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ASSIGNMENT SOLUTIONS GUIDE (2014-2015)

M.C.O.-1
Organization Theory and Behaviour
Disclaimer/Special Note: These are just the sample of the Answers/Solutions to some of the Questions given in the
Assignments. These Sample Answers/Solutions are prepared by Private Teacher/Tutors/Auhtors for the help and Guidance
of the student to get an idea of how he/she can answer the Questions of the Assignments. We do not claim 100% Accuracy
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may be seen as the Guide/Help Book for the reference to prepare the answers of the Question given in the assignment. As
these solutions and answers are prepared by the private teacher/tutor so the chances of error or mistake cannot be denied.
Any Omission or Error is highly regretted though every care has been taken while preparing these Sample Answers/
Solutions. Please consult your own Teacher/Tutor before you prepare a Particular Answer & for uptodate and exact
information, data and solution. Student should must read and refer the official study material provided by the university.
Q. 1. What are various principles of management? How are modern organisations different from typical
classical organisation, in terms of practices of various principles of management?
Ans. Management principles are guidelines for the decisions and actions of managers. They were derived through
observation and analysis of events faced in actual practice.
The Principles of Management are the essential, underlying factors that form the foundations of successful management. According to [Henri Fayol] (1841-1925) in his book General and Industrial Management (1916), there are fourteen
principles of management. These can be used to initiate and aid the processes of change, organization, decision making,
skill management and the overall view of the management function.
The 14 principles of management developed by Henri Fayol are listed and explained below:
1. Division of Work: In an organisation, work should be divided correctly, according to the time available. The
potential of employees increase when they are allowed to do the same work again.
2. Authority and Responsibility: Authority: Authority is the power given to a person to command and get work from
his sub-ordinates. It is the right given to managers. Responsibility: Responsibility is the work expected from
workers by their superiors. Wherever authority is present, responsibility occurs.
3. Discipline: In an organisation, workers should obey the commands of their superiors. Hence, discipline is very
important for any organisation. It promotes leadership and fair dealing.
4. Unity of Command: A worker should receive commands from only one person. Commands from multiple superiors lead to conflicts and chaos. Hence, unity of command should be maintained.
5. Scalar Chain: The line of authority should pass from top level management to bottom level management. Orders
and policies should always come from higher level management.
6. Order: In an organisation men and materials should be distributed correctly at the right place in right time. This
improves the productivity of the organisation.
7. Equity: All employees in a firm should be treated equally. Superiors should be fair towards their sub-ordinates.
8. Stability of Personnel: In a firm, the tenure of employees should be high. High employee turnover rate gives
heavy losses to an organisation.
9. Unity of Direction: An organisation might contain several groups, each having a head and an individual objective. All the individual objectives should be directed towards a common objective of developing the organisation.
10. Sub-ordination of Individual interests to General interest: General interest means interest of the organisation.
Individual interest means interest of an employee of the organisation. An employee should sub-ordinate his / her
individual interest to general interest.
11. Remuneration of Personnel: Employees should be paid proper wages to maintain the stability of organisation.
12. Centralisation: An organization is said to be completely centralised if all power rests in the hands of a single
person. An organisation is said to be completely decentralised if power is completely distributed among the subordinates. A firm should neither be completely centralised nor be completely decentralised. Centralisation and
decentralisation should be balanced.

