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MANAGEMENT ORGANIZATION BEHAVIOUR

MBA

by
Dr. [Link]
Professor

INSTITUTE OF AERONAUTICAL ENGG .

 MANAGEMENT AND ORGANIZATIONAL BEHAVIOR
Course Objectives:
To enable students to understand the Evolution, Functions and Theories of
Management
To orient on the aspects of planning and decision-making using relevant
management processes
To impart knowledge on the processes of Organizing and Controlling with the help of
various Types of Organization Structures
To describe the various aspects of individual and group behaviors in an
organizational setting
To elaborate on the impact of leadership and motivation for employee high
performance.
Course Outcomes: Students will be able to:
Gain understanding of the Concepts of Management, its Evolution, Functions and
the Theories contributed by various Management Thinkers.
Learn the process of planning, goal setting and the process of decision making with
the help of various models.
Learn the processes of Organizing and Controlling with the help of various
Organizational Structures.
Appreciate the relevance of Individual and group behavior in an organization and the
role of Culture and dynamics
Identify different Leadership Styles, Skills and the Theories of Motivation 2
 MANAGEMENT AND ORGANIZATIONAL BEHAVIOR
Unit – I: INTRODUCTION TO MANAGEMENT: Management- Definition, Nature, Purpose,
Evolution of Management Thought-Scientific Management, Administrative Theory, Human
Relations Approach, Hawthorne experiments, Behavioral Approach, Systems Theory. Managerial
Roles, Managerial Levels, Managerial Skills, Functions of Management, Administration vs.
Management, Contemporary Management Issues and Challenges
Unit – II: PLANNING - ORGANIZING: Planning – Nature, Purpose, Process, Types of Plans,
Management by Objectives (MBO). Decision Making – Types of Decisions, Decision Making
Process, Decision Making under Certainty, Uncertainty and Risk. Organizing – Formal and Informal
Organization, Process, Types of Organization structures, Line, Staff and Virtual concepts, Span of
Management – Factors, Delegation of Authority, Decentralization.
Unit – III: LEADING AND CONTROLLING: Leadership - Leadership Behavior and Styles.
Motivation- Early and Contemporary Theories of Motivation. Communication - Purpose, Process,
Barriers in Communication, Overcoming barriers to communication.
Controlling- Basic Control Process, Critical Control Points, Standards, and Benchmarking, Control
as a Feedback System, Requirements for effective controls.
Unit – IV: ORGANIZATION BEHAVIOUR : Organization Behavior – Nature, Levels, Challenges.
Individuals in Organizations - Personality and Ability. Big Five Model of Personality, Personality
Traits, Ability - Cognitive Ability, Physical Ability, Emotional Intelligence, Group Dynamics and
Teams- Types of Work Groups, Group Development, Characteristics of Work Groups, Effective
Work Groups and Teams.
Unit – V: CONFLICT AND NEGOTIATIONS: Nature of Power and Politics, Sources of Individual
Power, Functional and Divisional Power. Organizational Politics - The use of Power. Organizational
Conflict - Sources, Pondy’s Model of Organizational Conflict, Negotiation: Resolving Conflict -
Individual level conflict, Group level conflict and promoting Compromise.
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 Unit – II
PLANNING - ORGANIZING

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 PLANNING- INTRODUCTION

Defining Planning:
Before a manager can tackle any of the other functions, he
or she must first devise a plan.
-A plan is a blueprint for goal achievement that specifies the
necessary resource allocations, schedules, tasks, and other
actions.
-A goal is a desired future state that the organization
attempts to realize. Goals are important because an
organization exists for a purpose, and goals define and state
that purpose. Goals specify future ends; plans specify
today's means.

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 PLANNING- INTRODUCTION
The word planning incorporates both ideas:
determining the organization's goals and defining the means
for achieving them.
It allows managers the opportunity to adjust to the
environment instead of merely reacting to it.
Planning increases the possibility of survival in business by
actively anticipating and managing the risks that may occur in the
future.
In short, planning is preparing for tomorrow, today.
It's the activity that allows managers to determine what they
want and how they will achieve.

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 PLANNING
Planning provide direction and a unity of purpose for
organizations, it also answers six basic questions in regard
to any activity:
a. What needs to be accomplished?
b. When is the deadline?
c. Where will this be done?
d. Who will be responsible for it?
e. How will it get done?
f. How much time, energy, and resources are required to
accomplish this goal?

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PLANNING- PROCESS

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 PLANNING
As the Figure shows, all planning occurs within an environmental
context. If managers do not understand this context, they are
unable to develop effective plans. With this understanding as a
foundation, managers must then establish the organization's
mission. The mission outlines the organization’s purpose, premises,
values, and directions. Flowing from the mission are parallel streams
of goals and plans. Directly following the mission are strategic goals.
These goals and the mission help determine strategic plans.
Strategic goals and plans are primary inputs for developing tactical
goals. Tactical goals and the original strategic plans help shape
tactical plans. Tactical plans, in turn, combine with the tactical goals
to shape operational goals. These goals and the appropriate tactical
plans determine operational plans. Finally, goals and plans at each
level can also be used as inputs for future activities at all levels.

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 PLANNING
Organizational Goals
Goals are critical to organizational effectiveness, and they serve a number of
purposes. Organizations can also have several different kinds of goals, all of which
must be appropriately managed. And a number of different kinds of managers must
be involved in setting goals.
Purposes of Goals:
-provide guidance and a unified direction for people in the organization.
-help everyone understand where the organization is going and why getting there is
important.
-goal-setting practices strongly affect other aspects of planning. Effective goal setting
promotes good planning, and good planning facilitates future goal setting.
- goals can serve as a source of motivation for an organization’s employees.
- specific and moderately difficult can motivate people to work harder, especially if
attaining the goal is likely to result in rewards.
-provide an effective mechanism for evaluation and control, i.e., performance can be
assessed in the future in terms of how successfully today’s goals are accomplished.
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Kinds of Goals: Goals are set for and by different levels within an organization. An
organization’s mission is a statement of its “fundamental, unique purpose that sets a
business apart from other firms of its type and identifies the scope of the business’s
operations in product and market terms.”
Strategic goals are set by and for an organization’s top management. They focus on
broad, general issues. For example, Starbucks has a strategic goal of increasing the
profitability of each of its coffee stores by 25 percent over the next five years.
Tactical goals are set by and for middle managers. Their focus is on how to
operationalize actions necessary to achieve the strategic goals. To achieve Starbucks’
goal of increasing its per-store profitability, managers are working on tactical goals
related to company-owned versus licensed stores and the global distribution of
stores in different countries.
Operational goals are set by and for lower-level managers. Their concern is with
shorter-term issues associated with the tactical goals. An operational goal for
Starbucks might be to boost the profitability of a certain number of stores in each of
the next five years.

