OB ch 4 to 9 updated.pptx

CHAPTER FOUR
MANAGEMENT OF
ORGANIZATIONAL CONFLICT
1

Definitions:
Conflict can be defined (Thomas K.A.)
as the “process that begins when one
party perceives that another party has
negatively affected something that the
first party cares about .”
2

Cont…
Austin defines conflict “as a
disagreement between two or more
individuals or groups, with each
individual or group trying to gain
acceptance of its views or objective over
others.”
3

Nature and scope of conflict
 Conflict must be perceived by either of the parties. Stiff
opposition due to incompatibility of organizational goals
characterizes it.
 Conflict can also be caused due to difference about
interpretation of facts or issues involved. Conflict takes an ugly
turn and take a form of violence due to disagreement based on
behavioral expectations.
 It could be covert or overt and can be seen when one observes
violent acts of individual in organizations.
4

Cont…
 Every organization has its objective. It is further
broken down as departmental objectives, group
goals and lastly individual goals.
 When individual interacts with another individual
there is perceptual and communication problems
that causes misunderstanding and leads to
individual conflict situation. It is also true of
groups.
5

Cont…
Conflict can be considered as expression
of hostility, negative attitude, aggression
and gross misunderstanding. It is caused
due to varying interest of individual or
groups.
 Pondy has described that the term
‘conflict’ is used in four ways to indicate:
6

Cont…
 Antecedent conditions of conflictual behavior, such as
scarcity of resources.
 Affective states of individuals involved such as stress,
tension, hostility, anxiety, etc.
 Cognitive state of individuals, that is their perception or
awareness or conflictual situations.
 Conflictual behavior, ranging from passive resistance to
overt aggression.
7

Functional and Dysfunctional
Conflict
 Not all conflict is bad. In fact, some types of conflict encourage
new solutions to problems and enhance the creativity in the
organization, in these cases, managers will want to encourage
the conflicts.
 Therefore, managers should stimulate functional conflict and
prevent or resolve dysfunctional conflict. This is the key to
conflict management.
 However, the difficulty lies in trying to tell the difference
between dysfunctional and functional conflicts. The
consequences of conflict can be positive or negative, as shown
8

Cont…
Functional conflict: is a healthy, constructive
disagreement between two or more people.
Dysfunctional conflict: is an unhealthy,
destructive disagreement between two or more
people. Its danger is that it takes the focus
away from the work to be done and places the
focus on the conflict itself and the parties
involved.
9

Cont….
 Functional Conflict:
 Conflict develops cohesiveness within the group members. A group
goal therefore becomes a priority. Individual goals are then relegated
to secondary position.
 Conflict leads to innovation and creativity, as there is competing sprit
among various groups.
 Conflict provides challenging work environment and enhances
opportunities for self-development of group that leads to formation of
group norms.
 Enhance work culture leads to up gradation of various systems within
the organization and therefore growth is achieved.
10

Cont….
Dysfunctional conflict :
 When conflict does not lead to solution. When basic goals
of the organization are neglected.
 People should be treated with due respect. If it is violated
and a climate of distrust and suspicion is created people
feel defeated and demeaned which develops antagonism
and leads to conflict.
 Conflict may lead to absenteeism and subsequently to
increased turn over if not controlled in time.
11

Cont…
 Dual management style may create hatred and
lead to dysfunctional conflict.
 Disagreement with management may be
considered as disloyalty, if this environment
prevails, an opportunity for creativity would be lost
and employees would loose interest in their job.
This would lead to increased conflicting
situations.
12

Consequences of Conflict
POSITIVECONSEQUENCES NEGATIVE CONSEQUENCES
Leads to new ideas Diverts energy from work
Stimulates creativity Threatens psychological well-
being
 Motivates change Wastes resources
Promotes organizational
vitality
Creates a negative climate
Helps individuals and groups
establish identities
Breaks down group cohesion
 Serves as a safety value to
indicate problems
Can increase hostility and
aggressive behaviors
13

Causes of Conflict in Organizations
 Conflict is pervasive in organizations. To manage it
effectively, managers should understand the many
sources of conflict. They can be classified into two
broad categories:
 Structural factors: which stem from the nature of
the organization and the way in which work is
organized and
 Personal factors: which arise from differences
among individuals.
14

Structural Factors
The causes of conflict related to the organization's
structure include:
 Specialization,
 Interdependence,
 Common resources,
15

Cont…
 Goal differences,
 Authority relationships,
 Status inconsistencies, and
 Jurisdictional ambiguities.
16

Cont…
Specialization:
 When jobs are highly specialized, employees become experts at
certain tasks. A classic conflict of specialization is one between
salespeople and engineers. Engineers are technical specialists
responsible for product design and quality. Salespeople are
marketing experts and liaisons with customers.
 Salespeople are often accused of making delivery promises to
customers that engineers cannot keep because the sales force
lacks the technical knowledge necessary to develop realistic
delivery deadlines.
17

Cont…
Interdependence:
 Work that is interdependent requires
groups or individuals to depend on one
another to accomplish goals.
Depending on other people to get work
done is fine when the process works
smoothly.
18

Cont…
Common Resources:
 Any time multiple parties must share
resources, there is potential for conflict. This
potential is enhanced when the shared
resources become scarce. One resource often
shared by managers is secretarial support. It is
not uncommon for a secretary to support ten
or more managers, each of whom believes his
or her work is most important.
19

Cont….
Goal differences :
 When work groups have different goals, these
goals may be incompatible. For example, in
one cable television Company, the
salesperson's goal was to sell as many new
installations as possible. This created problems
for the service department, because its goal
was timely installations.
20

Cont….
 Authority relationships:
 The nature of a traditional boss-employee
relationship brings to mind a vision of a hierarchy
of a boss who is superior to the employee. For
many employees, this relationship is not a
comfortable one, because another individual has
the right to tell them what to do. Some people
resent authority more than others, and obviously
this creates conflicts.
21

Cont….
Status inconsistencies :
 Some organizations have a strong status difference
between management and no management
workers. Managers may enjoy privileges such as
flexible schedules, personal telephone calls at
work, and longer lunch hours that are not available
to no management employees. This may result in
resentment and conflict.
22

Cont….
 Jurisdictional ambiguities:
 Have you ever telephoned a company with a problem and
had your call transferred through several different people
and departments? This situation illustrates jurisdictional
ambiguity that is, unclear lines of responsibility within an
organization. When a problem occurs for which there is
no definite source of responsibility, workers tend to "pass
the back," or avoid dealing with the problem. Conflicts
emerge over responsibility for the problem.
23

Personal Factors
 The causes of conflict that arise from individual
differences include:
 skills and abilities,
 personalities,
 perceptions,
 values and ethics,
 emotions and
 communication barriers.
24

cont….
Skills and abilities :
 The work force is composed of individuals
with varying levels of skills and ability.
Diversity in skills and abilities may be
positive for the organization, but it also holds
potential for conflict, especially when jobs
are interdependent.
25

Cont….
 Experienced, competent workers may find it
difficult to work alongside with new and
unskilled recruits. Workers can become
resentful when their new boss, fresh from
college, knows a lot about managing people
but is unfamiliar with the technology with
which they are working.
26

Cont…
 Personalities:
 Individuals do not leave their personalities at the
doorstep when they enter the workplace.
Personality conflicts are realities in organizations.
 To expect that you will like all of your coworkers
may be a naive expectation, as would be the
expectation that they will all like you.
27

Cont…
Perceptions:
 Differences in perception can also lead to conflict.
One area in which perceptions can differ is the
perception of what motivates employees.
 If managers and workers do not have a shared
perception of what motivates people, the reward
system can create conflicts. Managers usually
provide what they think employees want rather than
what employees really want.
28

Cont…
Values and ethics:
 Differences in values and ethics can be sources of
disagreement. Older workers, for example, value
company loyalty and probably would not take a sick
day when they were not really ill. Younger workers,
valuing mobility, like the concept of "mental health
days," or calling in sick to get away from work. This may
not be true for all workers, but it illustrates that
differences in values can lead to conflict.
29

Cont….
Emotions :
 The moods of others can be a source of conflict
in the workplace. Problems at home often spill
over into the work area, and the related moods
can be hard for others to deal with.
30

Cont…
Communication barriers:
 Communication barriers such as physical
separation and language can create distortions in
messages, and these can lead to conflict. Another
communication barrier is value judgment, in
which a listener assigns a worth to a message
before it is received.
31

