INSTITUTE OF SUSTAINABLE

PROJECT PLANNING, MONITORING

AND EVALUATION

LIBRARY DEPARTMENT

CPPM 106 THE FUNDAMENTALS OF PROJECT MONITORING AND

EVALUATION

INTRODUCTION TO THE Module

This course is intended to introduce and expose the learners to the principles and
concepts governing the practice of management. Management is a social science hence a
complex and pervasive field and its practice is greatly affected by the situational factors
that each manager faces.

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Course objectives:
More specifically, at the end of the course you should be able to:
• Demonstrate understanding of managerial concepts and practices as applied in
project planning and management
• Apply management knowledge and skills in the design and implementation of
projects
• Gain insights into management challenges in project management

Learning Methods
• Lectures
• Group discussions and presentations
• Case studies

Assessment
The course will be assessed through continuous assessments, which comprise attendance,
participation, timed tests and essays (30%) and a 3 hour final semester examination (70%).
Pass mark is 50%: Duration:3 hours per week for 15 weeks

CONTENTS

LECTURE ONE: INTRODUCTION TO MANAGEMENT

1.1 Introduction
1.2 Lecture objectives
1.3 Overview of management
1.4 Definition of management
1.5 Characteristics of management
1.6 Management functions
1.7 Managerial roles and skills
1.8 Management Environment
1.9 Competitive environment
1.10 Remote environment
1.11 organizational environment
1.12 Summary

LECTURE TWO: MANAGEMENT THEORY

2.1 Lecture outline
2.2 Introduction
2.3 Lecture objectives
2.4 Development of management thought
2.4 Classical scientific management

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 2.4.1 Scientific management
2.4.2 Systems approach
2.4.3 Contingency approach
2.4.4 Management science approach
2.5 Bureaucratic approach
2.6 Neo-classical approach to management
2.7 Summary
2.8 Self-test
2.9 Suggestions for further reading

LECTURE THREE: THE PLANNING FUNCTION

3.1 Lecture outline
3.2 Introduction
5.3 Lecture objectives
5.4 Meaning of planning
5.5 Types of plans
3.6 Strategic planning
3.7 The Planning process
3.8 Objective setting techniques in planning
3.9 Barriers to effective planning
3.10 Summary
3.11 Self-test
3.12 Suggestions for further reading

LECTURE FOUR: THE ORGANIZING FUNCTION

4.1 Lecture outline
4.2 Introduction
4.3 Lecture objectives
4.4 Principles of organizational design
4.5 Departmentalization
4.6 Delegation
4.7 Line and staff functions
4.9 Span of control
4.10 Summary
4. 11 Summary
3.12 Self-test
3.13 Suggestions for further reading

LECTURE FIVE: THE STAFFING FUNCTION

5.1 Lecture outline

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5.2 Introduction
5.3 Lecture objectives
5.4 Meaning of human resource management
5.5 Systems approach to human resource management
5.6 Strategic importance of the HRM function
5.7 Functions of HRM
5.8 Performance appraisal as a HR control tool
5.9 Summary
5.10 Self-test
5.11 Suggestions for further reading

LECTURE SIX: THE DIRECTING FUNCTION

6.1 Lecture outline
6.2 Introduction
6.3 Lecture objectives
6.4 Meaning of leadership
6.5 Types of leaders
6.6 Importance of leadership
6.7 Approaches to leadership styles
6.8 Contemporary leadership models
6.9 Summary
6.10 Self-test
6.11 Suggestions for further reading

LECTURE SEVEN: MOTIVATION

7.1 Lecture outline
7.2 Introduction
7.3 Lecture objectives
7.3 Explain the meaning of motivation
7.4 Discuss the content and process theories of motivation
7.6 Illustrate the application of motivation theories in the workplace
7.7 Identify the challenges associated with employee motivation
7.8 Summary
7.9 Self-test
7.10 Suggestions for further reading

LECTURE EIGHT: COMMUNICATION

8.1 Lecture outline
8.2 Introduction
8.3 Lecture objectives
8.4 Explain the meaning of communication

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8.5 Describe the process of communication
8.6 Discuss the importance of communication in organizations
8.7 Discuss the channels of communication
8.8 Explain the barriers to communication
8.9 Summary
8.10 Self-test
8.11 Suggestions for further reading

LECTURE NINE: THE CONTROLLING FUNCTION

9.1 Lecture outline
9.2 Introduction
9.3 Lecture objectives
9.4 Importance of the control function
9.5 Areas of control
9.6 Components of the control process
9.7 Control systems in organizations
9.8 Major aspects of an effective control system
9.9 Summary
9.10 Summary
9.11 Self-test
9. 12 Suggestions for further reading

LECTURE TEN: GROUP DYNAMICS

10.1 Introduction
10.2 Lecture Objectives
10.3 The Concept of Group Dynamics
10.4 Theoretical Underpinnings of Group Dynamics
10.5 The Concept of Team
10.5.1 Difference between Work Groups and Teams
10.5.2 Lessons from Geese by Milton Olson
10.6 Process of Team Development
10.7 Functions of a Team
10.7.1 Team Roles and Responsibilities
10.7.2 Unhelpful behaviours in Teams
10.8: Strategies for Teambuilding
10.9 Managing Team Conflict
10.9.1 Types of Conflict
10.9.2 Team Leader's Role in Managing Conflict
10.10 Summary
10.11 Self-Test

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10.12 Suggestions for Further Reading

LECTURE ELEVEN: ORGANIZATIONAL CHANGE AND DEVELOPMENT

11.1 Introduction
11.2 Lecture objectives
11.3 The meaning of organizational development
11.4 Evolution of organizational development
11.5 Nature of organizational change
11.6 Theories of organizational change
11.7 The forces driving organizational change
11.8 Change management strategies
11.9 Resistance to change
11.10 Summary
11.11 Self test
11.12 Suggestions for further reading

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LECTURE ONE: INTRODUCTION TO MANAGEMENT
1.1 Introduction
1.2 Lecture objectives
1.3 Definition of management
1.4 Characteristics of management
1.5 Management functions
1.6 Managerial roles
1.7 Managerial skills
1.8 The art and science of management
1.9 Importance of management knowledge
1.10 Environmental influences on management
1.11 Types of environments
1.12 Management response to environmental change
1.13 Summary
1.14 Self-test
1.15 Suggestions for further reading

1.1 Introduction
In this lecture we will discuss the significance of management in achieving organizational
objectives efficiently and effectively. Managers do this by carrying out the functions of
planning, organizing, staffing, leading, motivating, communicating and controlling.
Managing is an essential activity at all levels although the managerial skills and roles vary
at different organizational levels. This lecture begins with some background knowledge to
the discipline of management, and the main purpose is to understand the meaning, process,
skills and functions of management. We shall also look at the environments in which
management operates, the variables in that environment and how management can respond
to such change.

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 1.2 Lecture Objectives
At the end of this lecture you should be able to:
1. Define the concept of management
2. Describe the characteristics of management
3. State the functions of management
4. Explain the skills of a manager
5. Discuss the roles of management
6. Identify the components of the management environment
7. Discuss how management can respond to a changing environment

1.3 The meaning of management

Management has been defined in many different ways by different authors. Before we
proceed, do the following activity:

Write your own definition of management.

Now compare your definition with the sample definitions from different scholars:
• Management is the art of getting things done through and with people in formally
organized groups.(Haimann, T.)
• Management is simply the process of decision-making and control over the actions of
human beings for the express purpose of attaining predetermined goals.(Vance S.)
• Management is a social process entailing responsibility for the effective and
economical planning and regulations of the operations of an enterprise in fulfilment of
a given purpose or task (Brech E. F., 1957).
• Management is the coordination of all resources through the process of planning,
organizing, directing and controlling in order to attain a given stated objective (Fayol
H. 1916; & Koontz and O‘Donnel, 1976)

From the above range of definitions, it is obvious that management is a complex process
with many facets/elements/dimensions.

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 Management is both a social and technical process that comprises a series of actions that
lead to the accomplishment of objectives.

It is a process by which the resources of production are transformed from just ―resources‖
to ―production‖ (Peter Drucker).

It requires a combination of technical, human and conceptual skills Managers are

resources or assets in organizations

1.4 Characteristics of Management:

To further enhance our understanding of the term management, we shall now examine
some of its major characteristics.
(i) Management is an activity.
Management is an activity that concerns the effective use of all resources both human and
non-human. It is the driving force that inspires an undertaking. It creates the conditions
and relationships that bring about the full use of resources.
(ii) Management is Purposeful and goal-oriented.
The main concern of management is the achievement of clearly defined goals or objectives.
Management is said to be successful only to the extent to which these objectives are
achieved.
(iii) Management is a Social Process
Organizations are social entities, as they are constituted of people. As such, management
has to control, organize and motivate people and create a favourable climate for their
development.
(iv) Management is getting things done.
A manager does not usually do the operating work himself, but gets the work done with
and through people. A manager has to direct people, harness talents through training and
procure technical, human, and psychological skills (intellectual capital).
(vi) Management is an intangible force.

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Though intangible, management is not abstract but a social skill which is evident by the
quality of the organization in terms of the efficiency and effectiveness of its operations.
(vii) Management is an Integrating Process.
Management brings together people, machines and materials to carry out the operation of
the organization and achieve a set of given objectives. It is a result-oriented process.
(viii) Management is separate from ownership.
Management and ownership may be the same in small family or individual or sole
proprietorship businesses, but in modern enterprises or corporations, a vast number of
shareholders own the business enterprise or organization, while management is in the
hands of qualified, professional and competent managers, who normally do not posses any
ownership interest.
(ix) Management is a Universal Activity
The techniques and tools of management are universally applicable. Managers perform the
same functions regardless of their position in the management hierarchy, type of enterprise
or location of enterprise.
(x) Management is a social science
The science of management is universally accepted as a distinct discipline. It has assumed
professional character, hence requiring the use of specific knowledge, skill and practice. It
utilizes certain fundamental concepts, theories, tools and techniques that constitute the
subject matter of management. It therefore satisfies all the conditions of a profession.

1.5 The art and science of management

Management can be said to be both a science and an art. First, it is a science because it is
based on a set of organized knowledge founded on proper scientific findings and exact
principles. It is part of the branch of science known as social science just like sociology,
economics or history. The other branches of science are physical science, biological
science etc. Management is also a behavioral science in which its theories and principles
are based on the situation.

Management can also be an art. An art refers to the best way of doing something.
Management can be said to be the process of directing scientific knowledge to the

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accomplishment of objectives. Like any other art, management is creative, develops new
situations, new designs and new systems needed to improve performance. Art therefore is
the ‗know-how‘ or ‗technique‘ to achieve a desired result. The most productive art is
always based on an understanding of the science underlying it.

Art and science therefore are not mutually exclusive but are complementary. As science
improves, so should art. As Koontz and O‘Donnell point out ‗physicians without a
knowledge of science become witchdoctors, but with science, they become skillful, artful
surgeons.‘ Therefore, managers who operate without scientific knowledge (in the form of
theory) can only trust in luck, intuition, common sense and experience (which may be
wrong experience). However, in utilizing theory and science, managers must learn to blend
knowledge (principles) and practice to achieve desired results.

1.6 The Scientific Method in Management.

The purpose of science is to explain phenomena. Science is based on the belief that
relationships can be found between two or more sets of events. The scientific method
involves determining facts through observation of events and verifying their accuracy
through continued observation. After classifying and analyzing the facts observed,
scientists establish causal relationships known as hypotheses that they test for accuracy.
When hypotheses are supported, and are found to explain or predict reality they become
principles. However, principles are not permanent they can still be challenged by future
research and analysis and either modified or discarded.

Principles, Theory and Concepts: Principles, theory and concepts form the structural
framework of a science.
Principles are fundamental truths or what are believed to be truths at a given time,
explaining relationships between two or more sets of variables.
For example: Motivation has a positive effect on the performance of employees.
Theory is a systematic grouping of interrelated principles. It ties together significant
knowledge to form a framework.

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For example, the theory of attribution which explains the behaviour of an individual on the
basis of whether it was caused by an external or an internal influence. Internal causes are
those believed to be under the personal control of the individual while external causes are
those believed to be beyond the control of the individual. These are judged on the basis of
distinctiveness, consensus and consistency.

Concepts are mental images of something formed by generalization from particulars.

Concepts are the building blocks of theory and principles. However, they tend to always
imply different things to different people. For example concepts such as: management,
organization, technology, labour etc.

1.7 The basic functions of management

The job of management is to help an organization make the best use of its resources to
achieve its goals. They do so by performing essential managerial functions which include:
▪ Planning
▪ Organizing
▪ Directing
▪ Staffing
▪ Controlling
Planning: It is the process of setting goals and objectives and showing how these goals
and objectives will be accomplished.
Organizing: This refers to the process of establishing a structure of working relationships.
It involves grouping people into departments according to specific tasks performed and
deciding how best to coordinate organizational resources.
Directing: This is the process of communicating what has been planned by leading and
motivating the efforts of people towards attainment of goals
Staffing: This function refers to the process of filling positions with the right kind of people
in the right job at the right time.
Controlling: This refers to the process of evaluating how well an organization is achieving
its goals and how to maintain and improve performance.

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Figure 1 below illustrates the relationships among these functions. It indicates that all the
functions are interdependent.

1.8 Managerial roles

Managers play several management roles: a role is a set of specific tasks that a person is
expected to perform in the position they hold. According to Henry Mintzberg, managers
play three major roles:
i) Interpersonal roles:
▪ Figurehead – a manager a representation or a symbol of the organization. They
determine the direction or mission of the organization. They inform stakeholders such
as employees about what the organization is seeking to achieve. They put up
appearances on behalf of the organization eg receiving guests at the workplace or
attending an employee‘s wedding.
▪ Leader – a manager occupies a position of influence, hence has to inspire and
encourage others to perform. They train, coach, counsel and mentor subordinates to
reach their full potential
▪ Liason – managers are the link between the organization and the larger society. They
deal with people outside the organization such as suppliers and customers and inside
by coordinating the activities of people in different departments.
ii) Informational roles: These roles are closely associated with the tasks necessary to
obtain and transmit and transmit information. The roles are:
▪ Monitor – managers analyze information from inside and outside the
organization so that he can effectively control and organize people and other
resources.
▪ Disseminator – Managers transmit information to other members in the
organization so as to influence their work attitudes and behaviour

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 ▪ Spokesperson – managers use information to promote the organization so that
people inside and outside the organization can respond positively to it iii)
Decisional roles: managers plan and lay strategies for achieving goals and
utilizing resources. They act as:
▪ Entrepreneurs: Managers decide which projects or programmes to initiate and
how to invest resources to increase organizational performance
▪ Disturbance handler: managers assume responsibility for handling unexpected
events or crisis that threatens the organizations access to resources. In this
situation a manager also assumes the roles of figurehead and leader to mobilize
employees to help secure the resources needed to avert the problem.
▪ Resource allocator: managers decide how best to use available resources to
increase organizational performance.
▪ Negotiator: managers work out agreements and contracts that will operate in the
best interest of the organization.
The relationships among these roles are illustrated in figure 2 below.

Figurehead

Interpersonal Leader
roles
Liason

Monitor

Informational
roles Disseminator

Spokesperson

Figure 1.1: Managerial roles

Decisional 13 Entrepreneurs
roles
Disturbance
 1.9 Managerial skills

Skills is what separates good managers from ordinary managers. Education and experience
enable managers to develop the skills they need to put organizational resources to their best
use. There are three types of skills:
i. Technical skills: These are needed to perform specialized tasks. They involve the ability
to use knowledge, methods, techniques and equipment necessary for the performance of
specific tasks. These skills are acquired from experience, education and training. They
are more useful for lower level management at supervisory levels because they train
others in the actual job.
ii. Human skills: The ability to work with and through people including understanding of
motivation and application of effective leadership. Also includes the ability to mould
individuals into a cohesive team. Human skills are useful for middle managers as they
link the top and the lower levels of employees.
iii. Conceptual skills: This skill is demonstrated in the ability to analyze and diagnose a
situation and to distinguish between cause and effect. Involves understanding the
complexities of the overall organization and the various variables that influence its
operations. It is about seeing the ‗big picture‘.

The appropriate mix of these skills varies as an individual advances in management from
supervisory to top management positions. The relationship between management level
and skills needed is illustrated below.
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 Management Skills needed level

Conceptual
Executive……
skills

Managerial…… Human skills

Technical
skills

Supervisory…..

Figure 1: Managerial roles

More conceptual skills are needed at executive levels as executives should be able to see
how all operative functions are interrelated in accomplishing organizational goals. Their
focus is external and global. Human skills are therefore crucial to all levels of management
as attested by the following statement:
―I will pay more for the ability to deal with people than any other ability under the
sun‖ (John D. Rockeffeler, American entrepreneur).
In other surveys, human skill has been rated higher than intelligence, decisiveness and
knowledge and job skills.

1.10 Importance of Management Knowledge

Knowledge of the basic principles and techniques of management is important for a number
of reasons.
(i) To increase efficiency.
Development and use of management principles improves managerial efficiency.
Managers can apply established guidelines to help solve problems without having to resort
to trial and error – which is risky and costly to the organization.

Although experience is important, it is not enough as no two situations or problems are the
same nor can be solved using the same methods. Hence an understanding of management
theory, principles and concepts allows the manager to see and understand what otherwise

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would remain unseen. Awareness of management principles helps managers avoid
mistakes.

(ii) To understand the nature of management.

An understanding of the concepts, principles and techniques of management enables
managers to analyze the managerial job and train others. The knowledge of these
fundamentals acts as a checklist of the meaning of management. With the accumulation of
management knowledge, management training is simplified.

(iii) To achieve social goals.

Development of management knowledge and its skillful use in the management of people
and material resources can have a revolutionary impact on society. For example, it is
observed that nations with high levels of material standards of living tend to have high
levels of knowledge and skill in the management of business. Management has a social
responsibility in addition to making profit. They oversee the operation of the economic
systems that fulfills the expectations of the public such as safeguarding shareholders
investment, providing a reasonable return, keeping employees satisfied and contented by
ensuring payment of fair wages, good working conditions and security of employment.

Management is also responsible for customers‘ needs e.g. quality goods and services. To
the State, it is the major source of income through taxes hence the business must be
conducted in accordance with state policy. It also has responsibility to the society by
maintenance of ethical behaviour. It should also be innovative and creative to produce
goods and services for the increased comfort of mankind. It is management knowledge
therefore that enables these multidimensional responsibilities of management to be
achieved. The key to successful management is the ability to identify the right things to be done
(effectiveness) and to concentrate resources on them (efficiency)

Using examples, identify the consequences of

customers/clients, suppliers, government and society
poor management to: employees,

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1.11 Environmental influences on management
Although most of a manager‘s time is spent in interactions with subordinates inside the
organization, the manager must also deal with issues in the external environment. These
consist of the micro, market and macro environments. The environmental concept refers to
the sum total of the factors or variables that may influence the continued existence of an
organization. They may be factors inside or outside the organization. An organization does
not exist in a vacuum, but in an environment that provides resources and limitations.

To remain prosperous, therefore, it must continually adapt to its environment, which is

constantly changing. An organization and its environment are interdependent. The
environment provides resources and feedback to the organization and it, in turn, produces
the goods and services required by the environment. An organization exists only for as long
as activities are desired and supported by the environment. The environment is made up of
threats, opportunities limitations and resources.

1.12 Types of environments

i) Micro environment
This consists of the organization itself:
▪ The mission, goals, objectives and strategies of the organization.
▪ The organization and its management
▪ The resources of the organization e.g. employees, capital, finance, etc ▪ The
organizational culture.

ii) Market environment

This is the environment that surrounds the organization also known as the competitive or
industry and comprises of:
▪ Consumers, their needs, purchasing power and behaviour.
▪ Suppliers of materials, capital and labour
▪ Intermediaries e.g. wholesalers and retailers, commercial agents and brokers,
banks etc.
▪ Competitors e.g. new entrants, existing competitors, availability of substitute
products or services and the bargaining power of clients, consumers and
suppliers.

iii) Macro environment

Is that which exists outside the organization. It comprises:

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 ▪ Technological environment: responsible for accelerating change and
innovation and creating opportunities and threats in the environment.
▪ Economic environment: responsible for change in the environment because of
changes in economic growth rate, levels of unemployment, consumer income,
rate of inflation and the exchange rate.
▪ Socio-cultural environment: referring to changes in value systems, family
structures, education, attitudes, ethics, workforce diversity, etc.
▪ Ecological/physical environment: is concerned with the natural resources from
which the organization derives its raw materials and the environment on which
the organization discharges its waste.
▪ The political-governmental environment: refers to the government and its
influence on the organization, e.g. in terms of political risk, legal matters,
government expenditure etc.
▪ The international environment: comprises of the factors emanating from other
countries with which the organization directly or indirectly has business
relations.

An organization can therefore be said to be an open system because it is dependent on the

environment in which it operates. (A closed system can exist independently). There is
specific interaction between the system and the environment.
Micro-
organizational
level

Market industry
level

Macro/internation
al level

1.13 Ways in which management can react to the Environment.

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 • Environmental scanning: refers to the measuring, projection and evaluation of
change in the environment. Organizations management information systems
should make provision for this.
• Strategy response: This may include changes in present strategy or formulation
of new strategies.
• Structural Change: The organization structure can be redesigned, adapted or
modified as a response to changes in the environment e.g. a flexible vs.
bureaucratic structure, integration vs. differentiation, decentralized vs.
centralize etc.
• Cultural change: change the organizational culture from closed to open etc.

1.14 Organizational culture and environment

Organizational culture is a pattern of shared beliefs and values (Morgan 1986) (Shared
meaning, shared understanding and shared sense making). Handy (1993), notes that
organizations have differing atmospheres, differing ways of doing things, differing levels
of energy, individual freedoms and kinds of personality. Organizations are like mini
societies that have their own distinctive patterns of culture and sub-cultures which can exert
a decisive influence on the overall ability of the organization to deal with its challenges.

The dominant culture that develops in an organization is the product of its founders aims
and styles and their successors in senior management and interaction with a variety of
internal and external forces.

Determinants of organizational culture

• Organizational mission and vision
• Corporate aims
• Policy statements
• Rituals, eg dressing, address
• Logos, brand names
• Rules, procedures
• Management attitudes
• Peer group attitudes
• Structures
• Technology etc

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 Consider a recent event that occurred at any of the three types of environments described
above. State whether it was a social, political economic or technological event; which
businesses were affected and how; which other environments have been affected by this
event and how?
1.15 Summary
Congratulations! We have now come to the end of chapter one. In this lecture we have
discussed the meaning and characteristics of management. The five major functions of
management – planning, organizing, directing, staffing and controlling were briefly
introduced. We also discussed the roles of management and skills that managers require at
different levels. These are technical, human and conceptual skills. From these discussions
we noted that management is a universal activity that is result-oriented and its evidence is
in the effectiveness and efficiency of an organization. It is also an art and a science in that
its practice utilizes knowledge organized and systematic derived using scientific methods.
It is also an organizational function that operates within a micro and a macro environment
where variables such as the organizational policies, employees attitudes and the political,
economic and technological factors are at play.

1.1 Self-test
To be able to know if you have achieved the objectives of this chapter, attempt
the following questions.
1. Define the concept of management
2. Describe the characteristics of management
3. State the functions of management
4. Identify the skills that managers require at different and justify why they are
important
5. Discuss the various roles of management
6. Identify the various of the management environment and explain them
using PESTEL
7. Discuss how management can respond to a changing environment

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1.2 Suggestions for further reading

2 Koontz H.O et al, (1988) Management, McGraw Hill

3 Cole G.A, (1996) Management – Theory and Practice, Pitman, London

4 Donnelly J, Fundamentals of Management, Irwin, Boston

5 Dressler, G, (2002) Management Fundamentals-Modern principles and
practices, Irwin, Boston

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 LECTURE TWO
MANAGEMENT THEORY

Lecture outline

2.1 Introduction
2.2 Lecture objectives
2.3 Development of management thought
2.4 Classical scientific management
2.4.1 Scientific management
2.4.2 Administrative approach
2.4.3 Systems approach
2.4.4 Contingency approach
2.4.5 Management science approach
2.4.6 Bureaucratic approach
2.6 Neo-classical approach to management
2.6.1 Human relations approach
2.7 Summary
2.8 Self-test
2.9 Suggestions for further reading

2.1 Introduction
In lecture two, we shall discuss the theories of management. These are divided into the
classical, bureaucratic and neo-classical approaches to management. Although we are
referring to this section as Management Theories, many texts and other sources refer to
these theories as management approaches or management concepts. Regardless of what you
call them, we are talking about some of the historical and leading concepts in the field of
management. It would certainly worth our time to read over many of these ideas in more
detail. Here are just a few general ideas about some of these theories.

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 2.2 Lecture Objectives
At the end of this lecture, you should be able to:

1. Describe the principles of scientific management as advanced by Fredrick Taylor

2. Discuss the rational-economic view in relation to scientific approach to management
3. Discuss the principles of management as advanced by Henri Fayol
4. Examine the bureaucratic approach to management as advanced by Max Weber
5. Discuss the significance of the systems, contingency and management science
approaches to modern management
6. Describe the human relations approach to management

2.3 Development of management thought

The history and theory of management are important to managers for various reasons:
▪ They help managers understand current developments and avoid mistakes of the
past
▪ They foster an understanding and appreciation of current situations and
developments and facilitates the prediction of future conditions
▪ They help managers organize information and approach problems systematically.
Without knowledge of theory, managers would be using guess work, hunches,
intuition and hopes which may not be useful in the present complex and dynamic
organization.

The practice of management can be traced to the beginning of man. Egyptian, Greek,
Roman and Chinese civilizations all have records indicating the importance of
management. (The writings of Sun Tzu on the ‗Art of War‘, written 2500 years ago are
a lesson on strategic management). In Greece, Socrates the famous philosopher
observed that ―the management of private affairs such as households is not different
from the conduct of public affairs except in magnitude‖

The biblical Moses used the Principle of delegation and hierarchy of command to
manage the Israelites during the exodus. (Exodus 18: 1-27). Joshua used the
management techniques to recruit soldiers for war. The Roman Catholic Church over
the centuries has effectively used the principles of division of labor and hierarchy of

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authority. The Roman empire colonized many parts of the world for many centuries by
effectively using basic management ideas such as scalar principle and delegation of
authority.

Niccolo Machiavelli in ‗The Prince‘ gives relevant ideas on how to develop and use
management skills. He suggests to ‗The Prince‘ ideas on – consent of the majority,
inspiration of people to greater achievement, offer of rewards and incentives and taking
advantage of all opportunities.

The above early influences on management, however, do not give much insight into
the principles of management as they are not organized and the relationships
among various variables are not explained. The knowledge is based on trial and
error and experience rather than organized scientific knowledge.

It was only in the late 19th century that large business organizations requiring systematic
administration started to emerge. In this section we shall focus on early schools of
management.

2.4. Classical Management Theory

The Classical Approach to management was the first significant effort to develop a body
of management thought. This approach is actually broken down into two categories,
Scientific Management and Classical Organization Theory. History records the
approach as the first concentrated effort to study management. Scientific Management
was concerned with the management of work and with the workers. It also was looking
for the one best way to perform a task. The leading proponent was
Frederick Taylor, and he would observe and time each element of a worker‘s job
trying to find more efficient ways of doing the task. Classical Organization Theory
focused more on managing the total organization. Henry Fayol was the leader in this
field, and he was the first to identify planning, organizing, leading, and controlling as
important managerial concepts. He also expressed many other principles such as:
division of labor, authority, discipline, unity of command and many others.

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 2.4.1 Scientific management theory

Changes in economic and production patterns during the industrial revolution led a few
practicing managers to examine the causes of inefficiency in production. It is these
basic studies that led to a system of management known as scientific management.

Scientific management has been defined as the application of scientific method of

study, analysis and problem solving in organizations.

The Thoughts of Frederick Taylor (1856-1917)

Taylor, an engineer in an American steel firm was concerned about the best methods of
doing jobs. He saw the main problem to be that of efficiency of workers in relation to
existing property relationships between workers and owners of organizations. He suggested
the development of a true science of management where methods for performing each task
could be determined. He advocated a mental revolution by both management and workers.
Taylor is referred to as the ‗father of scientific management‘

His findings were:

(i) Workers deliberately restricted production in their daily work due to fear of
unemployment and lack of piece rate system.
(ii) Lack of work rationalization, hence overlapping of jobs. The method of working
was also too complicated.
(iii) Due to poor remuneration, workers formed themselves into groups and labour
unions to press for better wages.
(iv) Management left the initiative of working methods to the ingenuity of workers (rule
of thumb).

To solve the above problems, Taylor suggested the following principles to guide
management.
Each worker should have a clearly defined daily task.
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 i. Establish standard conditions to ensure the task is more easily accomplished e.g.
work-study and motion studies.
ii. High payment for successful completion of tasks and none or lower payment when
standards are down. He believed money was a major motivator. iii. The scientific
selection, education and development of workers. iv. Friendly, close cooperation
between management and workers.
v. Managers should take more supervisory responsibility, arguing that workers preferred
to be given a definite task with clear-cut standards.

He emphasized planning and greater control by managers.

▪
▪ He believed adoption of scientific approach to managing would lead to prosperity
for both managers and workers.
▪ He believed conflict about how to divide profits was retrogressive and
unproductive.
▪ Wages should be scientifically determined and should not be left to the whims
of managers or power of trade unions.

The basic assumptions of scientific management were:

▪ Improved results in organizations will come from the application of scientific
methods of analysis to organizational problems. This implies that scientific
approach to problems is superior to other methods e.g. informal sector
▪ The focus is on the work itself and not the particular person doing the work
▪ Each worker is assumed to be a classical economic man hence interested only
in maximization of his monetary income

Evaluation of Scientific management

While Taylor‘s ideas of scientific management contributed to modern management, there
were also a number of limitations. Limitations
▪ The revolutionary ideas advocated by Taylor increased productivity but led to
layoffs
▪ It assumed people were rational and therefore motivated only by material gains.
Taylor and his followers overlooked the social needs of workers. They assumed that
one had only to tell workers what to do to increase their earnings and they would do
it. However, people have needs other than money e.g. recognition and acceptance

27
▪ They also overlooked the human desire for job satisfaction and workers became
more willing to go out on strike over job conditions rather than salary.
▪ The assumption that human beings are rational creatures who base their decisions
on rationality and logical analysis of their needs is not universally applicable to all
human beings.

Benefits of the Scientific Management Thoughts

(i) Its rational approach to organization of work enabled tasks to be measured with
accuracy.

(ii) Tasks measurement and processes provided useful information on which to base
improvement on working methods.

(iii) Improvement of working methods brought enormous

increases in productivity.

(iv) Enabled employees to be paid by results and to take advantage of incentive

schemes.

(v) Stimulated management into adopting a more positive role in leadership at the
factory level.

(vi) Contributed to major improvements in physical working conditions.

(vii) It provided the foundations on which modern work study and other quantitative
techniques are based.

Disadvantages of Scientific Management

(i) Reduced the role of workers to that of rigid adherence to methods and
procedures over which they have no discretion.

(ii) Led to fragmentation of work because of emphasis on analysis and organization

of individual operations, hence boring, repetitive jobs.

(iii) Generated a carrot and stick approach to the motivation of employees enabling
pay to be geared tightly to output.

(iv) It put the planning and control of workplace activities exclusively in the hands
of management, alienating workers.

28
 (v) Ruled out any realistic bargaining about wage rates since every job was
measured, timed and rated scientifically.

The concepts/ideas advanced by Taylor are not far from the fundamental beliefs of
the modern manager. A number of post Taylor studies are found in the
literature
e.g. The Hilbreths, Gault, E merson, and Filene. They all attempted to improve on
Taylor‘s ideas.
Note also, while while most of these ideas have been adopted, some are
difficult to implement in practice because of changes in organizations
and environmental conditions.

2.4.2 Administrative Theory

This theory came out of a need to find guidelines on how to manage complex organizations
such as factories. Henry Fayol is recognized as the ‗father of classical organization theory‘
since he was the first person to systematize managerial behaviour. Another contributor is
Max Weber (1864-1920) with his bureaucratic model.

Henri Fayol (1841-1925)

Fayol was an engineer in a large French Company. Fayol, unlike Taylor started in
management and his ideas therefore are more concerned with the science of management.
As such he drew up a list of principles of management.

Fayol believed that sound managerial practice fell into patterns that could be identified and
analyzed. He also believed that management is not a personal talent but a skill that can be
taught and learnt.

It is notable that Fayol‘s observations fit well into the currently developing management
theory. Fayol's work was one of the first comprehensive statements of a general theory of
management. He proposed that there were five primary functions of management and 14
principles of management

Functions of management are to:

29
1. Forecast and plan
2. Organize
3. Command
4. Coordinate
5. Control

Fayol's work has stood the test of time and has been shown to be relevant and
appropriate to contemporary management. Many of today‘s management texts have
reduced the six functions to five: (1) planning; (2) organizing; (3) Staffing (4) Leading;
and (5) controlling.

Principles of Management

1. Division of work. This principle is the same as Adam Smith's 'division of labour'.
Specialisation increases output by making employees more efficient.
2. Authority. Managers must be able to give orders. Authority gives them this right.
Note that responsibility arises wherever authority is exercised.
3. Discipline. Employees must obey and respect the rules that govern the organization.
Good discipline is the result of effective leadership, a clear understanding between
management and workers regarding the organization's rules, and the judicious use
of penalties for infractions of the rules.
4. Unity of command. Every employee should receive orders from only one superior.
like from top to bottom in an organization.
5. Unity of direction. Each group of organisational activities that have the same
objective should be directed by one manager using one plan.
6. Subordination of individual interests to the general interest. The interests of any one
employee or group of employees should not take precedence over the interests of
the organization as a whole.
7. Remuneration. Workers must be paid a fair wage for their services.
8. Centralisation. Centralisation refers to the degree to which subordinates are
involved in decision making. Whether decision making is centralized (to
management) or decentralized (to subordinates) is a question of proper proportion.
The task is to find the optimum degree of centralisation for each situation.
9. Scalar chain. The line of authority from top management to the lowest ranks
represents the scalar chain. Communications should follow this chain. However, if
following the chain creates delays, cross-communications can be allowed if agreed
to by all parties and superiors are kept informed.
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 10. Order. People and materials should be in the right place at the right time.
11. Equity. Managers should be kind and fair to their subordinates.
12. Stability of tenure of personnel. High employee turnover is inefficient. Management
should provide orderly personnel planning and ensure that replacements are
available to fill vacancies.
13. Initiative. Employees who are allowed to originate and carry out plans will exert
high levels of effort.
14. Esprit de corps. Promoting team spirit will build harmony and unity within the
organization.

2.4.3 Max Weber (1864-1920)

The concept of bureaucracy is attributed to Max Weber (1864-1920), a German

sociologist. Max Weber belongs to the Scientific School of Thought, who among others,
discussed intensely on subject-matters, such as, specialization of job-scope, merit system,
uniform principles, structure and hierarchy, to name a few. Among the scholars of his
contemporaries are, Frederick Taylor (1856-1915), Henri Fayol (1841-1925), Elton Mayo
(1880-1949.

Many aspects of modern public administration go back to him, and a classic, hierarchically
organized civil service of the Continental type is called "Weberian civil service". Weber's
ideal bureaucracy is characterized by hierarchical organization, delineated lines of authority
in a fixed area of activity, action taken on the basis of and recorded in written rules,
bureaucratic officials need expert training, rules are implemented by neutral officials, career
advancement depends on technical qualifications judged by organization, not individuals.
His interest in organizations was from the sociological perspective of why people obeyed
those in authority and why those in authority abused power. He published ―the theory of
social and economic organization‖ which was translated into English in 1947. He used the
term bureaucracy to describe the structure of organizations.

A bureaucracy is an organization of non-elected officials of a governmental or

organization who implement the rules, laws, and functions of their institution, and are
occasionally characterized by officialism and red tape.
The term has been used to mean:

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 • Red tape – an excess of paper work and rules leading to gross inefficiency
• Officialdom – all the apparatus of local and central government
• An organizational form made up of rules and hierarchy of authority.

Characteristics of Bureaucracies
a) Specialization – have a high degree of labour division thus ability and not personal
loyalty is the condition for employment
b) Rational – official jurisdictional areas are rationally determined by a clear hierarchy of
authority; duties and measures of performance are established and positions are well
defined and formalized in writing.
c) Professional - follows formal impersonal procedures of the organization. Organizational
structures are well defined and exist prior to filling positions with people.
d) Impersonal - authority is impersonal and amount of authority corresponds with rank of
office
e) Autonomous – officials, because of their expertise and technical competence are
recognized and rarely questioned within their areas of expertise.
f) Stable – performance is encouraged by rewards in form of stable careers, regular salary,
promotion and pensions.

- A bureaucratic organization has a functional structure, clear lines of authority and

obedience is owed to established rules and regulations.
- It has hierarchical levels of authority with firmly ordered superior-subordinate
relationships.
- Terms of employment are based on rank of office rather than amount of work
(performance)
- Bureaucracy is common in large complex organizations which depend on
specialization, rules and procedures for efficiency

Weaknesses
a) Works well only in stable environments where the work and information handled are
highly predictable, recurrent, routine and familiar.
b) Rules become so important that they become an obstacle to efficiency

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c) Decision making processes are programmed hence discouraging search for other
alternatives (is rigid)
d) Rigid behaviour damages relations with clients or customers as they are unable to get
tailor made services but have to accept the standard provided within the rules.
e) Difficult to change and adapt to new circumstances
f) It undervalues the human element by assuming that people are passive and respond only
to rules and incentives. It failed to see the fact that people are capable of going against
rules.

1. What common features do you see between Fayol‘s principles of management

and Weber‘s description of bureaucracy?
2. Discuss the advantages and disadvantages of bureaucratic structures. Why do you
think such structures may not be suitable for organizations that operate in highly
unstable environments?
3. Discuss the situations in which bureaucratic systems are desirable

2.5 Systems approach

Systems Approach states that to fully understand the functions of an entity, the entity must
be viewed as a system whose parts are interdependent. This concept was proposed by
Ludwig von Bertalanffy in 1968. It is based on two assumptions:
i. All phenomena can be viewed as a web of relationships among elements.
ii. All systems have common patterns, behaviors, and properties that can be
understood and used to develop greater insight into the behavior of complex
phenomena.

Think about an organization you are familiar with and identify the
various components that work together to make up the whole organization. As you
do that refer to the following principles of a system listed below.

The basic principles of the systems approach are:

1. A system is greater than the sum of its parts.

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 2. Though each sub-system is a self-contained unit, it is part of a wider and higher
order.

3. A system and its environment are highly interrelated.

4. A highly complex system may have to be broken into subsystems so each can be
analyzed and understood before being reassembled into a whole.

5. A system is a dynamic network of interconnecting elements. A change in only one

of the elements produces change in all the others.

