Organizational Behavior


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The best way to view organizational behavior is through a contingency approach.” Build an argument to support the statement”.

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Organizational Behavior

  1. 1. 1 Department of Business Administration. Assignment no.02 Organizational Behavior (565) Submitted To Most Respectable, Prof.Qasim Raza Submitted By Engr.Waseem Saeed Roll AD-512530 Semester 3’ rd ALLAMA IQBAL OPEN UNIVERSITY ISLAMABAD, PAKISTAN. Spring 2010
  2. 2. 2 DEDICATION I dedicate it to my beloved parents and respected teachers.
  3. 3. 3 ACKNOWLEDGMENT All praise and thanks is due to ALLAH, the Lord of mankind and all that exists, for His blessings, benevolence, and guidance at every stage of our life. I am deeply grateful to my course coordinator, Prof. Qasim Raza, for his guidance, support, and patience. He has been an invaluable source of knowledge and has certainly helped inspire many of the ideas expressed in this assignment. My words will fail to express my deepest heartfelt thanks to my family, especially my parents & my Cousin, for all what they did, and still doing, to help me be at this position and for their continuous support and encouragement. Any mistakes that remain are mine! I thank you all.
  4. 4. 4 The best way to view organizational behavior is through a contingency approach.” Build an argument to support the statement”.
  5. 5. 5 ABSTRACT In this case study, I extend a contingency perspective of international marketing in an exporting context by considering how internal and external forces of the firm explain adaptation of the marketing mix in export markets. The impact of marketing strategy adaptation and past performance satisfaction on current period satisfaction with performance is also considered. A survey of over 100 export managers indicates that external forces play a greater role in explaining marketing strategy adaptation than do internal forces. Moreover, satisfaction with performance improvement in the current year is affected. (i) Directly by the internal forces of the firm, (ii) Indirectly by external forces, (iii) Both directly and indirectlyby satisfaction with the preceding year’s export performance. Implications for the managementof exporting relationships alsoare discussed. The contingency approach to managementviews the organization as a set of interdependentunits operating in an open system. It differs from all other managementapproaches, though, in that it is based on the idea that every organization and situation is unique. Its situational perspective implies thatthere is no single bestway to manage. Therefore, specific techniques and managerialconcepts must be applied in different ways and in differentcombinations to achieve organizationalor departmental effectiveness.
  6. 6. 6 TOPIC OVERVIEW In very general terms, the objective of this case study is to provide a conceptual and empirical understanding ofthe structure and function of human behavior in organizations. Itry to explore behavioral influences which affect productivity, organizationaleffectiveness, and efficiency. We will look at such things as perception, motivation, decision making communication,leadership, job and organizational design,and group behavior, as well as exploring a variety ofother topics as they relate to the administrative process, including organizational power, politics, change, and development. In a general sense, the goal of this case study is to both simplify and complicate our picture of organizationalbehavior to simplify by systematizingand inter relatingsome basicideas, and to complicate by pointing out the infinite shades of gray and the multitude of interacting variables thatcan occur in a behavinghuman organization. In fact, the contingency theory has been described as a sort of amalgam of all other ideologies. Its chief contribution to modern managementtheory is its identification of critical internal and external variables thataffect managementprocesses.
  7. 7. 7 TOPIC OBJECTIVES Upon the successful completion of this case study, you will be able to understand and appreciate the systems approach as applied to human and organizational behavior. (i) Identify the role of personality and perception in affecting behavior in organizations. (ii) Criticallyexamine a number of traditional and contemporary approaches to work motivation. (iii) Increase your awareness of the potent role of groups in organizations and how they impactperformance. (iv) Review the current state of knowledge with respect to leadershipand leader behavior. (v) Examine the importantvariables in individualand groupdecision making and problem solving. (vi) Understand the pervasiveness and importance of communication in all aspects of the Organization’s functioning. (vii) Evaluate a number of differentapproaches to job and organizational design. (viii) Take a look at some contemporary issues and approaches organizational change and Development.
  8. 8. 8 TABLE OF CONTENTS Introduction 1. Contingency Approach Defined 2. Conceptual model of the contingency approach 3. Concise description of contingency theory 4. Four importantideas of Contingency Theory 5. The FunctionalistView of Contingency Theory 6. Contingency Planning 7. Essential Elements of a Contingency Plan 8. Barriers to Contingency Planning 9. Implementing a contingency plan. 10.How to Write an Effective Contingency Plan for your Organization 11.Steps for creating a contingency plan 12.Contingency Approach to Management 13.Factor Effecting on Contingency approach in organization 14.Advantages of contingency approach
  9. 9. 9 Case Study 1) Introduction of UBL 2) History 3) Our Mission & Vision 4) Services 5) Contingency Planning of UBL Bank 6) Steps for Contingency Planning 7) SWOT Analysis 8) Conclusion
  10. 10. 10 INTRODUCTION The contingency approach to managementis based on the idea that there is no one best way to manage and that to be effective, planning, organizing,leading,and controlling mustbe tailored to the particular circumstances faced by an organization. Managers have always asked questions such as  What is the rightthing to do?  Should we have a mechanisticor an organicstructure?  A functional or divisionalstructure?  Wide or narrow spans of management?  Tall or flat organizationalstructures?  Simple or complex control and coordination mechanisms?  Should we be centralizedor decentralized?  Should we use task or people oriented leadershipstyles?  What motivationalapproaches and incentive programs should we use? The contingency approach to management(alsocalled the situational approach) assumes that there is no universal answer tosuch questions because organizations, people, and situations vary and change over time. Thus, the rightthing to do depends on a complex variety of critical environmentaland internal contingencies.
  11. 11. 11 CONTINGENCYAPPROACH DEFINED:  Also sometimes called the situationalapproach.  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 differentways of managing. CONCEPTUAL MODEL OF THE CONTINGENCY APPROACH: According to this model, the formal structure of an organization defines the roles of its members in a specific way and thereby directs their behavior to a certain degree. The performance of the organization depends on the degree to which these role definitions enable members to cope with the requirements resultingfrom the context of the organization.For example if there is strong competition and a high degree of technological change, decisions about new products and marketingstrategies have to be changed frequently and be taken close to the market. A formal structure with a high degree of centralization, specialization and formalization would not fit to the requirements resulting from this situation; rather roles defined by a low degree of these structural dimensions would enable members toact in the required flexible way.
  12. 12. 12 The method to analyze and assess these kinds of relationships is the comparative quantitative analysis; in the most advanced stage a multi-level quantitative analysis, assigningdata to the level of the context, the organization and its members. These variables are operationalzedin quantitative indicators, and data are collected by standardized questionnaires distributedto several members ofeach organization under investigation and afterwards aggregatedto different However, the basicidea of the situational contingency of a particular object on its context as well as the idea that the performance of an institution depends on the fit between its properties and its relevant context is still valid and of greatheuristicvalue as it suggests the critical examination oftoo early generalizations and asks for situational differentiation.