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 Kinds of Organizational Plans

Organizations establish many different kinds of plans. At a general level, these

include strategic, tactical, and operational plans.
Strategic Plans Strategic plans are developed to achieve strategic goals. More
precisely, a strategic plan is a general plan outlining decisions about resource
allocation, priorities, and action steps necessary to reach strategic goals. These plans
are set by the board of directors and top management, generally have an extended
time horizon, and address questions of scope, resource deployment, competitive
advantage, and synergy.
Tactical Plans A tactical plan, aimed at achieving tactical goals, is developed to
implement specific parts of a strategic plan. Tactical plans typically involve upper and
middle management and, compared with strategic plans, have a somewhat shorter
time horizon and a more specific and concrete focus.
Operational Plans An operational plan focuses on carrying out tactical plans to
achieve operational goals. Developed by middle- and lower-level managers,
operational plans have a short-term focus and are relatively narrow in scope. Each
one deals with a fairly small set of activities.

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PLANNING, DECISION-MAKING AND GOAL SETTING
Main Steps Involved in Planning Process:
Eight main steps involved in the planning process of an organization. The steps are:

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PLANNING, DECISION-MAKING AND GOAL SETTING
1. Perception of Opportunities:
Perception of opportunities is not strictly a part of the planning
process. But this awareness of opportunities in the external
environment as well as within the organization is the real starting
point for planning. It is important to take a preliminary look at
possible future opportunities and see them clearly and
completely.
All managers should know where they stand in the light of their
strengths and weaknesses, understand the problems they wish
to solve and know what they gain. Setting objectives depends on
the awareness. Planning requires realistic diagnosis of the
opportunity situation.

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PLANNING, DECISION-MAKING AND GOAL SETTING
2. Establishing Objectives:
This is the second step in the planning process. The major organizational and unit
objectives are set in this stage. This is to be done for the long term as well as for
the short range. Objective specify the expected results and indicate the end points
of what is to be done, where the primary emphasis is to be placed and what is to
be accomplished by the various types of plans.
3. Planning Premises:
After determination of organizational objectives, the next step is establishing
planning premises that is the conditions under which planning activities will be
undertaken. Planning premises are planning assumptions the expected
environmental and internal conditions
Thus planning premises are external and internal. External premises include total
factors in task environment like political, social, technological, competitors, plans
and actions, government policies. Internal factors include organization’s policies,
resources of various types, and the ability of the organization to withstand the
environmental pressure. The plans are formulated in the light of both external and
internal factors.
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The nature of planning premises differs at different levels of
planning. At the top level, it is mostly externally focused. As one
moves down the organizational hierarchy the composition of
planning premises changes from external to internal. The major
plans both old and new will materially affect the future against
which the managers at lower units must plan.
4. Identification of Alternatives:
The fourth step in planning is to identify the alternatives. Various
alternatives can be identified based on the organizational objectives
and planning premises. The concept of various alternatives suggests
that a particular objective can be achieved through various actions.

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For example, if an organization has set its objectives to grow further,
it can be achieved in several ways like expanding in the same Field of
business or product line diversifying in other areas, joining hands with
other organizations, or taking over another organization and so on.
Within each category, there may be several alternatives

The most common problem is not finding alternatives but reducing

the number of alternatives so that the most promising may be
analyzed. Even with mathematical techniques and the computer,
there is a limit to the number of alternatives that can be thoroughly
examined. The planner must usually make a preliminary examination
to discover the most fruitful possibilities.

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5. Evaluation of Alternatives:
The various alternative course of action should be analyzed in the light of premises
and goals. There are various techniques available to evaluate alternatives. The
evaluation is to be done in the light of various factors. Example, cash inflow and
outflow, risks, limited resources, expected pay back etc.; the alternatives should give
us the best chance of meeting our goals at the lowest cost and highest profit.
6. Choice of Alternative Plans:
This is the real point of decision-making. An analysis and evaluation of alternative
courses will disclose that two or more .ire advisable and beneficial. The fit one is
selected.
7. Formulation of Supporting Plan:
After formulating the basic plan, various plans are derived so as to support the main
plan. In an organization there can be various derivative plans like planning for buying
equipment, buying raw materials, recruiting and training personal, developing new
product etc. These derivative plans are formulated out of the basic or main plan and
almost invariably required to support the basic plan.

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PLANNING, DECISION-MAKING AND GOAL SETTING
8. Establishing Sequence of Activities:
After formulating basic and derivative plans, the sequence of activities is determined
so those plans are put into action. After decisions are made and plans are set,
budgets for various periods and divisions can be prepared to give plans more
concrete meaning for implementation. The overall budgets of an enterprise
represent the sum total of income and expenses, with resultant profit or surplus, and
budgets of major balance sheet items such as cash and capital expenditures.

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 Problems in Planning

 Rigidity
 Misdirection
 Time Consuming
 Lack of Accurate Information
 Problems of Change
 Internal Flexibilities
- Psychological Inflexibility
- Policy an Procedural Inflexibility
- Capital Investment
 External Flexibilities
- Political Climate
- Trade Unions
- Technological Changes

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 Vision
A vision articulates the position that an organization would like to
attain in the distant future. It helps in creating a common identity
and a shared sense of purpose. A good vision is one which foster
risk taking and experimentation.
The vision must possess the following characteristics:
It is created by consensus.
It forms a company’s future mental image.
It forms the basis for formulating the mission statement
A good vision possesses the following features:
It should be inspiring
It should foster long term thinking
It should be original and unique.
It should be competitive
It should be realist

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 Mission
Mission refers to the purpose of an organization. Mission states the business
reason for the organization's existence. It relates the organization to the
society. The mission of an organization should aim high and at the same
time it must be realistic. It should provide a strategic direction for the
organization.
“Mission is the fundamental work given by the society to an organization”.
By Koontz & Q’ donnell
“The company mission is defined as the fundamental unique purpose that
sets a business apart from other firms of its type & identifies the scope of its
operations in product & market terms”.
By Pearce & Robinson
Goals are an intermediate result which is expected to be achieved by a
certain span of time. It is a target which an organization wishes to achieve in
long term. It provides the basis for judging the performance of the
organization.

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 Management by Objectives
Management by objectives (MBO) is a strategic management model
that aims to improve the performance of an organization by clearly
defining objectives that are agreed to by both management and
employees.
According to the theory, having a say in goal setting and action plans
encourages participation and commitment among employees, as well as
aligning objectives across the organization.
Management by objectives (MBO) is a process in which a manager and an
employee agree on specific performance goals and then develop a plan to
reach them.
It is designed to align objectives throughout an organization and boost
employee participation and commitment.

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 Management by Objectives
There are five steps:
Define objectives, share them with employees, encourage employees to
participate, monitor progress, and finally, evaluate performance and reward
achievements.

