How Organizational Behaviour

Organizational Behaviour
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Published Date:25-10-2017
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CHAPTER 1 Study of Organizational Behaviour INTRODUCTION The study of Organizational Behaviour (OB) is very interesting and challenging too. It is related to individuals, group of people working together in teams. The study becomes more challenging when situational factors interact. The study of organizational behaviour re- lates to the expected behaviour of an individual in the organization. No two individuals are likely to behave in the same manner in a particular work situation. It is the predict- ability of a manager about the expected behaviour of an individual. There are no absolutes in human behaviour. It is the human factor that is contributory to the productivity hence the study of human behaviour is important. Great importance therefore must be attached to the study. Researchers, management practitioners, psychologists, and social scientists must understand the very credentials of an individual, his background, social framework, educational update, impact of social groups and other situational factors on behaviour. Managers under whom an individual is working should be able to explain, predict, evalu- ate and modify human behaviour that will largely depend upon knowledge, skill and experience of the manager in handling large group of people in diverse situations. Pre- emptive actions need to be taken for human behaviour forecasting. The value system, emotional intelligence, organizational culture, job design and the work environment are important causal agents in determining human behaviour. Cause and effect relationship plays an important role in how an individual is likely to behave in a particular situation and its impact on productivity. An appropriate organizational culture can modify indi- vidual behaviour. Recent trends exist in laying greater stress on organizational develop- ment and imbibing a favourable organizational culture in each individual. It also involves fostering a team spirit and motivation so that the organizational objectives are achieved. There is a need for commitment on the part of the management that should be continuous and incremental in nature. The scope of the organizational behaviour is as under: (a) Impact of personality on performance (b) Employee motivation (c) Leadership (d) How to create effective teams and groups4 ORGANIZATIONAL BEHAVIOUR (e) Study of different organizational structures (f) Individual behaviour, attitude and learning (g) Perception (h) Design and development of effective organization (i) Job design (j) Impact of culture on organizational behaviour (k) Management of change (l) Management of conflict and stress (m) Organizational development (n) Organizational culture (o) Transactional analysis (p) Group behaviour, power and politics (q) Job design (r) Study of emotions The field of the organizational behaviour does not depend upon deductions based on gut feelings but attempts to gather information regarding an issue in a scientific manner under controlled conditions. It uses information and interprets the findings so that the behaviour of an individual and group can be canalized as desired. Large number of psychologists, social scientists and academicians have carried out research on various issues related to organization behaviour. Employee performance and job satisfaction are determinants of accomplishment of individual and organizational goals. Organizations have been set up to fulfill needs of the people. In today’s competitive world, the organizations have to be growth-oriented. This is possible when productivity is ensured with respect to quantity of product to be produced with zero error quality. Employee absenteeism and turnover has a negative impact on productivity. Employee who absents frequently cannot contribute towards productivity and growth of the organization. In the same manner, employee turnover causes increased cost of production. Job satisfaction is a major factor to analyse performance of an individual towards his work. Satisfied workers are productive workers who contribute towards building an appropriate work culture in an organization. Organizations are composed of number of individuals working independently or collectively in teams, and number of such teams makes a department and number of such departments make an organization. It is a formal structure and all departments have to function in a coordinated manner to achieve the organizational objective. It is therefore important for all employees to possess a positive attitude towards work. They need to function in congenial atmosphere and accomplish assigned goals. It is also important for managers to develop an appropriate work culture. Use of authority, delegation of certain powers to subordinates, division of labour, efficient communication, benchmarking, re-engineering, job re-design and empowerment are some of the important factors so that an organization can function as well-oiled machine. This is not only applicable to manufacturing organizations but also to service and social organizations. DEFINITIONS “Organizational behaviour is a field of study that investigates the impact that individuals, groups and organizational structure have on behaviour within the organization, for the purpose of applying such knowledge towards improving anSTUDY OF ORGANISATIONAL BEHAVIOUR 5 organizational effectiveness”. The above definition has three main elements; first organizational behaviour is an investigative study of individuals and groups, second, the impact of organizational structure on human behaviour and the third, the application of knowledge to achieve organizational effectiveness. These factors are interactive in nature and the impact of such behaviour is applied to various systems so that the goals are achieved. The nature of study of organizational behaviour is investigative to establish cause and effect relationship. OB involves integration of studies undertaken relating to behavioural sciences like psychology, sociology, anthropology, economics, social psychology and political science. Therefore, organizational behaviour is a comprehensive field of study in which individual, group and organizational structure is studied in relation to organizational growth and organizational culture, in an environment where impact of modern technology is great. The aim of the study is to ensure that the human behaviour contributes towards growth of the organization and greater efficiency is achieved. Organizational behaviour can be defined as – “the study and application of knowledge about human behaviour related to other elements of an organization such as structure, technology and social systems (LM Prasad). Stephen P Robins defines “Organizational behaviour as a systematic study of the actions and attitudes that people exhibit within organizations.” It has been observed that we generally form our opinion based on the symptoms of an issue and do not really go to the root cause of the happening. Science of organizational behaviour is applied in nature. Disciplines like psychology, anthropology and political science have contributed in terms of