Master of Business Administration-MBA Semester 3 MU0002 Management and Organization Development - 2 Credits

(Book ID: B1021)

Assignment Set- 1 (30 Marks)

Q.1 Discuss the characteristics of management.

Management is a distinct activity having the following salient features or characteristics: 1. Goal-oriented: Management is a purposeful activity. It co-ordinates the efforts of workers to achieve the goals of the organization. The success of management is measured by the extent to which the organizational goals are achieved. It is imperative that the organizational goals must be well-defined and properly understood by the mangers at various levels. 2. Economic Resource: Management is one of the factors of production together with land, labour and capital. It is the most critical input in the success of any organized group activity. It is the force which assembles and integrates other resources, namely, labour, capital and materials. These factors do not by themselves ensure production, they require the catalyst of management to produce goods and services required by the society. Thus, management is an essential ingredient of an organization. 3. Distinct Process: Management is a distinct process consisting of such functions as planning, organizing, staffing, directing and controlling. These functions are so interwoven that it is not possible to lay down exactly the sequence of various functions or their relative significance. In essence, the process of management involves decision-making and putting of decisions into practice. 4. Integrative Force: The essence of management is integration of human and other resources to achieve the desired objectives. All these resources are made available to those who manage. Managers apply knowledge, experience and management principles for getting the results from the workers by the use of non-human resources. Managers also seek to harmonize the individuals goals with the organizational goals for the smooth working of the organization. 5. Intangible Force: Management has been called an unseen force. Its presence is evidenced by the result of its efforts-orderliness, informed employees, buoyant spirit and adequate work output. Thus, feeling of management is result-oriented. One may not see with the naked eyes the functioning of management but its results are apparently known. People often remark of the effectiveness (or ineffectiveness) of management on the basis of the end results, although they cant observe it during operation.

6. Results through Others: The managers cannot do everything themselves. They must have the necessary ability and skills to get work accomplished through the efforts of others. They must motivate the subordinates for the accomplishment of the tasks assigned to them. 7. A Science and an Art: Management has an organized body of knowledge consisting of welldefined concepts, principles and techniques which have wide applications. So it is treated as a science. The application of these concepts, principles and techniques requires specialized knowledge and skills on the part of the manager. Since the skills acquired by a manager are his personal possession, management is viewed as an art. 8. System of Authority: Management as a team of managers represents a system of authority, a hierarchy of command and control. Managers at different levels possess varying degrees of authority. Generally, as we move down in the managerial hierarchy, the degree of authority gets gradually reduced. Authority enables the managers to perform their functions effectively. 9. Multi-disciplinary Subject: Management has grown as a field of study (i.e. discipline) taking the help of so many other disciplines such as Engineering, Anthropology, Sociology and Psychology. Much of the management literature is the result of association of these disciplines. For instance, productivity orientation drew its inspiration from Industrial Engineering and human relations orientation from Psychology. Similarly, Sociology and Operations Research have also contributed to the development of management science. 10. Universal Application: Management is universal in character. The principles and techniques of management are equally applicable in the fields of business, education, military, government and hospital. Henri Fayol suggested that principles of management would apply more or less in every situation. The principles are working guidelines which are flexible and capable of adaptation to every organization where the efforts of human beings are to be co-ordinated.
Q.2 Explain the difference between Management Development and Organization Development
Factors

Management Development Increasing managers contributions to goal ccomplishments. Train and equip employees and managers to perform better in existing organization.
Educative and training Short-range. No special requirement.

Organization Development
Changing the nature of the organization.

Objectives

Focus

Focus on design, not on the managers; focus on achieving improvement in design. Problem-solving approach. Long-range strategy for organizational innovation and renew

Approach Time Specialist

Trained specialists required.

Q.3 Explain the three stage Model of Change process.

Stage 1: Unfreezing: Creating motivation and readiness to change through a. Disconfirmation or lack of confirmation b. Creation of guilt or anxiety c. Provision of psychological safety Stage 2: Changing through Cognitive Restructuring: Helping the client to see things, judge things, feel things, and react to things differently based on a new point of view obtained through a. Identifying with a new role model, mentor, etc. b. Scanning the environment for new relevant information Stage 3: Refreezing: Helping the client to integrate the new point of view into a. The total personality and self-concept. b. Significant relationships. In stage 1, unfreezing, disconfirmation creates pain and discomfort, which cause guilt and anxiety, which motivate the person to change. But unless the person feels comfortable with dropping the old behaviours and acquiring new ones, change will not occur. That is, the person must develop a sense of psychological safety in order to replace the old behaviours with new behaviours. In stage 2, moving, the person undergoes cognitive restructuring. The person acquires information and evidence showing that the change is desirable and possible. This motivating evidence is gained by, for example, identifying with ex-smokers and learning about the health risks of smoking. The primary task in stage 3, refreezing, is to integrate the new behaviours into the persons personality, and attitudes. That is, stabilizing the changes requires testing to see if they fit-fit with the individual, and fit with the individuals social surroundings. The phrase significant relationships refer to important people in the persons social environment-do these significant others approve of the changes?

Master of Business Administration-MBA Semester 3 MU0002 Management and Organization Development - 2 Credits
(Book ID: B1021)

Assignment Set- 1 (30 Marks

Q.1

Explain the organizational effectiveness.

Organizational effectiveness, also called as organizational success or growth, is defined and conceptualized in different ways, and no unanimity is found in different approaches. Though a large volume of literature is available on the concept and working of organizational effectiveness, there is often contradiction in various approaches. The various approaches are judgmental and open to question. Thus, various terms such as efficiency, productivity, profitability, organizational growth, are often used interchangeably, to denote organizational effectiveness. Whatever the criteria adopted for organizational effectiveness, the organizational analysis is incomplete for a practicing manager unless the factors underlying effectiveness are identifying. Though each individuals effectiveness is significant but perhaps the most important aspect of effectiveness is its relationship to the entire organization. From this point of view, there are numerous variables. These variables have been classified by Likert into three groups-causal, intervening and end result- which are useful in discussing organizational effectiveness over time. Grouping variables into these categories aids greatly in the correct interpretation of the data and their use for diagnostic and other purposes. 1. