Professional Master in Business Administration

Semester 1

Academic Session 2024/2025

Module:

Organizational Behaviour
 Organizational Behaviour

Chapter 1: Organizational Culture

Definition and Overview

 Organizational (Corporate) Culture: A pattern of fundamental

assumptions deemed valid, taught as the way to perceive, think, and feel
within the organization. Organizational culture shapes how members
perceive and behave.
 Purpose: Provides cohesion, aids in decision-making, reinforces values,

and controls behavior.

 Culture’s Role in Identity: Culture fosters a sense of belonging,

enhancing employee commitment and motivation. A cohesive culture
leads to higher job satisfaction and retention.

Levels of Organizational Culture

Artifacts

 Visible symbols in the work environment reflecting cultural dynamics.

 Types:

 Personal Enactment

 Ceremonies and Rites

 Stories

 Rituals

 Symbols

Values

 Espoused Values: Stated values within the organization. What the

organization claims to value.

 Enacted Values: Values reflected through observable behavior.

Reflected in actual behavior of members.

 Assessment:

 Testable in the physical environment.

 Requires social consensus for validation.

Assumptions

 Deeply ingrained beliefs directing perceptions and thought processes:

 Relationship to environment

 Nature of reality, time, and space

 Nature of human nature

 Nature of human activity

 Nature of human relationships

 Characteristics:

 Visible yet often indecipherable

 Implied, implicit understanding

Artifacts vs. Assumptions

 While artifacts are visible signs of culture, assumptions are often

unarticulated beliefs guiding behavior. Understanding both is crucial for

cultural assessment and change.

Functions of Organizational Culture

 Facilitates identity and commitment.

 Acts as a sense-making tool.

 Strengthens organizational values.

 Controls behavior without bureaucracy.

Perspectives on Culture and Performance

Strong Culture Perspective

 Characteristics:

 Goal alignment

 High motivation through shared values

 Non-oppressive control

 Benefits:

 Facilitates performance

 Condition:

 Must align with industry/firm strategy

Fit Perspective

 Culture needs alignment with:

 Customer requirements

 Competitive environment

 Societal expectations

Adaptive Perspective

 Encourages risk-taking, leadership change, and customer focus.

 Contrasts with Nonadaptive Culture: Insularity and bureaucratic behavior.

 Adaptive: Focuses on customers, encourages risk-taking, and embraces

change.
 Nonadaptive: Focused on self-interest, insular behavior.

 Adaptive vs. Nonadaptive Cultures: Organizations that adapt their

cultures to meet environmental changes tend to thrive, while insular

cultures may struggle, highlighting the need for continuous cultural

evaluation.

Managing Organizational Culture

 Key elements:

 Leaders’ attention focuses

 Leaders’ crisis reactions

 Leadership behavior

 Reward allocation

 Hiring and firing practices

 Leadership Influence: Leaders play a pivotal role in shaping and

maintaining culture through their attention, reactions, and behaviors,

which directly impact organizational climate.

Organizational Socialization

 The process by which newcomers are transformed from outsiders to

participating, effective members of the organization.

 Stages: Newcomers progress from anticipatory to mastery stages.

 Anticipatory Socialization: Learning prior to joining.

 Encounter: Role and relationship establishment. Learning job tasks

and roles after joining.

  Change & Acquisition: Mastery and mutual influence. Mastering

job demands and achieving satisfaction.

 Outcomes:

 Performance orientation

 Satisfaction

 Engagement

 Low distress levels

 Retention

 Cultural Communication:

 Role models, training, and observed behaviors communicate core

values.

 Socialization Dynamics: The process of onboarding is vital for

integrating newcomers, helping them navigate job demands and

organizational expectations, ultimately leading to improved performance.

Assessing Organizational Culture

 Organizational Culture Inventory: Focus on behavior integration. Focus

on fitting in and meeting expectations.
 Kilman - Saxton Culture - Gap Survey: Analysis of role expectations.
Focus on organizational expectations.
 Triangulation: Multi-method measurement approach. Using multiple
methods to assess culture.
Interventions for Cultural Changes

 Reasons for difficulty:

 Unconscious assumptions

 Deep cultural engraining

 Situations requiring change:

 Mergers or acquisitions

 Diverse workforce integration

 Intervention for changing organizational culture:

 Hire and socialize members fitting the new culture

 Remove members rejecting the culture

 Change behavior and its justifications.

