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ACTIVITY 4
Organizational Decision Making
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Table of Contents
SUMMARY 4
INTRODUCTION 5
4.1 APPROACHES TO DECISION MAKING 5
Normative Descriptive and Prescriptive Approaches 5
Bounded Rationality for Decision Making 5
Incremental Bargaining Method 6
ORGANISATIONAL STYLES OF DECISION MAKING 6
Autocratic decision making 6
Participatory decision making 6
Consensus based decision making 6
Democratic Decision making 6
HOW DECISIONS ARE MADE ERROR! BOOKMARK NOT DEFINED.
Rational or Analytical approach Error! Bookmark not defined.
Intuitive Decision Making Approach Error! Bookmark not defined.
Random, Chance, or Luck Approach Error! Bookmark not defined.
4.2 RISK AND UNCERTAINTY 6
Identification of Risk 7
Attitude towards Risk 7
Risk Management 8
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Planning for risk management 8
4.3 EFFECTIVENESS OF ORGANIZATIONAL DECISIONS 9
PROCTOR AND GAMBLE 11
CONCLUSION 12
RECOMMENDATION 12
REFERENCES 13
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Summary
This report analysis the various approaches used in an organization for making decisions. It also assesses
the various management approaches to risk and uncertainty in decision making. It also highlights the
effectiveness of organizational decisions.
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Introduction
This report analyses various approaches used in an organization for making decisions. It also assesses the
various management approaches to risk and uncertainty in decision making. Based on these risks the
manager can consider the effects on decision making. It also highlights the effectiveness of organizational
decisions.
4.1 Approaches to Decision Making
Decision making is an important element in any organization. Great decisions help the company to
succeed and further grow while poor decisions blight the future of the organization. Different decision
making approaches generally deployed include:
Normative Descriptive and Prescriptive Approaches
According to Darwish (1998) Normative approach is more rational and logic based setting up process and
principles to take a decision. It usually emerges from analytical approach of mathematics, statistics or
economics. On Contrary Descriptive approach explains real time situations that how a particular decision
is processed by people. This approach has its roots in human psychology. Another transitivity dimension
includes Prescriptive approach which has empirical side of Descriptive and normative rational outcomes
both accommodated.
These approaches do not cover the constraints of data availability, future consequences predictability and
time factors which are discussed by other couple of models below.
Bounded Rationality for Decision Making
Herbert Simon was an economist who introduced this model which emphasizes that the decisions made
by people are aimed at maximizing the benefits and largely in their interest. These decisions are impacted
due to constraints of time and information available to an individual (Kromkowski, 2002).
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Incremental Bargaining Method
This method as defined by Vaidya (2012) allows people to keep limited options for their attention
because of information and time availability constraints. Hence it does not require all information to be
known and all possible alternatives to be identified as compared to Bounded rationality discussed above.
Organisational Styles of Decision Making
Autocratic decision making
All the decisions are made by the top management. This style has its own benefits and drawbacks. In this
case the decision has to be followed and abide by the middle management and should be enforced
throughout the organization.
Participatory decision making
In these decisions, the whole management including the top, middle and bottom are all invited to share
their opinions. The more everyone is involve the more they get the opportunity to share their views with
each other.
Consensus based decision making
This decision is made in cross functional team. Employees from different departments are invited to share
their inputs. However this is a time consuming method and requires a lot of time. Different people from
different backgrounds are brought together for the final decision.
Democratic Decision making
The decisions are made as a result of the majority of the vote. When more employees cast their vote for
one thing over the other, the decision is taken in its favor. In this case, people come together, some may
oppose while some other favor some decisions.
4.2 Risk and Uncertainty
Cleden (2009) defined risk with certain attributes like quantifiable nature, vulnerability and conceivability.
Also if a risk exists so does its mitigation plan regardless of it being opted on not.
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Uncertainty is different from the risk in the sense that it can neither be gauged nor its nature can be
identified until it occurs. If it could identified it would transform to risk. Hence it can be decalred that
ambiguity left over after all risks are identified is uncertainty. Risk is of tangible nature and likely to come
up due to lacking awareness or information; while uncertainty is intangible i.e. out of anything unknown.
Identification of Risk
Following figure shows requirement to identify a risk (Cleden, 2009):
Attitude towards Risk
According to HBR article, there are four types of attitudes when classifying on risk management which
might change over the period with the element of surprise from the actual world(Ingram and Thompson,
2012):
Prilimary information
about the issue
Threat associated with
the problem
Possible consequences of the threat
Levels of danger and vulnerability
Ways to manage
Is the risk one off or linked to
a risk series
Maximizers
Managers
Conservators
Pragmatists
•Who believe in lower levels of risk existence and are oriented to self- corrections
•Who believe that a moderate level of risk does exist; however it can be managed with appropriate guidance
•Who believe in high risk existance
•Who think that risk is as high as uncertainity and environment is always unpredictable
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Risk Management
Managing risks in decision-making depends on identifying, quantifying, and analyzing the factors that can
affect outcomes. This allows managers to classify likely risks and their potential effect.
Risk management and its planning are important since it helps securing assets, reputation, human capital,
environment etc. Risk preventive measures are not same as risk management measures. Simple steps to
risk management might include (Reserved, 2015):
Risk Management Types
There exist a number of perspectives for classifying risks. However, their application and intensity and
threat differ from one organisation to another. For instance, Financial risk management is common to
almost all organizations while Credit risk is only to those who are dealing with credit in the market.
Similarly Project risk is not applicable for all companies while IT or Technology risk is high for those
depending more on technological developments and their integration (World Finance, 2015). Other risk
management types include legal, time, financial, strategic, operational, physical, market and liquidity.
Planning for Risk management
A proper plan needs to be laid out before managing the risk.