Types of Conflict
 Intra-personal Conflict: Intra personal conflict is also called the
conflict within the individual. This type of conflict can be of two
types:
 Value conflict: Every individual has to play certain roles, which
conforms to his value system. However, there are certain situations
when an individual may have to compromise on value system and
beliefs.
 For example, finance manager of an organization, while submitting
tax returns to the government may conceal some facts, which may
go against his belief and value system. This situation may cause
tension and conflict within the individual. 32

Cont….
 Decision-making: Problem solving is one of the
important jobs every individual has to undertake in
work environment. Every problem has various courses
open.
 At times it is difficult for a person to select an
appropriate course of action. This situation causes
conflict within the individual. He therefore will have to
take decisions based on the past experience and the
knowledge.
33

Cont…
 Inter-personal Conflict: This relates to conflict between two or
more individuals and is probably the most common and recognized
form of conflict. Interpersonal conflict is caused due to disagreement
over goals and objectives of the organization.
 These are heightened due to difference of opinion of individuals and
when issues are not based on facts. Every organization is full of
unresolved issues, problems and differing situations that leads to
conflict. Conflict can also take place between one person of a group
with another person of the same group or another group on issues
relating to decision-making.
34

Cont….
 Intra-Group Conflict: this relates to values, status and
roles played by an individual in the group and the group
norms. Individual may want to remain in the group for
social needs but may disagree with the methods and
procedures followed by the group.
• The conflict may arise when social changes are
incorporated in the group. When group faces new
problems and when values are changed due to change
in social environment.
35

Cont…
 Intra-group conflict is like inter-personal
conflict except that the people involved in
the conflict episode belong to a common
group.
36

Cont…
 Inter-Group Conflict: Conflicts between different groups,
sections and departments are called inter-group conflict.
 For example, conflict between production and sales
departments over the quality being produced and the
customer requirements. Inter-group conflict causes due to
factors inherent to the organizational structure like
independence, inconsistency in various policy matter,
variance on promotion criteria, reward system and different
standards being adopted for different sub-units and
departments.
37

Cont…
 Inter-Organizational Conflict: this conflict takes place
between two dependent organizations. Conflict can take
place between government organization, unions and the
operating industry.
 Government organizations function to ensure that minimum
standards are followed by the organizations. Managers must
try and reduce inter-organizational conflicts by adopting
positive approach and by following strictly, the rules and
regulations laid down by the government agencies. Conflict
can also take place between seller and buyer organizations.
38

Cont…
Intra-Organizational Conflicts: this
conflict encompasses horizontal,
vertical, line–staff and role based
conflicts .
39

CONFLICT PROCESS
 Pondy developed a conflict process model, which is
useful to understand how a conflict starts. He has
delineated five steps that he calls as ‘conflict episode’
These are:
• latent conflict,
• perceived conflict,
• felt conflict
• manifest conflict,
• conflict resolution and
 conflict aftermath
40

Cont…
41
PERCEIVED
CONFLICT
FELT
CONFLICT
MANIFEST
CONFLICT
CONFLICT
RESOLUTION
LATENT
CONFLICT
CONFLICT
AFTERMATH

Cont….
 Latent Conflict:
 It is a first stage of conflict when conflict-promoting
situations appear on the scene between individuals
and groups. In this stage potential conflict inducing
forces exist.
 For example demand for various resources by
departments when some may get and be satisfied and
others may not get and be dissatisfied. Hence there
may exist a situation between two groups. At this
stage the seeds of dissatisfaction has been sown.
42

Cont….
Perceived Conflict:
 When one party frustrate the design of the
other party, people perceive that a
confluctual conditions exist.
 For example sales manager may need
additional budget for promotional activities
which financial manager may not release.
43

Cont…
Felt Conflict:
 At this stage, the conflict is actually felt
and recognized. As stated earlier, the
funds are not released by the finance
manager and the problem is being
surfaced and there is a likelihood of
confrontation.
44

Cont…
 Manifest Conflict:
 In this stage, there is not only recognition or
acknowledgement of conflict but also manifestation of conflict
by covert or overt behavior. It is a stage of open dispute. Both
parties devise their strategies to face each other.
 In the above example sales manager may make his point for
additional funds for promotional activities especially during
festival season. Finance manager may openly turn down the
request since he might have allotted additional funds for
procurement of better raw material for production department.
45

Cont…
Conflict resolution:
 The stage where the conflict is
resolved.
46

Cont…
Conflict Aftermath:
 Once the conflict is resolved between the two
parties, there is always a party, which is looser
because the resolution is the outcome of win –
lose or the compromise strategy, a stage is set for
subsequent conflict episodes.
 A party, which feels defeated, may start
preparations and be on the look out for the assault
to take the revenge.
47

Conflict Management Strategies and
Techniques
Several strategies can be used to manage
conflict in organizations. We examine both
effective and ineffective ways of managing
conflict.
48

Ineffective Techniques
 There are many techniques for dealing with
conflict. Before turning to techniques that work, it
should be recognized that some actions
commonly taken in organizations to deal with
conflict are not effective.
 Non action is doing nothing in hopes that the
conflict will disappear. This is not generally a
good technique, because most conflicts do not
go away, and the individuals involved in the
conflict react with frustration.
49

Cont…
Secrecy:
• Trying to keep a conflict out of view of most
people, only creates suspicion. An example is
an organizational policy of pay secrecy. In
some organizations, discussion of salary is
grounds for dismissal. When this is the case,
employees suspect that the company has
something to hide.
50

Cont…
Administrative delay:
• This is delaying action on a conflict by
buying time, usually by telling the
individuals involved that the problem is
being worked on or that the boss is still
thinking about the issue. Like non action,
this technique leads to frustration and
resentment. 51

Cont…
 Due process non action:
• is a procedure set up to address conflicts that is so costly,
time-consuming, or personally risky that no one will use it.
Some companies' sexual harassment policies are examples
of this technique. To file a sexual harassment complaint,
detailed paperwork is required, the accuser must go through
appropriate channels, and the accuser risks being branded a
troublemaker. Thus, the company has a procedure for
handling complaints (due process), but no one uses it (non
action).
52

Cont…
Character assassination:
• is an attempt to label or discredit an opponent.
Character assassination can backfire and make
the individual who uses it appear dishonest and
cruel.
• The spreading of rumors and deliberate
misinformation to present an untrue picture of the
targeted person, and unwarranted and excessive
criticism 53

Effective Techniques
Fortunately, there are effective conflict
management techniques. These include appealing
to :
• super ordinate goals,
• expanding resources,
• changing personnel, and
• confronting and negotiating. 54

Cont…
 SUPERORDINATE GOALS:
• An organizational goal that is more important to both
parties in a conflict than their individual or group goals is a
super ordinate goal. Super ordinate goals cannot be
achieved by an individual or by one group alone. The
achievement of these goals requires cooperation by both
parties. One effective technique for resolving conflict is to
appeal to a super ordinate goal ,in effect, to focus the
parties on a larger issue on which they both agree. This
helps them realize their similarities rather than their
differences.
55

Cont….
EXPANDING RESOURCES:
• One conflict resolution technique is so simple that
it may be overlooked. If the conflict's source is
common or scarce resources, providing more
resources may be a solution. Of course, managers
working with tight budgets may not have the luxury
of obtaining additional resources. Nevertheless, it
is a technique to be considered.
56

Cont….
CHANGING PERSONNEL:
• Sometimes a conflict is prolonged
and severe, and efforts at resolution
fail. In such cases, it may be
appropriate to change personnel.
Transferring or firing an individual may
be the best solution, but only after due
process. 57

Cont….
 CONFRONTING AND NEGOTIATING:
• Some conflicts require confrontation and negotiation
between the parties. Both these strategies require skill
on the part of the negotiator and careful planning
before engaging in negotiations. The process of
negotiating involves an open discussion of problem
solutions, and the outcome often is an exchange in
which both parties work toward a mutually beneficial
solution. Negotiation is a joint process of finding a
mutually acceptable solution to a complex conflict.
58

Cont…
 Negotiating is a useful strategy under the following
conditions:
 There are two or more parties. It is primarily an
interpersonal or inter group process.
 There is a conflict of interest between the parties such
that what one party wants is not what the other party
wants.
 They prefer to work together than to fight openly, or
take the dispute to a higher authority.
59