Critics of MBO argue that it leads to employees trying to achieve the set
goals by any means necessary, often at the cost of the company.
Management by objectives (also known as management by planning) is the
establishment of a management information system (MIS) to compare actual
performance and achievements with the defined objectives. Practitioners
claim that the major benefits of MBO are that it improves employee
motivation and commitment and allows for better communication between
management and employees.

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 Management by Objectives
MBO outlines five steps that organizations should use to put the
management technique into practice.
Either determine or revise organizational objectives for the entire company.
This broad overview should be derived from the firm’s mission and vision.
Translate the organizational objectives to employees. In 1981, George T.
Doran used the acronym SMART (specific, measurable, acceptable,
realistic, time-bound) to express the concept.
3
Stimulate the participation of employees in setting individual objectives.
After the organization’s objectives are shared with employees from the top
to the bottom, employees should be encouraged to help set their own
objectives to achieve these larger organizational objectives. This gives
employees greater motivation since they have greater empowerment.
Monitor the progress of employees. In step two, a key component of the
objectives was that they are measurable for employees and managers to
determine how well they are met.
Evaluate and reward employee progress. This step includes honest feedback 25
 DECISION MAKING


Decision making can refer to either a specific act or a
general process.

Decision making is the act of choosing one alternative
from among a set of alternatives.

The decision-making process includes recognizing and
defining the nature of a decision situation, identifying
alternatives, choosing the “best” alternative, and putting
it into practice.

The word best, of course, implies effectiveness.

Effective decision making requires that the decision
maker understands the situation driving the decision.

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 Types of Decisions

Managers must make many different types of decisions.

In general, most decisions fall into one of two categories:
programmed and non-programmed.
Programmed decisions are relatively structured or
recur with some frequency (or both).
Many decisions regarding basic operating systems and
procedures and standard organizational transactions are of
this variety and can therefore be programmed.
Non-programmed decisions are relatively unstructured and
occur much less often than programmed decisions. Most of
the decisions made by top managers involving
strategy (including mergers, acquisitions, and takeovers) and
organization design are non-programmed.
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Decision-Making Conditions:

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1. Decision-Making under certainty- When the decision maker
knows with reasonable certainty what the alternatives are and
what conditions are associated with each alternative, a state of
certainty exists.
Suppose that managers at Singapore Airlines make a decision to
buy five new jumbo jets. Their next decision would be from whom
to buy them. Because only two companies in the world make
jumbo jets, Boeing and Airbus, Singapore Airlines knows its
options exactly.
Each has proven products and will guarantee prices and delivery
dates. The airline thus knows the alternative conditions associated
with each. There is little ambiguity and relatively little chance of
making a bad decision.

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2. Decision-Making under risk: A more common decision-
making condition is a state of risk.
Under a state of risk, the availability of each alternative and its
potential payoffs and costs are all associated with probability
estimates.
As indicated, decision making under conditions of risk is
accompanied by moderate ambiguity and the chances of a bad
decision.
When making decisions under a state of risk, managers must
reasonably estimate the probabilities associated with each
alternative.

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3. Decision Making Under Uncertainty: Most of the major
decision making in contemporary organizations is done under a
state of uncertainty, where the decision maker does not know
all the alternatives, the risks associated with each, or the likely
consequences of each alternative. This uncertainty stems from
the complexity and dynamism of contemporary organizations
and their environments.
To make effective decisions in these circumstances, managers
must acquire as much relevant information as possible and
approach the situation from a logical and rational perspective.
Intuition, judgment, and experience always play major roles in
the decision-making process under conditions of uncertainty.

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Importance of Decision- Making

• Managers perform all their functions and activities through decision- making.
• In addition, making the decision in right time values much to the organization
rather than making a right decision in the wrong time.
• Managers in the business world, often fail to make a decision in the right time
and allow the competitors to grab the opportunities.
• As such, managers have to make not only the right decisions but make them in
right time.
• Otherwise, the problems remain or magnify and culminate into a crisis.
• Decision- making process helps the management to procure necessary data and
information.
• Decision- making further helps in the formulation of strategies and implement
them.

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Process of Decision- Making

I. Problem Awareness
II. Problem diagnosis
III. Development of alternative solutions
IV. Evaluation of alternative solutions
V. Selection of the best solution
VI. Implementation of the decision

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Problem awareness
Mostly individual employees identify the problems in various areas.
Individuals, when they get a ‘gut feeling’ that something is wrong, they identify the
problem.
The awareness of a problem mostly occurs to employees at the grass- root level like
sales people, machine operator, finance assistants, human resource assistant’s act.
Internal performance measurements like level of turnover or profit performance.
Problem diagnosis

After the individual employees are aware of the problem and it is informed to the
managers, managers will gather the information and define the problem.
Information may be explored to determine the facts of the problem in detail.
Such information may be gathered on a verbal and informal basis.
Rationalize the information and stimuli relevant to the problem so as to classify the
situation.
Act diplomatically to establish peer groups or those of political support for individual
views of the problem.

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Development of alternative solutions
•After the problem is diagnosed clearly, the tendency of managers is that of searching for
readymade solutions.
•Through memory search in which the managers seek for known, existing or attempted
solutions.
•Passive search which entails waiting for possible solutions to be offered.
•This process of developing solutions takes place through discussions, debates,
consultations and brainstorming sessions and by sharing management wisdom and
experience.
Evaluation of alternative solutions
•After the alternative solutions are developed, the solutions have to be formally evaluated
based on their inherent strengths and weaknesses and also based on the environmental
threats and opportunities for implementations.
•The solutions are to be ranked on the basis of their weights in terms of strengths and
opportunities after eliminating the non- viable solutions in view of their weaknesses and
environmental threats for implementation.

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Selection of the best solution
After the formal evaluation and ranking is completed, the managers tend to re-
evaluate the solution based on the managerial judgment followed by political
bargaining as the formal evaluation is not the predominant criterion for assessing
the feasibility in practice.
Therefore, the techniques for evaluation of solutions also include social and
political process.
Implementation of the decision
Implementation of the selected solutions is a part of the decision- making process
as the process may be required to be recycled due to impediments in the process
of implementation.
The managers should secure the support of the top management for allocation of
resources; time act, regarding the implementation of the decision.

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Decision Levels
We all recognize that some decisions are more important than others, whether in their
immediate impact or long term significance. As a means of understanding the
significance of a decision so that we can know how much time and resources to spend
on it, three levels of decision have been identified:

1. Strategic. Strategic decisions are the highest level. Here a decision concerns
general direction, long term goals, philosophies and values. These decisions are the
least structured and most imaginative; they are the most risky and of the most
uncertain outcome, partly because they reach so far into the future and partly because
they are of such importance.

For example: Decisions about what to do with your life, what to learn, or what
methods to use to gain knowledge (travel, work, and school) would be strategic.
Whether to produce a low priced product and gain market share or produce a high
priced product for a niche market would be a strategic decision.