Identification of project risk
A number of steps need to be followed in identifying the risks such as gathering the information. This
requires different techniques are used to gather the information.
Some of these techniques are:
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Conduct SWOT Analysis
Observing and assuming followed by supervision
Brainstorm ideas to identify potential threats
Having checklists prepared and monitored
Conducting interviews to explore
Project Risk assessment
Steps discussed above to under ‘Risk Management’ can be followed here. Two analytical approaches can
be devised to facilitate:
Qualitative Analysis – This is a way of evaluating a risk as High, Medium or Low. The severity of the risk
may be associated with cost, availability or resources required.
Quantitative analysis – It associates a numerical value against each risk. The higher the risk, the higher
the value it gets.
ID Risks and consequences Probability Impact Priority Mitigation response
1 Weather getting colder, cars will
be covered in snow 50% 4 100
Get the parking covered to
ensure cars are not parked in
open
2 Plants will shed leaves 20% 3 20 Keep the plant pots in warmer
place
4.3 Effectiveness of organizational decisions
Successful organizations make good and fast decisions. These organizations acquire more contracts,
penetrate easily in the market easily surpass their competitors. High performing organizations make high
quality decisions. They translate their decisions more quickly and put them into action. Highly effective
organizations possess the following elements (Steers, Porter and Bigley, 1996):
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Leadership
Decision making and structure
People
Work processes and systems
Culture
Organizational decisions are also influenced by the type of organizational structure that is implemented in
the organization. These structures can be:
Product organization structure – This is suitable in situations or places where people work in
departments and hold specialized product knowledge. They can easily understand the customer
requirement and can provide their valuable feedback.
Functional Organization Structure – This is suitable for organizations that are divided by functional areas
such as marketing, HR, engineering departments. Here people of specific talent are grouped together and
can take a decision in a more professional and technical way.
For effective decision making, organizations should also consider the following:
Every employee must understand his / her responsibilities and should be able to understand the
situation and be able to tackle it.
Decision making power should be in the hands of more than one person.
The higher the transparency and clarity be in the organization, the easier and more effective
decisions can be made.
Make a note of expectations and needs of the employees this will help to access the ones that can
be accepted.
Identify gaps in the organization and provide opportunities to all employees to participate and
share their input.
Organizations should always conform to legal standards and ethics.
Clearly document the job roles and responsibilities of the staff members, and the board members.
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Proctor and Gamble
Proctor and Gamble is a multinational organization with a number of stores all across the globe. The
company has a large number of products under its portfolio. This organization follows an autocratic
structure for running its operations. As a result of this, all important decisions are carried out by the top
management. It has a board of governors which discuss all important topics during the meetings which
are usually planned once every two weeks.
The management considers the various risks
associated with each topic or project under
discussion. Based on the risk analysis done by
professionals, the board then decided
whether to escalate the project or decline the
project.
The organization uses technology as a tool to
escalate communication between the
management and concerned departments.
They use a number of applications to visually
interpret the data.
The goal of the organization is to compress
the time required for decision making.
Decisions are made using easy to use video,
real time data and other technological
resources. They identify what the problem is,
why it has happened and how the issue can
be resolved. The executives use data like heat maps to decide.
However, with such approach preciseness of data is essential. Further the decision is totally dependent on
technological aid. The decisions made are largely with estimated risk which requires relevant members to
be updated with developing technical tools i.e. a cost of training development and hiring innovative
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minds is kind of fundamental understood investment. This is evident from the statement of Bob Hunt or
P&G who claimed to have thousands of employees trained for @RISK which is another decision making
tools P&G has been relying on. Precision Tree is also being rolled out after significant investment of
identifying, customizing and testing it. Another considerable thought here is that P&G and other such
groups are less likely to rely on one tool like P&G prefers framing decisions using ‘The Decision tool Suite’,
‘Precision Tree’ and ‘@Risk’ together which can result to contradictions if properly utilized (Palisade.com,
2015).
Conclusion
The report has demonstrated an understanding or organizational decision making. Different approaches
to decision making have been discussed. Various approaches to risk management have also been
discussed. The effectiveness of decisions on any organization has also been presented.
Recommendation
Organizations should consider all the perspectives of decisions. They should consider the risks involved in
any project and properly plan the solution.
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References
Adams, J. Stacy. Toward an Understanding of Equity. Journal of Abnormal and Social Psychology.
November 1963, 422–436.
Cleden, D. (2009). Managing project uncertainty. Farnham, England: Gower.
Darwish, A. (1998). Optimality in translation. Patterson Lakes, Vic.: Writescope.
Gordon, Judith R. (2001). Organizational Behavior: A Diagnostic Approach. 7th ed. NJ: Prentice Hall,
2001.
Herzberg, Frederick, B. Mausner, and B. Snyderman. (1959).The Motivation to Work. New York:
McGraw-Hill
Ingram, D. and Thompson, M. (2012). hbr.org. [online] Harvard Business Review. Available at:
http://What’s Your Risk Attitude? (And How Does It Affect Your Company?) David Ingram and
Michael Thompson [Accessed 21 Dec. 2015].
Jones, G., George, J. and Hill, C. (2000). Contemporary management. Boston: Irwin/McGraw-Hill.
Kromkowski, C. (2002). Recreating the American republic. Cheltenham, UK: Cambridge University
Press.
Palisade.com, (2015). Case Study: Procter & Gamble Uses @RISK - Palisade. [online] Available at:
http://www.palisade.com/cases/procterandgamble.asp [Accessed 22 Dec. 2015].
Reserved., C. (2015). What Is Risk Management? | ClearRisk™. *online+ Clearrisk.com. Available at:
http://www.clearrisk.com/what-is-risk-management [Accessed 22 Dec. 2015].