6. When subsystems are arranged in a series, the output of one is the input for another;
therefore, process alterations in one require alterations in other subsystems.

7. All systems tend toward equilibrium, which is a balance of various forces within
and outside of a system.
8. Systems have boundaries which can change.

9. To be viable, a system must be strongly goal-directed, governed by feedback, and

have the ability to adapt to changing circumstances.

10. Emergence: arising of characteristics from the interactions of the parts of the system

11. Synergy (combined effort is greater than sum of parts)

12. Interdependence (dependent on each other)Interconnections within the organization

and between the organization and the environment

The organization is a system of interrelated parts working in

conjunction with each other in order to accomplish a number of goals.

Systems can be closed or open. A closed system has the following characteristics:
• A self-sufficient entity.
• State of being isolated from its environment
• Does not need to interact with its environment to maintain its
existence.
• The elements or processes do not leave the system.
• Mechanical systems
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 An open system
• Depends on its surrounding environment for survival.

• Continually interacts with its environment

• Elements or processes can flow into or out of the system.

Systems are therefore classified as open or closed depending on how much or

how little they interact with their environments
2.6 Contingency approach

Contingency approach, also known as situational approach, is a concept in management

stating that there is no one universally applicable set of management principles (rules) by
which to manage organizations. Organizations are individually different, face different
situations (contingency variables), and require different ways of managing.

Contingency approach evolved during the 1960s. Management theory and research began
to adopt a new orientation, one that embodied a simple concept and enabled significant
advancements in the study of management and organizations, now referred to as the
contingency approach. It emphasised the importance of situational influences on the
management of organisations and questioned the existence of a single, best way to manage
or organise. Today, the contingency approach dominates theory and research in the
management literature. Contingency approach challenged the classic process and models
designed by management theorists such as Fredrick Taylor and Henri Fayol.

The contingency approach to management is based on the idea that there is no one best way
to manage and that to be effective, planning, organizing, leading, and controlling must be
tailored to the particular circumstances faced by an organization. Managers have always
asked questions such as

• "What is the right thing to do?

• Should we have a mechanistic or an organic structure?
• A functional or divisional structure?
• Wide or narrow spans of management?
• Tall or flat organizational structures?
• Simple or complex control and coordination mechanisms?
• Should we be centralized or decentralized?
• Should we use task or people oriented leadership styles?
35
 • What motivational approaches and incentive programs should we use?"

The contingency approach to management (also called the situational approach) assumes
that there is no universal answer to such questions because organizations, people, and
situations vary and change over time. Thus, the right thing to do depends on a complex
variety of critical environmental and internal contingencies.

Historical Overview of Contingency Theory

Classical management theorists such as Henri Fayol and Frederick Taylor identified and
emphasized management principles that they believed would make companies more
successful. However, the classicists came under fire in the 1950s and 1960s from
management thinkers who believed that their approach was inflexible and did not consider
environmental contingencies. Although the criticisms were largely invalid (both Fayol and
Taylor, for example, recognized that situational factors were relevant), they spawned what
has come to be called the contingency school of management. Research conducted in the
1960s and 1970s focused on situational factors that affected the appropriate structure of
organizations and the appropriate leadership styles for different situations. Although the
contingency perspective purports to apply to all aspects of management, and not just
organizing and leading, there has been little development of contingency approaches
outside organization theory and leadership theory.

The following sections provide brief overviews of the contingency perspective as relevant
to organization theory and leadership.

Contingency Perspective and Organization Theory

Environmental change and uncertainty, work technology, and the size of a company are all
identified as environmental factors impacting the effectiveness of different organizational
forms.

According to the contingency perspective, stable environments suggest mechanistic

structures that emphasize centralization, formalization, standardization, and specialization
to achieve efficiency and consistency. Certainty and predictability permit the use of
policies, rules, and procedures to guide decision making for routine tasks and problems.

36
Unstable environments suggest organic structures which emphasize decentralization to
achieve flexibility and adaptability. Uncertainty and unpredictability require general
problem solving methods for non-routine tasks and problems. Paul Lawrence and Jay
Lorsch suggest that organizational units operating in differing environments develop
different internal unit characteristics, and that the greater the internal differences, the greater
the need for coordination between units.

Joan Woodward found that financially successful manufacturing organizations with

different types of work technologies (such as unit or small batch; large-batch or
massproduction; or continuous-process) differed in the number of management levels, span
of management, and the degree of worker specialization. She linked differences in
organization to firm performance and suggested that certain organizational forms were
appropriate for certain types of work technologies.

Organizational size is another contingency variable thought to impact the effectiveness of

different organizational forms. Small organizations can behave informally while larger
organizations tend to become more formalized. The owner of a small organization may
directly control most things, but large organizations require more complex and indirect
control mechanisms. Large organizations can have more specialized staff, units, and jobs.
Hence, a divisional structure is not appropriate for a small organization but may be for a
large organization.

In addition to the contingencies identified above, customer diversity and the globalization
of business may require product or service diversity, employee diversity, and even the
creation of special units or divisions. Organizations operating within the United States may
have to adapt to variations in local, state, and federal laws and regulations. Organizations
operating internationally may have to adapt their organizational structures, managerial
practices, and products or services to differing cultural values, expectations, and
preferences. The availability of support institutions and the availability and cost of financial
resources may influence an organization's decision to produce or purchase new products.
Economic conditions can affect an organization's hiring and layoff practices as well as
wage, salary, and incentive structures. Technological change can significantly affect an
organization. The use of robotics affects the level and types of skills needed in employees.
Modern information technology both permits and requires changes in communication and
interaction patterns within and between organizations.

37
Contingency Perspective and Leadership

Dissatisfaction with trait-based theories of leadership effectiveness led to the development

of contingency leadership theories. Fred Fiedler, in the 1960s and 1970s, was an early
pioneer in this area. Various aspects of the situation have been identified as impacting the
effectiveness of different leadership styles. For example, Fiedler suggests that the degree to
which subordinates like or trust the leader, the degree to which the task is structured, and
the formal authority possessed by the leader are key determinants of the leadership
situation. Task-oriented or relationship oriented leadership should would each work if they
fit the characteristics of the situation.

Other contingency leadership theories were developed as well. However, empirical research
has been mixed as to the validity of these theories.

Current Perspectives on the Contingency Approach

As derived from these conceptual antecedents, the essential premise of the contingency
approach is that effectiveness, broadly defined as organizational adaptation and survival
can be achieved in more than one way. For example, management theorists and researchers
have recognised more than one way to organise effectively, more than one strategy that
maximises profitability and market position, and more than one leadership style that
achieves organisational goals. Each way is not equally effective under all conditions; certain
organisational actions or responses are more appropriate than others, depending on the
situation The contingency approach suggests, therefore, that we can observe wide variations
in effectiveness, but that these variations are not random.
Effectiveness depends on the appropriate matching of contingency factors with internal
organisational designs that can allow appropriate responses to the environment.

2.7 Management science approach

The management science approach originated during World War II as a means for making
the best use of available resources within military operations, according to the Encyclopedia
of Business. By studying existing strategies and tactics, the military hoped to gain a better
perspective on where resources could best be used. The success of this approach soon found
its way into the business world after World War II. Technological advances and economic
growth saw business managers wanting to make the most of their available resources. The

38
management science approach proved an effective means for maximizing resources and
reframing large operational problems into manageable scenarios.

Management science also goes by the name operations research, which somehow explains
the approach management scientists take when working in a business setting. Just like the
scientific method, the management science approach identifies a problematic issue or
process within a business' operations. It then develops possible theories for how the problem
developed and designs possible solutions. Scientists develop models from which to test
proposed theories and gather data from the results. Analysis of the data then provides
practical solutions for solving a problem.

The management science approach uses mathematical models of analysis to

apply the scientific method to business operations or processes.

Mathematical models uncover relationships between related

and unrelated variables, such as number of employees versus number of products produced
within a manufacturing environment. A mathematical model can uncover unknown
problem areas, such as equipment designs that slow the overall production process. The
results obtained from mathematical models enable decision-makers to develop solutions
based on the resulting data.

The use of management science within business operations can translate systems and
processes into measurable terms. In effect, the approach brings a new and practical
perspective on how different areas of an organization work together and affect its overall
output or effectiveness. Measurable results provide opportunities for decision-makers --
who work in seemingly unrelated processes, systems or departments -- to work toward a
common end goal. As a result, the management science approach plays a vital role within
large, complex operations such as government organizations, mass transit planning and
criminal analysis and investigations.

2.8 Neo-Classical Theory of Management

While the scientific management theorists were more concerned with the mechanics and
structure of organization, the neo-classical school of thought was more concerned with the
39
human factor i.e. people and their relationship with the organization, fellow workers and
the job. This set of ideas is also referred to as human relations school of thought or the
the behavioral approach. The aim is to increase production by understanding the people.
This approach believed that understanding the people and adapting the organization to them
would result in increased production. The approach was concerned with individual
attributes and behaviors in a group process. The primary catalyst for this movement was
the Hawthorne Studies by Elton Mayo. This well documented study manipulated the
illumination of workers in a plant. The results indicated that no matter what happened to
the lights the production increased because attention was being paid to the workers.

2.8.1 The works of Elton Mayo (1880 – 1949)

Elton was an Australian practicing psychologist at Harvard University. Mayo is known as

the founder of the Human Relations Movement, and is known for his research including the
Hawthorne Studies and his book The Human Problems of an Industrialized Civilization
(1933). The research he conducted under the Hawthorne Studies of the 1930s showed the
importance of groups in affecting the behavior of individuals at work. This enabled him to
make certain deductions about how managers should behave. His findings can be
summarized as follows:-
(i) Individual workers cannot be treated in isolation but must be seen as
members of a group.
(ii) The need to belong to a group and have status within it is more important
than monetary incentives or good working conditions.
(iii) Informal groups at work exercise a strong influence over the behaviour
of workers.
(iv) Supervisors need to be aware of these social needs and cater for them if
workers are to collaborate with the official/formal organization rather
than work against it.

The studies proved that interpersonal and group values are superior
to managerial and individual values. Managers who do not have the enthusiastic
support of the groups they supervise will be unable to motivate individual members
to a significant degree.

40
 Weaknesses of the human relations school of thought
▪ In viewing people as the most important organizational variable it committed
the mistakes of earlier theories of suggesting one best way of managing
▪ It saw workers as social beings motivated by social needs but this is too
simplistic as human beings are complex and motivated by many variables
▪ It assumed satisfied workers are highly productive but this is not always true

2.8.2 Assumptions about people.

To understand the human factor in organizations, assumptions made about people need to
be understood especially in the superior-subordinate relationship. The major theories of
motivation and leadership were developed after the Hawthorne studies of Elton Mayo.

Edgar Schein (1965)

Schein was an American academic who published a classification of assumptions about
people. Implicit in management ideas is what motivates people.

(i) Rational – Economic Man

This view or assumption has its roots in the economic theories of Adam Smith (1776). It
states that self-interest and the maximization of gain are the prime motivators of people.
It stresses man‘s rational calculation of self-interest especially in relation to economic
needs. Hence people are either untrustworthy and money-motivated or trustworthy and
motivated by broader issues. This appears to have been an important assumption in the
mind of Taylor and his followers. (ii) Social Man
This assumption draws from the conclusions of Elton-Mayo. This view sees people as
dominated by social needs. Acceptance of this view means managers need to pay more
attention to people‘s needs rather than tasks, groups and a change of role for manager from
organizer and controller to guide and supporter.

(iii) Self-actualizing man

This view is based on Maslows theory of human needs. It sees self-fulfillment needs as the
main driving force behind individuals. The managerial strategy should be one that provides
challenging work, delegation, responsibility and autonomy of work. While this view is true
for managers and professional staff, it is less clear for lower grade employees.

41
 (vi) Complex Man
This view sees human beings as complex and variable. People‘s motives vary depending
on tasks, work groups or organizational climate. Managers must therefore be able to also
adapt and vary their own behaviour in accordance with the motivational needs of particular
individuals and teams. Schein sees motivation in terms of psychological contract based on
the expectations that employers and employees have of each other.
Hence the relationship between an individual and his organization is an interactive one.

Douglas McGregor (1967)

Like Schein‘s classifications, McGregor‘s theory X and theory Y are a set of assumptions
about people. After observing the actual practice of managers, he proposed that they were
operating on two levels.

(a) Theory X
i. The average person has an inherent dislike for work and will avoid it if possible.
ii. Because of dislike for work, people must be coerced, controlled, directed and
threatened with punishment to get them to work.
iii. The average human being prefers to be directed, wishes to avoid responsibility,
has limited ambition and wants security above all else.

(b) Theory Y
i. The use of physical and mental effort in work is as natural as play or rest.
ii. People will exercise self-direction and self control in the service of objectives
to which they are committed.
iii. Commitment to objectives is a function of the rewards associated with
achievement.
iv. The average human being learns under proper conditions not only to accept but
to seek responsibility.
v. The capacity to exercise a relatively high degree of imagination, ingenuity and
creativity in the solution of organizational problems is widely and not narrowly
distributed.
vi. Under conditions of modern industrial life, the intellectual potentialities of the
average human being are only partially utilized.

42
 Attitudes and behaviour towards other people are a reflection of the assumptions we
make about people.
McGregor‘s theory X corresponds closely to Schein‘s rational-economic man, while
theory Y corresponds to self-actualizing man.
McGregor‘s assumptions have found wide application in issues of leadership than in
general management.
Based on these assumptions, managers should consider seriously practices such as
flexibility in working time, job enrichment, performance appraisal, participation etc.
In real life, a blend of the two assumptions can be observed.

2.9 Summary
In Lecture two, we discussed the theoretical foundations of management. We noted that
management has always been practiced by mankind from ancient times as exemplified by
historical records such as the bible and archeological findings of ancient civilizations such
as the Greek and Egyptian civilizations. However, the missing link is that this knowledge
was based on trial and error, commonsense and intuition. The advent of scientific
management advocated by Fredrick Taylor provided management knowledge based on
scientific findings. The ideas of Henri Fayol, Max Weber and the human relations
proponents such as Elton Mayo added to our knowledge of man agement through the
scientific method. These early scientific ideas have further been advanced by more
contemporary concepts such as the systems, contingency and management science
approaches to management

43
 2.10 Self-assessment questions

1. Explain the meaning of the term ‗scientific management‘

2. State the principles of scientific management as advanced by Fredrick Taylor

3. State some of the limitations and benefits of scientific management
4. State the principles of management by Henri Fayol
5. Using examples, explain how these principles of management can enhance
management efficiency and effectiveness
6. Explain the meaning of the concept of bureaucracy
7. Discuss the characteristics of a bureaucracy
8. Identify the advantages and disadvantages of bureaucratic structures
9. Discuss the significance of the systems, contingency and management science
approaches to modern management
10. Discuss the contribution of Elton Mayo to the human relations approach
11. ‗People are motivated only by money‘ Discuss this statement in relation to the
rational-economic view advanced by Edgar Schein
12. Discuss how you would apply the knowledge of Theory Y and Theory X in as a
manager

44
2.11 Suggestions for further reading

1. Taylor F.W. (1911) Principle of Scientific Management (New York: Harper and
Brothers.
2. Fayol. H. (1929) General and Industrial Management. Trans. By J.A. Conbrough
(Geneva: International Management Institute. 1929).
3. Burns [Link] Stalker G. (1961) The management Innovation. London, Tavistock
4. Koontz H.O and Weihrich H. (1988) ‗Management‘, McGraw Hill, International
Edition
5. Valarie A. Zeithaml, P. ―Rajan‖ Varadarajan, Carl P. Zeithaml, (1988) "The
Contingency Approach: Its Foundations and Relevance to Theory Building and
Research in Marketing", European Journal of Marketing, Vol. 22 Iss: 7, pp.37
6. Cole G.A, (1996) ‗Management – Theory and Practice‘, Pitman, London
7. Donnelly J, ‗Fundamentals of Management‘, Irwin, Boston
8. Dressler, G, (2002) ‗Management Fundamentals-Modern principles and practices‘,
Irwin, Boston
9. Robert N.L. (2009) Management Fundamentals. (USA: South-Western Cengage
Learning. International Student Edition.
10. Campbell, J. & Pritchard, D. (1976), Motivation Theory in industrial and
Organizational Psychology in Dunnette, M. (1976) Handbook of Industrial and
Organizational Psychology, Rand MCNally
11. Herzberg, F. (1968), Work and the Nature of Man, Staples Press
12. Kolb, D., Rubin, I & McIntyre, J. (1979), Organizational Psychology – An
Experiential Approach (3rd edn), Prentice Hall
13. Maslow, A. (1954), Motivation and Personality, Harper & Row
14. Peter Drucker, (1954), The Practice of Management
15. Wray, Ralph, Luft, Roger, L. & Highland, Patrick, J. (1996), Fundamentals of
Human Relations: Applications for Life and Work. Cincinnati, OH: Southwestern
Publishing
LECTURE THREE
PLANNING
Lecture outline
3.1 Introduction
3.2 Lecture objectives
3.3 Meaning of planning
3.4 Types of plans
3.5 Strategic planning
3.6 The Planning process
3.7 Objective setting techniques in planning
5.8 Barriers to effective planning
3.9 Summary
45
3.1 Introduction
Planning is the first task of a manager and forms the basis from which all the other tasks
are derived. Management decides the future of the organization, by planning, strategizing
and implementing plans.

3.2 Lecture objectives:

At the end of this lecture, you should be able to:
1. Define planning
2. Explain why planning is important.
3. Explain the types of plans in the hierarchy of plans
4. Identify the three levels of plans
5. State the characteristics of strategic plans
6. Outline the steps in the planning process
7. State what is meant by planning premises and explain their importance
8. Describe the concept of ‗management by objectives‘
9. Identify the barriers to planning and discuss how they may be avoided

What is Planning?

Planning is deciding what objectives to accomplish, the actions to be taken in order to

achieve them, the organizational position assigned to do them and who would be
responsible for the actions needed.
a) Planning precedes all other managerial functions as it establishes the objectives
and purpose of the project or enterprise.
b) It is the ‗star or compass‘ which directs the project.
c) Planning is a pervasive function – as it is performed by all managers at all levels.
It only varies with authority and nature of policies. (A manager is not a manager
if he does not perform a planning function).

46
 d) Research has shown that effective supervisors even at the lowest levels are those
who have the ability to plan.
e) Plans must be efficient – where efficiency is measured by the contribution of the
plan to accomplish objectives at the lowest cost. It implies the input-output ratio
and cost-benefit analysis of the of the plan.
f) Efficiency of plans is not measured only in terms of money but intangible costs
such low morale, hostility by employees, layoffs, and resentment.
g) A plan becomes inefficient if it cannot accomplish its intended objective or
accomplishes it at high costs e.g. A CEO who adopts a retrenchment plan to cut
costs only to experience lower productivity due to fear, resentment and loss of
morale by the employees thus defeating the objectives of reducing expenses and
making profits.

Organizations function in uncontrollable environments and to survive

they must plan to enable them be proactive. Effective planning requires development of
objectives to direct the plans. Plans can be influenced by: Values, experiences and
personality of the leader of an organization. Corporate culture – i.e. the beliefs and values
shared by people

3.3 Types of Plans

Plans are hierarchical. They range from the broad mission or purpose of the organization
to specific strategies.

Mission or purpose (tend to be

vague)

Goals & objectives (aimed at

specific activity)

Strategies (programme of action

to meet objective)

47
 Major & minor policies
(guides for decision making)

Procedures & rules (customary methods

for handling future activities)

Programmes/projects (specific tasks with aims,

rules etc.)

Budgets in figures (plan of

expected results expressed
numerically)

Figure 3.1 Hierarchy of plans

3.4 Scope of plans

Plans can be divided into:

Strategic plans - These are broad plans developed by top managers to guide the general
direction of the firm. They follow from major goals of the firm and indicate what business
the firm is in or what business it intends to be in. They show where the firm will position
itself within its environment.
Tactical plans - They have a moderate scope and immediate timeframe. They are
concerned with how to implement the strategic plans that are already developed. They deal
with specific resources and time constraints. They mainly focus on people and action. They
are mainly associated with middle management.
Operational plans - They have the narrowest focus and they fall into many types. They
include:
Standing plan- these are developed to handle recurring and relatively routine
situations. When the same situations occur repeatedly, managers have to develop
policies, rules and standard operating procedures to control the way employees
perform their tasks.
Single use plans – are developed handle non-programmed decision making in an
unusual or unique situation, e.g. specific action plan to complete a project or
programme.

48
 Long-range planning – covers several time periods from 5 years. They are mostly
associated with with activities such as major expansion of facilities, development of
top managers, change of manufacturing systems [Link] managers are responsible
for long range planning (modernization of Kenyan airports is a KAA long range
plan driven by top management)

Intermediate planning – they are less than five years and because of the uncertainty
associated with long-range plans, intermediate plans are the primary concern of
most organizations. They are usually developed by both top and middle
management. They are the building blocks in the pursuit of long range plans.

Short range planning – These cover time periods of one year or less. They focus
on day to day activities and provide a concrete base for evaluating progress towards
achievement of intermediate and long range plans e.g. the economic survey.

3.5 Levels of planning

Planning takes place at three levels of management: corporate, business and functional.

Corporate level strategy: The corporate level plan contains top management decisions
pertaining to the organization‘s mission and goals, overall strategy and structure. The
corporate level strategy indicates the industry and markets the organization intends to
operate in. It also provides the framework within which managers create their business level
plan.

Business level strategy: states the methods the division or business it intends to use to
compete against its rivals in an industry. The business level plan provides the framework
within which functional managers propose to pursue to help the division attain its business
level goals which in turn will allow the organization to achieve its corporate goals.

Functional level strategy: These set out the actions managers intend to take at the level of
departments such as manufacturing, marketing, and research and development to allow the
organization to attain its goals.

49
Consistency across the three levels is important for success. Functional strategies should be
consistent with divisional goals while business goals should in turn be consistent with
corporate strategies.

3.6 Strategic planning

Strategic planning is the formalized long-range planning process used to define and achieve
organizational goals. It involves: selecting an organizational goal, determining the policies
and strategic programmes necessary to achieve specific objectives, establishing the
methods necessary to ensure that policies and strategic programmes are implemented. A
vital component in strategic planning is organizational goals. They provide a sense of
direction for organizational activities. Goal includes purpose, mission and objectives.

Purpose is the primary role of an organization as defined by the society in which it operates.
It is a broad aim that applies not only to a given organization but to all organizations of its
type in that society. For example, the purpose of all hospitals is to provide healthcare.

Mission is that unique aim that sets the organization apart from others of its type.
Although the purpose of all hospitals is the same, individually, they have different
missions.

Objective is the target that must be reached if the organization is to achieve its goals. They
are the translation of its mission into specific corporate terms against which results can be
measured.

Strategy refers to the pattern of the organizations response to its environment over time.
Thus it is a broad programme for achieving the organizations objectives and thus
implementation of its vision.

3.6.1 Characteristics of strategic plans

A useful strategic plan exhibits many characteristics. Specifically, it should:
a. Provide answers to basic problems such as: what business should we be in?
who are our customers or who should they be?
b. Provide the basis for detailed planning and the day to day managerial
decisions
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 c. Set priorities - Setting priorities allows for the plan to be adjusted according to
changing needs or resources.
d. Achievable, measurable, and time sensitive [SMART] -remember, it‘s better
to do a few things well than many things poorly. The plan should contain goals
that are measurable and have deadlines.
e. Flexible and responsive to changing conditions - the plan is a road map that
may contain unforeseen detours such as unexpected crises, new opportunities,
or changes in resources.
f. Short and simple - plans that are more like a book will sit on a shelf. Keep it
focused on the most important things to accomplish.
g. A unit, not a menu - a useful plan is not a wish book. Everything in the plan
needs to be accomplished.
h. The means to an end, not an end in itself - the plan is the process by which it
reaches its destination; it is not the destination.
i. Based on a three- to five-year period - the strategic plan should be a living
document that has a one-year drop off and a new year added so that it always
covers the same time period.

3.6.2 Why organizations employ strategic planning

a. Managers find that the definition of the mission of their organizations in specific
terms through strategic planning gives their organization direction and purpose

b. It results in better functioning of the organization because it helps managers develop

a clear cut concept of their organization making it possible to formulate plans and
activities that bring the organization closer to its goals

c. It helps managers to prepare for and respond to the increasing complex and dynamic
environment. They are able to anticipate changes in the environment and prepare
for them. Such changes include: technological change; growing complexity of
managerial jobs; complex external environment (politics, culture, society etc); time
lag between current decisions and their future results etc. With all these changes
managers cannot afford to take a short-term perspective of their organization. They
need to look more into the future and integrate it with the present if their
organizations are going to survive.

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3.7 Steps in Planning

a. Being aware of opportunities by analysing the environment. At the outset the

internal and external environment is analyzed in order to identify the company‘s
strengths and weaknesses (in internal environment)and opportunities and threats
(existing in the external environment) this is also known as SWOT (Strengths
Weaknesses Opportunities and Threats ) analysis .
b. Establishing objectives or goals in the light of the environmental scanning, clear
or probable opportunities are identified and objectives or goals are clearly defined
in specific terms. Priorities in all the key areas of operations associated with such
objectives are also identified and defined, so that there may be special emphasis on
their planned solutions.
c. Premising are planning assumptions which form the context in which planning
takes place.
d. Planning premises set the parameters or boundaries within which realistic goals can
be formulated.
e. It means the organization cannot set goals and make goals that are unattainable in
terms of the environment and resources at the disposal of the org.

According to Koontz & O‘Donnel:

‖Planning premises include assumptions or forecasts of the future & known conditions
that will affect the course of plans, such as prevailing policies and existing company
plans that control the basic nature of supporting plans.‖

Planning Premises can be classified into external and internal premises. External
premises are those which lie outside the firm. General business environment including
economic, technological, political and social conditions, the product market consisting
of the demand and supply forces for the production or service and the factor market
for production resources. Internal premises include purpose, mission, experience of
management and management values which determine the organizational commitment
to social responsibility.

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In order to develop consistent and coordinate plans, it is necessary that planning is based
upon carefully considered assumption and predictions

a. Determining alternative courses of action.

This step involves search and examination of alternative courses of action.
Alternatives are many but they have to be reduced and analyzed until only a
few promising ones remain. Impossible or highly difficult propositions are
left out.
b. Evaluating alternative courses of action.
Evaluation involves weighing the strengths and weaknesses of a plan against
set objectives in terms of risk, profitability, returns, costs, technology, image
etc. Evaluation is difficult because of the many variables that can influence
a plan.
c. Selecting a course of action.
This is the point at which a plan is adopted. It is the point of decision making
on which alternative to follow.
d. Formulating derivative plans.
Once a decision is made and a course of action taken, derivative plans are
required to support the basic plan. E.g. If Kenya airways (KQ) decides to
acquire a new fleet of planes, derivative plans would be needed for
expansion of runways, hiring and training new pilots, crew, acquisition of
spare parts, scheduling and advertising, insurance etc.
e. Numbering plans by budgeting.
After decisions are made and plans set, they have to be given meaning. This
is done by converting the plans into budgets representing income and
expenses, profit and losses. Budgets are an important measure and means of
control of plans.

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 Planning is a rational, systematic approach to accomplishing an
objective

3.8 Effective Planning

Lack of effective planning is the major cause of many management failures. There are two
main barriers to effective planning: i). the reluctance to establish goals, and ii) resistance
to change.

Management by objectives is one approach to planning that helps to overcome some of

these barriers. It is based on the idea that organizational objectives are such an important
and fundamental part of management that managers should use a management approach
based exclusively on them. This concept emphasizes the establishment of common
objectives by managers and their subordinates acting together and the use of these
objectives as the primary basis of motivation, evaluation, and control efforts. The
management by objectives approach has been widely adopted in many organizations.

3.8.1 Management by Objectives

The term management by objectives (MBO) was popularized as an approach to planning

by Peter Drucker in 1954 in his book The Practice of Management. Drucker argued that
the first requirement of managing any enterprise is "management by objectives and self
control." He contrasted management by objectives with management by drivers.

54
Management by drivers responses to new financial or market pressures with an "economy
drive" and "production drive." In management by objectives, effective planning depends
on every manager having clearly defined objectives that apply specifically to his individual
functions within the company. Each person has an identified specific contribution to
enhance his unit‘s performance. If all the individuals achieve their objectives, then the
organization's overall objectives will be attained.

According to Drucker an MBO system has the following basic characteristics:

* MBO is a planning system requiring each manager to be involved in the total planning
process by participating in establishing the objectives for his own department and for higher
levels in the organization.

* MBO improves communications within the firm by requiring that managers and
employees discuss and reach agreement on performance objectives.

* By participating in the process of setting objectives, managers and employees develop

a better understanding of the broader objectives of the organization and how their goals
relate to those of the total organization.

* Performance reviews are conducted periodically to determine how close individuals are
to attaining their objectives.

* Rewards are given to individuals on the basis of how close they come to reaching their
objectives.

MBO offered a comprehensive program for converting overall organizational objectives

into specific objectives for organizational units and individual members. Many similar
programs have been developed, including "management by results," "goals management,"
"goals and controls," ―performance targets”, “Key performance indicators” and others.
Despite differences in name, these programs are similar.

3.8.2 The MBO process

There are four essential elements common to MBO programs:

* Goal specificity. Objective setting involves employees at all levels. Objectives should
be jointly derived. Appropriate goals must be set by top managers of the organization.
However, managers and subordinates must develop and agree on each individual's
objectives.

55
* Action planning. Action plans are made for both individuals and for departments. The
individuals have a wide range of discretion on choosing the means of achieving objectives.

* Self-control. Self control means systematic monitoring and measuring of performance

by the individuals themselves.

* Periodic review. This final step evaluates performance and initiates corrective action
when behavior deviates from the established objectives. Managers and subordinates
periodically meet to review progress towards the objectives. Moreover, management must
follow through on the employees performance evaluations and reward employees
accordingly.

Each of these elements can be converted into specific steps.

Management by objectives is one useful method of seeking individual

manager commitment to the objectives of the organization and providing managers with
clearly stated expectations.

3.8.3 Advantages and Disadvantages of MBO

MBO has many benefits when used properly and is associated with management problems
when used improperly.

Several reasons why organizations can fail in their MBO efforts have been identified. Some
of these are:
1) Failure to teach the philosophy of MBO. Not all managers are familiar with MBO
and may not be able to explain it to subordinates.
2) Failure to give guidelines to goal-setters. MBO cannot work if organizational goals,
mission and purpose are not clear to the managers who are expected to implement
it. Managers need planning premises – i.e. assumptions as to the future, knowledge
of major policies etc..
3) Difficulty of setting goals. Goal setting can be technical and complex requires
thorough knowledge and study.

4) Dangers of inflexibility. Managers are reluctant to change objectives or allow

subordinates to change them due to obsolescence.

56
 5) lack of involvement and commitment of top level managers

6) Overemphasizing performance appraisal aspects,

When used properly, MBO has the following benefits:

1) Better managing – MBO forces managers to think of planning for results rather than
merely planning for activities. e.g. on communication, a good objective would be
―to issue a two page newsletter beginning April 1, 2002 to all employees‖.

2) Clarify organization roles and structures. Forces managers to make use of the
people around them through delegation, decentralization to work etc.

3) Encourages personal commitment: Clearly defined objectives encourage

commitment as people know exactly what is expected from them, hence people
become masters of their own fate.

4) Development of effective controls. Involves measuring results and taking action to

correct deviations from plans to ensure goals are reached.

5) Improved communication because of the process of goal discussion between

managers and subordinates.

Describe what you understand by Management by Objectives.

Identify what you agree and disagree with, and consider what its implications are for
improving performance of people and the system for which you are responsible, or of
which you are part.

57
 3.9 Case Study

The case study given below illustrates the consequences of ineffective planning. Read it
carefully and attempt to find out why the CEO of this organization failed, Discuss your
thoughts in your study group and then compare with the section on ‗barriers to effective
planning‘ Do you see any similarities?

Adored No More

Two years ago, Hoechst was one of Germany‘s most watched companies. Harvard-educated boss,
Jurgen Dormann was loudly preaching the value of American-style shareholder capitalism and
promising to apply them to the lumbering, 135-year-old chemical group after taking the helm in
1994, he announced a huge restructuring programme, selling poorly performing or marginal parts
of his empire, floating others on the stock market, adopting transparent accounting standards and
even forcing managers to hold meetings and send memos in English. Hoechst, he used to say,
needed ―de-rusting and defrosting‖. Many Germans found this incendiary stuff. But investors
loved it.

It now seems they were too quick to believe Mr. Dormann‘s sermons. Formerly a Hoechst corporate
treasurer (and the first non-chemist to run the company), the new boss came to the top fizzing with
bright ideas. Noting how inefficient it was to have one huge firm whose stronger divisions cross-
subsidized the weaker ones, he vowed to split Hoechst into individual companies, each obliged to
earn a return on its capital, and each answerable to a central holding company. He also promised to
move out of stodgy commodity chemicals and into fashionable ―life sciences‖ (drugs,
agrichemicals, biotechnology and so on). These grand schemes have proved tricky to put into
practice.

58
A lean, ascetic man, Mr. Dormann gives the impression of polite frustration with the irrationality
of the world. Admittedly, his own experience outside Hoechst is limited: he joined the company at
the age of 23. unlike some of Germany‘s other industrial modernizers, he has never been based
abroad. Hoechst, he now concedes, has a corporate culture more entrenched than that of almost
any other German firm. Its sprawling Frankfurt Headquarters resembles a small town, rather than
the nerve center of a global corporation. Most of the 20,000 people who work there joined when
Hoechst was somewhere between a university and a government department. Changing their ideas
about costs, flexibility, performance and profits was always going to be hard.

The bubble burst last March, when Mr. Dormann abruptly discarded his original plan to turn
Hoechst into a holding company. Citing lack of cash, he broke his promise to float its key
pharmaceutical division, Hoechst Marion Roussel (HMR), on the stock market. Since then,
Hoechst‘s profits have lagged dismally behind those of its German rivals, BASF and Bayer.
Measured against the world‘s top ten pharmaceutical companies, its shares have done badly in
recent months. Mr. Dormann‘s clumsiness in explaining what is going on made matters worse.
―I simply don‘t trust that man anymore,‖ says one German fund manager.

All this is a shame. Hoechst‘s initial sell-offs were spectacularly successful. But the momentum
is flagging. ―The early divestures were the easy ones‖, admits Mr. Dormann. The Hoechst
portfolio remains cluttered with sluggish subsidiaries, producing fibers and specialty plastics.
Finding buyers for these may be tricky, although a week ago Mobil, an oil firm, announced plans
for a plastic film joint venture with Hoechst.

Then there are worries about those exciting life sciences. In particular the expensive centerpiece
of Mr. Dormann‘s plan – creating a world-class drug company out of French and American
acquisitions, plus Germany‘s pill makers – is proving tough. Researchers in Frankfurt, fearing
that their jobs might be lost to lower-cost laboratories in America, are not co-operating with their
American colleagues. The announcement of 600 layoffs in Germany sparked the biggest workers‘
protest in the history of the company. Hoechst‘s agrichemical business, AgrEvo (a joint venture
with Schering, a Berlin-based pharmaceutical company) looks more promising – but will
probably have to make an acquisition to keep ahead in plant genetics.

Mr. Dormann faces a difficulty. Eager to soothe jangled German nerves, he rules out firing
workers, insisting that Hoechst will honour its ―social responsibilities‖. This is not enough to
reassure trade unions, who still see him as a heartless apostle of alien ideas. But nor does it please
investors, who worry that Hoechst still behaves like a German company, rather than an
international company.

Mr. Dormann would probably be in less trouble with investors if he had not promised so much in
the first place. ―Our experience in managing expectations is pretty new,‖ he concedes. This is a
serious failing. Other German firms, such as Veba (an energy and chemical conglomerate) have
59
maintained credibility with fund managers by promising less. Its senior managers emphasize that
change will come gradually. Big transformations take time.

REQUIRED: 1) Identify Mr. Dormanns problem(s) at Hoechst

2) State why you think his plans did not have the desired outcomes

3.10 Barriers to effective planning Plans

sometimes fail because of:-
1) Lack of commitment to planning. This results in fighting fires hence management
by crises.
2) Failure to develop and implement sound strategies due to fear of failure.

3) Lack of meaningful objectives and goals because they are not clear and actionable,
thus cannot be accomplished.
4) Tendency to underestimate the importance of planning premises – by ignoring the
environment.
5) Failure to see the scope of plans i.e. neglecting other types of plans e.g. strategies,
policies, rules etc.
6) Failure to see planning as a rational process.
7) Excessive reliance on experience yet the past is not always the same as the future.
8) Lack of top management support.
9) Lack of clear delegation.
10) Lack of adequate control techniques and information – need for feedback and
evaluation.
11) Resistance to change.
12) Time consuming and expensive hence, planning is neglected in favour of shortterm
activities.
3.10.1 Techniques for avoiding barriers to effective planning
To avoid barriers to effective planning, managers can do the following:
1) Start at the top – to ensure commitment top managers should set the goals and
strategies that lower level managers will follow
2) Planners should recognize limits – no planning system is perfect
3) Communication – vertical communication within the organizational hierarchy
4) Participation – involvement leads to motivation and ownership of the plans

60
 5) Integration – of the long-term, intermediate and short-range plans must be properly
integrated for effective overall planning
6) Contingency planning – develop alternative plans of action if conditions change
7) Planning must not be left to chance
8) Planning must be organized
9) Goals, strategies and policies must be communicated clearly
10) Planning must include awareness and acceptance of change

3.11 Self assessment questions

To gauge how well you have understood the lecture on planning, make an attempt to answer
the following questions.

1) Define planning
2) Explain why planning is important.
3) Explain the types of plans in the hierarchy of plans
4) Identify the three levels of plans
5) State the characteristics of strategic plans
6) Outline the steps in the planning process
7) State what is meant by planning premises and explain their importance
8) Describe the concept of ‗management by objectives‘
9) Identify the barriers to planning and discuss how they may be avoided

3.12 Summary

In Lecture Three, we discussed the planning function of management. We noted that

planning involves deciding what objectives to accomplish, the actions to be taken in order
to achieve them, the organizational position assigned to do them and who would be

61
responsible for the actions needed. Planning precedes all other managerial functions as it
establishes the objectives and purpose of the project or enterprise.

It is analogous to a ‗star or compass‘ which directs the project. It is also a pervasive function
as it is performed by all managers at all levels. It only varies with authority and nature of
policies. Plans are in a hierarchy from the most broad – vision and mission to the most
specific such as projects and budgets. Plans take place at three levels – corporate, business
and functional and fall within long term, intermediate and short term. We also noted that
the planning process begins with a SWOT analysis to identify opportunities and this is
followed by a number of decisions that include formulating alternative plans, evaluating,
choosing and eventually numberizing through budgets. For plans to be effective, they
should be founded on clear objectives and outcomes. This is best understood by the
discussion on management by objectives (MBO). In management by objectives, effective
planning depends on every manager having clearly defined objectives that apply
specifically to his individual functions within the company. Each person has an identified
specific contribution to enhance his unit‘s performance. If all the individuals achieve their
objectives, then the organization's overall objectives will be attained.

