Master of Business Administration - MBA Semester 1

MB 0038 – Management Process and Organisational Behaviour (4 credits)

(Book ID: B1621 )

Q1. (a) A vision statement is a formal statement of what a business wants to be. According to
Collins and Porras, a vision statement should have four parts. What are those four parts?.

(b) Differentiate between ‘process’ and ‘tasks’.

Ans. A) Collins and Porras in their noted article ‘Organisational Vision and Visionary Organisation’
spelt out that a vision statement has to have four parts namely:
1. Core values,
2. Core purposes,
3. The Big Hairy Audacious Goal or BHAG
4. Vivid Descripition.

1. CORE VALUES:- The core values are those things very close to your heart that you will
not give up at any cost. It can be integrity (for example, I will never cheat on the taxes I have
to pay) or quality (I will never use a lower quality wood), etc. Usually we say that you should
have only 4 to 6 core values. Of course, personal values and business values may differ. For
example, love may be a very important personal value but it may not be so relevant in your
business of furniture though it can be relevant if you were having a home for the aged. If you
have too many of them, they fail to remain ‘core’ and loses their impact. Why are core values
important? When you have a decision dilemma, they come up like a lighthouse to navigate
you.

2. CORE PURPOSES:- Core purpose is the purpose of the organisation, for example, to make
furniture. This is something that you want to achieve within the framework of our core
values. It gives the achievement orientation to the business and therefore the focus. When we
get an opportunity to expand or sell off and if we are in a decision dilemma, this acts as
another light house.

3. THE BHAG: The BHAG is about having a goal which qualifies the purpose. For example,
to be the best furniture maker in the town in five years or to be the most well known furniture
supplier in India by 2025, etc. We say that BHAG should be big, yet specific and that your
chance of attaining it is only 70%. If the probability of attaining it is more than 70%, perhaps
your BHAG is not big enough and not audacious enough and you have set your goals too
low.

4. VIVID DESCRIPTION :-The vivid description should make the entire vision statement
very inspiring to all stakeholders. It should be simple and easily understandable. For
example, ‘Quit India’ is a very simple statement, but it is very vivid and easily
understandable by all. Let us be very clear that the vision statement is meant for the
stakeholders and therefore, the importance of the vivid and simple statement. We say that
your grandmother should be able to understand it or a twelve-year-old child should be able to
understand it and you should test it on them. This is also called ‘The Grandma’s Test’ or the
’12-Year-Old Test’.
B). Differentiate between ‘process’ and ‘tasks’
Ans. Processes
Process is a set of logical activities that lead to some final or interim output. For example, taking
pieces of wood, making it smooth, cutting it, making grooves, connecting them, finishing them, and
polishing them are processes to create a table. These have to be done in some logical sequence. This
is what a process is. Let us now look at Raju’s business itself. He has to manage things and for this,
he will have to plan the number of pieces to be made, how much wood to buy, which furniture to
make, how to organise these, where to get manpower, etc. These too have to be done in some
logical sequence. For example, he has to plan and decide the number of tables before deciding on
the quantity of wood. Thus at the business level, some processes come into play. These are
planning, organising, staffing, leading, and controlling. We call them management processes.
Tasks
This is perhaps the most basic unit in an organisation. In the example given above, teaching can be a
task, cutting wood can be a task, and making grooves in the wood can be a task.
Thus, we have learnt that ever organisation has a vision and mission. To execute the organizational
vision we create strategies. Structures, systems and processes help the organisation execute the
strategies.
Q2. Planning is called as the cornerstone of management. Define planning & describe the
importance of planning. Explain the types of planning?.
Ans. Planning can be defined as a basic management function which enables one to select the
purpose of the business, and how the resources should be mustered to achieve that purpose to
include using the available resources optimally to do that. Planning implies goal setting for the
organisation keeping in mind the constraints, opportunities, and threats as much as what the person
or business which is planning wants to do.
Importance Of Planning:-

Planning is important for the following reasons:

1. It helps the management to clarify, focus, and research their businesses or project's
development and prospects.

2. It provides a considered and logical framework within which a business can develop and
pursue business.

3. It offers a benchmark against which the actual performance can be measured and reviewed.

4. It plays a vital role in helping to avoid mistakes or recognise hidden opportunities.

5. In the business context, it guides the development of products, management, finances, and
most importantly, markets and competition.