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2. Tactical. Tactical decisions support strategic decisions. They tend to be medium
range, medium significance, with moderate consequences.
For example: If your strategic decision were to become a forest ranger, a tactical
decision would include where to go to school and what books to read. Or if your
company decided to produce a low priced product, a tactical decision might be to build
a new factory to produce them at a low manufacturing cost.
3. Operational. These are every day decisions, used to support tactical decisions.
They are often made with little thought and are structured. Their impact is immediate,
short term, short range, and usually low cost. The consequences of a bad operational
decision will be minimal, although a series of bad or sloppy operational decisions can
cause harm. Operational decisions can be preprogrammed, pre-made, or set out
clearly in policy manuals.

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Decision making styles:
Directive
The directive decision-making style uses quick, decisive
thinking to come to a solution. A directive decision-maker
has a low tolerance for unclear or ambiguous ideas. They
are focused on the task and will use their own knowledge
and judgment to come to a conclusion with selective input
from other individuals.
Analytical
Analytical decision-makers carefully analyze data to come
up with a solution. They are careful and adaptable thinkers.
They will invest time to clean information to form a
conclusion. These decision-makers are task-oriented, but
have a high tolerance for ambiguity.
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Behavioural
A behavioural style of decision-making focuses on relationships more
than the task. It evaluates the feelings of others as part of their
decision-making process. Behavior decision-makers have a low
tolerance for ambiguity and a social focus as they evaluate solutions.
Decision Types
We all recognize that some decisions are more important than others,
whether in their immediate impact or long term significance. As a
means of understanding the significance of a decision so that we can
know how much time and resources to spend on it, three levels of
decision have been identified:
[Link]. Strategic decisions are the highest level. Here a decision
concerns general direction, long term goals, philosophies and values.
These decisions are the least structured and most imaginative.
[Link]: Tactical decisions support strategic decisions. They tend to
be medium range, medium significance, with moderate consequences.
[Link]: These are every day decisions, used to support tactical
decisions. They are often made with little thought and are structured.
Their impact is immediate, short term, short range, and usually low 40
 Introduction to organizational behavior

Organization - An organization is a consciously

coordinated social unit, composed of two or more
people that functions on a relatively continuous basis to
achieve a common goal or set of goals.
Organizational behavior:- Organizational behavior is a
field of study that investigates the impact of behavior
that individuals, groups, and structure have within
organization, for the purpose of applying such
knowledge toward improving an organizations
effectiveness.

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ORGANIZING AND CONTROLLING

Organizational behavior:
• The behavior of people
• The process of management
• Organizational processes and the execution of work
• Interactions with the external environment of which
the organization is a part
• Organizational implications in terms of performance
and effectiveness

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ORGANIZING AND CONTROLLING

Management Skills
• Technical skills: - The ability to apply specialized or
expertise.
• Human skills: - The ability to work with, understands,
and motivates other people, both individually and in
groups.
• Conceptual skills: - The mental ability to analyze and
diagnose complex situations. This includes looking at
relationships, attempting to attribute causes looking at
relationships, conclusions on scientific evidence.

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ORGANIZING AND CONTROLLING
Basic concept related to organization
The following concepts provide an insight into the functioning of
organizations.
1. Organizational hierarchy: - The hierarchy in a business refers to
the layers of management from the top management down to
managers or supervisors of the lowest rank. In small business,
usually, there are few layers of hierarchy.
2. Authority and responsibility: - Authority is the power to give
command and to use discretion vested in that particular position or
job. If the person is removed from the job he or she loses the
authority. Responsibility is the obligation on the part of the
subordinate to complete the given job.
3. Delegation of authority: - The process of transferring authority
from the top to the lower levels in the organization is called
delegation.
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ORGANIZING AND CONTROLLING

Principles of organization
Align departmental objectives to corporate goals: - It is
to be ensured that the objectives of different
departments in the organization are unified and aligned
to the corporate goals.
Cost- effective operations: - An organization is said to
be efficient if it can achieve the goals at the lowest
costs and with minimum undesirable consequences.
Optimum number of subordinates: - In each managerial
position, there is a limit to the number of persons an
individual can effectively manage.
Specialization: - Similar activities are grouped together
to ensure better performance of the work and 45
ORGANIZING AND CONTROLLING

Define authority: - The authority and responsibility

relationships underlying each position in the
organization have to be defined clearly to avoid
confusion or misinterpretation.
Flow of authority: - This refers to the line of authority
from the top management in an enterprise to other
levels. If this is clear, then the terms of responsibility
also can be understood.

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ORGANIZING AND CONTROLLING

Mechanistic Organization Structure

The mechanistic structure is much more traditional and is often the
immediate way a new business establishes its organizational chart. The
structure is more clearly defined as a hierarchy with leadership
delegating specific roles and tasks to those below. Teams are led by
managers rather than building a team within cohesive groups. The
mechanistic structure tends to be more stable, and also rigid, when it
comes to delegated leadership roles.

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ORGANIZING AND CONTROLLING

With a centralized leadership approach, the mechanistic structure strives to

have specific job descriptions for everyone. People work on individual tasks,
with managers and leaders orchestrating the moving pieces. Written
communication is used to track and advise on all aspects of work; this is a
heavy-reporting organizational model. The mechanistic structure requires
leaders to build loyalty among workers who report directly to them. Workers
must have explicit trust that the directions they are given will move the company
closer to its goals

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Contemporary Challenges Facing Today's Organizations :
Corporate Reputation Management
Trust & Corporate Social Responsibility.
Discipline & Absenteeism.
Ethics in the Workplace.
Health & Safety.
Income Inequality.
Mergers and Acquisitions.
Outsourcing.

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Mechanistic Organic
Individual
specialization: Joint Specialization:
Employees work Employees work
separately together and
and specialize in one coordinate tasks
task
Complex integrating
Simple integrating
mechanisms:
mechanisms:
task forces and teams
Hierarchy of authority
are primary
well-defined
integrating mechanisms
Centralization: Decentralization:
Decision-making kept as Authority to control
high as possible. tasks is delegated.
Most communication is Most communication 50
Mechanistic Organic
Mutual Adjustment:
Standardization:
Face-to-face contact for
Extensive use made of rules &
coordination.
Standard
Work process tends to be
Operating Procedures
unpredictable
Much written communication Much verbal communication
Informal status in org based on Informal status based on
size of perceived
empire brilliance
Organization is a network of
Organization is network of
positions,
persons or
corresponding to tasks.
teams. People work in
Typically each
different capacities 51
ORGANIZING AND CONTROLLING
Controlling is one of the managerial functions like planning, organizing, staffing
and directing. It is an important function because it helps to check the errors and
to take the corrective action so that deviation from standards are minimized and
stated goals of the organization are achieved in a desired manner.
According to modern concepts, control is a foreseeing action whereas earlier
concept of control was used only when errors were detected. Control in
management means setting standards, measuring actual performance and taking
corrective action. Thus, control comprises these three main activities.
Definition
According to Henri Fayola,
Control of an undertaking consists of seeing that everything is being carried out
in accordance with the plan which has been adopted, the orders which have
been given, and the principles which have been laid down. Its object is to point
out mistakes in order that they may be rectified and prevented from recurring.
According to EFL Breach,
Control is checking current performance against pre-determined standards
contained in the plans, with a view to ensure adequate progress and satisfactory
52
ORGANIZING AND CONTROLLING