We also observed that plans can sometimes fail due to lack of commitment by the
implementers, lack of meaningful objectives and goals, tendency to underestimate the
importance of planning premises, failure to see the scope of plans and lack of clear
delegation. To avoid barriers to effective planning, managers can ensure commitment of
top managers, recognize limitations, greater participation and developing alternative plans
of action

Planning is a process that does not end when a plan is agreed upon; plans must be
implemented. At any time during the implementation and control process, plans
may require modification to avoid becoming useless or even damaging.

62
 LECTURE FOUR
ORGANIZING

Lecture outline
4.1 Introduction
4.2 Lecture objectives
4.3 Principles of organizational design
4.4 Departmentalization
4.5Delegation
4.6 Line and staff functions
4.7 Span of control
4.8 Summary

4.1 Introduction

Organizing is the second function of management. It is the managerial function of designing

and maintaining a system of roles. An organizational role must include: objectives; major
activities of role; authority; availability of necessary information and other resources. The
organizing function is necessary to avoid confusion of roles and tasks. It also clarifies the
responsibilities of the employees by allocating accountability to each employee for the
outcomes of the work they are responsible for. In this lecture we shall discuss the concepts
used in organizational design and the process of creating an organizational structure.

4.2 Lecture objectives

At the end of this lecture you should be able to do the following:

63
 • Define the term organizing
• Describe the purpose of organizing
• Outline the basic principles of organizing
• Distinguish between the various types of organizational designs
• State the factors influencing organizational design
• Explain the usefulness of organizational charts
• Discuss relationships between authority, power, accountability and responsibility
in relation to organizational hierarchy
• Explain the concepts of line and staff functions
• Discuss the significance of delegation as a managerial activity
• Explain the meaning and factors influencing span of control
• Discuss the influence of the environment on the structure of organizations

4.3 Case study

Njoroge saved some money and with the help of his parents opened a small vegetable
shop in the nearby shopping center. Njoroge worked very hard and soon he had regular
customers coming to buy their weekly supply of vegetables and fruits from his grocery.
He went to the wholesale market every morning to buy his fresh produce then he loaded
his little truck and headed back to his grocery to unpack the fruit and vegetables, clean
the shop and does some bookkeeping before the shop started to get busy. Njoroge also
wanted to attract working
women to his grocery and therefore he closed his shop at 9.00pm on weekdays.
Although his shop did well and Njoroge could start paying back the money he owed
his parents he was always tired. He also found the bookkeeping hard to do
especially at the end of the month when there were always so many other things to
do. Eventually Njoroge decided to hire an assistant to help in the shop and also a
bookkeeper working half-day.

64
 • List all the tasks that Njoroge had to do when he first opened his grocery.
Is a structure necessary?
• Draw a diagram to illustrate how the different tasks at the shop were
divided among Njoroge, the assistant and the bookkeeper. In your
diagram show who is reporting to whom.

This simple activity illustrates the concept of organizing

4.4 Definitions of Terms

Before we proceed, let us define some key terms that will be used in this lecture.
What is an organization?
The dictionary provides the following formal definition of an organization:
a) the act or process of organizing; the state or manner of being organized: a high degree of
organization;
b) something that has been organized or made into an ordered whole;
c) something made up of elements with varied functions that contribute to the whole and to
collective functions; an organism;
d) a group of persons organized for a particular purpose; an association: a benevolent
organization;
e) a structure through which individuals cooperate systematically to conduct business; the
administrative personnel of such a structure.
(American Heritage Dictionary of the English Language, 2000)

A more informal definition can include any situation in which two or more persons are
involved in a common pursuit or objective.

From the above definitions we can summarise organizing as the managerial function of
designing and maintaining a system of roles. An organizational role must include:
objectives; major activities of role; authority; availability of necessary information and
other resources.

Organizing: is the process of creating a structure for the organization that will enable the
various players to work together effectively towards its objectives.
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Organizational structure: is the basic framework of formal relationships among
responsibilities, tasks and people in the organization. It can be seen as the division of
activities into manageable units where everyone knows who is to do what and who is
responsible – it removes confusion and conflict.
Organizational design: design of an organizational structure involves the task of dividing
up the work, allocating responsibility and establishing chains of command.
Organizational Chart: Is a diagrammatic explanation of an organization‘s structure. It
depicts the organization as a whole, the various components and their interrelationships. It
can be compared to a road map – thus a chart is not the organization, but a representation
of it.

4.5 Organizational Design

Organizational design is the decision-making process through which managers construct an
organizational structure appropriate to the plans and strategies of the organization.
Organizing is necessary to avoid confusion of roles and tasks.
• Organizing clarifies the responsibilities of the employees of the organization
• It allocates accountability to each employee for the outcomes of the work they are
responsible for
• It establishes clear channels of communication
• It enables managers to deploy resources (human, financial, informational, and
physical) meaningfully and synergy can be reached
• It enables monitoring of organizational activities
• Allows for co-ordination of different parts of the organization and different areas of
work
• It provides the flexibility needed to respond to future demands and developments

Steps in organizational design are:

• Reflecting on the plans and objectives of the organization
• Establishing major tasks
• Dividing the major tasks into sub-tasks
• Allocating resources for sub-tasks
• Evaluating the results of the organizing strategy

4.6 Basic principles of organizing

Effective organizations are guided by the following principles:
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 • Division of work and specialization – involves dividing total workload into
tasks that can be logically and effectively performed by individuals with
specialized knowledge
• Departmentation – refers to the logical grouping into manageable sizes of
organizational activities belonging together. The departments created constitute
the organization‘s structure and appear on the organizational chart. (A
department is a distinct area, division or branch over which a manager has
authority over performance e.g. production, accounts or sales)
• Coordination - the process of integrating departments both horizontally and
vertically. It is achieved through authority relationships, which involve
allocation of responsibility and authority to each position in the organizational
structure.
• Chain of command – defines the reporting lines of individuals and groups in
the organizations
• Unity of command – implies that each subordinate must have only one manager
to report to
• Span of control – refers to the number of subordinates working under one
manager

4.7 The Organizing Process

Organizing creates a vertical hierarchy of positions, which involves structuring authority,

responsibility and accountability. The hierarchy is a channel or conduit through which
authority, power and accountability flow. While authority and power flow downwards,
accountability flows upward and responsibility rests with individuals.

Authority - is the right to do something – it is the right of a manager to make a subordinate

do something in order to accomplish organizational goals. Managerial authority is the right
to command others by making decisions, assigning tasks to subordinates and expecting and
requiring satisfactory performance from subordinates.
However, being able to enforce this right is a different matter.

Delegation of authority - refers to the process by which a supervisor gives a subordinate

the authority to do the supervisors job. A manager, however, cannot delegate the functions

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of planning, organizing, leading and control as this would lead to breakdown in
organizational performance.

Power - While authority is the right to do something, power is the ability to do it. The
sources of a manager‘s power are:
• Ability to give or withdraw rewards
• Ability to punish or threaten to punish
Power is subjective and is influenced by moral and ethical considerations. The perception
that people have about the power of another is more important than the actual power
possessed. People in authority sometimes bluff, pretending they have more power than they
actually do.

Authority and power must be balanced to avoid conflict. Too much power leads to abuse
while less authority leads to ineffectiveness.

Responsibility - is closely related to authority and power. It refers to the obligation to do

something. It is the duty to perform organizational tasks, functions etc. In formal
organizations everyone has a responsibility. Responsibility cannot be delegated. A
supervisor‘s responsibility is not diminished because of delegation of authority to a
subordinate. In fact, responsibility may increase because in addition to ensuring that the
delegated work is done, he has to supervise the subordinate. Whether a manager does the
work or chooses to delegate to a subordinate, he retains complete responsibility for the
accomplishment of the task.

Responsibility is created within a person when accepting an assignment together with the
appropriate responsibility. The act of responsibility is created internally when a person
agrees to perform a task. Refusal to be responsible for a task leads to disciplinary action or
dismissal. Responsibility is not a flow as in accountability and authority but is retained
within the person assigned. It is an internal obligation to perform tasks.

Accountability – refers to the right of a superior to require an account of the authority

given. In addition to personal responsibility to oneself, an employee is accountable to higher
authority. Accountability comes into being because the manager has a right to require an
accounting for the authority and power delegated and tasks assigned to a subordinate. The
subordinate must account/answer to the manager the stewardship of the power and authority
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granted. ―Each employee is obliqued to report to his superiors how well he has exercised
his responsibility and the use of the authority delegated to them‖ Just as a manager cannot
reduce responsibility by delegating, accountability cannot also be reduced.

What do you think are the consequences of an imbalance between

authority and power and between responsibility and accountability?

Problems occur when there is imbalance between authority, power, responsibility and
accountability. For the sake of organizational stability there must be equilibrium between
the above four factors.
• If authority and power exceed responsibility and accountability there is likely to
be abuse of power. Power can be used arbitrarily with little regard on its impact
on others. It creates fear of the potential acts of the holder of excessive authority
e.g. a dictatorship form of government or the police.
• If responsibility and accountability exceeds authority and power, then people
would be held accountable for actions beyond their control. People will
eventually object and seek additional authority.

4.8 Departmentalization

Departmental specialization can take many forms such as functional, product, geographical
or matrix designs.

What are the advantages and disadvantages of each design? What factors
would organizations consider when choosing a particular design?

Functional design: Each major function reports to the CEO and other sub functions report
to the major functional heads. The idea is to group specialists with similar interests and
training together e.g. marketing, HRM, finance or IT. This is the most common design
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Product design: this is common in organizations that deal in multiple products. It is a
modification of the functional design. Each major product or line is managed by an
executive who reports to the CEO. The product manager has control over the functions in
his division such as sales, marketing, HR and finance.
Geographical design: Where an organization operates in a wide geographical area,
territorial groupings are designed. A company‘s activities are divided into regions with a
manager for each with a home office for coordinating the activities of the geographical
units.
Customer design: Activities are structured to respond to specific groups of customers. For
example, the lending activities in banks that are tailored to meet the needs of different
customers say business/corporate clients, personal, mortgage or small business. Matrix
design: this involves a grid or matrix of authority flows. Authority flows both vertically
and horizontally while vertical authority is exercised by functional managers, horizontal
authority is vested in project managers so that some employees find themselves reporting
to two managers. Project managers have formal authority over budgetary funds, time and
tasks.
Advantages
Matrix designs are useful when:
• The activity has a definite completion date
• Cost constraints are a critical factor
• Specialized skills are required for the completion of a project
• Activity is new or unfamiliar to the participants
• When a high degree of competence is required and flexibility is needed
• The need to share resources and reduce costs
Disadvantages
• Conflict over allocation of resources and division of authority
• Dilution of functional authority
• Divided loyalty for project teams
• It sacrifices the principle of unity of command

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 i) As a practicing manager, how would you justify the use of a
matrix design since it potentially violates the principle of unity of command?
ii) Identify the consequences of poorly designed organizational structures

NB: It is rare to find organizations that use only one of these designs. Most use combinations
of two or more forms.

4.9 The Process of Delegation

Delegation is risky. Why are many managers reluctant to

delegate full authority? What kind of risks do you think they fear?

Delegation is the process by which managers assign a portion of their total workload to
others. It includes assigning formal authority and responsibility for completion of specific
activities.
Why delegate?
• Get more work done
• Subordinates may have some unique expertise which the manager lacks
• Helps develop subordinates managerial skills
• Enhances prompt action
• Superiors can take higher level tasks
• Better decisions as they are made lower down where the problems are What are the
barriers to delegation?
• Reluctance/inability to delegate due to lack of planning what to and not to delegate
• Insecurity due to fear that subordinates may do better and threaten their positions
• Lack of confidence in the subordinate to do the job
• Reluctance by subordinate to accept delegation due to fear of failure, lack of
rewards, risk avoidance tendencies etc.
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 • Incompetent subordinates
Some guidelines to effective delegation
• Free communication to ensure subordinates understand their responsibility,
authority and accountability
• Balance responsibility and authority- give enough authority to achieve desired
results
• Define the expected results clearly
• Evaluate the experience and competence of the subordinate before delegating
• Be flexible with delegation- modify, increase, decrease or withdraw
• Supportive managerial climate free from fear, frustration and threats
• Put in place checks and controls to ensure delegated authority is not abused

4.10 Line and staff relationships

The concepts of line and staff can be viewed both as functions and as authority relationships.
Line functions: Refers to those functions that have direct responsibility for accomplishing
the objectives of the firm. The managers responsible are line managers and the others are
line employees.

Line authority: refers to the chain of command where line officials have authority over
subordinates e.g. a manager and a subordinate. This is exercised by all managers
irrespective of whether they are line or staff.

Staff functions: refer to those functions that support the line functions by providing
expertise, advice and support. Examples are HRM, finance or research and development

What are some of the likely sources of conflict between line and staff
employees?

• Status conflict- who is more important or strategic to the organization than the
other in terms of contribution
• Failure to understand the line–staff roles - e.g. forcing policies that make the line
to feel that their authority to manage is being undermined
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 • Lack of clear responsibility between line and staff
• Staff see line management as resistant to attempts to provide assistance and
guidance

The distinction between a line manager and staff manager is not absolute.
There is a fine line between offering professional advice and giving instructions

4.11 Centralization and decentralization

This refers to the extent to which decision-making power and authority is dispersed to lower
levels. It also refers to the degree of delegation of duties, power and authority to lower
levels of an organization.
Table 4.1: Characteristics of centralized and decentralized organizations
Centralization Decentralization
High degree of retention of duties, power High degree of delegation of duties, power and
and authority by top management authority to lower levels of the organization

- suitable in stable environments - occurs when environment is changing

hence few people can make decisions rapidly - top level managers are comfortable
- culture of control by top with leadership styles
managers, lack of training for people at - emphasizes delegation
lower levels - uniformity is not critical
- need for uniformity is crucial

What factors determine an organizations position on the

decentralization-centralization continuum?

• External environment – the greater the complexity and uncertainty, the greater the
need to decentralize

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 • Tradition – tendency to do things the way they have always been done
• The nature of the decision – the costlier and riskier they are, the greater the pressure
to centralize
• The abilities of lower level managers – the more qualified and competent they are
the greater the tendency for top management to take advantage of their talents by
decentralizing
• The size of the organization – large organizations tend to be more decentralized

4.12 Span of control/management

Span of control or management refers to the number of subordinates who report directly to
a given superior. A manager‘s ability to manage a given number of subordinates is limited
by time, knowledge, energy, personality and the tasks. Research has shown that managers
at the top can handle up to four subordinates while the lower level can be as high as twenty.

Can you think of some of the other factors that determine a manager‘s span of control?

Factors determining an effective span of control

• Subordinate training – level of knowledge and experience possessed to handle
the job
• Degree of hazard or danger associated with the job
• Clarity of the delegation of authority in terms of scope
• Clarity of plans – clear policies, rules and procedures to guide decisions and
reduce supervision time
• Cost of possible mistakes to the individuals and to the organization
• Rate of change – change determines the degree of policy formulation and
stability. Stability is associated with wide spans of control e.g. catholic church
and the reverse is true.
• Extent to which the job is complex
• Communication techniques – written versus oral communication
• Number of levels in the organizational structure

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 • Level of technology
• Type of production system
• Physical dispersion of subordinates
• Availability of a set of standard procedures
• Similarity of tasks

What are some of the problems associated with wide and narrow spans of control?

4.13 Coordination
This is the process of linking the activities of the various departments of the organization.
Coordination is maintained through rules and procedures such as standard procedures.
Liason roles – act as a common point of contact e.g. a spokesperson who facilitates flow
of information between units.
Task force – involves representatives from various groups coming together to work on a
common project and dissolve thereafter.

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 LECTURE FIVE
THE STAFFING FUNCTION
Lecture outline
5.1 Introduction
5.2 Lecture objectives
5.3 The Systems Approach to HRM
5.4 The strategic approach to HRM
5.5 Finding the right people
5.6 Developing effective human resources
5.7 The performance appraisal process
5.8 Compensation
5.9 Employee relations
5.9 Summary
5.10 Self test
5.11 Suggestions for further reading

5.1 Introduction

The managerial function of staffing involves the recruitment, selection, training,

compensation, appraisal and maintenance of human resources. Staffing function is the most
important managerial act along with planning, organizing, directing and controlling. The
operations of these four functions depend upon the human resources available through
staffing function. Staffing is a pervasive activity which is carried out by all managers and
in all types of concerns where business activities are carried out. It is also a continuous
activity. This is because staffing function continues throughout the life of an organization
due to the transfers and promotions that take place.

5.2 Objectives

1. Describe the strategic approach to HRM

2. Explain the process of finding the right people
3. Discuss the process of developing effective human resources
4. Discuss the performance appraisal process
5. Explain the compensation function
6. Discuss the employee relations function

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5.3 Systems Approach to HRM

A system is a set of interrelated but separate elements or parts working towards a common goal.
A school for example, is made up of students, teachers administrative and laboratory staff who
relate to one another in an orderly manner. What one group does has implications for others. In
order to achieve the overall goal for imparting education, they all have to communicate with one
another. Project operations, similarly, must be viewed in terms of interacting and interdependent
elements. The project procures and transforms inputs such as physical, financial and human
resources into outputs such as products and services. To carry out its operations, each project has
certain departments known as subsystems such as production subsystem, finance subsystems,
marketing subsystem, and HR subsystem etc .Each consists of a number of other subsystems. For
example, the HR subsystem may have parts such as recruitment and selection, training,
compensation, performance appraisal and employee relations. The HRM system is illustrated in
Figure 5.1

Figure 5.1 Systems Approach to HRM

253
Corporate
plans
External environment

Business plan
External
Sources Performance
appraisal
Human Recruitment, Career
Analysis of development
Resource Plan present and selection, placement,
promotion and Training and
future needs for development
managers separation
Rewarding
HR Inventory
Employee
Internal sources Relations

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Leading
Internal Environment &Controlling

5.3 Strategic approach to HRM

The basis of the staffing function is efficient management of human resources. It places HR in the
right jobs. It can be done effectively through proper recruitment procedures and then finally
selecting the most suitable candidate as per the job requirements. We should note that staffing is
performed by all managers depending upon the nature of business, size of the company,
qualifications and skills of managers. In small companies, the top management generally performs
this function. In medium and small scale enterprise, it is performed by a HRM department.
The strategic approach to HRM recognizes three key elements namely:
1. All managers are involved in human resource management
2. Employees are valuable assets that give the organization a competitive edge

3. HRM is a matching process that integrates the organization‘s strategy and goals with the
correct approach to managing human capital
We also need to note that organizations have to continuously make strategic decisions on how to
get the right people who can compete globally, improve quality, innovation and customer service,
stay during mergers and acquisitions and apply ICT for e-business. In this regard, HRM has three
primary functions as illustrated in Figure 5.2: Finding the right people; maintaining an effective

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workforce and developing effective human resources. These activities do not take place in a
vacuum but within the context of other factors such as:
• Globalization
• Changing technology
• Need for innovation
• Market shifts
• Government regulations
• Changes in organizational culture, structure, strategy and goals

Success of an organization therefore depends on how human capital is managed.

What do you understand by the term human capital?

In your answer i hope you indicated that human capital refers to the economic value of the
combined knowledge, experience, skills and capabilities of employees. This is built by developing
strategies for finding the best talent, enhancing their skills and knowledge through training and
providing compensation and benefits that support the sharing of knowledge. Let us look at the
concept of competitive advantage.

HRM and Competitive Advantage

Competitive advantage refers to the ability of an organization formulate strategies to exploit

rewarding opportunities thereby maximizing its return on investment. Competitive advantages
occur if customers perceive that they receive value from their transaction with an organization.
This requires single minded focus on customers‘ needs and expectations. To achieve this, the
organizations need to tune its policies in line with changing customer‘s requirements. The second
principle of competitive advantage derives from offering a product or services that your competitor
cannot easily imitate or copy. An organization should always try to be unique in its industry along
dimensions that are widely valued by customers. For example Apple stresses its computers
usability. Mercedes Benz stresses reliability and quality; Maruti emphasizes affordability of its

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lower end car Maruti 800. In order to enjoy the competitive advantage the firm should be a cost
leader delivering value of money. It must have a committed and competent workforce. Workers
are most productive if (1) they are loyal to the company, informed about its mission, strategic and
current levels of success, (2) involved in teams which collectively decide how things are to be
done and (3) are trusted to take the right decisions rather tan be controlled at every stage by
managers above them (Thompson). A good team of competent and c committed employees will
deliver the goals if they are involved in all important activities and are encouraged to develop goals
that they are supposed to achieve. In recent years, a new line of thinking ha emerged to support
this view known as strategic human resources management (SHRM).

Organizations have come to realize over the years that improving technology and cutting costs
enhance performance only up to a point. To move beyond that point, the organization‘s people are
its most important resources. In the end everything an organization does depends on people. Low
cost and high quality cars like Toyota and Saturns are not just a product of sophisticated automated
machines. Instead they are the result of committed employees all working hard to produce the best
cars that they can at the lowest possible cost (Dessler). To get the best out of people the
organization must offer a healthy work climate where they can us their knowledge skills and
abilities fully while organizational goals. There is where HR managers play a crucial role – that of
bridging gaps between employee and organizational requirements by adopting appropriate Hr
policies strategies and practices.

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 Human Resource management

Find the Right People

✓ HRM Planning
✓ Job analysis
✓ Recruiting
✓ Selecting
HRM Environment
✓ Legislation
✓ Socio-cultural
Maintain an Effective Developing effective ✓ International events
Workforce employees ✓ Changing technology
✓ Wages and ✓ Training
salary ✓ Development
✓ Benefits ✓ Appraisal
✓ Labour relations

Adapted from Daft and Marcic (2008) Management: The New Workplace, South-Western
Cengage Learning, UK

In the next section, we shall discuss the specific functions of HRM namely: finding the right
people, developing and maintaining them.

5.4 Finding the right people through employee resourcing

This is the process of procuring or obtaining employees for the organization. The function has
three main stages:
• Human resource planning
• Job analysis
• Recruitment and selection

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5.4.1 Human Resource Planning
Human Resource Planning means predicting the the need for new employees based on existing
vacancies. The first step is to plan the human resource inventory required in order to match them
with the job requirements and demands. The process of HRP begins with questions such as:
• What new technologies are emerging and how will these affect work?

• What is the volume of the business likely to be in the next 5-10 years?

• What is the employee turnover rate and how much if any is avoidable?

From these broad questions, specific questions can be asked, e.g.

• What types of engineers will we need and how many?

• How many administrative personnel will we need to support will we need to support
the additional engineers?

• Can we use temporary, part-time or virtual workers?

To achieve a HRP, three broad categories of activities which make up the components of HRP
must be carried out by the HR manager.
Demand forecasting – means assessing the future labour needs of the organization by predicting
the future labour needs of the organization. The HR manager does this by collecting information
data from key members of departments or sections. These would include:
• Expected number of personnel within each occupation, their quality, education and
skills
• Expected turnover of employees through age retirement, resignations, dismissals
and death
• Formal qualifications for entrance into certain occupations
• Plans for managerial succession
Supply forecasting – means assessing the HR retention capability of the organization. To estimate
the organization‘s HR retention capability, many factors have to be considered. For example, in
western countries, labour turnover is high and organizations have to introduce many incentives to
retain labour. Developing countries on the other hand, experience high rates of unemployment
hence, low rates of labour turnover due to few alternative employment opportunities. Retaining
employees to reduce labour turnover is important and the factors that cause it have to be assessed
and ways of overcoming them found.

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Recruitment potential forecasting – means assessing the organization‘s ability to attract different
types of personnel. To estimate recruitment potential, the HR manager would have to consider the
local labour market situation e.g. current and future competition for personnel from other
employers, local unemployment levels and output from the educational system and training
institutions.

5.4.2 Job Analysis

This activity refers to a detailed and critical analysis of a specific job or position. It involves a
detailed examination of its various elements and provides the groundwork for determining the
value of a job.

Job analysis, alongside its derivatives of job description and job specification, form the cornerstone
or basic building blocks of HRM. Information obtained from this process can be used for:
a) The recruitment and selection of the most suitable candidates for a job
b) The determination of the training needed by employees
c) Determination of work performance standards
d) The redesign of jobs
e) The maintenance of good industrial relations as employees will know what is expected of
them (creates standardization in work)
f) The determination of the value of a job and subsequently the remuneration level
g) Career development provides employees with information on training, career
h) The means by which individual performance can be evaluated
i) Provide information which will help in decision making about the type of equipment and
materials to be employed with the job.
j) Identify and profile the experiences of employees in their work tasks (information which
can be used as evidence for staff development and promotion).
k) Identify areas of risk and danger at work.
l) Help in setting rates of pay for job tasks.
Job analysis can be carried out by direct observation of employees at work, by finding out
information from interviewing job holders, or by referring to documents such as training manuals.
Information can be gleaned directly from the person carrying out a task and/or from their

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supervisory staff. Some large organisations specifically employ 'job analysts'. In most companies,
however, job analysis is expected to be part of the general skills of a training or personnel officer.
Job descriptions and job specifications
The essence of job analysis is the application of systematic methods to the collection of
information about jobs. It distinguishes people issues (job specification) and job issues (job
description), which are the end products of the job analysis process.
These are the end products of job analysis.
A job description is a statement containing items such as:
- Job title
- Tools to use
- Place of job
- Supervision/reporting line
- Job summary
- Working conditions etc.
A job specification also known as person specification is a statement spelling out the human
capacities needed for the task. This includes:
- Experience
- Education
- Judgment
- Initiative
- Physical skills
- Emotional characterization etc

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Difference between job description and job specification
JOB DESCRIPTION JOB SPECIFICATION
Provides basic information on the overall A statement of the human qualifications
purpose of the job and on the jobholder‘s basic necessary to do the job.
accountabilities. Describes the amount of various qualification
Defines the place of the job in the organization factors that the job holder must possess in order
and clarifies to jobholders and others the to accomplish the assigned task adequately.
contribution the job makes to achieving The contents include:
organizational objectives Educational qualifications, Experience,
Provides job information to job applicants Training, Special skills, Special aptitude
Provides a basis for the contract of employment Initiative, Responsibility, Analysis and judgment
Shows the reporting line i.e. person whom job ability, Mental and visual demand,
holder is reporting to e.g. personnel manager or Adaptability, Emotional characteristics
chief accountant and who reports to the job Physical attributes/stamina
holder Verbal or written expression /communication
Overall responsibilities - the broad picture of
Demographic characteristics e.g. gender, age,
the job and distinguishing it from other jobs
race, marital status, nationality/citizenship etc.
Limits of main duties and responsibilities
Detailed statement of work to be performed
Tools, equipment and materials used
Working conditions, Hazards

Job analysis, job description, and job specification can provide useful information to a business
in addition to serving as recruitment instruments. For example, staff appraisal is a means of
monitoring staff performance and is a feature of promotion in modern companies. In some
companies, for example, employees and their immediate line managers discuss personal goals and
targets for the coming time period (e.g. the next six months). The appraisal will then involve a
review of performance during the previous six months, and setting new targets. Job details can
serve as a useful basis for establishing dialogue and targets. Job descriptions can be used as
reference points for arbitrating in disputes as to 'who does what' in a business.

Look at a newspaper job advertisement and identify its components. How do they relate
to what you have learnt about job descriptions and job specifications?

5.4.2 Recruitment and selection

After determining the type and number of employees needed through HRP and
determining/identifying the various elements of a job through a job analysis, the next problem of
personnel management is to procure the employees through recruitment and selection.

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5.4.3 Recruiting
Recruitment, sometimes referred to as ‗talent acquisition‘ is the first part of the process of filling
a vacancy. It is the process of searching for prospective employees and stimulating them to apply
for a job in an organization. It includes an examination of the vacancy by getting information on
the job – job description and job specifications, then considering the various sources of employees
or suitable candidates, making contact with them and attracting applications from them.
Organizations can opt for either of two strategic choices in recruitment: make strategy which
means hiring less skilled workforce and investing more in training and development or buy
strategy which is hiring skilled or professional labour who possess necessary skills to begin
working immediately. However the amount of money required to attract such labour may outweigh
the benefits
Sources of recruitment can be internal or external. Internal sources: i.e. ‗promotion from within‘
is considered the best method for recruiting for top and middle level managers.

What are some of the methods for internal sourcing of employees?

State some of the benefits and disadvantages of internal sourcing

Internal sourcing is less costly and it generates higher commitment and loyalty from employees as
it offers opportunity for career advancement.
External sourcing is used to recruit newcomers from outside the organization. Even when an
internal candidate is transferred or promoted in the organization, the final result is external
sourcing elsewhere in the organization.

Outline some of the sources of external recruitment What

are some of the advantages and disadvantages?

In addition to the traditional sources such as advertisements, colleges, head hunting and
employment agencies, you also included e-recruiting. The internet has become a powerful tool for

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reaching a wide pool of applicants and saving time and money. E-recruiting makes use of
organizational websites, commercial sites in the web and a variety of other online services.

5.4.4 Selection
This is the second stage in the procurement process. It is determining which applicants best fit the
job applied for. It involves:
- Sifting through applications
- Inviting candidates
- Interviewing
- Testing, assessing, obtaining references, offering employment, preparing contracts
of employment etc.
It is a series of activities for securing basic information about applicants, which is compared with
the job specification – the standard qualifications required for the job.
The interview is widely used as a selection tool or technique and it holds a central position in the
recruitment and selection function. The aims of interviews include:
a) To verify written information given by the applicant
b) Clarify any written details about the candidate or the firm
c) To measure/assess the personality of the candidate
d) To test the expression power, social skills and physical attributes of the candidate which
cannot be obtained in writing.
e) Obtain additional information through direct contact.

Think about an interview you have attended. What were

the strong and weak points?

The interview is not always a good predictor of job performance. Some studies have shown a 0.2
correlation. To overcome this limitation, a series of interviews each conducted by a different
person and probing different aspects of the candidate have been used. Panel interviews and
computer based interviews, intelligence or aptitude tests and personality inventories are
alternative methods.

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Assessment Centers developed by psychologists at AT &T is a method involving a series of
managerial situations given to groups of applicants over a period of two to three days. One
technique is the in basket simulation which requires the applicant to play the role of a manager
who must respond to ten memos in his basket within a two hour period. They are judged on
interpersonal communication and problem solving skills. A more recent development is online
checks where applicants are judged on what they say about themselves and the values they hold
as seen in social networking sites such as Facebook and Myspace.

Organizations must ensure that their recruiting practices conform to the

existing laws. The Kenyan constitution, for example, stipulates that members of one gender
should not constitute more than two thirds of the workforce while members of one ethnic
community should not exceed one third.

5.5 Developing effective human resources

This is the function concerned with ensuring that the organization has the right kind of human
qualifications in terms of knowledge, skills and attitudes through training, education and
development. Through training, employees develop competencies to improve their performance,
help people grow within the organization to meet future needs for HR and reduce learning time
for new employees or those on transfer or promotion.
Training: Training is the systematic modification of behaviour through learning, which occurs as
a result of education, instruction, development and planned experience. This refers to the imparting
of knowledge, skills and attitudes that are specifically related to a narrow area of employment. It
is task oriented as it focuses on a specific area of work. The training standards are derived from
the job description or task requirements of the job. Training is provided when there is a skill gap
between expected and actual standards of work performance.
Education: Education includes activities, which aim at developing knowledge, skills, moral values
and understanding in all aspects of life rather than knowledge and skills related to only one field
of activity. It is a process of transformation, transmission and preservation of cultural heritage

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Purpose: Provide conditions for all people - young and adult to develop understanding of traditions
and ideas influencing their society.
a) Empower people with knowledge and understanding to make a contribution in their society.
b) Education involves acquisition of linguistic and other skills which are basic to learning,
personal development, creativity and communication.
c) Enables people to cope with their environment
d) Develops character, behaviours and attitudes associated with personal and social adjustment
e) Provides a wide range of general knowledge - conceptual, theoretical and philosophical rather
than specific skills

Development: Employee development refers to individual growth and self-realization of a

person‘s ability through conscious or unconscious learning – usually in a broad area. It includes
both education and training. Employee development is directed at creating learning opportunities
and making learning possible by facilitating a learning environment.

Discuss other aims of training and development

Training can be divided into operative level training which is training programmes for
nonmanagers – they are designed to develop skills to perform a job, usually technological and
management Development/Supervisory levels: These are training and educational programmes
designed for supervisors and managers/executives to enable them to manage.
The common methods of training are on-thejob-training, in-house training, promotion from within,
mentoring and coaching.
Management development
Management development programmes are expected to meet the needs of managers such as
decision making skills, interpersonal skills and job knowledge. Common methods used are: Onthe-
job experiences; seminars, role playing, conferences, business games, sensitivity training, case
studies, in-basket (picking assorted memoranda in a basket and making sense out of them to test
potential),coaching, position rotation, special courses e.g. those run by colleges, selective reading,
special projects, special meetings, committee assignments, brainstorming.

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 Can you think of more reasons why organizations should invest in
management development.

The Process of Training

Training writers have formulated models – referred to as systematic training models/ or process
that consists of critical events in the training process.

Nadler (1982) proposes a general model with the following steps:

1. Identification of training needs
2. Determining learning objectives
3. Compiling a syllabus
4. Selecting instructional strategies
5. Presenting training
6. Evaluating training

Refer to any textbook on training and make notes on each of the steps of the
training process

5.6 Performance Appraisal

Performance appraisal is a method by which job performance of an employee is evaluated in terms
of quantity, quality, cost and time by the corresponding manager or supervisor. It‘s a process of
obtaining, analyzing and recording information about relative worth of an employee to the
organization. Its main aims are:

- Give employees feedback on performance

- Identifies employee training needs
- Documents criteria used to allocate organizational rewards
- Forms basis for personnel decisions e.g. salary increases, promotions, disciplinary action,
bonuses etc
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 - Provides opportunity for organizational diagnosis and development
- Facilitates communication between employee and administration
When conducted effectively, appraisals can be motivational to the appraisee and the appraiser, so
its worth taking time to design. Essential elements to consider are:-
- Annual appraisal is used to assess performance, identify future training and development
needs, set new performance objectives and can be linked to salary review.

- If linked to reward system, then the quality and exchange of information at the appraisal
interview may be compromised especially if the appraiser is inexperienced. Employees my
avoid mentioning areas of work they find difficult.

- It focused on development; it should set targets for the individual based on business needs
of the organization. This gives employees better understanding of their roles and
contribution they make.

Accurate performance appraisal tools are multidimensional. The 360-degree feedback is an

example that uses multiple raters.

It is important to train managers to effectively conduct the performance

appraisal interview and give feedback to employees
Performance appraisal errors This
include:
a) First impression effect- the manager‘s initial negative or positive first impression of an
employee may distort his judgment of employee‘s performance.
b) Halo effect – Occurs when a manager generalizes one positive or negative jab aspect for
all aspects of the job e.g. a secretary with offensive interpersonal relations but is an
outstanding typist and proficient in computer packages may receive an overall negative
rating because of that one aspect.
c) Recency effect – occurs when a manager rates the employee according to the most
remembered positive or negative event.

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 d) Similar to me effect – refers to the tendency by raters to rate favourably employees whom
they perceive to be similar to themselves in terms of attitudes, beliefs, values or
backgrounds.
e) Illegal discriminating errors – judgment is influenced by stereotyping, prejudice on racial
gender, age or religious basis.
f) Errors of central tendency: Involves rating employees as average or close to average.
This occurs where raters are expected to justify extreme ratings. To avoid raters can be
asked to justify all rates on the scale.
g) Errors of leniency or strictness: Raters place employees either high or low on the scale,
Leniency is high and it causes employees to expect high rates and receive undeserved pay
rate raises. Strictness is low and may lead to reduced effort.

5.7 Compensation
If the abilities of employees have been developed to the point where they meet the job requirement,
it is now appropriate that they be rewarded for their contribution to the organization. Reward
management or compensation, describes the HRM function of paying people for what they have
done and can do for the organization and for themselves by contributing effectively to the
achievement of organizational objectives.
It short it means:
- Rewarding people according to their actual and potential contribution to the
company

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 - Recognizing that people have their own needs and goals, this must be matched with
the rewards and incentives.

Rewards are concerned with both financial and non-financial

rewards. List some intrinsic and extrinsic non-financial rewards that
employees expect in exchange for their commitment, loyalty and
performance

The intrinsic and extrinsic motivational importance of rewards is explained by Herzberg‘s (1959)
two factor theory of motivation. The aims of reward management are to: attract capable employees
to the organization, motivate employees to give superior performance and retain employee services
over an extended period of time.

Apart from the aims listed above, why do you think it is important to
reward employees?

Factors influencing pay determination

There are several factors that influence the level of pay in organizations:

• Supply and demand for employee skills

• Labour Unions
• Ability to pay
• Productivity
• Cost of living
• Government

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 Page
Pay levels and pay structures
Organizations reward systems are guided by two types of policies based on the pay [Link]
pay levels
Pay Structure: This refers to an organization‘s internal pay scale or grades for single jobs or a
group of jobs. This is achieved once the processes of job analysis and job evaluation are done. Pay
structures are designed to achieve internal consistency or equity. Internal consistency means
rewarding people in such a way there is a feeling of fairness and justice by differentiating between
high and low performance
Pay Level: This refers to the total pay structure of an organization relative to that of other
organizations in the labour market. It can also be described as where a company‘s pay structure
lies in relation to what other comparable companies pay for similar jobs.
Pay level is a reflection of an organization‘s external consistency. External consistency or equity
refers to the degree to which an organization‘s wages are competitive with those of competitors.
Salary surveys are normally used to determine pay levels.

Equity and rewards

Employees must perceive that the compensation offered is fair and equitable.
Equity: is concerned with felt justice according to natural law or right.
Perception of equity is determined by;

• Ratio of compensation to one‘s effort, education, training, experience, endurance

of adverse working conditions etc.
• Comparison of this ratio relative to those of others in same position.

In the workplace, employees compare themselves with their peers in terms of their contribution to
the organization and in relation to what they get from the organization. They compare their ratio
of inputs and outcomes with that of another person. (The theory of equity was advanced by
Stacy Adams in 1968 to explain motivation)
• Equity is taken seriously by employees and management decisions and actions must
be seen to be fair.
 • The striving to restore the outcome/input ratio to equity is used as the explanation
of work motivation.
• Equity exists/or is perceived when a person perceives that ratio of outcomes to input
is in equilibrium, with respect to self and in relation to others, thus: Outcome =
input = others

Workers prefer equitable payment to over-payment. Research has

shown workers on a piece rate system who felt overpaid reduced their productivity
to restore equity. What do you think is the explanation for this observation?
Job evaluation

The process for establishing basic pay is termed as “job evaluation.”