  13. 13. 13 CONCISE DESCRIPTION OF CONTINGENCY THEORY: There are many forms of contingency theory. In a general sense, contingency theories are a class of behavioral theory that contends that there is no one best way of organizing/ leadingand thatan organizational / leadershipstyle thatis effective in some situations may not be successful in others. In other words: The optimal organization, leadershipstyle is contingent upon various internal and external constraints. Fourimportantideasof contingency theory are: 1. There is no universal or one best way to manage 2. The design of an organization and its subsystems must 'fit' with the environment 3. Effective organizations notonly have a proper 'fit' with the environmentbut alsobetween its subsystems 4. The needs of an organization are better satisfied when it is properly designed and the managementstyle is appropriate both to the tasks undertaken and the nature of the work group. There are alsocontingency theories that relate to decision making. According to these models, the effectiveness of a decision procedure depends upon a number of aspects of the situation: the importance of the decision quality and acceptance; the amount of relevantinformation possessed by the leader and subordinates;the likelihood thatsubordinates will accept an autocratic decision or cooperate in trying to make a good
  14. 14. 14 decision if allowed to participate; the amount of disagreementamong subordinates with respect to their preferred alternatives. An expanded view of contingency theory is that the structure of an organization depends on the company's technology and environmentand the effectiveness of the managementaccounting system is contingenton the organization's structure. The location of information in relation to technology and environment has an importantinfluence on organization structure. In uncertain environments with non-routine technology, information is frequently internal. Where environments are certain, or where technology is routine, information is external. The dimensions of structure and control include authority structure and activities structure, i.e., rules and procedures that determine the discretion of individuals. Authority relatesto social power. In the contingency model, decentralizedauthority is more appropriate where uncertain environments or non-routine technology exist. Centralized authority is more appropriate when environments are certain. The graphic illustration below reflects my interpretation of these theoretical concepts.
  15. 15. 15 The FunctionalistView of Contingency Theory: Contingency theories from a functionalistperspective where the assumption is that managementcontrol systems are developed, or adopted to aid in achieving desiredorganizational goals and outcomes. The appropriate managementaccounting system is contingent on the external environment, technology, organizational structure, organizational size, organizational strategy and nationalculture. The graphicbelow illustrates this functionalistperspective.
  16. 16. 16 The Importance of Contingency Plans Contingency Planning: A contingency plan is a plan devised for a specific situation when things could go wrong. Contingency plans are often devised by governments or businesses who want to be prepared for anything that could happen. Business and governmentcontingency plans need to include planning for marketing to gain stakeholdersupport and understanding. Stakeholders need to be kept informed of the reasons for any changes, the vision of the end resultand the proposed plan for getting there. The level of stakeholders' importance and influence should be considered when determiningthe amount of marketing required,the timescales for implementation and completion, and the overall effectiveness of the plan.
  17. 17. 17 If time permits, input and consultation from the most influential stakeholders should be incorporated into the building of any contingency plan as without acceptance from these people any plan will atbest encounter limited success. The goal of Contingency Planning is to mitigate business risks due to a mission critical functional failure caused, directly or indirectly, by non- complianthardware or software, vendor, package, embeddeddevice, supplier or external interface or environment. With little time left, companies must quickly solidify backupstrategies for business units and technical teams. Managementis discovering, however, thatcontingency planning is not necessarily intuitive. One financial institution describedthe process as a "tail chasing" exercise because they could not determine where various aspects of the plan began or ended. It is important, therefore, to understand how your organization can build contingency plans that are both comprehensive enough to deal with impending issues, yet practical enough to be clearly articulate and applied. Contingency planning addresses all aspects of a given year 2000 failure across an enterprise. These failures may include technology failures, power outages and the inabilityof customers to acquire products or services. Planning teams must accommodate the upward, downwardor lateral ripple effect of any failure thatof a critical business function, regardless of that failure originates.
  18. 18. 18 Contingency planning is a non-linear process that cannot be performed by a single task force or business or business unit. The planning process must rather be approached as a centrally coordinated,yethighly distributed series of facilitation exercises. In order for managementto successfully initiate a contingency planning project, they must incorporate two key sets of deliverables;the bottom-up, tactical portion of the plan and the top-down, business-driven component of the plan. The bottom-up process assesses tactical impacts of a system problem, project overrun, and data interface error or supply chain interruption. Project teams may alreadyby buildingbottom-up contingency plans to deal with localized year 2000 failures. Butbottom-up planning does not consider business-driven priorities,revenue continuity, enterprise-wide impacts or the ripple effect of a system or supply chain failure. This is where top-down planning comes into play. Top-down contingency planning deals with failures in mission critical functions and the abilityof business units to work around or contend with those failures to ensure business continuity. This process, which readies businesses for potential interruptions in ongoing operations, should be deployed across various business units, infrastructure (telecommunications, power, facilities, etc.) teams and executive committees.
  19. 19. 19 ESSENTIAL ELEMENTS OF A CONTINGENCY PLAN: The essential elements of a contingency plan include determining functional criticality, planned mitigation strategies, failure scenarios, failure probabilities, contingency losses, contingency options, contingency costs and trigger dates. Each of these planning elements should be included for each contingency that is linked to a mission critical function, system, supplier or data interface within an enterprise. Criticality analysis involvesranking the importance of a function, system, supplier or interface on a one-to-five scaling (with 5 being most critical)and buildingcontingencies for high priority items. Current mitigatingaction should be considered as a way of determiningthe likelihood ofa failure. In other words, if the currentplans to marginally test a system, the odds of a problem are likely to be high. Failure identification requiresthatbusiness unit and technical subject matter experts perform "what if" analysis on key functions, suppliers and technologies in their areas. There can be one or more failure scenarios assigned to a given business function, supplier or technology and each one of these scenarios may require a contingency plan. Once a failure scenariohas been identified, analysts can assess the likelihood or probabilityof a failure using a one-to-five scaling strategy. Once these factors have been assigned, analysts can multiply contingency failure probabilities by a functional system or supplier criticality factor as a way to prioritize contingencies. Contingency loss analysis determinedhow much a failure would ultimately cost an organization. Notall losses can be
  20. 20. 20 translated intoa cost figure, but most failures have a monetary impact. Analysts can then calculate the cost of the contingency plan and compare it to the projected contingency loss as a way to weed out plans that are not cost justifiable. The contingency plan itself outlines how a business or technical unit can mitigate the impactof a failure. Analysts mustalso assign a projected trigger date to each contingency to signify when they anticipate invoking the plan. Pre-2000 contingencies, which could include stockpiling parts or shutting down a plant, may have specific dates assigned tothem. Post-1999 plans, on the other hand, are typically invoked when a problem becomes apparent. As plans are invoked, contingency coordinators, using a relationaltrackingdatabase thatcontains the totality of all contingency plans, can record the invocation of a plan and share this data with other area within the enterprise. The importance of beginning contingency planningnow is critical because certain plans may need to be invoked before the year 2000 arrives. If you are just starting out, focus on mission critical systems, suppliers and business units as a top priority. There is no time to waste, but be judicious and avoid sidestepping essential planningrequirements.
