Taxmann's Principles of Management

Preface

In today’s world of globalisation, where business enterprises are free to enter international markets, managers must have complete knowledge of management principles to withstand the international competition. Even within the country, in the light of changing economic scenario, study of management is necessary to create managers who can efficiently run the business.

The present book has been designed and written with a view to give the students of Management an indepth insight into the subject of business management. It explains the nature of management and the evolution of management theory from the traditional to modern application and highlights the importance of planning function in the business enterprises. The importance of organising and various organisational structures have also been explained in detail. The important role that human beings play in the efficient running of an enterprise, the directing function, covering various aspects of motivation, leadership and communication explain the dynamic nature of business management and the nature and techniques of control.

The business enterprises are working in the changing, dynamic environment consisting of social, cultural, technological, political and legal factors. Change in any of these factors has to be duly incorporated in the current business policies and procedures. How and to what extent it is done has been explained along with the nature of conflict management at different levels.

Business is no more an economic institution which maximises the interests of owners only. It is equally responsible to look after the interests of other sections of society. The concept of social responsibilities explains social responsiveness of business firms and how their adherence to Corporate Governance principles helps in making them socially acceptable units.

It is hoped the book will be of interest to its readers. Though best efforts are made to present the book in simple and understandable language, errors may have crept in. Errors are deeply regretted and suggestions and ideas for improving the current volume are welcome.

DR. NEERU VASISHTH

Email : neeruvasishth8@gmail.com

Preface I-5

1

MANAGEMENT CONCEPT AND NATURE

1.1 Concept of management 1

1.2 Features of management 2

1.3 Importance of management 2

1.4 Aspects of management 4

1.5 Nature of management 6

1.6 Professionalisation of management 11

1.7 Justification of professionalisation 13

1.8 Management and administration 14

1.9 Levels of management 15

1.10 Diagrammatic representation of levels of management 17

1.11 Managerial skills 17

1.12 Management process 19

1.13 Management process/management functions 21

1.14 Management principles 24

1.15 Tasks of management 27

1.16 Role of managers 28

1.17 Managerial effectiveness (excellence in management) 30

1.18 Excellence in management 31

1.19 Functional areas of management 33

1.20 Production management 33

1.21 Financial management 36

1.22 Human Resource Management (HRM) 37

1.23 Marketing management 38

QUESTIONS 39

2

EVOLUTION OF MANAGEMENT THOUGHT

2.1 Introduction 43

2.2 Management theories 44

2.3 Pre-scientific management theories 44

2.4 Classical theory 45

2.5 Taylor’s scientific management theory 46

2.6 Henri Fayol’s classical organisation theory (management process theory) 53

2.7 Weber’s bureaucracy theory 59

2.8 Behavioural theory 62

2.9 Human relations (neo-classical) theory 62

2.10 Behavioural science theory 66

2.11 Modern management theory 68

2.12 Quantitative theory 68

2.13 Systems theory 72

2.14 Contingency theory 75

2.15 Operational theory 80

QUESTIONS 81

3

CONTEMPORARY MANAGEMENT THEORIES

3.1 Theory of Peter F. Drucker (1909-2005) 84

3.2 Theory of Michael Porter (born on May 23, 1947) 87

3.3 Theory of Tom Peters (born on November 7, 1942) 90

3.4 Theory of Michael Hammer (1948-2008) 91

3.5 Theory of Peter Senge (born in 1947) 93

3.6 Theory of C.K. Prahlad (1941-2010) 94

3.7 Theory of Mary Parker follett (1868-1933) 101

3.8 Theory of Chester I. Barnard (1886-1961) 102

3.9 Theory of McGregor (1906-1964) 103

3.10 Theory of Frank Gilbreth (1868-1924) 104

3.11 Theory of Rensis Likert (1903-1981) 105

3.12 Theory of Herbert Simon (1916-2001) 106

3.13 Mckinsey’s 7-S approach for management analysis 108

QUESTIONS 109

4

FUNDAMENTALS OF PLANNING

4.1 Introduction 111

4.2 Meaning of planning 111

4.3 Features of planning 112

4.4 Importance/objectives of planning 113

4.5 Limitations of planning 114

4.6 Ways to overcome limitations 115

4.7 Process of planning 116

4.8 Principles of planning 117

4.9 Features of a good plan 118

4.10 Planning premises 119

4.11 Process of planning premises 119

4.12 Types of planning premises 121

4.13 Business forecasting 122

4.14 Forecasting and planning 123 4.15 Approaches to forecasting 124 4.16 Merits of forecasting 124 4.17 Effective forecasting 125 4.18 Process of forecasting 126 4.19 Methods of forecasting 126 4.20 Choice of forecasting method 130

4.21 Evaluation of forecasts 130

QUESTIONS 131

5

GOALS AND PLANS

5.1 Introduction 133

5.2 Mission and purpose 133

5.3 Purpose of mission 134

5.4 Elements of mission 134

5.5 Mission statement 134

5.6 Components of mission statement 134

5.7 Features of mission statement 135

5.8 Goals/objectives 135

5.9 Features of objectives 136 5.10 Importance of objectives 136

5.11 Multiplicity of objectives 137

5.12 Hierarchy of objectives 138

5.13 Goal succession 139 5.14 Goal displacement 140

5.15 Management by objectives - Check on goal displacement 140 5.16 Problems of objective setting 140

5.17 Ways to overcome the problems 141

5.18 Problems in setting objectives and ways to overcome the problems 141

5.19 Objective setting - Moving from general to specific objectives 141 5.20 Forces affecting organisational goals 142

5.21 Organisational vs. individual goals 143

5.22 Goals and plans/types of plans 144 5.23 Plans on the basis of levels 144

5.24 Classification on the basis of use 146 5.25 Single-use plans 146 5.26 Programmes 147 5.27 Budget 148 5.28 Strategy 149 5.29 Projects 150 5.30 Standing plans 151 5.31 Policies 151 5.32 Procedures 154 5.33 Methods 156 5.34 Rules 157

5.35 Classification on the basis of time 158

5.36 Classification on the basis of functional areas 158

QUESTIONS 160

MANAGEMENT BY OBJECTIVES (MBO)

6.1 Meaning of MBO 164

6.2 Features of MBO 166

6.3 Objectives of MBO 167 6.4 Process of MBO 168

6.5 Merits of management by objectives 170

6.6 Limitations of MBO 172 6.7 Approaches to MBO 174 6.8 Effective MBO 175 QUESTIONS 177

STRATEGIC PLANNING

7.1 Dimensions of planning 179 7.2 Strategy 180 7.3 Features of strategy 180 7.4 Strategies and tactics 181 7.5 Styles of making strategy 181 7.6 Choice of style 182 7.7 Meaning of strategic planning 182