various studies and theories to the field of organizational behaviour. A leader should be able to communicate with his subordinate and keep them in picture as to the happenings in the organization. People promote organizational culture for mutual benefit. Politics is often used to create conflict with the aim of enlarging self-power base to the detrimental of organizational growth. Politics, in Indian context has made inroads based on religion, caste system in the decision making process which has led to formation of informal groups in the organization that often exploit the organization for fulfillment of personal goals at the cost of organizational goals. Conflict and manipulating power bases need to be handled in an appropriate manner to modify human behaviour and stimulate various individuals towards achieving higher productivity. Power dynamics plays a significant role in organization situations in different environment. Contributing Fields to Organizational Behaviour Psychology: Psychology is an applied science, which attempts to explain human behaviour in a particular situation and predicts actions of individuals. Psychologists have been able to modify individual behaviour largely with the help of various studies. It has contributed towards various theories on learning, motivation, personality, training and development, theories on individual decision making, leadership, job satisfaction, performance appraisal, attitude, ego state, job design, work stress and conflict management. Studies of these theories can improve personal skills, bring change in attitude and develop positive approach to organizational systems. Various psychological tests are conducted in the organizations for selection of employees, measuring personality attributes and aptitude. Various other dimensions of human personality are also measured. These instruments are scientific in nature and have been finalized after a great deal of research. Field of psychology continues6 ORGANIZATIONAL BEHAVIOUR to explore new areas applicable to the field of organizational behaviour. Contribution of psychology has enriched the organizational behaviour field. Sociology: Science of Sociology studies the impact of culture on group behaviour and has contributed to a large extent to the field of group-dynamics, roles that individual plays in the organization, communication, norms, status, power, conflict management, formal organization theory, group processes and group decision-making. Political science: Political science has contributed to the field of Organizational behaviour. Stability of government at national level is one major factor for promotion of international business, financial investments, expansion and employment. Various government rules and regulations play a very decisive role in growth of the organization. All organizations have to abide by the rules of the government of the day. Social psychology: Working organizations are formal assembly of people who are assigned specific jobs and play a vital role in formulating human behaviour. It is a subject where concept of psychology and sociology are blend to achieve better human behaviour in organization. The field has contributed to manage change, group decision-making, communication and ability of people in the organization, to maintain social norms. Anthropology: It is a field of study relating to human activities in various cultural and environmental frameworks. It understands difference in behaviour based on value system of different cultures of various countries. The study is more relevant to organizational behaviour today due to globalization, mergers and acquisitions of various industries. The st advent of the 21 century has created a situation wherein cross-cultural people will have to work in one particular industry. Managers will have to deal with individuals and groups belonging to different ethnic cultures and exercise adequate control or even channelise behaviour in the desired direction by appropriately manipulating various cultural factors. Organization behaviour has used the studies on comparative attitudes and cross-cultural transactions. Environment studies conducted by the field of anthropology aims to understand organizational human behaviour so that acquisitions and mergers are smooth. Organizations are bound by its culture that is formed by human beings. BEHAVIOUR MODEL FOR ORGANIZATIONAL EFFICIENCY Organizational behaviour is a study and application of managerial skills and knowledge to people in the organization to investigate individual and group behaviour. Various concepts and models in the field of organizational behaviour attempt to identify, not only the human behaviour but also modify their attitude and promote skills so that they can act more effectively. This is done scientifically; therefore, organizational behaviour field is a scien- tific discipline. The knowledge and models are practically applied to workers, groups and organizational structure that provide tools for improved behaviour and dynamics of rela- tionship. The field of organizational behaviour also provides various systems and models for international relationship that are applied to organizations. Leaders must look for indicators (effects) of individual behaviour and of groups in any organization. Indicators have a root cause beneath. As a leader, it is that symptom, which must be evaluated, and cause of human behaviour established so that if the behaviour is good, the manager can establish the norms of behaviour. If the behaviour is not conducive to achieve the organisastional objective then suitable alternative model can be applied to channelize individual behaviour towards an appropriate organizational value system andSTUDY OF ORGANISATIONAL BEHAVIOUR 7 thus individual behaviour modified. An organization has three basic elements namely, people, structure, and technology. An organization must have suitable organizational structure, with appropriate number of tier and reporting system properly explained. Principle of unity of command, delegation of authority and responsibility, formulation of objectives and its allotment to various groups is very important so that workers achieve a required level of job satisfaction. They must be trained to handle sophisticated machines and equipment. It is the people, their value system, and faith in the leadership that make an organization. Leader must be able to describe, understand, predict and control individual behaviour in the organization. This is explained in the succeeding paragraphs. (a) Describe: Study of organizational behaviour is based on scientific methods, which have been applied on human beings. It is a science, that analyses as to how people behave in different situations in the organization. A manager should be able de- scribe the behaviour of each of the individuals under his command, identify atti- tude, and be able to pinpoint his behaviour so that the situation in the organization is under control. (b) Understand: Leaders must understand human behaviour as to why people be- have in particular manner and try to identify reasons so that corrective actions can be taken. (c) Predict: By frequent closer interaction, a leader is in a position to identify the nature of workers. Some are more