varies
from organisation to organisation.

15.9 SELF-ASSESSMENT TEST

1. Discuss whether you need any control when everything is going as planned.
2. Do you subscribe to the view that only top management is responsible for
exercising control function in the organisation?
3. Explain how you could use the three step control process to control your
academic performance.
4. Examine the control methods and strategies used in your organisation.
5. Design a control system for controlling the performance of your own
subordinates, keeping in view the characteristics of effective controls.

15.10 KEY WORDS

Budgetary Control: Measuring performance against plans and expected results
expressed in numerical terms.
Controlling: The managerial function of measuring and correcting performance of
activities of subordinates in order to assure that enterprise objectives and plans are
being accomplished.
Control Process: In managing, the basic process involves establishing standards,
measuring performance against standards and correcting for deviations.
Direct Control: The concept that the most direct of all controls is to assure high-
quality managers on the premise that qualified managers make fewer mistakes
requiring other (or indirect; controls, perceive and anticipate problems, and initiate
appropriate actions to avoid or correct for deviations.
Feedback: An informational input in a system transmitting messages of system
operation to indicate whether the system is operating as planned. Information on
operations is relayed to the responsible persons for evaluation.
Feedforward Control: A control system that attempts to identify future deviations
from plans, early enough to take action before the deviations occur.

15.11 FURTHER READINGS

Bedeian, A.G. 1986. Management, Dryden. Press: New York.
Child, John, 1984. Organisation, Harper & Row: London.
Fayol, Henry, 1949. General and Industrial Management, Pitman: New York.
Koontz Harold et al. 1981. Management, McGraw-Hill: Auckland.
Ouchi, W.G. 1977. The Relationship between Organisational Structure and 61
Organisational Control, Administrative Science Quarterly, March.
 Group Dynamics
UNIT 19 GROUP DYNAMICS
Objectives
This unit aims at developing your understanding of the Group Dynamics in work
organisations. To be more specific it will familiarise you with the
concept of group and group dynamics
bases of group formation
theories of group formation
needs groups offer to satisfy
types of groups
management of formal and informal groups especially with reference to
committee organisations
ways by which one could become an effective member of a group
Structure
19.1 Introduction
19.2 Group Dynamics
19.3 What is a Group?
19.4 The Dynamics of Group Formation
19.5 Group Roles
19.6 Implications of Formal and Informal Groups for Management
19.7 Summary
19.8 Self-assessment Test
19.9 Key Words
19.10 Further Readings

19.1 INTRODUCTION
Your main aim apparently is to understand why do individuals form groups. Let us
ask you some questions: How old were you when you first joined a group? How
many different groups do you belong to? How would you identify a group leader?
Does your behaviour change when you are with different groups? Have you ever led
a group? In what sense were you the leader? What were the results?

If on your own you start answering these questions, you will find that understanding
group behaviour and the properties of groups are essential to being both a good
manager and an effective member of groups. In some of the preceding units of
lessons in this course, you must have by now become familiar with the manager's
functions related to groups. For example, a manager spends half of his time in some
formal or informal meetings, where a group of people get together to solve problems
or make plans. So the manager himself acts as a member of a group with other
managers or colleagues.

In unit 18, you have come across the Hawthorne studies. These studies demonstrated
that groups have a powerful effect on human behaviour. Any, increase in output of
those workers in the Hawthorne studies was because of the importance and attention
given to the group of workers by the researchers as well as their own interactions
with each other about the quality and quantity of output they were supposed to
produce. In unit 17, you have come across the fact that people are motivated to act in
a certain way in a given situation and one should change the situation in order to
make the people act the way one wants them to.

There are also many examples where the manager decides to take a decision on his
own or to rely on groups by holding meetings or making committees. In
Management, small groups with which he interacts are very important for a manager.
It may consist of his peers or colleagues, other managers, specialists or others who
really help the manager to take an effective decision. You might have also come
across instances of
35
Behavioral Dynamics
well knit and cohesive groups, which really make a superior performance under a
good leader. For all these purposes you must try to gain understanding of how to
manage a group and how to become a more effective group member. In order to
develop the above two objectives, you must always keep in mind that a group is part
of a larger organisation with which it interacts. It is in this context that we talk of
group dynamics. So we must understand the meaning of Group Dynamics before we
talk about the dynamics of group formation.

19.2 GROUP DYNAMICS

Group Dynamics is concerned with the interactions and forces among group
members in a social situation. In the context of this course on Management Functions
and Behaviour, it is important to understand dynamics of members of formal or
informal groups in the organisation. In the 1930s Kurt Lewin popularised the term,
Group Dynamics to mean interaction of forces among group members in a social
situation. You are already familiar in unit 1S with the three styles of leadership, i.e.
Authoritarian, Democratic and Laissez-faire, which Lewin (1939) and his associates
have developed by creating three different social situations for the three styles of
leadership. In course of time, various meanings were attached to the term `group
dynamics' (Kelly 1974). One of the meanings suggests how a group should be
organised and conducted. In democratic leadership, member participation and

overall cooperation are emphasised. Another meaning of Group Dynamics is that it is

a set of techniques. In various group exercises it tries to make the leader as well as
the member effective. An attempt is made to make the above members play their
roles in a management situation of group discussions, team building, finding out
various solutions to problems by brainstorming and understanding ourselves in
relation to others while we transact or interact with others. Such exercises are also
provided in situations where only members are present and no leader exists to direct
or control the group. All these exercises are techniques to develop both the individual
as well as the organisation in which he or she works. The last meaning of the term
Group Dynamics is closest to Lewin's use of the term suggesting internal nature of
the groups as to how they are formed, what their structures and processes are, how
they function and affect individual members, other groups and the organisation. In
this unit, our main attention will be focused on the third meaning of the term. You
will appreciate therefore the plan here to start with defining a group and then
consider the dynamics of group formation.

19.3 WHAT IS A GROUP?

A group is any number of people who:
have a common purpose or objective
interact with each other to accomplish their objective
are aware of one another
perceive themselves to be part of the group
This is the way Huse and Bowditch (1977) defined a group. You were asked at the
beginning as to how many different groups you belong to. You may see, from the
above definition that throughout our lives, we belong to many different groups.
Families are groups, a cricket team is a group, a club is a group, drama and music
organisations are all groups. You can thus apply the concept of group to various
examples of religion, politics, consumer, sports, etc. as the case may be. In
management, we primarily talk of groups at work. In most organisations, getting the
work done requires group efforts. Thus, a manager must know how to manage an
individual by knowing the individual dynamics, such as his values, personality,
perceptions and attitudes as discussed earlier. Also a manager must know how to
manage a group by understanding Group Dynamics.

At this point, the number of people as contained in the definition of the group should
not be taken too literally. At some point, the number of people may become too large to
36 fit the rest of the definition. For example all the people of India cannot interact with
each other. Also, each group has a common objective, but the members who belong Group Dynamics
to it may have other personal objectives. For example, a life insurance agent may like
to become a member of a parent-teacher association of a school to help promote the
development process of its students. But belonging to that association will also help
him to increase his or her contact to ensure more and more people, so he gets more
commission for as many members as he can sell the insurance to.
What is most important in the content of the definition of a group is to be aware of
each other in a group. This awareness is seldom there, when we look at an
aggregation of people. They are mere collections, different from what we call a
group, where members see themselves as belonging to a group in order to interact
and achieve the common objectives of the group. Moreover, such kind of interaction
may be over a long or a short period of time. In waiting for a bus, passengers make a
queue. All of them have a common purpose, that is, to enter the bus after buying
tickets. We cannot call them a group, although they have a common purpose.
Suddenly a person breaks the queue to go ahead. All others get together to prevent
that person from gatecrashing and getting his ticket ahead of those standing in the
queue before him. At that moment, a group is formed. Perhaps, after controlling that
person from getting a ticket out of turn, the others keep continuing to talk to each
other but the common purpose of keeping the queue breaker out vanishes. The group
disappears and the number of people become an aggregation or a collection.

19.4 THE DYNAMICS OF GROUP FORMATION

From the above example, it becomes imperative that you should understand why
people do form into groups. Some people believe that it is because of propinquity or
affiliating with one another that individuals form into groups. In a room people
sitting nearer to each other more easily make a group than people sitting at opposite
ends of a room. This kind of affiliation of people with each other is due to spatial
nearness or geographical nearness. But it does not help us to understand some of the
complexities of group formation which are more than mere affiliations due to
physical or geographical nearness. It will do you good to know some major theories
of group formation in brief.
Theories of Group Formation
i) Homans (1950) explained the basis of group formation in terms of activities,
interaction and sentiments of people. These three elements are directly related to each
other. In the above example of controlling a queue breaker in the line the required
activities are the assigned tasks at which people work. All others knew their turn and
how to exercise it especially, with a sudden change of then created by the queue
breaker. The required interaction takes place when any one person's activity
follows or is influenced by the activity of another. In this example the person whose
turn was dislocated by the queue breaker influences all others' activities. As soon as
he pushes out the person (the queue breaker) or tells him not to do it, all others follow
him. Hence required interaction may be verbal (telling him not to break the queue) or
non-verbal (pushing him out of the queue). One can see the activities and the
interactions. But as sentiments are the feelings or attitudes of a person towards
others, his likes or dislikes, approval or disapproval, can only be inferred from the
behaviour. After the activity of throwing out the queue breaker changed, the
interactions also change. In the above example, people talk to each other in a very
informal way after they succeeded in throwing out the queue breaker. These informal
interactions known as emergent interactions change the activities into informal or
emergent activities such as people reorganising their queue and ensuring that no other
intruder comes in out of turn, etc. All these activities emerge because of the
sentiments or feelings of the people.
You will notice that the more activities the people share, the more numerous will be
their interactions and the stronger will be their mutual sentiments. Therefore, in turn,
with more interactions among persons, the more will be their shared activities and
sentiments. Again in turn the more sentiments the persons have for one another, the
more will be their shared activities and interactions. Homan's theory therefore 37
explains the formation of groups on the basis of people's interaction with each other.
Behavioral Dynamics
People are not only physically together, but they also solve problems, attain goals,
facilitate coordination, reduce tension and achieve a balance. In an organisation the
participants interact with each other in this manner and tend to form into powerful
groups.
ii) Newcomb (1961) states a theory known as balance theory of group formation which
explains group formation on the basis of attraction of persons towards each other as
they have similiar attitudes towards common objects or goals. For example, person A
and B will interact and form a relationship because of their common
attitudes and values towards C.
Figure I: A Balance Theory of group formation
Common attitudes and values
Politics
Religion
Literature Work
Aesthetics Authority Marriage
If A and B form a relationship or a group, they will strive to maintain a symmetrical
balance between the attraction and the common attitudes and values, Whenever this
relationship between A and B becomes unbalanced, both them will try to restore the
balance. If the balance cannot be restored, then their relationship is dissolved, Both
affiliation and interaction play a significant role in balance theory.
(iii) Thaibaut and Kelley (1959) talk of another theory of group formation, stating the
outcome of interaction as the basis of group formation. The outcome of a relationship
should be rewarding in order to have attraction or affiliation among the persons or
members of a group. The persons derive personal and social satisfaction from having
interactions with each other. If they incur anxiety or frustration or embarrassment or
fatigue in such interactions, then that interaction becomes a cost for them rather than a
reward. Thaibaut and Kelley's theory of group formation is known as exchange theory
of reward and cost outcomes. You will appreciate that there are affiliation, interaction
and common attitudes-all playing roles in the exchange theory.
Activity A
Think of a group with which you have been familiar with over a period of time. Explain
the relationships among its activities, interactions and sentiments.














.
.
What do Groups Offer to Individuals?
For individuals, there are some very practical reasons to join a group or forming a
group. If you are hungry, you can satisfy your need for food by eating. This need for
food involves others too. You need money to buy food, but in order to have money
you must work for it or have someone give it to you. Very few people can live alone or in
isolation, like Robinson Crusoe. But most of us can satisfy our needs only with or
through other people. Let us see what some of the needs are that groups help us to
38 satisfy.
i) Safety and security needs Group Dynamics
Do you remember, the very first question asking you as to how old you were when you
first joined a group? The answer is, perhaps you joined in a group in your pre-school
years in a nursery class room. You learned to protect yourself by being in a group. A
newborn baby has to be protected from a hostile world and therefore he or she
belongs to a group by depending on it for its security and comfort. In the nursery class,
a teacher asks the small kids who broke the toy and seldom gets an answer. All the
kids keep quiet. Although young, they protect their members by not disclosing
anybody's name or pointing out at any one in a group. A teenager at the adolescent
stage derives social support from his group when he or she strives for individual
independence in taking decisions and actions. You may like to appreciate how group
is a source of support to an individual in an organisation. Workers become members
of a union and thus feel more secure to be with the group.
Even in emergency activities of putting off fire, the fire fighters depend on each other
for protection; similarly, coal miners depend heavily on each other for protection.
These are cases where individuals doing hazardous jobs as above derive
physiological and psychological support from the groups. They need to be physically
together even if they know that this may increase their collective danger. This helps
them to be more confident and able to perform well, less fearful and more responsible
to carry out their duties.
ii) Relatedness or belongingness needs
You might have noticed many persons in your working life, who are very isolated or
who prefer to be absent from work most of the times or an organisation having high
turnover of employees or frequent change of employees. Studies show, such
phenomena occur where people are unable to belong to groups. This is because of
the fact that all of us are social beings, and belonging to or relating to groups satisfies
a number of social needs. We get emotional support from a group, which is
particularly helpful at times of stress. In normal situations, as is seen in Hawthorne
studies, affiliation to a group has a major influence on human behaviour in
organisations. When we are isolated from human communication and
companionship, we simply lose touch with reality.
iii) Esteem and growth needs
When you do a piece of work, you get a praise from others. This gives how a sense of
recognition which fulfils your esteem need (being recognised) and also brings a sense
of fulfilment of your need for growth towards further achievement of good work and
career prospects.
Activity B
In one of the units of an organisation there are six trainers of technicians, three clerk-
typists and seven trainers associated with developing training materials. The unit has
a change of its head and he restructures the unit by placing all of them in separate
offices, effectively breaking up the group.
Earlier, they exchanged ideas and complaints. Now each one talks to himself or
herself. One really does not appreciate the groups until one is separated and put in
isolation.
Q: Which was the need that really remained unsatisfied by this restructuring?
A:

.
.
.
.
.
.
.
.
.
. 39
Behavioral Dynamics
We should now make ourselves familiar with many kinds of groups and many
different ways to classify them. In the present management course, we should
concentrate on both formal and informal groups existing in organisations. We shall
talk of other groups, but in brief.
Types of Groups
i. Formal Groups
These groups are established by the organisation to accomplish specific tasks.
According to Cartwright and Zander (1974) these groups include command groups
which consist of managers and their direct subordinates; and committees and task
forces which are created to carry out specific organisational assignments or activities.
Example: In an educational institution there are three broad formal groups of
teachers, students and administration. In the command group, the top administrator
or principal or head of the institution has Heads of Departments of different
disciplines as his direct subordinates. Various committees to look at academic
activities of teaching and research are made to carry out the assignments of the
organisations. Various task forces are set to carry out specific activities such as
selecting students, making of a curriculum; developing teaching and evaluation
methods, moderating performance, etc. in each department for a specific discipline or
course. The example can be extended to student groups of various levels and
disciplines, having their command groups, committees and task force as well as
administrative staff of various levels and categories (such as academic, accounts,
audit, sports, etc).
In all cases, command groups and committees continue to exist whereas task forces
are usually established to solve a particular problem. They are disbanded after the
work is done. The idea of task force is more applicable to manufacturing or service
organisations rather than research institutions. In the latter kind of organisations, task
forces consist of managers, technical experts from research, development, marketing,
production and purchasing departments, to make sure that each new product passes
through smoothly from the idea stage through the production stage and into market.
ii. Informal Groups
These groups are formed within the structure of the organisation but by the members
themselves rather than by the organisation. Sometimes they do not have the, approval
)f the management. Basically, informal groups are formed to satisfy social needs on
the job. Sometimes they are formed to perform a task better, sometimes they are
formed to hold production at a certain level. In a rigid system of organisation, these
informal groups meet fairly regularly to cut short the rigid bureaucratic practices of
the management.
iii. Primary Groups
Cooley (1911) defined and analysed primary groups as those characterised by
intimate, face-to-face association and cooperation. They are primary in several
senses, but chiefly in that they are fundamental in forming the social nature and
ideals of the individuals.
Example of primary group is family and the peer group. Many people use the term
small group interchangeably with primary group. But the small group only meets the
criterion of small size for face-to-face interaction and communication to occur. In
addition to being small primary group must have a feeling of comradeship, loyalty
and a common sense of values among all its members. Thus, all primary groups are
small groups but riot all small groups are primary.
The logic of primary group is extended to work groups in Hawthorne studies. These
work groups have primary group qualities which tremendously influence individual
behaviour irrespective of contact or environmental conditions.
iv. Membership Groups
These are the ones to which the individual actually belongs. Examples: clubs,
cooperative societies, workers unions, etc.
v. Reference Groups
These are the ones with which an individual identifies or to which he would like to
belong. Examples: socially or professionally prestigious groups with which the
40 individual would like to, belong.
vi. The In-groups Group Dynamics

The in-groups represent a clustering of individuals holding prevailing values in a

society or at least having a dominant place in social functioning. Examples: Member
of a team, family members.
vii. The Out-groups
The out-groups are the conglomerates looked upon as subordinate or marginal in the
future, Examples: street performers for an office worker, a hawker for a surgeon.
Whenever there is a win-lose situation in a competitive task, members of win or lose
group show tremendous in-group feelings within themselves. Their group, in relation
to the other group, is also called an out-group.
Activity C
You are by now familiar with some major theories of group formation. Identify the
theoretical bases of various groups by putting a (V) tick mark on the appropriate
theory against the type of group.
Type of group Theoretical basis
Interest groups Interaction/reward-cost
Formed on informal basis Interaction/reward-cost/balance on the basis
of similar attitudes and values

19.5 GROUP ROLE

Shakespeare said, "All the world's a stage, and all the men and women merely
players." Using the same metaphor, all group members are actors, each playing a
role. By this term, we mean a set of expected behaviour patterns attributed to
someone occupying a given position in a social unit. The understanding of role
behaviour would be dramatically simplified if each of us chose one role and "played
it out" regularly and consistently. We are required to play a number of diverse roles,
both on and off our jobs. As we shall see, one of the tasks in understanding
behaviour' is grasping the role that a person is currently playing.
For example, on his job, Mr. `X' is a plant manager with Electrical Industries, a large
electrical equipment manufacturer. He has a number of roles to fulfil on that job, for
instance, Electrical Industries employee, member of middle management, electrical
engineer and the primary company spokesman in the community. Off the job, he
finds himself playing still more roles: huband, father, Rotarian, tennis player, number
of the Thunderbird country club and president of homeowner's association. Many of
these roles are compatible, while some create conflicts e.g., how does his religious
incolvement influence his managerial decisions regarding layoffs, expense account
padding, or providing accurate information to Government agencies. Thus, we are all
required to play a number of roles and our behaviour varies with the role we are
playing.
Role Identity and Perception
There are certain attitudes and actual behaviours consistent with a role and they
create the role identity. People have the ability to shift roles rapidly when they
recognise that the situation and its demands clearly require major changes. For
example, when union stewards were promoted to foremen positions, it was found that
their attitudes changed from pro-union to pro-management within a few months of
their promotion. When these promotions had to be later rescinded because of
economic difficulties in the firm, it was found that the demoted foremen had once
again adopted their pro-union attitudes.
When the situation is more vague and the role one has to play is less clear, people
often revert to old identities. In spite of the fact that some of the former losers were
now winners by society's standards, they found it very difficult to deal with the
winners', role when placed in an environment in which they had always been losers.
With the role requirements ill-defined, identities became clouded, and individuals
reverted back to old patterns of behaviour.
41
One's own view of how one is supposed to act in a given situation is a role perceptio
Behavioral Dynamics
Based on an interpretation of how we believe we are supposed to behave, we engag
in certain types of behaviour. Where do we get these perceptions? One author
suggests that we all learn roles from such media as movies, books and television and
from friends. If this is true, we might propose that many persons may have formed
their role identities perceiving their favourite character. Of course, the primary reason
apprenticeship programmes exist in many trades and professions is to allow
individuals to watch .an "expert" so they can learn to act as they are supposed to.
Role Expectations and Conflict
Role expectations are defined as how others believe you should act in a given
situation. How you behave is determined, to a large part, by the role defined in the
context in which you are acting. The role of a Parliament Member is viewed as havin
propriety and dignity, whereas a football coach is seen as aggressive, dynamic and
inspiring to his players. When role expectations are concentrated into generalised
categories, we have role stereotypes. During last decades we have seen a major
change in the general population's role stereotypes of females. In 1950, a woman's
role was to stay home, take care of the house, bring up children, and generally care f -
her husband. Today, most of us no longer hold this stereotype. Girls can aspire to be
doctors, lawyers, managers and astronauts as well the more traditional activities of
nurse, school teachers, secretary or housewife. In other words, many of us have
changed our role expectations of women and, similarly many women carry new role
perceptions.
In the work place, it can be helpful to look at the role expectations through the
perspective of the psychological contract, an unwritten agreement, existing between
employee and the employer. It sets out mutual expectations-what management
expects from workers and vice versa. In effect, this contract defines the behavioural
expectations that go with every role: Management is expected to treat employees
justly, provide acceptable working conditions, clearly communicate what is a fair
day's work and give feedback on how well the employee is doing. In turn employees
are expected to respond by demonstrating a good attitude, following directions, and
showing loyalty to the organisation.
When an individual is confronted by divergent role expectations, the result is role
conflict. It exists when an individual finds that compliance with one role requirement
may make more difficult the compliance with another. At the extreme it would
include situations where two or more role expectations are mutually contradictory.
The issues of ethics in business demonstrates a well-publicised area of role conflict
among corporate executives. A recent study found that 57 per cent of Harvard
Business Review readers had experienced the dilemma of having to choose between
what was profitable for their firms and what was ethical.
Spatial Influences on Role
Research evidence indicates that the way individuals position themselves within a
group, that is, the spatial arrangement that they voluntarily develop, is far from
random.
Spatial factors can also determine who within a group will be chosen or accepted for
a leadership role. When one wants to take on the role of adversary pr to emphasise
superior-subordinate relationships, it is natural to place a barrier between himself and
others to identify a we-they distinction.
This may more readily be illustrated by comparing a traditional classroom situation,
where the instructor stands in front of the class before a podium, with the students in
clearly established neat rows and columns, and a less structured situation with the
chairs geographically dispersed about in a circle and the instructor taking one of the
seats in the circle. The latter positioning can be expected to increase group
interaction, reduce the feeling of superior-subordinate interaction, and place the
instructor on more equal footing with the students.
42 19.6 IMPLICATIONS OF FORMAL AND INFORMAL
GROUPS FOR MANAGEMENT Group Dynamics

i) Formal Groups: Committees

As defined earlier under section 4.3 formal groups are established by the organization
to accomplish specific tasks. These groups include command groups, committees and
task forces. I this section, we should further clarify committee organization as an
important type of formally designed group and its implication for management.
Committees are special kinds of groups which serve the following purposes in an
organisation:
a) Exchanging views and information
b) Recommending action
c) Generating ideas
d) Making decisions
The size of the committee is usually kept small. It is to encourage good quality of
decisions. Communication among members is thus limited to few. With increase in
the size of committee, many members feel less willing or threatened to participate
actively.
The chairperson of the committee provides directions to the committee to fulfil the
objectives of the committee. He or she should be a person of open mind and a careful
listener. He or she should allow members to voice their opinions and should not place
his or her opinion above those of others. He or she should involve everyone in the
activities of the committee. He or she should have active interest in the purpose of the
committee and in the ideas of the members. He or she should help the committee
focus on the task at hand and on the progress made.
The members of the committee should cooperate with each other to achieve the
purpose of the committee. To a great extent the image of a committee depends on the
cooperation of members with each other. They should have stronger motivation to
accomplish the task. They should have effective communication with each other.
There should be more ideas generated in the group, along with increased satisfaction
and performance of the members. It is the chairperson who should try to ensure
communication, satisfaction and productivity among the members of the committee.
With today's organisations becoming increasingly large and complex, the committee
form of organisation will, undoubtedly become more important and more widely
used in future. The modern manager must learn how his committees or teams or
commissions or boards or groups or task forces should be effectively formed and
should function, no matter whether he is in a Government or educational or religious
or business organisation. In other words this kind of group management will become
more popular as well as important in times to come.
Meetings of members in a committee may be time consuming and costly insofar as
individual's time is concerned. Committees are also criticised for not making the
members responsible for bad decisions or mistakes. Many individuals use the
committee as a shield to avoid personal responsibility for bad decisions or mistakes.
In fact, all committee members as well as chairperson should be made responsible for
all decisions. It is in the interest of the committee to differentiate between very
conscientious members who voted against a wrong decision as well as those who
took a particular decision and can defend it to the end. Many decisions taken by a
committee may or may not be liked by members of the organisation who are likely to
be affected by it.
In spite of all the above shortcomings that are likely to be there, the future manager
must learn to arrive at an improved decision through the combined and integrated
judgment of the committee members. He or, she can reduce conflict in the group,
facilitate coordination of various groups in the organisation and increase commitment
and motivation of members of the organisation through participation.
Committees, which are thus the formally designated groups of the organisation, are
assuming more importance in day-to-day functioning at any organisational level.
Today they are acknowledged as significant features of group dynamics in
43
Behavioral Dynamics
organisational behaviour.
Activity D
Show your familiarity with any committee (finance or executive or bonus or
grievance committee) that might have been formed in your organisation to fulfil
a certain objective.
1 What was the size of the committee?
2 How many times did the chairman and the members of the committee meet?
3 Did they arrive at a decision soon?
4 Was the decision implemented?
5 How did people in the organisation feel about it?
6 In what way the committee could have functioned in your opinion?