7.8 Features of strategic planning 182 7.9 Importance of strategic planning 182

7.10 Limitations of strategic planning 183

7.11 Process of strategic planning 184 7.12 Levels/types of strategies 185

7.13 Evaluation of strategies 188

7.14 Business growth 189 7.15 Growth strategy 189 7.16 Types of growth strategies 190 7.17 Internal growth strategy 190

7.18 Intensive growth strategy (expansion) 190 7.19 Diversification 191 7.20 External growth strategy 196

7.21 Mergers or amalgamations 198

7.22 Acquisitions and takeovers 202

7.23 Joint ventures 203

QUESTIONS 205

8

BUSINESS ENVIRONMENT (ANALYSIS AND DIAGNOSIS)

8.1 Business environment 210 8.2 Relationship between environment and business 215 8.3 Environment analysis and diagnosis 216 8.4 SWOT analysis 217 8.5 ETOP 220 8.6 BCG matrix 221 8.7 Competitor analysis 225

QUESTIONS 228

9

DECISION MAKING

9.1 Meaning of decision-making 229 9.2 Features of decision-making 230 9.3 Decision-making and planning 230 9.4 Process of decision-making 231 9.5 Types of decisions 234 9.6 Approaches to decision-making 236 9.7 Techniques of group decision-making 238 9.8 Decision-making environment 240 9.9 Techniques of decision-making 244 9.10 Models of decision-making 251 9.11 Creativity in decision-making 254 9.12 Information technology and decision-making 256 9.13 Management Information System (MIS) 257 9.14 Decision support system 258 9.15 MIS and DSS 258

QUESTIONS 259

ORGANISING FUNCTION

10.1 Meaning of organisation 262

10.2 Nature of organisation 264

10.3 Process of organising 264

10.4 Importance of organising 265

10.5 Organisation chart 266

10.6 What does organisation chart show 267

10.7 Principles of organisation chart 269

10.8 Merits of organisation chart 269

10.9 Limitations of organisation chart 269

10.10 Kinds of organisation charts 270

10.11 Organisation manuals 271

10.12 Types of manuals 272

10.13 Contents of manuals 272

10.14 Merits of manuals 272

10.15 Limitations of manuals 273

10.16 Span of management 273

10.17 Factors affecting span of management 276

10.18 Graicunas theory 277

10.19 Principles of organising 278 QUESTIONS 280 11

FORMAL AND INFORMAL ORGANISATIONS

11.1 Formal organisation 282

11.2 Features of formal organisation 282

11.3 Merits of formal organisation 283

11.4 Limitations of formal organisation 283

11.5 Theories of formal organisation 283

11.6 Classical theory 284

11.7 Human and participative theories 285

11.8 Contingency theory 286

11.9 Informal organisation 287

11.10 Features of informal organisation 287

11.11 Merits of informal organisation 288

11.12 Limitations of informal organisation 288

11.13 Formal and informal relationships on the organisation chart 289

11.14 Formal and informal organisations 289

11.15 Integration of formal and informal organisations 290

QUESTIONS 291 12

GROUP DYNAMICS

12.1 Meaning of group dynamics 293

12.2 Features of group 293

12.3 Group and collection of people 294

12.4 Types of groups 294

12.5 Reasons for joining informal groups 296

12.6 Management of informal groups 299

12.7 How do groups influence member behaviour 299

12.8 Negative aspects of group influence 299

12.9 Group processes and functions 300

12.10 Factors affecting group processes and functions 302

12.11 Group behaviour 303 12.12 Stages in group development 303

12.13 Group cohesiveness 305

QUESTIONS 306

TYPES OF ORGANISATION STRUCTURE

13.1 Organisation structure 308

13.2 Elements of organisation structure 308

13.3 Mechanistic and organic structures 309

13.4 Factors affecting organisation structure 310

13.5 Organisation formats/theories 314

13.6 Line organisation 315

13.7 Line and staff organisation 319

13.8 Functional organisation 321

13.9 Project organisation 325

13.10 Matrix organisation 327

13.11 Committee organisation 331

13.12 Networking organisation 334

QUESTIONS 339 14

AUTHORITY RESPONSIBILITY RELATIONSHIPS

14.1 Meaning of authority 342

14.2 Features of authority 342

14.3 Sources of authority 343

14.4 Types of authority 346

14.5 Types of authority (as defined by Weber) 347

14.6 Limitations of authority 348

14.7 Power 349

14.8 Authority and power 349

14.9 Nature of power 350

14.10 Sources of power 351 14.11 Use of power 352

14.12 Responsibility 353

14.13 Authority and responsibility 353

14.14 Parity between authority and responsibility 354

14.15 Accountability 354

QUESTIONS 355 15

LINE AND STAFF RELATIONSHIPS

15.1 Line and staff authority 358

15.2 Difference between line and staff 359

15.3 Importance of staff 359

15.4 Types of staff 359

15.5 Types of specialised staff 360

15.6 Line and staff conflict 362

15.7 Resolution of line and staff conflict 365

QUESTIONS 367

DEPARTMENTATION

16.1 Meaning of departmentation 369

16.2 Importance of departmentation 369

16.3 Basis of departmentation 370

16.4 Functional departmentation 370

16.5 Divisional departmentation 372

16.6 Functional and divisional structures 380

16.7 Choice of method of departmentation 381

16.8 Combined or composite method of departmentation 382

QUESTIONS 383 17

DELEGATION AND DECENTRALISATION

17.1 Meaning of delegation 386 17.2 Features of delegation 387 17.3 What should be delegated 387

17.4 Process of delegation 388

17.5 Forms of delegation 388 17.6 Importance of delegation 389 17.7 Principles of delegation 389

17.8 Elements of delegation 390

17.9 Barriers to delegation 390

17.10 Overcome barriers to delegation 391

17.11 Centralisation and decentralisation 392

17.12 Decentralisation 393

17.13 Importance of decentralisation 393

17.14 Limitations of decentralisation 394

17.15 Factors affecting decentralisation 394

17.16 Process of decentralisation 395

17.17 Delegation and decentralisation 396

QUESTIONS 397

CO-ORDINATION

18.1 Meaning of co-ordination 399

18.2 Features of co-ordination 400

18.3 Importance of co-ordination 400

18.4 Limitations in achieving co-ordination 401

18.5 Types of co-ordination 402

18.6 Techniques of co-ordination 403

18.7 Principles of co-ordination 404

18.8 Co-ordination and co-operation 405

18.9 Co-ordination the essence of management 405

QUESTIONS 406 19

CONFLICT MANAGEMENT

19.1 Meaning of conflict 408

19.2 Features of conflict 410

19.3 Conflict and organisational performance 410 19.4 Philosophy of conflict 412

19.5 Causes of conflict 412 19.6 Aspects of conflict 414 19.7 Consequences of conflict 416

19.8 Types of conflict 418 19.9 Management of conflict 420

19.10 Role of emotions in inter-group relations 422

QUESTIONS 423 20

STAFFING FUNCTION

20.1 Meaning of staffing 426

20.2 Nature of staffing 426

20.3 Importance of staffing 427

20.4 Personnel management (staffing) and human resource management 427

20.5 From personnel management to human resource management - A historical change 429

20.6 Human Resource Management (HRM) - Meaning 431

20.7 Nature of HRM 432

20.8 Objectives of HRM 432

20.9 Functions of human resource manager 433

20.10 HR department and staffing 435

20.11 Staffing process 435

20.12 Job analysis 441

20.13 Why job analysis 441

20.14 Elements of job analysis 442

QUESTIONS 444 21

RECRUITMENT AND SELECTION

21.1 Recruitment 445 21.2 Sources of recruitment 445 21.3 Selection 449 21.4 Recruitment and selection 449 21.5 Selection process 449 21.6 Selection tests 451 21.7 Interviews 453

QUESTIONS 458 22

TRAINING AND DEVELOPMENT

22.1 Training 459 22.2 Objectives of training programmes 459

22.3 Importance of training 460

22.4 Methods of training 461

22.5 On-the-job and off-the-job training methods 463

22.6 Methods for determining training needs 463

22.7 Training process 464

22.8 Evaluating training effectiveness 465

22.9 Meaning of management development 468

22.10 Features of management development 469

22.11 Objectives of management development 469

22.12 Methods of management development 470

22.13 Effective management development programmes 478

22.14 Training and development 479

QUESTIONS 480 23

COMPENSATION

23.1 Meaning of compensation 483

23.2 Forms of compensation 483

23.3 Factors affecting compensation 485

23.4 Features of a good compensation plan 485

23.5 Methods of wage payment 486

23.6 Incentive plans - Meaning 489

23.7 Incentive plan levels 489

23.8 Types of incentive plans 489 23.9 Supplementary compensation - Fringe benefits 493 23.10 Features of fringe benefits 494

23.11 Objectives of fringe benefits 494 23.12 Importance of fringe benefits 494 23.13 Types of fringe benefits 495

QUESTIONS 497 24

PERFORMANCE APPRAISAL

24.1 Meaning of appraisal 498

24.2 Objectives of appraisals 499

24.3 Merit rating and performance appraisal 500

24.4 Importance of appraisals 500

24.5 Approaches to performance appraisal 501

24.6 Methods of performance appraisal 501

24.7 Essentials of a good appraisal system 513

24.8 Performance appraisal process 513

24.9 Barriers to appraisals 514

24.10 How to make appraisals effective 515

24.11 Potential appraisal 516

24.12 Objectives of potential appraisal 516

24.13 Techniques of potential appraisal 516

24.14 Process of potential appraisal system 517

24.15 Potential appraisal vs. performance appraisal 517 24.16 Forms of promotion 518 24.17 Basis for promotion 518

QUESTIONS 520

25

DIRECTION AND SUPERVISION

25.1 Meaning of direction 521 25.2 Nature of direction 522 25.3 Importance of direction 523 25.4 Principles of direction 523 25.5 Components of direction 524 25.6 Direction and people 524 25.7 Meaning of supervision 527 25.8 Functions of supervisors 528 25.9 Objectives of supervision 529 25.10 Methods of supervision 529 25.11 Qualities of supervisors 530 25.12 Management and supervision 530

QUESTIONS 532

26

MOTIVATION

26.1 Meaning of motivation 534

26.2 Model of motivation 535 26.3 Motivators 536 26.4 Nature of motivation 539 26.5 Importance of motivation 539

26.6 Effective motivation 541 26.7 Approaches to motivation 542 26.8 Theories of motivation 543 26.9 Need theories 544

26.10 Need hierarchy theory 544

26.11 Two-factor theory 548

26.12 ERG motivation theory 552 26.13 Acquired - Needs theory 555 26.14 Cognitive theories 558 26.15 Expectancy theory 558 26.16 Equity theory of motivation 564

26.17 Goal setting theory of motivation 567 26.18 Reinforcement theory of motivation 569 26.19 Behavioural theories 572

26.20 Theory x and theory y 572 26.21 Theory z of motivation 575 26.22 Job design 578 26.23 Motivation and morale 582 26.24 Motivation and performance 584 26.25 Pay and job performance 586 26.26 Quality of Work Life (QWL) 588

QUESTIONS 594 27

LEADERSHIP

27.1 Meaning of leadership 599 27.2 Nature of leadership 599 27.3 Importance of leadership 601 27.4 Management and leadership 601 27.5 Leadership styles 602 27.6 Theories of leadership 607 27.7 Trait theories 607

27.8 Behavioural theories 610 27.9 Situational or contingency theories 615 27.10 Effective leadership 624

27.11 Principles of leadership 625

27.12 Qualities of a leader 626

27.13 Transactional vs. transformational leadership 627

QUESTIONS 630

COMMUNICATION

28.1 Meaning of communication 636

28.2 Nature of communication 637 28.3 Importance of communication 637 28.4 Process of communication 638

28.5 Channels of communication 640 28.6 Rumours 645 28.7 Dimensions of communication 646

28.8 Medium of communication 651 28.9 Verbal communication 651 28.10 Non-verbal communication 655 28.11 Channels of communication on the organisation chart 660 28.12 Communication networks 660 28.13 Communication skills 662 28.14 Communication barriers 663 28.15 Causes of communication barriers 663 28.16 Effective communication (overcome barriers to Communication) 667

QUESTIONS 669 29

INTERPERSONAL BEHAVIOUR

29.1 Meaning of interpersonal behaviour 671 29.2 Developing interpersonal skills 671 29.3 Techniques to develop interpersonal skills 672 29.4 Transactional analysis (TA) 672 29.5 Johari window 677

QUESTIONS 681 30

CONTROL CONCEPT AND PROCESS

30.1 Meaning of control 682 30.2 Nature of control 683 30.3 Importance of control 684

30.4 Relationship between planning and control 684

30.5 Types of control 686

30.6 Cybernetic and non-cybernetic control 688

30.7 Behavioural aspects of control 688

30.8 Resistance to control 689 30.9 Effects of resistance to control 690

30.10 Ways to overcome resistance to control 690 30.11 Control process 691 30.12 Focus of control 693 30.13 Management or control by exception 695 30.14 Effective control system 696 30.15 Principles of control 697

QUESTIONS 698 31

TECHNIQUES OF CONTROL

31.1 Techniques of control 700 31.2 Personal observation 701 31.3 Budgetary control 701 31.4 Break-even analysis 708 31.5 Financial statements 710 31.6 Statistical data and reports 711 31.7 Quality control 711 31.8 Management Information System (MIS) 718 31.9 Management audit 719 31.10 Responsibility accounting 723 31.11 Network techniques - PERT and CPM 727 31.12 Balanced score card 730 31.13 Ratio analysis 735 31.14 Return on Investment (RoI) 737 31.15 Economic Value Added (EVA) 738 31.16 Market Value Added (MVA) 740