Job evaluation is the process of measuring the inputs of employees i.e. skill, effort,
experience, education etc. required for minimum performance and to translate such
measures into specific monetary returns. (It is a systematic and orderly process of
determining the worth of a job in relation to others)
The main objectives of job evaluation are to determine the correct rate of pay, obtain internal and
external consistency in wages and salaries and create satisfaction of pay between employer and
employee.
Job evaluation provides a systematic procedure for describing and placing a value on a job and is
also useful in recruitment and selection. It is perceived as a fair way of rewarding employees as
people are paid for work performed and satisfaction derived leads to high morale and cooperation.
It is a strategy for reducing pay disputes as it is objective and produces logical pay structures.
Variable Compensation
Variable compensation also known as pay-for-performance is used to raise productivity and cut
labour costs. are to: it helps to change the organizational culture to one which is performance and
results oriented, discriminate consistently and equitably on the distribution of rewards to
employees according to their contribution and deliver a positive message about the performance
expectations of the company.

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 What do you think are some of the advantages and disadvantages of variable Page
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Employee/ Fringe Benefits

Employee benefits also known as fringe benefits are indirect forms of remuneration given in
addition to basic pay. They include paid time away form work such as coffee breaks, annual leave,
sick leave or maternity leave; life and health insurance; retirement income and employee services
such as transport, cafeterias, housing, day care etc.

Why do you think employers provide benefits to their

employees?

5.8 Employee Relations

Employee relations, industrial relations and labour relations: are all terms that refer to those
aspects of HRM where employees are dealt with as a group through collective agreements with
trade unions. It covers all the relations between employers and employees in industry. Some
scholars however see employee relations, a more recent and broader includes employee
participation in management decisions, communications, policies for improving cooperation and
control of grievances and minimization of conflicts.
The philosophy of HRM has led to a shift towards individualism rather than collectivism due to
increased competition hence leaner and more efficient organizations, restructuring, the market
economy and free enterprise are changing trade union legislation.
This relationship is complex and multi-dimensional – e.g. it is influenced by the economic, social,
political, psychological, ethical and legal factors.
Employee relations cover the following issues;
a) Development, negotiation and application of formal systems of rules and procedures
for collective bargaining, handling disputes and grievances, and regulating
employment.

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 b) Concerned with the formal and informal processes, which take the form of continuous
interactions between managers and shop stewards, trade unions etc.
c) The bargaining structures, recognition of trade unions and procedural agreements and

practices, i.e. the collective relations between employers and trade unions. Employee

relations improves cooperation between employers and employees, minimize

unnecessary conflict, enable employees to play a part in decision making and keeps

employees informed of decisions that concern them. Conflicts between employees and

their employers arise because of different interests. For industrial peace to prevail, the

employees and organizational interests must be merged or integrated.

Identify employees‘ interests and employers‘ interests. Why do you think they
differ?

5.8.1 Principles guiding management decisions regarding the employment relationship

Decisions relating to employment relations management such as those concerned with union
recognition, collective bargaining and worker participation are influenced by the manager‘s
ideology, values and philosophy, which form his frame of reference.
These values include basic beliefs about how to treat employees, what motivates people and the
role of unions in the workplace. Thus managers can be either opposed or supportive of unions.
Purcell and Sisson (1983) refereed to two primary cognitive frames of reference unitary and
pluralist perspectives.
Unitary perspective: The management sees the organization as a unitary system with one
source of authority – itself and one focus of loyalty – the organization. Employees and the
employer have one common objective with no conflict of interest. This view is in aligned
to the HRM philosophy of commitment and mutuality.

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 Pluralist perspective: Management recognizes that conflict is inevitable with rival sources
of leadership and even a triple personality: economic, political and social. It accepts that
―there is an opposition which does not seek to govern‖ The conflict can be managed
through a formal system of negotiation and collective bargaining.

Armstrong (2001) refers to the following approaches:

a) Adversarial – this is where management has more power than employees. They make all the
decisions pertaining to the employment relationship. Threats and fear are used to control trade
union activities. Due to greater awareness and higher education levels among employees, this
type of relationship is no longer very widespread.
b) Traditional – the employer sets the pace but there is mutual respect between unions and
management. This is the most common relationship.
c) Partnership – The employer involves the employees in decisions that affect them but still
retains power. This type of relationship exists in few organizations.
d) Power sharing – Employees are involved in strategic decisions of the organization. This type
of relationship is very rare.

Antony et al (1997) suggest two approaches to industrial relations:

Substitution approach is the use of good management practices such as fair play, job
satisfaction, training and development opportunities and employee benefits to discourage
trade unionism

Suppression approach is the use of both legal and illegal means to discourage trade unionism
such as threats of victimization, refusal to recognize unions, intimidation and failure to
honour contracts.

5.8.2 Requirements for Good Employee Relations

a) Constructive attitude:

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 o Management and union should accept one another by management accepting workers as
equal partners – associates and recognizing their union as custodian of workers‘ interests.
o Union accepting and appreciating the business system, the rights, authority and
responsibility of management by respecting managers.
b) Clear cut policies and procedure o All policies, procedures and rules pertaining to employee
relations must be clear to all o HR managers must ensure that line managers understand and
agree with policies to avoid conflict.
c) Good and prompt communication system o Prompt communication removes suspicion
rumours and doubts. HR managers must convince union leaders of company‘s integrity and
sincerity.
d) Top management support o Employee relations is a staff function and derives its authority
from line authority, HR manager in charge must report to top lime authority e.g. CEO or
chairman.
e) Training in industrial relations o Employee relations is largely a human relations problem,
hence supervisors, foremen etc should be trained in relevant areas e.g. leadership and
communication practices.
f) Development of the right union leadership o Management should create conditions which
would stimulate growth of competent union leaders

5.8.3 Role Players in Employee Relations

The tripartite nature of employee relations

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 STATE

Secondary player

Secondary relationship

EMPLOYER EMPLOYEE
Primary relationship

Discuss the roles of each of the players in the employee relations function

5.8.4 The Collective Bargaining and Negotiation Process

Collective Bargaining (CB) refers to the process of negotiating, settling employees terms of
employment between union representatives and management, which apply to all employees. CB
enables employer-employee issues to be handled in a systematic manner where open discussion
and compromise are encouraged. The process prevents disputes and can be used to settle those that
have occurred. However, it may lead to a highly bureaucratic relationship with management,
encouraging a ‗them‘ and ‗us‘ mentality.
The Collective Bargaining Agreement (CBA)
CBA is a written agreement concerning terms and conditions of employment or any other matter
of mutual interest concluded by one or more registered trade unions on the one hand and one or
more employers or one or more registered employer organizations on the other. It is a legal contract
binding on members of the trade union and the employer.
The expected outcome of collective bargaining process is to reach an agreement on issues that
regulate the employment relationship. The themes for collective agreements include health and
safety, wage gaps, grading and performance related increases and training and promotions among
others.
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Negotiation is a process used to resolve conflict by civilized societies. The process involves:
- recognizing that there is conflict
- preparing to meet with one another
- communicating with the aim of persuading the other party to change its position by using
strategies and tactics as instruments of persuasive communication
- reaching agreements which if implemented successfully will eliminate the conflict

The pre-negotiation stage, the preparations for actual bargaining by the union and the management
takes place. The Employers side prepares for effective negotiation by studying previous contracts
between the union and other organization, studying the personalities of the union negotiators,
finding more information on the union, defining the target settlement and agreeing on the
maximum offer the employer is prepared to concede. Factors that determine the employer‘s target
settlement include the relative strength of the employer and union case, relative power of employer
versus union, employer‘s ability to pay and the going market rate. The Union side also must define
their target, the minimum they will accept and decide on the opening claim to help them achieve
the target.

Bargaining and negotiation involves the use of tricky acts

that are aimed at misleading the other party

Strategy for Bargaining

Union Management
Claim 200%

Maximum 100%

Minimum 50% ( will

go on strike if less)

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 Maximum 40% ( will take
Negotiating range is 10% strike if more)
Target 30%
Offer 10%

The employer must know how far it can go without risking a strike.

Successful negotiation leads to collective agreements which are sealed by the signing of a contract
which runs for 2-3 years. This consists:
• Security of the union and its members
• Grievances procedures and dispute handling e.g. provision of arbitration
• Promotions transfers and layoffs Wages, fringe benefits etc.
• Working conditions e.g. Leave, holidays etc
• Incentive pay, study leaves etc
• Safety and health insurance etc
• Management responsibilities
• A miscellaneous clause which keeps the rest of the agreement valid.
Unsuccessful collective bargaining/negotiations can lead to industrial action by the union. Trade
unions use strikes, pickets, boycotts or go slow to pressure management to yield to their demand.

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 5.9 Summary

We have now come to the end of this lecture. In this lecture, we discussed the various
functions of the staffing function in management. We described how human resource
management plays a key s trategic role in building human capital and enabling an
organization to be more competitive. The first goal of HRM is to find the right people,
develop an effective workforce through training and development and evaluate them
through performance appraisal programmes. HRM must also maintain a wages and salary
structure, incentive systems and benefits. Another function of HRM is to manage the
employer -employee relationship through collective bargaining processes and negotiation.

5.10 Self- test

To test if you have achieved the objectives for this lecture, attempt the following
questions
1. Discuss the strategic role of HRM
2. If you were given the responsibility of filling vacant positions in your organization,
how would you go about the process of human resource planning?
3. Discuss the merits and demerits of sourcing employees from within and from
without
4. Discuss the importance of developing effective human resources
5. Justify the need for a performance appraisal system in your organization
6. Explain the problems assoc iated with appraisal processes and suggest ways they can
be overcome
7. Explain the importance of the compensation function
8. Discuss the roles of the various actors in the employee relations function

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 5.11 Suggestions for further reading
1. Gary Dessler, (2000) Human Resource Management, eleventh Edition.
2. Grote Richard C and Dick Grote (2002).The performance appraisal question and
answer tool: A survival guide for managers New York, USA,
3. Michael Armstrong (2001), A textbook of Human Resource Management
Practice 19th edition, philadelphia.
4. Kevin R Morphy and Jeanette N Cleveland (1995).Understanding performance
appraisal: Social, organizational and goal-based perspectives,
5. Daft R. L. and Marcic D. (2008) Management: The New Workplace, SouthWestern
Cengage Learning, UK

LECTURE SIX
DIRECTING FUNCTION

Lecture outline

6.1 Introduction
6.2 Lecture objectives
6.3 Meaning of leadership
6.4 Importance of directing function
6.5 Difference between management and leadership
6.4 Types of leaders
6.5 Importance of leadership
6.6 Theoretical approaches to leadership studies
6.7 Transformational leadership theory
6.8 Summary

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6.1 Introduction

Directing is the process in which managers instruct, guide and oversee the performance of workers
to achieve predetermined goals. It can be said to be the heart of management process. Planning,
organizing and staffing have got no importance if direction function does not take place as
directing initiates action so that actual work can begin. Direction consists of human factors.

In simple words, it can be described as providing guidance to workers in doing work. In the field
of management, direction is said to be all those activities which are designed to encourage the
subordinates to work effectively and efficiently. Directing is the function of guiding, inspiring,
overseeing and instructing people towards accomplishment of organizational goals.

The difference between successful and unsuccessful organizations is the presence or absence of
dynamic and effective leadership. In this lecture, we shall examine some key aspects of leadership.
To do so the following set of objectives will be the main focus.
The directing function is pervasive as it is required at all levels of organization. Every manager
provides guidance and inspiration to his subordinates. Directing function is concerned with the
human factor in organizations Direction function helps in converting plans into performance and
hence, without this function, people become inactive and physical resources are meaningless.
Direction involves delegation and allocation of work and supervision of people. Direction involves
the use of leadership skills.

6.2 Learning Objectives

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 1. Define and explain the meaning of leadership.
2. Explain the nature and importance of leadership.
3. Explain the difference between a leader and a manager
4. Identify and distinguish among the various research approaches to leadership.
5. Identify and discuss the various theories of leadership.
6. Explain the importance of leadership styles to management.

6.3 What is leadership?

Leadership is an important aspect of management and the ability to lead is one of the keys to
being an effective manager. The difference between success and failure, whether in war,
business, a protest movement or a soccer game can be attributed largely to leadership. A large
number of definitions can be found in the literature. A few examples are include:

• Leadership is the art or process of influencing people so that they will strive willingly and
enthusiastically toward achievement of group goals.

• Leadership is the ability of management to induce subordinates to work towards group

goals with confidence and keenness.

• Leadership is the ability of a person to influence the thoughts and behaviour of others
towards the accomplishment of some goals or goal.

• Getting people to move in certain directions make decisions and support paths they would
typically not have selected.

• The process of articulating visions, embodying values and creating the environment within
which things can be accomplished

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 Leadership
• Is a process not an individual position
• Involves a relationship between a leader and followers in a given situation.
• Is a complex concept involving the leader, the followers and the
• situation
• Consists of activities and is directional.
• Is the central point around which goals are accomplished
• Initiates actions
• Integrates efforts
• Means of employee motivation
• Provides stability and balance for organizational survival and growth
• Is concerned with efficient utilization of resources

From the above discussion, one can justify that direction is the heart of management process. As
we all know, the heart plays an important role in the human body as it serves the function of
pumping blood to all parts of body so that life is sustained. Similarly, direction helps subordinates
to perform to the best of their abilities. Therefore, direction can be said to be the essence of
management process.

6.4 Difference between leadership and management

What is the difference between management and leadership? It is a question that has been asked
more than once and also answered in different ways. The biggest difference between managers
and leaders is the way they motivate the people who work or follow them, and this sets the tone
for most other aspects of what they do.

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Leadership and management are closely related activities but distinguishable. Leaders and
managers are not different people, but can be the same individual performing both roles. Many
people, by the way, are both. They have management jobs, but they realize that you cannot buy
hearts, especially to follow them down a difficult path, and so act as leaders when necessary.

By definition, managers have subordinates - unless their title is honorary and given as a mark of
seniority, in which case the title is a misnomer and their power over others is other than formal
authority. Managers have a position of authority vested in them by the company, and their
subordinates work for them and largely do as they are told. Management style therefore is
transactional, in that the manager tells the subordinate what to do, and the subordinate does this
not because they are a blind robot, but because they have been promised a reward (at minimum
their salary) for doing so. Managers are paid to get things done (they are subordinates too), often
within tight constraints of time and money. They, thus, naturally pass on this work focus to their
subordinates.

An interesting research finding about managers is that they tend to come from stable home
backgrounds and led relatively normal and comfortable lives. This leads them to be relatively
risk-averse and they will seek to avoid conflict where possible. In terms of people, they
generally like to run a 'happy ship'.
Leaders do not have subordinates - at least not when they are leading. Many organizational
leaders do have subordinates, but only because they are also managers. But when they want to
lead, they have to give up formal authoritarian control, because to lead is to have followers, and
following is always a voluntary activity.

Telling people what to do does not inspire them to follow you. You have to appeal to them,
showing how following them will lead to their hearts' desire. They must want to follow you
enough to stop what they are doing and perhaps walk into danger and situations that they would
not normally consider risking. Leaders with a stronger charisma find it easier to attract people
to their cause. As a part of their persuasion, they typically promise transformational benefits,
such that their followers will not just receive extrinsic rewards but will somehow become better
people.

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Although many leaders have a charismatic style to some extent, this does not require a loud
personality. They are always good with people and quiet styles that give credit to others (and
takes blame on themselves) are very effective at creating the loyalty that great leaders engender.
Although leaders are good with people, this does not mean they are friendly with them. In order
to keep the mystique of leadership, they often retain a degree of separation and aloofness. This
does not mean that leaders do not pay attention to tasks - in fact they are often very achievement-
focused. What they do realize, however, is the importance of enthusing others to work towards
their vision.

In the same study that showed managers as risk-averse, leaders appeared as risk-seeking,
although they are not blind thrill-seekers. When pursuing their vision, they consider it natural to
encounter problems and hurdles that must be overcome along the way. They are thus comfortable
with risk and will see routes that others avoid as potential opportunities for advantage and will
happily break rules in order to get things done.

A surprising number of these leaders had some form of handicap in their lives which they had to
overcome. Some had traumatic childhoods, some had problems such as dyslexia, others were
shorter than average. This perhaps taught them the independence of mind that is needed to go
out on a limb and not worry about what others are thinking about you.

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 ✓ According to Brewster (1999), leadership and management qualities are
complementary. Many people lead and manage at the same time, and so may display a
combination of behaviors. These characteristics may be summarized as in Table 6.1 and
Table 6.2
✓ From the foregoing it is obvious that to increase the performance of any organization, all
managers should also be good leaders.
✓ The goal of leadership studies and leadership training is to turn managers into leaders so
that they can become better managers.
✓ To be effective, a leader must win the hearts and minds of the followers. This requires a
guiding vision and clear idea of what is to be accomplished. Effective leaders must be able
to communicate their vision. Knowing what to do, but not being able to communicate this
to others can be a major drawback to effective leadership.

Table 6.1: Management vs. Leadership

Management characteristics Leadership Characteristics

✓ Administers and problem-solves. ✓ Innovates- means alertness to opportunities,

✓ Works within a system. uses imagination and vision to capitalize on
✓ Focuses on control. them.
✓ Short range view. ✓ Works on the system ✓ Focuses on people.
✓ Accepts the status quo. ✓ Inspires trust.
✓ Sets things in motion by means of methods

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 and techniques. ✓ Long range view.
✓ Attitude of doing. ✓ Challenges the status quo.
✓ Transactional, authoritarian style ✓ Is a natural unforced ability to inspire people.
✓ Managers have subordinates ✓ Attitude of serving
✓ Work focus ✓ Leaders have followers
✓ Seek comfort ✓ Charismatic, transformational style
✓ Seek risk

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 Likes Striving Action

Wants Achievement Results

Risk Takes Minimizes

Rules Breaks Makes

Conflict Uses Avoids

Direction New roads Existing roads

Truth Seeks Establishes

Concern What is right Being right

Credit Gives Takes

Blame Takes Blames

6.5 Types of leaders and power

Writers have identified various types of leaders.

Charismatic Leaders – These are those whose influence is derived from the personality
e.g. Napoleon, Kenyatta, Billy Graham, Nelson Mandela, Desmond Tutu etc. This type
resides only in a few people and cannot be acquired by training – it is natural.

Traditional Leaders –These are those whose position is assured by birth e.g. Kings,
Queens, tribal chieftains etc. It is limited and not applicable to workplaces except in family
businesses.

Situational Leaders -Their influence is effective by being in the right place at the right
time – It is impromptu and temporary eg. One who steps to direct traffic in a jam.

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 Appointed Leaders –Refers to those whose influence arises from position e.g. manager
and supervisors. It is a bureaucratic type of leadership where legitimate power comes
from the position in the hierarchy.

Functional Leaders – Are those whose influence comes from the work done rather than
position such as experts.

The concepts of leadership and power are closely related. Power is the capacity to influence others
through the control of instruments of reward and punishment – which can be tangible or intangible.
Sources of Power are:

(vi) Legitimate power – derived from the position e.g. kingship, managerial
(vii) Reward Power – derived from control of resources e.g. promotion,
recommendation, training etc
(viii) Referent power– derived from association with powerful people
(ix) Coercive power – uses the ability to force other people to act against their
wishes through the fear of punishment.
(x) Expert power – derived from the possession of expert knowledge or
information that others need but have no alternative access.

6.6 Importance of leadership

Leadership is important as it can make a difference to organizational performance.

Leadership provides the spark that can raise morale of employees. Peter F. Drucker noted
that:
“Leadership is a human characteristic which lifts a person‟s vision to highest
heights, raises performance to higher standards and builds personality beyond its
normal situations”.
Leadership can be said to be important in the following ways:

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 1) Leaders not only guide, but provide a psychological shield to their followers (Managers –
employees) as the average person prefers to be led by an efficient and effective leader. The
presence of a leader (manager), makes followers (subordinates) behaviour consistent, and
raises morale, thus high quality of work.

2) Creates and sustains teamwork and groups. The will to work and accomplish a task is
triggered by effective leadership. Usually without leadership, a group disintegrates,
destroys its team spirit and fritters away its energy. Leadership inspires and motivates the
group.

3) Leaders are role models who set examples.

4) Leaders create confidence in workers.

5) Promotes morale which leads to high productivity and organizational stability.

6) Maintains unity and cohesiveness of the group.

7) Maintains discipline of the group and among group members.

6.7 Theoretical approaches to leadership studies

In the recent literature of leadership (that is over the last 80 years or so) there have been four main
‗generations‘ of leadership theory:
o Trait theories o
Behaviourist theories o
Situational theories o
Transformational theories
It is important, as John van Maurik (2001: 2-3) has pointed out, to recognize that none of the four
‗generations‘ is mutually exclusive or totally time-bound.

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―Although it is true that the progression of thinking tends to follow a sequential path, it is
quite possible for elements of one generation to crop up much later in the writings of someone
who would not normally think of himself or herself as being of that school. Consequently, it is
fair to say that each generation has added something to the overall debate on leadership and
that the debate continues (van Maurik 2001: 3)‖

6.7.1 Trait approach

The earliest studies on leadership focused on the qualities of effective leaders such as
bravery, loyalty, honesty, and compassion. However, as traits are many, research findings
often disagreed on which are the most important traits. Keith Davis (1972), in human
behaviour at work, summarized the traits and gave four general characteristics namely:-

(i) Intelligence – leaders tend to have higher intelligence than their followers.
(ii) Social maturity and breadth – leaders tend to be emotionally mature and have broad
range of interests.
(iii) Inner motivation and achievement drives – leaders want to accomplish things,
achieve goals and are intrinsically motivated.
(iv) Human Relations attitudes - leaders are able to work with others, and tend to respect
others.

Not all leaders have these traits, and followers can also have them (they
are not exclusive to leaders). Although positive correlations have been found between the
above traits and effective leaders, examples of effective leaders exist who do have these
traits.

The trait approach was used before 1949, when the „Great Man Theory‟ of „leaders are
born not made‟, a belief originating from the Greeks and Romans was in vogue. However,

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 this school of thought was no longer acceptable after the rising influence of the behaviourist
school of Psychology which emphasized that people are not born with traits, but made.
The trait approach has been criticized for several reasons. For example:
- Not all leaders possess all the traits.
- Many non-leaders possess most of the traits.
- The trait approach gives no guidance as to how much of any trait a person should
have.
- Research findings do not agree as to which are leadership traits and what their
relationships are to instances of leadership.
- The so called traits are nothing but patterns of behaviour.

6.7.2 Behaviourist approach

As a result of the failure of the trait approach to leadership, the focus shifted to the
individual behaviours of leaders. The main concern was on the leadership styles of leaders.
Leadership styles refer to the way a leader typically behaves towards his followers/group
members. These styles have been classified into:

(i) Autocratic Leadership – This approach refers to where all authority centers around
the leader. The manager enforces decisions by use of rewards and punishments
(ability to withhold or give rewards and punishment), communication is in one
direction - from manager to subordinate and conformity and obedience on the part of
followers is expected.

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 • One way communication
• Compliance and obedience
Advantages:
• Decisions are made speedily as leader
leader does not have to obtain group‘s approval.
• Useful where decision is unfavourable.
• Useful in cases where followers are
incompetent.
Disadvantages:
• Has negative effect on group morale –
decisions may not be supported.
• Can create ‗yes‘ mentality among
group members.

Can you now think about other advantages and disadvantages of autocratic
leadership styles

(ii) Democratic/Participative Leadership.

The democratic style of leadership considers the suggestions of members and leader. It is
a human relations approach where all group members are seen as important contributors to
a decision.

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 Democratic communication which allows an
Interchange of ideas between all involved.
perso
Leader

Advantages
- increased morale of members
- support for final decision
- better decisions through shared ideas
Disadvantages
- Slower decision
- Diluted accountability for decisions
- Possible compromises designed to please all

(iii) Laisser Faire Leadership

‗Allow (them) to do‘ style – the leader exercises very little control or influence over the group
members. Members are given a goal and left alone to decide how to achieve it. Role of the leader
is facilitative.

leader

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Advantages
• Increased opportunity for individual development.
• All persons are given a chance to express themselves and function independently.
Disadvantages
• Lack of group cohesion and unity toward org. goals.
• Lack of direction and control.
• Inefficiency and chaos.

6.8 Leadership Style Theories

There are several theories of leadership styles and a few will be considered in this lecture.
6.8.1 Rensis Likert‟s Systems of Management
Likert developed four styles of management. As a proponent of participative management, he saw
the effective manager as strongly oriented to subordinates where all group members including the
manager adopt a supportive relationship. His four styles are based on differing assumptions about
human behaviour e.g. McGregor‘s Theory X & Y.
System 1 Management Style: Exploitative – Authoritative -
Managers are highly autocratic.
- Have little trust in subordinate.
- Motivate people through fear and punishment.
- Engage only in downward communication.
- Limit decision making to the top.
- Relationships with subordinate are distant.

System 2 Management Style – Benevolent – Authoritative

- Managers are paternalistic.

- Have a condescending confidence and trust in subordinates.
- Motivate with rewards and some fear and punishment.
- Limited upward communication.
- Limited delegation of decision making, but with close policy control.

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System 3 Management Style – Consultative
- decisions are made after discussion with subordinates.
- Substantial confidence and trust in subordinates.
- Managers try to make constructive use of subordinate‘s ideas and opinions. -
Two way communication.
- Teamwork is encouraged and initiative - Controls are much looser.

System 4 Management Style – Participative – Group System -

Most participative style.
- Complete trust and confidence in subordinates.
- Get economic rewards on basis of group participation.
- Communication is up, down and lateral.
- Encourage decision making at all levels.
- Excellent productivity, low absenteeism and turnover

According to Likert, system 4 approach is the best. Leaders applying this system
have had greatest success, departments are most effective in setting and achieving goals.

Criticisms:
• Research focus was on small groups yet findings have been applied to the total
organization.
• Research was conducted at lower organizational levels and is not supported when data from
top level managers is separated.
• System 4 is more applicable when companies are profitable and not when in turbulence.

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 The situation must be considered before making a conclusion. System 1 and
2 are derived from the Scientific School of Management, while system 3 and 4 are developed
from the Human Relations School of Thought. Management styles fall within a continuum
ranging from total authoritarian to total democratic.

6.8.2 The Managerial Grid

This is a dramatized approach to leadership styles developed by Robert Blake and Jane Mouton in
1954 to show the importance of the manager‘s concern for production and for people. The
managerial grid is widely used for managerial training and identifying leadership styles.

The Blake and Mouton Managerial Grid, also known as the Leadership Grid (1985) uses two axes:
1. "Concern for people" is plotted using the vertical axis
2. "Concern for task or results" is plotted along the horizontal axis.

They both have a range of 0 to 9. The notion that just two dimensions can describe a managerial
behavior has the attraction of simplicity. These two dimensions can be drawn as a graph or grid.
This is illustrated in Figure 6.1.

9,9
1,9

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 5,5

9,1
1,1
Concern for tasks/results/production

Figure 6.1 The Managerial Grid

Concern for tasks/results/production conveys the attitudes managers have towards a variety of
things e.g.: Quality of policy decisions, procedures and processes, work efficiency, volume of
output etc.
Concern for people refers to the degree of personal commitment toward goal achievement, self
esteem of workers, responsibility and recognition, trust rather than obedience, good working
conditions, satisfying interpersonal relations, job enrichment etc.

Most people fall somewhere near the middle of the two axes — Middle of the Road. The extremes
show four types of leaders:

o 9,1 Authoritarian — strong on tasks, weak on people skills o

1,9 Country Club — strong on people skills, weak on tasks o
1,1 Impoverished — weak on tasks, weak on people skills o
9,9 Team Leader — strong on tasks, strong on people skills

The goal is to be at least in the middle of the road but preferably a Team Leader — that is, to
score at least between a 5,5 to 9,9.

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Authoritarian Leader (high task, low relationship) -
People who get this rating are very much task oriented and are hard on their workers (autocratic).
There is little or no allowance for cooperation or collaboration. Heavily task oriented people
display these characteristics: they are very strong on schedules; they expect people to do what they
are told without question or debate; when something goes wrong they tend to focus on who is to
blame rather than concentrate on exactly what is wrong and how to prevent it; they are intolerant
of what they see as dissent (it may just be someone's creativity), so it is difficult for their
subordinates to contribute or develop.

Team Leader (high task, high relationship) - This type of person leads by positive example and
endeavors to foster a team environment in which all team members can reach their highest
potential, both as team members and as people. They encourage the team to reach team goals as
effectively as possible, while also working tirelessly to strengthen the bonds among the various
members. They normally form and lead some of the most productive teams.
Country Club Leader (low task, high relationship) - This person uses predominantly reward
power to maintain discipline and to encourage the team to accomplish its goals. Conversely, they
are almost incapable of employing the more punitive coercive and legitimate powers. This inability
results from fear that using such powers could jeopardize relationships with the other team
members.

Impoverished Leader (low task, low relationship) - A leader who uses a "delegate and disappear"
management style. Since they are not committed to either task accomplishment or maintenance;
they essentially allow their team to do whatever it wishes and prefer to detach themselves from the
team process by allowing the team to suffer from a series of power struggles.

The most desirable place for a leader to be along the two axes at most times would be a 9 on task
and a 9 on people — the Team Leader. However, do not entirely dismiss the other three. Certain
situations might call for one of the other three to be used at times. For example, by playing the
Impoverished Leader, you allow your team to gain self-reliance. Be an Authoritarian Leader to
instill a sense of discipline in an unmotivated worker. By carefully studying the situation and the
forces affecting it, you will know at what points along the axes you need to be in order to achieve
the desired result.
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1.1 Management Style – (Impoverished Management).
- Managers have little concern for both people and production
- Job involvement is minimal
- The managers has practically abdicated the job and at best acts as a messenger
conveying information along the chain of command.
- It is basically an inefficient management style.

9.9 Management Style – (Team managers – executives).

- Possesses high concern for both people and production. - Manager is able
to integrate production needs and people needs - It is considered the ideal
or optimum style.

1.9 Management Style – (country club management or missionary).

- Has low concern for production and efficiency but emphasizes human relations
and pays attention to human needs.
- Manager promotes an environment where everyone is happy, relaxed, and
friendly.
- No one is concerned about putting forth coordinated effort to accomplish
organization goals.

9.1 Management Style – (autocratic, task managers).

- Manager is concerned with developing efficient operations.
- Has little concern for human feelings.
- Manager is autocratic in leadership style.

5.5 Management Style – (Compromiser or benevolent autocratic)

- Manager has medium concern for people and production.
- Adequate but not outstanding morale and production.
- Manager has a benevolent – autocratic – paternalistic attitude towards people.

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 - Manager balances production and concern for people.

Criticisms of the management grid

- The grid does not say why a manager falls in one part of the grid and not another.
- Or why one is an autocrat and not a compromiser.

Managers can be trained in appropriate management styles, however, it

is said the most difficult to change is the authoritarian, task-centred manager. Why do you
think this is the case?

So which is the best leadership approach? It is not possible to say

which
style is best as it depends on the situation. A leader may be autocratic in one situation
and democratic in another.

6.9 Situational approaches to leadership

While behavioural theories may help managers develop particular leadership behaviours they
give little guidance as to what constitutes effective leadership in different situations. There is no
one leadership style that is right for every manager under all circumstances. For these reason
contingency-situational theories were developed to indicate that the style to be used is
contingent upon factors such us the situation, the people, the task, the organization, and the
environment

Contingency or situational theories of leadership Fielder’s Contingency Model

Fielder argues that the situation a leader will be faced with will create the leadership style he/she
will choose to adopt i.e. the leadership style is contingent on the factors that impinge on a
situation. Fielder looked at three 3 situations that could define the conditions of a managerial
task:
Leader member relations - The regard with which the leader and the group members hold
one another determines, in part, the ability of the leader to influence the group and the conditions

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under which he or she can do so. A leader who is accepted by the group members is in a more
favorable situation than one who is not

Task structure - Factors that determine task structure are can a decision be demonstrated as
correct, are the requirements of the task understood by everyone, is there more than one way to
accomplish the task, and is there more than one correct solution. If the group’s task is
unstructured, and if the leader is no more knowledgeable that the group about how to accomplish
the task, the situation is unfavorable

Position power - Position power is determined at its most basic level by the rewards and
punishments which the leader officially has at his or her disposal for either rewarding or
punishing the group members on the basis of performance. The more power the leader has, the
more favorable the situation.

From the above situations, Fiedler developed two types of leadership styles or orientations:

Relationship Orientated: Such leaders are more concerned with personal relations, are more
sensitive to the feelings of others, and better off at heading off conflict. They use their good
relations with the group to get the job done. They are better able to deal with the complex issues
in making decisions. In high control situations, they tend to become bored and are no longer
challenged. They may seek approval from their superiors ignoring their subordinates, or they
may try to reorganize the task. As a result, they often become inconsiderate toward their
subordinates, more punishing, and more concerned with performance of the task. In moderate
control situations, they focus on group relations. They reduce the anxiety and tension of group
members, and thus reduce conflict. They handle creative decision making groups well. They see
this situation as challenging and interesting and perform well in it. In low control situations, they
become absorbed in obtaining group support often at the expense of the task. Under extremely
stressful situations, they may also withdraw from the leadership role, failing to direct the group’s
work.

Task Oriented: Such leaders have a no no-nonsense attitude about getting the work done. They
tend to be eager and impatient to get on with the work. They are more concerned with the task,
and less dependent on group support In moderate control situations, they tend to be anxious and
less effective. This situation is often characterized by group conflict. They become absorbed in
the task and pay little attention to personal relations in the group. They tend to be insensitive to
the feelings of their group members, and the group resents the lack of concern. In high control
situations, they tend to relax and develop pleasant relations with subordinates. They are easy to
get along with. As the work gets done, they do not interfere with the group or expect interference
from their superiors. In low control situations, they devote themselves to their challenging task.
They organize and drive he group to task completion. They also tend to control the group tightly
and maintain strict discipline. Group members often respect such leaders for enabling them to
reach the group’s goals in difficult situations.

The Hersey-Blanchard Model of Leadership

The theory, as outlined by Dr. Paul Hersey and Ken Blanchard, states that instead of using just
one style, successful leaders should change their leadership styles based on the maturity of the

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group members/ workers and the details of the task. Using this theory, leaders should be able to
place more or less emphasis on the task, and more or less emphasis on the relationships with the
people they're leading, depending on what's needed to get the job done successfully. Their theory
is based on the amount of direction (task behaviour) and social emotional support (relationship
behaviour) a leader must provide given the situation and the level of maturity of the followers.

They proposed four main leadership styles:

Telling (S1) – Leaders tell their people exactly what to do, and how to do it. Selling (S2) –
Leaders still provide information and direction, but there's more communication with followers.
Leaders "sell" their message to get the team on board.
Participating (S3) – Leaders focus more on the relationship and less on direction. The leader
works with the team, and shares decision-making responsibilities.
Delegating (S4) – Leaders pass most of the responsibility onto the follower or group and only
monitor progress. They're less involved in decisions. As you can see, styles S1 and S2 are focused
on getting the task done. Styles S3 and S4 are more concerned with developing team members'
abilities to work independently.

Maturity Levels
According to Hersey and Blanchard, knowing when to use each style is largely dependent on the
maturity of the person or group you're leading. They break maturity down into four different
levels:
M1 – People at this level of maturity are at the bottom level of the scale. They lack the knowledge,
skills, or confidence to work on their own, and they often need to be pushed to take the task on.
M2 – at this level, followers might be willing to work on the task, but they still don't have the
skills to do it successfully.
M3 – Here, followers are ready and willing to help with the task. They have more skills than the
M2 group, but they're still not confident in their abilities.
M4 – These followers are able to work on their own. They have high confidence and strong
skills, and they're committed to the task.
The Hersey-Blanchard model maps each leadership style to each maturity level, as shown
below.

Maturity Level Most Appropriate Leadership Style

M1: Low maturity S1: Telling/directing
M2: Medium maturity, limited skills S2: Selling/coaching
M3: Medium maturity, higher skills but lacking confidence
S3: Participating/supporting
M4: High maturity

S4: Delegating

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Adair’s Action-Centered Leadership Model
John Adair’s model suggests that the action-centered leader gets the job done through
the work team and relationships with fellow managers and staff. According to this
theory an action centered leader must;
• Direct the job to be done
• Support and review the individuals doing it
• Harmonize the work team as a whole
The effectiveness of a leader is dependent upon meeting three areas of need within the group:
• The need to achieve a common task
• The need for team maintenance, and
• The individual needs of group members
Adair symbolized these needs, and associated interactions with three overlapping circles.

Tannenbaum and Schmidst’s Model of Continuum of Leadership

Tannenbaum and Schmidst’s model of a continuum of leadership styles explored the different
styles of leadership. Tannenbaum and Schmidst suggested that leadership behaviour varies
along a scale/continuum (with autocratic style and laisser faire style on two extreme ends) and
that as one moves away from the autocratic extreme the amount of subordinate participation
and involvement in decision taking increases.
AMOUNT OF AUTHORITY HELD BY LEADER
[Link]
As a result of failure of the trait approaches, leadership studies turned to the study of situations and
the belief that leaders are the products of given situations. This approach supports the follower
theory that people follow those in whom they perceive (accurately or inaccurately) a means of
accomplishing their own goals. For example the rise of Hitler, Jomo Kenyatta, student leaders,
F.D. Roosevelt during the American great depression in the 1930‘s, Museveni in Uganda in 1985-
86, Corazon Aquino in the Philippines and Nelson Mandela.

Robert Tannenbaum and Warren Schmidt (1958) saw leadership as involving a variety of styles
ranging from boss-centered to subordinate-centered. Their approach suggests a range of styles
without preference for any.

The concept of the continuum recognizes that a style of leadership depends on the situation e.g.

(i) Forces operating within the manager‘s personality such as value system,
confidence/trust in subordinates, feelings of security etc.

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 (ii) Forces in subordinates that will affect manager‘s behaviour e.g. need for
independence, readiness to assume responsibility for decision making, tolerance for
ambiguity, interest in problem, understanding goals of organization, knowledge and
experience levels, sharing decisions.
(iii) Forces in the situation e.g. organization values and traditions, nature of the problem,
pressure of time, trade unions, civil rights etc.
(iv) Forces in the external environment: In a revised publication Tannebaum and
Schmidt, recognized the forces in the external environment such as government
legislation, political, social awareness and economic considerations as having an
effect upon leadership style.

Managers‘, therefore, have to consider these forces before choosing an

appropriate management style.

Area of manager‘s authority

Area of subordinate freedom

Figure 6.2 Continuum of leadership style

The continuum suggests 5 basic styles: Tell, sell, consult, join, delegate. Tell being where the
manager‘s area of authority is greatest while delegate is where the subordinate‘s area of freedom
is greatest.