According to Harold Koontz,

Controlling is the measurement and correction of performance in
order to make sure that enterprise objectives and the plans
devised to attain them are accomplished.
According to Stafford Beer, Management is the profession of
control
Characteristics of Control
• Control is a continuous process
• Control is a management process
• Control is embedded in each level of organizational hierarchy
• Control is forward looking
• Control is closely linked with planning
• Control is a tool for achieving organizational activities
• Control is an end process 53
ORGANIZING AND CONTROLLING

Open- and Closed-Loop Control

A Street-lighting system controlled by a timing device is an example of an
open-loop system. At a certain time each evening, a mechanical device closes
the circuit and energy flows through the electric lines to light the lamps. Note,
however, that the timing mechanism is an independent unit and is not
measuring the objective function of the lighting system.
Man and Machine Control
The elements of control are easy to identify in machine systems. For example,
the characteristic to be controlled might be some variable like speed or
temperature, and the sensing device could
Be a speedometer or a thermometer. An expectation of precision exists
because the characteristic is quantifiable and the standard and the normal
variation to be expected can be described in exact terms.

54
ORGANIZING AND CONTROLLING

Organizational and Operational Control

The concept of organizational control is implicit in the bureaucratic theory of
Max Weber. Associated with this theory are such concepts as "span of
control", "closeness of supervision", and "hierarchical authority".
organizational control, the approach used in the program of review and
evaluation depends on the reason for the evaluation that is, is it because the
system is not effective (accomplishing its objectives)? Is the system failing to
achieve an expected standard of efficiency? Is the evaluation being conducted
because of a breakdown or failure in operations? Is it merely a periodic audit-
and-review process?
Controlling Process
The control process involves carefully collecting information about a system,
process, person, or group of people in order to make necessary decisions
about each. Managers set up control systems that consist of four key steps:
Establish standards to measure performance. Within an organization's overall
strategic plan, managers define goals for organizational departments in
specific, operational terms that include standards of performance to compare 55
ORGANIZING AND CONTROLLING

Measure actual performance. Most organizations prepare formal reports of

performance measurements that manager’s review regularly. These
measurements should be related to the standards set in the first step of the
control process. For example, if sales growth is a target, the organization
should have a means of gathering and reporting sales data.
Compare performance with the standards. This step compares actual
activities to performance standards. When managers read computer reports
or walk through their plants, they identify whether actual performance meets,
exceeds, or falls short of standards. Typically, performance reports simplify
such comparison by placing the performance standards for the reporting
period alongside the actual performance for the same period and by
computing the variance—that is, the difference between each actual amount
and the associated standard.
Take corrective actions. When performance deviates from standards,
managers must determine what changes, if any, are necessary and how to
apply them. In the productivity and quality-centered environment, workers
and managers are often empowered to evaluate their own work. After the
56
ORGANIZING AND CONTROLLING
Traditional Control Techniques
Direct Supervision and Observation - the oldest technique of controlling. The
supervisor himself observes the employees and their work. This brings him in
direct contact with the workers. So, many problems are solved during
supervision.
Financial Statements - All business organizations prepare Profit and Loss
Account. It gives a summary of the income and expenses for a specified period.
They also prepare Balance Sheet, which shows the financial position of the
organization at the end of the specified period. Financial statements are used
to control the organization.
Budgetary Control - A budget is a planning and controlling device. Budgetary
control is a technique of managerial control through budgets. It is the essence
of financial control. Budgetary control is done for all aspects of a business such
as income, expenditure, production, capital and revenue. Budgetary control is
done by the budget committee.
57
ORGANIZING AND CONTROLLING

Break Even Analysis

Break Even Analysis or Break Even Point is the point of no profit,
no loss. For e.g. when an organization sells 50K cars it will break
even. It means that, any sale below this point will cause losses
and any sale above this point will earn profits.
Return on Investment (ROI)
Investment consists of fixed assets and working capital used in
business. Profit on the investment is a reward for risk taking. If
the ROI is high then the financial performance of a business is
good and vice-versa.
ROI is a tool to improve financial performance. It helps the
business to compare its present performance with that of
previous years' performance. It helps to conduct inter-firm
comparisons. It also shows the areas where corrective actions 58
ORGANIZING AND CONTROLLING

Management by Objectives (MBO)

MBO facilitates planning and control. It must fulfill following
requirements:-
• Objectives for individuals are jointly fixed by the superior and
the subordinate.
• Periodic evaluation and regular feedback to evaluate individual
performance.
• Achievement of objectives brings rewards to individuals.

59
ORGANIZING AND CONTROLLING

Management Audit
Management Audit is an evaluation of the management as a whole. It
critically examines the full management process, i.e. planning,
organizing, directing, and controlling. It finds out the efficiency of the
management.
Management Information System (MIS)
In order to control the organization properly the management needs
accurate information. They need information about the internal
working of the organization and also about the external environment...
PERT and CPM Techniques
Program me Evaluation and Review Technique (PERT) and Critical Path
Method (CPM) techniques were developed in USA in the late 50's. Any
programme consists of various activities and sub-activities. Successful
completion of any activity depends upon doing the work in a given
sequence and in a given time.
60
ORGANIZING AND CONTROLLING

Self-Control
Self-Control means self-directed control. A person is given freedom to set his
own targets, evaluate his own performance and take corrective measures as and
when required. Self-control is especially required for top level managers
because they do not like external control.

61
INDIVIDUAL AND GROUP BEHAVIOR

Meaning and Definition of Group

A group consists of two or more persons who interact with each
other, consciously for the achievement of certain common
objectives. The member of the independent and are aware that
they are part of a group. Group consists in every organization and
they affect the behavior of their members.
According to Stephen Robbins, “A group may be defined as
two or more individuals, interacting and interdependent, who
have come together to achieve particular objectives

62
INDIVIDUAL AND GROUP BEHAVIOR

According to Stephen Robbins, “A group may be defined as

two or more individuals, interacting and interdependent, who
have come together to achieve particular objectives”.
According to Marvin Shaw, “A group comprises, of two or
more persons who interact with one another in such a manner
that each person influences and is influenced by each other
persons”.
Nature of Group
Two or more persons
Collective Identity
63
INDIVIDUAL AND GROUP BEHAVIOR

Commercial Awareness. A skill that illustrates intelligence,

professionalism and commitment to the firm. Example question:
‘DescAccording to Stephen Robbins, “A group may be defined
as two or more individuals, interacting and interdependent, who
have come together to achieve particular objectives”.
According to Marvin Shaw, “A group comprises, of two or
more persons who interact with one another in such a manner
that each person influences and is influenced by each other
persons”.