.
ii) Informal Groups: Work Groups
Informal groups play a significant role in the dynamics of organisational behavior A
formal group has officially prescribed goals and relationships which an informal
group does not have. But we cannot think of these two groups as separate entities, as
they coexist and they are inseparable. Every formal organisation has informal groups
and every informal organisation eventually evolves some semblance of formal
groups. An illustration will make it clear. When an engineer designs the plans and
technology for a new factory and when an architect designs the office layout, they are
also designing the social relations that will prevail in the organisation. The formal
organisation of the management determines where men will work and what
opportunities they will have to contact each other during the day. Also the rates of
pay, work condition and other aspects of the job as decided by the management are
important too. Given these basic elements one can predict the social relations that
exist within the organisation long before the first person is employed and enters the
factory. This is because of the fact that every person is told formally where and how
he or she is to work, with whom to come in contact. Obviously, one develops
friendships with the people one most often comes across. In fact, those employees
who have the greatest opportunities to make contacts on the job make the largest
number of friends. In course of time, they may be in the best position to become
leaders of the group.
Remember for yourself, who were the first person you came in contact with when
you joined your present work organisation? how frequently did you meet them? In
course of time, have you noticed that you have become a member of your work group
having made contacts with quite a number of people-trying to share your problems
with them and their problems with you? This is how a work group is formed. In
course of time, you select from among various groups you are in touch with a group
which is important to you for your work, a group which matters to you for leisure and
recreation, a group which acknowledges you more for your personal qualities. As
time passes your affiliation with certain groups becomes more meaningful and
strong.
Based on contacts and common interests such friendship groups made by employees
arise out of the life of the organisation. Once these groups have been established they
44 develop a life of their own, which is almost completely separate from the work
process from which they started. The process is dynamic and self-generating and Group Dynamics
makes the work group an organisation in itself.
Characteristics of Effective Work Groups
in managing the organisation, you have to understand how groups can be made into
effective work groups. The factors that influence the work group effectiveness are
norms, cohesion and leadership. Let us see how each one of them contributes to
making the group effective to achieve the objectives of the organisation.
i) Group norms
When the group functions for a period of time, to attain certain objectives, it develops
norms or standards of behaviour. A norm is a rule. This tells the individual how to
behave in a particular group. An individual may be a member of a welfare group, a
chess club, his family and his work group. You may like to watch his behaviour in
various groups. You will see the different kinds of behaviour of the same individual
in different groups.
You may also notice that sometimes the norm is formal and is accepted by the group
that way. For example all members of a particular work group wear safety glasses
while operating on a particular machine. All of them would do so by accepting this
norm. On the other hand, a norm can be informal arising out of interactions and
feelings of the people. All the members of a task group decide to keep their output
high by regulating their pace of work. For example, a number of typists decide to
attain a target of fifty pages of neat typing everyday. So they do it.
It is also possible that another group may like to keep its output low again because of
some emergent activities, interactions and feelings of the group. So it is important to
know what behaviour is significant for the group which helps to develop a norm. In
other words, having high or low output is equally influenced. by what the group
prescribes for its members as well as what other activities, interactions and feelings
develop among the members in course of doing a work. So we can say that one of the
characteristics of norms is they develop behaviour that is significant for the group.
We also find another characteristic of norms: some norms are applicable to some
people only and not to all. For example, a manager of a group behaves differently,
from other members of the group. His or her behaviour is what is expected of him or
her in a given position by others. When a new member joins the group, he or she is
expected to follow the norms more closely than the senior members.
Some norms have central importance and are accepted by everyone of the group
while others have less importance. Schein (1974) talks of pivotal and relevant group.
norms. A pivotal group norm is a norm to which every member must conform. A
worker who remains absent or does not do any work will not last long in an
organisation. A relevant group norm is one which is neither central nor absolutely
essential to follow but is worthwhile and desirable. So any norm may be pivotal in
group, but may be irrelevant to another.
Some of us conform to all the norms of the group, some of us select only pivotal
norms for acceptance, still others reject all values and norms of the group. It is
usually seen that complete conformity to norms, as in the first case and complete
rejection of the norms, as in the last one, have undesirable consequences. A complete
conforming individual loses his or her ability to influence the group. An individual
who rejects all group norms is likely to be expelled from the group. It is therefore
advisable that the individual exercises his or her choice of acceptance of the norm
quite discreetly.
It is equally important to understand that with increase in size of the group, norms are
less likely to be accepted. It is also true that more intelligent persons are less likely to
conform to norms. You may notice that, as the group increases in size, there are
chances of subgroups being formed. Hence a general norm of the total group is
difficult to maintain with uniform conformity all the time.
The last characteristic of norms is that they allow possible deviations. An individual
who deviates too far gets punished. When the union is on strike, its member attending
to work is punished by being boycotted by the group. 45
Ask yourself the following questions in the position of a manager.
Behavioral Dynamics
What have you understood about norms when you are a formal leader of a group
and when you are a member of other group?
Have you understood what the norms of various groups are?
Do you know which are the central norms?
Do people conform to norms completely?
Do people wait for their leader to speak first in a meeting?
Do people come in time for meetings?
Is disagreement allowed?
Do people have a common style of clothing?
As a manager, you must also try to understand why people opt to lower their output
and if need be, you should change the situation in order to change the norm of low
output. You should try to develop trust among your members in order to be able to
influence and change or modify the norms of your group. Your effectiveness as a
manager will increase with a high level of trust between you and your group
members.
ii) Group cohesiveness
This means the degree to which group members are motivated to remain within the
group and consequently behave in similar ways. A cohesive group also helps the
members in their satsifaction of needs and attainment of goals. Cohesiveness
develops out of the activities, interactions and sentiments of the people. The cohesive
group acts as one man to attain its goal.
What are the factors which influence the cohesiveness?
Size of the group: With very few people in a group, you may fall short of skilled
hand: to do a good job. With a large number of people you may find it difficult to
communicate and identify the best talent. At the same time an individual member
may not be happy with his or her interaction with the group. In the first case, there is ,
breakdown of the task and in the second case reaching out of people is difficult.
Quite unintentionally you may even encourage formation of many sub-groups in a
large group. Hence group cohesiveness will suffer.
Proximity or geography of the group: Nearness or working closely together helps
in group cohesiveness. It helps face to face contact. A small isolated work group is
cohesive and will work better to attain its goals.
Outside pressure: This binds together all the members against a common enemy and
thus makes its members forget their differences. You might have observed how
groups become cohesive under outside pressures when there is (i) competition with
other groups or (ii) union management conflict or (iii) reaction against the supervisor
who closely supervises the work or (iv) lack of trust between the manager and his
group or (v) even mistrust between two groups.
Accomplishing group goals
As the group becomes more cohesive the members become more motivated to
accomplish its goals and behave in similar ways. Accomplishing group goals
increases the cohesion of the group. Failing to accomplish the group goals reduces
the group cohesiveness.
It is necessary to remember that it is not always desirable to have group cohesiveness,
which may result in going against the objectives of the work group. For example,
workers being highly cohesive may decide to work against the management. So you
must find out what the harmful effects are likely to be of a cohesive group. Examples
of rejection of new ideas by cohesive group members are not uncommon. At times
these members feel that they know the best. This kind of feeling is known as `group
think' where members show tremendous desire for unanimity. A great deal of
solidarity and loyalty to the group overrides the motivation of the members to consider
different courses of action logically and in a realistic manner. In governmental
administration many significant decisions are made on the basis of group think
principles which have been quite unfortunate for a large number of people.
46 As a manager, you must make a cohesive group to accomplish organisational goals.
You have to give information, get the resources for your members to accomplish the
task and hold frequent open meetings. O'Donnell (1961) and Filey (1970) suggest Group Dynamics
that one should try to avoid group think by having open discussion and allowing
conflicting points of view.
Group leadership
As you have studied in unit 13, leadership is the ability to influence the behaviour of
others. Any effective work group wanting to accomplish its task gaining some sort of
social satisfaction and having some sense of contribution and growth should like to
look up to a leader to help reach these goals.
Informal leaders often emerge from the activities, interactions, sentiments of the
ongoing group. They may help the group to accomplish its task or fulfil its social
goals. You will always notice that formal task instruction comes from the supervisor,
but informal help comes from the informal leader.
Informal leader may be lower in official status than the formal leader. But he helps
the group satisfy both personal and organisational goals. If this job is done by the
formal leader, then there will be no informal leader emerging out of the group. If the
informal leader helps in attaining the organisational goals, then he becomes task
oriented like a formal leader and there may be chances that a social leader will
emerge to maintain a balance between organisational and personal needs.
In order to be effective as a manager, you must recognise the existence of informal
leaders and work with them to develop group norms of high productivity, build more
cohesion and enable the members to have their social needs satisfied.
Managing Group Productivity
In your role as a manager you will do well to remember some useful ways to make
your work group effective. As O'Donnel (1961) suggests you must know the
following to manage your group of people towards attaining the goal.
i) Content
While having a meeting with your group members try to understand the subject
matter of the task to be performed by the committee. This will help you to see the
problem clearly and solve it to:
decide about the size of the commitee (having about five to fifteen members) and
include experts in the committee to solve your problem
distribute the agenda before the meeting is held to all the members
specify the timings of the meeting
encourage persons to present their ideas and do not encourage them to pick up
the first feasible solution to a problem. Allow them to think of various alternative
solutions
periodically summarise the discussion and restate the current position of the
committee as to whether the committee has to finally decide on a solution or only
recommend a solution to a higher authority/advise the higher authority.
ii) Process
This involves how the content is handled or discussed by the members. Benne and
Sheats (1948) describe three effective ways to approach the group processes.
One of the ways the content is handled is by group task activities. You may initiate,
orient the group to its goals, coordinate, give and seek information about the
problem.
Another way may be through the group building activities like encouraging members
to cooperate with each other. In the work, encourage people to participate, share
jokes or humour with them at times and see to it that they enjoy doing the work
because of a good group atmosphere. This is the group building activity which helps
a manager to establish better group relationship.
Still another way the group members satisfy their needs is through-self-serving
activities. Members satisfy their needs at the cost of others. You might have noticed
that more behave in a dominating manner, more try to get attention, more behave
aggressively and more withdraw while working in the group. Persons engaged in the
above activities are only serving their own purpose or interest rather than helping the
group to achieve its goal. 47
Behavioral Dynamics
You must try to understand the difference between the content and process to make
the group more effective. Too much of task activity and too little of group building
activity is not a good way to make an effective work group.

Self-serving activities are signs of non-constructive satisfaction of valid personal

needs and are disruptive. They reduce the ability of the group to attain its objectives.

Many times we overlook the fact that people can be both emotional and rational in
understanding the content and process of work. Emotions are realities that have to be
taken care of. A good manager must not neglect the group building activity as it may
make group and committee meetings ineffective. He or she should draw on the
influence of the informal group by integrating its objectives with those of formal
group as well as try to keep the formal activities from unnecessarily disrupting the
informal organisation.

19.7 SUMMARY
In this unit, we have come across the input, how groups represent an important
dynamic input into organisational behaviour. Group formation, types and theories
have relevance to the study of organisation. Members in an organisation form into
groups for satisfying their security, social and esteem needs. We have also come
across the concept of formal and informal groups which are especially important in
organisational functioning. We have discussed the role of the individuals in the
group, indentification, perception and various expectations of the group members

and the self from the role occupant ultimately leading to conflicts. Committees and
work groups in particular play an important role in modern organisations.
Characteristics of effective work groups, such as group norms, group cohesiveness
and group leadership are discussed and finally suggestions have been made about
how to manage effective groups and committees. Management in the future must be
able to understand, and when possible, take advantage of group dynamics, of formal
and informal groups in organisations.