QUESTIONS 741

ORGANISATIONAL CHANGE

32.1 Meaning of change 743 32.2 Features of change 744 32.3 Forces of change 744 32.4 Factors affecting change/need for change 745 32.5 Process of change 747 32.6 Change model (force field analysis) 748 32.7 Resistance to change 749

32.8 Overcome resistance to change 750 32.9 Types of change 752 32.10 Approaches to planned change 753 32.11 Management of change 754 32.12 Change agent 755 32.13 Emerging horizons of management in changing environment 757

QUESTIONS 764 33

CORPORATE CULTURE

33.1 Introduction 767 33.2 Features of culture 767 33.3 Organisation culture 768 33.4 Features of organisation culture 768 33.5 Factors determining organisation culture 769 33.6 Functions of organisation culture 770 33.7 Levels of organisation culture 770 33.8 Elements of organisation culture 770 33.9 Transmission of organisation culture 771 33.10 Strong/weak cultures 771 33.11 Developing organisation culture 772 33.12 Maintaining organisation culture 773 33.13 Changing organisation culture 773 33.14 Types of organisation culture 774 33.15 Performance and organisation culture 775

33.16 Organisation climate 776

QUESTIONS 777 34

ORGANISATION DEVELOPMENT

34.1 Meaning of Organisation Development (OD) 779

34.2 Features of organisation development 781

34.3 Organisation development process 782

34.4 Objectives of organisation development 784

34.5 Skills of organisation development practitioners 784

34.6 Merits of organisation development 785

34.7 Steps for organisation development interventions 785

34.8 Techniques of organisation develoment 787 34.9 Conditions for successful organisation development 792 34.10 Management Development (MD) 793 34.11 Importance of management development 794

34.12 Nature of management development 795 34.13 Merits of management development 795 34.14 OD and MD 795

QUESTIONS 796 35

CORPORATE SOCIAL RESPONSIBILITY

35.1 Introduction 798

35.2 Nature of corporate social responsibility 799

35.3 Levels of social responsibility 800

35.4 Historical perspectives of social responsibility 801

35.5 Philosophical perspectives of social responsibility 801

35.6 Phases of social responsibility 801

35.7 Approaches to social responsibility 802

35.8 Principles of corporate social responsibility 802

35.9 Arguments for and against Corporate Social Responsibility (CSR) 803

35.10 Dimensions of CSR 805

35.11 Social responsiveness and social audit 807

35.12 CSR and Companies Act 809

35.13 Ethics 811

35.14 Management ethics 811

35.15 Ethical activities 811

35.16 Types of management ethics 812

35.17 Guidelines for ethical behaviour 812

35.18 Approaches to management ethics 813 35.19 Need for business ethics 813

35.20 Barriers to management ethics 813 35.21 Solution to barriers 814 35.22 Values 814 35.23 Values and behaviour 814 35.24 Values of managers 814

QUESTIONS 816

CORPORATE GOVERNANCE

36.1 Introduction 821 36.2 Meaning of corporate governance 822 36.3 Corporate governance and corporate management 823 36.4 Objectives of corporate governance 823 36.5 History of corporate governance 823 36.6 Need for corporate governance 825 36.7 Importance of corporate governance 825 36.8 Corporate governance and organisational success 826 36.9 Corporate governance in the contemporary society 828 36.10 Corporate governance environment 829 36.11 Principles of corporate governance 829 36.12 True spirit of corporate governance 830 36.13 Code of corporate governance 831

QUESTIONS 832

KNOWLEDGE MANAGEMENT

37.1 Introduction 836 37.2 Transition from information value to knowledge value 837

37.3 Forms of knowledge 837

37.4 Meaning of knowledge management 838

37.5 Features of knowledge management 839

37.6 Data, information and knowledge 839

37.7 Importance of knowledge management 840 37.8 Facilitating knowledge management 840 37.9 Methods of acquiring knowledge 840

37.10 Professional attributes of knowledge workers 840 37.11 Process of knowledge management 841 37.12 Approaches to knowledge management 842 37.13 Implementing knowledge management 843 37.14 Align knowledge management with intellectual capital 843

QUESTIONS 845 38

LEARNING ORGANISATION

38.1 Introduction 846 38.2 Learning organisation 846 38.3 Features of learning organisation 848 38.4 Senge’s five disciplines of learning organisations 849 38.5 Application of the five disciplines 852 38.6 How to experience a learning organisation 852 38.7 Merits of learning organisation 853 38.8 Limitations and ways to overcome them 853 38.9 Traditional organisation and learning organisation 855 38.10 Learning organisation - Improvement over traditional organisation 855 38.11 Learning organisation - An ideal organisation 856 38.12 How to create a learning organisation 856

QUESTIONS 857 39

INDIVIDUAL BEHAVIOUR

39.1 Introduction 858 39.2 Factors affecting Individual Behaviour 858 39.3 Models of Individual Behaviour 863

QUESTIONS 869

40 PERSONALITY

40.1 Introduction 870

40.2 Meaning of Personality 870

40.3 Features of Personality 871

40.4 Factors affecting Personality 871 40.5 Personality Traits 873

40.6 Theories of Personality 879 40.7 Application of Personality to OB 883

QUESTIONS 884

41 PERCEPTION

41.1 Introduction 886 41.2 Meaning of Perception 886 41.3 Features of Perception 887 41.4 Importance of Perception 888 41.5 Factors Affecting Perception/Perception Distortions 888 41.6 Developing Perceptual Skills 894 41.7 Perceptual Process 894

QUESTIONS 904 42

WORK TEAMS AND GROUP DECISION-MAKING

42.1 Introduction 906 42.2 Meaning of Team 906 42.3 Features of a Team 906 42.4 Groups and Teams 907 42.5 Types of Teams 908 42.6 Quality Circles 910 42.7 Team Building 912 42.8 Effective Teams 913 42.9 Group Decision-Making 915

42.10 Merits of Group Decision-Making 916

42.11 Limitations of Group Decision-Making 917

42.12 Techniques of Group Decision-Making 917 42.13 Problem-Solving in Small Groups 919

QUESTIONS 920

IMPORTANT CASE STUDIES ASKED IN VARIOUS EXAMINATIONS 923

GROUP DYNAMICS

12.1 MEANING OF GROUP DYNAMICS

Groups are important for organisational life. Managers spend substantial time in managing groups and teams so that groups contribute to organisational and group goals. How effectively a manager plans, organises, staffs, leads and controls depends upon how effectively he manages the groups. A group means “two or more people who interact with one another, are psychologically aware of one another, perceive themselves to be members of the group, and work towards a common goal.”

Group dynamics studies the nature, formation and reasons for forming the groups. It studies how groups affect the behaviour and attitude of members and the organisation. It is a process by which people interact with each other. If groups are effectively managed, they contribute a lot to organisational goals.

12.2 FEATURES OF GROUP

Group has the following features :

1.It consists of two or more persons who interact with each other.

2.Group members have reciprocal influence on each other. Each member influences and is influenced by others in the group.

3.People develop mutual perceptions and emotions. They perceive and recognise each other as members of the group.

4.Every group has

•formal leader elected by group members, and

•informal leader “who engages in leadership activities but whose right to do so has not been formally recognised by the organisation or group.”

5.Each individual performs specific role which influences expectations of group members from each other. Role structure is “the set of defined roles and inter-relationships among those roles that the group or team members define and accept.”

6.Every group has group norms. “Norm is a standard of behaviour that the group accepts and expects of its members. It represents standards of work to promote group activity.”

7.It maintains stability through group cohesiveness. Members

•develop liking for each other,

•develop sense of identification with each other, and

•remain attached to each other.

8.Members work for common interests and goals.

12.3 GROUP AND COLLECTION OF PEOPLE

Group is a collection of people to achieve a common goal. Can a collection of people, therefore, sitting in the library or cinema hall or bus stop be called a group? No. This is mere aggregation of people. Interaction, power to influence and dependence on each other makes aggregation be called a group.

Aggregation of people is called a group when people;

•Interact with each other.

•Influence the behaviour of each other.

•Are mutually dependant on each other. People share views on the common subject, interact with one another, get influenced by others and arrive at consensus of opinion. Thus, group is an aggregation of people who interact with one another and influence interdependence of individuals. Study of groups and group behaviour is known as ‘Group Dynamics’. It is an important aspect of organising.

12.4 TYPES OF GROUPS

Groups can be of the following types :

I.Formal and Informal Groups

II.Primary and Secondary Groups

III.Small and Large Groups

Formal Groups

Formal groups are deliberately created to carry out specific tasks. They have clearly defined authority-responsibility relationships, communication channels, rules and regulations that govern the behaviour of members. Committees, task forces and work teams are the formal groups.

Formal Groups can be :

(i)Permanent Formal Groups [Command groups and permanent committees]

(ii)Temporary Formal Groups [Task forces and project groups]

(i)Permanent formal groups are formally represented on the organisation chart. They are also known as command groups and have both managers and subordinates. Functional or product departments are the command groups.

(ii)Temporary formal groups deal with specific problems. They dissolve once the problem is solved. Task groups, project groups or ad hoc committees are temporary formal groups. They are created to respond to the changing environment and include people from different command groups.

Types of Committees : Committees (formal groups) can be of the following types :

(i)Line and Staff Committees : The basis of forming line and staff committees is authority. Committee which has authority to make decisions is line committee and committee which does not make decisions but only assists, advices and counsels the superiors is staff committee. It helps line managers to perform the managerial functions.

(ii)Ad hoc and Standing Committee : The basis for forming ad hoc and standing committees is time frame. Committees which are formed for a specific purpose and dissolve once

the purpose is achieved are ad hoc or temporary committees. For example, if company wants to conduct market survey for a new product, committee shall be formed for this purpose which shall function till the survey is completed. Once done and the product launched, the committee gets dissolved. Committee which lasts for long duration is standing or permanent committee. These committees provide advisory functions to the chief executives.

(iii)Formal and Informal Committees : The basis of forming formal and informal committees is their position on the organisation chart. Committees formed according to formal procedures and assigned duties, power and authority to discharge those duties are formal committees. They are formally shown on organisation charts and are permanent committees.

Informal committees are groups of individuals which are not officially set up by the organisation. They work for a given purpose without officially defined rules or guidelines.

(iv)Plural Executive Committee and Advisory Committee : Committee which carries out managerial functions (planning through controlling), makes and implements decisions is a plural executive committee. The most common example of this committee is the Board of directors which takes important managerial decisions and orders for their implementation. The advisory committee does not make decisions but only performs advisory or recommendatory functions.

Meaning : These groups are not created by managers but spontaneously grow out of interaction amongst members of formal groups. They are created by choice for promoting the group goals. Members even subordinate individual goals to group goals. These groups may oppose or support the formal objectives. They are informal committees not shown on the organisation chart. They form out of common thinking of people. They are temporary and assist top executives on specific matters.

Types of Informal Groups : These are also called ‘overlays’. They are classified into five categories by Pfiffner and Sherwood.

(i)Social overlays : These groups form because of social needs of people, that is, need to interact.

(ii)Functional overlays : People of one department assist people of other departments. Workers of production department can go to supervisors of sales department for help. Groups formed through inter-departmental interactions are called functional overlays.

(iii)Decision overlays : Some people excel in decision-making because of their ability to judge, analyse and scan the information. People often approach them from different departments for consultation. This forms decision overlays.

(iv)Power overlays : Power is different from authority. While authority is authority of position, power is the authority of individual. Managers can acquire power through experience, education, and factors like religion, politics, nationality etc. Interaction based on such factors forms power overlays.

(v)Communication overlays : People using common equipments and machines, recreational halls, canteens, club facilities etc. interact informally and form communication overlays.

Functions of Informal Groups : Major functions of informal groups are as follows:

(i)Group values and life-style : Within formal structure of organisation, informal groups arise on the basis of social values and life-styles of individuals. However, as these groups strengthen, they develop tendency to resist change.

(ii)Social satisfaction : Interaction at the work place, sharing common thoughts, sitting and eating together satisfy employees’ social needs.

(iii)Operate communication systems : Informal system of communication operates along the formal channel of communication and works even faster than the formal communication channel. Messages are transmitted at much faster speed though rumours may also spread along with formal messages.

(iv)Maintain social control : Informal groups influence behaviour of people inside and outside the group. Influencing behaviour inside the group is called internal control and of those outside the groups is called external control. A particular kind of behaviour not acceptable to group serves as internal control. External control is exercised on people outside the group such as, trade unions.

Merits of Informal Groups : These are similar to merits of informal organisation. (see para 11.11)

Limitations of Informal Groups : These are similar to limitations of informal organisation. (see para 11.12)

Primary groups promote common goals. Members share values and behaviour. These groups are small and largely affect inter-personal behaviour. Friendship and social needs are the basis of these groups.

Secondary groups have loose inter-personal relationships and no common goals to share. Their members do not actively interact with each other. Professional bodies, business organisations are the common forms of secondary groups.

Small groups have few members who closely interact with each other. Large groups have large number of members with weak inter-personal interaction. They do not actively communicate with each other.

12.5 REASONS FOR JOINING INFORMAL GROUPS

People join informal groups for two reasons :

I.Internal Reasons

II.External Reasons

Groups satisfy needs in the following ways :

1.Interpersonal attraction : There is basic need in human beings for care, help and be useful to others. When people have similar attitudes, personality, economic status, values and beliefs, they become part of the same group. They like to enjoy interact with others. Frequent interaction is rewarding as it promotes similar values and beliefs.

2.Group activities : A person may join a group because he is attracted by group activities, like religious and charitable activities. Though group activities attract membership, interpersonal attraction is also necessary. A person may choose to forgo the activity than join a group with low interpersonal attraction.

3.Group goals : People join groups because they are motivated by group goals, for example, upliftment of the poor.

4.Group norms : Group norms have strong influence on behaviour of members. Norms are the standards accepted by the group. They are implicitly binding on group members. They are not written rules of behaviour but evolve informally. Members implicitly agree to these standards. Group norms influence behaviour a great deal and are binding on members of the group.

5.Higher pay-off : Generally, people behave according to perceived reward for the behaviour. If one type of behaviour has higher pay-off (is rewarded more), they repeat that behaviour.

Researchers have shown that when pay-off is high, people tend to collaborate more, particularly those who are interested in others. Conceptually, achievement motivation (concern for individual excellence and competition) is supposed to have high correlation with competitive behaviour. But findings did not bear this result. A person with high achievement motivation is interested in results. If he perceives that by collaborating he can get better results, he is likely to collaborate. Similarly, if a person perceives that results are better (pay-off is higher) from competition, he is likely to compete against others.

Not only those who have tendency to collaborate but also those who have tendency to compete collaborate if collaborative behaviour has higher pay-off.

For instance, political parties who compete with each other often collaborate when it comes to winning an election compaign.

6.Need satisfaction : People join groups to satisfy their affiliation, achievement, power, social and esteem needs. New residents in a locality, for example, join the local club to satisfy their individual needs.

Even at work place, informal groups provide mental rest and release official tensions.

People join groups because group membership satisfies their needs by forces that lie outside the group. It provides benefits other than those provided by the group:

1.Interaction : Professionally qualified students become members of groups which have contacts with firms for job market. Their interaction with companies is not direct but through groups.

2.Personal goals : Group membership helps to achieve personal goals which are different from group goals. People join Lions Club or Rotary Club not because these clubs meet their personal goals (club goals may be different from personal goals) but because other members of the club help to establish contacts (business or otherwise) which satisfy their personal goals.

3.Superordinate goals : These goals are important to all the parties and cannot be achieved by any party alone.

Experimental conflict and competition were first created in two groups of adolescents who were taken out camping for several days. Later, situations were created in which problems could not be solved independently by either group (superordinate goal). It was found that perception of superordinate goals by both the groups, which were hitherto involved in conflict and competition with each other, changed their behaviour and they engaged in maximum possible collaboration.

Several factors contribute to development of superordinate goal.

(i) The goal should be attractive and desirable to all the members.

(ii) The goal should be seen as shareable so that all individuals (or groups) share it.

(iii) If the situation is seen as something in which the goal cannot be achieved by single individual or group without working with other(s), then it becomes a superordinate goal.

In traditional sports, members of a team competing with other teams have superordinate goal of getting higher score. Within the team itself, members play collaborative game because they perceive the superordinate goal. The goal of victory is attractive to all members, they see this as shareable goal, and each one knows it cannot be achieved single-handedly, that each has to work with others to achieve this goal.

When people see a goal as having all these three elements, it becomes a superordinate goal.

4.Perceived power : Another condition which contributes to collaboration in group is the perception of power. It can be power to reward and power to punish. Punishment may be in the form of depriving a person of the reward which he or she is likely to get. This may be done by holding back information or misleading the other person. Even the person at the lowest level in organisation can use negative power to create annoying situations: delaying matters, holding back information, giving information which creates misunderstandings, etc.

If people in the system perceive clearly that they have power which is positive in nature, that they may be able to contribute to and use their influence for the attainment of certain goals, this is perception of positive power. At the same time, it is important that they realise that others involved in the situation also have power, both positive and negative.

5.Mutual trust : Along with perception of each other’s power, it is important that parties do not use power against each other. Some amount of mutual trust is likely to lead to co-operation. Trust indicates high probability that power of the concerned party or individual will not be used in a mala fide way. Combination of perceived power and trust leads to co-operation.

6.Communication : Communication amongst parties involved in the situation also contributes to collaboration. Several experiments have demonstrated that when representatives of the groups communicate with each other, the chances of collaboration increase.

Communication opens possibility of discussing the consequences of behaviour. It also helps the groups to discuss their perception of each other’s power and see that power turns into positive force for the benefit of all concerned. When people communicate as representatives of a group, it is important that the groups they represent trust them and representatives are sure that the commitment they make to other groups will be honoured by them.

7.Fait accompli : If groups or individuals live together and share certain norms, they begin to see good points in each other and collaboration begins to emerge. As long as individuals or groups do not work or live together, they may be prejudiced about each other. Poor communication or indifference can lead to prejudice.

For example, till representatives of the management and the union do not communicate with each other, management may think Union has no empathy for them. The realisation that they have to live or work together contributes to collaboration. Through sharing of experiences, they evolve common understanding and norms. Sharing a space may help each party to ‘experience’ and ‘see’ the other party’s strengths and good points.

12.6 MANAGEMENT OF INFORMAL GROUPS

Informal groups (or informal organisations) cannot be avoided. Managers should view them as pillars of support to formal structures. Many problems can be solved by informal groups if they are formally accepted. They speed up transmission of information and provide feedback on how people respond to policies and procedures. They provide useful tips on matters which cannot be officially deal with. They also promote team spirit which reduces the need for close control and supervision. Informal groups are a strong support and supplement to formal structures. Managers should, therefore, merge group goals with organisational goals. Following measures help to achieve this objective :

1.Managers view informal groups as support to formal structures.

2.They use these groups to obtain quick feedback on how people respond to plans, policies and procedures.

3.They view them as important supplement to formal groups.

4.They involve group members in group decision-making.

5.They integrate group goals with organisational goals and avoid inter-group conflicts.

6.They merge informal goals with positive attitude towards formal organisation structure.

7.They increase group cohesiveness by promoting inter-group competition, inter-personal attraction, consensus on group goals etc.

12.7 HOW DO GROUPS INFLUENCE MEMBER BEHAVIOUR

Groups satisfy needs of members in the following ways:

1.Members of informal groups have common values (social and cultural) which perpetuate group goals.

2.They fulfil needs of interaction, recognition and acceptance by others. Members derive individuality as part of informal groups.

3.They solve work-related problems in a friendly and supportive way.

4.They promote skills of communication, leadership and direction.

5.They promote cordial environment in the organisation.

6.They provide opportunities for personal growth.

7.They overcome stress and frustration of members through friendship, love and support.

12.8 NEGATIVE ASPECTS OF GROUP INFLUENCE

Groups may prove to be counter-productive in the following cases:

1.Excessive conformity to norms hinders creativity if group norms (or goals) are different from organisational norms. Members are reluctant to act differently as they fear to lose group approval.

2.Negative attitude of group leaders promotes vested interest at the cost of organisational interest.

3.If group goals are different from organisational goals, members pursue group goals. There is conflict between formal and informal roles.