64
INDIVIDUAL AND GROUP BEHAVIOR

Nature of Group
Two or more persons
Collective Identity
Interaction
Shared goal interest
Reasons for Joining Group
Personal attraction
Group activities
Group goals
Security and social affiliations
Status and self-esteem
Power

65
INDIVIDUAL AND GROUP BEHAVIOR

Need or Benefits for Forming a Group

Security
Empowerment through sharing of resources
Becoming a leader
Synergy
Goal achievement
Status
Affiliation needs
Self-esteem

66
GROUP ROLE

A role earns a set of expected behavior pattern attached to a

position or post in a social unit. In an organization, an employee's
role is briefly indicated by a position title and elaborately
specified by a job description. As regards group roles, these are
designated and assigned in formal groups. These roles are
prescribed by the organization with a view to make division
among workers and assign them responsibility. But, group roles
are usually not explicitly prescribed in informal groups. That is
why in informal groups, one group member may perform several
67
Types of Group Roles

In practice, the group members may be expected to

perform a variety of different roles. A complete listing of these
group roles would be very lengthy. However, the three most
relevant group roles are discussed as follows:

(i) Work Roles: These roles relate to task-oriented activities

involved in accomplishing the group tasks or group goals.
Developing a strategy for accomplishing the task, assigning jobs,
evaluating work progress and clarifying the group goals are the
examples of work roles related to task-oriented activities.
68
INTERVIEWING AND JOB DESCRIPTION

Maintenance Role:

These roles relate to social-emotional activities of group members that help

maintain their involvement and commitment to group. Examples of these
roles may be encouraging other fellow members to participate, praising and
rewarding other members for their excellent contribution and similar other
activities designed to maintain a friendly group atmosphere.

69
Blocking Roles: These are the activities that disrupt or destroy the group.
These activities may

Include such things as dominating the discussion, attacking other group

members, disagreeing unreasonably with other group members and
distracting group by unnecessary humour

70
GROUP NORMS

A norm is accepted by group members. It is a rule of conduct that has been

established by group members. They are standardized generalizations
concerning expected behavior in matters that are of some importance of the
group. A rule dictates what must be done by another whereas norm refers to
what should be done. Group norm is a standard of behavior. In other words,
group norm is a rule that tells the individual how to behave in a particular
group. Thus, group norms identify the standards against which behavior of
group members will be evaluated and help the group members know what
they should not do. Norms could be formal or could be informal.

71
Identify your mission or message.
For example, maybe the main message of your talk is to argue for the creation
of after school programs at your child’s school. You may then identify the
mission of your speech as: “The mission of my speech is to convince the
school board to provide after school programming at my child’s school.”

If the main message of your interview is to discuss the latest product released
by your company, you may write out the mission as: “The mission of my
interview is to promote the 2016 release of the lightweight hover board by
my company, Hover, Inc.”

72
Outline two to three talking points.
Once you have identified your main message, you can then create two to
three main talking points to support your main message. You will then use
these main points to develop supporting arguments or examples to ensure
your main message is well supported. Focus on talking points that will help
you prove your main message or expand further on your main message.
Your talking points should be clear, short, and to the point. Think of your
talking points as your elevator pitch, made up of keywords or short sentences.

73
There are two types of groups an individual forms.
Formal groups and
Informal groups.
Let us know about these two groups. Formal Groups
These are the type of work groups created by the organization
and have designated work assignments and rooted tasks. The
behavior of such groups is directed toward achieving
organizational goals

.
74

Command group − It is a group consisting of individuals who
report directly to the manager.

Interest group − It is a group formed by individuals working
together to achieve a specific objective.
Example − A group of workers working on a project and
reporting to the same manager is considered as a command
group. A group of friends chilling out together is considered as
interest group or say members of a club.

75
Informal Groups

These groups are formed with friendships and common interests.

These can be further classified into two sub-groups −

Task group − those working together to finish a job or task is
known as task group.

Friendship group − those brought together because of their
shared interests or common characteristics is known as friendship
group.

76
Why Do People Join Groups
There is no particular reason answering why individuals join
groups. Group helps individual to feel stronger, have fewer self-
doubts, and be more contrary to threats.
The following points help us understand the need of joining a
group by individuals −

Security mirrors strength in numbers. Status pinpoints a
prestige that comes from belonging to a specific group. Inclusion
in a group is considered as important because it provides
recognition and status. 77

Self-esteem transmits people's feelings of self-worth.
Membership can sometimes raise feelings of self-esteem like
being accepted into a highly valued group.

Affiliation with groups can meet one's social needs. Work
groups significantly contribute to meet the need for friendships
and social relations.

78

Groups represent power. What mostly cannot be achieved
individually becomes possible with group effort. Power might
be aimed to protect themselves from unreasonable demands.
Informal groups provide options for individuals to practice
power.

People may join a group for goal achievement. Sometimes it
takes more than one person to accomplish a particular task.

79
Group Roles

The concept of roles is applicable to all employees within an organization as

well as to their life outside the organization. A role is a set of expected
behavior patterns attributed to the one who occupies the position demanded
by the social unit.

80
Individuals play multiple roles at the same time. Employees attempt to
understand what kind of behavior is expected from them. An individual when
presented by divergent role expectations experiences role conflict.

Group roles are divided into three types −

Task-oriented Roles

Relationship-oriented Roles

Individual Roles

81
Task-oriented Roles
Roles allotted to individuals according to their work and
eligibility is known as task-oriented roles. Task-oriented roles can
broadly divide individuals into six categories initiator, informer,
clarifier, summarizer, reality tester and information seekers or
providers respectively.

82
 Initiator − the one who proposes, suggests, defines.
 Informer − the one who offers facts, expresses feelings, gives opinions.
 Clarifier − the one who interprets, defines, clarifies everything.
 Summarizer − the one who links, restates, concludes, summarizes.
 Reality Tester − the one who provides critical analysis.
 Information seekers or providers − the one who gives information and
data.

83
Dis-advantages of employment tests

• If you are not a brand, experienced candidate may be reluctant to appear

for test, behavioral problem.

• Follow up to the candidates to take the tests.

• You need to spend some money initially to save more money, time,
efforts and hassles.