productive while the others are tardy and disruptive. In such situation, a leader should be able to handle each individual differently so that his or her actions can be channalized to higher productivity. (d) Control: Managers in the organizations should train their subordinates continu- ously; aim being development of skills, promotion of productivity and improvement of individual behaviour. It is a continuous process on the part of manager. He must lay down control measures so that the energy of workers is diverted towards orga- nizational objectives. Communication should be used to ensure that the behaviour of individual is controlled. Environment has a great impact on human behaviour. Appropriate internal environment would help organizations to built favourable work environment that will help individuals and groups within organizations to work effectively towards higher productivity. Organizational Components that Need to be Managed People People are the main component of any organization that has to be managed. Every individual has a personal goal to be achieved. Organizations must identify the need spectrum of individuals and take suitable steps for its fulfillment to enable them to perform effectively so that they complete their allotted task in time. Relationship between the workers, with subordinates and superiors should be established based on full understanding and complete faith based on mutual trust so that it is easy to communicate and understand each other’s views. Work teams and Groups play a vital role in the organization. Individual may have to keep his personal interest aside if it conflicts with team or group goals. It is the team goals, accomplishment of which contribute towards achieving organizational goals. Apart from managing internal workforce, it is also important to manage customers who are the8 ORGANIZATIONAL BEHAVIOUR end persons using organization’s products or services. Utmost interest of stakeholders, government, employees, social groups and non-governmental organizations (NGOs) must be kept in mind as they play a dominant role in the society. Apart from the above, adequate consideration should also be given to competitors, regulatory agencies, labour force, suppliers and resource persons. Structure There are two types of organizations, formal and informal. Informal organizations do not have a specified structure. Formal organizations are build based upon the objective set for it. Organizational structure in such organization is hierarchical in nature, with people at each level having their own objectives, which contributes towards fulfillment of over allorganizational objectives. In such organisastion people at lower levels report to higher level managers. The tier system has the principle of unity of command inbuilt in it. The organization structure may depend upon the size, number of products/services produced, skill and experience of the employees, managerial staff and geographical location of the organization. An organization may have several levels and pyramid like organizational structure or flat structure. The efficiency of the organization will depend upon the free flow of the information, efficient communication system prevailing in the organization, well-defined authority and responsibility supported by detailed policies, rules and regula- tions. The organization must have well laid out systems, which are understood by workers, supervisors and managers. The leader must keep open mind while dealing with subordi- nates and exercise full control over various systems, levels and ensure planned productiv- ity and achieve high level of job satisfaction. Technology Managing technology is an important job of any management. It is an important element of any unit. Selection of technology, procurement, installation, operation and maintenance is important and no compromise should be made in procuring latest or advanced tech- nology. Various systems and sub- systems should support technology that exists in an organization. Based on the technology, an organization should formulate job structure and resultant procurement of human resource so that they are complimentary to each other. Adequate attention is also be paid to service industry. For example an appropriate drill, procedures are installed in hospital industry to ensure that the patients’ record is main- tained properly. On line operations of all systems relating to admission record, past treat- ment, drugs, availability of beds, schedule of operations maintained so that the level of patients satisfaction is raised. In minimum number of days, maximum numbers of pa- tients should be treated. Various processes required to regulate these functions form the important part of service industry. Jobs Job is an assignment assigned to an individual. It encompasses various tasks within it. For example, Personnel manager wants to fill up twelve vacancies in production department within three months. Job will have various tasks inbuilt in it like designing of job specification, selection of media, advertising vacancies, scheduling of selection and recruiting process. Manager, therefore have to manage various tasks to accomplish a particular job. This may form a part of managerial functions. Adequate delegation, supervision, applicationSTUDY OF ORGANISATIONAL BEHAVIOUR 9 of various control techniques makes the job simpler for the manager. Introduction of computers have made managerial functions simpler, as required information is available for decision making. Processes Management of processes and its inter-dependence is very crucial to high productivity and higher job satisfaction. What is important for a manager is to ensure high morale of the work force. To ensure this, he must identify various managerial dictums. Select appropri- ate subordinates to carry out a job based on aptitude, personality traits, mental build up and attitude. He should also involve himself and lead subordinates by personal example. In defence services, it is the quality of leadership, that motivates troops to achieve near impossible task where every thing appears to be going wrong. Various role models assist leaders in identifying as to which process, method or approach would be suitable to mould subordinates in suitable frame that may be required by any organization. Nothing moti- vates workers better if you give them their entitlements in full and train them to take up higher jobs. By doing so, manager must develop and build an organizational culture that will bind employees to a common cultural bond. During day-to-day functions, managers must be transparent and maintain a high degree of value system and display ethical behaviour. There are no short cuts to this and will pay rich dividends in times to come. External Environment What we have so far discussed is various components of an organization that should be managed properly. External environment also plays an important role in managing the points discussed above. When we talk about managing people in the organization, what we have to study and manage is the influence of culture and its impact on the individual. A manager should examine as to how he is going to cope up with the changes. Study of external environment is very wide and encompasses economic, cultural, social, government rules and regulations, legal aspects, political climate, demographics and its impact. If one scans the external environment that is prevailing in Indian context, one will find that individuals are racing to catch up the upper class as it relates to standards of living, material possession, higher education, attempt to copy western culture, food habits, dressing pattern and the like. Beauty parlors, pubs and cyber cafes around each corner are an ample evidence of the impact of external environment. This trend has an impact on what products or services are on priority in the society and indicates the behaviour of an individual. If the above factors are evaluated appropriately, a manager will be able to examine and predict human behaviour in the organization. It is therefore important to evaluate market situation, competitors, and availability of raw material, technology, availability of skilled, semi skilled and non-skilled personnel. In addition, evaluate prevailing culture and how individuals are likely to respond to the call of the organization. Some factors like government rules, and political stability keep changing, the organizations must cater for such contingencies. Manager must therefore keep in mind the internal and external factors and make the best amalgam and work to achieve organizational effectiveness. SUMMARY Study of organizational behaviour is very interesting. It is the art on the part of manager10 ORGANIZATIONAL BEHAVIOUR to understand, describe, forecast and modify individual behaviour. Lot of studies have been undertaken in the field of organizational behaviour and vast literature is available, which need to be studied by practictioners in the field of managing human resources. Various models and research instruments are available to investigate human behaviour. Various fields like psychology, social psychology, anthropology, sociology, politics, economics, and medical sciences have contributed to the field of organization behaviour. Various models in the above fields have enriched the study of organization behaviour. It is the field of study that investigates the impact on individuals, groups and organizational structure have on individual behaviour so that the knowledge so achieved can be suitably modified and applied for organizational effectiveness. The study of organizational behaviour relates to the study of attitude, perception, learning, values at individual level. The study is undertaken pertaining to managing stress, conflicts, intergroup behaviour, decision making at group level. Management of change, development of organizational culture, designing and redesigning of jobs, and various organizational development strategies are required to be undertaken by leaders for organizational effectiveness. It is the responsibility of the managers to evolve appropriate strategies to study organizational components. The first component is people. The study of organizational behaviour involves identifying need spectrum of the people, managing interpersonal relationship, understanding of individual objectives and co-relating organizational strategies accordingly. The second component is understanding of organizational structure and its modification based on the need of the hour. Manager should decide upon the nature of structure and ensure unity of command, number of levels that may be required for effective command and control. Communication, delegation of authority, well defined policies, rules, regulation, systems, procedures and processes. Introduction of latest technology is an essential part of organizational development that should be taken care of by the manager responsible for running the organization. Jobs should be allotted to the individual based on the aptitude and the processes must be compatible with the technology being used. One of the most important components is environment. While internal environment relates to various personnel policies and corresponding managerial actions, the external environment relates to cultural, social, legal, and governmental rules and regulations that should be taken care of. Technological changes has made it imperative on the part of managers that they should take care of employees and meet their social expectations so that organizational goals can be achieved. TEXT QUESTIONS Q. 1. Define organizational bevaiour. What are various factors that are considered to regulate individual behaviour. Q. 2. What are various fields that have contributed to the field of organizational behaviour. Explain their contributions. Q. 3. Explain various components that should be taken care of while studying organiza- tional behaviour. Q. 4. Explain the field of organizational behaviour. Why the study is challenging.STUDY OF ORGANISATIONAL BEHAVIOUR 11 Case-1 NATIONAL CADET CORPS (NCC) – A BOON FOR SOCIAL DEVELOPMENT V.G. Kondalkar National Cadet Corps (NCC) is a national organization having junior wing and senior wing both for girls and boys. Junior wing NCC is meant for secondary school level and senior wing is applicable for college students. The objective of NCC organization is to inculcate discipline for the youth of our nation. An Army Officer of the rank of Lt General called Director General (DG) heads NCC organization at national level. The organization has a vast network at each state level headed by an officer of the rank of Brigadier known as Deputy Director General (DDG) of a particular state. In every state there are number of Group Headquarters located at important cities depending upon school and college den- sity and compositions. Under Group Headquarters there are number of NCC Battalions (Boys/ Girls). Number of battalions in each Group Headquarters varies depending upon the size of the area. In the same fashion, number of groups under a DDG varies. NCC is applicable to all school/ college going children. It is voluntary organization in nature. DDGs, group commanders and battalion commanders organize various events round the year. These are as under: (a) Participation in professional training that includes the following: – Weapon training, including firing or rifles, sten guns, light machine guns. – Drill. – First aid training in various contingencies. – Basic field craft and guard duties. – Basic battle craft at a level of a section (section comprises of ten men) (b) Organization of training camps where teamwork, comradeship, cooperation and events mention in (a) above are practiced. The training camps are generally of the duration of two weeks. Such camps are held twice a year. (c) After completion of two and four years of training, B certification and C certificates respectively are awarded to the cadets. The certificates have preference for admission to various professional courses like medicine. It also has a weightage for government jobs. A person having C certificate need not appear in the written examination conducted by UPSC for commissioned officers of the defence services which is a major concession. Such students have to face Service Selection Boards direct, for selection in the defence services as commissioned officers. (d) Individual having C certification (which is achieved after four years of NCC train- ing) gets six months seniority in defence services. (e) NCC is considered as one of the best organizations of our country. The organization has produced better citizens. During the course of the attachment, the cadets are given full NCC kit. Refreshment is provided during parade days (twice a week). The cadets are provided meals, transportation and medical facility.12 ORGANIZATIONAL BEHAVIOUR The training in the organization is a costly affair to the exchequer of the state government. NCC officers have to interact with civil administration at state level, district level, and with principals/ directors of the colleges. They have to deal with local population, medical authorities, RTO and all agencies related with civil administration. This involves advance planning, good communication and inter-personal relationship. Social, cultural and ethnic activities are promoted in the NCC. Annual training camps are held at state or national level. Cadets, develop friendship with various individuals and learn to live in a community environment during training camps. NCC covers land, air and naval branches and all cadets are put through training in the skill development of respective wings. Discussion Questions Q. 1. Why NCC is considered as one of the best organizations. Q. 2. How does the organization relate to field of organizational behaviour. What are various agencies that the officials have to interact. Q. 3. What are the benefits of NCC. Q. 4. How does the management interact with external environmental forces? Practical Assignment Visit a NCC unit in your city and find out organizational structure, daily routine of cadets and training schedule. Case-2 Overcoming Absenteeism at Unique Schweppes Ltd Unique Schweppes Ltd was multinational Public limited Company with its head office at London. The company’s 51 % shares were held by Unique and 49% by Government finan- cial Institutions and individual shareholders. Unique owns three factories and three partly manufacturing units i.e. they had 6 primary manufacturing units located at Jammu, Nagpur, Agra, Pune, Gorakhapur and Hyderabad. The total manpower in these six units was 1900, and was held by Mathew Thomas as managing director. Five directors looking after vari- ous financial areas like technical, operations, commercial, HR and marketing, supported him. Agra unit was situated near Mathura with a manpower capacity of 450 employees, including 41 executives, 12 managers and remaining operators. A representative union was also registered in the name of Association of Chemical Workers in the company. This unit was working in 3 shifts and for all the seven days. The average age of the employees was around 30 years. Agra unit was the only automated plant among the plants of Unique India. It had a unique feature of cross-functional activities at the managerial level with the result a strong networking was observed. Emphasis on financial relations among the employees was given to promote simplified working and better understanding among them. Unique was known for its welfare facilities like – free canteen, free transportation, free uniform, medical re-imbursement up to 5% of the gross salary and all other benefits according to the statutory norms. They also provide with housing loan facilities to employees through HDFC and State Bank of India. Unique re-imbrued the interest amount on houseSTUDY OF ORGANISATIONAL BEHAVIOUR 13 loan exceeding 4%. The loan entitlement is dependent upon the income of workers. Inspite of all the facilities provided to the workers absenteeism was very high thus creating problems in the production. In July 1995, HR executive, Alok Gupta received a complaint from line supervisor, Prakash Sharma that production was suffering due to absenteeism in his department. Alok Gupta was perplexed. The reason being that with 52 weekly off, 9 casual leaves and 22 earned leaves provided to the workers in line with Factory Act 1948 under Section 52, the absenteeism rate was still 18 %. In January 1996, a meeting was called by Alok Gupta and in consultation with Prakash Sharma, it was decided that warning should be given to cronic cases and the workers who had started remaining absent should be counseled. Inspite of doing this no change was observed until April 1996. Alok Gupta reported to Priya Kumar, Human resources manager about increasing complaints related to absenteeism. Priya Kumar, Alok Gupta and Prakash Sharma in a brain storming session concluded that punishment was not the solution. An Incentive scheme was felt to be the solution to the existing problem. Thus, the management offered the employees the scheme of doubling the amount of annual interest free loans from Rs 5000 to Rs 10 000 to those who were regular at their work. A plan chalked out for this: (a) Employee who had worked for more than 280 days out of 365 days would get Rs 10,000 interest free loan. Employees who were present for more than 230 work- ing days, amount of free loan would be Rs 5000. For less than 230 there would be no loan facilities. (b) In a period of 4 months, if an employee availed no leave then he would be entitled for additional payment of Rs 500. If a half-day leave, it would be Rs 350 and for one day leave it would be Rs 250. Similarly, some workers who had not shown any improvement in their attendance, it was decided that charge- sheet would be is- sued. However, when the charge sheet was issued to such cases the union members resisted. A meeting called by Priya Kumar in which he briefed about the problem of absenteeism and justified the action taken by the management. Ultimately union members were convinced but insisted on counselling and introducing new incentive schemes instead of disciplinary actions alone. During counselling sessions management found some of the reasons which led to absenteeism were high salary, festival celebration, dual employment, very good family background, age factor and defective recruitment policies as fresher were taken from ITI and where less serious about their work and less motivated towards accomplishment of the organizational goals. It was observed in the beginning of 1999, that the rate of absenteeism had decreased from 18% to 16 %. But it was not satisfactory and hence management decided to put in more efforts in the form of new incentives schemes which were best on social recognition like; tea party, attendance awards, recognition by senior executives at work place and celebrating family day on 17 September i.e., on Vishwakarma Jayanti. By the end of 1999, they had introduced all monetary as well as social benefits schemes yet three employees among the nine employees who had been issued the charge sheet in September, 1998 had not shown any improvement and remained absent for more than 20014 ORGANIZATIONAL BEHAVIOUR days out of 280 working days. Therefore, the management finally decided to terminate them, and termination letters were issued to them. In the year 2000, a remarkable decline was found in the rate of absenteeism. It had reduced from 16% to 12%. QUESTIONS 1. In your opinion, which alternative steps would be more effective for reducing ab- senteeism? 2. What is the role of non-financial incentives over the financial incentives? 