4.Since informal groups do not follow official channels of communication, they may spread false information or rumours. This is counter-productive for organisational activities.

5.If group norms and values are carried too far, they become resistant to change. Groups become overprotective about group values. People do not deviate from values or norms.

12.9 GROUP PROCESSES AND FUNCTIONS

Groups perform the following processes and functions:

1. Assign Roles : Role is a set of expected behaviour attributed to someone who occupies a given position in a social unit. In formal groups, these roles are defined by job titles and positions. In informal groups, they are defined by their expectations and perceptions of other managers. Group members perform the following roles:

(i)Task-oriented roles : Members perform organisational tasks and keep other members focused on work.

(ii)Relations-oriented roles : They offer ideas and support other people’s ideas.

(iii)Self-oriented roles : These roles define personal expectations of members. They may or may not support the formal, task-oriented roles.

Members perform these roles in different degrees. High clarity in roles leads to high performance of the group.

2. Group Norms and Conformity : Group norms are acceptable standards or expectations shared by group members. They relate to output levels, absenteeism, promptness, dress, loyalty, etc.

Norms have powerful influence on performance. Members perform according to group norms.

Group norms serve the following purposes :

(i)They define acceptable standards of behaviour.

(ii)They promote group cohesiveness.

(iii)They promote consistent, uniform and predictable behaviour.

(iv)They promote group discipline.

(v)They promote group culture as members interact with each other.

(vi)They provide order by restraining discretionary powers of members.

(vii)They ensure group effectiveness and survival.

Group norms can be enforced in the following ways :

(i)Members conform to norms as they want to be accepted by groups.

(ii)Members perceive rewards like esteem, recognition, appreciation, acceptance and social satisfaction through group norms.

(iii)Conformity to group norms strengthens group membership.

(iv)Penalties for non-conformance (disapproval, social boycott, loss of membership etc.) also promotes conformity to group norms.

3. Group Cohesiveness : Group cohesiveness is the degree to which members are attracted to the group and share the group goals. It is “the degree to which members are attracted to a group, are motivated to remain in the group, and are mutually influenced by one another.”

Group cohesiveness has the following merits :

•It strengthens group goals and group norms.

•Cohesive groups perceive management as supportive to group goals. They perform better than less cohesive groups.

•Members communicate freely and better understand the feelings, emotions and behaviour of others.

•Members collectively engage in decision-making. This provides higher satisfaction than less cohesive groups.

•Mutual trust and confidence develop strong inter-personal relationships.

•Membership of cohesive groups is stable. Members accept innovations and change.

•High compatibility between group goals and organisational goals motivates to perform better than less cohesive groups.

•Members achieve higher job satisfaction than members of less cohesive groups.

•Groups that perform similar activities do not depend on others to get the work done. Group cohesiveness leads to positive consequences when members accept change in organisational policies. Group norms are high, resistance to change is low and people subordinate group goals in favour of organisational goals.

4. Group Decision-Making : Group decision-making is more effective as decisions are based on extensive information. Groups spend substantial time on finding problems, solutions and their implementation. Group decisions involve superiors and subordinates which develop diverse, open and new ideas.

5. Group Communication : Groups communicate through informal channels. Messages are clearly understood by members. There is effective feedback from group members which corrects misunderstanding. It is an important supplement to formal communication. Information gaps in formal communication are filled by informal channels. It promotes healthy inter-personal relationships and speeds up the flow of information.

Though rumours spread through informal channels, judicious use of this channel avoids gossips and rumours. Informal channels help to attain group goals, solve group problems, improve group performance, increase group cohesiveness and resolve group conflicts.

6. Informal leadership : Though formal leaders lead the group, informal leaders emerge by common consent of group members. They direct group activities. They are confident and assertive to perform :

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i)Task role : They help members to achieve the formal goals. They provide unity of action to group efforts. Sales manager, for example, assigns territories to sales people and supervises the new sales force members.

ii)Group building and maintenance role : Leaders provide emotional, psychological and social support to group members. They build group image and strengthen their solidarity. They settle non-work related disputes and keep members attached to the group.

It is often difficult for the same person to perform both these roles. Different members, therefore, become leaders for different roles.

12.10 FACTORS AFFECTING GROUP PROCESSES AND FUNCTIONS

Functions and processes performed by groups are affected by the following factors :

1. Group size : Group size affects functions of the group. Smaller groups complete tasks faster than larger ones. They are more productive than large groups. Large groups, on the other hand, generate more facts, collect diverse and open viewpoints, generate more solutions to problems.

However, with increase in size of the group, contribution of individual member tends to decline. Responsibility for group goals gets dispersed amongst larger number of members. Relationship between individual input and group output cannot be maintained as group results cannot be attributed to single person. This reduces efficiency of the group. Large groups develop sub-groups, restrict participation by members, take time in making decisions, promote dominance by few etc.

What, then, is the optimum group size? It should be large enough to develop diverse viewpoints and small enough to fix responsibility and promote inter-personal interaction. Following points affect the optimum group size:

(i)Groups should have odd number of members. It eliminates ties when decisions are taken by vote. Odd number facilitates decision-making.

(ii)Usually five or seven makes the optimum size. It is neither too large nor too small. It allows diverse inputs and avoids negative outcomes of large groups.

2. Group composition : It represents the kind of individuals that make a group and affect its performance. Groups can be heterogeneous or homogeneous.

Heterogeneous groups have dissimilar individuals, in terms of age, gender, education, experience, skills, culture etc.

Homogeneous groups have similar individuals.

Heterogeneous groups are generally more effective as they have people with diverse skills and backgrounds. There may be conflicting opinions but they perform better than homogeneous groups.

3. Group goals and tasks : Groups are formed for some goals and perform tasks to achieve those goals. These goals promote cooperation and also result in role conflict. The tasks also vary in their skills, complexity, competence, etc.

These factors affect group performance in the following ways :

(i)Group size affects unity in group activities, formation of sub-groups, interaction amongst group members etc.

(ii)Group composition assignes roles to group members, affects quality of group leadership, group satisfaction etc.

(iii)Groups goals and tasks affect group decision-making, group communication, group cohesiveness etc.

12.11 GROUP BEHAVIOUR

Group behaviour defines the way people behave with each other. It explains the roles performed by members of the group. It reflects unity and commitment of members towards group and organisational goals. Group members empathise and actively interact with each other. Though groups expect the members to obey group norms, some difference in roles is evident. Differences develop novel and creative ideas.

George Homans describes three elements of group behaviour : activities, sentiments and interaction.

Activities are the tasks performed by group members. Members perform activities that achieve goals of the organisation.

While performing formal activities, members form small informal groups on the basis of sentiments.

The sentiments develop interaction for social satisfaction.

This interplay of activities, sentiments and interaction results in group behaviour which is different from formal behaviour. It defines group behaviour which is more inclined towards need satisfaction than formal goals of the organisation.