6. It helps in forecasting the future and makes the future visible to some extent.

7. It bridges between where we are and where we want to go.

Types of Planning

1. Based on importance (strategic and operational plan):- A plan that is important and
future oriented and forms the hub of fulfilling the vision is, of course, very important and
such plans are called strategic plans. As against this, short-term plans made for the day-to-
day functioning such as production, purchase operation, etc are called operational plans.
These plans cover the production, distribution, etc that sustain the markets.

2. Based on formal process (formal and informal) :- When planning is done as per the steps
and documented in a structured way, it is called formal plan and when this is missing it is
called informal plan.

3. Based on approach (proactive and reactive) :- The plans that we make anticipating an
incident is called proactive plans and something that we make as a consequence of an event
or action of the competition is called reactive plans. Reactive plans bring us back to the
balance after we have lost it while the proactive plans give us initiative. In other words, we
can say that reactive plans are about survival while proactive is about growth.

4. Based on level (corporate, business and functional plans) :- They cover long-term
objectives of various businesses and the ways to do these. They are integrated and future
oriented. Sambhavi may consider that they could enter into long-life-packaged bakery
products, production of bakery raw materials, a chain food retail, etc.

Q3. What is meant by ‘span of control’? Differentiate between narrow span of control and
wide span of control. What are the factors that influence the span of control?

Ans. The term span of control indicates the number of employees or managers who work under one
head. Span of control may be narrow or broad as seen When a very few people report to a head and
a chain is made that way upward, then it is called narrow span. Thus in a narrow span, a department
may have three or four sections, under each section head, there could be another two or three sub
section and under each sub section there could be nine or ten employees. In a wide span there may
be 20, 30, or more subordinates under one head.
Advantages and Disadvantages of Narrow Span and Wide Span

NARROW SPAN WIDE SPAN

ADVANTAGE DISADVANTAGE ADVANTAGE DISADVANTAGE
Close supervision Superior tend to get Forced to delegate Overloaded superior
too much involved in may become decision
the work of bottlenecks.
subordinates.
Close control Many levels of Clear polices must be Danger of superior
Management made loss of control
Faster communication High cost Excessive Subordinate must be Requires High quality
distance between top carefully selected managers.
and bottom level

Factors that influence the span of control

The time that a manager gets to spend with the subordinate is the fundamental factor. Based on this,
several sub factors emerge and are discussed below.

a. Training – Wide span demands high level of training while in narrow span, one can
manage with less.

b. Task definition and delegation – Wide span demands clear task definition and
delegation while this can be much less in a narrow span.

c. Well defined plans and repetitive process – If the business has these, a wide span is
viable, if not a narrow span is preferred.

d. Verifiable objectives – Wide span demands verifiable objectives and this is much less in
narrow span.

e. Speed of change – When the speed of change is high, a wide span may not be practical
from a communication perspective but may not be practical if such changes need close
control.

f. Organisation structure, written and oral communication – When this is of a higher

order, wide span can work well.

g. Effective interaction and meeting – Wide span demands both more than narrow span.

h. Specialists – When there are a greater number of specialists at the upper level, a wide span
is preferable. If the number of specialists is more at the lower level, then a narrow span can
work better

Q4. Define organisational behavior? What are the various approaches to organisational
behavior?

Ans. Organisational behaviour can be defined as a systematic study that investigates the impact of
individuals, groups and organisational factors on productivity to include effectiveness and
efficiency, absentee, turnover, organisational citizenship behaviour and job satisfaction.
Modern approach to organisational behaviour
There are four main approaches to organisational behaviour. They are:

a. Human resources approach

b. Contingency approach
c. Productivity approach
d. Systems approach
a) Human resources approach :- The human resources approach is concerned with the
growth and development of people towards higher levels of competency, creativity and
fulfillment. People are the central resource in any organisation. Hence it tries to create a work
climate for improved abilities. This approach is also known as 'supportive approach' because
the manager's primary role changes from control of employees to providing an active support
for their growth and performance.

b) Contingency approach :- It implies that different situations require different behavioural

practices for effectiveness. Hence each situation must be analysed carefully to determine the
significant variables that exist in order to establish the more effective practices. This
approach ensures or at least encourages analysis of each situation prior to action. Thus it
helps to use all the current knowledge about people in the organisation in the most
appropriate manner.

c) Productivity approach :- In this approach, the output per unit input is considered. Besides,
economic inputs and outputs, we need to have human and social inputs and outputs in
workplace, is the premise of this approach.

d) Systems approach :- We have already seen the systems approach. It means that the
organisation 'people' employ 'technology' in performing the 'task' that they are responsible
for, while the 'structure' of the organisation serves as a basis for coordinating all their
different activities. The systems view emphasises the interdependence of each of these
elements within the organisation, if the organisation as a whole is to function effectively.