Steers, R., Porter, L. and Bigley, G. (1996). Motivation and leadership at work. New York: McGraw-Hill.
Vaidya, K. (2012). Inter-organizational information systems and business management. Hershey, PA:
Business Science Reference.
World Finance, (2015). Types of Risk Management. [online] Available at:
http://finance.mapsofworld.com/risk-management/types/ [Accessed 22 Dec. 2015].
Name-ID-OB-Sample Assignment2 A1.pdf
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Statement and Confirmation of Own Work
Student Declaration
I have read and understood ATHE Assignment Submission guidelines and Academic Dishonesty and Plagiarism
Policies. I can confirm the following details:
Student ID 13523
Student Name Xxx
Programme Title ATHE Level 7 - Diploma in Strategic Management
Module Organisational Behaviour
Subject Tutor Dr. Asha Peter
Assignment Number 1
Enrolment Date Jan-16
Due Date
Word Count (Excluding TOC, References and Appendices)
I declare that the work submitted is my own work and that I have not plagiarized any part of it. I have also
noted the assessment criteria and pass mark for assignments.
Student Signature:
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Course Title: Organisational Behaviour
Assignment No: 1
ATHE Level 7 - Diploma in Strategic Management
Student Name: Xxx Xxx
Due Date: XX
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Organizational Behavior
ACTIVITY 1
Effective Leadership Behavior
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Table of Contents
A.) LEADERSHIP THEORIES 7
Great Man Theory 7
Trait Theory 8
Behavioral Theory 8
Participative Leadership Theory 9
Situational Leadership Theory 10
Contingency Theory 11
Transactional Leadership Theory 11
Transformational Leadership Theory 12
B.) IMPACT OF MANAGERIAL STYLES ON ORGANIZATIONAL EFFECTIVENESS 13
i.) Autocratic Management Style 13
ii.) Participative Leadership Style 13
iii.) Delegative Leadership Style 13
C.) MOTIVATIONAL THEORIES 14
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MAJOR CONTENT THEORIES: 14
Maslow’s Hierarchy of Needs 14
Alderfer's ERG Theory 14
Herzberg's Motivator-Hygiene Theory 15
Mcclelland's Learned Needs Theory 16
Major Process Theories: 17
Expectancy Theory 17
Equity Theory 17
Goal-Setting Theory 17
Reinforcement Theory 18
D.) WORK RELATIONSHIPS AND INTERACTION 18
Developing Trust – 18
Respect to one another – 18
Diversity Management – 19
Communication – 19
Diligence – 19
Power and Politics – 19
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Summary
This report will demonstrate the understanding of effective leadership behavior theories and the various
leadership styles in practice. The report will provide an evaluation of managerial styles in the effectiveness
of organizations.
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Introduction
This report aims at providing a clear understanding of the various leadership theories and the leadership
styles that are in practice in the organization. The report will also evaluate the impact managerial styles on
the organization. This will also provide an insight on how motivation theories will have an impact on the
employees. It will consider the effects of employee motivation. Finally an analysis has been given to
consider the relationships and the interaction of employees.
A.) Leadership Theories
Leadership is a noteworthy path in which individuals change the thinking of others and propel associations
to perform recognized objectives. Researchers, philosophers have studied the leadership concept for many
years. The literature has wide scope of discussion and development to explain and criticize concepts of
leadership.
Great Man Theory
This theory was proposed by Thomas Carlyle who was a writer and a teacher. This theory dates back to the
19th century. The focus of this concept stems from situational leadership i.e. the inborn leadership skills of
an individual shines as the situational need arises. According to this theory the traits of the leadership are
inborn. This means that a person is born with or without the necessary traits of leadership. It refers to
great leaders as they are destined by birth to become
great leaders. So no matter where or in which group the
leader is, he will always be valued for what he is. Their
dominant characteristics include socializing, intellect, self-
confidence, and magnetism. These leaders also have a
commanding personality, charm, courage and intelligence.
Researchers believed that leaders possess these qualities
from their birth and since then they practice them. This
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theory reflects gender orientation. At the time when this theory was presented most leaders were men so
gender was not an issue. Even the researchers were mostly men so the concept of biasness against the
women was not considered (Denslow, 2015).
Trait Theory
Accoridng to Parera (2013) the right combination of certain skill sets to be a leader is the essence of this
theory. Great leaders need to possess traits such as self confidence, courage, sense of responsibility,
creativity and extraversion. These qualities help them to excel. The theory identifies the different
personality traits that are associated to the successful leaders. Different traits lead to different behavioral
patterns. The traits do not guarantee that the person who possesses them will always be successful leader
or not but these are considered as a prerequisite that help the people to enhance their potential. The
advantages of this theory can be considered as (Leadership-Central,
2015):
The theory is widely acceptable as extensive research has been
done for its validation.
It is considered as a tool to assess the capabilities of an individual.
It provides in depth knowledge of the individuals potential by
analyzing the traits that one possesses.
By knowing the various traits, it’s easy to identify prospective
leaders. By possessing certain traits individuals are permitted to
qualify for certain positions.
Behavioral Theory
Behavioural Leader concept says that leaders emerge and are shaped through learnt beheviours
(Technofunc.com, 2015). It actually opposes Great Man theory’s concept of born leaders. This theory
focuses on the behaviors of the leaders as opposed to their mental capabilities in the traits theory. Two sub
notions of this theory are people orientation and task orientation. This theory believes that a person can
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become leader through teaching and observation. An example for this theory can be considered by the
actions of a manager who punishes his employees if they are late to work while appreciate when they
arrive at the right time (Changing minds, 2015).