Members reinforce their attitudes and sentiments and tend to do tasks different from those defined by formal organisation.

12.12 STAGES IN GROUP DEVELOPMENT

The model of group development was first proposed by Bruce Tuckman in 1965. He presented a model of five stages of group development: Forming, Storming, Norming, Performing and Adjourning.

Stage V Adjourning

Stage III

Norming

Stage I

Forming

(Members get to know each other and seek to establish ground rules)

Stage II

Storming (Members resist control by group leaders and show hospitality)

(Members work together, develop close relationships and feeling of friendship)

Stage IV Performing (Group members work towards getting their jobs done)

(Group may discard their goals or members leave the group)

All these phases are necessary and inevitable for the team to grow, face challenges, find solutions, plan work, and deliver results.

A team cannot be expected to perform right when it is formed. Forming a team is just like maintaining a relationship. It takes time, patience, support and efforts to go through recognisable stages as members move from collection of strangers to a united group with common goals. These stages are explained below:

The first stage of group development is the forming stage. At this stage,the group just starts to come together and is described with anxiety and uncertainty.

A person’s behaviour is driven by his desire to be accepted by other members of the group. Conflict, controversy, misunderstanding and personal opinions are avoided even though members have just begun to form impressions of each other and understand what the group will do together.

At the forming stage, members understand group purpose, determine how the team is going to be organised and who will be responsible for what. They discuss major phases of group goal that include rough project schedule, outlining general group rules regarding when they will meet and discover what resources will be available for the group to use.

At this stage, group members learn what to do, how the group will operate, what is expected, and what is acceptable.

The second stage of group development is the storming stage. At this stage, disputes and competition are high because members have understand the work and a general feel of belongingness towards the group prevails.

The dominating group members emerge, while less confrontational members stay in their comfort zone.

Issues like leadership, authority, rules, policies, norms, responsibilities, structure, evaluation criteria and reward systems arise during this stage. They help the group move to the next stage.

At this stage, it becomes enjoyable for the members to work together. Group interaction becomes easier, cooperative and productive. There is mutual give and take, open communication, bonding, and mutual respect.

Disputes or conflicts are comparatively easy to be resolved and the group gets back on track. Though group leadership is important, the facilitator usually steps back a little and lets the group members take initiative to move forward together.

Now the group is clear about its needs. It moves forward to work for the goals for which it is formed. The group becomes really united to perform.

At this stage, the morale of group members is high as they actively acknowledge the talent, skills and experience that each member brings to the group. A sense of belongingness prevails and group remains focused on its purpose and goal.

Members are flexible, interdependent, and trust each other. Leadership is distributive and members willingly adapt to needs of the group.

This stage of group is usually reached when the task has been successfully completed. The project is close to end and team members look forward to move in different directions. This stage looks at the well-being of the team rather than handling the team through the original four stages of team growth.

12.13 GROUP COHESIVENESS

Group cohesiveness is the attraction, loyalty and commitment of members to group goals. It is “the degree to which members are attracted to a group, are motivated to remain in the group, and are mutually influenced by one another.”

The following factors affect group cohesiveness :

I.Factors that Increase Cohesiveness

II.Factors that Decrease Cohesiveness

I. Factors that Increase Cohesiveness : Members of a cohesive group share common goals, remain attached to one another, conform to group standards and unitedly work to achieve the goals. The following factors increase group cohesiveness :

1.Similar attitudes, values, beliefs and interests increase group cohesiveness, facilitate communication and develop understanding amongst group members.

2.Inter-group competition increases cohesiveness of each group as the goal is same. A basketball championship, for example, increases cohesiveness of each team to win the match.

3.Liking and attraction for each other increases group cohesiveness.

4.Success in group goals promotes group cohesiveness.

5.Size of the group also determines its cohesiveness. Small groups are generally more cohesive than big groups.

6.Consensus on group goals increases cohesiveness.

7.Dependence of members on each other to achieve group goals increases group cohesiveness.

II. Factors that Decrease Cohesiveness : When members are not strongly bonded to work, it declines group cohesiveness. The following factors decrease group cohesiveness:

1.Increase in size of the group decreases cohesiveness.

2.When members have conflicting opinions, group cohesiveness declines.

3.While inter-group competition increases cohesiveness, intra-group competition decreases cohesiveness. Intra-group competition (competition amongst members of the same group) promotes individual goals at the cost of group goals.

4.If less dominant members surrender to the views of dominant members, this declines group cohesiveness.

5.Unpleasant group interaction, dissimilarity amongst attitudes, beliefs and values decrease cohesiveness.

6.Involvement in activities outside the group and competition amongst members for resources within the group reduces group cohesiveness.

7.Heterogeneous groups with members from different age groups, job responsibilities, qualification and status decease cohesiveness.

LEARNING OBJECTIVES

After reading this chapter, you should be able to:

1.Explain group dynamics and its dimensions.

2.Explain the types of groups in the organisations.

3.Know why people join groups and how they manage them.

4.Understand group process, functions and factors that affect them.

QUESTIONS

1.Explain the concept of group dynamics. State the types of groups that can be formed in an organisation.

2.What are informal groups ? Why do people join informal groups ?

3.What is group cohesiveness ? Explain the factors that affect group cohesiveness.

4.How do groups influence member behaviour? State the negative aspects of group influence.

5.Explain the functions performed by a group.

6.Explain the factors that affect group processes and functions.

7.Define a group. State the various types of groups. Explain the stages of group formation.

1.Group dynamics

2.Group norms

3.Group cohesiveness

1.Group and collection of people

2.Formal and informal groups

3.Primary and secondary groups

4.Small and large groups

5.Line and staff committees

Principles of Management

VASISHTH, VIBHUTI VASISHTH

Description

This book has been designed and written to give the students of management an in-depth insight into the subject of business management. This book will be helpful to the students of MBA, PGDM, PGPM, MCA, BBA & other professional courses.

The Present Publication is the latest edition, authored by Dr. Neeru Vasishth & Dr. Vibhuti Vasishth, with the following noteworthy features:

u [ Simple, Systematic & Comprehensive Explanation ] The subject matter is presented in a simple, systematic method along with a comprehensive explanation of the concept and theories underlying management

u [ Student-Oriented Book ] This book has been developed keeping in mind the following factors:

u Interaction of the author/teacher with their students in the classroom

u Shaped by the author/teacher’s experience of teaching the subject matter at different levels for more than three decades

u Reactions and responses of students have also been incorporated at different places in the book

u [ Tabular Format ] Tables have been used for comparative study and understanding of the concepts

u [ Quotations ] have been given at the start of every chapter to promote conceptual thought of the subject matter

u Each paragraph is distinctly numbered and starts with the relevant background of the subject

u [ Questions for Conceptual Understanding ] have been given in this book

u [ Case Studies ] are meant to give practical insights into the application of management concepts ORDER NOW