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 This approach emphasizes flexibility and sensitivity to the situation in which the
leader and the group find themselves.
Other variables in the situation are:
The job, or tasks.
• Organizational environment.
• Characteristics of people/demographic differences.
• History/culture of the organization.
• The community in which the organization operates.
• Psychological climate of the group.
• Cultural influences.
• Time required to make decision.
• Nature of the decision/task.

Situation: circumstances/conditions under which a leader operates.

Condition: consists of anything that affects leadership.

6.9 Critical Dimensions of the Leadership Situation - Fiedler F. E. (1967)

According to Fiedler, people become leaders because of various situational factors and the
interaction between leaders and the situation. He describes these as:
1. Position Power:-refers to the degree to which the power of the position enables group
members to comply with leader‘s directions i.e. organizational authority.
A leader with position power can obtain better followership than one without.

2. Task Structure:- refers to the degree to which tasks are structural. Where tasks are clear,
the quality of performance can be easily controlled and group members held responsible
than where they are unclear.

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 3. Leader- member relations:- refers to the extent to which group members like and trust
the leader and are willing to follow. The better the relations, the easier it is for the leader
to exercise influence.

Based on the three dimensions, Fiedler postulated two styles of management – task
oriented and interpersonal relations oriented. Measures were carried out on these
elements using the least preferred coworker scale indicating a favourable or unfavourable
situation continuum.
Findings
• Favourable situation in which the leader has power, informal backing and a structured
task – then the group is ready to be directed.

• When leader position power is weak, task structure is unclear, and leader-member
relations are poor, the situation is unfavourable for the leader and a task-oriented leader
is most effective.

• Where the situation was moderately favourable – middle of the scale, then interpersonal
oriented leader was most effective.

6.10 Transformational leadership

Burns (1977) argued that it was possible to distinguish between transactional and transforming
leaders. The former, ‗approach their followers with an eye to trading one thing for another (1977:
4), while the latter are visionary leaders who seek to appeal to their followers ‗better nature and
move them toward higher and more universal needs and purposes‘ (Bolman and Deal 1997: 314).
In other words, the leader is seen as a change agent.

Table 6.1 Transactional and transformational leadership

The transactional leader: The transformational leader:

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Recognizes what it is that we want to get from Raises our level of awareness, our level of
work and tries to ensure that we get it if our consciousness about the significance and value
performance merits it. of designated outcomes, and ways of reaching
them.
Exchanges rewards and promises for our
effort. Gets us transcend our own self-interest for the
sake of the team, organization or larger polity.
Is responsive to our immediate self interests if
they can be met by getting the work done. Alters our need level (after Maslow) and
expands our range of wants and needs.

(Based on Bass 1985 - Wright 1996: 213)

Bass (1985) was concerned that Burns (1977) set transactional and transforming leaders as polar
opposites. Instead, he suggests we should be looking at the way in which transactional forms can
be drawn upon and transformed. The resulting transformational leadership is said to be necessary
because of the more sophisticated demands made of leaders. van Maurik (2001: 75) argues that
such demands ‗centre around the high levels of uncertainty experienced by leaders, their staff and,
indeed, the whole organization… today‘. He goes on to identify three broad bodies of writers in
this orientation. Those concerned with:

· Team leadership e.g. Meredith Belbin.

· The leader as a catalyst of change e.g. Warren Bennis, James Kouzes and Barry Posner, and
Stephen R. Covey.

· The leader as strategic visionary e.g. Peter Senge

The dividing lines between these is a matter for some debate; the sophistication of the analysis
offered by different writers is variable; and some of the writers may not recognize their placement
but there would appear to be a body of material that can be labeled transformational. There is
strong emphasis in the contemporary literature of management leadership on charismatic and
related forms of leadership. However, whether there is a solid body of evidence to support its
effectiveness is an open question. Indeed, Wright (1996: 221) concludes ‗it is impossible to say
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how effective transformational leadership is with any degree of certainty. We will return to some
questions around charisma later – but first we need to briefly examine the nature of authority in
organizations (and the relationship to leadership).

6.11 Summary
In Lecture Six, we discussed the directing function of management and more specifically its
leadership role. We noted that management and leadership roles can be played by individuals in
different situations. From the various theories of leadership, we noted that leadership styles range
from autocratic to participative and while participative/democratic styles of management are
thought to be better than autocratic styles, extremes are not effective thus the continuum. Style
also depends on the situation such as the manger‘s personality, nature of the subordinates, the
philosophy of the organization and the external environment in which leadership is taking place.
Appropriate training in leadership can change a manager‘s style of management if done early in
the career. However, it is not easy as style is rooted in attitudes.

[Link] THEORY
The transactional style of leadership was first described by Max Weber in 1947 and
then by Bernard Bass in 1981. This style is most often used by the managers. It focuses
on the basic management process of controlling, organizing, and short-term planning.
The famous examples of leaders who have used transactional technique include
McCarthy and de Gaulle.
Transactional leadership involves motivating and directing followers primarily
through appealing to their own self-interest. The power of transactional leaders comes
from their formal authority and responsibility in the organization. The main goal of
the follower is to obey the instructions of the leader.
The leader believes in motivating through a system of rewards and punishment. If a
subordinate does what is desired, a reward will follow, and if he does not go as per
the wishes of the leader, a punishment will follow. Here, the exchange between
leader and follower takes place to achieve four routine performance goals.
Contingent Rewards: Transactional leaders link the goal to rewards, clarify
expectations, provide necessary resources, set mutually agreed upon goals, and

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provide various kinds of rewards for successful performance. They set SMART
(specific, measurable, attainable, realistic, and timely) goals for their subordinates.
Autocratic Style Participative Style Laisser Faire Style
AMOUNT OF AUTHORITY HELD BY GROUP MEMBERS
AMOUNT OF AUTHORITY HELD BY LEADERS
• Active Management by Exception: Transactional leaders actively monitor
the work of their subordinates, watch for deviations from rules and standards
and taking corrective action to prevent m
• Passive Management by Exception: Transactional leaders intervene only
when standards are not met or when the performance is not as per the
expectations. They may even use punishment as a response to unacceptable
performance.
• Laissez-faire: The leader provides an environment where the subordinates
get many opportunities to make decisions. The leader himself abdicates
responsibilities and avoids making decisions and therefore the group often
lacks direction.
Implications of Transactional Theory
The transactional leaders overemphasize detailed and short-term goals, and
standard rules and procedures. They do not make an effort to enhance followers’
creativity and generation of new ideas. This kind of a leadership style may work well
where the organizational problems are simple and clearly defined. Such leaders tend
to not reward or ignore ideas that do not fit with existing plans and goals.
The transactional leaders are found to be quite effective in guiding efficiency decisions
which are aimed at cutting costs and improving productivity. The transactional
leaders tend to be highly directive and action oriented and their relationship with the
followers tends to be transitory and not based on emotional bonds.
The theory assumes that subordinates can be motivated by simple rewards. The only
‘transaction’ between the leader and the followers is the money which the followers
receive for their compliance and effort.
[Link] THEORY
Transformational leadership is all about Creating high performance workforce which
has become increasingly important and to do so business leaders must be able to
inspire organizational members to go beyond their task requirements. As a result, new
concepts of leadership have emerged which involves transformational leadership.
Transformational leadership may be found at all levels of the organization: teams,
departments, divisions, and organization as a whole. Such leaders are visionary,
inspiring, daring, risk-takers, and thoughtful thinkers. They have a charismatic appeal.
But charisma alone is insufficient for changing the way an organization operates. For
bringing major changes, transformational leaders must exhibit the following four
factors:
Inspirational Motivation: The foundation of transformational leadership is the
promotion of consistent vision, mission, and a set of values to the members. Their vision
is so compelling that they know what they want from every interaction.

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Transformational leaders guide followers by providing them with a sense of meaning
and challenge. They work enthusiastically and optimistically to foster the spirit of
teamwork and commitment.
Intellectual Stimulation: Such leaders encourage their followers to be innovative and
creative. They encourage new ideas from their followers and never criticize them
publicly for the mistakes committed by them. The leaders focus on the “what” in
problems and do not focus on the blaming part of it. They have no hesitation in
discarding an old practice set by them if it is found ineffective.
Idealized Influence: They believe in the philosophy that a leader can influence
followers only when he practices what he preaches. The leaders act as role models that
followers seek to emulate. Such leaders always win the trust and respect of their
followers through their action. They typically place their followers needs over their
own, sacrifice their personal gains for them, ad demonstrate high standards of ethical
conduct. The use of power by such leaders is aimed at influencing them to strive for the
common goals of the organization
Individualized Consideration: Leaders act as mentors to their followers and reward
them for creativity and innovation. The followers are treated differently according to
their talents and knowledge. They are empowered to make decisions and are always
provided with the needed support to implement their decisions. Criticisms of
Transformational Leadership Theory
• Transformational leadership makes use of impression management and
therefore lends itself to amoral self promotion by leaders
• The theory is very difficult to e trained or taught because it is a combination of many
leadership theories.
• Followers might be manipulated by leaders and there are chances that they lose
more than they gain.
Implications of Transformational Leadership Theory
The current environment characterized by uncertainty, global turbulence, and
organizational instability calls for transformational leadership to prevail at all levels of
the organization. The followers of such leaders demonstrate high levels of job
satisfaction and organizational commitment, and engage in organizational citizenship
behaviors. With such a devoted workforce, it will definitely be useful to consider making
efforts towards developing ways of transforming organization through leadership.
For example the Kenya Wildlife service has been transformed by the good work of Dr.
Julius Kipngetich. He took over the parastatal which was in shambles, financially
mismanaged and low morale among the staff and turned it around. His good work has
been recognized not only locally but internationally. His leadership style would be
placed as transformational because he took over KWS with a vision to transform it a
institute that delivers its mandate and does so well and where staff will find the
fulfillment that they want. In his effort, he re-organized the organization structure to be
more flat, decentralized management structures, inculcated a sense of togetherness
among the employees, encourage employees to be participatory in the affairs of KWS,
put up the strategic plan for KWS by setting up the legal, policy and regulatory
framework for the smooth fulfillment of its statutory mandate, enhanced branding of
KWS as a brand. Dr. Kipngetich turned around the fortunes of KWS from loss making
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organizations to a profit making organization in three years of which he also steered the
company to win the company of the year award. Leadership the KWS has been
attributed to one that completely eliminated middlemen and thus the workers are able
to hear ideas and instructions from the director himself and not from others reducing
misinformation. This clearly shows transformational from a KWS perspective
7. CONCLUSION
Leadership is a very important function in management in that it provides a sense of
direction and drive towards achieving organizational objectives. A leader must be able
to inspire and influence his/her subordinates in order to achieve their commitment to
the course of the organization. Consequently a leader needs to have the necessary
qualities and generally be a role model to be followed by the rest of the team members.
A leader or manager who is working in any particular project needs to be able to
understand the objectives of the project, the standards to be achieved, the needs and
capabilities of the personnel he/she is working with and allow them participation in
making decisions. It is necessary to allow team members’ participation in decision
making since they may have very important contributions to the success of the
programme or project.

Suggestions for further

Edwin A. Fleishman and Edwin F. Harris, “Patterns of Leadership Behaviour related to
employee Grievances and Turnover,” Personnel Psychology, Spring, 1962, pp. 43-56
Robert R. Blake and Jane S. Mouton, The Managerial Grid, “ Managerial Facades,”
Advanced Management Journal, July, 1966, p.31
R.N. McMurry, “The Case for Benevolent Autocracy,” Harvard Business Review, January-
February, 1958, pp-82-90
Victor H. Vroom and Floyd C. Mann, “Leader Authoritarianism and Employee Attitudes,”
1960, pp. 125-140
C.G. Browne and Richard P. Shore, “Leadership and Predictive Abstracting,” Journal of
Applied Psychology, April, 1956, pp. 112-116
G. A. Cole (1996) Management Theory and Practice, fifth edition, ELBS, London.
Dubrin, Ireland & Williams (1998) Management & Organization, South Western,
London
Robert N. Luissier (2010), Effective leadership, Fourth Edition, Leap Publishing Services
Andrew J. Dubrin (2007), Leadership, Reasearch Findings, Practice and Skills, Fourth
Edition, Houghton Mifflin Company.
John Antokis (2004), The nature of Leadership, Sage Publication
Peter G. Northhouse, (2003), Leadership: Theory & Practice, third edition, Sage
Publication.
[Link]

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 LECTURE SEVEN
MOTIVATION

Lecture outline
7.1 Introduction
7.2 Lecture objectives
7.3 Explain the meaning of motivation
7.4 Discuss the content and process theories of motivation
7.5 Illustrate the application of motivation theories in the workplace 7.6
Identify the challenges associated with employee motivation

7.1 Introduction
Motivation is one of the functions of management dealing with the human factor in the workplace.
The study of motivation is a search for answers about human nature. Motivation is concerned with
why people do or refrain from doing something. Workers in any organization need something to
keep them working. Most times the salary of the employee is enough to keep him or her working
for an organization. However, sometimes just working for salary is not enough for employees to
stay at an organization. If no motivation is present in an employee, then that employee‘s quality
of work or all work in general will deteriorate. Keeping an employee working at full potential is
the ultimate goal of employee motivation. There are many methods to help keep employees
motivated. In this lecture, we shall discuss the process and content theories of motivation and their
application in organizations.

7.2 Lecture Objectives

At the end of this lecture you should be able to:
1. Define motivation
2. Explain the consequences of unsatisfied needs
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3. Discuss the content and process theories of motivation
4. Illustrate the application of motivation theories to the workplace
5. Explain the challenges associated with employee motivation

7.3 Meaning of motivation

Motivation can be described as an individual‘s internal process that energizes, directs, and sustains
behaviour. It is a personal force that causes one to behave in a certain way‘. It is the willingness
to exert high levels of effort to reach or achieve a predetermined reward or goal or a force that
kindles a burning desire for work or action and the readiness to work towards a goal or satisfy a
need. Motivators such as higher pay, prestigious title, name tag, praise, recognition, responsibility
are used ti induce greater effort in employees. There are limitless ways in which managers can be
innovative in the use of motivators. When a need is met, satisfaction is achieved thus a sense of
contentment is experienced.

7.4 Types of motivation

There are two types of motivation: intrinsic and extrinsic motivation. We shall now discuss each
of this.
Intrinsic motivation: refers to self-generated factors that influence people to behave in a certain
way or to move in a particular direction. It is motivation that is derived from rewards that are
largely intangible. This means we place more value on outcomes that are sourced from within
ourselves, rather than from external factors. Intrinsic motivation can be linked to our feelings. For
example: feeling satisfied; feeling capable; enjoying a sense of challenge; re-enforcing selfesteem;
satisfaction at accomplishments; general enjoyment in our work; feeling appreciated; satisfaction
at realizing our potential and taking pleasure at being treated with care and consideration. Intrinsic
motivation, therefore, comes from within.

How can managers promote and support intrinsic motivation in their people?

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.
Managers can enhance and support the intrinsic motivation of their employees by ensuring the
value and achievements of employees is fully, fairly and explicitly recognized

Extrinsic motivation: refers to motivation by external or tangible rewards. We are motivated to

perform by things or factors which come from other people or organizations. Typically these
include: salary and what it can buy; fringe benefits; promotion and its trappings; security; the
physical work environment and conditions of work. Often these benefits are beyond the direct
control of a line manager and are more often determined at an organizational level. Nonetheless,
effective managers should be supportive of colleagues motivated by extrinsic factors, if they are
justly entitled to such rewards.

It is important to balance intrinsic and extrinsic motivation. Extrinsic

motivators have short-term effects while intrinsic motivators which are more concerned
with the quality of working life are likely to have deeper and longerterm effects because
they are inherent in individuals and not imposed from outside.

Intrinsic and extrinsic motivation can be considered as a continuum. At one end we find some
people motivated by tangible, extrinsic benefits, such as salary and the trappings of position. Others
may be motivated by factors at the opposite end of the spectrum. These people tend to forego the
tangible rewards of monetary benefits, in favour of intrinsic or self-satisfaction that comes from
the feeling that work is important, freedom to act, scope to use and develop abilities, interesting
and challenging work and opportunities for advancement..

However, to gain the most from the basics of intrinsic extrinsic motivation, it's perhaps best to
remember that people can easily move along any continuum. Rather than considering these
motivational factors as opposites, try to remember that most people are motivated by a combination
of the two. And that such motivation is also influenced by a number of other complex, social and
economic factors, such as age, family status, and so on.

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Reward is the use of inducement in the form of money, promotion or security. It is a strong
motivator, which should not be overlooked by managers. However, some scholars believe that
manipulating people with incentives seems to work in the short run, it is a strategy that ultimately
fails and even does lasting harm. Alfie Kohn argues that workplaces will continue to decline until
we begin to question our reliance on a theory of motivation derived from laboratory animals.

Drawing from hundreds of studies, Kohn demonstrates that people actually do inferior work when
they are enticed with money, grades, or other incentives. Programs that use rewards to change
people's behavior are similarly ineffective over the long run. For example, promising goodies to
children for good behavior can never produce anything more than temporary obedience. In fact,
the more we use artificial inducements to motivate people, the more they lose interest in what
we're bribing them to do. Rewards turn play into work, and work into drudgery. Pay-for-
performance plans cannot work; the more an organization relies on incentives, the worse things
get.

Rewards and punishments are just two sides of the same coin - and the coin doesn't buy very much.
What is needed, Kohn explains, is an alternative to both ways of controlling people. Managers
should develop motivation strategies that move beyond the use of carrots or sticks. Rewards can
be seen as a threat just like punishment.. Managers should hold off the temptation to reward or
punish. Both work only in the short term.

Stop here and reflect for a moment why rewards would only have a short -term
positive effect?
Punishment is the denial of a reward, use of threats and fear e.g. fear of loss of a job, loss of
income, reduction of bonus etc. Punishment can be effective in stopping undesirable employee
behaviors such as tardiness, absenteeism or substandard work performance. However, punishment
does not necessarily cause an employee to demonstrate a desirable behavior. Although it is a strong

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motivator, it is not sustainable because it can give rise to defensive or retaliatory behaviour such
as union organization, poor quality work, indifference and dishonesty.

Punishment may cause a punished worker to avoid or counterattack the punisher. The worker may
‗punish‘ the supervisor for causing displeasure. This may be done by sabotage or "malicious
obedience." Punishment does not always bring about good work behaviors instead it only
temporarily stops one bad behavior from recurring. However, if the next most likely behavior is
an appropriate one, punishment may elicit a good behavior. The challenge for the supervisor here
is knowing how people will respond. Punishment leads to fear, psychological tension and anxiety,
which may interfere with the worker's desire to behave properly. After being punished, a worker
actually may want to behave properly, but this desire could be short-circuited by the worker's
anxieties.

Punishment creates a vicious cycle as more punishment leads to more punishment. When a
supervisor criticizes a worker for poor performance, the poor performance probably will stop. This
pleases the supervisor and, therefore, could promote further use of punishment. The supervisor
also may get reinforcement from the visible display of power. A vicious cycle is created.

For punishment to work, the threat of punishment must always be present. If the supervisor is the
main source of punishment, employees tend to behave properly only when the supervisor is
present, especially when punishment is the only technique used to modify worker behavior.

Punishment may become a positive reinforcer for the punished person. This occurs where some
people identify more closely with the informal work group than with the organization. In many
informal groups, recognition and attention from management is a reward, especially if it is
negative. Punishment may become a positive reinforcer if the individual gets various kinds of
rewards from the informal group for upsetting management.

Think about some of the ways which a supervisor can use punishment to
achieve positive results
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Punishment in organizations does exist. Some worker actions are so harmful and damaging that
punishment should be used. But punishment can be combined with positive reinforcement, in order
to eliminate many of the undesirable side effects. If punishment is necessary, the supervisor should
inform the punished person exactly what he or she may do to receive positive reinforcement. Offer
alternative ways to behave, and specify the rewards. The crucial point is to explain the alternative
good behaviors and their accompanying rewards.

To demonstrate this technique, consider a hypothetical situation. A worker is producing

substandard products. Punishing the worker could generate several undesirable side effects: He or
she may feel boxed in, fearful and anxious. A combination of punishment and positive
reinforcement would lessen the likelihood of negative side effects. Criticism of the person's job
performance could easily be followed with an explanation of how the product should be assembled.
The supervisor also should point out the favorable consequences of proper job performance -
upgraded job responsibility, a bonus or even an opportunity to train new employees in assembling
the product. The worker has been both punished and reinforced at the same time. The worker sees
a reason for performing well. Positive reinforcement tends to increase the probability of desirable
behavior, but punishment does not necessarily decrease undesirable behavior. What it boils down
to? The impact of reward is simple; the impact of punishment is complex.

Reinforcement: Reinforcement suggests that success in achieving goals and rewards act as
positive incentives and reinforce successful behaviour which is repeated next time a similar need
emerges. The more powerful and frequent the reinforcement, the more likely it is that the
behaviour will be repeated until it becomes an unconscious reaction to an event. Conversely,
failures or punishments provide negative reinforcements, suggesting seeking alternative means of
achieving goals. Operant conditioning is the term used by B.F. Skinner to describe the effects of
the consequences of a particular behaviour on the future occurrence of that behaviour. There
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are four types of Operant Conditioning: Positive Reinforcement, Negative
Reinforcement, Punishment, and Extinction. Both Positive and Negative Reinforcement
strengthen behavior while both Punishment and Extinction weaken behavior. In
Negative Reinforcement a particular behavior is strengthened by the consequence of the
stopping or avoiding of a negative condition. Here are two examples of Negative
Reinforcement:
1. A rat is placed in a cage and immediately receives a mild electrical shock on its
feet. The shock is a negative condition for the rat. The rat presses a bar and the shock
stops. The rat receives another shock, presses the bar again, and again the shock stops.
The rat's behavior of pressing the bar is strengthened by the consequence of the stopping
of the shock.
2. Driving in heavy traffic is a negative condition for most of us. You leave home
earlier than usual one morning, and don't run into heavy traffic. You leave home earlier
again the next morning and again you avoid heavy traffic. Your behavior of leaving home
earlier is strengthened by the consequence of the avoidance of heavy traffic.

Negative Reinforcement is often confused with Punishment. They are different. Negative
Reinforcement strengthens a behavior because a negative condition is stopped or
avoided as a consequence of the behavior. Punishment, on the other hand, weakens a
behavior because a negative condition is introduced or experienced as a consequence of
the behavior.

Think of some examples where as a supervisor you can apply negative

and positive reinforcement

7.5 Consequences of unsatisfied needs.

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Some needs are impossible to satisfy and this may result in some types of negative behaviours.
Such irrational behaviours are as a result of failure to accomplish an individual goal. Unsatisfied
employees become frustrated and may display the following behaviours.

▪ Aggression: This is destructive behaviour such as hostility (physical/verbal) and striking out.
The feelings of rage or hostility are directed against the person or object that is felt to be the
cause of the frustration. As it is not possible sometimes to attack the causes of frustration
directly people may look for scapegoats.

▪ Rationalization: Means making excuses such as blaming someone else for inability to
accomplish a goal e.g. ―I was not even interested in it anyway‖.

▪ Regression: Means not acting one‘s age by resorting to immature acts e.g. unreasonable
complaining or crying. It relieves some of the tension, but has adverse effects on associates
e.g. a person kicking a car when it cannot start.

▪ Fixation: Occurs when a person exhibits the same behaviour pattern several times even though
the experience has shown that it can accomplish nothing. Research has shown that frustration
can maintain old and habitual responses and prevent the use of new and more effective
methods. Although habits can be broken when they bring no satisfaction or lead to punishment,
fixation actually becomes stronger under such circumstances, e.g. the inability
to accept change even when the facts show otherwise penalties even when they make the
situation worse.

▪ Resignation (apathy): occurs when people lose hope of accomplishing their goals and
withdraw from reality and the source of their frustration. Involves complete surrender and
borders on serious mental disorders. This phenomenon is characteristic of people in boring,
routine jobs, where they resign themselves to the fact that there is little hope for improvement
of their goals.

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 Why managers should understand human behaviour.
i) .. Be able to explain the behaviour of their subordinates.
ii) . Knowledge will form the basis for people management activities such as
performance appraisal and disciplinary action. iii) Search for logic behind any
behaviour though it may appear insane to the manager.

7.6 Theories of motivation

The theories of motivation can be classified into content and process theories. Content or needs
theories are the theories that focus explicitly on the content of motivation in the form of
fundamental human needs. They are more concerned with the quantitative aspects of motivation
i.e. what motivates people and what people seek in their work. Examples:
▪ Maslow‘s Hierarchy of needs theory
▪ Herzberg‘s two-factor theory
▪ McClellands three basic needs
Process or contemporary theories of motivation are the theories which attempt to develop
understanding of the psychological processes involved in motivation. They are more concerned
with the qualitative aspects and the dynamics of motivation i.e. how people are motivated and how
rewards influence behaviour. They focus on the why and how of motivation. Examples:
o Latham and Locke‘s goal-directed theory
o Vroom‘s expectancy theory o Adams
equity theory o Bandura‘s self-efficacy
theory

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7.6.1 Maslow‟s Hierarchy of Needs Theory (1943)

Maslow was a psychologist and his theory has found wide application in many fields including
management. He proposed that:
- Behaviours of human beings are motivated by needs.
- Individual needs can be classified into 5 broad categories.
- These 5 categories operate in a hierarchical manner, flowing from low
order to high order needs as shown below:
The low order needs are physiological, security and love and belonging while the high order
needs are self-esteem and self-actualization. These are illustrated in Figure 7.1.

Physiological, safety and social needs are referred to as lower order or deficiency needs, because
the absence of them make individuals deficient and existence as a human being is threatened. On
the other hand, esteem and self-actualization are referred to as high order needs or growth needs
as these make an individual become better at doing what they are expected to do: gain control and
mastery over their environment in terms of technology, services etc.

Maslow‘s theory of motivation therefore states that: “when a lower order need is satisfied, the
next highest becomes dominant and the individuals attention is turned to satisfying this
higher need.” The most difficult need to satisfy is that of self-fulfillment. Psychological
development takes place as people move up the hierarchy of needs, but not necessarily in a

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straightforward progression. The lower needs still exist even if temporarily dormant as motivators,
and individuals constantly return to previously satisfied needs.

The lowest unsatisfied need in the hierarchy is the one that motivates behaviour e.g. a deprived
individual without basic needs will be directed towards finding food. The need for safety is
dormant at that time. A satisfied need does not motivate behaviour. Once satisfied, it ceases to be
a motivator, instead the next higher level need becomes active and motivates behaviour.

[Link] Application of Maslow‟s Hierarchy of Needs Theory.

Physiological needs : Involves mainly payment of wages and salaries to enable people pay for
their basic needs of food shelter and clothing.

Safety needs: .Provision of protective clothing, insurance and medical cover, pension schemes,
housing and transport (in relation to safety), and job security.

Social needs: .Promoting family feeling, intimacy and closeness, use of first names, to break
formality and reduce social distance, sharing facilities e.g. cafeterias, sports club etc, casual
dressing to identify with each other and recognition of trade unions.

Esteem needs: Supporting education, delegation of responsibility, titles and other status symbols,
fringe benefits e.g. Cars; bonus; shares; office size and equipment.

Self fulfillment needs: This is the apex of human needs and involves the need for realizing ones
potentialities, continued self-development, feelings of accomplishment and attainment and being
creative in the broadest sense possible. Organizations can facilitate and create an environment in
which individuals can realize their potentialities e.g. writing, inventions, occupying important
positions etc.
 Page 153 of 253

There are limits to how much organizations can provide to meet these needs as they
▪ are limited by resources
▪ Esteem needs are mainly applicable to managers as they sometimes make important
business deals informally through informal networks such as clubs. As such, status
symbols become important. It is also notable that as one moves up the ladder, fewer
people benefit.

Research findings have shown that:

▪ Managers generally have high order needs compared to those at lower levels.
▪ Employees in developed countries generally have higher order needs than those in
poor countries.

It appears, however, that Maslow never considered the above dimensions as he was concerned with
individual employees.

Do employees in developed countries have higher order needs than those in poor
countries?

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 Do managers have higher order needs compared to lower level employees?
Explain

[Link]. Weaknesses of the need hierarchy theory

▪ The five categories of needs are not mutually exclusive
▪ The order in which the needs must be satisfied is not supported by real life ▪
situations.
▪ The model only applies to typical healthy people. A sick person is ▪ unlikely
to be satisfied by basic social or self-esteem needs.
▪ Research conducted to test the model have not supported its assumptions and
predictions.
▪ Some of the basic concepts of the theory such as self-actualization are vague.

7.6.2 Herzberg‟s two-factor theory of motivation

Herzberg (1959) conducted a study, which focused on job satisfaction primarily to find out the
factors associated with job satisfaction. He collected data from a sample of 203 accountants and
engineers based in Pittsburg, USA.

From these findings he proposed that human beings have two basic needs; ▪
The need to avoid pain and survive.
▪ The need to grow, develop and learn.
He also found that factors associated with feelings of happiness or satisfaction were concerned with
the job itself while those associated with dissatisfaction were related to the environment in which
the job was done.

He came up with two sets of factors from which the theory was coined. Different
terminologies have been used to refer to this theory.

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 Satisfaction-related factors

Satisfiers
Motivators Motivators
• Job content factors
• Intrinsic factors
Dissatisfaction related factors

Dissatisfiers
Hygiene factors Hygiene or
maintenance
• Job Context factors
• Maintenance
• Extrinsic factors

Herzberg‘s findings showed that motivation can be explained by two factors:

A group of needs which he called hygiene or maintenance needs as they serve to remove
dissatisfaction. They are related to the job context e.g.

▪ Supervision
▪ Company policy and administration.
• Peer relations
• Working conditions
• Status
• Job security
• Pay
• Status
• Job title
• Job security, etc

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He explained that if these factors exist, then there is no dissatisfaction, if they do not then
dissatisfaction results, but they are not motivators as such.

A second group of needs he called satisfiers or motivators and these are related to the job content.
They tend to increase job satisfaction e.g.

• Achievement
• Recognition
• Work itself
• Responsibility
• Advancement
• Possibility of growth etc.

[Link]. Application of Herzberg‟s two-factor theory- Job enrichment and job enlargement

Herzberg suggested that jobs should be made more interesting and challenging so as to motivate
employees. A great deal of interest has been directed at job satisfaction over the last decades as a
popular technique for increasing employee‘s motivation. The concept of job enrichment has been
found to provide employees with an opportunity to:

▪ Perform more challenging and meaningful work.

▪ Utilize knowledge and skills more fully.
▪ Assume more authority and responsibility for planning, organizing, directing and
controlling of work.
▪ Receive feedback on performance. ▪ Grow and develop

[Link]. Principles and limitations of Job Enrichment.

▪ Removing controls while retaining accountability
▪ Giving a complete unit of work
▪ Giving more authority

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 ▪ Giving regular feedback to employees
▪ Giving new, difficult and challenging tasks

This theory assumes that employees are only motivated by enriched jobs and that every
employee desires an enriched job.
▪ In your view are these assumptions true?
▪ What are the limitations of job enrichment as a motivator?

Research findings have shown that not all employees are motivated by job enrichment. Some of
the limitations are:
• Are unable to tolerate responsibility.
• Dislike complex duties.
• Uncomfortable with group work.
• Dislike relearning new skills.
• Prefer security and stability.
• Uncomfortable with supervisory authority Skills are not adaptable.
• Prefer to quit their jobs.

For organizations, enriched jobs may result in the following problems

• Supervisor‘s roles may be reduced because of shared responsibility hence causing

dissatisfaction.
• Enriched jobs may increase pay dissatisfaction because of increased responsibility.
• Costs in terms of training and development, new technology and more equipment e.g.
computers may increase.

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 • Unions may oppose some job enrichment efforts for fear of loss of employment or
decreased membership due to reduced desire to join unions by satisfied employees.

Strengths of the two-factor theory

Easy to comprehend.
• It was developed from an empirical study, hence has some validity.
• There are clear guidelines for applying it in the job setting.

Weaknesses
• It uses too many and confusing terminologies.
• The research instrument was defective.
• Motivators and hygiene factors are not mutually exclusive, but interdependent e.g. salary
can be both hygiene and a motivating factor.

Further research findings on job enrichment have shown that it is only those people
with a strong need for personal growth, power and achievement that job enrichment
will have some impact. For further reading, see the works of David McClelland and
Arch Patton.(Koontz, O‘Donnel & Weihrich, Management-1984)

[Link]. Comparison of Maslow‟s Needs Hierarchy with Herzberg‟s Two-factor Theory.

Maslow‘s needs theory and Herzberg‘s two-factor theory are similar in many ways. The high order
needs of the need hierarchy represent motivators in Herzeberg‘s theory, while lower order needs
are similar to Herzeberg‘s hygiene factors.

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 Herzeberg‟s two-factor theory Maslow‟s hierarchy of needs

• Challenging work
• Achievement
• Growth in job
Self-actualization
• Responsibility
• Advancement
• Recognition Esteem or ego
• Status

• Inter personal relations

• Company policy and administration
Social
• Quality of supervision
• Working conditions
• Job security
Safety/securirty
• Salary
• Personal life Physiological

7.7 Process theories of motivation

Process theories of motivation were proposed as alternatives and to fill the gaps not explained by
the content theories. Process theories are more concerned with the cognitive antecedents that go
into the motivation process. This include: expectancy theory by Victor Vroom (1964) and the
Porter-Lawler Model (1968); Equity theory by Stacy Adams and Attribution theories and others.
In this section we shall only discuss a few of these.

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7.7.1. Expectancy Theory of Motivation

Victor Vroom developed this theory in 1964 as an alternative to the content theories of motivation.
It refers to any situation or context where people have expectations from whatever they do. It states
that “motivated behaviour is increased if a person perceives a positive relationship between
effort and performance – i.e. the outcome.

Based on this theory, extrinsic financial motivation works only if the link between effort and reward
is clear and the value of the reward is worth the effort. Whereas Maslow and Herzberg looked at
the relationship between internal needs and the resulting effort expended to fulfill them, Vroom
separates effort (which arises from motivation), performance and outcomes. Vroom, hypothesises
that in order for a person to be motivated effort, performance and motivation must be linked. He
proposes three variables to account for this, which he calls
Valence, Expectancy and Instrumentality. This is illustrated in Figure 7.2

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Expectancy is the belief that increased effort will lead to increased performance i.e.
 If I work harder then this will be better. This is affected by such things as:
 Having the right resources available (e.g. raw materials, time)
 Having the right skills to do the job
 Having the necessary support to get the job done (e.g. supervisor support, or correct
information on the job)

Instrumentality is the belief that if you perform well, a valued outcome will be received i.e. if I
do a good job, there is something in it for me. This is affected by:
 Clear understanding of the relationship between performance and outcomes – e.g.
the rules of the reward ‗game‘
 Trust in the people who will take the decisions on who gets what outcome
 Transparency of the process that decides who gets what outcome

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Valence is the importance that the individual places upon the expected outcome. For example, if I
am mainly motivated by money, I might not value offers of additional time off.
Having examined these links: the individual then changes their level of effort according to the value
they place on the outcomes they receive from the process and on their perception of the strength of
the links between effort and outcome For example, if I perceive that any one of these is true:
 My increased effort will not increase my performance
 My increased performance will not increase my rewards
 I don‘t value the rewards on offer
...then Vroom‘s expectancy theory suggests that this individual will not be motivated. This means
that even if an organization achieves two out of three, employees would still not be motivated, all
three are required for positive motivation. Expectancy theory, therefore, works on perceptions –
someone may perceive that it doesn‘t work for them even if it works for others

7.7.1.1Managerial Implications of Expectancy Theory

▪ Strengthen employees effort and performance expectations by providing resources such as
training, that enable employees to perform.
▪ Strengthen performance–outcome–rewards by linking performance with reward e.g. pay.
Managers should be consistent and transparent about criteria used for promotion.
▪ Match rewards with employee‘s performances.
▪ Recognize employee‘s ability and ensure that it is used optimally.
▪ Provide employees with opportunity to perform e.g. enabling environment, resources, etc.
▪ Develop appropriate procedures for evaluating employee performance by measuring actual
performance, aptitude and criteria for promotion.

7.7.2 Equity Theory of Motivation

This is a process theory advanced by Stacy Adams (1968). Equity refers to perception of fairness
and justice in the treatment of people. If people feel that they are not being treated equitably,
they feel aggrieved and this grief will affect their levels of motivation in different ways.

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In the workplace, employees compare themselves with their peers in terms of their contribution to
the organization and in relation to what they get from the organization. They compare their ratio
of inputs and outcomes with that of another person.

Inputs: refer to the contributions made by an individual e.g. effort – both physical and mental,
time, education, training, experience, loyalty, useful contacts age, gender etc..
Outcome: refers to what is received in return for effort e.g. salary, fringe benefits, travel
allowances, medical insurance cover, status symbols, autonomy, recognition, friendly environment
etc.

Examples of ratios of outcomes to inputs

(i) Outcomes of ‗A‘ = Outcomes of ‗B Satisfaction

Inputs of ‗A‘ Inputs of ‗B‘ = (Equity)

(ii) Outcomes of ‗A‘ < Outcomes of ‗B‘ = Underpayment

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 Inputs of ‗A‘ Inputs of ‗B‘ (Inequity)

(iii) Outcomes of ‗A‘ > Outcomes of ‗B‘ = Overpayment

Inputs of ‗A‘ Outcomes of ‗B‘ (Inequity)

Reactions of „A‟
▪ In situation (ii), ‗A‘ will act on outcomes to restore equity i.e. where there is perception of
underpayment by stealing from the organization, taking kickbacks, undermining ‗B‘,
joining trade unions or reducing effort.
▪ In (iii) ‗A‘ will attempt to restore balance by decreasing or increasing effort, e.g. working
longer hours, producing quality work, being loyal and committed to organization etc, or by
rationalizing or justifying the higher outcomes on the basis of experience, educational levels
etc. (resorting to subjective distortion of ‗A‘s or ‗B‘s inputs).
▪ In situation (i), there is perception of equity, hence no problems.

Equity is taken seriously by employees and management decisions and

actions must be seen to be fair
The striving to restore the outcome/input ratio to equity is used as the explanation of work
motivation.
Workers prefer equitable payment to over-payment. Research has shown workers on a
piece rate system who felt overpaid reduced their productivity to restore equity.

7.7.3 Goal Theory (Latham and Locke, 1979)

It states that motivation and performance are higher when:
• Individuals are set specific goals
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 • Goals are difficult but accepted
• There is feedback on performance

Goal theory is aligned to the concept of management by objectives (MBO) and it forms the
foundation for performance management process.

7.8 Motivational strategies and challenges

7.8.1 Motivational strategies
Money: It is an important motivator as it reflects on other motivators e.g.
status, esteem, achievement etc. Hence it is complicated as it is entangled
with other needs.
• Money has symbolic power – its value comes from what it can buy.
• To increase the motivational value of money, an incentive plan/system should be
introduced, as the extra money is usually spent on high-value ‗extra‘ items.
• Equitable salary structures in organizations lessens the importance of money as a
motivator, hence Herzberg‘s contention that money is hygiene, not a motivator.