The theory promotes leaders who show their skills by their act
in a certain situation. Individuals can become good leaders by
watching, researching, analyzing, coaching and training
(Technofunc, 2015). Behavior does not refer to the attitudes or
feelings but the actions that are taken in the environment. This
theory considers that it is more important to consider a person
the way he acts or performs tasks rather than accessing his traits that he possesses as his personality. His
actions are more effective, helpful and valuable.
Participative Leadership Theory
As the title illustrates under this concept the prime quality of a leader is his capacity to involve people in
decision making process i.e. through acquiring feedback and input of his followers to shape a decision.
As per this theory, leaders take decisions on the basis of collaboration and tend to make decision taking
into account the opinion of all other members. Such leaders are not autocratic that is self centered but
involve other people such as peers, subordinates, other stakeholders in taking decisions.
This style is very much in use today in the organizations as more and more organizations prefer working in
teams and group where different individuals are required to participate and share their input. This way
decisions can be made by the ones who are going to be affected by them. The theory assumes that when
individuals are asked to share their opinions, the
level of understanding gets better. The people
tend to be more responsible for their actions
when they are the ones who have put forward
those decisions. This helps them to be less
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competitive rather they tend to become more collaborative as they all share the same aim. The level of
commitment increases when people work together towards the same aim. The decisions can be more
effective and better when they are made by a group of individuals rather than its one persons decision
(Parera, 2013).
Situational Leadership Theory
According to Paul Hersey’s theory, there is a need for different leaders on the basis of different situations
(Great Thinker, 2008). It assumes that the best action of a leader depends on situational factors i.e.
adaptability of a leader to a certain scenario is the vital concept. Situational leaders should be well aware of
the happenings in their surroundings, they should conduct effective conversation. They also understand
the ups and downs in the organization and that when they should be consistent rather than being flexible.
They have the characteristic of recognizing high performing individual and engaging them in appropriate
tasks. A good situational leader understands the requirements and the needs of the tasks, the employees
and the stakeholders and accordingly restructures his strategy.
This strategy has a number of benefits:
The theory is simple and therefore can
easily be applied in situations.
This theory is very easy for any good leader
to adapt and use.
This theory consider the elements of
maturity and competence as these qualities
help a successful leader to be a situational leader.
However there are certain elements that do not consider this theory as beneficial:
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The theory is not applicable to managers who have limited authority and power. They may not be
able to enforce their decisions and judgments.
The theory does not prove to be a success in situations where time is a constraint the tasks are
complex.
Contingency Theory
This theory was devised by Fred Fiedler. According to this theory, no one style is suitable for a leader in all
situation. It assumes that the leader's capacity to lead is dependent upon different situational elements,
including the leader's favored style, the capacities and practices of supporters. This theory considers two
elements:
Leadership style:
Fiedler believed that leadership style can be measured on a scale such as Least Preferred coworker LPC.
People who score low are more effective in completing tasks. People who score high, are better in making
personal connections and are good at avoiding fights and conflicts.
Situational favorableness:
This can be determined by three factors Leader member relations, task structure and leaders position
power.
Transactional Leadership Theory
This leadership style was described by Max Weber and later explored
by Bernard M. Bass. This theory believes that punishment and reward
are the motivational factors for the people to perform; hence a leader
knows how to use them (Parera, 2013).
The exchange involves four dimensions:
Contingent rewards – The leaders provide the necessary resources
and accordingly reward when successful performance is done.
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Active management by exception – The transactional leaders continuously monitor their employees to
ensure that rules are followed as outlined and no one deviates or breaks them. This helps in prevention of
errors and flaws.
Passive management by exception – This style is followed by leaders who only interact when tasks are not
handled correctly. They may punish the employees if the tasks are done in an unacceptable manner.
Laissez-faire – The leader in this case provides all necessary resources and creates and environment with
numerous opportunities. However the leader himself may no make decision and this creates
misunderstandings as the directions may not clearly given.
Transformational Leadership Theory
This concept was introduced by James McGregor Burns. It is considered as a process where both the leader
and the follower will support and raise each other to a higher level of morality and motivation. It assumes
that people will follow a person who motivates them. This leadership trait is not confined to a particular
hierarchical level. A transformational leader possesses the following characteristics:
Sets goals clearly.
Motivates and encourages others.
Understands the emotions of the people.
Inspires people to look ahead and make the
impossible as possible.
Visionary and risk taker.
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B.) Impact of Managerial Styles on Organizational Effectiveness
i.) Autocratic Management Style
Also known as Authoritarian leadership, this style clearly separates leaders and workers. Autocratic leaders
do not encourage input from the staff rather decision making process
is centralized to them.
Impact on Organization: Though this style is less people oriented
yet quick to implement and usually lead by specialized experts or key
management people. It is usually suitable for tall hierarchies with top
down approach.
ii.) Participative Leadership Style
Also known as Democratic leadership, this style is usually the top
choice for most organizations. This style stresses that management
guides its teams & departments while getting information from
individual staff.
Impact on Organization: The ultimate authority belongs to Leaders
to make a decision yet the welcoming suggestions and input from team
members increases motivation and satisfaction level. This style might
work well with flat organizations; if applied to tall structures might
result in delays and complexity of decision making (Small Business -
Chron.com, 2015)
iii.) Delegative Leadership Style
This style is not really encouraged because of its susceptibility of
effectiveness. The leaders tend to take their hands off from decision making leaving it to the group which is
why is known as Laissez-Faire leadership. It might only work for those individuals who have high analytical
and decision making skills. Most people are likely to be unconvinced with this kind of delegation and might
think that the leader is hardly engaged (Action-Wheel.com, 2015).
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Impact on Organization: Since job roles are hardly defined this type of leadership results in lack of
motivation and positive thinking that often creates confusion for team members. On other hand it is a good
way to portrait confidence among subordinates by giving them authority.