 Cultural Change: Difficult due to deep-rooted beliefs and norms.

 Challenges of Cultural Change: Changing organizational culture is

complex due to unconscious assumptions and established norms.

Strategies must address these deeply ingrained elements for successful

transformation.

Cultural Modification Strategies

 Global Business Perspective:

 Develop a clear mission statement.

 Foster effective communication systems.

 Global career path.

 Utilizing culture differences.

 Implement management education globally.

 Ethical Culture Reinforcement:

 Recruit ethically aligned individuals.

 Reward ethical practices.

 Punish unethical actions conspicuously.

 Employee Empowerment:

 Encourage creativity and involvement in decision-making.

 Dismantle hierarchical power structures.

 Communicate and value quality service/product.

 Empowerment: Encourages creativity and quality through inclusive

decision-making.

 Empowerment and Quality: Empowering employees not only

enhances performance but also fosters a culture of accountability and

innovation, driving long-term organizational success.

Conclusion

Organizational culture is a multi-layered construct essential for defining

identity, behavior, and performance within companies. Understanding and

managing it involves strategic interventions, adaptive practices, and a focus

on core values and effective leadership.

 Organizational Behaviour

Chapter Two: Individual Differences

Introduction

Individual differences framework emphasizes the unique characteristics that

distinguish one person from another, influencing behaviors, leadership styles,

and interpersonal dynamics. Understanding individual differences is crucial in

various fields, including psychology, management, and education. Key

components include personality, leadership styles, abilities and skills,

values, environment, culture, education, parental influence, physical

environment, and heredity. This chapter explores how these factors shape

individual behavior and interactions.

Individual Characteristics

 Personality: Stable psychological characteristics that define individuals

over time and across different situations.

 Abilities and Skills:

 Ability: Natural talent, either mental or physical.

 Skill: Acquired talents developed through practice.

 Values: Long-lasting beliefs about what is worthwhile, influenced by

culture, personality, gender, and ethnicity.

 Environmental Factors: Include culture, education, and parental

influence, all contributing to individual behavior.

 Heredity: Genetic factors such as race, ethnicity, and gender also play

significant roles.
Behavioral Range

 Individuals operate within a comfort zone and a zone of discomfort,

impacting their responses and adaptability.

 Behavioral Range is influenced by individual characteristics and the

context of the situation, determining how one reacts to challenges and

opportunities.

Components of Emotional Intelligence

 Self-Awareness: Understanding one's emotions.

 Managing Emotions: Regulating emotional responses.

 Self-Motivation: The drive to achieve goals.

 Empathy: The ability to understand others' feelings.

 Interpersonal Skills: Effective communication and relationship-building.

Leadership Styles and Behaviors

 Creative Leaders exhibit:

 Perseverance: Persistence despite obstacles.

 Self-Confidence: Belief in one's abilities.

 Risk-Taking: Willingness to embrace uncertainty.

 Openness to Experience: Embracing new ideas and learning.

 Tolerance for Ambiguity: Comfort with uncertainty.

Categories of Leadership Skills

1. Technical Skills: Proficiency in specific tasks.

2. Interpersonal Skills: Ability to connect and communicate with others.

3. Conceptual Skills: Understanding and analyzing complex situations.

Social Perception

 Social Perception involves interpreting information about others,

influenced by both perceiver and target characteristics.

 Factors affecting perception:

 Perceiver Characteristics: Familiarity with the target, mood, self-

concept, and cognitive structure.

 Target Characteristics: Physical appearance, verbal communication,

nonverbal cues, and intentions.

 Situational Characteristics: Context of interaction and strength of

situational cues.

The Perception Process

 Attention: Focus on the perceived and the perceiver.

 Organization: Creating patterns and schemas.

 Comprehension: Understanding through the lens of past experiences.

Barriers to Social Perception

 Selective Perception: Focusing on specific aspects while ignoring others.

 Stereotyping: Generalizing characteristics based on group membership.