Positive reinforcement: This idea was advocated by B.F. Skinner. He suggests that individuals
can be motivated by designing their jobs well, praising good performance so that it can be
repeated and removing barriers to performance and good communication.

Participation: Having knowledge of what is happening and being asked to participate in solving
problems is motivating to employees as it appeals to the need for recognition, affiliation and
acceptance and it gives people a sense of accomplishment.

Job Enrichment: Involves making a job more challenging and important by increasing scope of
authority and responsibility. These can be achieved by:

• giving workers more say in deciding about work methods, task sequencing etc.
• encouraging subordinate participation and interaction among workers.
• Giving workers a feeling of personal responsibility for their tasks.

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 • Ensuring that people see the contribution of their tasks in the overall result.
• Giving feedback on performance.

Job enrichment appeals mainly to higher level needs such as status, esteem and
self-fulfillment.

Other strategies of motivation may include; promotion to higher responsibility, personal interest
by manager, status symbols, training and development, monitoring, leadership style etc.

Negative reinforcement or punishment: These should be avoided as it has the tendency of

stimulating anger, hostility, aggression, and rebellion in workers. The motivational effects are
only short term.

In your view to what extent do you think money can be used as a motivator?

7.8.2 Motivational Challenges

Motivation is a psychological and a social process. Although the theoretical concepts appear simple
and straightforward, they are difficult to implement in real life because of the following:-

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Differences among people: People differ in their expectations; hence require different types of
incentives. For example, while scientists, engineers and other professionals may have a stronger
need for achievement, managers and politicians have a stronger need for power. Needs also differ
because of demographic characteristics of employees such as gender, age, race, education, personal
ambition, cultural background, occupation etc.

Social and economic change: Changes that impact on people‘s lifestyles, such as increased
education, tastes and preferences, cross-cultural interactions mean that motivating techniques
which worked a decade ago may not work today.

Employees‟ personal problems: Motivation can be effective only to a limited extent as people
may have problems that are beyond management and cannot be solved by motivation.

Lack of resources: Organizations may be willing to motivate its employees, but may lack the
resources to do so. This is especially so for financial motivators.

Motivation is an internal instinct: motivation by nature is an internalized process that comes from
within the individual. Reinforcements are only needed to activate it. Thus a manager can give only
encourage it, but the actual and effective motivation will depend upon the internal will of the
employee.

Motivation is situation oriented: Variables in motivation situation are, the motivator, the
motivated, the motivational technique and the motivational circumstances all of which affect the
motivational outcome. To achieve a positive outcome, all four must be in congruence- which
almost impossible.

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 Given the complexity of motivation in the light of varying
personalities and situations it is clear that risks of failure exist when any group of
motivators are applied without taking into account all the variables.

7.9 Lecture summary

Human behaviour is complicated and must be looked upon as a system of variables and
interactions. Motivating factors do not exist in a vacuum. In an organization people operate in a
field of restraining and driving forces. The actual behaviour will depend on the strength of these
counteracting forces. Managers can improve productive effort by reducing restraining forces or by
strengthening driving forces. Individual desires are conditioned by physiological and cultural
needs and the organizational climate in which they operate. Climate may repress or arouse motives.

Managers who, if effective would certainly also be leaders must respond to the motivational needs
of individuals by designing a climate that will arouse motivation. Managers can design an
environment for performance by setting goals, developing and communicating strategies and
making plans to achieve objectives. In short managers can motivate employees by carrying out
effectively their core functions of planning, organizing, leadership, control and staffing.

LECTURE EIGHT
COMMUNICATION
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Lecture outline
8.1 Introduction
8.2 Lecture objectives
8.3 Explain the meaning of communication
8.4Describe the process of communication
9.10 Discuss the importance of communication in organizations
9.11 Discuss the channels of communication
9.12 Explain the barriers to communication
8.9 Summary

8.1 Introduction
Communication is simply a method of sending a message from one person or group of persons to
another. It is of vital importance to a business because it involves all the persons and organizations
connected with the business - employees, customers, shareholders, suppliers, creditors, debtors -
and a whole range of people outside - journalists, television reporters, tax authorities, local
government and national government officials and any person or organization throughout the world
with which the business has any contact.

Effective communication will ensure that all these persons and organizations understand the
message sent. They will also be more likely to respond favourably to the message if it appears to
be reasonable and fair to both the receiver and the business.
Bad communication will have exactly the opposite effect. People will be confused by the message
and are less likely to do what the business wants. Communication is not only what what you say
(or write), but how you say it that is important. Your message should be easy to understand and
take account of the receivers' own attitudes and feelings. In this lecture, we shall explore the
meaning, process, importance, channels and barriers to communication.

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 8.2 Lecture objectives:
At the end of this unit you should be able to:
▪ Explain the meaning of communication
▪ Describe the process of communication
▪ Discuss the importance of communication in organizations
▪ Discuss the channels of communication
▪ Explain the barriers to communication

8.3 The Meaning of Communication

Communication is a human skill and the ability to communicate effectively is one of the major
skills of a manager. According to research, managers spend between 70% - 90% of their working
hours in communication broken down as follows: 5% writing, 10% reading., 35% talking, 50%
listening. Such communication plays a vital role in managerial decision-making.
People often communicate through signals such as facial expressions, gestures etc.

Communication is a word derived from the Latin word ‗communis‘, which literally means
‗common‘, ‗to share‘, ‗impart‘, ‗convey‘ or ‗transmit‘. It is the process through which two or
more persons come to exchange ideas and understanding among themselves.

Communication is the sum of all the things one person does when he wants to create understanding
in the mind of another. It involves a continuous process of telling, listening and understanding.
The word communication describes the process of conveying messages (facts, ideas, attitudes and
opinions) from one person to another so that they are understood.

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Communication involves:
▪ More than one person.
▪ Deals with the transmission of both facts and feelings.
▪ Many media of communication.
▪ A continuous process.
▪ Depends upon proper understanding of message, and response.

Communication involves more than transmission and receipt of message. Correct interpretation
and understanding are more important. Hence the greater the degree of understanding, in the
communication, the more likelihood the human action intended will proceed in the desired
direction.

8.4 Shannon's Model of the Communication Process

Shannon's (1948) model of the communication process is, in important ways, the beginning of the
modern field. It provided, for the first time, a general model of the communication process that
could be treated as the common ground of such diverse disciplines as journalism, rhetoric,
linguistics, and speech and hearing sciences. Part of its success is due to its structuralist reduction
of communication to a set of basic constituents that not only explain how communication happens,
but why communication sometimes fails. Good timing played a role as well. The world was barely
thirty years into the age of mass radio, had arguably fought a world war in its wake, and an even
more powerful, television, was about to assert itself. It was time to create the field of
communication as a unified discipline, and Shannon's model was as good an excuse as any. The
model's enduring value is readily evident in introductory textbooks.

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 Figure 8.1: Shannon's (1948) Model of the communication process.

Shannon's model, as shown in Figure 1, breaks the process of communication down into eight
discrete components:

1. An information source. Presumably a person who creates a message.

2. The message, which is both sent by the information source and received by the destination.
3. A transmitter. For Shannon's immediate purpose a telephone instrument that captures an
audio signal, converts it into an electronic signal, and amplifies it for transmission through
the telephone network. Transmission is readily generalized within Shannon's information
theory to encompass a wide range of transmitters. The simplest transmission system, that
associated with face-to-face communication, has at least two layers of transmission. The
first, the mouth (sound) and body (gesture), create and modulate a signal. The second layer,
which might also be described as a channel, is built of the air (sound) and light (gesture)
that enable the transmission of those signals from one person to another. A television
broadcast would obviously include many more layers, with the addition of cameras and
microphones, editing and filtering systems, a national signal distribution network (often
satellite), and a local radio wave broadcast antenna.
4. The signal, which flows through a channel. There may be multiple parallel signals, as is the
case in face-to-face interaction where sound and gesture involve different signal systems
that depend on different channels and modes of transmission. There may be multiple serial
signals, with sound and/or gesture turned into electronic signals, radio waves, or words and
pictures in a book.

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 5. A carrier or channel, which is represented by the small unlabeled box in the middle of the
model. The most commonly used channels include air, light, electricity, radio waves, paper,
and postal systems. Note that there may be multiple channels associated with the multiple
layers of transmission, as described above.
6. Noise, in the form of secondary signals that obscure or confuse the signal carried. Given
Shannon's focus on telephone transmission, carriers, and reception, it should not be
surprising that noise is restricted to noise that obscures or obliterates some portion of the
signal within the channel. This is a fairly restrictive notion of noise, by current standards,
and a somewhat misleading one. Today we have at least some media which are so noise
free that compressed signals are constructed with an absolutely minimal amount
information and little likelihood of signal loss. In the process, Shannon's solution to noise,
redundancy, has been largely replaced by a minimally redundant solution: error detection
and correction. Today we use noise more as a metaphor for problems associated with
effective listening.
7. A receiver. In Shannon's conception, the receiving telephone instrument. In face to face
communication a set of ears (sound) and eyes (gesture). In television, several layers of
receiver, including an antenna and a television set.
8. A destination. Presumably a person who consumes and processes the message.

Like all models, this is a minimalist abstraction of the reality it attempts to reproduce. The reality
of most communication systems is more complex. Most information sources (and destinations) act
as both sources and destinations. Transmitters, receivers, channels, signals, and even messages are
often layered both serially and in parallel such that there are multiple signals transmitted and
received, even when they are converged into a common signal stream and a common channel.
Many other elaborations can be readily described.. It remains, however, that Shannon's model is a
useful abstraction that identifies the most important components of communication and their
general relationship to one another.

The bi-directionality of communication is commonly addressed in interpersonal communication

text with two elaborations of Shannon's model (which is often labeled as the action model of
communication): the interactive model and the transactive model. The interactive model, a variant
of which is shown in Figure 8.2 elaborates Shannon's model with the cybernetic concept of
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feedback (Weiner, 1948, 1986), often (as is the case in Figure 4) without changing any other
element of Shannon's model.

The key concept associated with this elaboration is that destinations provide feedback on the
messages they receive such that the information sources can adapt their messages, in real time. This
is an important elaboration, and as generally depicted, a radically oversimplified one. Feedback is
a message (or a set of messages). The source of feedback is an information source. The consumer
of feedback is a destination. Feedback is transmitted, received, and potentially disruptable via noise
sources. None of this is visible in the typical depiction of the interactive model. This doesn't
diminish the importance of feedback or the usefulness of elaborating Shannon's model to include
it. People really do adapt their messages based on the feedback they receive. It is useful, however,
to notice that the interactive model depicts feedback at a much higher level of abstraction than it
does messages.

Figure 8.2: An Interactive Model:

8.5 Importance and growth of communication

The importance of communication in organizations, is well recognized, - ―it serves as the lubricant
fostering the smooth operations of the management process‖. Some of the important reasons are:

Forms the basis for coordination: Increasingly, large and complex organizations with high degree
of specialization, division of labour and a large number of employees, require effective
coordination, which can only be achieved through communication.

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Smooth working of the enterprise: Process of communication makes cooperative action of people
possible. Without communication organized activity ceases to exist.
Basis for Decision-making: Communication is the primary requirement for decision-making. In
its absence, it may not be possible to take any meaningful decision, as information must be received
before any decision can be made or implemented.
Increases managerial efficiency: Communication is essential for quick and systematic
performance of managerial functions. Management conveys the goals, targets, instructions, job
allocations and responsibilities, and performance of subordinates through communication.

Promotion of cooperation and industrial peace: High productivity is the aim of management.
This can only be achieved when there is industrial peace in the organizations and mutual
cooperation between management and workers. Downward communication helps management tell
workers their expectations while upward communication helps workers put their grievances,
suggestions or reactions to management.
Establishment of effective leadership: Communication is the basis of direction and leadership. It
is a process of influencing others behaviour. By developing communications skills and using them,
managers become effective leaders.
Morale building and motivation: Communication is the basis of participative and democratic
pattern of management. It improves good human relations in industry. An efficient system of
communication enables management to change attitudes, motivate and build morale – hence
employee satisfaction.

Most of the conflicts in business are not basic, but are caused by misunderstood motives and
ignorance of the facts. Proper and timely communication between the interested parties, reduce
the points of friction and minimize those that are inevitable. Bernard Chester wrote. ―The first
executive function is to develop and maintain a system of communication.‖

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There are many factors responsible for growing importance of communication. These include:
Growth in size of organizations: Complex and large organizations have several levels in the
hierarchy, and many employees. Direct contact is not possible, hence a communication system to
direct all their activities.
Growth of trade unions: Cooperation between organizations and trade unions is essential for
industrial peace. This can only be achieved through an efficient communication system e.g.
collective bargaining process, negotiations etc.
Technological Developments: Rapid change in technology affects the composition of groups,
relationships between managers and subordinates, and methods of work. The necessary
adjustments in the social, organizational and physical aspects of work can only be possible through
communication.
Emphasis of human relations in industry: The growing importance of human relations in
industry and the desire of management to maintain it has necessitated communication. The change
of employer relationship from master-servant to partnership or associates helps in the attitude
change process.
The work of research psychologists and sociologists: Their findings and conclusions have
increased knowledge of the nature and process of communication.

In what ways do you think lack of effective communication can

be a source of conflict between managers and employees?

8.6. Channels of communication

There are four major channels of communication: words; actions; pictures and numbers.

8.6.1 Words
Words are like a map that purports to represent a certain territory. The map is not the territory but
the representation and so are words. The meaning of a word is easy when it represents a tangible
object e.g. a cup or a book but more difficult when it refers to abstract concepts such as
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management, labour, levels etc. People will assign different meanings to the same word because
they have different frames of reference due to background, culture, education, experience or
associates. Words constitute the most important symbols in the communication process. They can
be oral or written. The important skills required are: Reading, writing, speaking and listening.

Verbal/Oral Communication: refers to exchange of ideas between sender and receiver through
oral words – face to face, telephone, radio call, fax, email via the internet etc. In organizations,
this can take the form of personnel instructions, management conferences, interviews or staff
meetings.

The advantages include:

▪ Easy to clarify a point.
▪ High degree of potential for speedy exchange of information – timely.
▪ Effective as can be used together with non-verbal communication e.g. gestures, guttural sounds,
tone of voice etc.
▪ Popular – preferred by managers and supervisors. Gives opportunity to employees to ask
questions and participate in the discussion – boosts morale.

The disadvantages are:

▪ Absence of any permanent record of communication.
▪ Not taken seriously by receiver hence objective of communication is not achieved.
▪ Possibility of misquoting or misinterpretation especially where relations may be strained
between superior and subordinate.

Written Communication: when communication is put in written form, it becomes written

communication. In organizations, these appear in the form of; - letters, circulars, newsletters,
reports, budgets, rules, orders, regulations, policies, schedules and manuals. It includes other
symbols such pictures, graphs and charts.

Some of the advantages are:

▪ Stored as record for future reference.
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▪ Communication effort is minimized by simultaneous communication to various points e.g. a
circular to all employees.
▪ Enables communication between distantly placed parties without much cost.
▪ Orderly and binding on subordinates.
▪ Enable superiors to take suitable actions based on recorded communications.

Disadvantages include:
▪ Time consuming in preparation and understanding (reading and interpreting).
▪ Chance of misunderstanding.
▪ Can be more costly than oral communication.

8.6.2 Actions
Actions can be used as a non-verbal form of communication e.g. body language, facial expressions,
gestures, tone of voice/pitch of voice, etc. It can also take the form of physical actions such as
location of one‘s desk, removal of equipment or furniture, searching drawers/opening ones
cabinet/office, delays etc

A manager is the center of attention to subordinates. All observable acts communicate something
to the observer whether intended or not by the supervisor. When unexplained actions by
management occur, a vacuum of meaning is thereby created which is filled by the receiver‘s own
interpretation of the actions. If an action is not explained, the receiver will supply the missing signal
by creating one of his own.
8.6.3 Pictures
Pictures are a powerful means of conveying meaning and understanding to other people. This is
demonstrated by cartoons, films, television or photographs. Important, accurate and comprehensive
reports, have been given little attention because of the complexities of reading, but the use of charts,
graphs, posters etc. can convey more meaning sometimes than volumes of long, uninterrupted
passages of writing. Hence the saying ―a picture is worth a thousand words‖

A chart or graph has the advantage of depicting many complex relationships in one picture, for
example, contrasts and trends can be seen and grasped more clearly. Common Pictures in business
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are: curves, bar graphs, columns, circles, pie charts, pictorials, maps, organization charts, ranking
and frequency distributions.

8.6.4 Numbers
It has generally been found that people are impressed by numbers, i.e. figures and statistics.
Acceptance, belief and confidence of information tends to rise for a report that has data statistics
e.g. percentages, proportions, etc. Numbers, however, can be misleading as they can be
manipulated by unscrupulous people. Skillful use of numbers can be applied to lead or mislead.

8.7 Listening

Listening is the process of receiving communication signals. People are said to speak at the rate of
120-160 words per minute and the discrepancy between the speeds of speaking and listening and
thinking speed is four times faster i.e. 480-640 words per minute. However, this is an obstacle to
effective communication because:
o Leads the listener to only listen marginally/poorly. o Fast thinking makes people
think ahead on what they are going to reply.
o Listening is not passive but active.

Effective listening results in 50% retention immediately after a 10-minute talk, and 25% decline
after 48 hours.
Real listening is an active process that has three basic steps:
Hearing: Hearing just means listening enough to catch what the speaker is saying. For
example, say you were listening to a report on zebras, and the speaker mentioned that no two
are alike. If you can repeat the fact, then you have heard what has been said.

Understanding: The next part of listening happens when you take what you have heard and
understand it in your own way. Let's go back to that report on zebras. When you hear that no
two are alike, think about what that might mean. You might think, "Maybe this means that
the pattern of stripes is different for each zebra."

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Judging: After you are sure you understand what the speaker has said, think about whether
it makes sense. Do you believe what you have heard? You might think, "How could the stripes
to be different for every zebra? But then again, the fingerprints are different for every person.
I think this seems believable."

The degree of attention, the perspective taken into consideration and the objective of listening
determine the type of listening one engages in. The various kinds of listening can be classified into
two broad types: positive and negative. Positive listening benefits the listener, the speaker and
society at large. Positive types of listening include sensitive listening, active listening, evaluative
listening, relationship listening and appreciative listening. Negative listening is defective and hence
does not serve the purpose of one or more of the parties to communication.

The following are the various kinds of listening.

8.7.1 Passive Listening

In passive listening, nothing of the speaker's words go into the mind of the listener. The words of
the speaker don't activate the thought process of the listener, but the listeners are physically present
though mentally absent. The listener may have decided to ignore the speaker due to either
preconceived notion or boring introduction of the listener. The responsibility for this negative kind
of listening lies with the speaker who may not have aroused the interest of the listeners.

8.7.2 Marginal Listening

Marginal listening, which is also referred as Selective listening, is a little better than passive
listening in that the information of the speaker is listened to in bits and pieces rather than the whole
of it. The listener occasionally raises his head to take some information, probably due to its being
pleasant to him or agreeable to his existing views. But, the listener may be missing out on the
important part of the speaker's message. This also can be classified under negative kind of listening
since the important part of the message is ignored and the benefit of it missed out.

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8.7.3 Projective Listening

In this type of listening, the listener takes and absorbs the information in accordance with the
listener's own view or perspective which dominates the perspective of the speaker, even if the
speaker's view is amalgamated into the listener's own. In other words, the broader view of the
speaker is either ignored or given less predominant place and limited view of the listener retained.
This also is classified as negative kind of listening. It is similar to a jaundiced person looking at the
world and believing the surroundings as green. The view is far from being true.

8.7.4 Empathic Listening

Empathic listening, which is also known as 'sensitive listening' is the opposite of projective
listening in that only the speaker's view is taken predominantly while that of the listener is either
completely ignored or given less importance. If a proper balance between two views is struck, it
could be classified as positive. Owing to dominance of only speaker's view, it has to be termed as
negative listening and hence needs to be improved. Being too empathetic with others may ignore
the broader perspective or lead to the listener being exploited. But there are some features of this
type of listening. They include building of trust, facilitating release of emotions, reducing of
tensions, creating of positive climate for negotiations etc.
([Link]/essay/empathic_listening). The listeners must attend, support and
empathize with the speaker. Since empathetic listening build relationships, it can also be called
'relationship listening'.

8.8 Types of communication

Communication can be identified in a business organization according to organizational structure,

direction of communication and ways of expression.

8.8.1 According to organizational structure

Formal communication: Associated with the formal organizational structure. Information travels
through the officially recognized positions in the organization chart. E.g. orders, instructions,
decisions, rules, procedures, policies etc maybe written or oral.

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Informal communication: Also known as the ‗grapevine‘. They are free from all sorts of
formalities. Based on friendship, membership of a group/club, or origin of place, e.g. opinions,
views, comments, suggestions, complaints, rumours, whispers, gossip etc may use symbols such
as glance, gestures, nod or silence, anonymous letters etc.

8.8.2 According to direction of communication.

Downward communication: Communications that flow from superiors to subordinates.

Include orders, instructions, ruled, policy directives etc. They are directive in nature.
Upward communication: Reverse of downward communication, flows form subordinates to
superiors. Includes reaction and suggestions from workers, grievances, and disputes. They maybe
in the form of reports, proposals, memorandums, etc. Upward communication is now considered
to be a main source of motivation.
Horizontal communication: Refers to communication between persons at the same level in the
management hierarchy. Also known as lateral or cross-wise communication e.g. meeting of
general managers, Divisional heads etc. can be oral or written.

8.8.3 According to way of expressions

Oral/verbal communication: Exchange of ideas/information occurs through face to face

conversation or mechanical media e.g. Telephone, loud speaker, radio call etc conferences,
seminars, workshops, interviews, consultations are other media.
Written communication: Takes the written form (black & white) includes written words, pictures,
graphs, diagrams, maps, etc. They may take the form of circulars, personal letters, memos,
manuals, reports etc.
Grapevine Communication: The informal channel of communication is also known as the
grapevine. It results from the operation of social forces at the workplace. The term arose during
the days of the American Civil war when intelligence telephone lines were strung loosely from tree
to tree like grapevine plants and the message was usually distorted, hence any rumour was
popularly referred to as the grapevine. Today all types of informal communication are referred to

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as the grapevine. Although the grapevine exists outside the official network, it continuously
interacts with it.
Advantages
i) Operates with much greater speed than the formal communication network ii)
Appropriate for some subject matters which do not require the formal channel e.g. when
management wants to sound out the feelings of employees before formalizing a rule or
policy iii) Satisfies the needs of persons who like to mix up with others freely and ‗chat‘
iv) Can compensate for an inadequate or non-existent formal communication network

Disadvantages.
i) Disorderly and unreliable hence cannot be acted on.
ii) Difficult to assign responsibility for false information as it is hard to pinpoint the
source. iii) Negatively affect productivity as rumours can lower morale and much time is
taken in
―rumour mongering‖.

8.9 Evaluation of communication network.

There are several methods for evaluating the effectiveness of communication:
• Attitude surveys.
• Employee relations index – a measure of the smooth flow of communication.
• Clarity – Fog index and reading ease – measures of readability and
understanding.
• Communication Audit- measures of information known to different individuals.
• Records – safety, accidents and labour turnover may indicate understanding of
communication by employees.
• Observing practice

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 Using examples from an organization of your choice, explain some
of the ways in which the effectiveness of communication can be evaluated?

8.9 Barriers to communication

Communication does not always give the desired results due to certain barriers or obstacles.
These are classified as follows:

8.9.1 Semantic Barriers

These arise from the linguistic capacity of the parties e.g.

Badly expressed message – lack of clarity and precision, poorly chosen and empty words, phrases,
careless omission, lack of coherence, bad organization of ideas, bad sentence structure, inadequate
vocabulary, jargon, etc.
Faculty Translation – managers often receive communications from superiors which must be
translated into appropriate language suitable for lower levels of employees e.g. policy decisions
etc. If the translation is faulty or inaccurate, it is misunderstood.
Unclarified assumptions – uncommunicated assumptions are common in most messages, so
others have to ―read between the lines‖.
Specialists language (jargon) – some groups e.g. Legal, insurance or personnel develop a special,
peculiar and technical language of their own. This increases their isolation, thus, building a
communication barrier.

8.9.2 Emotional/psychological barriers.

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The meaning ascribed to a message depends upon the emotional or psychological status of the
parties involved e.g.

Premature Evaluation – refers to the tendency to evaluate (judge) communications instead of

being neutral during the interchange of ideas. Such evaluation interferes with the transfer of
information from the sender.
Inattention – the pre-occupied mind of the receiver and resultant non-listening is a major chronic
psychological barrier. It is the reason why people fail to respond to notices, circulars, memos etc.
Loss by transmission and retention – when communication passes through various levels in the
organization, successive transmission of the same message decreases accuracy. In oral
communication about 30% of the message is lost. Poor retention is also common. Employees
retain about 50% of information which superiors retain about 63%.
Undue reliance on the written word – written word cannot substitute for face-to-face
relationships. Employees do not accept management‘s views through publications unless level
of trust and confidence is very high.
Distrust of Communication – arises out of illogical decisions or frequent changes of the original
communication by the communicator. Repeated experience of this kind gradually conditions the
receiver to delay action or to act unenthusiastically, hence making communication unsuccessful.
Failure to communicate – managers may fail to transmit needed messages because of laziness,
procrastination, hoarding information to embarrass, or assuming that everybody knows.

8.9.3 Organizational barriers.

Organizational Policy – general organizational policy regarding communication acts as an overall

guideline to all. However if the policy is not supportive to the flow of communication in different
directions, communication flow would not be smooth and adequate.
Organizational rules regulations – These affect the flow of communication by prescribing the
subject matter to be communicated, the channel of communication, restrictions on what and who
to communicate with etc. These specifications may cause delays and work against the willingness
of persons to convey the message.

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Status Relationships – the superior – subordinate relationship may block particularly upward
communication. The greater the difference between hierarchical positions, the greater the
possibility of communication breakdown.
Organizational facilities/communication infrastructure – these refer to telephones, internet and
intranet connectivity, physical proximity and office layout.

8.9.4 Personal barriers.

Barriers in superior: these include personality and attitudes which affect the flow of messages in
different directions. Unfavourable attitude means messages would not flow properly to and from
superiors/subordinates.
Fear of challenge to authority – superiors, when ambitious and want to maintain their power and
authority may withhold information coming down the line or going up if it will expose their
weaknesses.
Insistence on proper channel – in exercising their authority, superiors may insist on
communication passing through them. However, if by-passed, they may block other
communication as they see this as thwarting of their authority.
Lack of confidence in subordinates – generally, superiors perceive their subordinates as less
competent and incapable, hence their suggestions and advice are ignored. This works against
upward communication.
Ignoring communication – sometimes superiors consciously and deliberately ignore
communication from their subordinates to maintain their importance. This works against the
willingness of subordinates to communicate.
Lack of time – superiors feel, whether correct or otherwise, that their workload is heavy and have
little time to talk to subordinates.
Lack of awareness – superiors sometimes lack awareness about the significance and usefulness of
communication in different directions in general, hence blocking the flow of communication.
Barriers in Subordinates – may include:
Unwillingness to communicate – subordinates may feel that the information they wish to share
may have adverse effect on their future relations with the superior, or there is no mutual trust and
confidence with superior, hence would not be willing to communicate.
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Lack of incentives – subordinates require rewards like positive feedback and reinforcement for
ideas that improve work performance to encourage them to share information with their superiors

From situations that you have observed in your organization or any that you
know, what are some of the actions that a project manager can take to overcome the obstacles to
communication? List at least four here
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________

8.10 Self assessment questions

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8.11 Summary
In this lecture, we have discussed communication as a tool that managers use to achieve
effectiveness. It refers to an exchange of facts, ideas and opinions between two or more people to
create understanding. We noted that communication is the basis for coordination of organizational
activities, decision making and effective leadership. Communication is transmitted through words,
actions, pictures and numbers. The choice of the channel of communication will depend on the
type of message, the audience and efficiency and effectiveness. We also observed that there are
various barriers to communication such as those related to clarity of language, sentence structure,
jargon and translation. The emotional and psychological state of the actors in a communication
process may lead to lack of attention, distrust and premature judgement of the message. There are
also other barriers related to the organization such as policies and culture and personal attitudes of
both superiors and subordinates. To evaluate the effectiveness of communication processes in an
organization, attitude surveys, employee relations index, fog index, communication audit, records
and observing practice can be used.

LECTURE TEN
GROUP DYNAMICS
Lecture Outline
10.1 Introduction
10.2 Lecture Objectives
10.3 The Concept of Group Dynamics
10.4 Theoretical Underpinnings of Group Dynamics
10.5 The Concept of Team
10.5.1 Difference between Work Groups and Teams
10.5.2 Lessons from Geese by Milton Olson
10.6 Process of Team Development
10.7 Functions of a Team
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 10.7.1 Team Roles and Responsibilities
10.7.2 Unhelpful behaviours in Teams
10.8: Strategies for Teambuilding
10.9 Managing Team Conflict
10.9.1 Types of Conflict
10.9.2 Team Leader's Role in Managing Conflict
10.10 Summary
10.11 Self-Test
10.12 Suggestions for Further Reading

10.1 Introduction
In the last unit, we discussed the function of communication in management. We noted that
communication is the basis for coordination of organizational activities, decision making and
effective leadership. In this unit, we shall now turn our attention to the important function of group
dynamics and team building. You will appreciate that an important leadership competency for any
organization, big or small, is the ability to build and lead high performing teams. In organizations,
people must work closely together; perform many different roles and work effectively to ensure
objectives are achieved. It is the desire of every manager, to have a motivated and cohesive team
of people who can work together productively. This unit will provide you with insightful
knowledge on the meaning, evolution and theoretical underpinnings of group dynamics. We shall
also discuss the process of team formation and development, communication and conflict in teams.
Various activities and case studies are provided to enable you deepen your understanding of this
concept.

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 Lecture Objectives
By the end of this lecture, you should be able to:

1. Describe the concept of group dynamics

2. Discuss the theoretical underpinnings of group dynamics
3. Explain the concept of team
4. Explain the process of team development
5. Outline the functions of a team
6. Discuss the unhelpful behaviours in teams
7. Identify the Strategies for teambuilding
8. Discuss the management of conflict in a team

10.3 The Concept of Group Dynamics

Before we continue, we need to delve a bit into the concept of group dynamics. Kurt
Lewin (1959), a social psychologist, coined the term ‗group dynamics‘ to describe the positive and
negative forces within groups of people. He used the term to describe the way groups and
individuals act and react to changing circumstances. Based on feelings and emotions, members of
a group form a common perception. The interactive psychological relationship in which members
of a group form this common perception is what is referred to as ―Group Dynamics". This term
can also be taken to mean a system of behaviors and psychological processes occurring within a
social group (intragroup dynamics), or between social groups (intergroup dynamics). Group
dynamics can, therefore, be defined as a field of enquiry dedicated to the advancing knowledge
about the nature of groups, the laws of their development and their interrelations with individuals,
other groups and larger institutions.

The study of group dynamics can be useful in understanding the decision-making behaviour of
groups, for example, tracking the spread of diseases in society, creating effective therapy
techniques, and following the emergence and popularity of new ideas and technologies. From a
macro perspective, group dynamics are at the core of understanding cross-cutting factors such as
racism, sexism, and other forms of social prejudice and discrimination in societies. The term also
encompasses the structures and processes by which groups form and function.

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The phrase "Group Dynamics" contains two words- (i) Group - is a social unit of two or more
individuals who have in common a set of beliefs and values, follow the same norms and works to
establish a common aim. The members of the group share a common purpose, task or goals. (ii)
Dynamics – refers to the flow of coherent activities which as envisaged, will, in total, lead the
group towards the establishment of its set goals.

People may underestimate the importance of society and group memberships on their lives.
Whilst people sometimes undertake solo journeys, by and large much of their experiences of life
involves being engaged with others. The nature of these groups can be quite varied, ranging
from a family going for a walk, to the crowd at a football game, to an internet discussion group,
to a group of fellow workers.

10.4 Theoretical Underpinnings of Group Dynamics

Having looked at the concept of group dynamics in the previous section, let us now trace its
theoretical underpinnings. The underlying premise of a group is that: 'the whole is greater than the
sum of its parts.' A group is an entity, which has qualities that cannot be understood just by studying
the individuals that make up the group. Gestalt psychologist, Max Wertheimer (1999) identified
this fact, stating ‗there are entities where the behavior of the whole cannot be derived from its
individual elements nor from the way these elements fit together; rather, the opposite is true: ‗the
properties of any of the parts are determined by the intrinsic structural laws of the whole‘
(Wertheimer 1999, p. 7)

As a field of study, the roots of group dynamics are found in both psychology and sociology.
Wilhelm Wundt (1832–1920), credited as the founder of experimental psychology, had a particular
interest in the psychology of communities, which he believed possessed phenomena such as human
language, customs, and religion that could not be described through a study of the individual. On
the sociological side, Emile Durkheim (1858–1917), who was influenced by Wundt, also
recognized collective phenomena, such as public knowledge. Other key theorists include Gustave
Le Bon (1841–1931) who believed that crowds possessed a 'racial unconscious' with primitive,
aggressive, and antisocial instincts. The psychologist, William McDougall, believed in a 'group
mind,' which had a distinct existence born from the interaction of individuals. William Schutz
(1958, 1966) looked at interpersonal relations from the perspective of three dimensions: inclusion,

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control, and affection. This became the basis for a theory of group behavior that sees groups as
resolving issues in each of these stages in order to be able to develop to the next stage. Conversely,
a group may also devolve to an earlier stage if unable to resolve outstanding issues in a particular
stage.

Bruce Tuckman (1965) proposed the four-stage model called Tuckman's Stages for a group.
Tuckman's model states that the ideal group decision-making process should occur in four stages:
Forming, Storming, Norming, Performing He later added a fifth stage for the dissolution of a group
called adjourning. (Adjourning may also be referred to as mourning, i.e. mourning the adjournment
of the group). This model refers to the overall pattern of the group, but of course individuals within
a group work in different ways. If distrust persists, a group may never even get to the norming
stage.

M. Scott Peck developed stages for larger-scale groups such as communities, which are similar to
Tuckman's stages of group development. Peck describes the stages of a community as; pseudo-
community stage, chaos stage, emptiness stage and true community. According to Peck,
communities may be distinguished from other types of groups by the need for members to eliminate
barriers to communication in order to form true community. A community is born when its
members reach a stage of "emptiness" or peace.

Richard Hackman (2002) developed a synthetic, research-based model for designing and managing
work groups. Hackman suggested that groups are successful when they satisfy internal and external
clients develop capabilities to perform in the future, and when members find meaning and
satisfaction in the group. He proposed five conditions that increase the chance that groups will be
successful. These include:

a) Being a real team, which results from having a shared task, clear boundaries which
clarify who is inside or outside of the group, and stability in group membership
b) Compelling direction resulting from a clear, challenging and consequential goal
c) Enabling structure emerging from tasks which have variety, a group size that is not
too large, talented group members who have at least moderate social skill and strong
norms that specify appropriate behavior
d) Supportive context, that occurs in groups within larger groups such as companies

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10.5 The Concept of Team

In the previous section, we looked at the theoretical foundations of group dynamics and noted that
it is a field of enquiry that advances knowledge about the nature of groups, the principles of their
formation and development and their interrelations with individuals and other groups. In this
section, we shall look at the related concept of team. Many authors have argued that while all teams
are groups, groups are not always teams. However, teams can be taken as a special subset of
groups. Teams constitute the foundation of any functioning organization. The challenges of the global
business environment such as, the communications revolution, the global market and the ever-
increasing specialization and division of labor, clearly demand team rather than individual effort to
achieve high levels of performance and thereby ensure continued growth and survival. The net effect
is that individuals are now required to work with many different groups of people in their professional
as well as personal lives. It is unlikely, therefore, for an individual to join a group and immediately be
expected to get along with them naturally. The ability to build and maintain a team is an essential
quality for any effective, long-term leader.

What do you understand by the term ‗team‘?

A team is a group or collection of two or more individuals working together to achieve a common goal,
and whose individual efforts are complementary. Essentially, a team is a group of people who need
each other to achieve their purpose.
Working in a team helps build synergy between its members and, as a result, the work, at hand, gets
efficiently done. It has to be appreciated, however, that each member of a team is different; has different
personality; thinks differently; analyses issues differently and responds differently.

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 ✓ Sometimes, what appears to be a team is only a functional group - a collection of
individuals who are assembled together within the hierarchy for organizational
convenience such as a clerical unit
✓ A team is defined by a common goal towards which the team is working. If that is
not clear, then you may be dealing with a group and not a team.

Examples of teams are: football team, production team, quality improvement team, quality circle,
academic committee, task force, project team, management team.

10.5.1 Difference between Work Groups and Teams

What are the differences and similarities between a group and a team?

In your reflection on the question above, I hope you were able to mention characteristics such as:

i) Group members are measured by individual accountability while members of a team

hold themselves to be mutually accountable
ii) Both groups and teams are guided by formal rules and norms
iii) They both have a sense of shared purpose but the group‘s purpose is essentially that of
the organization while the team‘s purpose is jointly determined and planned with
management
iv) Leaders of work groups are most often managers based on hierarchical positions while
teams have a leadership role shared by team members who are empowered and self-
directed. In addition, team members are committed to working together and achieving
their agreed upon common goal, for example, a product design team or a project team
that has specific outputs to be delivered within a time period

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Katzenbach and Smith (1993) provide a clear distinction between work groups and teams. They
describe a work group as a collection of people working in the same area or placed together to
complete a task. The group‘s performance is the result of people coming together to share
information, views and insights. The focus of groups is individual performance and actions within
are geared toward it. Table 11.1 illustrates the differences between teams and groups across seven
factors: competition; focus; style; tolerance; risk; accountability and objectives. A team, for
example, tends to compete with those outside the organization while work groups compete against
each other for favours and recognition within the organization. Teams also tend to be goal-oriented
while work groups are task oriented sometimes with a personal agenda. The leadership style in
teams is participative and self-steering but autocratic and hierarchical in work groups.

Table 10.1 Work groups and teams

Factor Team Work Group
Competition Compete with those outside the Compete against each other for
organization favour, recognition
Focus Goal-oriented Task-oriented; personal agenda.

Style Participative and self-steering Autocratic and hierarchical in

nature
Tolerance Enjoy each other; differences are Tolerate each other;
welcomed and encouraged. differences disagreement are
suppressed.
Risk Accept risk Avoid risk
Accountability Mutual collective accountability Individual accountability
Objectives Create specific team objectives Objectives are
mandated; imposed or granted
10.5.2 Lessons from Geese by Milton Olson
To help us understand teams even better, we shall use the flying behaviour of geese as an example. Geese
are birds common in most parts of the world and also in Kenya. These birds fly in a V formation and they
display some powerful lessons for managers of organizations. Let us look at five lessons we can learn.