Cont…
 The parties are willing to negotiate
because they believe they can use their
influence to obtain a better outcome than
by simply taking the side of the other
party.
 There are two major negotiating
approaches: distributive bargaining and
integrative negotiation. 60

Cont….
 Distributive bargaining: is an approach in which the
goals of one party are in direct conflict with the goals of
the other party. Resources are limited, and each party
wants to maximize its share of the resources.
 It is a competitive or win-lose approach to negotiations.
Sometimes distributive bargaining causes negotiators to
focus so much on their differences that they ignore their
common ground. In these cases, distributive bargaining
can become counterproductive.
61

Cont…
 Integrative negotiation: is an approach in
which the parties' goals are not seen as
mutually exclusive and in which the focus is
on making it possible for both sides to
achieve their objectives.
 Integrative negotiation focuses on the merits
of the issues and is a win-win approach.
62

Cont….
 There are preconditions for integrative negotiation
to be successful. These include:
 having a common goal,
 faith in one's own problem-solving abilities,
 a belief in the validity of the other party's position,
 motivation to work together,
 mutual trust, and
 clear communication.
63

Conflict Management Styles
 Managers have their disposal on a variety of
conflict management styles:
 avoiding,
 accommodating,
 competing,
 compromising, and
 collaborating
64

Cont…
 Assertiveness (the extent to which you want your
goals met) and cooperativeness (the extent to
which you want to see the other party's concerns
met).
 Developed by Kilmann and Thomas that
measures the way conflict is handled in relation
to two behavioral dimensions: Assertiveness (the
degree to which one satisfies their own
concerns) and Cooperativeness (the degree to
which one satisfies another person’s concerns).
65

cont…
Avoiding:
 Avoiding is a style low on both assertiveness
and cooperativeness. Avoiding is a deliberate
decision to take no action on a conflict or to
stay out of a conflict situation. There is a
potential danger in using an avoiding style
too often, however. Research shows that
overuse of this style results in negative
evaluations from others in the workplace.
66

Cont…
Accommodating:
 A style in which you are concerned that the other party's
goals be met but relatively unconcerned with getting your own
way is called accommodating.
 It is cooperative but unassertive. Appropriate situations for
accommodating include times when you find you are wrong,
when you want to let the other party have his or her way in
order to remind the individual that he or she owes you similar
treatment later, or when the relationship is important.
67

Cont…
Competing:
 Competing is a style that is very assertive and uncooperative.
You want to satisfy your own interests and are willing to do so
at the other party's expense.
 In an emergency or in situations where you know you are
right, it may be appropriate to put your foot down. Relying
solely on competing strategies is dangerous. Managers who
do so may become reluctant to admit when they are wrong
and may find themselves surrounded by people who are
afraid to disagree with them.
68

Cont…
 Compromising:
 The compromising style is intermediate in both
assertiveness and cooperativeness, because
each party must give up something to reach a
solution to the conflict.
 Compromises are often made in the final hours
of union-management negotiations, when time is
of the essence. Compromise is also an effective
backup style when efforts toward collaboration
are not successful.
69

Cont….
Collaborating:
 A win-win style that is high on both assertiveness and
cooperativeness is known as collaborating. Working toward
collaborating involves an open and thorough discussion of the
conflict and arriving at a solution that is satisfactory to both
parties.
 Situations where collaboration may be effective include times
when both parties need to be committed to a final solution or
when a combination of different perspectives can be formed
into a solution.
70

CHAPTER FIVE
STRESS MANAGEMENT
71

What is stress?
 People experience stress in private life and at work place.
People have to work effectively against time and within the
parameter of various rules and regulations. It is not always
possible to create an organizational climate conducive to work.
 Various departments, groups and external environment factors
affect individual behavior. Minimal level of stress is required
for organizations to operate effectively. Excessive stress is
harmful for the individual as it causes mental and physical
disequilibrium and subsequently leads to physical and mental
disturbance.
72

Cont.…
 People suffer from high blood pressure, heart
attack when stress is beyond control of the
human beings. It is therefore necessary to
identify causes of stress and modify behavior
so that the individual energy is directed
towards organizational productivity and
healthy organization climate is created.
73

Cont…
John M. Ivancevich and Michael T. Matterson
have defined stress as “adoptive response,
mediated by individual characteristics and/ or
psychological processes, that is a consequence
of any external action, situation or event that
places special physical and/or psychological
demands upon a person”.
74

Cont…
 As it is clear from the definition that stress is caused due
to external factors, situations or events. These have
adverse impact on the individual characteristics and
psychological processes. These together put an additional
burden or demands on individual, hence the stress.
 External factors may include social setting, work ethics in
the organization, leadership styles, availability of
resources, workload, level of technology and the work
environment.
75

Cont…
 The internal factors that are effected are psychological in nature and
includes emotions, ego state, attitude, perception, motivational
factors, need and demographics.
 If employees feel that external factors are of not much consequence
and have no compelling effect the stress is not formed within the
minds of individuals. High desire, uncertainty, result of promotion
examination, unrealized ambition may cause stress to the individual.
 Stress should not be confused with anxiety or nervous tension and
damaging. They occur as regular features in many cases and have no
long – lasting impact on the working capacities of the employees.
76

Symptoms of Stress
Stress is generally of a mild nature and one
recovers from it easily. Once a person gets used
to environmental factors and people with
whom one generally works on a daily basis,
there is no existence of stress. It is the work
environment, plant, people and situations,
which one is not used to, creates tension and
resultant stress.
77

Cont…
 The stress diminishes gradually when one get used to
it. However the stress can be mild, stiff and chronic in
nature.
 Mild stress is visible when person develops lack of
appetite and high blood pressure.
 The stress becomes stiffer if these are not carefully
countered.
78

Cont…
 When stress attains a chronic stage, where a person
develops instability, frustration and feel uncomfortable
and can not cope up with problems. It affects physical
efficiency and subsequently a psychological strength. This
stage is called “Burn out”. In this stage individual is
emotionally weakened. The stage of burn-out is reached
when an individual fails to achieve his objective. He
exhibits irritation, errors, frustration and apathy.
Executives are highly prone to burn out.
79

General Adaptation Syndrome
The general adaptation syndrome (GAS)
refers to development of individuals
responses to stressful events in the form
of physiological, psychological and
behavior patterns. They follow a fairly
consistent pattern. These are of three
types as classified by Hans Selve.
80

Cont…
 Alarm Stage: This is a warning stage and occurs as first
sign of stress. Many physiological and chemical reactions
occur. During this stage muscle becomes tense and there
is a increased hormone flow. Increased pituitary
adrenaline secretion, increased respiration, heart trouble
and high blood pressure are major symptoms of alarm
stage. Regular physically exercises and expert psychiatric
treatment can prevent this phenomenon.
81

Cont….
 Resistance Stage: If the alarm stage is not
controlled in time, body organs develop resistance
but leaves its ill effects. During the resistance stage
individual is unable to rest and develops irritating
nature. There is increased nervousness, tension
frustration and uneasiness in the day to day work
environment. Individual develops ulcer, loss of
appetite and illness.
82

Cont…
 Exhaustion: When the body, psyche is affected it is
believed the stress has reached the stage of exhaustion.
During this stage individual experiences physical and
mental pressures individual develops ulcers and high
blood pressure. Exhaustion develops moodiness, negative
attitude, individual appears fatigued and displays
helplessness in his behavior. Organizations where
employees suffer from exhaustion must take corrective
action.
83

SOURCES OF JOB STRESS
Organization, Group and individual have
impact on the performance of a job.
Enviornment also effects adversely on the
efficiency of the individual.
84

1.Environment Factors
There are innumerable environmental factors
that have caused a great deal of work stress on
the employees. Ivancevich and Matterson have
identified societal, economic, financial,
cultural, familial and technological factors
which have tremendous influence on mental
health of the employees.
85

2.Organizational Stressors
 Organizational stressors can be classified into
mission statement, strategies, policies,
organizational structure and design, reporting
channels, communication, various processes,
systems and last but not the least the working
conditions.
86

3.Group Stressors
 Hawthorne studies have established the impact of group
cohesiveness, group norms and importance of group
objective for attainment of organizational goals. Lack of
cohesiveness creates conflict. Employees must be given
full opportunities to develop themselves. People join
group for social security that should be provided.
Managers must ensure that job well done is recognized,
omission on this account creates stress like situation in
the minds of the employees.
87