  21. 21. 21 BARRIERS TO CONTINGENCY PLANNING: The following pitfalls have resulted in ill-timed responses to narrowly definedproblems, unusable piles of paper and the inability to successfully launch a contingency planning program. Limited businessunit participation: One of the most difficulttasks in launching a contingency planning initiative is getting the attention of business people that believe the year 2000 should by handled by technical people. The incentive that managementshould assume that when they arrive atwork on January 3, 2000 thatthey would have no access to systems personnel or to suppliers to help fix year 2000 problems.With this thought as a backdrop, business analysts can begin to craft a series of backupplans for critical business function under their domain. Overemphasison preventativeversusfuture planning: Preventative planningis a good idea, but is not the name of the game when the year 2000 arrives. Companies musthave a finely honed, integrated strategyto maintain a functioning business environmentwhen failures do occur. This means that managementwill be able to react to functional, system or supply chain failures so that those failures do not result in large-scale losses or the inability tofunction as a business entity.
  22. 22. 22 Inadequatefunding: Most organizations setaside limited funds for contingency planning in 1998 and, ifthey were reasonablyprepared, setaside additionalfunds for 1999. This means that middle managers and direct reports to the CFO and CIO will be cutting corners at a time when they can leastafford it. Contingency planning and invocation funding must be set aside now and reflect contingency requirements intoand beyond the year 2000. Considering narrowly defined year2000failure impacts: Some organizations are buildingtactical plans to fend off a system failure here or a corrupt data input there. Other companies are focusing solely on business continuity to developoptions for a business unit in crisis. The biggestrisk is that piecemeal planning, being performedby segregatedteams, does not fully reflects the breadth of contingencies that must be deployed from across an organization. Managementcan only deliver integrated contingency plans by linking tactical failures tostrategicimpacts and vice versa via a central contingency managementteam and planning repository.
  23. 23. 23 Some things you should think about when developing — and implementing — a contingency plan. 1. Whose gotyourback? If you’re working with a team, as long as you keep them well- informed, team members are often in the ideal position to take over a project for you while you’re out of commission. If you are working solo, however, you may not have identified someone to help take over your workload ata moment’s notice. Choosing this person presents some obvious challenges because, technically, the person who mightbest know how to handle the things you do is potentially alsoyour competition. You need to find someone who is experienced and savvy enough to keep projects afloatbut not necessarilysomeone who could easily replace you in the eyes of the client. The key is to pick someone you trust to best represent you and your interests. Tapinto your most solid relationships to identify this person. 2. Whatwill they do? When you are working on projects for clients, get in the habitof documenting whatyou are doing and any relevantresources, contacts and timelines. Determinewhattasks are mission critical to keep the project moving forward and the clienthappy while you’re away. Developa list of main tasks for each clientproject.
  24. 24. 24 3. How will you prepare them? You should touch base with your point person often enough to keep lines of communications open and the relationshipstrong. You may want to provide them with access to a with your listof tasks so they can familiarize themselves with the work without giving awaytoo much detail. This would be your guide and reference document if you were caught in an emergency and needed to relay directions tothem quickly. 4. How will you notify and prepare clients? When you are planning for an absence — such as a pregnancy and birth — you can communicate and prepare for your absence far enough in advance to build client confidence. But whatif you’re in a car accident? Sure, the client will tell you, “don’t worry, we’ve got it covered until you get back on your feet,” but they have their own bottom line to consider. Being able to trigger your stand-in immediatelyand letthe client know this person is “working with you” to handle things in your absence is not only a good confidence builder butcan help you hold on to the client. 5. Whatare the risks? With anything in business, there is a risk of losing business when something happens to you. Even bringing in a trusted stand-in could result in the clientdeciding to go with that person in the future instead of you. Business is all about relationships and trust. There is no way to prevent client attrition — not even with seemingly bindingcontracts. Some of the most importantaspects of business are to have open communication with
  25. 25. 25 your client and a relationshipbased on mutual respect and trust. With open communications, even difficult decisions can be made mutually and without burning bridges. 6. How will you hand offthe work? While you probably don’tneed to do an actual drill to run through the steps of handing off clientprojects to someone else during a crisis, you should clearly communicate whatthey should do and how they can access critical files and information to take over in your time of need. Thatcould include giving them access to a shared file system such as drop.ioor Drop box as needed. And what if something really badhappens — like you’re in a coma? How can they help handle things, and who in your family should they stay in touch with for updates? 7. How will you getit back? Clearly communicate how projects will be transferred back toyou when you’re ready. There may be some transitioningtime to get you back up to speed with developments, especially ifyou’ve been out of commission for a while. Realize thatthis transition could be emotional for you as you are eager to get back into the swing of things, but mightjust need some time to process everything. 8. Giving it up. In some extreme cases, you may have to make the decision to give up the client. This should be a decision discussed directly with your client to find a mutually agreeable and professional manner in which to part ways.
  26. 26. 26 The logical nextstep mightbe to give the clientwork to your stand-in or the clientmightwant to put the project up to bid again or work with someone else. The wisestthing to do in this situation is to make the decision that is best for your well-beingand the well-beingof the relationshipyouhave with the client. Keeping relationships strong and intact will work well for everyone in the long run. When you are working on your business contingency plan, put everything in writing,not just for your own reference but to make sure you are on the same page with the person who will act as your stand-in. Some may advise consulting a lawyer todraw up a contract that covers the details of the business relationshipbetween you, your stand-in and your clients. Regardless, havingthe process in writing can help to temper expectations on all sides. When I took a six-week maternity leave,I fully expected to continue to work on a reduced schedule within the first few weeks post- partum. I was taken aback to find that not only was I unable to do this, but that my doctor strongly recommended thatI take off three months to recover after a number of unexpected complications. I didn’thave a contingency plan in place and lost thousands of dollars of income. Luckily, I had excellent relationships with my clients, and all of the jobs were still there when I got back on my feet. Today, I’m even luckier to have a virtual team who can pick up the slack if anything were to happen, all of them people whom I trust implicitlyto do the rightthing.
  27. 27. 27 How to Write an Effective Contingency Plan for your Organization At first pass, your organization's contingency planningand testing seems time-consuming and non-value added. It also seems pessimistic: planning worst-case scenarios can be depressing work when most folks would rather be entering the future with a spiritof optimism. However, the very process of contingency planning can get an entire organization positivelythinking about the importance of various business systems. In a fast-paced environment, contingency planningcan lead to implementingbetter systems and processes overall. Late last century, the Y2K hysteria underscored the urgency for contingency planning. Today, mostquality driven organizations willhave a contingency plan and contingency planning process. Why? 1. You need to effectively deal with a rapidly changing business and technology environment 2. You need to understand and document the business processes that are vital to your company's business. Bottom line? An organizationalcontingency plan can reduce business risk. A solid procedure can make contingency planning a manageable and positive experience that produces a workable plan.
  28. 28. 28 STEPS FOR CREATING A CONTINGENCY PLAN First, senior staff needs to decide who the lead for contingency planning is. Usually a StrategicPlanning or Quality departmentmanageris best suited for this task. A contingency plan is a requirementfor many quality systems - you may wantto go to your Quality Departmentfor guidance on plans or processes that are alreadyin development. The company-wide contingency plan leader provides tools, skills and a knowledge base so that each departmentcan write its own contingency plans. (A common misconception is that the contingency plan leader should be writing all contingency plans. This would be near-impossible: subject matter experts closest to the system have the best working knowledge, and therefore are best suited to writing and brainstorming with their department.)The leader's key functions are to provide a common means for writing and reporting; to train; to set deadlines;to promote enthusiasm and to mentor. For example, there are many ways to write and store plans. Many templates and databases are available for an organization. The lead decides how plans are organized: Will the organization use a similarsetof folders? A database? A special network drive? The intranet?