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Lesson one
 By flying in a V formation, a flock of geese adds 71% greater flying range than if each bird flew
alone.
Thus, people who share a common vision and direction can get where they are going
quicker and easier because they are traveling on the thrust of one another
Lesson two
 When a goose falls out of formation, it suddenly feels the drag and resistance of flying alone. It
quickly moves into formation to take advantage of the lifting power of the bird immediately in
front of it.
Hence, if we have as much sense as a goose, we stay in formation with those headed
where we are going. We should be willing to accept and give help to others.
Lesson Three
 When a goose tires, it rotates back into formation and another goose takes the front position.
It pays to take turns doing the hard tasks and sharing leadership. Just as with geese,
people are interdependent on each other‘s skills, capabilities and unique arrangements
of gifts and resources
Lesson Four
 The geese flying in formation honk to encourage those upfront to keep up the speed.
We need to make sure our honking is encouraging. In groups where there is
encouragement, the production is greater. The power of encouragement allows one to
stand by one‘s core values and encourage the core values of others.
Lesson five
 When a goose gets sick, wounded or shot down, two geese drop out of formation and follow it
down to help and protect until it dies or flies again. They launch another V formation to catch
up with the flock.
If we have as much sense as geese, we will stand by each other in difficult times as well
as when we are strong.

How can you apply these lessons in your workplace?

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 Your answers could include the following:

1. Create and maintain an upbeat and positive working environment.

2. Get people to participate in planning, implementing and decision-making.

3. Set targets that people can work towards.

4. Share the stress of taking the lead.

5. Utilize the unique qualities of the team members.

6. Encourage and stand by each other.

From the lessons learnt from geese, we can see that teams can help an organization to achieve its
strategic objectives by bringing together individual energies and creating what is known as
synergy. Synergy is where the group output is greater than the sum of each individual output. It is
like saying 1+1=4. Managers should make it part of their leadership style to create situations in
which people can pool their talents, time and other resources together to accomplish given tasks.
You will be surprised how this will increase morale, improve communication, enhance
commitment to work, job satisfaction, and interpersonal relations and generally create a positive
work environment.

10.6 Process of Team Development

Having looked at why teams are so important in any organisation, let us briefly look at how teams
are formed. Bruce Tuckman (1965) came up with a theory which focuses on the way teams tackle
a task from initial formation to the completion of a project. Team development is sequential and
developmental. Demonstrating team cohesiveness and harmony in each stage also determines
group performance and its growth and maturity. Each member of the team must be prepared to
contribute and give up something at each stage in order to make the group move to the next stage.
Groups who have started directly from the performing stage are more likely to become ineffective
and may not work in a sustained manner. Therefore to avoid such a situation, issues and concerns
pertaining to group dynamics must be resolved in each stage before the team can move on. If the
team is not able to resolve such issues and concerns at each stage, the group members will become
less enthusiastic on team function or conflict may grow within the members, thus resulting in the
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dysfunction and disintegration of the team. Below is what happens in each stage and what should
be done in each stage;

Let us briefly look at what each stage entails.

Forming: The group is 'undeveloped' and generally people are concerned with 'who fits where'.
This is usually the initial stage of a group of people meeting for the first time, but it can also happen
when a new member of a team joins an established team, such as a new leader, or a strong character.
Storming: The group is 'experimenting' and concerned with how they work together. Only a small
amount of work is being achieved at this stage. The group is likely to be showing signs of conflict
but also engages in lively debates and discussions.
Norming: The group is 'settling down' and starting to feel more comfortable with working with
each other. Far more is being achieved at this stage, although there is room for improvement!
Performing: The group is now a team! It is mature with goals being achieved and an atmosphere
that is relaxed and purposeful. The team is likely to be feeling confident at this stage with a really
open and honest dialogue taking place.
Mourning or adjourning: The group is disbanding. An acid test of how well a team has worked
together can often be found at the mourning stage. If there has been great team spirit and harmony
and the team has produced great results, the team is likely to feel great sadness and loss at breaking
up. Often successful teams once disbanded, keep in touch afterwards, and certainly feel a bond
when meeting up in the future.

By understanding how teams develop, you realize that you may need to adapt your
leadership style with the maturity level of the team. For example, at the early stages of
team development, your leadership style is likely to be more instructional/directive but as
the team matures you will most likely adapt to a far more facilitative/collaborative style.

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10.7 Functions of a team
In this section we shall look at the functions of teams and then the roles and responsibilities of team
members as observed by Meredith Belbin. According to (Luthans, 2005) there are three functions
that influence the effectiveness and productivity of groups. They are task functions, maintenance
functions, and self-interest functions.

Task Functions
This is the primary reason for the establishment of a team. To achieve the task, they must have
members that fulfill some or all of the following roles:
a) Initiating: by proposing tasks or goals, defining problems and suggesting procedures for a
solution
b) Information seeking: by requesting facts, seeking relevant information, and asking for
suggestions or ideas
c) Information giving: by offering facts, providing information, stating beliefs, and giving
suggestions or ideas
d) Clarifying ideas: by interpreting and clarifying input, indicating alternatives and giving
examples
e) Bringing closure: by summarizing, restating, and offering solutions
f) Consensus testing: by checking for agreements and sending up ‗trial balloons‘.
Maintenance Behavior
Each team needs social-emotional support to be effective. Some members of the team will take the
lead in providing this support, which consists of the following:
a) Encouraging: by showing regard for other members and providing positive response to their
contributions
b) Improving group atmosphere: by expressing team feelings, sensing moods and relationships,
and sharing feelings
c) Harmonizing: by reconciling differences and reducing team tension
d) Compromising: by admitting errors and looking for alternatives
e) Gate-keeping: by attempting to keep communications flowing, facilitating the participation of
others, and suggesting procedures for sharing discussion.
f) Standard setting: by reminding members of team norms, rules, and roles.
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Self-interest Behavior
This third function displayed by some individual members, generally takes away the team
performance and affects task achievement at the expense of the team. Activities that identify self-
interest behaviors are as follows:
a) Dominating and controlling: by displaying lack of respect for others, cutting them off, not
listening, and restating other members‘ suggestions with a different meaning
b) Blocking: by stifling a line of thought, and changing the topic either away from the point of
view or back to his or her own interest
c) Manipulating: by providing self-serving information, or a single point of view designed to
achieve a decision that is consistent with their position
d) Belittling: through put-downs, sneering at other‘s point of view, or making jokes about
another member‘s contribution
e) Splitting hairs: by nit-picking, searching for insignificant details that delay a solution, or
undermining another person‘s point of view.

10.7.1 Team Roles and Responsibilities

Through observation over many years, both in industry and in the world of management training, Dr.
Meredith Belbin identified a set of nine roles which, if all present in a team, give that team the best
possible chance of success.

Observe teams in your workplace and identify the roles played by each member.
Compare your observations with those in Belbin‘s model outlined below

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 Monitor Evaluator provides logical judgments where required and weighs up the
team‘s options in a dispassionate way.

Chairman/coordinator: clarifies goals and coordinates resources. He must be highly

creative and good at solving problems in unconventional ways

Completer/finisher: searches for errors and keeps a feeling of urgency in the team. He
ensures work is done on time and quality is achieved.

Implementer: translates the concepts into practical plans and ensures work is done.

Resource investigator: explores opportunities and handles external contacts. Ensures

the team is relevant to the world.

The Shaper: This is a challenging individual who provides necessary drive that
keeps the team moving without losing focus.
The Specialist: provides scarce knowledge, values and skills.

Team worker: builds bridges, fosters team spirit, and calms rough waters.
After going through the above functions of teams and roles played by members, I am sure you will
agree that in each team, there must be a balance in the roles and the members must work in
harmony. No one role is better than another. Roles are the basic structures through which objectives
are realized. The importance of team roles can be explained by the analogy of the parts of a car.
Each part is different but you need them all for it to function.

10.7.2 Unhelpful Behaviours in Teams

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There are behaviours exhibited by members of a team that can lead to team ineffectiveness. These have
been explained using the behaviours of different animals: The Donkey: very stubborn and will not
change their point of view.
The Monkey: fools around, chatters a lot and prevents the group from concentrating on any serious
business.
The Elephant: simply blocks the way, and stubbornly prevents the group from continuing along the
road to their goals.
The Lion: gets in and fights whenever others disagree with his plans or interfere with his desires.
The Frog: croaks on and on about the same subject in a monotonous voice.
The Snake: hides in the grass and strikes unexpectedly.
The Rhino: charges around, putting his/her footing it, and upsetting people unnecessarily.
The Hippo: sleeps all the time, and never puts up his head except to yawn.
The Mouse: is too timid to speak up on any subject
The Giraffe: looks down on others and the program in general. Feels he is above all this childish
nonsense.
The Tortoise: withdraws from the group refusing to give his or her ideas or opinions.
The Fish: sits there with a cold glassy stare, not responding to anyone or anything.
The Cat: is always looking for sympathy. It is so difficult for me… ‗Meaow‘.
The Peacock: is always showing of, competing for attention, see what a fine fellow I am!
The Rabbit: runs away as soon as (s) he senses tension, conflict, or an unpleasant job. This may mean
quickly switching to another topic. (Fight Behaviour)
The Chameleon: changes colour according to the people she is with. He will say one thing to this
group and something else to another.
The Ostrich: buries his or her head in the sand and refuses to face reality or admit there is any problem
at all.
The Owl: looks very solemn and pretends to be very wise, always talking in long words and
complicated sentences.

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 Supposing you were a team leader, how would you deal with the various unhelpful
behaviours to ensure the team achieves its goals

10.8: Strategies for Teambuilding

In order to encourage a high level of collaboration and interdependency among the team, you must
start with putting together the right people. Team members should be selected and their tasks
assigned with their natural skills in mind. Remember that not every person is capable of doing
every job. The team must also have the resources and training required to develop the skills needed
to do their jobs. This includes cross-training. Cross-training gives team members a greater
awareness of how their jobs are interdependent, increasing the team's flexibility and improving
response time.

List some of the strategies you would use to build high performance teams

Strategies seen as important to the successful set-up and launch of team efforts include: selection of
participants; establishing goals; balancing skill sets; allocation of roles within the team; harmonizing
personality types; training on how to work together; support within the team; making effective use of
resources and communication between team members and leaders. We shall now discuss each of these
strategies.
a) Selection of participants

The first important ingredient for team building is selecting of participants to be included in an activity.
The team leader usually looks for specific things in the members in order to ensure success in the
project. Identifying people who have confidence, a positive attitude and are able to build trust among
the other participants is key. The authors of When Teams Work Best collected 15,000 assessments that
team members had to fill out about their fellow teammates. In the assessment there were only two
questions asked: (1) What strengths does this person bring to the team? (2) What might this individual
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do to contribute more effectively to the team‘s success? The assessment revealed six factors to help
distinguish between the effective and ineffective team members. The factors fell into two groups: a)
working knowledge and b) teamwork. ―Working knowledge consists of two factors: experience and
problem-solving ability while teamwork consists of four factors: openness, supportiveness, action
orientation, and personal style‖. If each member has these qualities, the outcome of the team building
activity will most likely be successful.
b) Establishing goals

The team leader should establish goals early so the members understand their purpose for participating.
If the goals are clarified, the participants are motivated to excel in the activities and develop trust
among their leader. Goals give the team direction and provide a feeling of value and importance.
Without goals, the team has nothing to strive for, and many members may lose motivation. Keeping
the goal simple and achievable will be very beneficial to the team in the end. Many organizations have
introduced self-regulatory teamwork requiring changes in leadership behaviour leading to a
renewed interest in management by objectives (MBO) as a means for leading self-regulating teams.

c) Balancing skill sets

When creating a team building activity, a balanced skill set is an important consideration. This can be
achieved by having experts in different fields. If some members provide their technical skills, and other
members provide their theoretical skills, the outcome of the project will likely be successful. For
example, individuals that are knowledgeable about the course materials are confused about the
technology part of it. On the other hand, individuals may feel that the technical side of the problem is
more comprehensible than the theoretical side of it. By combining both types of strengths, the team
can come up with a solution that benefits the project or organization. Balancing skill sets can be one
of the most challenging things to achieve, but it is a necessary condition for team effectiveness.
d) Allocation of roles within the team

Assigning roles to team members help thems to know their place on the team. The role assigned should
be clear and matches the individuals personality. Advantages of defining roles among team members
are that it makes assignments more straightforward, helps to understand the decisionmaking process,
and assures the task will be completed. In most projects there are three roles: project leader, chief
architect, and documentation leader. It is important to clarify each of these roles at the very first meeting
so members know exactly what they have to do. Making a list of everyone‘s skill sets, preference, work
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experience, training, and interests would help in assigning the roles. A problem that may occur is that
a specific role may have too little or too much work, which may cause resentment between the members
and this may affect productivity. A team must always be ready to adjust to their new roles and be
prepared if assigned a new one. Members must be willing to move beyond their roles and help others
in order to practice good teamwork and to get the job done.
e) Harmonizing personality

The personality of a team leader plays is a major on how the team performs. Many studies have been
done on the effect of personality on working environments. For example, in a study conducted of
ineffective managers at Sears, a department store, it was found that almost all of the managers had a
―personality defect‖ of some sort. Other studies have found four personality traits of ineffective
managers. The four traits were: poor interpersonal skills (being insensitive, arrogant, cold, aloof, overly
ambitious), unable to get work done (betraying trust, not following through, overly ambitious), unable
to build a team, and unable to make the transition after promotion. The personality traits that these
managers portrayed were found to negatively affect the working environment. It is imperative for
leaders to have a positive and effective personality to gain respect among their organization and
members.
f) Training on how to work together

A team must know how to work together in order to be productive and successful. Working together
may not come easy at first, but with proper training the team will be able to adapt quickly. The training
may include instruction on how to communicate better, manage conflict, or understand the skills and
talents that everyone brings to the table. However, for such training to be effective, training needs
analysis of the team members is recommended. To encourage team members to work together, many
companies provide workshops in communication skills, meetings management, listening,
assertiveness, conflict resolution, goal setting, and other topics that help in being an effective team
player. If people are working together effectively rather than working by themselves, more work will
be accomplished.
g) Support within the team

Supportiveness which means the aspiration to help others succeed is a useful ingredient for team
building. Someone who shows supportiveness is; dedicated to the team‘s success and wants what‘s
best for the team; works behind the scenes to aid the team; willing to take on more responsibility; very
easy to work with, and listens well to others‘ ideas. Recently, M. West, author of Effective Teamwork,
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introduced a comprehensive model of team support. In the model he concluded that team support is a
multidimensional concept that includes four types of people. These are: emotional support,
informational support, instrumental support, and appraisal support. Someone who provides a shoulder
to cry on, encouraging words, and is sympathetic of others‘ pain is said to be a team emotional support.
A person that provides team informational support exchanges necessary information about a certain
thing to their peers. The person who is actually ―doing the support‖ provides team instrumental
support. The last type, appraisal support is the help individual team members can provide to aid in
making sense of a particular problem. Team building will be successful if the team members can cover
each of these types of team support.
h) Making effective use of resources

In the business-world, companies are keen on how resources are used. Many companies use team
techniques in systems development to effectively use their resources. During group sessions,
nontechnical end users and information systems staff meet on a common ground to hammer out
systems solutions that truly meet the needs of everyone---especially the needs of end-user management.
To ensure system requirements are on target, companies like Cigna Company in Philadelphia, CNA
Insurance Company in Dearborn, Michigan, and Chase Manhattan Bank in New York are all using
group design techniques. All of these companies believe in the same thing: effective goal setting,
listening, facilitation skills, consensus building, and a willingness to communicate. These team
techniques in systems development not only make effective use of resources, but they also result in
measurable benefits. Resources are essential to team building and they must be used wisely and
efficiently.
i) Communication between team members and leaders

In “When Teams Work Best‖ West states that , ―the most important contribution a team leader can
make is to ensure a climate that enables team members to speak up and address the real issues
preventing the goal from being achieved.‖ A leader with good communication skills must be able to
speak the truth and deal with problems openly. Their goal should be to promote listening, to understand
different viewpoints, and to work toward a resolution. It is important for a team leader to make team
members feel comfortable enough to express their needs and their wants. Members want to feel that
they know what is going on at all times and are informed about things such as plans, priorities, and
progress the group is making. Some ways to communicate is by email, online messengers, telephone,

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or face-to-face methods. The most important part of communication is not so much the tools you
choose, but the dedication by each member of the team to use the chosen tools regularly.
10.9 Managing Team Conflict

It is commonplace for organizations today to work in teams. Whether they be leader-driven teams or
self-directed teams; the hope is that productivity, creativity, and results will be greater in a team
environment. While this is a proven approach, any time you bring together people from differing
backgrounds and experiences, it is inevitable that conflict will occur.

Many people and organizations view conflict as a negative thing or something to be avoided, yet
conflict, differences, or disagreements are a natural result of people working together. It is important
to note that without conflict, teams can become complacent and not perform at optimum levels. The
challenge then becomes, how should the team be prepared for this stage of their existence, and how
should the team leader facilitate it?

In this section we shall identify the types of conflict and describe how each manifests in a team. We
shall also look at the reasons why team members struggle with conflict and how a team leader can
manage conflict within the team.

10.9.1 Types of Conflict

Let us now look at the types of conflict that team members can experience. Conflict arises from the
clash of perceptions, goals, or values. If the management of that conflict is not effective, it can totally
disrupt the entire group process. Conflict can be termed either functional or dysfunctional. Functional
conflict enables a team to maximize its performance, and the outcomes are desirable. However; when
that conflict escalates to a level that disrupts the team and gets in the way of accomplishing its goals,
then it has become dysfunctional. Managing that balance is the key to effective teams. Another way to
categorize conflict is by focusing on its origin. How the conflict has evolved is clearly an indicator of
whether it will help or hinder the group process.

Some of the common sources of group conflict are values, attitudes, goals or expectations, roles and
responsibilities and limited resources of team members.

According to Allen C. Amason, there are two types of conflict:

a) Cognitive - conflict aimed at issues, ideas, principles, or process

b) Affective - conflict aimed at people, emotions, or values

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His studies showed the presence of both types in any group setting; but he explains that cognitive
conflict is constructive, while affective is destructive. Another researcher, Thomas K. Capozzoli
(1995), reinforces this by describing the outcomes of constructive and destructive conflict:
Constructive conflicts exist when:
i) People change and grow personally from the conflict ii) The
conflict results in a solution to a problem iii) It increases involvement
of everyone affected by the conflict iv) It builds cohesiveness among
the members of the team Destructive conflicts exist when:
i) No decision is reached and problem still exists ii) It
diverts energy away from more value-adding activities iii)
It destroys the morale of the team members iv) It polarizes
or divides the team
10.9.2 Team Leader's Role in Managing Conflict
Conflicts are part of individual relationships and organizational development, and no relationship or
organization can hope to mature to productivity and be successful without being able to resolve
conflicts effectively. Clearly, one of the main responsibilities of any manager or group leader is to
resolve conflict. The two key goals for a group leader are to remain impartial, and to facilitate
understanding among the group members. "As a team leader, one must realize the paradox that
surrounds conflict. The team needs to embrace conflict as a means of generating and evaluating ideas.
While at the same time, it must shy away from it to prevent anger, frustration, or alienation. The biggest
challenge for the team leader is figuring out how to balance these two forces.
Let us now look at the preventative and reactive strategies that team leaders can use to resolve conflict.
Preventative Strategies
The first step in conflict management is learning how to prevent or minimize conflict. A team leader
has several ways to do that. Here are just a few:
a) Establish ground rules

At the beginning of each project or each meeting, incorporate processes or behaviors that the
group will allow or prohibit. Ground rules can be useful because as conflict arises, the leader
can refer the team back to them for guidance. These tend to be good objective guidelines that
remove the leader from the role of enforcer.
b) Agreement on how to resolve conflict

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 Developing a team agreement on how the group will resolve conflict if it does occur gets them
to focus on good resolution behaviors, and prepares the team with a process that is available if
necessary.
c) Training in conflict resolution or communication skills

In order for a team to be successful, it is essential that members know the basics of conflict
resolution, delegation, and consensus building. Develop a strategy for training and
preparing team members for group process. It would be preferable if the team could attend
this training as a group.
d) Focus on team goals
Conflict arises from goal mis-alignment, and if this is uncovered and cleared up early, then it
could minimize problems later. If new members are added to the team, then it would be
beneficial to re-visit this exercise again.
Reactive Strategies
Should the above preventive measures fail and a conflict occurs, then this has to be managed to
avoid it degenerating into what we earlier described as dysfunctional conflict. There are many ways
for a team leader to facilitate the resolution of conflict. Every situation is different, and often a
combination of techniques is required. Most reactive strategies are concerned with conflict
management styles. Conflict management styles

Figure 10.1 illustrates five Conflict Management Styles. An individual with knowledge of these styles can
select the style most appropriate for a specific conflict. Once a style is identified, it is also possible to
better understand the motivations of others during conflict. The chart relates concern for others as
against concern for self in a conflict situation. We shall discuss each of these styles below.

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 High
Accomodating Collaborating

Compromising

Avoiding Dominating/Competing

CONCERN FOR SELF High

Figure 10.2 Conflict Management Styles
Figure 10.2 shows four possible styles of managing a conflict that ra nge from low to high concern for
CONCERN
FOR
OTHERS

Low

self or others.

a) Competing/Dominating – This is a style where the leader is high on concern for self and low
on concern for others. This is a power oriented mode, in which one uses whatever power seems
appropriate to win one's own position: the source of power could be one's ability to argue, one's
rank, or ability to use economic sanctions. Competing might even mean standing up for your
rights, defending a position which you believe correct, or simply trying to win.
This style has also been called the Shark style.

Appropriate times to use a Shark style are:

i. when conflict involves personal differences that are difficult to change

ii. when fostering intimate or supportive relationships is not critical iii.

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 when others are likely to take advantage of non-competitive behaviour

iv. when conflict resolution is urgent;

v. when decision is vital in crisis

vi. when unpopular decisions need to be implemented

b) Accommodating – This is the opposite of competing. When accommodating, an individual

neglects his or her own concerns to satisfy the concerns of the other person; there is an element
of self-sacrifice in this mode. Accommodating might take the form of selfless generosity or
charity, obeying another person's order when one would prefer not to, or yielding to another
person's point of view. The analogy for this style is the Teddy Bear style.

Appropriate times to use a Teddy Bear Style are:

i. when maintaining the relationship outweighs other considerations ii.

when suggestions/changes are not important to the accommodator

iii. when minimizing losses in situations where outmatched or losing

iv. when time is limited or when harmony and stability are valued

Avoiding – in this style the individual does not immediately pursue his or her own concerns or those
of the other person. He or she does not address the conflict. Avoiding might take the form of
diplomatically sidestepping an issue, postponing an issue until a better time or simply withdrawing
from a threatening situation. It is also referred to as the Turtle style.

Appropriate times to use a Turtle Style:

i. when the stakes are not high or issue is trivial ii.

when confrontation will hurt a working relationship

iii. when there is little chance of satisfying your wants

iv. when disruption outweighs benefit of conflict

resolution

v. when gathering information is more important than an immediate decision vi.

when others can more effectively resolve the conflict

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 vii. when time constraints demand a delay

Compromising – The aim of using this style is to find some expedient, mutually acceptable solution
which partially satisfies both parties. It falls somewhere between competing and accommodating.
Compromising cedes more than competing but less than accommodating. Likewise, it addresses an
issue more directly than avoiding, but does not explore in as much depth as collaborating.
Compromising might mean splitting the difference, exchanging concessions, or seeking a quick
middle-ground position. This style has been called The Fox Style.

It is appropriate to use this Fox Style when:

i. Important and complex issues leave no clear or simple solutions ii. All conflicting

people are equal in power and have strong interests in different solutions

iii. There are no time restraints

Collaborating – This is opposite to avoiding. Collaborating involves an attempt to work with the other
person to find some solution which fully satisfies the concerns of both persons. It means digging
into an issue to identify the underlying concerns of the two individuals and to find an alternative
which meets both sets of concerns. This is clearly the most effective approach of conflict
management. This style is also known as the Owl Style.

Specifically it will produce the following results:

i. Both parties win ii. Mutual

respect iii. Continuing effort of

both parties iv. Satisfaction

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 v. Both parties feel enriched than belittled

Appropriate times to use an Owl Style

i. when maintaining relationships is important ii. when

time is not a concern iii. When peer conflict is involved iv.

When trying to gain commitment through consensus

building

v. When learning and trying to merge differing perspectives

 teams.

Exercise
What's Your Conflict Management Style?
Inst ructions: Listed below are 15 statements. Each strategy provides a possible strategy for dealing with a
conflict.

Give each a numerical value (i.e., 1=Always, 2=Very often, 3=Sometimes, 4= Not very often, 5 = Rarely, if
ever.) Don't answer as you think you should, answer as you actually behave.
____ a. I argue my case with peers, colleagues and coworkers to demonstrate the merits of the position I take.

____ b. I try to reach compromises through negotiation.

____ c. I attempt to meet the expectation of others.

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____ d. I seek to investigate issues with others in order to find solutions that are mutually acceptable. Page 214
of 253
____ e. I am firm in resolve when it comes to defending my side of the issue.

____ f. I try to avoid being singled out, keeping conflict with others to myself.
____ g. I uphold my solutions to problems.

All five styles of conflict management obviously have advantages and disadvantages. When
dealing with conflict in personal relationships, any of these types may be useful and necessary
in certain situations. However, the last style, collaboration, is highly recommended for dealing
with conflict in most organizations. It has the most promise of resulting in something
satisfactory to both parties. People often feel proud of themselves and feel a sense of personal
power when they use this method. It is a sign of integrity and self-confidence when one is able
to use this method with patience, regardless of how difficult the situation may be.

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Using the knowledge on conflict management styles that we have just discussed, do the following
exercise to establish your dominant and back-up style of dealing with conflict in
Scoring: The 15 statements you just read are listed below under the five conflict management styles.
Each category contains the letters of three statements. Record the number you placed next to each
statement. Calculate the total for each category.
Style Scores Scores Scores Total
Competing/forcing a ______ e______ g_____
Shark
Collaborating Owl d ______ i______ l______
Avoiding Turtle f _______ j______ o______
Accommodating c_______ k______ n______
Teddy Bear
Compromising Fox b_______ h______ m______

Results: My dominant style is ________________ (Your LOWEST score)

My back-up style is__________________ (Your second Lowest score)

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 10.10 Summary
In Lecture Ten, we discussed the basic aspects of group dynamics paying particular attention
to the meaning of group dynamics and how it has been defined by different authors. We also

delved into its theoretical foundations from a historical perspective and noted that its roots
can be traced to Gestalt psychology. While the term team and group is sometimes used to

mean the same, we noted they have different characteristics. The lessons from Geese by
Milton Olson gave a good analogy of how teams function. Using Tuckmans theory, we

looked at the process of team d evelopment, and observed that teams have a life cycle from

formation to adjourning. We looked at the functions of teams and Belbin‘s list of roles and

responsibilities of teams. We discussed the unhelpful behaviours in teams that can lead to

ineffectiveness and discussed the need for a team leader to devise strategies for teambuilding

and m anaging conflict

Congratulations! You have come to the end of this lecture. Now 10.11 Self
.
Test , to be sure that you have
achieved the learning objectives that we set out at the beginning, do the following self-test. If
you cannot answer a question, just roll back to the relevant section and read again or refer to the
suggestions for further reading at the end of the lecture.

1. Describe the concept of group dynamics

2. Discuss the theoretical underpinnings of group dynamics
3. Explain the concept of team

4. Explain the process of team development

5. Outline the functions of a team
6. Discuss the unhelpful behaviours in teams
7. Identify the Strategies for teambuilding
8. Discuss the management of conflict in a team

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 10.10 Suggestions for Further Reading
Johns Gary, Concordia University, Social Behavior and Organizational Processes
Organizational Behavior: Understanding and Managing Life at Work. Harper Collin, College
Publishers, 1996
Kravitz, D.A. and Martin, B. (1986) Ringelmann rediscovered: The original article. Journal of
Personality and Social Psychology, 50(5), p. 936-941
.Luthans, F.(2005). Organizational Behavior (10th ed). Boston: McGraw-Hill.
Poole, M & Hollingshead, A.B. (2005) Theories of small groups: Interdisciplinary perspectives.
Carlifornia CA: Sage publications
Shaw, M.E. (1971) Group Dynamics: The Psychology of Small Group Behavior London:
McGraw Hill Publishing
Townsend, A. et al. (1968) Virtual Teams: Technology and the workplace of the future. Academy
of Management Executive, 12 (3), p. 17-29
Tuckman B.W. (1965), Developmental sequence in small groups. Psychological Bulletin, 63 (6),
p. 384-399
Wertheimer, G (1999) ―Gestalt theory reconfigured‖ Max Wertheimer‘s anticipation of recent
developments in visual neuroscience
[Link] - Interpersonal Growth and Gender in Groups,
MODULE # 2, Group Dynamic
[Link]
[Link]
Sandy Pokras, Building High Performance Team (1995) Kogan Page Ltd.
G.A. Cole, Organizational Behaviour (Teamwork) (1995) DP Publications Ltd.
Brain Clegg & Paul Birch, Instant Teamwork, Motivate a Energize Your Team Now, (1998) Kogan Page
Ltd.
th
John W. Newstrom & Keith Davis, Organizational Behaviour (Readings and Exercises), 8 Edition,
McGRAW-Hill in Management
John C. Maxwell, The 17 Essential Qualities et a Team Player (2002), Thomas Nelson. Anthony
D‘Sonza, Leadership – A Trilogy on Leadership and Effective Management (1989).
Brain Clegg, Instant Negotiation (2000), Kogan Page Ltd
Peter Fleming, Negotiating the Better Deal (1997), International Thomson Business Press.
Dorothy M. Hai Organizational Behaviour – Experiences & Cases (1986), West Publishing Co.
1Steve Chalke with Penny Relph, Making a Team Work – How to Lead a Team Effectively (1995),
Kingsway Publications Eastbourne
John A. Woods, 10 Minute Guide to Teams & Teamwork (1997), MacMillan Spectrum/Alpha Books.
rd
Peg Pickering, How to Manage Conflict – Turn all Conflicts into Win-Win Outcomes (2000), 3 Edition,
Career Press, Inc.
Nicky Hayes, Successful Team Management (1997), International Thomas Business Press

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John Syer and Christopher Connolly, How Teamwork Works – The Dynamics of Effective Team
Development (1996), McGraw-Hill Publishing Company
Teamwork and high performance work organisation

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 LECTURE ELEVEN
ORGANIZATIONAL CHANGE AND DEVELOPMENT

Lecture outline
11.1 Introduction
11.2 Lecture objectives
11.3 The meaning of organizational development
11.4 Evolution of organizational development
11.5 Nature of organizational change
11.6 Theories of organizational change
11.7 The forces driving organizational change
11.8 Change management strategies
11.9 Resistance to change
11.10 Summary
11.11 Self test
11.12 Suggestions for further reading

11.1 Introduction

The concept of organizational change and development refers to organization-wide change, as

opposed to smaller changes such as adding a new person or modifying a program. In this context
managers have to be able to introduce and manage change to ensure the organizational objectives
of change are met, and they have to ensure that they gain the commitment of their people, both
during and after implementation. Whilst each change situation will be unique, there are still a
number of common themes that will help ensure that the change process stands the greatest chance
of success. Organizations must also be cognizant of their holistic nature and of the ways their
members affect one another. The incredible amount of change has forced individuals and
organizations to see ―the big picture‖ and to be aware of how events affect them and vice versa.

This lecture provides an overview of both change and organizational development. Managers,
including project managers need to be familiar with the dynamics of organizational change, since
all organizational activities, both at the individual and organizational level, are concerned with
effecting change. Organizational development and change efforts go hand-in-hand. Various
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theories and models of change will be reviewed to help us explain the dynamic nature of change
and how it can be managed in all kinds of organizations including projects.

11.2 Lecture objectives

At the end of this lecture, you should be able to:
1. Explain the meaning of organizational development
2. Outline the evolution of organizational development
3. Describe the nature of organizational change
4. Discuss the theories of organizational change
5. Identify the forces driving organizational change
6. Identify strategies to manage change
7. Discuss resistance to change

11.3 The Meaning of Organizational Development (OD)

Organizational development (OD) is a field of study that addresses change and how it affects
organizations and the individuals within those organizations. Effective organizational
development can assist organizations and individuals to cope with change. Strategies can be
developed to introduce planned change, such as team-building efforts to improve organizational
functioning. While change is a ―given,‖ there are a number of ways to deal with change.
Organizational development assists organizations in coping with the turbulent environment, both
internally and externally by introducing planned change. OD can be seen as a response to change,
a complex educational strategy intended to change the beliefs, attitudes, values, and structure of
an organization so that it can better adapt to new technologies, markets, challenges, and the rapid
rate of change itself.
Let us now look at several definitions of OD from various scholars.
―OD is an effort (1) planned (2) organization-wide and (3) managed from the top to (4)
increase organization effectiveness and health through (5) planned interventions in
organizations ―processes‖ using behavioural science knowledge‖ (Beckherd, 1969)

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Page 218 of 253
 ―OD is a process of planned change – change of an organizations culture from one which
avoids an examination of social processes (especially decision making, planning and
communication) to one which institutionalizes and legitimizes this examination‖. (Burke
& Hornstein, 1972)

―OD is a systematic application of behavioural science knowledge to planned

development and reinforcement of organizational strategies, structures and processes for
improving organizational effectiveness.‖ (Cummings & Worley, 1993)

The above definitions address various perspectives of OD. We can simply summarize OD as a
process that focuses on the human and social aspects of the organization and works to change
attitudes and relationships among employees, helping to strengthen the organization‘s capacity for
adaptation and renewal.

Egan (2002), using a card-sorting process based on all the OD definitions, identified 10 clusters of
dependent variables (or desired outcomes) contained in the definitions:
• Advance organizational renewal
• Engage organization culture change
• Enhance profitability and competitiveness
• Ensure health and well-being of organizations and employees
• Facilitate learning and development
• Improve problem solving
• Increase effectiveness
• Initiate and/or manage change
• Strengthen system and process improvement
• Support adaptation to change (p. 67)

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1.
Organizational Development addresses an entire system, such as a team, department or total
organization.
2.
Organizations are viewed as open systems with multiple levels and interrelated parts that exist in
the context of a larger environment.

3.
Change at one level of the organization—individual member, work team, or total
organization—can affect other levels.
4.
Change in one part or design feature of the organization, such as a reward system, work design,
or organization structure, can require supporting changes in other parts.
5.
OD treats change as a process, not a discrete event or end state.
6.
Organizational change involves an ongoing series of diagnostic, action planning, implementation,
Page 220
and evaluation actions that overlap and feed back on each other .

11.4 Historical development of OD

Kurt Lewin (1898–1947) is widely recognized as the founding father of OD, although he died
before the concept became current in the mid-1950s. It was Douglas McGregor and Richard
Beckhard who later coined the term organizational development (OD). The ideas of group
dynamics and action research which underpin the basic OD process came after Lewin‘s concept.
Kurt Lewin played a key role in the evolution of organization development as it is known today.
As early as World War II, Lewin experimented with a collaborative change process (involving
himself as consultant and a client group) based on a three-step process of planning, taking action,
and measuring results. This was the forerunner of action research, an important element of OD.
Lewin then participated in the beginnings of laboratory training, or T-groups (Training groups),
and after his death in 1947, his close associates helped to develop survey-research methods at the
University of Michigan. These procedures became important parts of OD as developments in this
field continued at the National Training Laboratories and in growing numbers of universities and
private consulting firms across the USA. Some Universities now offer master‘s and doctoral level
degrees in OD.

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The evolution of OD is also linked to the failure of off-site laboratory training. Laboratory training
is learning from a person's "here and now" experience as a member of an ongoing training group.
Such groups usually meet without a specific agenda. Their purpose is for the members to learn
about themselves from their spontaneous "here and now" responses to an ambiguous hypothetical
situation. The members have an opportunity to learn something about themselves and to practice
such skills as listening, observing others, and functioning as effective group members.

As formerly practiced, laboratory training was conducted in "stranger groups," or groups

composed of individuals from different organizations, situations, and backgrounds. A major
difficulty developed, however, in transferring knowledge gained from these "stranger labs" to the
actual situation "back home". This required a transfer between two different cultures, the relatively
safe and protected environment of the T-group (or training group) and the give-andtake of the
organizational environment with its traditional values. This led the early pioneers in this type of
learning to begin to apply it to "family groups" — that is, groups located within an organization.
From this shift in the locale of the training site and the realization that culture was an important
factor in influencing group members, emerged the concept of organization development. OD is a
practitioner-driven intervention for effecting organizational change

OD is a broad and complex field. Read more about it to gain a deeper

understanding

11.5 Nature of organizational change

Change is a shift or alteration in the present situation. The shift may be in the way we perceive
things or how items are organized, processed, created or maintained. Organizational change is a
process in which an organization takes new ideas or ways in a bid to become different.
Organizational-wide change may be experienced when there is a shift or alteration in various areas
which may include change in the organization‘s mission, restructuring operations ( for example,
restructuring to self-managed teams, layoffs, etc), new technologies, start up of new divisions,
changes in work ethics (for example new policies, values and expectations etc), introduction of
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new product lines or production lines, re-engineering, top management changes, tighter production
schedules and divestitures.

There are two main types of planned change namely, strategic and operational change. Strategic
change is concerned with organizational transformation. Strategic change therefore deals with
broad, long term and organization- wide issues. It is about moving to a future state, which has been
defined generally in terms of strategic vision and scope. It covers the purpose and mission of the
organization, its corporate philosophy on such matters as growth, quality, and innovation and
values concerning people, the customer needs served and the technologies employed. It takes
place within the context of the external competitive, economic and social environment and the
organization‘s internal resources, capabilities, culture, structure and systems. Operational change
relates to new systems, procedures, structures or technology which normally will have an
immediate effect on working arrangements within the organization.

The concept of organizational change is in regard to organizational-wide change rather

smaller changes. Write down some examples of organization-wide change.

Compare your answer with the following examples, change in mission, restructuring operations such as
restructuring of self-managed teams and layoffs, new technologies, mergers, major collaborations,
"rightsizing", new programs such as Total Quality Management or re-engineering.

11.6 Theories of organizational change

Much has been written on the subject of change, and various theories and models of change
proposed. Conceptions of planned change have tended to focus on how change can be implemented
in organizations. These frameworks describe the activities that must take place to initiate and carry
out successful organizational change. In this section we shall discuss some of these theories. Figure
11.1 contrasts Lewin‘s Model, the Action Model and the Positive Model.