19.8 SELF-ASSESSMENT TEST

Having gone through the Unit 19, you should be able to define and use the following
concepts:
Group Emergent activities
- Formal group pivotal group norms
- Command groups relevant group norms group
- Committees cohesiveness leadership
- Task force

Informal Group Content

- required activities process
- required interactions group tasks activities group
- sentiments building activities self-
- emergent interactions serving activities

On the basis of the objectives listed above:

1. Identify the characteristics of effective work groups, in not more than half a page
on each characteristic.
2. State in a page, how groups can help or hinder the manager in achieving
organisational goals.
3. Suggest the process of effectively managing a group or committee. Your answer
may not exceed a page.
48
 Group Dynamics
19.9 KEY WORDS
Command Groups: Formal groups that consist of managers and their direct
subordinates.
Committee: A formal group that is created to carry out specific organisational
assignments or activities.
Content: The subject of the meeting or of the task being performed.
Emergent Activities: Informal actions beyond those required that result from
changed sentiments.
Formal Group: A unit established by the organisation to accomplish specific tasks.
individuals are usually assigned to formal tasks.
Group: Any number of people who
i. have a common purpose or objective
ii. interact with each other to accomplish their objective
iii. are aware of one another, and
iv. perceive themselves to be a part of the group.
Group Building Activities: Those activities that allow the group to maintain itself
by helping to satisfy members' needs and by encouraging cooperation among
members.
Group Cohesiveness: The extent to which group members are motivated to remain
within the group and in consequence to behave in similar ways.
Group Task Activities: Activities performed within the organisational structure by
the individuals rather than by. management.
Leadership: The ability to influence the behaviour of others. The task of the leader is
to help the group reach both organisational and personal goals.
Pivotal Norms: Organisational values which are absolutely necessary for any one
who wants to stay in the organisation.
Process: The way the content is handled or discussed by the members of the group.
Relevant Group Norms: Not as central as pivotal norm, but considered as
worthwhile and desirable.
Required Activities: Assigned tasks performed by the individuals.
Required Interaction: This occurs, when a person's activity follows or is influenced
by the activity of another; interaction can be verbal or non-verbal.
Self-serving Activities: Activities that satisfy individual needs at the expense of the
group.
Sentiments: The feelings or attitudes a person has about others, such as likes or
dislikes and approval or disapproval.
Task Force: A group established to solve a particular problem.
19.10 FURTHER READINGS
Benne K. and P. Sheats, 1984. Functional Roles of Group Members. Journal of
Social Issues. 4 (Spring), pp 4149.
Cartwright, D. and D. Lippitt, 1974. Group Dynamics and the individual. In
Organisational Psychology: A Book of Readings, Revised. Eds. D. Kolb, I.
Rubin and J: McIntyre, Prentice Hall: Engelwood-Cliffs.
Cooly H.C.L. 1911. Social Organisation Scribner: New York.
Filey A. 1970.Committee Management. Guidelines from Social Science Research.
California Management Review 13, Fall, 1970 pp 13-21.
Romans G. C. 1950. The Human Group, Harcourt, Brace and World: New York.

49
 Leadership Styles and Influence
UNIT 18 LEADERSHIP STYLES AND Process

INFLUENCE PROCESS
Objectives
The objectives of this unit are to:
introduce various leadership styles
familiarise you with various theories and styles of leadership
create an awareness that leadership is a process of shared influence on the work
group
Structure
18.1 Introduction
18.2 Leadership Styles
18.3 Leadership Styles and Leadership Theories
18.4 Leadership and Influence Process
18.5 Types of Power
18.6 Types of Leader and Power Concept
18.7 Successful Vs. Effective Leader
18.8 Summary
18.9 Self-assessment Test
18.10 Key Words
18.11 Further Readings

18.1 INTRODUCTION
In giving the input on leadership styles and influence process to you, we presume
your main aim is to understand and improve your style of functioning as a leader.

To start with, you must have clear idea as to what is meant by leadership. Leadership
is the activity of influencing people to strive willingly for group objectives. As you
can see, this process is a function of the leader, the followers and the situation. There
may not be any particular organisation in our mind, when we talk of leadership. In
any situation where you are trying to influence the behaviour of another individual or
group, leadership is operating. Thus each one of us tries leadership. at one time or the
other, whether our activities are centred around a business, educational institution,
hospital, political organisation, Government organisation or a family. As part of this
process, one who attempts to influence the behaviour of others becomes a potential
leader and the persons he is attempting to influence are the potential followers. This
may happen irrespective of the fact that the leader may be their boss or a colleague
(associate) or a subordinate or a friend or a relative. In other words through a style of
functioning he influences attitudes and expectations, which in turn encourage or
discourage the follower's activity or achievement, enhance or diminish the follower's
commitment to the work, etc.

In our day-to-day life, we come across instances of how people are influenced by the
activities or word of a person who is trying to lead them. We always make judgments
about the leaders of our own office. In our mind, we make a difference between a
good leader and a bad one, by judging his style or way of functioning and his
influence on others. Hence, in understanding the phenomenon of leadership, we must
first understand the various styles of the leaders.

18.2 LEADERSHIP STYLES

The word style is the way in which the leader influences followers. Let us have a
look at the various studies that help us to understand the leadership styles. 21
Behavioral Dynamics
Hawthorne Studies
Mayo and Roethlisberger did a series of studies from 1924 to 1932 in an electricity
company, at Illinois, in USA. These studies are known as Hawthorne Studies.
One phase of these studies aimed at finding out if changes in illumination, rest period
and lunch breaks can affect the productivity of the workers. It was found to the
surprise of the researchers that less light, shorter and fewer rest periods and shorter
lunch breaks resulted in increased productivity. And once all these changes; were
eliminated and the normal working conditions were resumed, it was also seen that the
workers' productivity and the feeling of being together went up. The increase in
productivity was attributed to the attitude of workers towards each other and their
feeling of togetherness. In addition, attention paid to the workers by the researches
made them feel important which resulted in improvement in their work performance.
This is known as Hawthorne effect. These findings made Mayo and Roethlisberger
conclude that a leader has not only to plan, decide, organise, lead and control but also
consider the human element. This includes social needs of being together and being
recognised for the work interaction of the group members with each other and their
well being. A good leader ought to keep the above aspects in his style of working
with people and supervising their work.
Theory X and Y
McGregor (1960) categorised leadership styles into two broad categories having two
different beliefs and assumptions about subordinates. He called these Theory X and
Theory Y. The Theory X style of leaders believe that most people dislike work and
will avoid it wherever possible. Such leaders feel they themselves are a small but
important group, who want to lead and take responsibility, but a large majority of
people want to be directed and avoid responsibility. Therefore, this style of
leadership exercises strong controls and direction and wherever necessary punish
people if they do not do the work. If people do the work as desired, they may even
get monetary or other rewards. Theory Y leaders assume that people will work hard.
and assume responsibility if they can satisfy their personal needs and the objectives
or goals of their organisation. Such leaders do not sharply distinguish between the
leaders and the followers in contrast to Theory X style. They feel that people control
themselves within rather than being controlled by others from outside such as a
leader or a manager or a supervisor.
An effective leader needs to examine carefully his own ideas about the motivation
and behaviour of subordinates and others, as well as the situation, before adopting a
particular style of leadership.
Iowa Leadership Studies
In 1939 Lippitt and White under the direction of Lewin, did a study on three different
styles of leadership in the task performance of ten-year old boys in three groups. The
authoritarian leader of the group was very directive. He did not allow any
participation. He was concerned about the task and told the followers what to do and
how to do it. He was friendly while praising the performance of the individual
member and was impersonal while criticising the individual member. In the other
group, the democratic leader encouraged discussion with the group and allowed
participation in making decisions. He shared his leadership responsibilities with his
followers and involved them in the planning and execution of the task. The laissez-
faire leader of the third group gave complete freedom to the group and did not
provide any leadership. He did not establish any policies or procedures to do the task.
Each member was let alone. No one attempted to influence the other.
The researchers selected boys of the same intelligence level. Each group did the same
task of making paper masks or model air-planes or murals or soap carvings. The room
used by the three groups remained the same. The three group leaders assumed different
styles as they shifted every six weeks from group to group. The researchers under the
direction of Lewin, who did several studies on groups, were trying to see how different
styles of leadership could change the satisfaction, frustration-aggression levels of the
individuals. One definite finding was that nineteen out of twenty boys like the
democratic leadership style. That kind of a leader never tried to boss over them, yet
22 they had plenty, to do. The only boy who liked the authoritarian style of leadership
happened to be the son of an army officer. It was also observed that seven out of ten Leadership Styles and Influence
boys preferred the laissez-faire leader to the autocratic one as they preferred Process
confusion and disorder to strictness and rigidity present in the autocratic style. Boys
under the latter style exhibited more of aggressive, hostile and indifferent behaviour
as compared to their counterparts under other styles of leadership. They either
showed hostility or cracked jokes about hostility towards others. Others belonging to
the democratic style of leadership showed less aggressive and more indifferent
behaviour when brought under the autocratic style of a leader. Even under the
laissez-faire style of the leader, boys committed more aggressive acts than the ones
under the democratic style.
Of course, a study on ten year old boys in making paper masks or soap carving, etc.
cannot be compared to leader behaviour of adults with complex jobs. But like the
studies of Mayo and Roethlisberger, the studies by Lewin, Lippitt and White are a
pioneering effort in understanding leadership styles from the point of scientific
methodology. They also throw light on how different styles of leadership can produce
different complex reactions from the same or similar groups.
Michigan Studies on Leadership Styles
Likert (1961) at University of Michigan Survey Research Centre identified two major
styles of leadership orientations-employee orientation and production orientation.
The employee oriented style of the leader emphasises the relationship aspect of the
jobs of the individual. Such a leader takes interest in every one and accepts the
individuality and personal needs of the individual. He has complete confidence and
trust in all matters in his subordinates. His subordinates feel free to discuss things
about their jobs with their superior. He always asks subordinates for ideas and
opinions and always tries to make constructive use of them.
The production oriented style of the leader emphasises production and technical
aspects of the job. He looks at subordinates or employees as tools to accomplish the
goals of the organisation. Work, working condition and work methods are tried to be
understood better in his style of the leadership orientation. Likert related these
orientations to the performance of the employees. He showed that the employee
oriented style brought high-producing performance compared to production-oriented
style. Of course, the satisfaction of employees was not directly related to productivity
in Likerts study.
Ohio State Studies on Leadership Styles
Stogdill (1957) at the Bureau of Business Research at Ohio State University initiated
a series of researches on leadership in 1945. He, along with his colleagues, studied
leader behaviour in numerous types of groups and situations by using a Leader
Behaviour Description Questionnaire (LBDQ). The studies were conducted on Air
Force Commanders and members of bomber crews, officers, non-commissioned
opersonnel, civilian administrators in the Navy Department, manufacturing
supervisors, executives, teachers, principals and school superintendents and leaders
of various civilian groups. They did not have any satisfactory definition of
leadership. They also did not think leadership is synonymous with `good' leadership.
The LBDQ was administered in a wide variety of situations and surprisingly two
dimensions of, leadership continually emerged from the study: one is `consideration'
and the other is initiating structure.
Consideration reflects the extent to which individuals are likely to have job,
relationship characterised by mutual respect for subordinates, ideas and consideration
of subordinates, feelings. You may like to describe it as the behaviour of the leader
indicating friendship, mutual trust, respect and warmth in the relationship between
the leader and his group members.
Initiating structure reflects the extent to which individuals are likely to define and
structure their roles and those of their subordinates towards goal attainment. In other
words, it is the behaviour of the leader which deals with the relationship between
himself and the work-group and tries to establish well-defined patterns of
organisation, channels of communication and method of procedure. 23
Examples of observed behaviour of the leader under consideration and initiating
Behavioral Dynamics
structure are as follows:
Consideration Initiating Structure
The leaders finds time to listen to group The leader assigns group members to
members ( ) particular tasks ( )
The leader is willing to make change ( ) The leader asks the group members to
follow standard rules and
regulations ( )
The leader is friendly and approachable ( ) The leader lets group members know
what is expected of them ( )
Activity A
In the above example of items check how frequently as a leader you engage yourself
by marking A(Always), O(Occasionally) or N(Never), against each one of the items
in the box given at the right hand side of each statement. This may help you to know
your own style of leadership.
One can do this exercise by observing and judging the behaviour of the leader in a
work situation.
Scientific Manager's Style
Taylor (1911) stressed the best way of doing a job. He emphasised the importance of
having management and labour work in harmony to maximise profits. The basis of
his scientific management was technological in nature. It was felt that the best way to
increase output was to improve the techniques or methods used by workers.
Therefore, profit can be maximised by using a systematic and scientifically based
approach to the study of jobs. Taylor was not trained as a manager He relied on
scientific study of time and movement spent and used for a job to improve the
performance of the worker. According to the scientific managerial style, management
of a work organisation must be divorced from human affairs and emotions and people
have to adjust to the management and not management to the people. Once jobs are
recognised with efficiency in mind, the economic self-interest of the workers could
be satisfied through various incentive work plans such as piece rate . system of
payment, etc. The leader is assumed to be the most competent individual in planning
and organising the work of subordinates according to Taylor's principle of scientific
management.
Various studies reflecting different styles of functioning of a leader have been stated
above, which highlight how the leader simultaneously pays attention to the:
a) task to be accomplished by the group, and
b) needs and expectations of the group and its individual members.
Exactly how the leader goes about attending to these two functions is a matter of his
leadership style. Many theories have been suggested by the researchers regarding
which leadership style is most effective. Even the above two functions can have
different descriptions for different leaders. But in course of time every leader
develops a particular style which reflects his own ideas and perspectives on the
relative importance of task and people.
We should now consider in what ways we can enrich the understanding of various
styles of leadership by making ourselves familiar with some important theories of
leadership.