C.) Motivational Theories
The term motivation originated from Latin word movere, meaning ‘to move’. It refers to the factor that
influence behaviour of people or enthuse them to act behave and move in a particular dimension i.e. the
value that reinforces the result as defined by Kalat (2013).
Major Content Theories:
Maslow’s Hierarchy of Needs
Maslow wanted to explain the reasons why people get motivated via hierarchical pyramid with different
levels of motivation. He said that it’s a human psychology that when one need is fulfilled a person looks for
the next need and so on. This hierarchy comprises of five
motivational needs depicted in a pyramid. This model consists
of five levels:
Physiological needs: These needs include the basic
necessities of survival such as air, food, drink, shelter.
Security needs: These needs are considered as security,
law, stability, freedom of fear.
Love and belongingness needs: This includes love and affection from family, friends, work group.
Esteem needs: These are the feelings of self respect, achievement, status.
Self-actualization needs: This includes personal growth, self fulfillment, and personal experiences.
Alderfer's ERG Theory
Extended from Maslow’s theory the ERG theory was developed by a psychologist Clayton Alderfer. He
compressed the level from five to three to classify the motivational needs:
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Existence: This is the most basic level and comprises of the basic needs of the people. This
comprises of the two low levels from the Maslow’s hierarchy and Includes all material and
physiological desires. These needs are very concrete
and can be easily identified.
Relatedness: This refers to social and external esteem
needs. Here relationships with family members, family,
friends, co workers and employers are considered.
These needs are less concrete than Existence needs.
Growth: This relates to the personal growth and
development of individuals and is meant to be of high
quality, and meaning. These needs are the least concrete.
Herzberg's Motivator-Hygiene
Theory
This theory was developed by Frederick Herzberg
as the motivator-hygiene theory.
As defined by Fiore (2004) the two factors are
distinguished as hygiene factors that are minimum
essentials to keep dissatisfaction levels down but
they do not contribute to enthuse people.
Motivators are the high level needs which if
satisfied can impact motivational levels of the employees.
The two factors either enhance employee satisfaction or hinder it.
Hygiene factor – This refers to the dissatisfaction caused to the employees in the work place.
Interpersonal relationship issues, inefficient leadership, unsatisfactory workplace conditions,
company politics, job insecurity or wage related issues can result in dissatisfaction.
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Motivator factor – These are intrinsic factors i.e. these are dependent conditions in the work
place. It includes factors such as responsibilities, job satisfaction, opportunities for growth.
Mcclelland's Learned Needs Theory
This theory was proposed by McClelland (1987) which exhibits that the sense of need emerges from culture
(Integralleadershipmanifesto.com, 2015)
Affiliation Need (n Aff): This suggests that people who have a high need for achievement avoid low
risk and high risk situations. They avoid low risk if they have achieved success but it was not a genuine
success. In high risk they see the outcome rather than owns effort. These achievers need regular feedback
to keep a check on their achievements and progress.
Power Need (n Pow): The interest in power can be of two types i.e. personal and institutional.
Personal power is meant for those individuals who want to direct others. While institutional powers
enforce people to promote the organizational goals.
Achievement Need (n Ach): These people need harmonious
relations with other people. They want themselves to be accepted by
others. They follow the norms and rules of the workplace. They feel
satisfied in tasks that give them a chance for personal attention. They are
well suited for jobs where they interact with customers or clients.
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Major Process Theories:
Expectancy Theory
Defined by Victor H. Vroom Expectancy theory believes that people are usually convinced of a behavior,
therefore can only agree to an extent to choose another. This theory recommends that a person will agree
to act in a certain way because they are inspired to select a
particular behavior over other behaviors (DuBrin, 2009). This
theory comprises of three elements:
Expectancy: It is the belief that one's effort (E) will result in
attainment of desired performance (P) goals.
Instrumentality: This relates to the belief that if the performance
expectation is met the a person will receive a reward
Valence: It is the value that an individual places on the reward.
Equity Theory
This theory was developed by psychologist Adams (1963) about
employee satisfaction. Adam indicated that employees keep a
balance between what they give to the organization and what they
get in return. When people are treated fairly they are more likely
to be motivated. But when they are treated unfairly, they are
become highly demotivated and dissatisfied. This theory indicates
that a person will involve in social similarity by comparing their energies and returns with those of
significant others. Thus this theory explains why elements such as pay and conditions do not determine the
motivation of employees.
Goal-Setting Theory
This theory was proposed by Edwin Locke (Eysenck,
2004) which says that peope motivation and
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behavior is actually affected by their goals. The advantage of this theory is that it helps an employee to gain
incentives as he completes his work quickly and effectively. This concept increases the level of motivation
which results in better performance. Goals set by individuals should be specific, realistic and challenging.
Reinforcement Theory
As reinforced by McClincy (2010), Skinner – the innovative
behaviorist defined it as a learning and motivation concept. As
signified from the name, the reinforced behaviours are likely to
reoccur. Leaders and managers can use this concept via
Positive reinforcement, Negative reinforcement, Punishment
or Extinction.
D.) Work Relationships and Interaction
Since organizations are comprised of people linked and grouped for designated functions, the social scope
cannot be overlooked. With this perspective the interaction, communication and relationships also come in
view. A range of elements can be included as the bases of workplace relationships and interaction. For
healthy relationships a few of the factors include (Mindtool, 2015):
Developing Trust – it is considered as the base of every relation including business relationships.
Developing, retaining and exhibiting trust is always expected in a professional environment. It gives people
a sense of belongingness and ownership. Also facilitate for open communication and transparent dealings.
However, it might contradict with the perceived phenomenon of supervision and control where people feel
‘being watched’ instead of realizing the its need for performance reviews.
Respect to one another – This can be portrayed in number of ways such as listening to others,
valuing inputs and feedback, avoiding presumptions, etc.