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13. Initiative: If a worker comes up with a new idea or plan, he / she must be encouraged. Initiatives give rise to
higher levels of effort.
14. Esprit de Corps: This signifies the proverb United we stand; Divided we fall. In a firm, team spirit should be
encouraged to promote harmony and unity among workers.
Organizational theory aims to understand the structure within organizations. The research is intended to find out if
there is a superior method for structuring organizations, or if it varies based on the situation. Another goal is to understand
what causes the different structures between organizations. All of the theories in this realm are generally split into three
categories: classical, neo-classical and modern.
The differences between traditional organizational structures and modern organizational structures are quite extensive, as you can see below. It helps to identify examples of each type of organizational structure. These organizations are
very stable and robust but they cannot respond to change and are very slow to act. Companies that use modern organizational structures are project based companies such as video game producers and Boeing. These companies or very organic
and can change and adapt quickly to new trends.
Every organization is different and therefore there is no set best organizational structure for a company. It is
important to note when establishing a company that how you structure the organization will have implications on how
responsive the organization can be to change. For example, during the recession, the auto-manufacturing industry had to
be bailed out due to their practices of locking capital into fixed costs and mass production, effectively spreading the fixed
costs onto many products.
Q. 2. What is individual behaviour? Discuss various factors influencing the individual difference.
Ans. The impact of formal characteristics of population dynamics on individual behaviour was studied through the
use of a random graphical dynamical model. In this model, individual agents attempted to minimize the costs associated
with the establishment of cooperative links with neighboring agents. These costs varied according to the compatibility
between agents. The links were dynamic, changing with fluctuations in costs. Population size, compatibilities, sociability
and contact rate were tunable parameters.
Human behaviour is complex and every individual is different from another, the challenge of an effective organization is in successfully matching the task, the manager and the subordinate.
Factors Influencing Individual behaviour:
Abilities: Abilities of a person are the natural or learnt traits. Abilities can be classified into mental and physical
abilities and different task requires different level of the two. Mental abilities represent the intelligence, persons deductive reasoning, and memory, analytical and verbal comprehension. Physical abilities include muscular strength, stamina,
body coordination and motor skills. An individuals self awareness of his own abilities determines how he feels about the
task, while the managers perception of his abilities determines the kind of task he assigns to the individual.
Gender: Although, research concludes that men and women are equal in their mental abilities and job performance,
society does emphasize differences. However, absenteeism is one area where differences are found and can be attributed
to being primary caregiver to children. However, this creates a difference in self perception of ones abilities, personal
values and social behaviour. Similarly, a managers personal values might influence how he considers gender as factor in
his task assignment and evaluation.
Race: Race and culture exert significant influence when both workplace and society have considerable diversity.
Stereotyping and attributing behaviour based on race and culture are common mistakes that influence individual behaviour.
It is important for both management and the staff of diverse workforce to learn about different cultures, their values,
common artifacts and communication protocols. This would create a more comfortable corporate culture and would
subdue behaviours that might be perceived as insensitive and offensive.
Consensus: It is the extent to which other people in the same situation might respond similarly. When behaviour is
attributed to consensus, the individual is not rewarded or penalized due his personality.
Distinctiveness: It is the extent to which the individuals behaviour can be attributed to situations or to his personality. If the person behaves the same way in seemingly different situations, then his behaviour will be attributed to his
personality.
Consistency: It is the measure of the frequency of the observed behaviour, how often does the behaviour occurs?
High consistency is linked to dispositional attribution while low consistency is linked to situational attribution.
Attitude: An attitude is the abstract learnt response of an individuals entire cognitive process over a period of time.
It is experienced as a quick response to a familiar situation without any deep reasoning; it forms the basis of biases and
attribution errors. As an example, an individual who has worked in various organizations might develop an attitude of

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indifference towards organizational citizenship.