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Lewin‟s change model Action research model The positive model

Unfreezing Problem Initiate the inquiry

Identification

Consultation with
Behavioral science expert

Movement
Consultation with
Behavioral science Inquire into best
Expert practices

Data gathering and

preliminary Diagnosis
Discover themes

Feedback to key client

or group

Refreezing
Joint Diagnosis of Envision a preferred
problem future

Joint Action
planning

Design and deliver

Action ways to create the
future

Data gathering after

action

Figure 11.1 Comparison of planned change models

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11.6.1 Lewin‟s Change Model

One of the early fundamental models of planned change was provided by Kurt Lewin in 1951.
He conceived of change as modification of those forces keeping a system‘s behaviour stable or in
equilibrium. Specifically, according to Kurt Lewin (1951) a particular set of behaviours at any
moment in time is the result of two groups of forces: those striving to maintain the status quo and
those pushing for change. When both sets of forces are about equal, current behaviours are
maintained in what Lewin termed a state of ―quasi-stationary equilibrium‖. To change that state,
one can increase those forces pushing for change and decrease those forces maintaining the current
state, or apply some combination of both. For example, the level of performance of a work group
might be stable because group norms maintaining that level are equivalent to the supervisor‘s
pressure for change to higher levels. This level can be increased either by changing the group
norms to support higher levels of performance or by increasing supervisor pressure to produce at
higher levels. Lewin suggested that modifying those forces maintaining the status quo produces
less tension and resistance than increasing forces for change.

Lewin viewed this change process as consisting of the following three steps:

Figure 11.2 Lewin‘s Process of change

Unfreezing: This step usually involves reducing those forces maintaining the organization‘s
behaviour at its present level. Unfreezing is sometimes accomplished through a process of

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―psychological disconfirmation‖. By introducing information that shows discrepancies between
behaviours desired by organization members and those behaviours currently exhibited, members
can be motivated to engage in change activities.

Transition/moving: This step shifts the behaviour of the organization, department, or individual to
a new level. It involves intervening in the system to develop new behaviours, values, and attitudes
through changes in organizational structure and processes.
Refreezing: This step stabilizes the organization at a new state of equilibrium. It is frequently
accomplished through the use of supporting mechanisms that reinforce the new organizational
state, such as organizational culture, norms, policies and structures.

Roles in the Organizational Change Process

During any organizational change process, four roles are essential to the success of the change process.
These are the change sponsor, the change agent, the change advocate, and the change participant.
a) Change Sponsor – A sponsor is the individual (or group) with the power to determine that
change will occur. They are responsible to introduce the change and legitimize it by using their
organizational power and influence to legitimize the change. In most institutions, a change
sponsor is usually performed by executive or upper administration.
b) Change Agent – An agent is the individual (or group) responsible for seeing that a previously
determined change occurs. They design and implement or help to implement the change. The
role of change agent is normally performed by middle or lower level administration.
c) Change Advocate – An advocate is the individual (or group) who want to achieve a change but
lacks the power to sanction it and require support from the appropriate sponsor who can
approve the change. Any individual within an organization who has a good idea and the ability
to communicate it can be a change advocate.
d) Change Participant – A participant is an individual (or group) who, as a result of the change,
will alter their knowledge, skills, attitudes, or behavior. These people are the focus of the
change effort and must be educated to understand the changes they are expected to
accommodate. Typically, they are part of a workgroup. In a change project, change agents assist
them in adapting to the change.

All roles act interdependently in all three states (unfreezing, transition, refreezing) of the change process,
but certain roles are more critical at specific states of a change project. Without the power
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 and influence of change sponsors to unfreeze the status quo and effectively oversee the implementation
of the change process, the likelihood of change is extremely low. Change agents demonstrate their
greatest contribution by serving as planners, diagnosticians, implementers, translators, ombudsmen,
coaches, and negotiators among sponsors and participants during the transition phase. Change
advocates help sponsors understand the implications and importance of the change. Change participants
determine whether or not the intended modification of knowledge, skill attitudes, or behavior actually
occurs during the refreezing phase.

Force Field Analysis

Kurt Lewin also developed the 'force field analysis' model (1951) which describes any current
level of performance or being as a state of equilibrium between the driving forces that encourage
upward movement and the restraining forces that discourage it. Essentially this means that a
current equilibrium exists because the forces acting for change are balanced by the forces acting
against change.

The driving forces are (usually) positive, reasonable, logical, conscious and
economic.
The restraining forces are (usually) negative, emotional, illogical,
unconscious and social/psychological.

Force field analysis is a general-purpose diagnostic and problem-solving technique. Every

behavior is the result of an equilibrium between driving and restraining forces. There are forces
that push for change (driving) and forces that hinder change (restraining). If the forces offset each
other completely, it results in equilibrium and status quo. Change is brought about by increasing
the driving forces or reducing the restraining forces.
The change process consists of:
▪ Identifying the restraining forces and overcoming/removing/getting round them.
▪ Carrying out the change.

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 ▪ Stabilizing the new situation by reinforcing the (now changed) behavior of individuals and
work groups with praise and encouragement.
Figure 11.3 illustrates the structure of a force field analysis.

Figure 11.3 Force Field Analysis

Once you have carried out an analysis, you can decide whether your project is viable. In the
example below, you might initially question whether it is worth going ahead with the plan.

Where you have already decided to carry out a project, Force Field Analysis can help you to work
out how to improve its probability of success. Here you have two choices:

• To reduce the strength of the forces opposing a project. To increase the forces pushing
a project.

Often the best solution is trying to reduce the forces opposing a project. If you had to implement
the project in the example above, the analysis might suggest a number of changes to the initial
plan:

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 • By training staff (increase cost by 1) you could eliminate fear of technology (reduce fear
by 2)
• It would be useful to show staff that change is necessary for business survival (new force
in favor, +2)
• Staff could be shown that new machines would introduce variety and interest to their jobs
(new force, +1)
• You could raise wages to reflect new productivity (cost +1, loss of overtime -2)
• Slightly different machines with filters to eliminate pollution could be installed
(environmental impact -1)

These changes would swing the balance from 11:10 (against the plan), to 8:13 (in favor of the
plan).

Imagine that you are the project manager in a large supermarket responsible for installing a
new management information system. Refer to the example in Figure 1 above and draw up a
force field analysis for the project.

11.6.2 Action Research Model

The action research model focuses on planned change as a cyclical process in which initial
research about the organization provides information to guide subsequent action. The results of
the action are assessed to provide further information to guide further action, and so on. It places
heavy emphasis on data gathering and diagnosis prior to action planning and implementation, as
well as careful evaluation of results after action is taken. A cyclical phase of planned change as
defined by the original action research model has eight steps:-
1. Problem identification: This stage usually begins when a key executive in the organization
or someone with power and influence senses that the organization has one or more
problems that might be solved with the help of an OD practitioner.
2. Consultation with a behavioral science expert: During the initial contact, the OD
practitioner and the client usually assess each other. The practitioner has his or her own
normative, developmental theory or frame of reference and must be conscious of those
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 assumptions and values. Sharing them with the client from the beginning establishes an
open and collaborative atmosphere.
3. Data gathering and preliminary diagnosis: This step is usually completed by the OD
practitioner, often in conjunction with organization members. It involves gathering
appropriate information and analyzing it to determine the underlying causes of
organizational problems. The four basic methods of gathering data are interviews, process
observation, questionnaires, and organizational performance data.
4. Feedback to a key client or group: Because action research is a collaborative activity, the
diagnostic data are fed back to the client, usually in a group or work-team meeting. The
feedback step, in which members are given the information gathered by the OP practitioner,
helps them determine the strengths and weakness of the organization or unit under study.
5. Joint diagnosis of the problem: At this point, members discuss the feedback and explore
with the OD practitioner whether they want to work on identified problems. A close
interrelationship exists among data gathering, feedback, and diagnosis because the
consultant summarizes the basic data from the client members and presents the data to
them for validation and further diagnosis
6. Joint action planning: Next, the OD practitioner and the client members jointly agree on
further actions to be taken. This is the beginning of the moving process (described in
Lewin‘s change model), as the organization decides how best to reach a different
quasistationary equilibrium. At this stage, the specific action to be taken depends on the
culture, technology, and environment of the organization.
7. Action: This stage involves the actual change from one organizational state to another. It
may include installing new methods and procedures, reorganizing structures and work
designs, and reinforcing new behaviors. Such actions typically cannot be implemented
immediately but require a transition period as the organization moves from the present to
a desired future state.
8. Data gathering after action: Because action research is a cyclical process, data must also
be gathered after the action has been taken to measure and determine the effects of the
action and to feed the results back to the organization. This, in turn, may lead to rediagnosis
and new action.

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11.6.3 The positive model
The positive model focus on what the organization is doing right. It helps members understand
their organization when it is working at its best and focuses on positive dynamics in
organizations that give rise to extraordinary outcomes. It shows that people tend to act in ways
that make their expectations occur. Thus, positive expectations about the organization can
create an anticipation that energizes and directs behavior toward making those beliefs happen.
The positive model of planned change involves five phases:-
1. Initiate the inquiry: This first phase determines the subject of change. It emphasizes
member involvement to identify the organizational issue they have the most energy to
address. For example, members can choose to look for successful male-female
collaboration (as opposed to sexual discrimination), instances of customer satisfaction (as
opposed to customer dissatisfaction), particularly effective work teams, or product
development processes that brought new ideas to market especially fast. If the focus of
inquiry is real and vital to organization members, the change process itself will take on
these positive attributes.
2. Inquire into best practices: This phase involves gathering information about the ―best of
what is‖ in the organization. For example, on organizational innovation, members can help
develop an interview protocol that collects stories of new ideas that were developed and
implemented in the organization. The interviews are conducted by organization members;
they interview each other and tell stories of innovation in which they have personally been
involved. These stories are pulled together to create a pool of information describing the
organization as an innovative system.
3. Discover the themes: Members examine the stories, both large and small, to identify a set
of themes representing the common dimensions of people‘s experiences. For example, the
stories of innovation may contain themes about how managers gave people the freedom to
explore a new idea, the support organization members received from their co-workers, or
how the exposure to customers sparked creative thinking.
4. Envision a preferred future: Members then examine the identified themes, challenge the
status quo, and describe a compelling future. Based on the organization‘s successful past,
members collectively visualize the organization‘s future and develop ―possibility

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 propositions‖- statements that bridge the organization‘s current best practices with ideal
possibilities for future organizing‖.
5. Design and Delivery: Involves the design and delivery of ways to create the future. It
describes the activities and creates the plans necessary to bring about the vision. It proceeds
to action and assessment phases similar to those of action research. Members make
changes, assess the results, make necessary adjustments so as to move the organization
toward the vision and ―sustain‖ what it will be.

11.6.4 ADKAR Change Management Model

ADKAR is a goal-oriented change management model that was initially used as a tool for
determining if change management activities like communications and training were having the
desired results during organizational change. The model has its origins in aligning traditional
change management activities to a given result or goal. ADKAR is an acronym for Awareness,
Desire, Knowledge, Ability and Reinforcement.

The goals or outcomes defined by ADKAR are sequential and cumulative. An individual must
obtain each element in sequence in order for a change to be implemented and sustained. As a
manager, you can use this model to identify gaps in your change management process and to
provide effective coaching for your employees. The ADKAR model can be used to:
• diagnose employee resistance to change
• help employees transition through the change process
• create a successful action plan for personal and professional advancement during
change
• develop a change management plan for your employees

The ADKAR model has the ability to identify why changes are not working and help you take the
necessary steps to make the change successful. You will be able to break down the change into
parts, understand where the change is failing and address that impact point.
The ADKAR model was first published by Prosci in 1998 after research with more than 300
companies undergoing major change projects. In 2006, Prosci released the first complete text on
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the ADKAR model in Jeff Hiatt's book ―ADKAR: A model for change in business, government
and our community‖. This model is intended to be a coaching tool to help employees through the
change process.

To use the ADKAR model effectively, you need to understand the underlying framework for
change initiatives. In the diagram below, change happens on two dimensions: the business
dimension (vertical axis) and the people dimension (horizontal axis). Successful change happens
when both dimensions of change occur simultaneously.

Figure 11.5 Dimensions of Change

Business dimension of change
The business dimension of change includes the typical project elements.
• Business need or opportunity is identified.
• Project is defined (scope and objectives).
• Business solution is designed (new processes, systems and organizational structure).
• New processes and systems are developed.
• Solution is implemented into the organization.
These are the standard elements of a business change that managers feel most comfortable
managing.

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 People dimension of change
Research shows that problems with the people dimension of change are the most commonly cited
reason for project failures. In a study with 248 companies, effective change management with
employees was listed as one of the top-three overall success factors for the project. Helping
managers be effective sponsors of change was considered the most critical success factor overall.

The ADKAR Model – An Example.

If you are an employee in an organization undergoing change, your reaction to the

change and how you are viewed by the organization will be directly affected by
each of the five elements in the ADKAR model.
Take for example the implementation of a new software tool. If the change is
implemented and you believe it was not needed (i.e., you were not aware that any changes were
required), then your reaction might be:
▪ ―Why change if it was working just fine before?‖
▪ ―This is a waste of time.‖
▪ ―If it is not broken, don not fix it.‖
▪ ―They never tell us what‘s going on!‖
Our natural reaction to change, even in the best circumstances, is to resist. Awareness of the
business need to change is a critical ingredient of any change and must come first.
If someone had taken the time to explain that the old software would no longer be supported by the
vendor, and that new software was necessary to meet the needs of your customers, then your
reaction (based on this awareness) would likely be very different:
▪ ―How soon will this happen?‖
▪ ―How will this impact on me?‖
▪ ―Will I receive new training?‖
Take this same example one step further. Assume you were made aware that a change was
required, but you had no desire to participate or support the change.
▪ ―What‘s in it for me?‖
▪ ―I doubt they are really serious about this.‖
Now the tables are turned, and you may become the target of an emotional response from individuals
within the organization. You may be labelled as difficult, inflexible or unsupportive.
Some may say you lack initiative or vision. You may be called a cynic or pessimist.

The power of the ADKAR model is that it creates focus on the root cause of failure. When change
is approached using this model, you can immediately identify where the process is breaking down

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and which elements are being overlooked. This avoids generic conversations about the change that
rarely produces actionable steps. This results-oriented approach helps focus energy on the area that
will produce the highest probability for success.

ADKAR can help to plan effectively for a new change or diagnose why a current change is failing.
In some cases, corrective action can be taken and the change successfully implemented.

11.6.5 Mckinsey 7s Model

This model was developed in the 1980's by Robert Waterman, Tom Peters and Julien Philips whilst
working for McKinsey and originally presented in their article ―Structure is not Organization".
To quote them:
"Intellectually all managers and consultants know that much more goes on in the process
of organizing than the charts, boxes, dotted lines, position descriptions, and matrices can
possibly depict. But all too often we behave as though we didn‘t know it - if we want
change we change the structure. Diagnosing and solving organizational problems means
looking not merely to structural reorganization for answers but to a framework that includes
structure and several related factors."

The 7S Model which they developed and presented became extensively used by managers and
consultants and is one of the cornerstones of organizational analysis.

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 Figure11.6: McKinsey ―7S‖ Model

Essentially the model says that any organization can be best described by seven interrelated
elements shown above:

Strategy: This plans for the allocation of a firm's scarce resources, over time, to reach identified
goals. Factors such as environment, competition, customers are taken into consideration.
Structure: The way the organization's units relate to each other: centralized, functional divisions
(top-down); decentralized (the trend in larger organizations); matrix, network, holding, etc.
Systems: It comprises the procedures, processes and routines that characterize how important
work is to be done: financial systems; hiring, promotion and performance appraisal systems;
information systems.
Skills: These are the distinctive capabilities of personnel or of the organization as a whole.
Staff: These are the numbers and types of personnel within the organization.
Style: This is the cultural style of the organization and how key managers behave in achieving the
organization‘s goals.
Shared Value: The interconnecting centre of McKinsey's model is: Shared Values. What the
organization stands for and what it believes in. For example: the central beliefs and attitudes.

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However the model is more than simply a list. Key Points are:
1. The top 3, strategy, structure and systems are the hard elements. The bottom 4, skills, staff,
style, and shared values are the soft elements.
2. Organizational studies initially focused on the top "hard" elements and ignored the bottom
"soft" elements.
3. The current view is to focus on all 7, accepting that for each business or enterprise, two or
three will be the VITAL ones.
4. The key point is that all the elements are all inter-dependent. Changes in one will have
repercussions on the others. Thus, introduction of new systems will certainly affect skills,
and may well affect structure, style and staff. It could even have an impact on strategy.
Similar repercussions occur with decentralization.
5. If you just try to change one element on its own, the other element may well resist the
change and try to maintain the status quo.
6. In this sense, any change in organization is best seen as a shift in the whole picture.

11.6.6 Kotter's 8-Step Change Model

John Kotter, a professor at Harvard Business School and world-renowned change expert,
introduced his eight-step change process in his 1995 book, "Leading Change." We shall now look
at his eight steps for leading change.

Step One: Create Urgency

For change to happen, it helps if the whole organization really wants it. As a manager, develop a
sense of urgency around the need for change. This may help you spark the initial motivation to get
things moving. He emphasizes the importance of open, honest and convincing dialogue about
what's happening in the marketplace and with your competition. If many people start talking about
the change you propose, the urgency can build and feed on itself.
Here are some strategies that managers can use:
• Identify potential threats, and develop scenarios showing what could happen in the future.
• Examine opportunities that should be, or could be, exploited.
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 • Start honest discussions, and give dynamic and convincing reasons to get people talking
and thinking.
• Request support from customers, outside stakeholders and industry people to strengthen
your argument.

Kotter suggests that for change to be successful, 75% of a company's

management needs to "buy into" the change. In other words, you have to really work
hard on Step One, and spend significant time and energy building urgency, before
moving onto the next steps. Don't panic and jump in too fast because you don't want to
risk further short-term losses - if you act without proper preparation, you could be in for
a very bumpy ride.

Step Two: Form a Powerful Coalition

To achieve a powerful coalition, the change agent must convince people that change is necessary.
This takes strong leadership and visible support from key people within your organization. The
manager needs to bring together a coalition, or team, of influential people whose power comes
from a variety of sources, including job title, status, expertise, and political importance. Once
formed, the "change coalition" needs to work as a team, continuing to build urgency and
momentum around the need for change.
A manager can do the following to succeed:
• Identify the true leaders in your organization.
• Ask for an emotional commitment from these key people.
• Work on team building within your change coalition.
• Check your team for weak areas, and ensure that you have a good mix of people from
different departments and different levels within your company.

Step Three: Create a Vision for Change

When you first start thinking about change, there will probably be many great ideas and solutions
floating around. Link these concepts to an overall vision that people can grasp easily and
remember.

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A clear vision can help everyone understand why you're asking them to do something. When
people see for themselves what you're trying to achieve, then the directives they're given tend to
make more sense.
What you can do:
• Determine the values that are central to the change.
• Develop a short summary (one or two sentences) that captures what you "see" as the future
of your organization.
• Create a strategy to execute that vision.
• Ensure that your change coalition can describe the vision in five minutes or less.
• Practice your "vision speech" often.

Step Four: Communicate the Vision

What you do with your vision after you create it will determine your success. Your message will
probably have strong competition from other day-to-day communications within the company, so
you need to communicate it frequently and powerfully, and embed it within everything that you
do. Use the vision daily to make decisions and solve problems. When you keep it fresh on
everyone's minds, they'll remember it and respond to it.
It is also important to "walk the talk." What you do is far more important - and believable - than
what you say. Demonstrate the kind of behavior that you want from others.
What you can do:
• Talk often about your change vision.
• Openly and honestly address peoples' concerns and anxieties.
• Apply your vision to all aspects of operations - from training to performance reviews. Tie
everything back to the vision.
• Lead by example.

Step Five: Remove Obstacles

You also need to establish if anyone is resisting the change and identify the processes or structures
that are inhibiting the change. Put in place the structure for change, and continually check for
barriers to it. Removing obstacles can empower the people you need to execute your vision, and it
can help the change move forward.
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What you can do:
• Identify, or hire, change leaders whose main roles are to deliver the change.
• Look at your organizational structure, job descriptions, and performance and compensation
systems to ensure they're in line with your vision.
• Recognize and reward people for making change happen.
• Identify people who are resisting the change, and help them see what's needed.
• Take action to quickly remove barriers (human or otherwise).

Step Six: Create Short-term Wins

You have probably heard the saying that ‗nothing motivates more than success‘. Give your
company a taste of victory early in the change process. Within a short time frame (this could be a
month or a year, depending on the type of change), give results that your staff can see. Without
short term results, critics and negative thinkers might hurt your progress. It is necessary therefore
to create short-term targets - not just one long-term goal. The idea is to set a smaller achievable
target, with little room for failure. The change team has to work on these targets, but remember
each "win" that you produce can further motivate the entire staff.
What you can do:
• Look for sure-fire projects that you can implement without help from any strong critics of
the change.
• Don't choose early targets that are expensive. You want to be able to justify the investment
in each project.
• Thoroughly analyze the potential pros and cons of your targets. If you don't succeed with
an early goal, it can hurt your entire change initiative.
• Reward the people who help you meet the targets.

Step Seven: Build on the Change

Kotter argues that many change projects fail because victory is declared too early. Real change
runs deep. Quick wins are only the beginning of what needs to be done to achieve long-term
change.

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Launching one new product using a new system is great. But if you can launch 10 products, that
means the new system is working. To reach that 10th success, you need to keep looking for
improvements.
Each success provides an opportunity to build on what went right and identify what you can
improve.
What you can do:
• After every win, analyze what went right and what needs improving.
• Set goals to continue building on the momentum you've achieved.
• Learn about kaizen, the idea of continuous improvement.
• Keep ideas fresh by bringing in new change agents and leaders for your change coalition.

Step Eight: Anchor the Changes in Corporate Culture

Finally, to make any change stick, it should become part of the core of your organization. Your
corporate culture often determines what gets done, so the values behind your vision must show in
day-to-day work. Make continuous efforts to ensure that the change is seen in every aspect of the
organization. This will help give that change a solid place in your organization's culture.
It is also important that your company's leaders continue to support the change. This includes
existing staff and new leaders who are brought in. If you lose the support of these people, you
might end up where you started.
What you can do:
• Talk about progress continuously. Tell success stories about the change process, and repeat
other stories that you hear.
• Include the change ideals and values when hiring and training new staff.
• Publicly recognize key members of your original change coalition, and make sure the rest
of the staff - new and old - remembers their contributions.
• Create plans to replace key leaders of change as they move on. This will help ensure that
their legacy is not lost or forgotten.

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11.7 Forces driving organizational change

The forces for change can be classified conveniently into two groups: external forces and
internal forces. External forces are beyond management‘s control. Internal forces operate inside
the firm and are generally within the control of management.

External forces – organizations seldom undertake significant change without a strong shock
from their environment. The external environment includes many economic, technological,
and social/political forces that can trigger the change process. Note that these environmental
triggers are necessary but not sufficient to initiate change. Change also involves managers who
are aware of the need for change and who take action. The HRM has historically been concerned
with reacting to economic forces, technology and social and political change. Some of the
forces or triggers of external change are:
1. Market Forces: These include activities and innovations of competitors and include the
need to develop new/improved products, continually develop competitive pricing policies
and provide new improved and quality services.
2. Legislation and government policies: These include environmental and employment
legislation like quota controls, equal opportunities and discrimination.
3. New Technologies: These may include new process equipment, new computer technology
or new information/data processing system.

Internal forces – Internal forces for change within the organization can usually be traced to
process and behavioral problems. The process problems include breakdowns in decision
making and communications. Decisions are not being made, are made too late, or are of poor
quality, while communications are short-circuited, redundant, or simply inadequate. Some of
the internal forces or triggers of organizational change can include:-
1. Profitability: these are changes which occur with the aim of improving the organizations
profitability, and include attitudes and skill of senior management; products or research;
improved production facilities and reduction in staff.

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 2. Takeover/mergers: This source of change seeks to improve efficiency in the use of assets
and increases profitability. These measures include economies of scale; reduced
duplication; increased market pull; and dynamic management.
3. Low performance and morale, high stress and staff turnover
4. Appointment of new senior manager‘s or top management team
5. Rapid technological advancement within the organization
6. Aging of materials and human resources
7. Change in managerial polices and styles

Think about a recent change in your organization or one that you know of.
What do you think were the major triggers of this change? Indicate if they were external,
internal or both

11.7 Strategies for managing change

Change management is a systematic approach to shifting/transitioning individuals, teams, and

organizations from a current state to a desired future state. It is an organizational process aimed at
helping employees to accept and embrace changes in their current business environment. Managers
have to device strategies for managing change. The relevance of different change strategies is that
they build upon different assumptions about human motivation and hence willingness to engage
in change at a particular point in time. These strategies are not intended to be mutually exclusive.
Rather they may each be appropriate at a different stage of a particular change process. Once the
environment is identified, an effective implementation plan can be composed.

Table 11.1 Change strategies and assumptions about human motivation

Strategy Description
People are rational and will follow their self-interest — once it is
Rational-Empirical revealed to them. Change is based on the communication of
information and the proffering of incentives.

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 People are social beings and will adhere to cultural norms and
Normative-Reductive values. Change is based on redefining and reinterpreting existing
norms and values, and developing commitments to new ones.
People are basically compliant and will generally do what they
Power-Coercive are told or can be made to do. Change is based on the exercise of
authority and the imposition of sanctions.
People oppose loss and disruption but they adapt readily to new
circumstances. Change is based on building a new organization
Environmental-Adaptive
and gradually transferring people from the old one to the new one.

Individual change initiatives are not always undertaken as part of a wider coherent change plan,
for example through considering linkages between strategy, structure and systems issues.
Therefore a change that considers a new structure but fails to establish the need to introduce new
systems to support such a structure is less likely to succeed.

Lack of effective project management and programme management disciplines can lead to
slippages in timings, in achievement of desired outcomes, in ensuring that the projects do deliver
as planned. Insufficient relevant training, for example in project management, change management
skills and leadership skills can all impact negatively on the effectiveness of any change initiative.

Poor communication has been linked to issues surrounding the effectiveness of in achieving
effective change in various ways. For example, imposed change can lead to greater employee
resistance. Lack of effective leadership has been identified as an inhibitor of effective change.

List some of the strategies you would use as a project manager to make change management
more effective?

Effective leadership is a key enabler as it provides the vision and the rationale for change. Different
styles of leadership have been identified, for example coercive, directive, consultative and
collaborative. These different styles may each be appropriate depending on the type and scale of
change being undertaken. For example, when there is a large-scale organisation-wide change, a
directive style has been identified as most effective.

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Appropriate and timely training is frequently identified as key to effective change. Examples of
training requirements might include:

• project and programme management skills to ensure change initiatives are completed both
on time and to budget
• change management skills, including communication and facilitation Leadership and
coaching.

Two-way communication with employees and their active involvement in implementation has also
been identified as a key enabler of change. Active participation is one suggested means of
overcoming resistance to change. However, research has indicated that part of the
communication/participation issue might arise from a potential mismatch between what the
employer and employee opinions are regarding levels of communication.

Finally, linking all the change agendas within an organization coherently, rather than completing
changes in isolation is vital to ensure that change effectiveness is maximised. Seven areas of
activity that make successful change happen are ('the seven c's of change'):

• Choosing a team.
• Crafting the vision and the path.
• Connecting organization-wide change.
• Consulting stakeholders.
• Communicating.
• Coping with change.
• Capturing learning.

The best approaches to address resistances are through increased and sustained communications
and education. A plan should be developed and communicated. Plans do change. That's fine, but
communicate that the plan has changed and why. Forums should be held for organization members
to express their ideas for the plan. They should be able to express their concerns and frustrations
as well.

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11.8 Resistance to change

Despite its potential positive outcomes or attributes, change is often resisted at both the individual
and the organizational level as it involves confrontation with the unknown and loss with the
familiar. Resistance to change can take many forms and it is often difficult to pinpoint the exact
reasons for the resistance. Fears may be expressed over such matters as, employment levels and
job security; loss of satisfaction; wage rate differentials; changes to social structures and working
conditions; loss of individual control over work, and greater management control.

Many people find change, or the thought of change, painful and frustrating. Hence, people resist
change because it is seen as a threat to familiar patterns of behaviour as well as to status and
financial rewards. Organizations run into some form of employee resistance when introducing any
change. Change may trigger emotional reactions because of the uncertainty involved in change. In
planning for change, therefore, it is important that management always takes resistance to change
into account. This can be done by understanding why people and organizations resist change.

Individuals resist change for various reasons and include the shock of the new. People are
suspicious of anything which they perceive will upset their established routines, methods of
working or conditions of employment. They do not want to lose the security of what is familiar to
them. They may not believe statements by management that the change is for their benefit as well
as that of the organization; sometimes with good reason. They may feel that management has
ulterior motives and sometimes the louder the protestations of management; the less they will be
believed. Let us now look at some of the reasons for resisting change:

Threatened self interests

Economic implication fears. People are likely to resist change which is perceived as
reducing either directly or indirectly their pay or other rewards, requiring an increase
in work for the same level of pay or acting as a threat to their job security. People tend
to have established patterns of working and a vested interest in maintaining the status
quo.

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Inconvenience or loss of freedom. If the change is seen as likely to, prove
inconvenient; make life more difficult; reduce freedom of action or results in increased
control then there will be resistance.
Fear of the unknown or uncertainty. Change can be worrying because of uncertainty
about its likely impact. Change which confronts people with the unknown tends to
cause anxiety or fear. Many major changes in a work organization present a degree of
uncertainty; for example, the introduction of new technology or methods of working.
A person may resist promotion because of uncertainty over changes in responsibilities
or the increased social demands of the higher position.
Symbolic fears - a small change that may affect some threatened symbol, such as a
separate office or a reserved parking space, may symbolize big ones, especially when
employees are uncertain about how extensive the program of change will be.
Competence fears — lays emphasis on the ability to cope with new demands or to
acquire new skills.
Habit. People tend to respond to situations in an established and accustomed manner.
Habits may serve as a means of comfort and security, and as a guide for easy decision-
making. Proposed changes to habits, especially if the habits are well established and
require little effort, may well be resisted. However, if there is a clearly perceived
advantage, for example a reduction in working hours without loss of pay, there is likely
to be less, if any, resistance to the change, although some people may, because of habit,
still find it difficult to adjust to the new times.
Selective perception. People's own interpretation of stimuli presents a unique picture
or image of the "real" world and can result in selective perception. This can lead to a
biased view of a particular situation, which fits most comfortably into a person's own
perception of reality, and can cause resistance to change. For example trade unionists
may have a stereotyped view of management as untrustworthy and therefore oppose
any management change; however well founded might have been the intention.
Managers exposed to different theories or ideas may tend to categorize these as
either: those they already practice and have no need to worry about or those that are of
no practical value and which can be discarded as of no concern to them.

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 Security in the past. There is a tendency for some people to find a sense of security in
the past. In times of frustration or difficulty, or when faced with new or unfamiliar ideas
or methods, people may reflect on the past. There is a wish to retain old and comfortable
ways. For example, in bureaucratic organizations, officials often tend to place faith in
well-established ('tried and trusted') procedures and cling to these as giving a feeling of
security.
Parochial self-interest. We understandably seek to protect a status quo with which we
are content and which we regard as advantageous to us in some way. Change may
threaten to move us out of our "comfort zone", away from those things which we prefer
and enjoy. We develop vested interests in the perpetuation of organization structures
and accompanying technologies. Change can mean loss of power, prestige, respect,
approval, status and security.

Misunderstanding and lack of trust - We are more likely to resist change when we do not
understand the reasoning behind it, or its nature and possible consequences. If managers have little
trust in their employees, information about change may be withheld or distorted. If employees
distrust managers on the other hand, then information about changes proposed by management
may not be believed. Incomplete and incorrect information creates uncertainty and rumour. This
has the unfortunate result of increasing perceptions of threat, increasing defensiveness, and
reducing further effective communication about the change.

Contradictory assessment - We differ in the ways in which we perceive and evaluate the costs
and benefits of change; our personal values ultimately determine which changes are welcomed,
promoted and succeed, and which ones fail. Our contradictory assessments are more likely to arise
when communication is inadequate, and where those concerned lack the relevant information.

Low tolerance for change - We differ in our abilities to cope with change, to face the unknown
and to deal with uncertainty. Change that requires people to think and behave in different ways
can challenge the individual's self concept. We each have ideas about our abilities and our
strengths. The anxiety and apprehension that they suffer may lead them to oppose even potentially

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beneficial changes. It is important to note that there are potentially as many different; reasons for
resisting change as there are individuals affected.

We have noted that resistance to change can be due to individual concerns or can
emanate from factors associated with the organization itself.

Resistance to organizational change also stems from conditions associated with organizations
themselves. Several such factors may be identified:

Structural inertia: Organizations are designed to promote stability. Thus, because jobs are
designed to have stability, it is often difficult to overcome the resistance created by the forces
that create stability, hence the structural inertia of jobs.

Work group inertia: Inertia to continue performing jobs in a specified way comes not only from
the jobs themselves but also from the social groups within which people work. Because of the
development of strong social norms within groups, potent pressures exist to perform jobs in
certain ways. Introducing change disrupts these established normative expectations, leading to
formidable resistance.

Threats to the existing balance of power: If changes are made with respect to who is in charge,
a shift in the balance of power between individuals and organizational sub-units is likely to occur.
Those units that now control the resources, have the expertise and wield the power, may fear
losing their advantageous positions resulting from any organizational change.

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Previously unsuccessful change efforts: Anyone who has lived through a past disaster
understandably may be reluctant to endure another attempt at the same thing. Similarly, groups or
entire organizations that have been unsuccessful in introducing change in the past may be cautious
about accepting further attempts.

How can resistance to change be reduced?

Since organizational change is inevitable, managers should be sensitive to the barriers to change
so that resistance can be overcome. This, of course, is easier said than done. However, several
useful approaches have been suggested, and some of the key ones are summarized here below.

a) Shape political dynamics

b) Educate the workforce
c) ‗Sell‘ the need for change
d) Involve employees in the change efforts
f) Reward constructive behaviours
g) Lead in a way that stresses the urgency of change
h) Pay careful attention to job design.
i) Acknowledge resistance
j) Create a ‗learning organization

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 11.10 Summary
Congratulations! We have now come to the end of Lecture Eleven. We discussed the concept of
organizational development and observed that it is a planned systematic process of change that
uses behavioural science knowledge and techniques to improve an organizations performance
and effectiveness by enabling it adapt to its environment and increase problem solving
capabilities. We also discussed the concept of organizational change and noted that in this era of
global competition, technological innovation, turbulence, discontinuity, even chaos, change is
inevitable and necessary. We reviewed various theories and models of change such as Kurt
Lewin‘s freeze, change and refreeze model, force field analysis, ADKER model and Kotter‘s 8
stage model. Resistance to change is a major hindrance to implementation of change. Some of
the causes are related to individual perceptions such as fear of the unknown and organizational
barriers such as job inertia and threats to existing balance of power. To overcome resistance to
change, it helps to discover the individual variables (e.g., personality) and aspects of the work
setting to which such resistance is most closely linked. Doing this makes it possible to identify
specific ways of changing people and/or changing situations so as to make them more accepting
of organizational changes.

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 11.11 Self test
To gauge if you have achieved the objectives of this lecture which we had set at the beginning,
test yourself by answering the following questions.
1. What do you understand by the term organizational development?
2. How is organizational development related to organizational change?
3. Discuss the following models of organizational change
i) Lewin‘s Change
Model ii) Action Model
iii) Positive Model
iv) ADKER Model
v) McKinsey‘s 7s Model vi) Kotter‘s 8 Stage Model
4. Using an illustration, demonstrate how you would apply the concept of force field
analysis to implement change in a department where you are the manager
5. Think about an organization you know and a specific event that led to change. Can you
identify the forces that were driving the change
6. Explain the strategies you would use to manage change in an organization

11.12 Suggestions for further reading

Argyris, C.; Schon, D. (1978), Organizational Learning: A theory of action perspective, Reading MA:
Addison-Wesley, ISBN 0201001748, [Link]
AddisonWesley-Organization-Development/dp/0201001748

Beckhard, R. (1969) Organization Development Strategies and Models, Addison – Wesley, Reading,
MA

Bennis, W. G. (1969) Organization Development: Its Nature, Origin and Prospects, Addison Wesley

Belbin R.M. (1981) Management Teams: Why They Succeed or Fail, Heinmann, London

Carter, Louis L. (2004), Best Practices in Leadership Development and Organization Change, Jossey
Bass, ISBN 0787976253, [Link]
change/dp/0787976253/ref=sr_1_1?s=books&ie=UTF8&qid=1291315169&sr=1-1

Carter McNamara. Adapted from the ―Field Guide to Consulting and Organizational Development –
Authencity Consulting,

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 Change Management Learning Centre: Prosci‘s 2009 edition of Best Practices in Change
Management, Benchmarking Report – 2009 edition, 1367 S. Garfield Ave. Loveland, CO 80537
USA.

Change Management Learning Centre: Prosci‘s Change Management Toolkit Garfield Ave.
Loveland. Overview (Revised for 2008), 1367 S., CO 80537 USA. Copyright 1997 – 2008.

Cummings, Thomas G.; Worley, Christopher G., Organization Development & Change, Thomson
South-Western, ISBN 8131502872

Donald L. Anderson. Organizational Development: The process of Leading Organizational Change.

2009.

Gary N. McLean (2005) Organization Development, Principles, Processes, Performance,

BerrettKoehler, New York

James A.F. Stoner and R. Edward Freeman. Management, 5th Edition. 1992. LLC, Experts in
Organizational Change.

Lewin, K. (1951) Field Theory in Social science, Harper & Row, New York

McShane, S.L., & Glinow, M. (2008) Organizational Behaviour: Emerging Knowledge and Practice
for The Real World. New York, NY. Mc Graw Hill.

Nonaka, I.; Takeuchi, H. (1995), The Knowledge Creating Company, New York: New York: Oxford
University Press, ISBN 0195092694, [Link]

Sullivan, Roland (2010), Practicing Organization Development: A Guide for Leading Change, Jossey
Bass, ISBN 0470405449, [Link]
D Organizational/dp/0470405449/ref=sr_1_1?ie=UTF8&qid=1291315240&sr=8-1

Rother, Mike (2009), Toyota Kata, McGraw-Hill, ISBN 0071635238,

[Link]

Senge, Peter M. (1990), The Fifth Discipline, Doubleday/Currency, ISBN 0385260946,

[Link] see also: The Fifth Discipline

Schaffer, R. H. and Thompson, H. A (1992) Successful Change Programs begin with Results,
Hansard Business Review, January - February, pp. 180 – 9

Thomas V. Mecca Basic (2004, September 25) Concepts of Organisational Change. Retrieved from
[Link]

Waterman Jr., Robert H., Peters, Thomas J., and Julien R. Phillips. 1980. "Structure is not
Organization." Business Horizons 23, no. 3: 14

Western, S. (2010), What do we mean by Organizational Development, Krakow: Krakow: Advisio

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 Press,[Link]
development,[Link]

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