4. Individual Stressors
Personal life and events of official life
cannot be separated. Events of
marriage, divorce, death in the family
has a remarkable impact on work
situation. Personal life difficulties are
highly stressful.
88

Cont….
 Job Security: Job and career enhancement can become a
source of stress. Job security is one of the major reasons for
an employee. Insecurity increases during times of
recession. The prospect of losing job, specially when an
employee is the sole bread earner for the entire family is
very stressful. Another reason for job related stress is
promotion or enhancement of appointment. Nothing is
more stressful that a junior employee being appointed as a
senior to an equally competent person.
89

Cont….
Relocation: Relocation is related to transfer of
a person to a different place. Transfers upsets
the daily routine of individuals. The fear of
working at new location with different people
itself is stressful. Unpredictability about new
work environment and creating new
relationship cause anxiety. Transfer also creates
problems for family members
90

Cont…
 Changes in life structure: Span of life has many facets.
Some of these are socio-economic environment, culture,
systems, religion, race, education and person’s interaction
with society in different roles. If all these aspects are
favorable, then the stress is minimal, stress is also
determined by ability of a person to cope up with it and
the faith.
91

Stress and Behavior
 Stress is a state of mind which reflects biochemical
reactions in the human body. Environmental and internal
forces cause sense of anxiety, tension and depression to
human being. As stress is the non specific response of the
body to any demand, it is necessary to understand specific
or routine activities that cause stress. There are two types
of activities. Desirable activities and undesirable activities.
Both these activities create stress.
92

Cont…
 The stress created by desirable and successful
effects is called “eustress”.
 Eustress is a positive, healthy and developmental
stress response. It leads to better performance and
a more adjusted personality. In eustress situation,
we learn how to deal with the situation better. It
improves our capacity to deal with stressful
situations.
93

Cont…
 Stress created by undesirable outcomes is known “distress”. It is
primarily the distress form of stress which causes undesirable
effects on physical and psychological well – being of the person.
Highly stressful activities weakens individuals ability to cope up
with various situations. Just as extremely high level of stress is
harmful and damaging, extremely low level of stress is also
equally harmful. It causes boredom, reduces innovativeness and
ability to face challenges. Thus moderate level of stress is
desirable for higher level of performance.
94

Cont…
 Physiological Response:
 When stress appears, immediate biochemical changes take
place. Heart beat and heightening of all the body senses.
Serious health problems occur as body faces stress for long
period of time. Baron concluded that stress could lead to
breakdown of body’s immune systems and may result in serious
health problems such as high blood pressure, ulcer and even
heart attack. High level stress can result in physical changes
that threaten our health and well-being.
95

Cont…
 Psychological Response:
 People have different levels of handling stress. Those who
are highly affected by stress tend to be depressed and
display lack of self confidence. They believe that they
have lost the battle in handling a situation and develop a
feeling of helplessness and elicit sympathy from others.
They have a greater fear of unknown, display irritating
behaviour, become impatient and tend to blame others
for the inefficiency.
96

Cont…
 Behavioral Response:
 Chohen carried out studies on the impact of stress on human-
being. As per the study people under constant stress behave
differently as compared to the people who are emotionally
balanced. High level of stress is usually associated with
smoking, increased use of alcohol and consumption of drugs.
They are either defensive or offensive in their behavior. Stress
induces irrational interpersonal behavior. They withdraw from
the social environment and confine themselves to isolation.
97

Cont…
 Frustration:
 Frustration is a form of behaviour which occurs when a person is
prevented from achieving a goal or objective. It refers to obstruction or
impediment to goal oriented behaviour. Frustration is caused firstly
due to delay in getting advancement or recognition through a
promotion is insight. One even get frustrated waiting for some one to
meet at a scheduled time and date. Secondly non availability of
various resources. A faculty member may not be able to carryout
research work because he is over burdened with other responsibilities.
98

Cont…
 Anxiety:
 Jit S Chandan explains “anxiety” as a feeling of inability
and helplessness in formulating appropriate responses for
dealing with the anticipated negative outcome. It occurs
when a decision has to be made but the outcome of the
decision could have positive as well as negative
consequences. Anxiety also occur when there is situation
when one does not know as to what is right.
99

MANAGEMENT OF STRESS
 Individual Level Strategies:
 Minimum level of stress is required to stimulate
individuals to higher productivity. Excessive stress is
harmful to both individual and organization. It is a
common practice to evolve various stress reduction
strategies in the organizations. Individuals must take
steps to reduce stress to a acceptable level.
100

Cont…
 It is clarified that every individual has
different capacity to cope with
individual stress. Some of the
individual stress reduction strategies
are as under:
101

Cont…
 Define objective for Self: Setting up of objective for self is a
continuous process right from the childhood where parents generally
decide as to the stream of learning, institutes and the like. When you
join an organization, it is important to study organizational structure,
job involved and the prospects of growth. Every person must set for
himself the object vis – vis the ability and skill one possesses. It is
generally observed that individuals set high objective for themselves to
be achieved in short span of time. They inhibit inbuilt fear of failing.
Setting up of high standard without analyzing resources available
leads to stressful situation.
102

Cont…
 Plan your life: Work stress has an impact on personal life
at home and vice versa. It is therefore important to plan
various aspects of life as is possible. This will include
increasing professional competence by way of acquiring
additional qualification and skill, sound financial
planning, home, children education and so on.
Contingency plan must also be evolved in case of
uncertainty. If this is done, a person is physically and
mentally prepared for events to come.
103

Cont…
 Social Support: A man is becoming isolated like an
island in vast ocean due to breaking of joint family
system, requirement of moving out of home for service
purposes and thereby losing physical contacts with
families. It is important to keep close rapport with
relatives. At closer to work place develop friendship with
fellow workers who can help in times of crisis, stress and
strain. Social support can be easily built by adhering to
social functions, norms and following religious activities
104

Cont…
 Physical Fitness: Healthy body and mind are stress resistance. It
has been conclusively proved that individuals who exercise and so
strengthen their endurance and cardiovascular system, are much less
likely to suffer from certain types of stress related illness. Regular
physical exercises like walking, jogging, light gymnastics exercises
keep person fit and develop an ability to sustain greater level of stress.
Soldiers are definitely more stress resistant as they keep themselves
physically fit. They develop an ability and mind to withstand worst of
the situations. Appropriate daily diet help individual to keep good
health.
105

cont…
 Yoga: Yoga is a methodology to integrate body and mind and
achieve a required level of harmony with the God. This is
achieved by physical exercises called Asanas which stimulates
various systems in the body like respiratory system, nervous
system, blood circulation system etc. This brings a remarkable
change into individuals physical capacity and mental ability to
sustain through various stress and strain situations. Yoga is also
considered as a process of attainment of ultimate peace. But for
a common man, it is merely the physical exercises which are
aimed at healthy body and mind to counter stress.
106

Cont…
 Meditation: Meditation involves sitting at quite place, closing
eyes and concentrating on some symbol .It is aimed at total
concentration thus forgetting routine situations. Meditation is
combination of body, concentration of mind on a particular
symbol, utterance of words, regulating of breathing thereby
achieving a total concentration of body and mind to achieve a
super natural personal power. If this is achieved a person can
comfortably handle stressful situation with ease. Meditation
brings peace to the mind, develops tolerance power, improves
personality and ultimately leads to sainthood.
107

Cont….
 Time Management: Time management is one of
the methods of reducing stress. Life has become
very fast. Executives down to a common worker is
pressed for time. Everybody has to play various
roles in life. All the roles have to be performed in a
given span of time. It is therefore necessary to plan
time adequately. Time management can be for
various events in life like education, marriage etc.
108

Cont…
 Live a simple Life: It is advisable that every person
should live a simple life free from cumbrances. Too
much of issues being handled at any one time saps
individuals energy. One should not complicate issues
rather provide simple, straight forward solutions.
Cases must be disposed off fast without loss of time.
In personal life too simplicity of behavior help
individual resolve issues in time.
109

Cont…
 Organizational Level Strategies:
 Organization play a decisive role in ensuring peaceful
environment free of stress. Basically stress relates to two
categories of events. First the organizational structure and
policy and second relating to personal development and
growth that the job can provide. Following aspects must
be carefully examined and evaluated for its effectiveness
and implementation:
110