3. How do you evaluate the impact of termination on absenteeism? The case has been adapted from the “Case Method in Management education” edited by Dr Upinder Dhar and Dr. Santosh Dhar. Publish by Excel Books, New Delhi, 2002.CHAPTER 2 Evolution of Management Thoughts INTRODUCTION The origin of management in the organized way can be traced as back as the origin of human beings. They earned their livelihood by hunting that was carried out in groups. Later possession of land mass became important hence there arose conflict between the groups. Local conflicts were resolved by power using primitive weapon system. Management th century when industrial revolution practices were undertaken in a scientific way early 18 took place. World War I saw a marked development in evolution of management concepts. In India management practices were in existence in Ramayana and Mahabharata periods. People were administered by the state and their needs fulfilled. The king was considered to be the master. Proper executive, judicial, and state affairs were managed in a very disciplined way. Every individual was morally responsible to the master (king/ruler) for the task assigned to him. Chanakya was a pioneer in evolving principles of economics and warfare in particular and efficient administration of the state in general. Various systems evolved in those days can be seen even today. Water supply system to Aurangabad introduced by King Aurangazeb is even visible today. Management of education, eradication of social evils and various religious systems are evidence of existence of proper management. th Management as a field of study was considered early 20 century. Management principles like delegation of authority, empowerment, leadership, scalar chain, unity of command and motivation were clearly demonstrated in Roman Umpire and their ability to organize th can be seen from its expansion. Shivaji demonstrated above principles in 17 century. People have displayed tremendous amount of ability and skill in planning, organising, and directing people as to what is to be done, how it is to be done and anticipating future plans. They also evolved various models of controlling the planned work being executed properly. Various wars have been fought where use of human resources, heavy weapon system, its procurement and use and shifting it to various theatres of war based on threat perceptions are the examples of management. Great war of Mahabharata between Pandavas and Kauravas is an example of managing power, confllict situations, human resource training and development and an art of generalship had been practiced in the most scientific manner. Egyptian piramids, Great Wall of China are the tangible examples where hundreds16 ORGANIZATIONAL BEHAVIOUR of thousand of people were involved in construction activity over a protracted period of time. Every individual had a chain of command. He knew as to what is to be done, how it is to be done and the time frame within which it is to be completed. These examples indicate that organizations have been in exixtence for thousands of years and management was being practiced ever since. However, in the past several years, the management has undergone systematic investigation, acquired common body of knowledge, formulated various models to deal with various phenomenon like handling conflict or managing stress and thus became a formal discipline for study. Two landmarks are most important in the management study. One, publication of classical economic doctrines by Adam Smith in 1776 tittled “Wealth of Nations” in which Smith has argued that the economic advantages the organizations and societies would gain from the concepts are: 1) division of labour that promoted 2) skill development. 3) specialised task allotment. 4) time measurement in relation to the quantum of work performed. Smith concluded that, division of work would benefit in higher quality of work and higher productivity. Two. Indudtrisl revolution of eighteenth century, advent of machine power and subsequent development of infrastructural facilities of rail road transportation, communication network, formation of corporations worldwide promoted requirement of people having increased manegerial skills and formalised management practices, which gave birth to the formal theories of management th in early 1900s. The concept of management was not clear till about mid of 20 century. There was a contrast between the thinkers. However, Classical approach of management which propogated Scientific Management and General Administrative Theory was a fabulous development. This followed an intensive research work undertaken by Elton Mayo which is known as Howthrone studies. It was followed by more recent concepts of Operatons Research, process management, systems approach, total quality management and last but not the least the contingency approach. In this chapter let us study various theories as the management progressed. Approaches to Management th th As a consequence of industrial revolution in England during 18 and 19 centuries important inventions like lathe machine, power looms and spinning etc. were invented and used Evolution of management thoughts Modern management theory Classical theory Neo-classical theory (Three streams) Bureaucracy theory by Weber Human relations theory - Operations research (1900) Mayo and Roethisberger Computer technology and IT Scientific management - (1930) Theory-Taylor (1910) Empowerment Behavioural science theory Contingency Theory - Maslow and Mc Gregar Process management theory System Approach to Management (1940) (Administrative theory) TQM Fayol-(1910) Re-engineering Fig. 2.1. Classification of management thoughtsEVOLUTION OF MANAGEMENT THOUGHTS 17 extensively. Therefore to manage the affairs of large industrial houses, modern management came into existence. This development has led to emergence of various schools of thoughts. Koonz called it as ‘management theory jungle. The diagrammatic layout of management thoughts is given in Figure 2.1 above. CLASSICAL THEORIES OF MANAGEMENT BUREAUCRACY Max Weber (1864-1920) a German sociologist introduced the theory of Bureaucracy. His major contribution to the theory is the concept of authority, structure and its inter-se relationship. Weber in his model of bureaucracy stated that there are three types of authority in any organization. First, legal authority indicating that a person holds authority based on legal position or a rank within the hierarchy. For example, a production manager in the industry or a battalion commander in the military organization. Secondly, Traditional authority, employees obey a person because he comes from a traditionally recognized power holding family or a person belonging to a royal family. Lastly, charismatic authority, which indicates special power or an appeal that a leader possesses. 