 First-Impression Error: Judging based on initial encounters.

 Implicit Personality Theory: Assuming certain traits go together.

 Self-Fulfilling Prophecies: Expectations influencing outcomes.

Personality Theories

 Trait Theory: Breaks down behavior into observable traits.

 Psychodynamic Theory: Emphasizes the role of the unconscious.

 Humanistic Theory: Focuses on individual growth and improvement.

 Integrative Approach: Views personality as a composite of various

psychological processes.

Variables Influencing Individual Behavior

 The Person: Skills & abilities, personality, perception, attribution, attitudes,

values, ethics.

 The Environment: Organizational culture, work groups, job roles,

personal life.

Interactional Psychology Approach

 Behavior is a function of both personal and environmental factors (B = f(P,

E)).

The "Big Five" Personality Dimensions

1. Conscientiousness: High achievers who manage stress well.

2. Extraversion/Introversion: Social engagement versus introspection.

3. Openness to Experience: Creativity and adaptability.

4. Emotional Stability: Coping with stress and change.

5. Agreeableness: Considerate and cooperative nature.

Characteristics of Individuals

 Internal Locus of Control: High need for control, setting challenging

goals.

 Type A Individuals: Competitive, time-urgent, and work well

independently.

 High Self-Monitors: Adapt behavior based on social cues.

Myers-Briggs Type Indicator (MBTI)

 Based on Carl Jung's theories, the MBTI categorizes personality types

based on preferences:

 Extraversion vs. Introversion: Source of energy.

 Sensing vs. Intuition: Gathering information.

 Thinking vs. Feeling: Decision-making style.

 Judging vs. Perceiving: Approach of the outerworld.

Johari Window

 Model for Self-Awareness:

1. Free Area: Known to self and others.

2. Blind Spot: Known to others, not to self.

3. Facade: Known to self, not to others.

4. Unknown: Unknown to both.

Implications of Personality Types

 Each personality type presents strengths and weaknesses in managing

situations.
 Understanding these types can enhance interpersonal dynamics and

leadership effectiveness.

Conclusion

Individual differences significantly impact behavior, leadership styles, and

interpersonal interactions. Recognizing the interplay of personality, abilities,

values, and environmental influences is essential for effective communication,

leadership, and personal development. By understanding these dynamics,

individuals can navigate their comfort zones and engage more effectively with

diverse perspectives in both personal and professional contexts. This chapter

underscores the importance of appreciating individual differences as a means

to foster collaboration and innovation in various environments.

 Organizational Behaviour

Chapter 3: Motivation – Needs, Job Design, and Satisfaction

Fundamentals of Employee Motivation

This chapter explores the fundamentals of employee motivation, including key

theories, concepts, and practical applications that influence employee

engagement and performance in the workplace.

 Definition of Motivation: Psychological processes causing arousal,

direction, and persistence of voluntary actions towards goal achievement.

 Types of Motivation:

1. Intrinsic Motivation:

 Definition: Motivation driven by internal satisfaction and positive

feelings from performing well, rather than external rewards.

2. Extrinsic Motivation:

 Definition: Motivation influenced by external factors such as

incentives, recognition, and rewards.

 Employee Engagement:

1. Definition: The harnessing of organization members' selves to their

work roles, involving physical, cognitive, and emotional investment in

work.

2. Importance: Engaged employees are more likely to perform better

and contribute positively to the organization.

 Job Characteristics Model:

1. Focuses on how specific job characteristics can enhance intrinsic

motivation and job satisfaction.

2. Key characteristics include skill variety, task identity, task significance,

autonomy, and feedback.

Theories of Motivation

1. Maslow’s Need Hierarchy Theory:

 A theory that categorizes human needs into five levels: physiological,

safety, love/belonging, esteem, and self-actualization.

 Needs emerge in a stair-step progression.

 Understanding these needs helps organizations create environments

that fulfill employee motivations.

2. McClelland’s Need Theory:

 Identifies three primary needs that motivate individuals:

 Need for Achievement: Desire to accomplish challenging tasks,

set and meet high standards, and achieve success.

 Need for Affiliation: Desire to establish and maintain social

relationships, seek approval from others, and feel a sense of

belonging within a group.