18.3 LEADERSHIP STYLES AND LEADERSHIP

THEORIES
Trait Theory

This theory as described by Kelly (1974) attempts to classify what personal

characteristics such as physical, personality and mental, are associated with
leadership success. Trait theory relies on research that relates various traits to the
success of a leader. A lengthy list of traits has been made to describe an effective
leader in terms of certain characteristics. A broad classification of six categories of
24 traits are given below:
1. Physical characteristics of the leader, such as age, height, weight. Leadership Styles and Influence
2. Background characteristics-education, social status, mobility and experience. Process

3. Intelligence-ability, judgment, knowledge.

4. Personality-aggressiveness, alertness, dominance, decisiveness, enthusiasm,
extroversion, independence, self-confidence, authoritarianism.
5. Task-oriented characteristics-achievement needs, responsibility, initiative,
and persistence.
6. Social characteristics-supervisory ability, cooperativeness, popularity,
prestige, tact, diplomacy.
These characteristics according to some people are considered valid indicators of
successful leaders, but if you compare leaders by various physical personality and
intelligence traits, you may find very little agreement on these. Some findings point
out to the fact that leaders are intelligent individuals. But they do not provide any
clue as to whether leaders are brighter than their followers or are as close to them in
intelligence. Again, some of the personality traits are overlapping with each other.
Therefore, you need to be cautious in stating, personality or any other characteristic
as a cause of successful leadership. You must ask the questions: Who is a successful
leader? Is he far superior physically? Is he far brighter? Is he more mature as a
person? Is he more motivated to achieve his goal? Does he have more consideration
for his followers? etc. Some of the traits may describe a successful leader but
predicting successful leaders on the basis of traits alone is not a correct approach. The
followers have a significant effect on the job accomplished by the leader. Trait theory
completely ignores the followers and the situations that also help a leader to be
successful. Secondly, we should also weigh in our own mind, which of the
objectives, `confident' or independent' or intelligent' is relatively more important in
becoming a, successful leader. You may observe one or all the above traits as
important in ' a successful leader whereas your friend may feel that an enthusiastic,
aggressive and authoritarian person is a good leader. To be more objective, traits of
the person as well as demand of the situation together determine the effectiveness of
the leader.
Group and Exchange Theories of Leadership
These theories as reported by Hollandder and Julian (1969) state that the leader
provides more benefits or regards than burden or costs for followers who help him
achieve the goal of the organisation. Thgre must be a positive exchange between the
leader and followers in order for group goals to be accomplished. The leader can give
rewards to his followers in the form of praise or pay increase or promotion for
accomplishment of the group goal or task. This has positive impact on attitudes,
satisfaction and performance of the followers. In return, they respect the leader and
give due regard for his status and esteem and believe in his heightened influence. As
you are already aware, that a leader emphasises initiating structure when followers do
not perform very well. He increases his emphasis on consideration when the
followers do a good job. In return, the perception of his followers of his being an
effective leader increases. Hence the leader and the followers mutually affect each
other.
Social Learning Theories
This theory by Bandura (1977) states that there is a continuous reciprocal interaction
between person, environment and behaviour as shown in Figure I.

25
Behavioral Dynamics
Person and environment function in conjunction with the behaviour itself and
reciprocally interact to determine behaviour. A person, through his actions, produces
the environmental conditions that affect his behaviour in a reciprocal fashion. The
experience generated by behaviour also partly determines what a person becomes and
can do. This in turn affects his subsequent behaviour. The theory is called social
learning theory because, individuals learn in an environment in the process of
interacting with each other- which is a social process. You will appreciate the
application of this theory in understanding the behaviour of a leader and the
continuous reciprocal interaction between the person (leader's cognitions) and
environment (including subordinates and their needs, experiences, objectives in the
organisation, abilities, skills, energy performance, etc. known as contingencies that,
regulate their behaviour). Thus a social learning approach to leadership can be shown
in Figure II.
Figure II: A Social Learning approach to leadership

The three aspects of this theory of leadership assume that the leader knows how his
behaviour is controlled by various needs, situations and experiences that he
undergoes. The leader works with the subordinates to discover what those needs
situations and experience. The leader and the subordinates jointly attempt to discover
ways in which they can manage their individual behaviour to produce mutually
satisfying as well as organisationally productive outcomes. In this approach, .
theleader and the subordinates have a negotiable and interactive relationship. They
are' continuously aware of how they can modify or influence each other's behaviour
by giving the rewards or holding back the performance respectively.
Managerial Grid Theory
Leaders can be oriented towards both tasks and persons. This theory by Blake and
Mouton (1978) has a popular application of both task and person orientation.
According to this theory leaders are most effective when they achieve a high and
balanced concern for people and for tasks. Each leader can be rated somewhere along
each of the axes from 1 to 9 depending on his orientation as shown in Figure III.
Figure III: Interaction between Pelrson and Task orientations

26
Although there can be 81 possible combinations you should try to understand the 5 Leadership Styles and Influence
types that are shown in the diagram. These will give you a basic understanding of the Process
theory, on which you can base your other combinations.

1. The (9, 1) leader is primarily concerned about the task or production. He is

concerned with his responsibility to see that the work is completed. He is called a
Task-Management leader.

2. The (1, 9) leader is primarily concerned for people and only incidentally
concerned with production. The leader's major responsibility is to establish
harmonious relationships among subordinates and to provide a secure and
pleasant work atmosphere. He is called as Country Club Management leader.

3. The (1,1) leader is concerned with neither production nor people. He tries to stay
out of the way and not become involved in the conflict between the necessity for
production and the attainment of good working relationship. He is called as
Impoverish Management leader.

4. The (5,5) leader reflects a middle ground position and is called as Middle of the
Road Management leader. He seeks to compromise between high production and
employee satisfaction.

5. The (9,9) leader is extremely concerned about the task and also the people. He is
concerned to see that the work accomplishment is from committed people;
interdependence through a'common stake' in organisation; purpose leads to
relationship of trust and respect. He is called a Team Management leader.

Activity B

Read the following statements/examples and mark for yourself, the ones that are
applicable to you -as a leader of the group.

Contingency Theory of Leadership

Regarding this theory Fiedler (1967) states that a leader may become effective if the
situation is favourable in three ways. These are: good leader-member relations
showing acceptance of the leader by the group; details of the task spelled out to the
leader's position; and a great deal of authority and power is formally attributed to the
leader's position. With these three favourable situations and his style of functioning, a 27
leader will be effective.
Behavioral Dynamics
When the situation is very favourable or very unfavourable to the leader, the task-
oriented leader is effective. When the situation is moderately favourable to the leader
the person oriented leader is effective.
Example (of moderately A leader with good interpersonal relationships may
favourable situation to be developing a new policy that will have great
person-oriented leader) impact on the work group. The situation is relatively
vague but moderately favourable. The task is not
very well defined and the leader-member relation is
good. The leader is likely to be effective as he would
like to consult the members and consider their
thoughts and ideas. When the new policy gets
approved, the situation becomes more favourable to
` him.
Path-goal Leadership Theory
This theory by House (1971) states that the leader smooths out the path towards goals
and provides rewards for achieving them.
As a leader, you should understand the needs of the people and their desire to work or
behave in a way that accomplishes goals that satisfy those needs. This theory is based
on a situation of the above kind. If you know the need of the person and his desire to
work and he is able to accomplish the work, you can reward him to make him feel
happy and satisfied. In essence, you are doing three things: One, you are motivating
the members of the group by clarifying the path to personal rewards that result from
attaining work goals. You have thus `fixed' him on the job and made him see that his
performance can lead to positive or negative rewards.'Two, you have already made
the path-goal clear to the member and also told him about what the job requires. You
need not say too many things about the job to him as this may decrease his interest in
the work and deter his performance. Three, you must offer the reward to the member
of the group who actually accomplishes the task. Your reward may be a praise or
increase in the pay or promotion of the member to a higher position. Your judgment
about the desirability of the member to a higher position is crucial. Your judgment
about the desirability of the member's effort and the goal helps you to decide whether
a reward can be given.
It is very important for the leader to know every member as a person, in order to use
a style to get the best out of the member. For example, a task-oriented leader is
preferred by a highly achievement-oriented member, whereas a person-oriented
leader is preferred by a person who needs a good deal of affiliation with others.
Similarly it does good for the leader to know each situation to adjust his style of
functioning for better results. With a clear task on hand, members feel satisfied if the
. leader is supporting them. They may not show a lot of output, but they are satisfied.
On the other hand with a less clear or more vague task on hand, member show more
output, if the leader directs them to work better. The member in this situation may not
be very satisfied.
In most of the Indian work settings, it is usually observed that members are quite
dependent on the leader or the superior. They also are quite conscious of their status,
but have very little commitment to work. Singh (1980) suggests that the leader who is
task-oriented and nurtures the dependence of members on him is most effective in
dealing with such members. He or she can get the work done in his nurturant task
style from the members of his group. To a great extent, he knows characteristics of
the members' work group, that he or she utilises in making the leadership style
effective and getting the work done.
From the above discussions, it is clear that a leader is a person who has ability to
persuade others to get the work done. You must have seen a person having the title of
a leader. He may be very popular, but map not have the ability of leadership. Many
leaders try to become popular by agreeing with everyone, thus avoiding any kind of
conflict. Their influence on the subordinate or members of the work group may not
be very lasting. There are leaders, who by virtue of their ability to exercise authority
and power show better influence on members. It is therefore necessary for you to
understand the authority of a leader and his sources of power, which help him to
28 exercise influence on the subordinates.
15.4 LEADERSHIP AND INFLUENCE PROCESS Leadership Styles and Influence
Process
Authority is the right to command and extract obedience from others. It comes from
organisation and it allows the leader to use power. Power is the ability to exercise
influence or control over others.

In the functioning of a leader the ability to guide the action of others is achieved
through his authority. Carrying out of these decisions is accomplished because of the
power of the leader. You will see the relationship between the authority and power of
a leader as we go further to understand various types of power.

15.5 TYPES OF POWER

Legitimate Power

This power comes to the leader when the organisation's authority is accepted. It
comes from the rules of the organisation. For example, parents, teachers, mana, ers,
police, etc. have legitimate power only when their authority is accepted in the
positions they hold.

Expert Power

This is the power of knowledge and skill of special kind that are important in getting
the job done. A person's professional competence or knowledge gives him the expert
power. His credibility increases. He can lead other persons to trust his judgments and
decisions, as an expert like a physicist or a lawyer or a chemist or a computer
programmer or a purchasing agent or a financial analyst. A leader himself may not be
an expert in all fields, but he can certainly take the help of experts in particular fields.

Charismatic Power

This is the power of attraction or devotion, the desire of one person to admire
another. A subordinate feels a positive attraction towards a leader by identifying
himself with the leader, or gets influenced by the leader's attractive power. This
power helps the subordinate to understand and value the leader so much that he
understands and acts according to the expectations of the boss or the leader. It helps
him to act as his own boss, and behave in ways he thinks the boss will want.
Reward Power
This power is the present or potential ability to reward for worthy behaviour. The
superior or the leader has the power to give tangible rewards such as promotion,
office space, time off from work, attractive work assignments and help to the
subordinate. Also phychological rewards like praise, appreciation, approval and
recognition can be given by the leader or the superior to the subordinate. The
subordinate has to believe that he has access to higher authorities, therefore he can
give rewards. This reward power of the leader can also increase the leader's
charismatic and legitimate power.
Coercive Power
This is the ability to threaten or punish. The leader can give tangible punishments like
dismissal, demotion, low rating, less satisfying work assignments, etc. Psychological
punishments include criticism, avoidance, disapproval, satirical remarks on the
subordinate. The reward power helps to avoid something undesirable. Self-esteem of
the subordinate increases because of reward power and decreases because of
punishment or coercive power. Even a subordinate may withdraw or break the rules
or become hostile. He may not feel attracted towards the charismatic power of the
leader and at times may ignore the leader's legitimate power. Having seen the reasons
for differences between the authority and power of the leader, you should know the 29
type of leaders as understood on the basis of their authority and power.
Behavioral Dynamics 18.6 TYPES OF LEADER AND POWER CONCEPT
Formal Leader
A formal leader is selected by the organisation. For example, a manager is a formal
leader by virtue of the authority coming from the organisation. He influences others
to help accomplish the goals of the organisation or unit. Such a leadership lasts over a
long period of time.
Informal Leader
An informal leader is chosen by the group. Thus, all managers are leaders if their
authority is accepted, but not all leaders are managers. Informal leadership is
leadership without position and may shift from one person to another. It may last for
a brief time. Most people are leaders at one time or the other and they can have
influence on others as defined by the concept of leadership itself.
The ideal leader is the one who can combine the formal and informal leadership
simultaneously within himself.

18.7 SUCCESSFUL VERSUS EFFECTIVE LEADER

As we have seen in the preceding discussions, leadership is the activity of influencing
people to strive willingly for group objectives. It is the ability to persuade others to
get something done. So the leader attempts to have some effect on the behaviour of
another, which we call attempted leadership. The response to this attempt may or
may not be successful. A basic responsibility of managers in any work organisation
is. to get the work done with and through people. The success of managers is
measured by the output or productivity of the group they lead. Therefore, we should
clearly distinguish between successful versus effective leader.
Figure IV: Successful-Unsuccessful Leadership Continuum

In the above figure, A's attempt to influence B to do a certain job can be judged
successful or unsuccessful. B does the job for the reason that A has position of power
and he controls the reward and punishment, then A's attempted leadership.is
successful.
A's style of leadership may not be compatible with B's expectation and B is made
hostile towards A and does the job only because of A's position power; then we can
say A has been successful, but not effective. B does the job because A can punish
him for not doing it or reward him for doing it. B's own needs are not being
accomplished by satisfying the goals of A (the leader) for the organisation.
On the other hand, A's attempted leadership leads to a successful response and B does
the job because he wants to do it and finds it rewarding, then we may say, A has both
position power as well as personal power. B respects A, B is consistent with ' some
personal goals and B sees personal goals as being accomplished by the job he does
for A. We can then say A's leadership is effective.
We should try to understand the difference between success and effectiveness.
Success has to do with how the individual or the group behaves. Effectiveness
describes the
internal state or predisposition of an individual or a group and is thus attitudinal in
nature.
You may have noticed that individuals who are interested in success tend to
emphasise their position power. They use close supervision of the work of their
associates. If they have to be effective, they have to use their personal power as well
30 as their general supervision.
Examples of successful and effective individuals can be noticed if one understands Leadership Styles and Influence
the underlying acceptance of the superior by the subordinate. In the examination hall, Process
a certain kind of teachers fear that if they leave the hall for a while the students will
indulge in copying and exchanging notes. There are yet another kind of teachers who
leave the examination hall, but the students never behave differently.