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Diversity Management – Diversity is one of the core focus organizations are focusing these
days. It means acceptance and appreciation of people along with their inputs irrespective of their
backgrounds. Though, managers require developed skills for welcoming and reinforcing importance of
diversity in the workplace.
Communication – Communication is the most important factor in developing and maintaining
relationships. It involves face-to-face, written and media communication. With the technological
development, role of communication is getting stronger and significant. However, the challenge for
managing communication in ethical and reliable way is also a big challenge.
Diligence – It refers to being mindful about own words, actions and responsibilities
Power and Politics – According to Sias (2009) Power and Politics are two other fundamentals that
tend to develop in any workplace. Power usually emerges from hierarchical levels with authorities.
However accountability and responsibility is equally associated with power. This factor can serve both
positive and negative influences. Politics is likely to have its roots with power, communication and social
networking i.e. when people try to take additional advantage for personal or professional cause they
advocate.
To cope up with complex relationships, work, situational and communication issues, a lot of emphasis has
been placed on developing soft skills related to time management, business communication, emotional
intelligence, listening, problem solving, decision making and social networking.
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References
Action-Wheel.com, (2015). Delegative Leadership Style. [online] Available at:
http://www.action-wheel.com/delegative-leadership-style.html [Accessed 22 Dec. 2015].
Behavioral Theories Of Leadership. 2015. Technofunc.com [Online] Available from:
http://www.technofunc.com/index.php/leadership-skills-2/leadership-
theories/item/behavioral-theories-of-leadership (Accessed on 30-Jun-15)
Behavioral Theory. 2015. Changingminds.org. [Online] Available from:
http://changingminds.org/disciplines/leadership/theories/behavioral_theory.htm (Accessed
on 30-Jun-15)
Building Good Work Relationships Making Work Enjoyable and Productive. mindtools.com.
[Online] Available from: https://www.mindtools.com/pages/article/good-relationships.htm
(Accessed on 14-Dec-15)
Denslow, T. (2015). ⚡Presentation "Leadership and governance Different types of leaders and
traits of leadership.". [online] Slideplayer.com. Available at:
http://slideplayer.com/slide/4037064/ [Accessed 22 Dec. 2015].
DuBrin A. 2009. Essentials of Management. Edn 8th. Canada: South-Western Cengage Learning
Eysenck. M. W., 2004. Psychology: An International Perspective. New York: Psychology Press
Fiore D. J. 2004. Introduction to Educational Administration: Standards, Theories, and Practice.
USA: Eye on Education Inc.
Integralleadershipmanifesto.com, (2015). Solving the Motivation Puzzle | Integral Leadership
Manifesto. [online] Available at: http://integralleadershipmanifesto.com/manifesto/solving-
the-motivation-puzzle/ [Accessed 22 Dec. 2015].
Kalat, J. (2013). Introduction to psychology. USA: Wadsworth Cengage Learning.
McClelland D. C. 1987. Human Motivation. Sydney: Cambridge University Press
McClincy W. 2010. Instructional Methods for Public Safety. Canada: Jones and Bartlett Learning
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Parera, S. (2013). Function of management leadership. [online] Slideshare.net. Available at:
http://www.slideshare.net/SthefanieParera/function-of-management-leadership [Accessed 22
Dec. 2015].
Profile, V. (2008). GREAT THINKER. [online] Ochuuw.blogspot.no. Available at:
http://ochuuw.blogspot.no/ [Accessed 22 Dec. 2015].
Sias P. M. 2009. Organizing Relationships: Traditional and Emerging Perspectives on Workplace.
USA: Sage Publication
Small Business - Chron.com, (2015). The Effects of Leadership Styles on the Organization.
[online] Available at: http://smallbusiness.chron.com/effects-leadership-styles-organization-
10387.html [Accessed 22 Dec. 2015].
Technofunc.com, (2015). Behavioral Theories of Leadership. [online] Available at:
http://www.technofunc.com/index.php/leadership-skills/leadership-
theories/item/behavioral-theories-of-leadership [Accessed 22 Dec. 2015].
Trait Theory. 2015. Leadership-Central.com,. [Online] Available from: http://www.leadership-
central.com/trait-theory.html#axzz3uUGAwpPp (Accessed on 30-Jun-15)
Name-ID-OB-Sample Assignment2 A2 PPT.pdf
Activity 2 Presented by : Fouad Ahmed
Contents
Activity 2
Organization Structure and Culture
Types of organizational Structures
Types of Organizational Cultures
Relationship between culture and organizational Performance
Characteristics of high performing organizations
Facilitation of innovation and creativity
Importance of learning in organization
Effectiveness of team working
Organization Structure and Culture
Organization Structure
It can be defined as the hierarchy of reporting lines in an organization. A
structure describes how members are accepted, how leadership is chosen, and
how decisions are made.
Organization Culture
It can be defined as the values and behavior of employees that affects the
organizations long term vision. It represents the collective values, beliefs and
principles of organization’s members.
Types of organizational Structures
Organisational structure is one of the vital component to be included when
deciding about company’s strategic mission and visionary goals. Also it is
supported by cultural values a company aims to reinforce.
Three most common types of organisational structures are:
Functional
Divisional
Matrix Functional
Matrix
Divisional
Functional structure
It is like departmental structure where individuals are grouped according to the functions
and activities they perform. Majority of organizations are like to have functional
structure with departments like HR, Finance, Marketing, Sales, Asset Management and IT.
This structure support skill and knowledge sharing providing employees opportunities to
learn and grow in their respective field. Might serve as an obstruction when
interdepartmental competition arises; provide space to hoard knowledge.