  29. 29. 29 The company-wide lead providesthe organization with common tools and training sothat everyone is following a similarprocess that produces a standardized plan. CONTINGENCY (SITUATIONAL) APPROACH. COMPARISION WITH OTHER THEORIES Introduced in 1967, Fiedler's contingency theory was the first to specify how situational factors interactwith leader traits and behavior to influence leadershipeffectiveness. The theory suggests that the "favorability" of the situation determines the effectiveness of task- and person-oriented leader behavior. Favorabilityis determined by (1) The respect and trust that followers have for the leader; (2) The extent to which subordinates' responsibilities can be structured and performance measured; (3) The control the leader has over subordinates' rewards. The situation is most favorable when followers respect and trust the leader, the task is highly structured, and the leader has control over rewards and punishments.
  30. 30. 30 Fiedler's research indicated that task-oriented leaders were more effective when the situation was either highly favorable or highly unfavorable, butthat person-oriented leaders were more effective in the moderately favorable or unfavorable situations. The theory did not necessarily propose that leaders could adapttheir leadershipstyles to differentsituations, but that leaders with differentleadershipstyles would be more effective when placed in situations that matched their preferred style. Fiedler's contingency theory has been criticized on both conceptual and methodological grounds. However,empirical research has supported many of the specific propositions of the theory, and it remains an importantcontribution to the understanding ofleadershipeffectiveness Comparison of contingencytheory with system theory Contingency Theory SystemsTheory The contingency approach to managementis based on the idea that there is no one best way to manage and thatto be effective, planning, organizing, leading,and controlling must be tailored tothe particular circumstances faced by an organization. Managers have always A central theme of systems theory is that nonlinear relationships might exist between variables.Small changes in one variable can cause huge changes in another, and large changes in a variable mighthave only a nominal effect on another. The concept of nonlinearity adds
  31. 31. 31 asked questions such as "What is the rightthing to do? Should we have a mechanisticor an organicstructure? A functional or divisionalstructure? Wide or narrow spans of management?Tallor flat organizational structures?Simple or complex control and coordination mechanisms?Should we be centralizedor decentralized?Should we use task or people oriented leadershipstyles?What motivationalapproaches and incentive programs should we use?" The contingency approach to management(alsocalled the situational approach)assumes that there is no universal answerto 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. enormous complexity to our understandingof organizations.In fact, one of the most salient argumentagainstsystems theory is that the complexity introduced by nonlinearitymakes itdifficultor impossible to fully understand the relationships between variables Understandinghow our actions shape our reality. If I believe thatmy current state was created by somebody else, or by forces outside my control, why should I hold a vision?The central premise behind holding a vision is that somehow I can shape my future, Systems thinking helps us see how our own actions have shaped our current reality, therebygivingus confidence that we can create a differentreality in the future
  32. 32. 32 Path-goaltheory proposes that subordinates' characteristics and characteristics of the work environmentdetermine which leader behaviors will be more effective. Key characteristics ofsubordinates identifiedby the theory are locus of control, work experience, ability, and the need for affiliation. Importantenvironmentalcharacteristics named by the theory are the nature of the task, the formal authority system, and the nature of the work group. The theory includes four differentleader behaviors, which include directive leadership, supportive leadership, participative leadership, and achievement-oriented leadership.
  33. 33. 33 According to the theory, leader behavior should reduce barriers to subordinates' goal attainment, strengthen subordinates' expectancies that improved performance will lead to valued rewards, and provide coaching to make the path to payoffs easier for subordinates. Path-goaltheory suggests that the leader behaviorthatwill accomplish these tasks depends upon the subordinate and environmentalcontingency factors. Path-goal theory has been criticized because itdoes not consider interactions among the contingency factors and alsobecause of the complexity of its underlyingtheoretical model, expectancy theory. Empiricalresearch has provided some support for the theory's propositions, primarilyas they relate to directive and supportive leader behaviors. NaturalSelection or Ecology Theory: Ecology theories draw on Darwin’s theory of natural selection to explain the persistence of certain organizationalforms. Organizations whose structures are not fitted to the environmentwill not perform well and will die-out. Indeed, most new organizations fail within the first few years. Successful organizations provide models to other organizations as to what a survivalform looks like. Therefore, successful forms are imitated and become the dominantstructural type. Structures, then, are hard to change. There is a structural inertia to change that maintains the existence of structural types and limits the successful adaptation of a new form.
  34. 34. 34 Resource DependencyTheory: A problem with the ecology theory is that it may explain why existing firms tend to all look like one another – they imitate the form of successful firms – but, it offers little insightas to how a successful structure arises. The resource dependency view is that organizations adaptto environmentalresources. Organizations developa capabilityor competency to do something: 3-M makes innovative uses of adhesives and Disney is a top entertainmentfirm. Todevelopa competency the organization notonly must develop internal resources, but it is dependent upon external resources. These include labor markets, customers, suppliers, financial markets,and other stakeholders and economicfactors. This dependency has implications for how organizationalstructure. Most resource dependency theorists link structure to environmental factors. For example, under conditions of scarcity, organizations try to conserve resources by implementing greatercontrols through hierarchy, centralization, and formalization. These controls are relaxed in a prosperous environment. InstitutionalTheory: This approach is now in vogue. In many ways the institutional approach accommodates the other process theories with currentinterest in culture and “ideational” systems (the way we think about and understand the outside world). Organizations are social inventions – we make them up. The models available for this are based on our experience and whatwe teach and write aboutorganizations. Banks look the way they do because
  35. 35. 35 there is a dominant, accepted view of what a “bank” ought” to look like. Although higher learning could be configured in alternative forms, universities have historicallycome to pretty much look like one another – we have a cultural and institutional agreement on whatthey ought to look like. And, if I saw Sam’s Universityoperating from an e-mail address and website, I would know that this is not a “real”university - maybe some form of distance learning,which today is not as valued culturallyas a higher education. Institutions do change. An entrepreneur or innovator tries some new form. The new form competes with old forms for acceptance. Usually with success, and sometimes simply through perseverance, novel forms of organization dobecome institutionalized. Consider the way we organize to deliver movies: the historical institution is derived from traditionaltheater; but, in the 1950’s people would see movies seated in their cars at a drive-in movie. Today, movies are deliveredto homes via pay-per-view. The institutional perspective suggests that there may be many ways to organize but some forms are accepted, others are not. Why forms are rejected and others are accepted can be explained by social values and by the economics of organizational forms. I suspect that we see few drive-ins today because movies are made to exploit the technologies available through the theater experience (which we value) and because it is simply more efficient (less costly) to show multiple screenings in small rooms than to bear the costs of land to construct a large drive-in a city. People stopped going to drive-ins, business stopped buildingdrive-ins, and the dominantway to “correctly”
  36. 36. 36 organize a movie today is the theater. The same logicapplies to other forms of institutions and organizations Table. Comparison ofsix contingency theories Contingency Theory Leader Traits Leader Behavior Situational Variables Intervening Variables Validation Results Path-Goal Theory None Instrumental, Supportive, Participative, Achievement Many aspects Expectancies, Valences, Role Ambiguity Many Studies, some support Leadership substitutes Theory None Instrumental, Supportive Many aspects None Few Studies, inconclusive Multiple linkage model None Many aspects Many aspects Effort, ability organization, teamwork, resources, external coordination Few Studies, inconclusive LPC Contingency Model LPC None Task Structure, L- M Relations None Many studies, some support Cognitive Resource Theory Intelligence, Experience Directive Stress Group Support None Few studies, some support Normative Decision Theory None Decision Procedures Many aspects Decision Quality and acceptance Many studies, moderate support
  37. 37. 37 CONTINGENCYPERSPECTIVE AND ORGANIZATIONTHEORY Environmental change and uncertainty, work technology, and the size of a company are all identified as environmentalfactors impacting the effectiveness of differentorganizational forms. According tothe contingency perspective, stable environments suggestmechanistic structures that emphasize centralization, formalization,standardization, and specialization toachieve efficiency and consistency. Certainty and predictabilitypermitthe use of policies, rules, and procedures to guide decision making for routine tasks and problems. Unstable environments suggest organicstructures which emphasize decentralization toachieve flexibility and adaptability.Uncertaintyand unpredictabilityrequire general problem solvingmethods for no routine tasks and problems. Paul Lawrence and Jay Lorsch suggest that organizationalunits operating in differing environments developdifferentinternal unitcharacteristics, and that the greater the internal differences, the greater the need for coordination between units. Joan Woodward found that financiallysuccessful manufacturing organizations with differenttypes of work technologies (such as unit or small batch; large-batch or mass-production; or continuous-process) differed in the number of managementlevels, span of management, and the degree of worker specialization. She linked differences in organization to firm performance and suggested that certain organizationalforms were appropriate for certain types of work technologies.