Cont…
 Organizational goals must be in realms of achievement. Too much
high goals not only put the employees under undue stress but also
creates unhealthy work environment.
 Organizational polices should be clearly defined with particular
reference to training and development, promotion, leave, wages and
salary administration, discipline, incentives, etc.
 Authority and responsibility must be clearly defined by setting up
reporting channels. Principle of unity of command should be adhered
to.
111

Cont…
 Corporate policies, physical work environment should be
suitable for higher productivity.
 An updated systems and processes increases efficiency.
 Management must create an healthy working
environment.
 Organizational structure, redesigning of jobs and
improved communication reduces stress.
112

Cont…
 Career plan for mangers must be developed and
implemented in letter and spirit. Nothing discourages
employees as bad developmental programmes.
 Employees must be empowered. They should be provided
with suitable time to time counseling by way of advice,
reassurance, good communication, release of emotional
tension and clarified thinking. Re-orientation is
important to keep employees free of stress for increased
productivity.
113

CHAPTER SIX
CULTURE, POWER AND POLITICS IN AN
ORGANIZATION
 What is the purpose of organizational
culture?
 What kinds of organizational culture might
suit your organization?
 Can organizational culture have a downside?
114

 According to Henry Mintzberg professor at
McGill University “Culture is the soul of the
organization—the beliefs and values, and how
they are manifested. I think of the structure as
the skeleton, and as the flesh and blood. And
culture is the soul that holds the thing together
and gives it life force.”
 Culture sets the tone for how organizations
operate and how individuals within the
organization interact.
 Organizational culture is the pattern of shared
values, beliefs, and assumptions considered to
be the appropriate way to think and act within an
115

 The key features of culture are as follows:
◦ Culture is shared by the members of the
organization.
◦ Culture helps members of the organization
solve and understand the things that the
organization encounters, both internally and
externally.
◦ Because the assumptions, beliefs, and
expectations that make up culture have worked
over time, members of the organization believe
they are valid. Therefore, they are taught to
people who join the organization.
◦ These assumptions, beliefs, and expectations
strongly influence how people perceive,
116

organization.
externally.
117

organization.
externally.
118

Levels of cultural analysis
 Because organizational culture has multiple levels, the
metaphor of an iceberg has often been used to describe it. Other
writers use a simmering volcano to represent the layers of
culture: beliefs, values, assumptions bubble below the surface
observable aspects of culture at the surface.
 The important levels of cultural analysis in organizations are:
observable culture (artifacts), beliefs, shared values, and
common assumptions. These levels may be envisioned as layers.
The deeper one gets, the more difficult it is to discover the
culture.
 The first level concerns observable culture, or the way we do
things around here or “aspects of an organization’s culture that
you see, hear, and feel”. For instance, employees in two offices
have very different dress policies, or one office displays great
works of art while another posts company mottos on the wall.

Contd…
 The second level of analysis is belief. Beliefs are the
understandings of how objects and ideas relate to each other.
 The third level of analysis recognizes that shared values can
play a critical part in linking people together and can provide a
powerful motivational mechanism for members of the culture.
Values are the stable, long-lasting beliefs about what is
important. The term shared in cultural analysis implies that
the group is a whole. Every member may not agree with the
shared values, but they have all been exposed to them and have
often been told they are important.
 At Hewlett-Packard, for example, “quality” is part of
everyone’s vocabulary/ language. The firm was founded on the
belief that everyone could make a creative contribution to
developing quality products.

 At the deepest level of cultural analysis are
common assumptions, or the taken-for-
granted truths that collections of corporate
members share as a result of their joint
experience. It is often extremely difficult to
isolate these patterns, but doing so helps
explain why culture invades every aspect of
organizational life.
121

Functions of Culture
 Culture performs a number of functions within an
organization:
◦ It has a boundary-defining role because it creates distinction
between one organization and others.
◦ It conveys a sense of identity to organization members.
◦ It helps create commitment to something larger than an
individual’s self-interest.
◦ It enhances stability; it is the social glue that helps hold the
organization together by providing appropriate standards for
what employees should say and do.
◦ It serves as a control mechanism that guides and shapes the
attitudes and behavior of employees, and helps them make
sense of the organization

Dimensions of culture
The following are the different cultural dimensions.
1. Dominant vs Subculture:
Dominant culture is the set of core values shared by a
majority of organizational members. It is a macro level that
helps to guide the day to day behavior of employees.
Where as sub-culture is a set of values shared by small
minority organizational members. This arises as a result of
problems and experiences that are shared by members of the
department or unit of the organization. In the sub-culture
the values of dominant culture are retained but modified to
reflect individuals unit’s distinct situation. E.g. marketing
dept may have its own sub-culture, purchasing dept
similarly.

2. Strong Culture vs. Weak culture: Organizational culture may be
strong or weak.
 Strong Cultures have the following features;
a. Have strong values and strong leadership
b. Widely shared high degree of organizational members with core
values.
c. Intensely held; organizational members have high degree of
commitment of core values.
d. Strong culture with high shared value and intensity reduces labor
turnover and increases positive employee’s attitude.
On the other hand it leads to high “group think”
3. Mechanistic Vs. organic Cultures: in the cultures of mechanistic
the values of bureaucracy and feudalism are exhibited. People
restrict their careers to their own specializations only and
organizational work is concerned as a system of narrow
specialization. It follows a flow of traditional authority from top
to bottom. Communication channels are well defined and
prescribed.

 On the other hand organic culture just contrast of mechanistic
culture, where there is no prescribed (loose) communication
channels, departmental boundaries, strict hierarchies of
authority and formal rules and regulations. More stress is on
flexibility , consultation, change and innovation.
4. Authoritarian vs Participative culture:
In authoritarian culture power is centralized and subordinates are
supposed to obey orders strictly.
Discipline is stressed and disobedience is severely punished. This
culture is based on the assumption that leader knows what is
good for the organization.
In the participative culture, all people working in the organization
participate in decision making.
Group problem solving, synergy the “we approach”.

contd
5. National Culture vs. Organizational
culture
 Organizational culture is always influenced by national
culture irrespective of the origin company.
 In other words if there is a clash between national and
organizational cultures, the national culture prevails.
 For example any company operating in India whether it
is Indian origin or foreign, observes the local culture.
 They declare the same holidays, celebrate the same
festivals and organize the same functions and cultural
activities. As reflected by Indian ethnos.

Characteristics of Organizational Culture
 A good organizational culture has the following Characteristics.
1. Individual Autonomy: the degree of responsibility, freedom
and opportunities of exercising initiative that the individual
have in the organization.
2. Structure : the degree to w/c the organization creates clear
objectives, communication, performance expectations.
3. Management support: : the degree to w/c managers provide
clear communication, assistance, warmth and support to
subordinates.
4. Identity: the degree to w/c members identify in with
organization as a whole rather than with their particular work
group or field of professional expertise.
5. Performance -reward system: the degree to w/c reward
system in the organization like increase in salary, promotion,
transfer etc are based on employee performance rather than
seniority, nepotism or any sort of artificial segregation.

Contd.
6. Conflict Tolerance: the degree of conflict present in
relationships between colleagues and work groups as
well as the degree to which employees are encouraged
to air conflict and criticisms openly
7. Risk tolerance: The degree to w/c employees are
encouraged to be innovative, aggressive and risk
taking.
8. Communication patterns: the degree to w/c org.
communications are restricted to the formal hierarchy
of authority.
9. Outcome orientation: the degree to w/c management
focuses on outcomes or results rather than the
techniques and processes used to achieve these
outcomes.
10. People orientation: the degree to w/c the
management decisions take in to consideration the
impacts of outcomes on people in the orgs.
When we appraise the organization with the above

 Creating and Sustaining an Organization’s
Culture
 A culture can be created in three ways. First,
founders hire and keep only employees who think
and feel the way they do. Second, they
indoctrinate and socialize these employees to their
way of thinking and feeling. Finally, the founders’
behavior acts as a role model, encouraging
employees to identify with the founders and
internalize those beliefs, values, and assumptions.
When the organization succeeds, the founders’
vision is seen as a primary determinant of that
success. At that point, the founders’ entire
personality becomes embedded in the culture of
130

 Forexample,
◦ Microsoft’s culture is largely a reflection of its
co-founder, chair, and chief software architect
(and former CEO), Bill Gates. Gates is
personally aggressive, competitive, and highly
disciplined.
◦ Kroc. Kroc McDonalds co.(Quality service and
cleanness).
◦ TATA co. powerful and successful
cultures(honesty and fair dealing).
 Philosophies, principles and values are still alive
in their business .
131