Let us work at family level which is a less formal organisation. Parents can be
successful and effective by using their position and personal power. The children
easily accept the goals of the family as their own. Parents who use position power
and a closer supervision, are likely to face a kind of revolt or disobeying attitude
among their children not accepting the goals set by the parents for the family. With
the absence of the parents, the whole house becomes topsy-turvy. This can never
happen in 'a family where parents create a good deal of trust between them and the
children by exercising their personal power of love and discipline. The children in
the absence of parents do not behave differently than if their parents were there.

Leaders are successful, but ineffective when they have a short-run influence over the
behaviour of others. They must try to be both successful and effective to have long-
term influence for leading others towards productivity and developing the
organisation as a whole. The most importantconclusion from the above discussion is
that the managers must understand their own abilities and their impact on others.

Activity C

Interview several people asking them to describe situations where someone's attempt
to influence them was successful or unsuccessful

18.8 SUMMARY
In this unit you have been exposed to leadership as a process of influence on others to
work willingly for group objectives. You have also come across different leadership
styles, such as Human relations style, theory X and Y styles, Authoritarian,
Democratic and Laissez-faire style, Employee-orientation and Production-
orientation styles, Consideration and Initiating Structure styles and Scientific
Managerial styles. Styles have been related to various theories of leadership such as
Trait theory, Group and Exchange theory, Social Learning theory, Managerial Grid
theory, Contingency Thoory and Path-goal theory.

In the context of leadership and influence process, a distinction was drawn

between authority and power. Five types of power such as legitimate power,
reward power, expert power, charismatic power, and coercive power were
explained. Based an the types of power, we discussed two types of leader-
formal and informal. We also attempted to distinguish between a successful 31
and an effective leader.
Behavioral Dynamics 18.9 SELF-ASSESSMENT TEST
1. What are the various ways in which you influence your colleagues and
subordinates?
2. To what extent various theories of leadership are likely to influence your
leadership styles.
3. Discuss the various types of power. Relate the concept of power to the types of
leadership. Who is an ideal leader?
4. Is there any difference between a successful and an effective leader? Discuss.

18.10 KEY WORDS

Authoritarian Style: The assumption that the power of leaders is derived from the
position they occupy and that people are innately lazy and unreliable.
Consideration: A leader's acts which imply supportive concern for the followers in a
group.
Contingency Theory: A theory that considers an organisation's objectives,
environment and leadership skills, as interacting and affecting the effectiveness of a
leader.
Democratic Style: The assumption that the power of leaders is granted by the group
they are to lead and that people can be basically self-directed and creative at work, if
properly motivated.
Employee Orientation: Stresses the relationship aspect of the job.
Group and Exchange Theories of Leadership: These theories state that the leader
provides more benefits and rewards than burdens or costs for followers who help him
achieve the goal of the organisation.
Hawthorne Effect: When worker's behaviour changes and productivity increases
because the workers become aware of their importance.
Human Relation Style: Follows from the work of Elton Mayo and his associates to
find the best technological methods to improve output by studying human relations at
interpersonal level.
Initiating Structure: Reflects the extent to which individuals are likely to define and
structure their roles and those of their subordinates towards goal attainment.
Laissez-faire Style: This style of a leader permits the members of the group to do
whatever they want to do. No policies or procedures are established.
Leadership: The ability to influence the behaviour of others. The task is to help the
group reach both organisational and personal goals.
Managerial Grid Theory: The theory suggests that each manager must be
concerned about both production (structure) and people (consideration).
Path-goal Theory: This theory defines the relationship between leader behaviour,
subordinate's work attitudes and performance as situational. The essential ingredient
of this theory is that the leader smoothes out the path to work goals and provides
rewards for achieving them.
Production Orientation: Stresses the production and the technical aspects of the
job. Employees are seen as tools to accomplish the goals of the organisation.
Style Scientific Manager: This style of the leader focuses on the needs of the
organisation and not on the needs of the individual.
Social Learning Theory: The theory deals with continuous, reciprocal interaction
among the leader (including his cognition) the environment (including
subordinates/followers and other variables) and the behaviour itself.
Theory X, Theory Y: McGregor's theory that behind every management decision,
32 there is a set of assumptions that a manager makes about human behaviour. The
theory X manager assumes that people are lazy, dislike work, want no responsibility Leadership Styles and Influence
and prefer to be closely directed. The theory Y manager assumes that Process
people seek responsibility, like to work and are committed to doing good work if
rewards are received for achievement.
Trait Theory; This theory attempts to specify which personal characteristics
(physical, personality) are associated with leadership success. Trait-theory relies on
research that relates various traits to success criteria of a leader.
Authority: The legitimate right to use assigned resources to accomplish a delegated
task or objective, the right to give orders and to extract obedience.
Charismatic Power: This power is based on followers' identification with a leader.
The leader is admired because of one or more personal traits. Followers can be
influenced because of this admiration.
Coercive Power: The power of a leader that is derived from fear. The follower
perceives the leader as a person who can punish deviant behaviour and action.
Expert Power: An individual with this type of power has some technical expertise,
skill or knowledge which is important in getting the job done.
Formal Leadership: A manager is a formal leader by virtue of authority coming
from the organisation that a formal leader is usually selected by the organisation.
Informal Leadership: An informal leader is chosen by an individual or a group.
Legitimate Power: The power comes when the organisation's authority is accepted.
It is power that stems from implicit or explicit rules.
Power: Ability to exercise influence or control over others.
Reward Power: The present or potential ability to give some reward for worthy
behaviour.
Situational Management: Skill in changing the style demands of one or more
situational elements so that managerial effectiveness increases.
Situational Manipulation: Changing the style demands of one or more situational
elements so that personal effectiveness increases.

18.11 FARTHER READINGS

Bandura, A. 1977. Social Learning Theory, Prentice-Hall: Engelwood-Cliffs.
Bass, B.M. 1960. Leadership, Psychology and Organisational Behaviour, Harper and
Brothers: New york.
Blake, R.R. and J.S. Mouton. Should You Teach There's Only One Best Way to
Manage?
Fiedler, F. E. 1967. A Theory of Leadership Effectiveness, McGraw Hill: New York.
House, R.J. 1971. A Path-Goal Theory of Leadership Effectiveness, Administrative
Science Quarterly, September, (pp 321-228).
Kelly, J. 1974. Organisational Behaviour, Rev. Ed Irwin: Homewood.
Likert, R. 1961. New Patterns of Management, McGraw-Hill: New York.
Mayo, E. 1933. The Human Problems of an Industrial Civilisation, Viking: New
York.
McGregor, D. 1960. The Human Side of Enterprise, McGraw Hill Book Company:
New York.
Roethlisberger, F.J. and W.J. Dickson, 1939. Management and the Worker, Harvard:
Cambridge.
Singh, J.B. 1980. The Nurturant Task Leader, First Edition, The Concept Publishing
House: New Delhi: 33
Taylor, E.W. 1909. The Principles of Scientific Management; Harper: New York.
 Analysing Interpersonal Relations
UNIT 17 ANALYSING INTERPERSONAL
RELATIONS
Objectives
After studying this unit, you should be able to:
appreciate the need for interpersonal competence
understand how the self-concept operates and is protected
understand how interpersonal needs, orientations and attractions affect behaviour
understand how an interpersonal relationship is created, developed and
maintained
develop a set of interpersonal skills
Structure
17.1 Introduction
17.2 Understanding Determinants of Interpersonal Behaviour
17.3 Developing Interpersonal Relationship
17.4 Developing Interpersonal Skills
17.5 Summary
17.6 Self-assessment Test
17.7 Further Readings
17.1 INTRODUCTION
Think about yesterday. Out of the total number of hours while you were awake, how
much time did you spend all by yourself with nobody around to talk to or deal with?
How much time did you spend in a "dyadic" relationship, that is, with another
person? How much time did you devote in a small group upto eight persons? Finally,
how much time did you interact with a large group?
Chances are high, that most of your daily time is spent in some sort of interpersonal
situation-rather than all by yourself or being just a member of a large group. Most of
your daily experiences involve interactions with other human beings. Some such
experiences have been quite joyful resulting into relationships which have flourished
overtime. Some experiences have hurt you, upset you, resulting in relationships
which have remained stagnant or have worsened or have even been abandoned.
Understanding how and why these have happened to you will help you develop and
improve your relationships with others. You' are likely to feel more competent in
interpersonal situations and be happier.
Your "interpersonal competence" refers to the degree to which you are accurately
aware of your impact on others and of the impact of others on you. It is your ability
to engage in any mutually helpful relationships. It enables you to achieve your
personal goals as well as task goals in the organisations where you are a member.
What are the effects of your interpersonal competence on your managerial
behaviour? Interpersonally incompetent managers create an organisational
environment in which members act very defensively to protect their own interests.
Since everybody acts defensively in the organisation, where roles and relationships
are basically interdependent, neither the personal goals of the members, nor the task
goals can be fully realised. Problems are not confronted and are kept hidden from
each other for fear that exploring the problems will only aggravate the situation. In
course, of time, issues which were avoided and swept under the rug assume gigantic
proportions and overwhelm the members. On the other hand, interpersonally
competent managers allow their subordinates to challenge their views and to question
the organisation's norms, policies, rules and objectives. When these kinds of
behaviours are tolerated, people are likely to discover problems and commit
themselves to their solutions. Organisational effectiveness increases. 5
Behavioral Dynamics Your role in the organisation can be viewed as a central role surrounded by at least
three other types of roles: Superiors, Colleagues and Subordinates.

Besides these three types of roles, you may have to interact with a lot of other people
from different positions: consumers, suppliers, people from regulatory agencies,
general public, etc. Interactions with different interest-groups demand different type
of specific skills and competencies. Possession and understanding of these skills may
not guarantee successful human relations, but it can increase your interpersonal
sensitivity and help you take appropriate action to improve relationships. But
remember: any attempt to improve interpersonal competence must begin with
knowing oneself more accurately.

Activity A

Check your understanding of the concept of "interpersonal competence" by indicating

whether the following statements are True (T) or False (F).
An interpersonally competent manager:
i. is able to engage in any mutually helpful relationship
ii. achieves personal goals but not the task goals of the organisation where he is a
member
iii. is more accurately aware of his impact on others and others' impact on him,
iv. creates an environment in which members act very defensively to protect their
own interests
v. allows subordinates to challenge his views and to question the organisation's
norms, policies, rules and objectives
Answers: (i) T, (ii) F, (iii) T, (iv) F, (v) T

17.2 UNDERSTANDING THE DETERMINANTS OF

INTERPERSONAL BEHAVIOUR
Self-Concept: What am I?

Mankind is unique because only a human being has the capacity for thinking about hi
or her behaviour and appearance. Each person has an attitude toward himself or
herself and this attitude comprises the self or self-concept. The self-concept has three
aspects-beliefs, feelings and behaviours. The belief component represents the content
of the self. This is illustrated by such thoughts as "I am intelligent, sociable, sincere,
overweight" etc. The feeling component about one's self is reflected in feelings of
self-worth or in general as `I'm O.K.' or `I'm not O.K.' Finally, the behavioural
component is the tendency to act toward one's self in a self-deprecating c self-
enhancing manner.