  38. 38. 38 Organizationalsize is another contingency variable thoughtto impact the effectiveness of differentorganizationalforms. Small organizations can behave informallywhile largerorganizations tend to become more formalized.The owner of a small organization may directly control most things, but large organizations require more complex and indirectcontrol mechanisms. Large organizations can have more specialized staff, units, and jobs. Hence, a divisional structure is not appropriate for a small organization butmay be for a large organization.
  39. 39. 39 The situationalleadership theory: Was initiallyintroduced in 1969 and revised in 1977 by Hersey and Blanchard. The theory suggests that the key contingency factor affecting leaders' choice of leadershipstyle is the task-related maturity of the subordinates. Subordinate maturity is defined in terms of the ability of subordinates to accept responsibility for their own task-related behavior. The theory classifies leader behaviors intothe two broad classes of task- oriented and relationship-oriented behaviors. The major proposition of situational leadershiptheory is that the effectiveness of task and relationship-oriented leadershipdepends upon the maturity of a leader's subordinates. Situational leadershiptheory has been criticized on both theoretical and methodological grounds.However, itremains one of the better-known contingency theories of leadershipand offers importantinsights into the interaction between subordinate abilityand leadershipstyle Contingency Perspectiveand Leadership: Dissatisfaction with trait-basedtheories of leadershipeffectiveness led to the developmentof contingency leadershiptheories. 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 leadershipstyles. For example, Fiedler suggests thatthe 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.
  40. 40. 40 Task-oriented or relationshiporiented leadershipshould would each work if they fit the characteristics of the situation. Other contingency leadershiptheories were developed as well. However, empirical research has been mixed as to the validityof these theories Fiedler’s Contingency Theory of Leadership  Leader’s style is an enduring personal characteristic that is not easily changed o Relationship Oriented o Task Oriented  Most effective style of leadership depends on the situation o Leader-member relations o Task structure o Position power  Must match leadership style to situation Fiedler’s Contingency Theory of Leadership  Situations vary in favorability for leading o Leader-member relations (good-poor) o Task structure (high-low) o Position power (high-low)  Used Least Preferred Co-Employee Scale  Eight leadership situations (octants)
  41. 41. 41 Fiedler’s Contingency Theory of Leadership  Task-oriented leaders are most effective in very favorable or very unfavorable situations  Relationship-oriented leaders are most effective in moderately favorable situations Fiedler’s Contingency Theory of Leadership  Leaders mustbe assigned to situations in which they will be effective. If that won’t work, the situation must be changed to fit the leader.  Research provides some support for model but also suggest needs modifying Situational Leadership Model  The style of leadershipshould be matched to the readiness (a situatio nal Contingency of the followers o Telling style o Selling style o Participating style o Delegating style
  42. 42. 42 CONTINGENCY APPROACH TO CONFLICT MANAGEMENT: The approaches to conflict management are often demonstrated by a continuum of flight (moving away from the conflict) and fight (being confrontational) at the extremes. Both extremes are inappropriate with a win-lose orientation to conflict, which often lead to prolonged conflicts and negotiation for the parties involved. As the contingency approach lies somewhere between these extremes, it is seen as a more effective way to conflict resolution. The contingency approach takes the view that "one" best way of managingconflictunder all conditions does not exist, but that there are optimal ways of managing conflict under certain conditions. The contingency approach to diagnose conflicts and identified five styles of conflict management. These management styles are identified as: 1. Avoidance is often a form of flight suggesting indifference, evasion, withdrawal, or isolation. Avoidance is usually used when the issue is trivialor when the costs outweigh the benefits of resolution. 2. Compromise/sharing involves splitting the difference or giving up something to get something. This may be appropriate when the objectives are important, or when potential disruptions are likely to result from assertive behaviour.
  43. 43. 43 3. Competition frequently means a desire to win at the other's expense. It is a win-lose power struggle where the opinions and interests of others are of little concern. This is practised in situations when quick, decisive action is essential, as in emergencies or when critical issues require unpopular action, as in cost cutting. 4. Accommodation means a submission to others at one’s own expense. On occasion, it can represent generosity, while atother times; it might mean conserving energy and resources by giving up a few battles in order to win the war. This is usually when an individual wants to build good will for more important matters and/or to minimize losses when defeat is inevitable. 5. Collaborationrepresents a desire to fully satisfy the interests of both parties. It is a mutually beneficial stance based on trust and problem solving. A common practice in circumstances when both sets of concerns are so important that only an integrative solution is acceptable. The five management styles are identified to help resolve organization conflicts that usually stems from the senior management’s attempt to meet organizational demands and on the other hand, trying to balance the need to satisfy individual needs of the employees. A CEO can apply the contingency approach to conflict management as explained above within the organization when the need arises.
  44. 44. 44 The Contingency Approach BelievesThatIt Is Impossible To Select One Way of Managing That Works Best In All Situations The contingency approach believes thatit is impossible to select one way of managingthatworks best in all situations like promoted by Taylor. Their approach is to identify the conditions of a task (scientific managementschool), managerial job (administrative managementschool) and person (human relations school) as parts of a complete management situation and attempt to integrate them all into a solution which is most appropriate for a specific circumstance. Contingency refers to the immediate (contingentor touching) circumstances. The manager has to systematicallytry to identify which technique or approach will be the best solution for a problem which exists in a particular circumstance or context. An example of this is the never ending problem of increasing productivity. The differentexperts would offer the following solutions:  Behavioral scientist: create a climate which is psychologically motivating;  Classical managementapproach: create a new incentive scheme;  Contingency approach: both ideas are viable and itdepends on the possible fit of each solution with the goals, structure and resources of the organization. .