Culture as a Barrier to Change
 Culture is a liability when the shared values do not
agree with those that will further the organization’s
effectiveness. Employees are less likely to have
shared values when the organization’s environment is
dynamic. When the environment is undergoing rapid
change, the organization’s entrenched culture may no
longer be appropriate. Consistency of behavior is an
asset to an organization when it faces a stable
environment. However, it may burden the
organization and make it difficult to respond to
changes in the environment.
 For many organizations with strong cultures,
practices that led to previous successes can lead to
failure when those practices no longer match up well
with environmental needs.
132

Power and Politics in an Organizations
 What is power?
 How does one get power?
 How does dependency affect power?
 What tactics can be used to increase
power?
133

 Power in OB, is defined as the ability to get someone
to do something you want done or the ability to make
things happen in the way you want them to.
 Power refers to a capacity that A has to influence the
behavior of B, so that B acts in accordance with A’s
wishes. This definition implies that there is a potential
for power if someone is dependent on another.
 The essence of power is control over the behavior of
others. Power is the force you use to make things
happen in an intended way, whereas influence is
what you have when you exercise power, and it is
expressed by others’ behavioral response to your
exercise of power.

Dependency: The Key To Power
 The greater B’s dependency on A, the greater the power A
has over B. When you possess anything that others require
but that you alone control, you make them dependent upon
you and therefore you gain power over them.
 What Creates Dependency?
◦ Dependency is increased when the resource you control is
important, scarce, and cannot be substituted.
◦ Importance
 If nobody wants what you have, there is no dependency.
o create dependency, the thing(s) you control must be
perceived as important.
◦ Scarcity
 A resource must be perceived as scarce to create
dependency.
◦ Non-substitutability
 The fewer substitutes for a resource, the more power
comes from control over that resource.

 Managers derive power from both
organizational and individual sources.
These sources are called:
◦ position power and
◦ personal power, respectively.

Position power
 Three bases of power are available to a manager solely as a
result of his or her position in the organization: reward,
coercive, and legitimate power. ( bases of power)
 Reward power is the extent to which a manager can use
extrinsic and intrinsic rewards to control other people.
Examples of such rewards include money, promotions,
compliments, or enriched jobs.
 Although all managers have some access to rewards, success
in accessing and utilizing rewards to achieve influence varies
according to the skills of the manager.
 Power can also be founded on punishment instead of reward.
For example, a manager may threaten to withhold a pay raise,
or to transfer, demote, or even recommend the firing of a
subordinate who does not act as desired.
 Such coercive power is the extent to which a manager can
deny desired rewards or administer punishments to control
other people. The availability of coercive power also varies from
one organization and manager to another. The presence of
unions and organizational policies on employee treatment can
weaken this power base considerably.

Cont…
 The third base of “position” power is legitimate/lawful power,
or formal authority.
 It stems from the extent to which a manager can use
subordinates’ internalized values or beliefs that the “boss” has
a “right of command” to control their behavior.
 For example, the boss may have the formal authority to
approve or deny such employee requests as job transfers,
equipment purchases, personal time off, or overtime work.
 Legitimate power represents a special kind of power a manager
has because subordinates believe it is legitimate for a person
occupying the managerial position to have the right to
command. If this legitimacy is lost, authority will not be
accepted by subordinates.
 One of the most important aspects of legitimacy is the access
to and control of information. Indeed, some observers believe
that information power should be listed as a separate source of
power. In most organizations, the “right” to know and use
information is restricted and confined by a series of rules and
regulations.

Personal power
 Personal power resides in the individual and is
independent of that individual’s position.
 Personal power is important in many well-managed
firms. Three bases of personal power are expertise,
referent, and personal charisma (bases of personal
Power).
 Expert power is the ability to control another person’s
behavior through the possession of knowledge,
experience, or judgment that the other person does not
have but needs.
 A subordinate obeys a supervisor possessing expert
power because the boss ordinarily knows more about
what is to be done or how it is to be done than does the
subordinate.
 Expert power is relative, not absolute.

contd
 Referent power is the ability to control another’s behavior
because the person wants to identify with the power
source. In this case, a subordinate obeys the boss
because he or she wants to behave, perceive, or believe
as the boss does. This obedience may occur, for example,
because the subordinate likes the boss personally( Role-
model e.g. My role- models Mathis teacher) and therefore
tries to do things the way the boss wants them done. In a
sense, the subordinate attempts to avoid doing anything
that would interfere with the pleasing boss–subordinate
relationship.

Influence/Tactics
 What tactics can be used to increase power?
 Research indicates that people use common tactics to
influence outcomes.
 One study identifies the nine influence tactics managers
and employees use to increase their power:
1. Rational persuasion. Using facts and data to make a
logical or rational presentation of ideas.
2. Inspirational appeals. Appealing to values, ideals, and
goals when making a request.
3. Consultation. Getting others involved to support one’s
objectives.
4. Ingratiation. Using flattery, creating goodwill, and being
friendly prior to making a request.
142

5. Personal appeals. Appealing to loyalty and friendship
when asking for something.
6. Exchange. Offering favor's or benefits in exchange for
support.
7. Coalition tactics. Getting the support of other people
to provide backing when making a request.
8. Pressure. Using demands, threats, and reminders to
get someone to do something.
9. Legitimating tactics. Claiming the authority or right to
make a request, or showing that it supports organizational
goals or policies.
143

Major techniques of organizational
politics practices
 Restricting access to information
◦ People prone to control others' access to information in ways that
enhance their own power
 Cultivating a favorable impression
◦ attempts to enhance the goodness of one's impressions on
others.
 Developing a base of support
◦ managers may "lobby" for their ideas before they officially present
them at meetings
 Blaming and attacking others
◦ finding a scapegoat— that is, someone to put blame on for some
failure or wrongdoing
 Aligning with those more powerful
◦ One of the most direct ways to gain power is by associating
oneself with those that are higher in power.
 Reciprocity
 Co-optation:
◦ get support by putting possible opponents on a task force or
advisory board 144

Discussion Point
 Share your experience or observation
of powerful and powerless leaders in
your organizations?
145

Power, Leadership, and Management
 Essential to leadership and management
 Much more than dominance. Capacity to get things
done.
 Behavior of powerful leaders and managers
◦ Delegate decision authority
◦ See people’s talents as a resource- second line mgmt
◦ Can change people’s working conditions
◦ Get resources and information for work group
◦ Take risks, entrepreneurs.
◦ Press for innovations
◦ Share power widely
◦ Help develop people, reach their aspirations.

Contd…
 Behavior of powerless leaders and managers
◦ Supervise closely
◦ Do not delegate decision authority
◦ Often distrust subordinates
◦ See people’s talents as a threat belittling them,
fear
◦ Stick to the rules
◦ Do not take risks (risk averse)
◦ Strongly focus on the work
◦ Protect his or her territory

CHAPTER SEVEN
LEADERS TRAITS AND BEHAVIORAL
STYLES
 Group Assignment and Presentations
148

CHAPTER EIGHT
CHANGE MANAGEMENT
 How do organizations manage
change?
 Why do people and organizations
resist change?
149

What is Organizational Change?
◦ It is generally considered to be an organization-wide
change, as opposed to smaller changes such as adding a new
person.
◦ It includes the management of changes to the organizational
culture, business processes, physical environment, job
design / responsibilities, staff skills / knowledge and policies
/ procedures.
◦ When the change is fundamental and radical, one might call
it organizational transformation.
◦ The only constant in business today is change.
◦ Change is something old that is stop and something new that
is started.

 Change cannot just be allowed to happen. It
needs to be managed.
 Change management is deﬁned as:
◦ the process of achieving the smooth implementation
of change by planning and introducing it
systematically, taking into account the likelihood of it
being resisted (Armstrong, 2009)
 Managing change is the instruments (tools) and
strategies (directions) used to manage issues and
challenges to ensure success or failure of
business.
 Change management is the mastering or gain
control of changes (Kanter 1983).