Q5. Perception is the way we see and interpret things. Explain the importance of such
‘perception’. What are the factors affecting perception?

Ans. Importance of Perception

Perception is perhaps the most important aspect of OB that we use in our daily life and in
management. The importance of perception is:

1. While creating vision for an organisation, our perception of the future and the way things
should be is a deciding factor.
2. While making strategy, out perception of the opportunities and threats make us see the same
situation differently.

3. Perception gives the impetus to seek more information to make more rational decisions e.g.,
the perception of Rakhi on the situation of the bakery in trouble, made her travel and talk to
the employees to gain more information. If she had perceived what the manager did was right
or that it is too small a thing to intervene, she would not have made the effort to find out
more information.
 4. Perception affects the planning because the goals set depend on our perception of the
world and the employees and their ability to achieve them.

5. The way we organise, i.e., flat versus hierarchical, depends on our perception of the
competence of the employees and business needs. You will find the same industry having
different organisational set up because of this.

6. The way we select staff is often fully based on perception and once we select, the way we
manage their performance, reward and promote them and treat them are also heavily
dependent on perception.

7. Business leaders make an effort to change the perception of the employees to bring about
change.
Factors affecting perception
Factors that affect perception are:

1. Perceiver related factors

2. Target related factors
3. Situation related factors

Target related factors. These are novelty, motion, sound, size, background and proximity. We see
how these are used in business especially advertisements. Rakhi used to bake a cake for birthday of
every one of her employees. This is novelty because employers don’t do it. Had the manager talked
to this assistant manager softly but firmly in his room the sound, background and proximity would
have been more appropriate for the advice rather than on the shop floor.

Situation related. Time, work setting, work tradition, nature of word and social setting are important
factors in a work situation that affect perception. The manager admonished his assistant manager
with long experience during the peak work time, it was done against a work setting that focus on
total customer satisfaction if not literal pampering of the customers, which was Sambhavi’s
tradition, the nature of work too was service and the attraction was kid care and merchandise, which
makes the service very different from a standard eatery or even a good restaurant

Perceiver related factors

People’s attitude, motives, interests, experiences and expectations affect perception.

Attitude and motives. Attitudes are evaluative statements (whether spoken in words or otherwise)
about objects, people and events. The manager in our case was making statements about the need to
adhere to procedures while the assistant manager about the need to please customers. Motives are
strong drives that we have for taking an action. The motive of the manager could be to assert his
position and could be drawn from his ego needs

Interests. Interest is a natural inclination to talk, participate or perform a task. So, when you are
interested in pleasing customers you see things differently and when you are interested in adhering
to discipline (both are, of course, required), you perceive things differently.

Experiences. Experiences hard wire our brains. It is possible that the assistant manager would have
had good experience from the customer reaction when he serves in a way that is different from the
manual and it is equally possible that the manager would have been from an organisation where
systems and discipline are strict.

Expectations. The assistant manager expects the customers to be pleased when he serves them in a
particular way and therefore he expects the manager to accept this mode, while the manager expects
the assistant manager to follow the manual and therefore perceives the same situation differently

Q6. Give the definition and importance of ‘motivation’. Describe Maslow’s hierarchy of need
theory.
Ans. Motivation is “the process that account for an individual’s intensity, direction, and persistence
of effort toward attaining a goal.” (Robbins, 2003) Intensity is concerned with how hard a person
tries. This is the element most of us focus on when we talk about motivation. Direction is the
orientation that benefits the organisation.

 Motivation is important to an individual because:

 Motivation helps to achieve personal goals.
 Motivation gives job satisfaction.
 Motivation helps in self-development of individual.
 An individual would always gain by working with a dynamic team.

Similarly, motivation is important to a business because:

o The more motivated the employees are, the more empowered the team is.
o The more is the team work and individual employee contribution, more profitable and
successful is the business.
o During period of change, there is more adaptability and creativity.
o Motivation leads to an optimistic and challenging attitude at work place.

 In general, motivation has the following benefits:

 Puts human resources into action and enables organisations to coordinate its physical and
financial resources to achieve its goals.

 Improves efficiency by increasing productivity and decreasing cost.

 It leads to innovation because of the desire to do a job better and accomplish a challenge.

 It leads to best possible utilisation of resources.

 It creates a co-operative work environment where high degree of coordination is achieved

and reduces the cost of controls.

 It makes them goal oriented and therefore makes them capable of delivering even in the
absence of close supervision.