  45. 45. 45 The contingency approach may consider, for policy reasons, that an incentive scheme was not relevant. The complexity of each situation should be noted and decisions made in each individualcircumstance. CONTINGENCY APPROACH TO MANAGEMENT: The contingency approach to managementis based on the idea that there is no single bestway to manage. Contingency refers to the immediate contingent circumstances. Effective organizations musttailor their planning, organizing, leading,and controlling totheir particular circumstances. In other words, managers should identify the conditions of a task, the requirements of the managementjob, and people involved as parts of a complete managementsituation. The leaders mustthen work to integrate all these facets into a solution that is most appropriate for a specific circumstance. The contingency theory is similar to situation theory in that there is an assumption that no simple way is always right. Situation theory, however, focuses more on the behaviors thatthe leader should use. The contingency theory takes a broader view thatincludes contingent factors about leader capabilityand alsoincludes other variables within the situation.
  46. 46. 46 OB TAKES A CONTINGENCY APPROACH: Just because people can behave differently atdifferenttimes doesn’t mean, of course, that we can’t offer reasonably accurate explanations of human behavior or make valid predictions. It does mean, however, that OB must consider behavior within the context in which it occurs known as a contingency approach. So, for example, OB scholars avoid stating that effective leaders should always seek the ideas of their employees before making a decision. Rather, we may find that in some situations a participative style is clearly superior, but, in other situations, an autocratic decision style is more effective. In other words, the effectiveness of a particular leadershipstyle depends upon the situation in which it is used. The OB scholar therefore tries to describe the situations to which each style is suited. Consistent with the contingency approach, Point/Counterpoint debates are provided in each chapter. These debates are included to highlightthe fact that within OB there are disagreements.By directly addressingsome of the more controversial issues using the Point/Counterpoint format, you gain the opportunity to explore different points of view, discover how diverse perspectives complement and oppose each other, and gain insight into some of the debates currently taking place within the OB field.
  47. 47. 47 OB is a lively field and, like many disciplines,has disagreements over specific findings, methods, and theories. Some of the Point/Counterpoint arguments are more charged than others, but each makes some valid points that you should find thought provoking. The key is to be able to decipher under what conditions each argument may be rightor wrong. FACTOR EFFECTING ON CONTINGENCY APPROACH IN ORGANIZATION Organizational Design: We tend to view organizinga matter of decision-making: we decide to arrange the people, jobs, and positions that we have available to meet management’s needs. But, there are real constraints on the forms of organization available tous. Hospitals tend not to be structured like fast food restaurants, and banks are notorganized like a manufacturing plant. The task (or type of work to be done), the technology (the way we know how to do something), and our knowledge of what has worked and what does not work influence and limitour choice of organizational design. The classictheorists, Taylor, Fayol,and Weber contributed to the architectural perspective on organizations by focusing on their structural attributes: Three major contingency factors that affect organization designinclude strategy, size, and technology. Strategy affects organization designin that structure should change as an organization's strategychanges. Size affects organization designbecause as organizations grow,they tend to become
  48. 48. 48 more formalized and bureaucratic. Finally,technology affects organization design because the production process should fit with the type of organization structure in order to be effective.
  49. 49. 49 Size: Number of personnel, outputs (customers, sales), resources (wealth), or capacity provides measures of an organization’s size. But, organizations grow and the structure changes with increases in size. As organizations grow there is a greater need to regain the coordination thatcould be accomplished informally in a small group, and there is a tendency for division of labor with more and more specialists and departments. To achieve greater coordination, layers of managementmay be added to create hierarchy.As hierarchy increases power becomes difficult to concentrate at the top and there can be a distribution of power to lower managers.Decentralization can occur as lower level managers assume decision-making,butto retain some degree of standard operational procedures, the organization increasingrelies on written policies and procedures. This formalization of organizational rules helps to maintain order across the growing organization and ensures conformity and continuity in practices. Also, with growth organizations begin to divide the work into ordered units that perform specialized work. Increased specialization of work into departments is termed differentiation.The extent to which an organization is departmentalized, divisional,and hierarchicallylayered characterizes the organization’s complexity.
  50. 50. 50 Span of Control:- “How many employees can or should a manager oversee?” Thatis the issue of span of control. Span of control has interesting implications for work, how work is performed, and the organizationalstructure. A narrow span of control describes a low number of workers under a manager. The structure that is created is tall, or mechanistic. The tall pyramid structure is created by the hierarchicallayering required tomaintain a low manager-to- employee ratio. The tightsupervision inherentin the mechanisticstructure is characteristicof bureaucracy. Work is performed under tight controls, little variabilityof tasks is permitted, and there is high specialization or departmentalization. Technology/Task:- The knowledge or technology of how work is to be performed affects how we organize. Consider: If the work requires tightcontrols and can tolerate few mistakes, such as the processing of checks at a bank, the repetitive and mechanical work requires high formalization, specialization, and division of labor. If the work is creative, such as Research and Development, creativityis required and the organization is not formalized, division of labor is not clear, and decision-making is highly decentralized. Custom (small batch or job order):- Production is in small quantities or one of a kind. Because the product is novel or designed for a specific buyer or use, there is no “standard”way for manufacturer. Custom technology relies on the skill,
  51. 51. 51 craftsmanshipand ability of the worker, therefore work supervision is not helpful and there is no economy of scale. Examples include: tailored suits, private yachts, artisticcreations. Unit production/smallbatch:- Companies that make one-of-a-kind custom products or small quantities of products (e.g., ship building, aircraftmanufacture, furniture maker, tailors,printers of engraved wedding invitation, surgicalteams).  In these companies, typically, people's skills and knowledge is more importantthan the machines used.  Relativelyexpensive to operate: work process is unpredictable, hard to pre-program or automate.  Flatorganization (few levels of hierarchy).  CEO has low span of control (directreports).  Relativelylow percentage of managers  Organicstructure Mass Production (large batch):- The manufacture of products for a mass marketrequires controls to insure a standardize product. The assemblyline production can make plant costs (fixed costs) high which are spread over large production to achieve low unit costs. The skill level of a large labor force is low to keep variable costs low, but this requires tightsupervision. Managementcontrols are
  52. 52. 52 importantto ensure no variations in the making of the standardized product. Examples include:. Mass production/large batch:- Companies that sell huge volumes of identical products (e.g., cars, razor blades,aluminum cans, toasters). Make heavy use of automation and assembly lines. Typically,  Bigger than small batch  Taller hierarchies  Bottom level is huge (supervisor span of control is 48)  Relativelygreaternumber of managers (because hierarchy is so tall)  Mechanistic, bureaucraticstructure  Relativelycheapto operate Continuous(process) Production:- This technology is controlled by the manufacturing process itself and requires little worker involvement. For example, oil refining intakes continuous crude oil for transformation intopetroleum products Custom, mass production, and process technologies are in Woodward’s work “ideal”types, but are typical of certain industries. Successful firms, she found, matched their technology base with the structural type illustrated at the right. Other researchers have found similarresults to conclude that there is an inverted U relationshipbetween use of technology and structural complexity.