Divisional Structure
Appropriate for big multinational or global companies that have offices spread in
various geographical locations. Also for different strategic subunits or companies
operating under one parent brand. The divisions are therefore developed
according to market wise or based on product development. Though this system
is responsive to changing needs of a particular industry but expensive to maintain
because of scope and size.
Matrix Structure
The blend of functional and divisional structure is Matrix. With the hybrid, it allows to
have features of both types of structure. Yet it is complex and expensive because of
overlapped job roles
Types of Organizational Cultures
Adhocracy: Supports creativity where staff is encouraged to take risks and
initiatives, provide novel ideas and experiment them.
Clan: Well suited for family business where care and personal relationships
are important than competitiveness
Market: Goal and target focused culture type. Place emphasis on
competition and market needs.
Hierarchy: Planned and organized job levels; well suited for large
coporations
Culture and organizational Performance
Fairfield-Sonn 2001 strongly advocates that the culture does impact organisational and individual
performance. Since it culture has its roots in the ways operations are carried out and decisions are
shaped everyday in an organisation
Organizational culture has the potential to improve and organizational performance.
By understanding the organizational culture the employees are aware of organizations history
and methods of operations.
It can foster commitment between the employees and the organization. This way organizations
can achieve effectiveness.
This can help make the employee understand the acceptable and the non acceptable.
It can help understanding employees’ safety nets and their psychological contracts with the
organisation
Understanding culture can help in achieving higher productivity.
Organisational Culture and Structure
Choice of culture is also linked with the organizational types and structure.
No culture can be ideal for all organisation. It should be developed based on
organisational strategy and type of business. For instance:
Hierarchical culture is more control oriented with set roles and
levels hence more suitable for large bureaucratic organisations
like McDonald’s and Ford whereas adhocracy culture gives freedom
to think and raise opinions like Google.
Market culture focus on competition which drives results like
General Electric but clan culture is more focussed on care and
concern like most of Japanese firms.
Characteristics of high performing
organizations
Some of the characteristics of high performing organizations are as follows:
Clear Management: Organizations that implement transparency in their
commitments with the stakeholders are successful.
Collaboration: The higher the collaboration among the employees and the
management, the higher the organization will perform.
Financial Efficiency : A high-performing organization manages financial
resources efficiently.
Measurement and Feedback: Organizations can use feedback to change their
performance to meet their goals.
Name-ID-OB-Sample Assignment2 A2.pdf
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How organizations can improve employee effectiveness to respond to business opportunities.
Contents
Facilitation of innovation and creativity ........................... 2
Importance of learning in organization ............................. 2
Effectiveness of team working .......................................... 3
Factors contributing to team’s ineffectiveness .............. 3
Frail Leadership – ....................................................... 3
Authority deference – ................................................ 3
Disruptions and blockage - ......................................... 3
Group Thinking –........................................................ 3
Apprehensive Evaluation - ......................................... 3
Why organizations need to change ................................... 4
Managing Change Effectively ............................................ 4
References ........................................................................ 5
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Continuous Organisational learning, encouraging
creativity and effective team work are essentials to
improve employees’ efficiency which ultimately helps in
responding to new business opportunities
Facilitation of innovation and creativity
Following methods can be adopted to facilitate innovation
and creativity in the organization:
* Foster an open, creative work environment
* Motivate the team members.
* Encourage diversity.
* Provide proper tools, resources and equipment.
* Create innovative teams.
* Don’t penalize, criticize or argue
* Encourage experimentation, lower the fear of failure
Importance of learning in organization
Learning is an important element in organization.
* It develops morale and motivation.
* It helps in identifying problems and their optimal
solutions.
* It aids in staff retention.
* It provides deeper understanding of issues from
different perspectives.
* It increases productive capacity.
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Effectiveness of team working
Effectiveness of a team is based on following factors:
* Knowing the team member
* Understanding and communicating roles and responsibilities
* Improved group dynamics
* Open communication across all team levels
* Problems should be handled and resolved at earliest to break down obstructions
* Developing commitment among team players to the same goal
Factors contributing to team’s
ineffectiveness
Frail Leadership – A more dominant member should take an initiative if the leadership is weaker
Authority deference – this can hold people from raising their opinion since the implicit expectations are to agree with the leader
Disruptions and blockage - when a few of the team member tend to act as joker, negator, aggressor, recognition seeker or free rider
Group Thinking – It can also be a negative element of teamwork since the member tries to agree to an approach rather than focusing on correct decision making
Apprehensive Evaluation - If team members think that they are being critically evaluated they are likely to hold their opinions instead of presenting them to the team
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Why organizations need to change
Many things cause organizational change. These include: * Challenges of growth, especially global markets
* Economic downturns and tougher trading conditions
* Changes in strategy
* Technological changes
* Competitive pressures, including mergers and acquisitions
* Customer pressure, particularly shifting markets
* Learning new organizational behaviors and skills
* Government legislation/initiatives.
Managing Change Effectively
Changes are inevitable. However to cope up and manage
the changes is the challenge for all leaders. Kotter’s Model
describes 8 steps involved in managing change in the
diagram below (Sengupta, 2012)
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References
Gordon, Judith R. Organizational Behavior: A Diagnostic
Approach. 7th ed. Upper Saddle River, NJ: Prentice Hall,
2001.
Motivation and Leadership at Work (Steers, Porter, and
Bigley, 1996)
Adams, J. Stacy. "Toward an Understanding of Equity."
Journal of Abnormal and Social Psychology, November
1963, 422–436.
Herzberg, Frederick, B. Mausner, and B. Snyderman. The
Motivation to Work. New York: McGraw-Hill, 1959.
Jones, Gareth R., Jennifer M. George, and Charles W.L.
Hill. Contemporary Management. 2nd ed. Boston:
Irwin/McGraw-Hill, 2000.