Types of change
 According to Armstrong (2009) there are three types of
change:
Strategic
 concerned with broad, long-term and organization-wide issues involving
change
Operational change
 Operational change relates to new systems, procedures, structures or
technology that will have an immediate effect on working arrangements
within a part of the organization.
 Its impact on people can be more signiﬁcant than broader strategic change
Transformational change
 It takes place when there are fundamental and comprehensive changes in
structures, processes and behaviors
Other types of changes are:-
Evolutionary/Incremental change
 Incremental and it takes place gradually
Revolutionary/Transformational Change
 Change is fundamental, dramatic, radical

Change versus Transition
 Change is an event that is situational and
external to us
 Transition is the experience of the gradual,
psychological reorientation process that happens
inside of us
◦ Endings - disengage from “what was”
◦ Neutral Zone - confusion, in-between state
◦ New Beginnings - familiar with “what will be”,
acceptance of new reality

Context for change
 Companies must continually undergo organizational
transformations to survive and grow
Organizational
effectiveness
Time

Context for change
 Organizational transformations can be disruptive
Organizational
effectiveness
Time
Transformation
Point
Before
Established systems
Solidified culture
High level of effectiveness
During and After
Disruptions to leader ship & systems
Organizational nervousness
Reduced effectiveness

The Transformation Point
 Low stability: high chaos
 High emotional stress
 Control becomes a major issue
 High undirected energy
 Glorifying the past
 Conflict increases
 Resistance starts to build

Change Forces
 What is the biggest experience of change
you have experienced at your organization
over the last year?
• Why change? What were the forces?
 What impact did this change have on you
and others?
 What was your initial response to this
change?

Why Change?
 McMillan (2004) described six factors that are responsible for the
changes occurring in the modern world and organizations, namely:
1. New technologies that have transformed communications,
electronics, consumer markets and speeded up industries;
2. Globalization, which has resulted in a world that is evermore
connected
3. Globalization and new technologies, which together have
sharpened competition
4. New change processes and practices, which are now happening
faster than ever before in our known history;
5. Speed – an incredible increase in technological speed is matched
in business (product life cycles are measured in months not years)
and in people’s lives (most of us feel we are running as fast as we
can merely to stay in place); and
6. Complexity and paradox which are increasing as a result of all
these changes and are making more and more difficult demands on
managers used to seeking certainties and ‘either/or’ type solutions
in order to bring about the ideals of stability and order.

 Today’s organizational domain includes
unpredictable and uncontrollable domestic
and international forces. These and many
other forces from outside and inside the
organization demand attention.
◦ Internal Forces
◦ External Forces

Internal Forces
 Internal change forces are pressure that comes
from a worker, a group, or a department.
 Sometimes the pressure is the cost of production a
microchip or car.
◦ For example unit cost increases; therefore pricing the
product at a reasonable amount to make a sale is a
force that may signal a need for change.
◦ If the product costs too much to produce, it can’t be
priced competitively.
◦ Poor worker morale over some inequity in the reward
system could be an internal pressure point that a
manager becomes aware of and must address.

External Forces
 External (outside-the-organization) forces can signal us that
change is needed.
◦ Government regulations could suggest the need to change a
firm’s work area layout or recruitment and selection program.
◦ Market competitors and how they reward employees, distribute
products, service customers, or form alliances with foreign
partners may signal the need to change.
◦ The economic environment also has a key influence on the type
and nature of change. Here, ‘economic rationalism’, a regulated
market economy, privatization and private sector competition.
◦ Technological forces also play an influential role regarding
change (The use of computer technology and global
communications
◦ Social factors

The Change Process
 The change process starts with
◦ An awareness of the need for change.
◦ An analysis of this situation and the factors
that have created it leads to a diagnosis of their
distinctive characteristics and an indication of
the direction in which action needs to be
taken.
◦ Possible courses of action can then be
identiﬁed and evaluated and a choice made of
the preferred action.

The Planned Approach to Organizational
Change (Kurt Lewin’s Model of Change)
 The planned approach to organizational
change emerged through the work of Kurt
Lewin (1951) relating to group decision-
making, implementation and social change.
 Kurt Lewin argued that successful change in
organizations should follow three steps,
which are illustrated in Figure 1: unfreezing
the status quo, moving to a new state, and
refreezing the new change to make it
permanent.

Unfreezing
 The status quo was about to change. The status
quo can be considered an equilibrium state.
 To move from this equilibrium—to overcome the
pressures of both individual resistance and group
conformity — unfreezing is necessary.
 Figure 1 shows that unfreezing can occur in one
of three ways.
◦ The driving forces, which direct behavior away from
the status quo, can be increased.
◦ The restraining forces, which hinder movement from
the existing equilibrium, can be decreased.
◦ Creating dissatisfaction with the present state of
affairs

Moving
 In step two (initiating the change), employees
engage in activities that identify and implement
new ways of doing things or engage in new
activities in order to bring about change.
 In this respect, Harper (2001) proposed that for
effective change to take place, management must
ensure that all relevant stakeholders are given the
opportunity to be engaged in decision making and
problem solving in a collaborative manner.
 To effect change and implement plans to more a
better position based on intended change.

Refreezing
 In the third and final step (refreezing), the
emphasis is on the reinforcing of new
processes and tasks in the organization by
the employer.
 For this step to be successful, employees
must be acknowledged, as reward is an
important consideration. Reward is crucial
for behavior modification.
 Employees should receive appropriate
recognition for changes in behavior if they
embrace or accept the change

RESISTANCE TO CHANGE
Why people resist Change?

 One of the most well-documented findings
from studies of individual and organizational
behavior is that organizations and their
members resist change.
 In a sense, this is positive. It provides a
degree of stability and predictability to
behavior.
 If there were no resistance, organizational
behavior would take on characteristics of
chaotic randomness.
 Resistance to change can also be a source of
functional conflict.

 Think of one successful change in your
work environment. List the successful
change variables that were in place.
What was the critical factor(s) for the
success of the change?
 Think of some unsuccessful change from
your environment. List the resistance to
change variables that were present.
What was the critical factor(s) that
thwarted the change?

Copyright CVR/IT Consulting 2004
 Resistance to Change
◦ Why people resist change:
 Resistance to change can be a defense mechanism
caused by frustration and anxiety
 Individuals may not be resisting the change as much
as they are resisting a potential loss of status, pay,
comfort, or power that arises from expertise
 In many case there is not a disagreement with the
benefits of the new process, but rather a fear of the
unknown future and about their ability to adapt to it,
e.g. fear that one will not be able to develop new skills
and behaviors that are required in a new work setting.

 Armstrong (2009) identified the main reasons for
resisting change are as follows:
◦ The shock of the new – people are suspicious of anything
that they perceive will upset their established routines,
methods of working or conditions of employment.
◦ Economic fears – loss of money, threats to job security
◦ Inconvenience – the change will make life more difﬁcult.
◦ Uncertainty – change can be worrying because of
uncertainty about its likely impact.
◦ Symbolic fears – a small change that may affect some
treasured symbol, such as a separate ofﬁce or a reserved
parking space.
◦ Threat to interpersonal relationships
◦ Threat to status or skill
◦ Competence fears

 For analytical purposes, we have
categorized them as individual and
organizational sources. In the real world,
the sources often overlap.
◦ Individual resistance
◦ Organizational resistance

Individual Resistance
 Individual sources of resistance to change
reside in basic human characteristics such
as perceptions, personalities, and needs.
◦ Habit. To cope with life’s complexities, we
rely on habits or programmed responses. But
when confronted with change, this tendency to
respond in our accustomed ways becomes a
source of resistance.
◦ Security. People with a high need for security
are likely to resist change because it threatens
their feelings of safety.

 Economic factors. Changes in job tasks or
established work routines can arouse economic
fears if people are concerned that they will not be
able to perform the new tasks or routines to their
previous standards, especially when pay is closely
tied to productivity.
 Fear of the unknown. Change substitutes
ambiguity and uncertainty for the known. This is
also referred to as the “status quo bias,” in
which individuals assume that their current
state is better than whatever the changed
state might be.

 Selective information processing.
Individuals are guilty of selectively
processing information in order to keep their
perceptions intact.
 They hear what they want to hear, and they
ignore information that challenges the world
they have created.
 Cynicism. In addition to simple resistance to
change, employees often feel cynical about
the change process, particularly if they have
been through several rounds of change, and
nothing appears (to them) to have changed.