1. Elements of Bureaucracy Bureaucracy plays a vital role in business, government, education or any other large organization. Though the bureaucratic model was suggested about 80 years ago but it still holds good. For ease of understanding, the structure of bureaucratic model is given in Figure 2.2 below. Top Level Management Middle Level Management Middle Level Management Supervisory Management Supervisory Management Horizontal Specialization Fig 2.2 Structure of bureaucracy 2. Features of Bureaucracy Salient points of the Bureaucratic model are as under: Vertical Specialization18 ORGANIZATIONAL BEHAVIOUR (a) Hierarchy of authority exists in the organization, which involves superior- subordinate relationship and chain of command. (b) Division of work based on competence and functional foremanship. (c) System of policy, rules, and regulations is necessary to regulate subordinate behaviour and to ensure rationality, objectivity, discipline and control. (d) In bureaucratic model, rule of law exists that leads to impersonal behaviour of employees. Relations are based on position in the hierarchy. (e) Weber suggests standardization of methods, systems, processes, job contents and tools for smooth operation. (f) Selection and promotion of employees should be based on competence. (g) Bureaucracy recognizes legal power derived from the official position held by an individual. 3. Evaluation of Bureaucratic Theory The theory is based on rigid rules and regulations having no consideration for interpersonal relationship based on emotions and human qualities. Power has been considered as the dominant factor to administer the organization leading to self-perpetuation. There are glaring drawbacks in the bureaucratic model namely rigidity, impersonal and mechanistic relationship, higher cost of control and umpire building. Lack of co-ordination and interpersonal communication and lastly existence of blind faith in rules and regulations. The system may work in large government organizations or the organization where there is no change anticipated. The theory does not promote fulfillment of human needs and does not exploit full potential of employees. SCIENTIFIC MANAGEMENT - TAYLOR Fredrick Winslow Taylor (1856-1915), Frank Gilberth his wife Lillan Gilberth and Henry Gantt have done pioneering work in the field of management They evolved methods and techniques and transformed the field of management in which all works were to be done in the scientific way. Taylor’s work was so unique that he eventually came to be known as the father of scientific management. Taylor joined Midvale steel company as a worker and later he was promoted as supervisor. While working, he completed post graduation in industrial engineering and subsequently joined Bethlehem Steel Company. Salient points of scientific management propagated by Taylor are given as under: (i) Effective use of human beings in industrial organizations particularly at the shop floor. He introduced various systems to improve the efficiency of workers. (ii) Taylor stated that managing workforce is an art. He further defined managing as ‘knowing exactly what you want men to do and then see that they do it the best and cheapest way’ (iii) He standardized the work and introduced better methods of doing it. (iv) Time and motion study (v) Introduction of differential piece- rate system of payment offering additional reward for production beyond the standard laid down. (vi) Functional foremanship, creating supervisor having direct authority over the workersEVOLUTION OF MANAGEMENT THOUGHTS 19 Features of Scientific Management 1. Separation of Planning and doing. Earlier entire work was done by workers. There were no separate teams for planning and executing the work. Taylor divided the entire work into two parts namely planning and doing. It was the responsibility of supervisors to plan the work that an individual worker is required to do and ensure that the tools required by them are made available to them. 2. Functional foremanship. Separation of planning from doing resulted in introduction of supervisory staff system, which could undertake planning work separately. This has led to introduction of functional foremanship though it went against the principle of unity of command. The entire work was divided into two parts i.e. planning and doing. Supervisors headed these departments. Each of the departments was further divided into four functional parts. Planning department therefore consisted of route clerk, instrument card clerk, time and cost clerk and disciplinarian. Supervisor “doing” department had under him speed boss, inspector, maintenance foreman and gang boss. The concept of functional foremanship is shown in figure 2.3 below. Workshop manager Supervisor I/c doing Supervisor I/c planning Inspector Speed Maintenance Instrument Time and Route clerk Disciplinarian foreman card clerk cost clerk Boss Gang boss Worker Fig. 2.3. Functional foremanship 3. Job Analysis. Taylor carried out intensive studies on time and motion about each job and incorporated such layout in the operations that involved least movement to the workers, minimum operation time and therefore less cost of production. He also carried out studies pertaining to fatigue and incorporated rest periods so that efficiency of the worker is increased. 4. Standardisation. Taylor carried out job analysis and based on the analysis he standardised tools, instruments, period of work, amount of work each worker has to undertake, working conditions and cost of production. This type of improved work culture and working conditions brought revolution in the production units.20 ORGANIZATIONAL BEHAVIOUR 5. Scientific selection and training of workers. Workers selection should be carried out on scientific basis. Taylor suggested that workers should be given adequate training and work allotted based on their physical and technical aptitude. 6. Financial incentives. Taylor was a visionary in his approach. He always balanced organizational responsibilities and worker’s responsibilities towards the organization. In his approach he tried to introduce scientific way of doing a job and went in details as to how it could be improved at the same time keeping interests of the workers in mind. He introduced various methods to motivate workers by introducing differential piece- rate of payment system. He fixed targets for each work and they were paid based on efficiency. Anybody who worked beyond the laid down target were paid higher rate of wages and any employee who could not meet allotted target was paid below the laid down rate. He also introduced various incentive systems in the organization so that higher productivity was achieved. 7. Economies. Taylor insisted that internal economy must be ensured by each worker ensuring that there was no wastage in time and material while carrying out the job. Adequate care must be taken at all levels that the work was carried out as per the planning done by the supervisors. Organizations must ensure adequate profitability, which was necessary for survival, he maintained. 8. Mental revolution. Taylor was a firm believer that there must be sound relations between the management and the workers. All disputes should be resolved by mutual discussion within the organization. Close supervision therefore was a part of supervisors job. Gang boss was responsible for the smooth flow of the work. Workers were provided necessary tools, instructions pertaining to the job, perfect work environment and advise when necessary. Principles of Scientific Management 1. Replacing Rule of Thumb with Science: Taylor introduced standardization, differential piece-rate of payment and carried out detailed work-study about each job in industry. He was the first engineer who separated planning and execution of work in the scientific way and allotted specific responsibilities to each of the persons involved in planning and doing. 