84
 Harmonizers − the one who limits tension and reconciles disagreements.
 Gatekeeper − the one who ensures participation by all.
 Consensus Tester − the one who analyzes the decision-making process.
 Encourager − the one who is warm, responsive, active, shows acceptance.
Compromiser − the one who admits error, limits conflict

85
Individual Roles
Roles that classify a person according to the measure of
individual effort put in the project aimed is known as individual
roles. Five types of individuals fall into these roles: aggressor,
blocker, dominator, cavalier, and avoidance.

86

Aggressor − the one who devalues others, attacks ideas.

Blocker − the one who disagrees and rebels beyond reason.

Dominator − the one who insists superiority to manipulate.

Cavalier − the one who takes part in a group non-
productively.

Avoidance − the one who shows special interest to avoid task.

87
These are the various roles a person plays in an organization.

Well-Functioning Groups
We know what a group is, why it is important to form a group,
and what the group-oriented roles are. Now we need to know how
to mark a group as a well-functioning group, what features are
necessary for a group to mark it as efficient

88
A group is considered effective when it has the following
characteristics.

Relaxed, comfortable, friendly atmosphere.

Task to be executed are well understood and accepted.

Members listen well and actively participate in given
assignments.

Assignments are made clear and are accepted.

Group is acquainted of its operation and function.

People express their feelings and ideas openly.

Consensus decision-making process is followed.

Conflict and disagreement center regarding ideas or method.
.

89
UNIT-V LEADERSHIP, MOTIVATION AND
ORGANIZATIONAL STRUCTURE

Leadership is defined as “the process whereby one individual

influences other group members towards the attainment of
defined group or organizational goals.”
According to Hollander, “Leadership is a process of influence
between a leader and those who are followers”.
According to Hemphill and Coons, “Leadership is the behavior
of an individual when he is directing the activities of a group
toward a share goal”.

90
Qualities of a Leader
Intelligence
Sound Physique
Responsibility
Trustworthy
Spirit of Enthusiasm
Confidence
Must do Things in Systematic manner
Significant Level of Tolerance
Focused
Committed to Excellence
91
Effectiveness of leaders
Task achievement
Development of individuals
Building the team
Make the vision tangible

Leader’s power
Reward power
Coercive power
Legitimate power
Expert power
Referent power
92
Leadership styles: - leadership is practiced by its styles which may be
positive or negative. The style used by the military officers and traditional
managers are mostly negatives whereas those of the modern and high
technology organizations are positive.
Autocratic/ Dictator Leadership style
Democratic/ Participative leadership style
Bureaucratic leadership style
Diplomatic leadership style
Laicize- fair leadership style

93
Theories of a Leadership
Traditional theory
Trait theory
Group and exchange theory

Behavioral theory
Continuous theory
Liker’s four systems
Managerial grid
Leader- participation model

94
Contingency/ situation theories
Fielder’s contingency theory
Path- goal theory
Hersey and Blanchard’s life- cycle/ Situational approach

Modern theories
Charismatic leadership
Transformational leadership theory

95
Trait theory
Trait theories of leadership sought personality, social, physical or
intellectual traits those differentiated leaders from non-leaders.
Trait theorists refer the people like Mahatma Gandhi, India
Gandhi, Nelson Mandela, and describe them in terms of
charismatic, enthusiastic and courageous.
.

96
Trait theories assume that leaders are born not made. The
research studies focus on personal traits or characteristics that
distinguish the leaders from the followers and a successful leader
from an unsuccessful leader. A number of research studies were
conducted during the last 50 years. The cumulative findings of
these studies conclude that some traits increase the likelihood of
success as a leader, but more of the traits guarantee success.

97
Stodgily classified these theist into five categories
Intelligence and scholarship.
Physical traits like age, height, weight, strength act.
Personality characterized by self-confidence, honesty, integrity,
creativity and
imitation.
Social status and experience.
Task-orientation.

98
Managerial Grid Theory
Industrial psychologists Blake and Mouton developed the
managerial grid basing on the Ohio State study. The managerial
grid identifies a range of management behavior based on the
Different ways how production/service-oriented and employee-
oriented styles interact with each other.

.
99
McClelland's Human Motivation Theory
Mc Cleland’s theory of needs is one such theory that explains
this process of motivation by breaking down what and how
needs are and how they have to be approached. David
McClelland was an American Psychologist who developed his
theory of needs or Achievement1 Theory of Motivation which
revolves around three important aspects, namely, Achievement,
Power and Affiliation. This theory was developed in the 1960’s
and McClelland’s points out that regardless of our age, sex, race
or culture, all of us possess one of these needs and are driven by 100
 This theory is also known as the Acquired Needs as McClelland
put forth that the specific needs of an individual are acquired
and shaped over time through the experiences he has had in
life. Psychologist David McClelland advocated Need theory,
also popular as Three Needs Theory. This motivational theory
states that the needs for achievement, power, and
affiliation significantly influence the behavior of an individual,
which is useful to understand from a managerial context.

101
 Need for Achievement
 The need for achievement as the name itself suggests is the
urge to achieve something in what you do. If you are a lawyer
it is the need to win cases and be recognized, if you are a
painter it is the need to paint a famous painting. It is the need
that drives a person to work and even struggle for the
objective that he wants to achieve. People who possess high
achievement needs are people who always work to excel by
particularly avoiding low reward low risk situations and
difficult to achieve high risk situations.
102
Motivation
Motivation is derived from the word motive. “A motive is an
inner state that energies, activates or moves and directs or
channels behavior towards goals.”
“Motivation represents an unsatisfied need which creates a state
of tension or disequilibrium, causing the individual to move in a
goal directed pattern towards restoring a state of equilibrium by
satisfying the need.”
Motivation is a process that starts with a physiological or
psychological deficiency or need that activates behavior or a
drive that is aimed at a goal or ‘incentive.’ Thus, the process of
motivation lies in the meaning of and relationship among needs,
drives and incentives.

103
The basic motivation process
The three basic phases of motivation
Nature of motivation
Motivation is a continuous process
Motivation is a psychological concept
The entire individual is motivated
Frustrated individual fails to motivated
Goals lead to motivation
The self concept as a unifying force

104
Features of motivation
Motivation is individual’s internal feeling
Motivation is concerned with the total person
Motivation = anticipated values x perceived probability
Motivation is the willingness to exert
Motivation involves

Types of motivation
 Positive motivation or pull mechanism
 Negative motivation or push mechanism
105
Steps in motivation

Sizing up

Preparing a set of motivating tools

Selecting and applying motivators

Feedback
Theories of motivation: - There are several approaches and
theories of motivation. These theories of motivation are broadly
classified into content theories, process theories and
reinforcement theory. The classification of the theories of
106
Maslow’s theory of hierarchy of needs
The most popular and important content theories of motivation
are the Maslow’s theory. According to Maslow, human needs
form a hierarchy, starting at the bottom with the physiological
needs ascending to the highest need of self- actualization as
shown below. He says when one set of needs are satisfied, they
no longer work as motivation as a man seeks to satisfy the next
higher level.