Perception: Perception is the basic cognitive process that transforms sensory stimuli into meaningful information.
Most real life problems are multidimensional and the rational approach is often entwined with the gut feeling, resulting in
individual perception. This quells the famous notion that reality is objective and thus everyone must perceive it the same
way. Both managers and subordinates must recognize that perceptual differences exist and often are the reason for mutual
dissatisfaction.
Stereotyping: It is categorization of individuals on basis of single attribute, it ends up creating a generalized and
simplified belief that do not take into account other significant characteristics. Age, race and sex are the three most
common basis of stereotyping; not only they are unethical but can cost missing resources. In general, stereotyping leads
to decisions that are based on inaccurate data that can result in unfair performance evaluations, job design or promotion.
Selective Perception: It is the process of selecting only the information that supports our pre-existing belief system,
thereby eliminating the discomforting information. Selective perception acts like a catalyst to stereotyping because people
tend to notice things that fit their existing notion and not notice things that dont.
Both stereotyping and selective perception can be beneficial only by chance since they are based on partial information. The specific situations in which they can be positively exploited cannot be used as reliable methods.
Attribution: Attribution is the process of observing behaviour and then determining its cause based on individuals
personality or situation. Attribution based on personality is due to internal causes and is termed as dispositional attribution. It includes personality traits like shyness, arrogance, intelligence, etc. Attribution based on external influences and
situations that are outside the control of individual are termed as situational attribution.
Q. 3. How organisations respond to bring down employees stress and make them better use in the organisation?
Ans. Stress is not always negative. It may also bring out the best in individuals at times. It may induce an individual
to discover innovative and smarter way of doing things. This positive dimension of stress is called as enstress. But usually,
the term stress has a negative implication and this negative aspect of stress is termed as distress. For instance - When a
subordinate is harassed or warned by his superior, unhappiness of unsuitable job, etc. We can say that Stress causes some
people to break, and other to break records.Employees stress is a growing concern for organizations today. Stress can be
defined as a lively circumstance in which people face constraints, opportunities, or loss of something they desire and for
which the consequence is both unpredictable as well as crucial. Stress is the response of people to the unreasonable/
excessive pressure or demands placed on them.
Many attempts at organizational change and improvement fail because of employees resistance to change. Wellintentioned attempts at improvement are sabotaged because would-be change-agents ignore, to their peril, the connection
between stress and the fear of change. Human beings, just like other mammals, are hardwired to revert to familiar
routines and behaviour patterns when stressed. This makes sense in an ancestral survival context. In such a context, if you
were being chased and had to seek shelter, you wouldnt want to be thinking about all the possible escape routes. You
dont want to spend time thinking and deciding in this situation. You want to go on autopilot and follow the familiar
route that has proven successful (i.e., it enabled you to survive) in the past. This hardwired survival mechanism wreaks
havoc in todays climate of rapid organizational change. As a persons stress level increases, that person is more likely to
operate out of this primitive, hardwired response clinging to the old ways, the tried and true, even if they are no longer
effective. Research shows that stress is also connected with neophobia fear of novelty. Animals, which are naturally
curious and motivated to explore new environments, avoid new objects and places when stressed. We see this throughout
organizations everyday. As people become more stressed, the new and the different triggers fear. Millions of dollars are
wasted on organizational change efforts that end up being sabotaged and on program implementation delays caused by
this innate resistance to change and novelty triggered by stress.
The first step for risk managers or any professional seeking to help their organization minimize the cost of stress is to
learn more about how stress affects people. By understanding this, risk managers can more clearly and compellingly
communicate the depth and breadth to which stress compromises employee performance. Successfully addressing stress
is not a simple or an easy task. It requires more than a one-day stress management seminar. It requires nothing less than
brutal honesty about ones management practices and policies and a commitment to do the hard work necessary to change
course.
Q. 4. What is leadership? Explain various theories of leadership.
Ans. Leadership has been described as a process of social influence in which one person can enlist the aid and
support of others in the accomplishment of a common task. For example, some understand a leader simply as somebody
whom people follow, or as somebody who guides or directs others, while others define leadership as organizing a group

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of people to achieve a common goal. Leadership is a vital role in any organisation. It involves defining the direction of
a team and communicating it to people, motivating, inspiring and empowering them to contribute to achieving organisational
success. Leadership requires being strategically focused and applying behavioural techniques to build commitment and
attain the best work from your people.
The ingredients of effective leadership are complex and are widely agreed to depend on the specific leadership
situation, considering the difficulty of tasks, the degree of a leaders authority and the maturity and capabilities of subordinates. Leadership skills often take time to learn, because they are multi-faceted, behavioural and context dependent.
Becoming an effective leader is challenging to many new managers, but offers the rewards of successfully orientating
peoples work to be most effective and achieving excellence in team performance. An understanding of the principles of
strategic thinking, direction setting, communications and motivation provides a springboard for developing skills and an
effective management style to suit your personality and leadership situations.
Successful leaders in business often demonstrate the following attributes
positiveness, reliability and pro-activeness
clear vision of business goals
a firm commitment towards meeting defined goals
an ability to effectively communicate their vision
commitment to their team and to their organisation
skilfulness in planning and developing strategies
a focus on motivation and setting clear directions
the adaptability to engage with the views and needs of team members
an ability to inspire employees to meet goals
commitment to the happiness and wellbeing of their team
honesty and openness with their team
Q. 5. Write short notes on the following:
(a) Organisational Effectiveness
Ans. Organizational effectiveness is the concept of how effective an organization is in achieving the outcomes the
organization intends to produce. The idea of organizational effectiveness is especially important for non-profit organizations as most people who donate money to nonprofit organizations and charities are interested in knowing whether the
organization is effective in accomplishing its goals.
However, scholars of nonprofit organizational effectiveness acknowledge that the concept has multiple dimensions
and multiple definitions. For example, while most non-profit leaders define organizational effectiveness as outcome
accountability, or the extent to which an organization achieves specified levels of progress toward its own goals, a
minority of nonprofit leaders define effectiveness as overhead minimization, or the minimization of fundraising and
administrative costs.
The main measure of organizational effectiveness for a business will generally be expressed in terms of how well its
net profitability compares with its target profitability. Additional measures might include growth data and the results of
customer satisfaction surveys.
Highly effective organizations exhibit strengths across five areas: leadership, decision making and structure, people,
work processes and systems, and culture. For an organization to achieve and sustain success, it needs to adapt to its
dynamic environment. Evaluating and improving organizational effectiveness and efficiency is one strategy used to help
insure the continued growth and development of an organization.
Measuring organizational effectiveness can be an inexact science, since each individual entity will have a different
list of criteria and priorities to weight and consider through self-assessment. Understanding a companys level of organizational effectiveness is important for several reasons: it serves as a check-in to see how well internal procedures are
meeting an initial vision, it provides investors, donors, or employees with an idea of the companys strengths, and it
highlights areas of ineffectiveness that can be the focus of improvements.
In many cases, a business success or failure cannot be measured by financial performance as well. Even a company
that is currently making a profit may be ineffective if it is failing to meet the core values of its mission statement, attract
and retain talented workers, and plan for the next generation of projects.
Organizational effectiveness measures the big-picture performance of a business, across a broad range of criteria.
Financial performance, long-term planning, internal structure, and adherence to core values may all be critical components in understanding organizational effectiveness.