 Need for Power: Desire to have control over others, influence

their behavior, and make an impact in their environment.

Characteristics of Achievement-Motivated People

 Preference for tasks of moderate difficulty.

 Success attributed to their efforts.

 Desire for feedback.

Job Design and Motivation

 Definition: Activities altering job design to improve job satisfaction and

productivity.

Approaches to Job Design

1. Top-Down Approaches

 Scientific Management: Systematic observation for efficiency.

 Job Enlargement: Adding variety to a job (horizontal loading).

 Job Rotation: Moving employees between jobs for skill variety.

 Job Enrichment: Modifying jobs to include achievement, recognition,

and responsibility.

2. Bottom-Up Approaches

 Job Crafting: Employees redefine job roles to increase engagement.

3. Idiosyncratic Deals (I-Deals)

 Customized employment terms negotiated individually.

Job Characteristics Model

 Core Job Characteristics: Skill Variety, Task Identity, Task Significance,

Autonomy, Feedback.

 Leads to intrinsic motivation and job satisfaction.

Employee Engagement and Satisfaction

 Definition: Emotional and cognitive engagement in work roles.

 Contributors:

1. Sense of Meaningfulness: Work purpose aligns with personal values.

2. Sense of Choice: Autonomy in tasks.

3. Sense of Competence: Accomplishments at work.

4. Sense of Progress: Feeling productive and impactful.

Causes of Job Satisfaction

 Need Fulfillment: Job meets individual needs.

 Discrepancies: Satisfaction results from met expectations.

 Value Attainment: Alignment with work values.

 Equity: Fair treatment at work.

 Disposition/Genetics: Personality traits influence satisfaction.

Correlates of Job Satisfaction

 Organizational Commitment.

 Organizational Citizenship Behavior.

 Withdrawal Cognitions.

 Counterproductive Work Behaviors (CWB): Includes theft, gossip,

tardiness, and property destruction.

Practical Applications

1. Employee Surveys: Measure engagement and satisfaction.

2. Job Crafting: Empower employees to redesign roles for motivation.

3. Top-Down Redesign: Adjust job characteristics for better outcomes.

Key Discussion Questions

 Why is employee motivation critical to organizational success?

 How do job design and satisfaction influence productivity?

 What incentives and engagement practices are most effective?

Graphical Summary

 Maslow’s Hierarchy: Pyramidal structure of needs.

 Job Characteristics Model: Core job traits leading to satisfaction.

 Engagement Contributors: Visual flow linking purpose, autonomy,

competence, and progress to engagement.

 Organizational Behaviour

Chapter 4: Conflict and Negotiation

Conflict

 Definition: Conflict is a process that arises when one party perceives

that another has negatively affected or may negatively affect

something the first party cares about.

 Examples: Goal incompatibility, factual disagreements, behavioral

expectations.

Types of Conflict:

1. Task Conflict: Disagreements over the content and goals of work.

2. Relationship Conflict: Based on interpersonal relationships; usually

dysfunctional.

3. Process Conflict: Disputes over how work gets done.

Conflict Thought Transitions

1. Traditional View: All conflict is harmful and should be avoided.

2. Human Relations View: Conflict is natural and inevitable.

3. Interactionist View: Conflict can be positive and is necessary for

effective performance.

Functional vs Dysfunctional Conflict

 Functional Conflict: Supports group goals and performance.

 Dysfunctional Conflict: Hinders group performance.

Stages of Conflict

1. Stage I: Potential Opposition

 Causes: Communication issues, structural variables (e.g.,

incompatible goals), and personal differences (e.g., personality types).

2. Stage II: Cognition & Personalization

 Perceived Conflict: Awareness of conflict.

 Felt Conflict: Emotional involvement causing frustration, anxiety, or

hostility.

3. Stage III: Intentions

 Intentions are categorized as:

 Competing: Prioritizing one’s interests over others. Prioritizing

own interests.

 Collaborating: Satisfying all parties’ concerns.

 Avoiding: Withdrawing or avoiding conflict.

 Accommodating: Prioritizing opponent’s interests. Placing

others’ interests above one’s own.

 Compromising: Mutual sacrifice for resolution. Both sides give

up something.