Improving Group Dynamics - Helping Your Team Work
More Effectively. Mintools.com. [Online] Available from:
https://www.mindtools.com/pages/article/improving-
group-dynamics.htm [Accessed on 17-Dec-15]
Building Teams That Work!. Personnelinsights.com.
[Online] Available from:
http://www.personnelinsights.com/team_analysis.htm
[Accessed on 17-Dec-15]
Sengupta N, Bhattacharya M S., Sengupta R. N. 2012.
Managing Change In Organizations. New Dehli: PHI
Learning Private Limited
Name-ID-OB-Sample Assignment2 A3.pdf
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Organizational Behavior
ACTIVITY 3 Organisational Effectiveness
Information Pack
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Table of Contents
INTRODUCTION TO ETISALAT 3
ETISALAT – STRUCTURE 4
IMPROVING EMPLOYEE EFFECTIVENESS 5
REFERENCES: 6
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Introduction to Etisalat Etisalat, the leader in telecommunication across UAE and Middle East was
founded in 1976 and has since expanded its operations in more than 19 countries. It has its
headquarters in Abu Dhabi. In March 2014, it reported its net revenue of US$10.6 billion (AED
38.85 billion) and net profits of USD US$1.93bn (AED 7.08 billion) (Etisalat.ae, 2015).
Etisalat provides a number of services to its customers. Some of the Internet services for home
users that Etisalat offers include: 3G Mobile Internet access, 4G Mobile Internet access,
Broadband, d Internet services (Al Shamil and eLife), Prepaid and Postpaid mobile packages.
Etisalat has been a pioneer in the field of telecom in the region. It has also been successful in
meeting the needs of its employees by providing them standard salaries as per the industry,
providing them with sufficient facilities to grow them personally and professionally.
Etisalat - Culture Etisalat follows a hierarchical culture. The corporate levels and structures are clearly defined.
With top down approach the orders from management descends down to employees through
middle management for day to day operations with explicit communication channels. Relevant
employees report to their respective managers (Small Business - Chron.com, 2015).
As the instructions are clearly defined, this avoids confusions and misunderstanding. This helps
in perfect results as per the expectations of the management. An environment of open
communication is in effect where employees share their knowledge and upgrade their skills.
Employees are encouraged to continuously grow themselves by travelling, going through
trainings and various other courses.
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Employees communicate through the intranet and all the requests are made through the same.
The management hierarchy has access to the same service. Requests are forwarded to various
managers in the hierarchy.
However, it does not allow open innovative ideas to be introduced at every level all the time
nor does it encourage risky initiatives i.e. adhocracy culture is not encouraged which is pre-
requisite for any learning organisation.
Etisalat – Structure
A Functional structure is followed in Etisalat. An expert individual manages his staff who is
qualified enough to supervise the tasks and people. The Staff is managed by a manager who has
experience in the same specialty and can adequately understand and review their work. This
way he can assist the performance of the employees and ensure that that the tasks are carried
out in the right way. He can also ensure that the subordinates are following the procedures as
they are mentioned and required by the management. The career ladder enables employees to
accelerate in their filed and benefit the company as well with their developed experience in
long-term. This helps them to retain the employees for longer periods of time and thus
reducing the turnover rate. The management does not have to spend time and effort in hiring
new candidates each time and then making arrangements for training them according to their
respective designations; though new hiring is also essential for fresh ideas and concepts.
The structure supports learning culture in a way to offer job movement and rotation for
acquisition of new skills; despite that this may hinder knowledge sharing if people are insecure
of their designations. Team work helps the employees to enhance their knowledge and upgrade
their skills. The structure of Etisalat looks like the following:
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Improving employee effectiveness According to Kouhy et al. (2010) employee effectiveness supports organisational effectiveness.
Whereas employees can be only be effective when they are motivated. The management of
Etisalat gives a lot emphasis on the employee effectiveness. They give high value to the
employees as it believes them an asset for the organization. They have a number of schemes to
enhance the motivation of the employees.
Financial Incentives Financial incentives are given to the employees who perform well. The performance is measured on the basis of certain criteria like punctuality, quality of work, peer assessment etc. they are provided by the following Individual bonuses – An increment in the salary is given as a way of recognition of the employees’ hard work to the organization. Sales commission – Sales managers are given targets to meet. If they achieve their targets they are given commission for their efforts. This helps the sales team to put extra effort and increase the sales. Stock options – The UAE nationals are allowed to get stocks in the organization. The more the organization will succeed the higher the returns will be gained by the stockholders.
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Moral Incentives – Various moral incentives are given to the employees to recognize their efforts for Etisalat. Awards – Certificates are given to the employees to appreciate their accomplishments. Recognition – An Employee of the month is chosen every month who has performed his duty in an excellent manner. Promotion- employees are upgraded and promoted to senior positions if the management considers that the person has put effort in his job.
References: Kouhy R. et al. (2010). Management Accounting, Human Resource Policies and Organisational Performance In Canada, Japan and the UK. UK: CIMA Publishing Samenacouncil.org,. 'Etisalat Recognizes Highest Achieving Employees In Northern Emirates Region - SAMENA Telecommunications Council'. N.p., 2015. Web. 11 Jun. 2015. This is Dubib.com,. 'Etisalat Recognises Its Top Talent To Inspire And Motivate Employees At Work'. N.p., 2015. Web. 12 Jun. 2015. Etisalat.ae, (2015). etisalat. [online] Available at: http://www.etisalat.ae/en/aboutus/about.jsp
[Accessed 22 Dec. 2015].
Small Business - Chron.com, (2015). Pros & Cons of a Hierarchical Organizational Structure.
[online] Available at: http://smallbusiness.chron.com/pros-cons-hierarchical-organizational-
structure-24276.html [Accessed 22 Dec. 2015].