  53. 53. 53 Low level technology (Custom) requires an organicstructure; mass production that combines labor resources with machines requires mechanisticstructures; and, high level technology (production is dependentupon machines)is matched with an organicstructure. Continuous Production. Primarilycompanies thatrefine liquids and powders (e.g., chemical companies, oil refineries, bakeries,dairies, distilleries/breweries, electricpower plants). Machines do everything; humans just monitor the machines and plan changes.  These organizations are tall and thin or even inverted pyramid: almostnobody at the bottom  At the very top there is an organicstructure Lower levels more mechanistic, butbecause machines do everything, there is not much paper work, low level supervision, etc
  54. 54. 54 Strategy:- For most of America’s business history firm’s produced a single product for a local market. The organizational structure to support this business strategy is the functional form. This simple form is organized around a division of labor into specialized functions (or departments) that interrelate to create, deliver and manage a product. This form is often characterizedas organizing inputs for transformation into a single output. Environment:- The environmentrepresents factors outside the organization to which managementreacts, rather than “manage there is a simple correlation between environments and structure: organicstructures are found in changing or dynamicenvironments; mechanisticstructures are found in staticor stable environments. The interpretation of this relationshipis that in dynamicenvironments, such as in the software developmentindustry, organizations needs to promote creativity and interpersonal communications for problem solving. Industries, such as textile manufacturing, have staticenvironments, not much innovation and not many changes to the way the product is made, and have mechanistic structures. Tall, hierarchical structures afford the controls necessary to manufacture a product that is well understood.
  55. 55. 55 Advantagesof contingencyapproach: Contingency approachhelpsin programmed decision The contingency approach recognizes that problems can be categorized a number of different ways. Simon refers to problems on a continuum from well-structured to ill-structured (Simon 1973:181).A well- structured problem has identifiable procedures for its resolution: that is, the problem, when confronted, has a known methodology to resolve it. According to Mint berg, an ill-defined problem involves a task requiring decision processes that have not been encountered in quite the same form and for which no predetermined and explicitsetof ordered responses exists. The contingency approach led theorists to differentiate between programmeddecisions to handle well-structured problemsby providing routine and repetitive procedures and non-programmeddecisions to handle a problem requiring a unique solution. Rules and policies predominate in programmeddecisions thereby providingmanagers with a high degree of certainty aboutthe appropriateness of the solution. In contrast, non-programmed decisions bringmanagers a high degree of uncertainty and therefore risk. The problem therefore requires both qualitative and quantitative solution methodologies to reduce the risk. When a managersolves a problem in isolation the risk is higher than when a manager enrolls others to assistwith the solution. The risk may be reduced by a factor associated with the increased number of people who participate in the problem solution. This is why some managersprefer
  56. 56. 56 to solve problems in a group situation. The advantagesof group problem solving are:  More complete information  More alternatives are generated  Acceptance of solutions are increased  The legitimacy of the solution is increased. The disadvantages of group problem solving are:  Minorities can dominate (more powerful)  Pressures to conform are applied by more powerful members  Time consuming  Responsibilityfor the solution is ambiguous. The contingency approach has spawned two separate approaches to problem solving: qualitative approaches and quantitative approaches.
  57. 57. 57 THE CONTINGENCYAPPROACHTO ORGANIZATIONDESIGN. Classical views of organization design were thatthe ideal structural design was a mechanistic/bureaucraticorganization. We now recognize that the ideal organization design depends on contingency factors. A. Mechanisticand organicorganizations. Twodiverse organizational forms can be described. 1. A mechanisticorganization or bureaucracy is a structure that is high in complexity, formalization, and centralization. 2. An organicorganization or adhocracy is a structure that is low in complexity, formalization, and centralization. B. Strategy and structure. Strategy and structure are closely linked, and as strategy changes, the structure should also. C. Size and structure. There is considerable historicalevidence thatan organization's size significantly affects its structure. D.Technology and structure. Every organization uses some form of technology to transform inputs into outputs. Tworesearch studies on the relationshipbetween technology and structure have been significant. 1. Joan Woodward found that three distinct technologies had increasing levels of complexity and sophistication.
  58. 58. 58 a. Unit production describes the production of items in units or small batches. b. Mass production describes large-batch manufacturing. c. Process production describes continuous-process production. 2. Charles Perrow looked at knowledge technology rather than manufacturing technology. He proposed that technology be viewed from two dimensions. a. Task variability describes the number of exceptions individuals encounter in their work. b. Problem analyzability describes the type of search procedures employees follow in responding to exceptions. 3. What's our conclusion? We can conclude that the processes or methods that transform inputs into outputs differ by their degree of routineness.In general, the more routine the technology, the more standardized the structure can be. E. Environmentand structure. Research has shown that environment is a major influence on structure. We also know that mechanistic organizations tend to be ill-equipped to respond to rapid environmental change.
  59. 59. 59 The Top Ten Things You Need to Know About the Contingency Approach 1. The contingency approach was broughtabout in the late 1950's after thinkers who proposed that their approach was inflexible tofuture changes and challengedthe managementprinciples of Henri Fayol and Frederick Taylor. 2. Fred Fiedler, an early adaptor ofthe contingency approach suggested that leadershipstyles would vary dependingon the situations they were placed. For example the task they were given, the trust from subordinates, and the authority granted to the manager. 3. Location of an organization is going to have adverse effects on the management principles used. If a company decides to expand its reach across the county it’s going to have to change the way it manages its people and environmentfrom one location to the next. 4. Managementofan individual is alwaysgoing to be differentin terms of what their idea of growth and exceptions are for themselves. Managers will have to take that into account and then decide the proper way to lead and motive that individual. 5. Environmental uncertaintyplays a big factor in the contingency approach, with the ever-changing surroundings managementstyles must be flexible and able to adaptto things around it. Managementideas cannot be set in stone and expect to survive.
  60. 60. 60 6. A good way to look at the contingency approach is with an "if, then" attitude. Startby saying "If this is my situation, then this is the best way for me to manage it." With this sort of managementstyle youhave to rely on what you know, can figure out, and determine how to solve the problem. 7. Work place technology is ever changing and managers have to be able to adaptand respond to the changes. The way you manage a company that relies heavily on technology, such as tracking and shipping orders will not be the same as a company that uses technology as a sole purpose to send emails. 8. Diversitywith clients and employees is going to always demand differentforms of managementtechniques. Whether it is cultural or ethnicity, special care is going to be needed to manage the different individuals. 9. Size of an organization can have an effect on the way it needs to be managed.An example would be of a group of 20 people who may require an informal managementapproach, where as a group 1,000 people tend to be formal. 10. Managingfor the future demands contingency planning. Management styles have to be able to adaptto an ever-changing future. What may work now in this current economic climate may not in the future and managementphilosophies mustbe able to adjust.
  61. 61. 61 ON
  62. 62. 62 INTRODUCTION OF UBL United Bank Limited (UBL) is one of the largestcommercial banks in Pakistan having more than 1,000 branches inside the country. Its 15 branches outside the country are in the United States of America, Qatar, UAE, Bahrain, and Republicof Yemen. It also has representative offices in Tehran, Iran, and Almaty, Kazakhstan. It owns subsidiaries in the UK (United National Bank Limited), and in Zurich, Switzerland. History Agha Hasan Abedi founded the bank in 1959. In 1971 the Governmentof Pakistan nationalizedthe bank. In 2002, the Government of Pakistan sold it in an open auction to a consortium of Abu Dhabi Group and Best way Group. In 2002 the bank merged its operations in the UK with those belonging to National Bank of Pakistan to form United National Bank Limited. United Bank owns 55% of the joint-venture and National Bank of Pakistan owning the remainder. Atif Riaz Bokhari, President & CEO of UBL was brought by President General Musharraf from Bank of America. Atif is younger brother of General Asif Riaz Bukhari, a commando who is a close friend of General Musharraf.