6 Your self-concept is a reflection of all your past experiences with other persons and
includes characteristics which distinguish you from others. Once your self-concept is
established and specific patterns of behaviour are adopted, it tends to resist Analysing Interpersonal Relations
change.This resistance to change also gives you a degree of stability that prevents
you from regarding yourself as worthless at one moment and worthy at the next. As
your activities are organised and integrated in relation to your self-concept, you can
expect to develop a relatively consistent life-style. Also, you achieve a stable
interpersonal environment by maintaining a consistent relationship between your
self-concept and your beliefs about how others behave and feel toward you with
regard to your self-concept. In order to maintain your interpersonal environment and
to maximise congruence or harmony, you (like any other individual) actively use
certain mechanisms to stabilise interactions:
1. Misperception: When the actual expectations of others are not congruent with
your self-concept or behaviour, you may simply misperceive how others see you.
2. Selective Interaction: You may choose to interact with those persons with
whom you can most readily establish a congruent state.
3. Selective Evaluation of the Other Person: You maximise congruency by
favourably evaluating those who behave congruently towards you and devaluate
those who do not.
4. Selective Evaluation of Self: You maximise congruency by altering the values
placed on various aspects of your self-concept so that the aspects that are in
agreement with the perception of your own behaviour and those of others arc
most highly evaluated.
5. Response Evocation: You, intentionally or unintentionally, behave in a way that
results in others' behaving toward you in a congruent fashion. A person in
interaction controls the cues provided to others to ensure that he or she will be
categorised in certain ways and not in any unexpected way.
The mechanisms, mentioned above, are some of the means used by any person to
protect one's self-concept and maintain an interpersonal environment.
Interpersonal Needs: What do you want from me?
People need people, but for what? Schutz (1966) maintains that there are three
interpersonal needs-inclusion, control and affection-that cause one, to establish and
maintain relations with others. These needs are defined as follows:
1 Inclusion-the need for interaction and association.
2 Control --the need for control and power.
3 Affection-the need for love and affection.
Individuals differ, however, in the strength of their interpersonal needs.
For each interpersonal need, there are two behavioural aspects--expressed and
wanted. Expressed behaviour is the behaviour that we initiate toward others.,
whereas wanted behaviour is the behaviour we want or prefer from others toward us.

Compatibility is a property of a relationship between two or more persons that leads

to the mutual satisfaction of interpersonal needs and harmonious coexistence. If what
is wanted and what is expressed is equal for both interacting persons, mutual needs
are satisfied. For example, those who wish to dominate and control activities, work
well with those who want to be controlled or directed. However, if both parties want
to dominate, some degree of conflict may be expected.
When you compare these interpersonal needs with self-concept, you will find that the
need for inclusion is to feel that the self is significant and worthwhile; for control; the
need is to feel one's self as a competent and responsible person; for affection, the 7
need is to feel that self is a lovable person.
Behavioral Dynamics Activity B

Write eighteen simple sentences about yourself starting with "I am" or "I want others
to," or "I like" Write these sentences as frankly and spontaneously as possible
without exercising much caution. Analyse the sentences yourself to determine your
self-concept and interpersonal needs. 'You may find some of the sentences cannot be
put into any of the categories we have discussed so far.
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Interpersonal Orientations: How do you influence me?

Individuals vary greatly in how they relate to and influence others. Three basic types
of persons have been identified-the tough battler, the friendly helper, and the
objective thinker. These three styles and associated behaviours are outlined in Chart
1.

The interpersonal orientations are shown in terms of extremes, but they are typical
descriptions of familiar behaviour. Many people are more oriented to one style than
another and feel more comfortable with its associated behaviours. While one's style is
related to his or her personal needs and self-concept, a style can be overdone and
distorted. Each style reflects behaviour that, in varying degrees, is ineffective in some
situations.

The Tough Battler would relate better to others, if he or she were more sensitive to
others, could accept his or her own inevitable dependence on others, and recognise
that some situations will not yield to pressure. The Friendly Helper would be more
satisfied if he or she could stand up for his or her own interests and face conflict.
Like-wise, the Objective Thinker could relate to others more effectively, if he or she
were more aware and accepting of his or her own feelings and those of others. One
does not have to assume that his or her behaviour is fixed or impossible to control.

Chart 1

Three Interpersonal Orientations and Associated Behaviours

8
Activity C Analysing Interpersonal Relations

Draw an equilateral triangle and name three vertices with three interpersonal
orientations. Note where you think you are and put a dot at that space within the
triangle which will depict your position. Get the opinion of a close friend and ask'
him to place you within the triangle. Do you agree on his assessment of your
interpersonal orientation? Explore, with him, the differences in perception.

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Interpersonal Attraction: Why do we like each other?

You are not passive in your interpersonal interactions with others but seek to
structure these relationships. You will choose to interact with others with whom you
can most readily establish a harmonious relationship. For example, if you regard
yourself as very intelligent, you will interact with others who respect your
intelligence or allow you to use it. By choosing such persons as friends, an important
and durable source of harmonious interactions is created. So, remember: people
interact more frequently with those who are perceived as confirming their self-
concept to the greatest extent.

The greater the importance and common consequences of an "object" for two people,
the greater the attraction between both persons. An "object" may refer to any focus of
perception-including physical objects, symbols, the other person's self-concept or to
one's own self-concept. This relationship is depicted in Figure I.

Figure I: Factors and Dynamics of Interpersonal Attraction

9
Behavioral Dynamics The attraction of 'A' towards `B' is affected by the similarity between A's attitude
towards `X' and his or her perception of B's attitude toward `X'. Moreover, A's own
attitude towards `X' and his or her perception of B's attitude are influenced by the
degree to which he or she is attracted to `B'. For example, assume that `A', who is
attracted to `B', discovers a difference between A's and B's attitudes towards their
common supervisor `X'. Assume that `A' likes the supervisor but B' does not and
holds many unfavourable views about him. Since `A' is attracted to `B', even while
holding divergent views, a strain is created that must be resolved. Return to a state of
balance may take several forms:
1. A shift in A's perception of B's attitude may occur. `A' may decide that he or she
was mistaken in attributing to `B' a negative attitude towards the supervisor. If
`B' actually does have a negative attitude, this would be a misperception.
2. A' might change his or her own attitude in the direction of `B' and develop a
negative attitude towards the supervisor (X)..
3. A' might try to convince `B' that `B'' is mistaken about the supervisor. If `B' is
attracted to `A' and is also experiencing a strain, `B' might be susceptible to such
persuasion.
4. A' might restore balance to the relationship by reducing his or her attraction
towards `B'.
These actions indicate how people seek to validate their attitudes by seeking
agreement with others-consensual validation.

When a group begins to interact and acquire information of other's views and
attitudes, bonds of attraction form most strongly between those who hold similar
views toward things that are important and relevant to both. Also, a person likes
others who have the same feeling toward him or her as that person has toward
himself or herself. This reinforces one's self-concept and facilitates interpersonal
relations.

Activity D

Recall a situation where you had differences of attitude with your very close friend
about somebody whom both of you knows well. How was the difference in attitude
reduced? Reflect on the process of returning to the state of balance and prepare a
small introspective note.

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Activity E

Select three to four close friends with whom' you are mutually attracted. Prepare a list
of similarities and differences of values, attitudes, needs and expectations between
you and your friends. How does the list look like? Do similarities outweigh
differences or the way round?

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10 ..
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 Analysing Interpersonal Relations
17.3 DEVELOPINGINTERPERSONAL
RELATIONSHIP
The development of successful working relationships takes time. No one can
cultivate such a relationship with another person without going through a long
arduous process that usually takes months or years to develop. The development of a
working relationship occurs in the following sequences:
1. The initial contact produces a set of impressions and attitudes in each towards the
other. A favourable mutual impression is needed to develop a long-term
relationship.
2. A positive impression opens the door for a long-term working relationship.
When this occurs, the interacting parties develop a set of mutually agreeable
expectations regarding their roles, performance and relationships.
3. The interacting parties make continuous attempts to meet each other's
expectations. Failure to carry out this psychological contract will probably
terminate the relationship.
4. Mutual trust and influence develop as a result of meeting the psychological
contract, and these ensure the continuation of the relationship.
In this section, we are going to discuss, in brief, the four stages of developing
interpersonal relationship:
1. Forming first impressions
2. Developing mutual expectations
3. Honouring psychological contracts
4. Developing trust and influence.
Forming First Impressions
First impressions, though often inaccurate, are lasting impressions. First impressions
are lasting because they influence the way in which people see subsequent data about
the perceived object or person. So, whether or not first impressions are correct, it is
important for us to make favourable impressions on other people. Initial impressions
do not guarantee long-term relationships, but they are essential for entering into
enduring relationship with others. Many studies have shown that much of the ground-
work for subsequent relationships with others is laid in the very first stage of
socialisation.
The first stage of socialisation has a significant implication for those who are looking
for jobs. When an organisation searches for a new manager, it will probably contact
between 10 to 40 potential candidates. Of these, it will probably interview between
three to eight people, but only one will be selected for the position. What factors help
the employer to narrow down the list? The initial selection is probably based on
substantive qualities such as educational achievement, job experience and
specialisation, references, etc. as described in the resume, But the next selection most
likely results from the impression the candidates make during the job interview.
Image consultants list the following qualities which help make a good first
impression (Thompson, 1977):
1. Poise: One should maintain composure by being diplomatic and personable.
Nervousness disturbs one's poise.
2. Articulation: One should speak naturally and fluently, use proper language and
add deep tones in the voice to create an impression of maturity.
3. Conservative Dress: Conservative dress in classic styles are appropriate for a
business engagement such as job interview. Extremes in fashion should be
avoided.
4. Positive Attitude: Without being a naive optimist, one should show a positive
outlook towards life, for people generally prefer a prudent optimist to a pessimist.
5. Knowledgeability: Learning something about the organisation and its products, 11
> services and people before an interview demonstrates one's interest.
Behavioral Dynamics 6. Thoughtfulness: One should be alert and responsive, yet weigh each question
before responding. A hasty response can be seen as indicative of immaturity or
lack of wisdom.
7. Self-confidence: In order to make other people have confidence in him or her,
the person needs to appear self-confident. An erect posture, head held high and
an assertive tone of voice can help show self-confidence with requisite humility.

Remember that in forming first impressions, your non-verbal behaviour plays as

important a role as your verbal behaviour. Read the theme paper of transactional
analysis and you will appreciate that the body-language associated with different
"ego-states" (like Nurturing Parent, Adult, Adapted Child and Natural Child) play a
very important part in the process of exchange of positive "strokes" to each other.

Developing Mutual Expectations

When people are mutually impressed, they are more likely to enter into a long-term
relationship.' When this happens, they develop certain expectations about each other.
In work organisations, managers may expect new employees to be competent,
productive, reliable and loyal and to conform to organisational norms. New
employees, on the other hand, expect their superiors to be fair, supportive and
considerate of their needs.

Many of these expectations are unwritten and unspoken. People usually do not have
clear ideas about what they expect from other people or from organisations,
especially at the beginning of a relationship. Initial expectations are usually very
general and tend to be unrealistic. Unrealistic expectations often develop because
people promise more than they can deliver at the initial stage in order to impress the
other party.

Parties must go beyond the stage of establishing general expectations in order to

determine whether or not the relationship is satisfactory. Unless they work out more
realistic expectations, the relationship becomes superficial and less meaningful. The
process of working out mutual expectations involves a series of exchanges and
adjustments to each other's expectations.

A set of mutual expectations that is worked out. and understood by the parties is
called a psychological contract; it governs the relationships between them in day-to-
day interactions. Although this contract is neither formally stated nor legally binding,
it serves as the basis for evaluating the quality of the relationship.

Activity F

What is the nature of "psychological contract" between you and another person (your
employer or your friend or your life partner)? What do you expect the other party to
do? What do you believe the other party expects you to, do? Find out the areas of
expectations where you think both the parties mutually but tacitly agree.

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Honouring Psychological Contracts

12 An effective interpersonal or work relationship cannot develop and be maintained

unless the participants are willing to honour their psychological contracts. Each party
expects the other to be faithful in the relationship, not to take arbitrary actions and to
be honest with him or her. There will, of course, be times when some of these Analysing Interpersonal Relations
expectations cannot be fully satisfied. But when this happens, each party must be
reassured that the other is acting in good faith.

What do people expect from others in working relationships? In one study (Gabarro,
1978); executives expected three things from their colleagues: reliable character,
professional competence and good judgment.
The character-based expectations include:
1. Integrity: Maintaining personal and moral honesty in the relationship.
2. Motive: Having good intentions and acting in good faith.
3. Consistency: Showing consistency in behaviour.
4. Openness: Levelling and being honest with another person.
5. Discretion: Maintaining confidences.
The competence-based expectations include:
1. Technical competence: Having the ability to perform the assigned task.
2. Interpersonal competence: Being able to maintain effective interpersonal
relationships.
The judgment-based expectations include:
1. Business sense: Making good business judgment.
2. Interpersonal judgment: Making an accurate perceptual judgment of other
people.
Each of us has a minimum acceptable level of satisfaction. If the actual fulfilment of
expectations is below that level, the situation will be viewed a* a violation of the
contract. When this happens the affected member will send out signals of
dissatisfaction in the form of joking, complaining or showing anger (sometimes
through withdrawal). If these signals are received and honoured by the other person,
the relationship can be restored or the contract may be renegotiated. Otherwise, the
association will suffer chronic discontent, strife, alienation and eventual termination.

Activity G

Think of a situation where the other party violated the "psychological

contract" you had with him or her. In what way did you send your signal of
dissatisfaction? What happened to your signals?

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Developing Trust and Influence

The result of meeting the psychological contract is an increased level of trust and
influence. When the parties to the contract are able to meet their mutual expectations,
the relationship produces mutual trust and favourable sentiment. The more
satisfactory the association becomes, the greater the influence the parties have on
each other. Since the relationship is fulfilling, the parties will continually rely on it to
satisfy their needs. This dependency permits them to exert influence on each other.