4. Stage IV: Behavior

 Conflict Management: Conflict becomes visible. Using resolution

and stimulation techniques.

5. Stage V: Outcomes

 Functional Outcomes: Improved group performance, quality

decisions, creativity, and problem-solving.

 Dysfunctional Outcomes: Reduced group cohesiveness,

communication issues, and reduced performance.

Negotiation

 Definition: A process where parties exchange goods/services and aim to

agree on terms.

 Key Concepts:

 BATNA: Best Alternative to a Negotiated Agreement. The lowest

acceptable outcome.

Bargaining Strategies:

 Distributive Bargaining: Win-lose negotiation (fixed resources).

 Integrative Bargaining: Win-win solution (focused on mutual benefits).

Issues in Negotiation:

 Personality Traits: Minimal impact on negotiation outcomes.

 Gender Differences: Similar negotiation styles but men often achieve

slightly better outcomes.

Third-Party Negotiations

 Mediator: Neutral party facilitating solutions.

 Arbitrator: Authority to impose an agreement.

 Conciliator: Trusted intermediary for informal communication. Provides

informal communication link.

 Consultant: Conflict management expert. Facilitates creative problem-

solving.

Conflict-Handling Styles

1. Competition:

 Quick decisions, vital issues, enforcing unpopular actions.

 Quick decisions; vital for emergencies or critical issues.

2. Collaboration:

 Integrative solutions, learning, consensus-building.

 Ideal for integrative solutions and gaining consensus.

3. Avoidance:

 Trivial issues, potential disruption, cooling off.

 Use when issues are trivial or need cooling-off time.

4. Accommodation:

 Showing reasonableness, maintaining cooperation.

 Use to maintain harmony or when the issue is more important to

others.

5. Compromise:

 Balancing goals, temporary solutions, expedient under time pressure.

 Best when both parties have equal power and need quick solutions.
Quick Exam Tips

 Understand types of conflict and their impacts.

 Memorize the stages of conflict.

 Differentiate between functional and dysfunctional conflict outcomes.

 Familiarize with conflict-handling intentions and when to apply each

strategy.

 Know the negotiation strategies and BATNA concept.

 Organizational Behaviour

Chapter 5: Effective Groups and Teams

Groups vs. Teams:

 Group: Defined as two or more people interacting to achieve certain

goals or meet needs.

 Team: A subset of groups where members work intensely together

toward a specific, common goal.

 Differences from Groups:

 Teams exhibit a higher intensity of collaboration.

 Teams focus on an overriding objective.

 Teams require more effort to form and time to learn effective

collaboration.

Contributions to Performance

 Synergy in Teams:

 Collective efforts in teams can surpass the sum of individual

contributions due to:

 Sharing and refining ideas.

 Error correction through collaboration.

 Leveraging diverse expertise for complex problems.

 Tackling large-scale tasks unmanageable by individuals.

 Manager’s Role:

 Assemble teams with complementary skills for the task at hand.

Enhancing Organizational Effectiveness

 Responsiveness to Customers:

 Cross-functional teams combine skills from various departments,

helping meet complex customer needs while addressing constraints

(e.g., safety, regulations, cost).

 Innovation:

 Teams drive creative development of new solutions.

 Managers must empower and hold teams accountable for results.

 Motivation:

 Teams foster greater satisfaction by providing:

 Social interaction.

 A sense of contribution to goals.

 Stress relief through shared responsibilities.

Types of Groups and Teams

 Formal Groups:

 Created by managers to fulfill organizational goals.

 Examples:

 Cross-functional teams: Members from diverse departments.

 Cross-cultural teams: Members from different cultures or

regions.
 Informal Groups:

 Formed by employees for their own goals or social needs.

 Examples:

 Friendship groups: For socializing.

 Interest groups: Pursuing shared goals within an organization.

 Other Types:

 Top-management teams: Include the CEO and department heads.

 Research and Development teams: Focus on innovation.

 Self-managed teams: Autonomous groups handling their activities.

 Virtual teams: Utilize technology for collaboration without physical

meetings.

Group Dynamics

 Roles:

 Defined tasks expected of members.