107
The need hierarchy
1. Physiological needs
2. Security/ Safety needs
3. Social needs [Affiliation or acceptance needs]
4. Esteem needs
5. Self- Actualization needs

108
Physiological needs: - These are the basic necessities of human
life- food, water, warmth, shelter, sleep and sexual satisfaction.
Maslow’s says that until these needs are satisfied to the required
level, man does not aim for the satisfaction of the next highest
level needs. As for as work organization is concerned, these
needs include basic needs like pay, allowance, incentives and
benefits.

109
Security/ safety needs: - These refer to the need to be free of
physical danger or the feeling of loss of food, or job or shelter.
When the physiological needs sure satisfied, man starts thinking
of the way by which he can continue to satisfy these
physiological needs. These needs as far as work organization is
concerned include: conformity, security plans, membership in
unions, severance pay act.

110
Social needs [Affiliation or Acceptance needs]:- When the
physiological and security needs are satisfied, these social needs
being occupying the mind of a man. This is exactly why he looks
for the
Association of other human beings and strives hard to be
accepted by its group. Social needs at work place include: human
relations, formal and informal work group.

111
Esteem needs: - These needs are power, prestige, and status and
self- confidence. Every man has a feeling of importance and he
wants others to regard him highly. These needs make people aim
high and make them achieve something great. These needs for
employees include: status symbols, awards, promotions, titles
act.
Self- Actualization needs: - This is the highest need in
hierarchy. This refers to the desire to become what one is capable
of becoming. Man tries to maximize his potential and accomplish
something, when this need is activated in him. 112
Douglas McGregor’s Theory X&Y
Douglas McGregor proposed two altogether different views of
human beings. One view is basically negative of human beings
called X and the other is basically positive of human beings
called theory Y.

113
Assumptions of theory X: - Theory X is a traditional set of
assumptions about people. The assumptions held by managers
under theory X include
The typical person dislikes work and will avoid it, if possible
The typical person lacks personality, has little ambition and
seeks security about all and
Most people must be coerced, controlled and threatened with
punishment to get them to work

114
Assumptions of Y theory: - Theory Y implies a more positive,
human and supportive approach to managing people. The
assumptions of Y includes
People view work as being as natural as rest or play
People will exercise self- direction and self- control, if they are
committed the organizational objectives
The average person can learn to accept and/ or seek
responsibility
People are not inherently lazy. They have become that way as a
consequence of their experience and
People have potential. Under proper conditions, they learn to
accept and seek responsibility

115
Belzberg’s Two- Factor Theory of Motivation
Maslow’s theory has been modified by Herzberg and he called it
two- factor theory of motivation. According to him, the first
groups of needs are things such as company policies,
administration, and supervision.

116
David McClelland’s Needs Theory
Dave McClelland developed a theory of motivation that focused
particularly on the need for achievement, power, and affiliation.
He contends that individuals acquire certain needs from the
culture of a society by learning from the events that they
experience, particularly in early life.
Need for Achievements: - McClelland’s defined as “behavior
toward competition with a standard of excellence”. He and his
associates defined four characteristics of individuals with a high
need for achievement 117
 A strong desire to assume personal responsibility for finding
solutions to problems or performing a task.
 A tendency to set moderately difficult achievement goals and
to take calculated risks.
 A strong desire for concrete performance feedback on tasks,
and
A single-minded preoccupation with task accomplishment

118
Expectancy Theory of Motivation
The expectancy theory was proposed by Victor Vroom of Yale School of
Management in 1964. Vroom stresses and focuses on outcomes, and not on
needs unlike Maslow and Herzberg. The theory states that the intensity of a
tendency to perform in a particular manner is dependent on the intensity of
an expectation that the performance will be followed by a definite outcome
and on the appeal of the outcome to the individual.

119
Expectancy Theory of Motivation

The Expectancy theory states that employee’s motivation is an outcome of

how much an individual wants a reward (Valence), the assessment that the
likelihood that the effort will lead to expected performance (Expectancy) and
the belief that the performance will lead to reward (Instrumentality). In
short, Valence is the significance associated by an individual about the
expected outcome. It is an expected and not the actual satisfaction that an
employee expects to receive after achieving the goals. Expectancy is the faith
that better efforts will result in better performance. Expectancy is influenced
by factors such as possession of appropriate skills for performing the job,
availability of right resources, availability of crucial information and getting
the required support for completing the job. 120
Instrumentality is the faith that if you perform well, then a valid outcome will
be there. Instrumentality is affected by factors such as believe in the people
who decide who receives what outcome, the simplicity of the process
deciding who gets what outcome, and clarity of relationship between
performance and outcomes.

121
Thus, the expectancy theory concentrates on the following three
relationships:
Effort-performance relationship: What is the likelihood that the individual’s
effort be recognized in his performance appraisal?
Performance-reward relationship: It talks about the extent to which the
employee believes that getting a good performance appraisal leads to
organizational rewards.
Rewards-personal goals relationship: It is all about the attractiveness or
appeal of the potential reward to the individual.

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Advantages of the Expectancy Theory
It is based on self-interest individual who want to achieve maximum
satisfaction and who wants to minimize dissatisfaction.
This theory stresses upon the expectations and perception; what is real and
actual is immaterial.
It emphasizes on rewards or pay-offs.
It focuses on psychological extravagance where final objective of individual is
to attain maximum pleasure and least pain.
Limitations of the Expectancy Theory

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 ABILITY TESTS

Here is the list of characteristics explained with the use of graphology-

1. DYNAMISM:
Those individuals Whose hand writing have Rightward Slant, Long, Sweeping
And Heavy T-Bars Are Very Dynamic.

[Link] ABILITY:
In The People Who Have V Formations In M’s And N’s, And Medium Size
Writing are good at numbers and outscore others with their observations.

[Link]:
it is the sigh of resilience When an Individual Has a dominance of Upwards
Slope Formations, Sweeping T- Bars And Light Pressure in his hand writing

[Link]:
People Who Have Retraced Lower P Loops Have Precision Trait.

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The expectancy theory seems to be idealistic because quite a few individuals
perceive high degree correlation between performance and rewards.
The application of this theory is limited as reward is not directly correlated
with performance in many organizations. It is related to other parameters also
such as position, effort, responsibility, education, etc.

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Implications of the Expectancy Theory
The managers can correlate the preferred outcomes to the aimed
performance levels.
The managers must ensure that the employees can achieve the aimed
performance levels.
The deserving employees must be rewarded for their exceptional
performance.
The reward system must be fair and just in an organization.
Organizations must design interesting, dynamic and challenging jobs.
The employee’s motivation level should be continually assessed through
various techniques such as questionnaire, personal interviews, etc.

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