2. Harmony in Group Action: All work groups should work in harmony. They must develop the spirit of give and take. 3. Co-operation: Taylor recommended “co-operation among workers as against chaotic individualism. He insisted peace for war; replace suspicion to mutual confidence, friends for enemy”. From this principles one can find out and imagine that there was a shadow of world war I prevailing at the time he carried out his work. He carried out tremendous work to put the organizations on scientific footing and evolved methods to develop harmonious relations among workers. 4. Maximum Output and development of workers: Taylor was of the opinion that development of workers was central to improvement of productivity. He incorporated Gantt graphics in industrial operations. He disliked estimation and insisted precision in measuring the job. Work of Taylor brought near revolution in management and therefore was called the “father of Scientific Management”EVOLUTION OF MANAGEMENT THOUGHTS 21 ANALYSIS Scientific management propagated by Taylor made contributions at the production level. It created a near revolution in the field of engineering, production and work performance. It contributed towards efficiency, standardisation, specialisation and simplification of work. Optimum use of men and material was carried out in scientific way. Taylor emphasized five basic concepts to improve theory of management. These are research, standardisation, planning, cooperation and control. He assumed that industrial efficiency could be improved through the application of methods of science. Higher wages were related to higher productivity. He firmly believed that standardisation of working conditions, work methods, time and motion study and lastly the planning of daily tasks as important components of industrial efficiency. Taylor failed to appreciate human potential and treated human beings as yet another source. Indeed, he considered human recourse as component of large productive system. Man was literally equated with machine and his motives and desires had no place in the scientific management. The theory was not people oriented. Man was considered a rational being and not the emotional being. This led to exploitation of the human resources by introducing piece- rate of payment and enhanced payment based on units of production. Scientific management advocated fragmentation of work into small units that led to allocation of small part of a whole job to each individual who was controlled mechanically. It induced in the minds of workers to work more and earn more that reduced them to the level of machines. Very little attention was paid to the welfare, security and health of the employees, if any. A centralized controlled system and excessive rules and regulations were required to be implemented by managers. Taylor’s scientific management brought revolution in higher productivity, savings in time, optimum utilisation of machines, expertise, higher rate of payment and materialistic approach in the field of management. The theory was work oriented rather than people oriented. Taylor described scientific management as under: “Science not rule of thumb. Harmony not discord. Co-operation, not individualism. Maximum output, in place of restricted out put. The development of each man to his greatest efficiency and prosperity.” PROCESS MANAGEMENT THEORY – FAYOL The real father of modern management theory is the French industrialist Henry Fayol. His contribution is generally termed as process management and administrative management. Fayol looked at the problems from the top management point of view. He has used the term ‘administration’ instead of management emphasising that there is unity of science of administration. This administrative science can be applied equally well to public and private affairs. Therefore, management is a universal phenomenon. However he has emphasised that principles of management are flexible and not absolute and are usable regardless of changing and special conditions. Industrial Activities Fayol found that activities of an industrial organization could be divided into six groups 1. Technical – relating to production and maintenance 2. Commercial – buying, selling and exchange.22 ORGANIZATIONAL BEHAVIOUR 3. Financial – search for capital and its optimum utilization. 4. Security – protection of property and human beings 5. Accounting – accounting of stores and equipment. Statistics is also covered under accounting. 6. Managerial – activities include planning, organizing, commanding, coordinating and control. Fayol divided his approach of studying management into three parts. 1. Managerial Qualities Fayol Considered that manager must have following qualities (a) Physical ability: relating to health, vigour and ability to effectively addresses the people. (b) Mental ability: to understand and learn, judgment, mental vigour and adaptability. (c) Moral ability: energy, firmness, initiative, loyalty, tact and dignity (d) Educational ability: General acquaintance with matter not belonging exclusively to the function performed (e) Technical ability: Particular to function being performed (f) Experience: Arising out of work 2. General Principles of Management In order to develop managerial knowledge, he developed principles of management. These are given below (i) Division of Labour: Fayol recommended that work of all types must be sub- divided and allotted to number of persons. Sub-division makes each task simpler and results in greater efficiency. (ii) Parity of authority and responsibility: Authority refers to the right of a superior to give orders to subordinates, take decisions on specified matter, use the sources of organization. Responsibility on the other hand includes obligation with respect to the performance and achieving goals in a satisfactory manner. This principle suggests that giving authority without corresponding responsibility leads to arbitrary and unmindful use of authority. Authority relates to the power an individual acquire by virtue of his official position. Personal authority can also be derived from intelligence, moral worth and past experience of an individual. (iii) Discipline: In the context of management means obedience, proper conduct in relation to others and complying with the rules and regulations of the organization. Smooth functioning needs discipline. Discipline is also self-imposed in relation to the work environment. If an individual does not display adequate self-discipline and if it has an adverse impact on the work then he should be warned, suspended, demoted or even dismissed depending upon the gravity of the indiscipline. (iv) Unity of command: This principle states that subordinate should receive orders and be accountable to one and only one superior. It is necessary for stability, orderly functioning of the organization and accountability (v) Unity of direction: According to this principle, the efforts of all the members of the organization should be directed towards common goals. The principle seeks to

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