 Clarity of roles is crucial, especially in cross-functional and self-

managed teams.

 Size:

 Small groups: Easier coordination, greater motivation, and better

communication.

 Large groups: Provide more resources but face challenges in

coordination and motivation.

 Task Interdependence:

 Pooled: Independent contributions summed up.

 Sequential: Work done in a specific order, requiring synchronization.

 Reciprocal: Mutual dependency for tasks.

Group Development Stages

1. Forming: Initial stage where members get to know each other.

2. Storming: Members may disagree on leadership or direction.

3. Norming: Relationships develop, and consensus is built.

4. Performing: The group focuses on achieving goals.

5. Adjourning: Applicable to temporary teams; involves disbanding.

Group Norms and Cohesiveness

 Norms: Shared rules guiding group behavior.

 Conformity vs. Deviance: Balanced conformity fosters performance,

while deviance introduces innovation.

 Cohesiveness: Influenced by group size, diversity, identity, and success.

Managing Performance

 Social Loafing: Tendency of individuals to reduce effort in group settings.

 Counteracting Social Loafing:

 Make individual contributions visible.

 Highlight individual value.

 Maintain optimal group size.

Tips for High-Performance Teams

 Reward team success (monetary or recognition).

 Provide necessary resources.

 Promote a collaborative environment through effective leadership.

 Organizational Behaviour

Chapter 6: Managing Occupational Stress

Understanding Stress

 Definition: Stress is an emotional or physical response triggered by

demanding circumstances or threats. It is rooted in the primitive part of the

brain designed to respond to fear.

 Key Insight: Stress often involves "what if" scenarios (future concerns)

and "I should have" reflections (past regrets).

Types of Stress

1. Eustress:

 Positive and motivating.

 Helps individuals perform better and achieve goals.

2. Distress:

 Negative and overwhelming.

 Hard to manage, often leading to adverse mental and physical

outcomes.

 Management Tip: Recognize and address stress triggers through

behavioral or attitudinal changes.

The Science of Stress

 Stress regulation involves the hypothalamus, pituitary gland, and

adrenal glands (HPA axis).

 This biological system plays a critical role in the body’s fight-or-flight

response.

Stress vs. Anxiety

 Anxiety is a normal phase in childhood but can become a concern if

persistent.

 Warning Signs:

 Panic attacks.

 Avoiding specific places or situations.

 Obsessions or compulsions.

 Persistent worry and fear.

 Re-experiencing trauma and avoiding related stimuli.

Other Mood Disorders Associated with Stress

 Major Depression: Severe and persistent low mood.

 Cyclothymia: Mild mood swings.

 Dysthymia: Chronic mild depression.

 Bipolar I and II: Extreme mood swings ranging from highs (mania) to

lows (depression).

Signs and Symptoms of Stress and Mood Disorders

 Behavioral:

 Risk-taking behaviors.

 Withdrawing from social activities.

 Neglecting personal hygiene.

 Emotional:

 Increased emotional distress causing physical symptoms (e.g.,

migraines, fatigue).

 Difficulty concentrating.

 Declining performance at work or school.

 Social:

 Isolation from family and friends.

 Changing peer groups.

 Physical:

 Sleep and eating habit changes.

Stress Management Strategies

1. Lifestyle Adjustments:

 Prioritize sleep and healthy eating.

 Avoid stimulants like caffeine.

 Incorporate exercise, relaxation, and music into daily routines.

 Use prayer or spirituality for mental grounding.

2. Effective Planning:

 Practice smarter study/work methods.

 Organize and plan tasks to avoid overwhelm.

3. Emotional Coping:

 Practice gratitude.

 Address negative thoughts actively.

How to Help Your Teen or Yourself

1. Validation: Use empathetic language to acknowledge emotions (e.g., "I

hear you saying this feels overwhelming").

2. Open-Ended Questions: Encourage expression by asking reflective and

engaging questions.

3. Involve Therapists:

 Stay in communication with professionals.

 Seek therapy as a family to address shared challenges.

4. Teach Coping Skills:

 Model stress-management techniques for children.

 Discuss personal approaches to managing stress.

Coping Steps

1. Identify Stressors:

 Determine what causes stress for you or your child.