  63. 63. 63 Our Mission: To improve the quality of life for millions Our Vision: To be the most admired Financial Institution in Pakistan Our Core Purpose: Enablingsuccess; Realizingdreams Services:-  Consumer Banking  Commercial banking  Corporate Banking  Investment  Treasury  UBL Ameen Islamic Banking Online banking UBL’s state of the art online banking, customers were able to access their account from more than 900 branches located in 150 cities across Pakistan. Transactions such as Cash Deposit, Cheque Encashment, Stop Payment, Account Statement, and Funds Transfer were done online without the need to travel to the local branch.
  64. 64. 64 CONTINGENCY PLANNING OF UBL BANK Recent volatility in the wholesale funding markets has highlighted both the importance of sound liquidity risk management practices and the fact that financial institutions can and have experienced liquidity problems even during good economic times. As a result, a bank management's ability to adequately meet daily and emergency liquidity needs while controlling liquidity risk through risk identification, monitoring, and controls is receiving increasingly intense regulatory scrutiny. To meet the new demands of liquidity risk management, UBL bank have evolved new techniques. Bank should have a formal contingency plan of policies and procedures to use as a blueprint in the event the bank is unable to fund some or all of its activities in a timely manner and at a reasonable cost. Industry experts generally agree that these crises tend to develop very rapidly. Their onset is no longer measured in days but rather hours. A comprehensive contingency funding plan can provide a useful framework for meeting both temporary and long-range liquidity disruptions. A good plan should emphasize a reliable but flexible administrative structure, realisticaction plans, ongoing communications at all levels, and a set of metrics backed by adequate management information systems. Periodic testing of contingency MIS requirements ensures the availability of timely reports for rapid decision-making.
  65. 65. 65 Steps for ContingencyPlanning The UBL has been taking the following these steps for contingency planning. 1.Examine basicinformation on and strategy for businesscontinuity measuresat each of the Bank'scomputersystems The Bank examined the following points for each section's computer systems: whether existing contingency plans are in place; - whether manual procedures are possible for performing business operations usually carried out by such systems; and general approach to continuity of business processes. 2. Coordinatecontingency plansofeach office and departmentof the UBL Individualcontingency plans drawn up by each office and departmentof the Bank are to be coordinated with those of other offices and departments as well as those of the parties outside the Bank and modified where necessary. In this process, feasibilityof the contingency plans, including that of securing the necessary staff members, is alsochecked in detail. All sections of the Bank share the results of this coordination. 3. Draw up detailed contingency action plans Each section of the Bank develops more detailed "action plans" based on business continuity measures defined in the Year 2000 contingency plan. Each section sets out step by step procedures of business continuity measures and the tasks of each staff member so that the Bank's business operations can be carried out even in Year 2000 contingencies.
  66. 66. 66 SWOT ANALYSIS Strengths:- •3rdlargest Bank of Pakistan in term of deposits • 2nd largest Privatized Bank of Pakistan •Improved operational efficiency as to its past •Courteous Customer service and fast delivery of online and offline services •Marvelous Image and Reputation of the bank in the eyes of its customers •Extensive Branch network •UBL Product positioning is very effective standard of living Weaknesses:- •No standardization in terms of branches some of the branches are very attractive and most of the branches are not very good like other branches. •In some regions, urban areas of Pakistan service of UBL is not good as compared to other privatized banks •The application time is also quite lengthy. •UBL is a step behind in using new technology as compared to other banks •All branches need orientation for customer dealing. •Most of the employees are overload with the work and promotion is also not timely. •Employees are not well dressed
  67. 67. 67 Opportunities:- •Bank can extend its network in other cities of Pakistan like other 4 remote cities, it would increase their sales. •Proper orientation of employees in all branches can help them to cope up with foreign banks •By bringing new technology and modern business processes will bring the change and increase their profitability •Call centre services should be improved to enhance their network Threats:- •Large and increasing competition •High operating costs •Lack of huge deposits
  68. 68. 68 QUESTION:- 1. How is it a best way to view organization behavior through contingency approach? 2. Best way to view organizational behavioris through a contingency approach? 3. The best way to view organizational behavioris the contingency approach? 4. Why is contingency approach the best way to view organizational behavior? 5. How does bureaucracy differ from the contingency approach to management? 6. What is the example of the Contingency Model of Human behavior? 7. The best way of view organization behavior is through contingency? 8. Distinguish between contingency approach and system approach? 9. The best way to view organizational behavioris through? 10.View of organization behavior through a contingency approach? 11.What is a contingency approach to organizationalbehavior? 12.Ways to build an organizationaltrustamongstpartners? 13.What is a Contingency approach to organization behavior? 14.What is contingency approach to leadership? 15.What is the basicapproach on human behavior? 16.What argumentsupport by Gompers’s? 17.Job Design and Contingency approach? 18.Explain the contingency approach? 19.Contingency approach and OB Model?
  69. 69. 69 Conclusion:- The contingency approach to managementis based on the idea that there is no single bestway to manage. Contingency refers to the immediate contingent circumstances. Effective organizations musttailor their planning, organizing, leading,and controlling totheir particular circumstances. In other words, managers should identify the conditions of a task, the requirements of the managementjob, and people involved as parts of a complete managementsituation. The leaders mustthen work to integrate all these facets into a solution that is most appropriate for a specific circumstance. The contingency theory is similarto situation theory in that there is an assumption that no simple way is always right. Situation theory, however, focuses more on the behaviors thatthe leader should use. The contingency theory takes a broader view thatincludes contingent factors about leader capabilityand alsoincludes other variables within the situation. Organizational behavior theories comprise a framework for understandinghow individuals and groups behave and provide a basis for research and practical application of these behaviors. OB research takes several forms, including: meta-analyses which pool the results of many other studies; field studies involving real-life situations; laboratory studies which enable researchers tointentionally manipulate variables; sample surveys or questionnaires; and case studies which provide in-depth analysis ofa single situation. The results of these research methods are
  70. 70. 70 then put to practical use in one of three ways: directapplication (instrumental use); general enlightenment(conceptual use); and verification or legitimization of extantbeliefs (symbolicuse). Symbolicuse can be detrimental ifthe research results are used to reinforce prejudice or bias. Organizationalbehavior practice occurs when people learn by doing. As is true of learning experiences in general,understandingis enhanced when OB theory and research are put into practice in organizations. Differences in communication effectiveness are a function both of type of organization and composition of work force (age, sex, education, tenure). The communication process is influenced by many internal and external constraints from the organization and its subsystems. The constraints determine the status of the organization ofthe environmental supra system and the state of each subsystem. The communication process is thus contingent upon external and internal stimuliand upon the degree of freedom of states within the system allowed by the organizational constraints. Some internal contingencies are: structural contingencies, output, and demographic, spatiotemporaland traditionalcontingencies. External contingencies are: economic, technological, legal,and environmentalcontingencies.