Responses to Change
“Negative Responses to change”
R
e
s
i
s
t
a
n
c
e
Passive
Active
Time
Stability
Immobilization
Denial
Anger
Bargainin
g
Depressio
n
Testing
Acceptance

Individual Change Response
P
r
o
d
u
c
ti
v
it
y
Denial
Commitment
Resistance Exploration
Adapted from Kubler -Ross

Recognizing the Individual Change Response
P
r
o
d
u
c
ti
v
it
y
Denial
Commitment
Resistance Exploration
Adapted from Kubler -Ross
What you see
Anger
Complaining
Glorifying the
past
Skepticism
Unwillingness
to participate
What you Hear
It wont work
It used to be…
The data is
flawed..
What you
see
Indifference
Disbelief
Avoidance
What you Hear
Silence
It will never happen
It wont affect me
What you See
Future
Orientation
Initiative
Self-efficiency
Confidence
What you hear
How can I contribute
Lets get on with it
What you see
Energy
Risk taking
Tentativeness
Impatience
Activity without
focus
What you hear
Optimism
I’ve got an idea
Lets try…
What if ….

Remember…..
 “Its not so much that we’re
afraid of change, or so in love
with the old ways , but it’s a
place in between we fear…it’s
like being in between trapezes
….there’s nothing to hold on
to.”

Resistance is a Normal
Reaction to Disruption and
Real or Perceived Loss

What resistance to change have you encountered in
the past ? Active or Passive?
Active
Because it is out in the
open, active resistance is
more constructive and
easier to manage than its
underground counterpart
Passive
When resistance is Hidden, it
can go unnoticed and undermine
efforts to transform an
organization

Faces of Resistance
 Active
◦ Deliberate opposition
◦ Hostility
◦ Agitating others
◦ Failing to report
problems
◦ Problem denial
◦ Chronic quarrels
◦ “This won’t work”
 Passive
◦ Withholding info
◦ Procrastination/ Delays
◦ No confrontation, but still
no productivity
◦ Not attacking solution, but
not supporting either
◦ Over-complicating the
new way
◦ “We’ve always don it this
way

Organizational Resistance
 Organizations, by their very nature, are
conservative.
 They actively resist change.
 You do not have to look far to see evidence
of this phenomenon. Government agencies
want to continue doing what they have been
doing for years, whether the need for their
service changes or remains the same.
 Organized religions are deeply entrenched in
their history. Attempts to change church
doctrine require great persistence and
patience.

• The following Six major sources of organizational
resistance to change have been identified:
◦ Structural inertia. Organizations have built-in
mechanisms—such as their selection processes and
formal regulations—to produce stability. When an
organization is confronted with change, this structural
inertia acts as a counterbalance to sustain stability.
◦ Limited focus of change. Organizations are made up
of a number of interdependent subsystems. One cannot
be changed without affecting the others. So limited
changes in subsystems tend to be nullified by the larger
system.

◦ Group inertia. Even if individuals want to
change their behavior, group norms may act as a
constraint.
◦ Threat to expertise. Changes in organizational
patterns may threaten the expertise of specialized
groups.
◦ Threat to established power relationships. Any
redistribution of decision-making authority can
threaten long-established power relationships
within the organization.
◦ Threat to established resource allocations.
Groups in the organization that control sizable
resources often see change as a threat. They tend
to be content with the way things are.

Overcoming Resistance to Change
 Kotter and Schlesinger have identified six tactics
organizations use to deal with resistance to change:
◦ Education and communication. Resistance can be
reduced through communicating with employees to help
them see the logic of a change.
◦ Participation and involvement. It is difficult for
individuals to resist a change decision in which they have
participated. Before making a change, those opposed can
be brought into the decision process.
◦ Facilitation and support. Organizations undergoing
change can offer a range of supportive efforts to reduce
resistance such as employee counseling and therapy, new-
skills training, or a short paid leave of absence.

 Negotiation and agreement. Another way for organizations
to deal with potential resistance to change is to exchange
something of value for less resistance. For instance, if the
resistance is centred in a few powerful individuals, a specific
reward package can be negotiated that will meet their
individual needs.
 Manipulation and co-optation. Manipulation refers to
covert influence attempts. Twisting and distorting facts to
make them appear more attractive, withholding undesirable
information, and creating false rumours to get employees to
accept a change are all examples of manipulation.
 Explicit and implicit coercion. Coercion is the application
of direct threats or force upon the resisters. If the corporate
management is determined to close a manufacturing plant
should employees not acquiesce to a pay cut, then coercion
would be the label attached to its change tactic.

Adapted from Prosci 2008
The ADKAR Model
ADKAR describes the
required phases that
an individual will go
through when faced
with change.

The five building blocks of successful
change
Awareness of the need for change
Desire to participate and support the
change
Knowledge on how to change
Ability to implement required skills and
behaviors
Reinforcement to sustain the change

Connecting ADKAR and the current,
transition and future states.
Current Transition Future
A D K A R

ADKAR Gap Model
Change
Confusion
Resistance
Fear/
Anxiety
Frustration
Backsliding

CHAPTER NINE
ORGANIZATIONAL STRUCTURE AND
DESIGN
 Koontz and Donnel have defined organizational
structure as ‘the establishment of authority relationships
with provision for coordination between them, both
vertically and horizontally in the enterprise structure’.
 Vertical structure indicates the line authority and
reporting channel. Horizontal structure indicates the
division of work and specialization. Tiers of
organizational structure are indicative of power
structure, positions and its inter-relationship, roles,
channels of reporting, delegation and accountability,
grouping and dividing jobs and tasks.
 According to Sheldon Organization is the process of
combining the work, which individuals and groups have
to perform with the facilities necessary for its execution,
that the duties so performed provide the best channels
for the efficient, systematic, positive and coordinated
application of the available efforts.
193

Factors Affecting Organizational Structure

The Organizational Environment
◦ The quicker the environment changes, the more
problems face managers.
◦ Structure must be more flexible (i.e., decentralized
authority) when environmental change is rapid.
Strategy
◦ Different strategies require the use of different
structures.
 A differentiation strategy needs a flexible structure, low
cost may need a more formal structure.
 Increased vertical integration or diversification also
requires a more flexible structure.
Technology
◦ The combination of skills, knowledge, tools, equipment,
computers and machines used in the organization.
◦ More complex technology makes it harder for managers

contd
◦ Technology can be measured by:
 Task variety: the number of new problems a manager
encounters.
 Task analyzability: the availability of programmed solutions to a
manager to solve problems.
 High task variety and low analyzability present many unique
problems to managers.
 Flexible structure works best in these conditions.
 Low task variety and high analyzability allow managers to
rely on established procedures.
Human Resources
◦ Highly skilled workers whose jobs require working in teams usually
need a more flexible structure.
◦ Higher skilled workers (e.g., CPA’s and doctors) often have
internalized professional norms and values.
◦ Managers must take into account all four factors (environment,
strategy, technology and human resources) when designing the
structure of the organization.

Types of Organizational Structures
1. Functional structure: people working together with
similar skills, tools or techniques to perform their jobs.
 Functional structure consists of departments such as
marketing, production, and finance HR. etc
 Pros -Workers can learn from others doing similar
tasks.
- Easy for managers to monitor and evaluate
workers.
Cons- Hard for one department to communicate
with others.
- Managers can become preoccupied with
their department and forget the firm.
• An organizational structure composed of all the
departments that an organization requires to produce its
goods or services.

contd
2. Product Structure
◦ Managers place each distinct product line or business in
its own self-contained division.
◦ divisions created according to the type of product or service.
◦ Divisional managers have the responsibility for devising
an appropriate business-level strategy to allow the
division to compete effectively in its industry.
3. Market Structure
◦ Groups divisions according to the particular kinds of
customers they serve.
◦ Allows managers to be responsive to the needs of
their customers and act flexibly in making decisions
in response to customers’ changing needs

contd
4. Matrix Structure
◦ An organizational structure that simultaneously
groups people and resources by function and
product.
◦ This combines both the best of both worlds to
make an efficient organizational structure. This
structure is the most complex organizational
structure.
5. Geographic structure: divisions based on the
area of a country/teritory or world served.
– large organizations have offices at different place,
for example there could be a north zone, south
zone, west and east zone. The organizational
structure would then follow a zonal region

Basic OB Model/ Three Levels of
Analysis
Independent
Variables (X)
Dependent
Variables (Y)
Three
Levels
Advanced Organizational Behavior
(MBA 711)
Compiled by: Haile Y.
200

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