2. Change What You Can:

 Adjust attitudes and negative thought patterns.

 Focus on gratitude while acknowledging challenges.

3. Learn to Let Go:

 Accept what cannot be changed.

4. Educate Others:

 Share your process to help others, especially children, develop their

coping mechanisms.
 Organizational Behaviour

Chapter 7: Organizational Structure

Organizational Architecture

 Organizational Architecture: Comprises organizational structure, control

systems, culture, and human resource management systems determining

efficient and effective use of resources.

 Designing Organizational Structure: Involves managers establishing

working relationships among employees to achieve organizational goals.

Designing Organizational Structure

1. Organizational Design

 Organizational Design: The process managers undertake to create

a specific type of organizational structure and culture for optimal

efficiency and effectiveness.

Factors Affecting Organizational Structure

1. Organizational Environment:

 The necessity for flexibility in structure increases with rapid

environmental changes.

 Strategies involving decentralization are needed to adapt to rapid

changes.

2. Strategy:

 Differentiation Strategy: Requires a flexible structure.

  Low-Cost Strategy: May demand a more formal structure.

 Vertical Integration/Diversification: Necessitates flexible structures.

3. Technology:

 Complex technology makes regulation challenging.

 Key Measures:

 Task Variety: Number of new problems a manager encounters.

 Task Analyzability: Availability of program solutions for problem-

solving.

4. Human Resources:

 Teams or highly skilled workers need flexible structures due to

internalized professional norms.

Organizational Choices

 Determining:

1. Task grouping into individual jobs.

2. Grouping jobs into functions and divisions.

3. Authority allocation and coordination of functions/divisions.

Job Design

 Job Design: Division of tasks into specific jobs, ensuring an effective

workforce.

 Job Simplification: Reduction of tasks, though excessive

simplification can lead to boredom.

  Job Enlargement: Increasing task variety.

 Job Enrichment:

 Empowering workers for innovation, skill development, autonomy

in work decisions, and self-monitoring of performance.

Job Characteristics Model

Job Charateristic Description

Skill Variety Employee uses a wide range of skills.

Task Identity Worker is involved in all job tasks from start to end.

Task Significance Worker feels the task is meaningful to the organization.

Autonomy Freedom in scheduling and task execution.

Feedback Direct feedback on job performance.

Grouping Jobs into Functions

 Function: A group possessing similar skills or using the same knowledge

and tools.

 Functional Structure:

 Advantages:

 Encourages job-specific learning.

 Supports activity monitoring and competitive environment

assessment.

 Disadvantages:

 Potential communication difficulties between departments.

 Risk of departmental narrowing and oversight of organizational

goals.
Divisional Structures

Types of Divisional Structures

 Product Structure:

 Organizes distinct products/businesses into self-contained divisions.

 Allows for specialization and minimizes direct supervision needs.

 Geographic Structure:

 Divisions are organized by location, often used in global operations.

 Market Structure:

 Organizes divisions by customer type, facilitating responsiveness and

flexibility.

Other Structure Types

 Matrix Structure:

 Combines functional and product-based groupings.

 Features complex reporting lines and dual authority from functional

and product managers.

 Product Team Structure:

 Emphasizes teamwork across functions for product development,

limiting dual reporting.

 Hybrid Structure:

 Utilized by large organizations with diverse divisions and multiple

structures.

,
Coordinating Functions: Allocating Authority

 Hierarchy of Authority: The chain of command specifying managerial

power.

 Span of Control: Number of subordinates reporting directly to a

manager.

 Roles:

 Line Manager: Holds direct authority over people and resources.

 Staff Manager: Specializes in functional areas, advising line

managers.

Organizational Layers

 Tall Structures: Many authority levels; potential for communication

delays and distortion.

 Flat Structures: Fewer levels, promoting fast communication but risking

manager overwork.

Centralization and Decentralization

 Decentralizing Authority: Allows lower-level decision-making, posing

risks of goal misalignment and poor inter-divisional communication.

Organizational Culture

 Organizational Culture: Shared beliefs, values, expectations, and norms

influencing interaction and cooperation.

 Strong vs. Weak Cultures:

  Adaptive Cultures: Cultures that support growth and change aligned

with goals.