The increased level of influence enhances each party's ability to affect the behaviour 13
and thinking of the other. When a person is able to influence others, the person
Behavioral Dynamics becomes more effective in performing a task. The person's effectiveness is especially
increased when the task requires a high degree of interaction with other people, for
the influential person is capable of enlisting the necessary support and cooperation
from others.

17.4 DEVELOPING INTERPERSONAL SKILLS

The quality of interpersonal relationships is largely affected by the way the parties
relate to each other. How we relate to another person reflects our own personality. As
you have seen earlier, some people have a greater desire to maintain close -
relationships, others are relatively insensitive. But the ability to create, develop and
maintain such relationships is not inborn. More often than not, this ability involves
the way a person listens, questions, cares and responds to others. In order to develop
a close and binding relationship, parties must expose themselves to each other so they
can really get to know each other. Unless they know each other well, they cannot
develop a trusting relationship.
Increasing Interpersonal Awareness: The Johari Window
The Johari Window is a conceptual model for studying interpersonal awareness. It
was developed by Joseph Luft and Harry Ingham (the name Johari combines their
first names). It is a schematic model that shows how people expose themselves to
others and receive feedback from others in their interpersonal relationships. As
shown in Figure II, the Johari Window has four parts: Arena, Blindspot, Closed and
Dark. Arena represents the "Public self" that is known to the self and others. The
Blindspot area is known to others, but not to the self. The Closed area is the "private
self" which is known to the self, but not to others. The Dark area is neither known to
the self nor to others.

Figure II: The Johari Awareness Model of Interpersonal Process

(Source: Jay Hall, 1975)

The implication of this model is that if Arena is very small, there is very little free
and spontaneous interaction. On the other hand, the larger the Arena, the greater the
chance for participants in any relationship to make correct perceptual judgments
14
about each other. This accurate perceptual judgment helps them to develop realistic. .
mutual expectations. Meeting these expectations increases their level of trust and
influence, and it helps them maintain a mutually satisfying relationship. As. Arena Analysing Interpersonal Relations
expands, the closed area or private self shrinks and it becomes less necessary to hide
or deny things one knows or feels. The Blind spot takes longer to reduce because self
concept protection mechanisms are involved.
Arena can be expanded by means of self-disclosure and feedback. These two variables
are shown as two large arrows in the figure and range from less to more. Self-disclosure
means revealing oneself to another person and sharing one's own "feelings, emotions,
facts and knowledge with that individual. Self-disclosure is an act of showing respect for,
and sharing intimacy with another person. Such an act requires trust in another person
and is likely to encourage the other person to follow suit. But self-disclosure involves
both rewards and costs. Being open (more self-disclosure) offers the possibility of self-
understanding, growth and better interpersonal adjustments. On the other hand, when we
disclose ourselves to another, we are taking the risk of being rejected, misinterpreted or
short changed. However, unless someone takes the risk and initiates self-disclosure, the
relationship will not develop.
Feedback reduces the Blindspot area and helps us increase our self-awareness, since we
often do not know how others view us. We can guess how they see us by their reactions,
but these reactions are often not clear and likely to be misperceived. Unless we receive
feedback as to how they see us, or what kind of effects our behaviours have on them, we
are likely to be blind to their feelings and reactions.
The feedback given by others can hope to reduce Blindspot only if it has the following
characteristics (Anderson, 1970):
1. Intended to help the recipient.
2. Given directly, with real feelings and based on a foundation of trust between the
giver and the receiver.
3. Descriptive rather than evaluative.
4. Specific rather than general, with good, clear and preferably recent examples.,
5. Given at a time when the recipient appears to be in a condition of readiness to accept
it.
6. Checked with others to be sure that they support its validity.
7. Includes only those things that the recipient might be expected to be able to do
something about.
8. Does not include more than the recipient can handle at any particular time.
Interpersonal awareness can be increased in several ways. When you feel that something
is wrong with a relationship but the problem area cannot be identified, you may take one
of the following actions:
1. Ask the other party how the relationship is working out for him or her (i.e., solicit
feedback). Take the initiative in expressing your concerns and feelings (i.e., initiate
self-disclosure) and listen to the feedback with empathy and without any attempt to
defend. The feedback obtained may not be satisfactory but at least opens the door for
improvement.
2. Ask yourself whether you are fulfilling the psychological contract. Take stock of
your perceptions of mutual expectation and see if each of you is meeting these
expectations. Keeping in mind the characteristics of effective feedback, communicate
your concerns to your partner.
Taking Interpersonal Risks
Nothing really happens in a relationship until the participants learn to trust each other.
However, trusting another person is not simple because it involves risk of being
exploited. If the other person behaves in such a manner that it violates one's trust in him
or her, the relationship cannot continue; However, we do not know if we can trust,
another person until such an opportunity of violation of trust arises: There are a few
things a person can do to create and maintain a trusting relationship:
1. Take the initiative in self-disclosure. This can set the tone for developing and
maintaining a relationship of trust.
2. Accept another person's self-disclosure: Appreciate the other person for taking the
initiative and the risk of rejection.
3. Reciprocate another's initiative with your own self-disclosure. Failure to do so will 15
be interpreted by the other person's a lack of interest and will arouse the anxiety of
Behavioral Dynamics possible exploitation.
4. Remember that the self-fulfilling prophecy works in an interpersonal relationship.
An initial assumption about a person has a way of proving itself. If you assume that
the other person cannot be trusted, you will find evidence to that effect. If you
assume that other person can be trusted, you are likely to experience the same.

Developing Cooperative Relationships

A relationship will be maintained and will prosper only when it satisfies the
participants' needs and expectations. In a mutually helpful relationship, the
participants tend to cooperate rather than compete in sharing limited resources or
rewards. In work organisations, people compete for limited resources-pay increases,
promotions, power and recognition. But those who want to develop mutually helpful'
relationships with others should make an effort to cooperate rather than compete in
such a situation.
However, development of a cooperative relationships is a function of three factors:
1. Shareable goal: The perception that the goal is shareable by the parties. In all
interdependent relationships, there exists at least one superordinate goal which
can be achieved only if the parties cooperate.
2. Perceived power of all parties: The perception that all parties have power
enough to use in a benevolent or a malevolent manner, depending upon their
individual choice. This factor refers to the appreciation of the fact that anybody
in a relationship has the power to help or hinder goal achievement.
3. Trust: A minimum level of trust prevailing amongst the parties that power of the
other party will not be used in a malevolent way. The present level of trust is a
product of past experience and self-fulfilling prophecy. The more trusting the
parties become, the more likely it is that they will engage in cooperative
relationships in future.
Resolving Interpersonal Problems
A close interpersonal relationship is maintained by building trust, acceptance and
support. But there are times when one party may become angry with the other for
failing to meet the psychological contract. When this occurs, the first party should
constructively confront the second. How well the two handle such an interpersonal
problem will indicate the depth of the relationship. In a shallow relationship, one
party may ignore the destructive behaviour of the other, but in a mature relationship,
however, both parties should engage in constructive confrontation in order to
improve the quality of the relationship.
Constructive confrontation is defined by Johnson (1972) as a deliberate attempt to
help another person examine the consequences of his or her behaviour. It involves
providing feedback that is useful and unthreatening to the confrontee. Keeping in
mind the characteristics of giving feedback as discussed earlier, you can improve the
effectiveness of confrontation by observing the following principles:
1. Importance of the relationship: Do not confront another person unless both
parties see the importance of the relationship and truly value it. Otherwise,
confrontation may turn into, or be perceived as, criticism.
2. Ability of the confrontee: Confront another person only when you perceive that
he or she has the ability to act on your feedback. If the confrontee cannot change
his or her behaviour, confrontation can lead to frustration.
3. Use of empathy: View the problem from the confrontee's perspective. You may
even change your perception of the problem as a result of this empathy.
4. Use of "I" language: Use "I" language, such as the words "I", "Me" and "My"
to reduce the defensiveness of the confrontee. "You" language-use of "You" and
"Your" is more closely related to criticism and sermonising.
5. Focusing on behaviour: Focus you feedback on specific behaviours rather than
on the person. A person-directed feedback produces defensive behaviour and
resentment. We can change our behaviour but not ourselves.
16 6. Use of descriptive statements: Describe how you see and feel about the
situation. Evaluating in judgmental statements can easily evoke defensive
 behaviours because such statements can be interpreted as criticism. Analysing Interpersonal Relations
7. Exploring alternative behaviours: Instead of suggesting any specific solution
to the problem, help the person explore various means of overcoming it.
8. Selection of time: Since timing is important for an effective confrontation, select
a time when the confrontation is relaxed and more open to receiving feedback
without being defensive.

9. Importance of privacy: Confront the person in private. Open confrontation will

be considered a personal attack rather than a helpful encounter.

10. Use of non-verbal behaviour: Use non-verbal behaviours, which speak louder
than words, to express yourself to others. Eye contact, appropriate tone of voice
and correct posture can all add to the effectiveness of confrontation.

Activity H

Select a person with whom you would like to develop a closer relationship in a work-
related environment. Make a list of the things that you want most from this person.
After you have done this, make a list of the things that this person may want from
you. Compare what you want from the other person with what you think the other
person wants from you, and answer the following questions:

i) What are the bases for mutual attractions?

ii) How well can or do you meet the other person's expectations?

iii) How well does the other person meet your expectations?

iv) If the relationship is not satisfactory, what do you think is the cause?

v) How can you improve the relationship?

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Activity I

Recollect a situation where you constructively confronted another party by providing

feedback effectively. Analyse what exactly did you do and how it worked. Recall
another situation where you failed to successfully confront another person. Analyse
how and why it happened that way. What would you do in case you get a second
chance?
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Behavioral Dynamics ..
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Activity J

Transactional Analysis is a very useful framework for understanding and improving

interpersonal behaviour. Read the theme paper on Transactional Analysis and
integrate TA concepts with the concepts mentioned in this unit.
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17.5 SUMMARY
In this unit we have discussed the importance of interpersonal competence which is at
the heart of social skills required by any manager in any organisation. You have seen
that, in order to improve interpersonal competence, one must have a fairly accurate
idea about one's self-concept. Self-concept, once formed, resists changes through
several protective mechanisms.

Three types of interpersonal needs, i.e. inclusion, control and affection are related
with self-concept. But these have two behavioural aspects-expressed and wanted.
Concepts of interpersonal orientation tell us how we influence each other. In that
section you have seen that three basic types of persons have been identified-the tough
battler, the friendly helper and the objective thinker. The concept of interpersonal
attraction tells us why we like each other. You have seen that people interact more
frequently with those who are perceived as confirming their self-concept to the
greatest extent. Bonds of attraction form most strongly between those who hold
similar views towards things that are important and relevant to both.

In this unit, we have discussed four stages of development of a working relationship.

The first stage of socialisation is forming the initial impression. Initial favourable
impressions do not guarantee long-term relationships, but they are essential for
entering into enduring relationship with others. In forming first impressions, non-
verbal behaviour plays as important a role as verbal behaviour. In the second stage a
set of mutual expectations are worked out and understood by the parties. Many of
these expectations are unwritten and unspoken. Hence, these are called psychological
contracts. An effective interpersonal or work-relationship cannot develop unless the
participants are willing to honour their psychological contracts. The result of
fulfilling the psychological contracts is an increased level of trust and influence.

In the last section on `developing interpersonal skills', you have come across a
conceptual model called `Johari Window'. You have seen that interpersonal
competence can be greatly enhanced by enlarging `Arena' with the help of feedback
and self-disclosure. Several characteristics of effective feedback have been discussed.
18 It is also emphasised that interpersonal relations cannot flourish unless the parties are
prepared to take certain interpersonal risks. Development of cooperative relationships
is facilitated when there are shared goals, mutually perceived power and the Analysing Interpersonal Relations
minimum level of distrust. Finally, we have discussed the principles of constructive
confrontation in resolving Interpersonal problems.

17.6 SELF-ASSESSMENT TEST

1 Explain the various aspects of self-concept. What steps will you take to achieve a
stable interpersonal environment?

2 What are the specific stages involved in developing interpersonal relationship?

3 After going through this unit, do you think that you can enrich your relationship
with others? If yes, how?

17.7 FURTHER READINGS

Anderson, J. 1970. `Giving and receiving feedback'. In G.W. Dawson, P.R.
Lawrence and L.E. Greiner (eds) Organisational Change and Development,
Irwin: Homewood.
Gabarro, J.J. 1978. `The development of trust influence and expectations'. In A.G.
Athos & J.J. Gabarro (eds.) Interpersonal Behaviour, Prentice Hall: Engelwood-
Cliffs.
Hall, J. 1975. Interpersonal style and the communication dilemma: Utility of Johari
Awareness Model for genotypic diagnosis'. Human Relations, October (p 716).
Johnson, D.W. 1972. Reaching Out, Prentice-Hall: Engelwood-Cliffs.
Schutz, W.C. 1966. The Interpersonal Underworld. Science and Behaviour Books:
Palo Alto.
Thompson, J.A. 1977. `The Image Doctors: A guide to the personal packaging
consultants'. MBA, September (p. 23-30).

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