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(b) Social Learning and Change of Behaviour

Ans. According to the social learning theory, which is also known as the social cognitive theory, behavioural change
is determined by environmental, personal, and behavioural elements. Each factor affects each of the others. For example,
in congruence with the principles of self-efficacy, an individuals thoughts affect their behaviour and an individuals
characteristics elicit certain responses from the social environment. Likewise, an individuals environment affects the
development of personal characteristics as well as the persons behaviour, and an individuals behaviour may change their
environment as well as the way the individual thinks or feels. Social learning theory focuses on the reciprocal interactions
between these factors, which are hypothesised to determine behavioural change.
The social learning theory proposed by Albert Bandura has become perhaps the most influential theory of learning
and development. While rooted in many of the basic concepts of traditional learning theory, Bandura believed that direct
reinforcement could not account for all types of learning. His theory added a social element, arguing that people can learn
new information and behaviours by watching other people. Known as observational learning (or modelling), this type of
learning can be used to explain a wide variety of behaviours. In his famous Bobo doll experiment, Bandura demonstrated
that children learn and imitate behaviours they have observed in other people.
(c) Creating a stress free environment
Ans. In todays economic climate, jobs are hard to come by, companies are stretched thin, and tensions are running
high. Many surveys have been conducted on how stress affects the workplace. Some of the findings paint a pretty dismal
picture about how much influence stress has on many aspects of work. For instance, a study in the United Kingdom
estimated that up to 80% of industrial accidents could be attributed to stress. It concluded that stress could be costing the
community up to $14 billion a year in lost productivity and health related costs. This is a huge amount of money that could
be saved if the work environment could be made less stressful. The money saved could be used in far better ways like
funding education or improving the health service.
The main causes of stress in the work environment include:
Increased workload
High demands
Long or difficult hours
Personal and family issues
All these issues can be grouped into three categories.
The first might be termed how you do the job.
The second might be seen as how the job treats you.
And the third relates to issues away from the job that may affect your performance at work.
Lack of support
Organizational changes
Poor management communication
Poor work organization
Inadequate staff numbers and resources
Lack of recognition
Lack of training
Lack of control or input
(d) Measurement of Job satisfaction
Ans. Surveys are a common method of measuring job satisfaction. A survey can assess satisfaction in the areas of
pay, promotion, supervision, tasks and coworkers. While standard surveys are available for businesses, a customized
survey that is tailored to a businesss own needs and industry may be more effective. Surveys with the majority of
questions in the multiple-choice format typically are preferred so that responses can be compared and analyzed more
easily. Employees who are allowed to remain anonymous are more likely to be more open and honest with their answers
since they will not feel pressure or fear of repercussion.
Interviewing employees as a method of measuring job satisfaction is mostly useful in organizations that have positive
relationships with employees and believe the problem is too sophisticated to be understood with a survey. If employees do
not trust the organization or interviewer, however, responses may not be entirely honest. Businesses with low job satisfaction or employees who fear being let go may find the employees reluctant to discuss the situation since they may fear it
could negatively affect them in the future. The questions asked should be standardized in order to compare different
employee responses as well as the same employees responses over time. Monitoring performance targets is a method of

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measuring job satisfaction that requires a business to be an active observer. With this method, management monitors
employee satisfaction by using standard criteria, such as achieving bonuses, participating in optional programs and performance in reaching goals. This method provides indirect data on the levels of job satisfaction. While it can flag management that there is a problem with job satisfaction, combining this with a survey or interview can provide the company with
a stronger analysis on the cause of low levels of job satisfaction.

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