 Inert Cultures: Cultures that stagnate, leading to inefficiency and

potential failure.

Sources of Culture

 Largely derived from organizational members over time, potentially

affecting their adaptability.

 Organizational Ethics: Define appropriate behavior internally and

externally.

Employment Relationship

 Impact of human resource policies on employee motivation, attachment,

and alignment with organizational values.

Centralized vs. Decentralized Structures

 Centralized Structures: Limited autonomy and a focus on tradition,

favoring stability.

 Decentralized Structures: Encourage autonomy, creativity, and risk-

taking, fostering innovation.

 Organizational Behaviour

Chapter 8: Managing Change and Organizational Learning

Forces of Change

External Forces

 Originate outside the organization.

 Include:

 Demographic characteristics

 Technological advancements

 Customer and market changes

 Social and political pressures

Internal Forces

 Originate inside the organization.

 Include:

 Low job satisfaction

 Low productivity

 Conflict

 Strikes

Example Scenario

 ABC Trucking: Turnover rate due to low job satisfaction is an Internal

force for change.

Lewin’s Change Model

1. Unfreezing

 Objective: Create motivation to change.

 Steps:

 Disconfirm the current usefulness of existing behaviors or attitudes.

2. Changing

 Provide:

 New information, behavior models, processes, procedures, equipment,

technology.

 Aim for improvement, growth, or problem resolution (e.g., poor service,

low productivity).

3. Refreezing

 Objective: Stabilize the change.

 Methods:

 Help employees integrate new behaviors into everyday routine.

 Reinforce new behaviors.

Benchmarking

 Regular performance comparison with industry leaders to learn and

improve, as seen in Fredfirst’s approach with Merrill Lynch.

A Systems Model of Change

Concept

 Systems Approach: Recognizes cascades of changes throughout the

organization.

 Encompasses:

 Mission Statement: Reason for existence.

 Vision: Describes organizational aspirations.

 Strategic Plan: Long-term direction and actions for desired outcomes.

Target Elements of Change

 Organizational arrangements

 Social factors

 Methods

 People

Applications

 Strategic Planning Aid: Guide through strategic plans.

 Diagnostic Framework: Identify and resolve organizational problems.

Steps to Leading Organizational Change

1. Establish a sense of urgency before major changes, e.g., altering

manufacturing processes.

2. Develop a vision and strategy that compellingly explains the change's

necessity.
Creating Change Through Organization Development (OD)

OD Process

 Planned changes to enhance collaborative work and living in

organizations.

OD Research and Practical Implications

 Change efforts are effective when designed for both short- and long-term.

 Success increases with top management commitment and cultural

sensitivity.

Resistance to Change

Reasons for Resistance

1. Individual predisposition toward change

2. Surprise and fear of unknown

3. Fear of failure

4. Loss of status or security

5. Peer pressure

6. Past success

7. Cultural disruption

8. Personality conflicts

9. Poor timing/tact

10. Leadership style

11. Failure to legitimize change

Example

 Jamie: Resists change on behalf of peers, indicative of peer pressure.

Overcoming Resistance to Change

Resilience and Commitment

 Resilience: High self-esteem, optimism, internal control enhance change

acceptance.

 Commitment: Adopting a course of action necessary for successful

change.

Strategies

1. Inform employees about impending changes and reasons.

2. Address concerns through meetings.

3. Facilitate discussions regarding change impacts.

Creating a Learning Organization

Concept

 Learning Organization: Actively creates, acquires, and shares

knowledge.

Key Elements

 Team mental models: Shared understanding of team environments.

 Leadership commitment to learning and idea generation.

Enhancement Techniques

 Continuous improvement programs

 External idea acquisition

 Open dialogue and increased communication

 Encouragement of risk-taking and innovation

 Promoting organizational learning by questioning and re-evaluating old

paradigms.

Case Study: Louisville Slugger - Hillerich & Bradsby

 Discussion Points

 Analyze information systems and their roles.

 Evaluate trade-offs of system reconfiguration vs. new design.

 Follow Kotter’s steps for transition facilitation.

 Investigate resistance sources and stress points.

 Develop strategies for overcoming resistance.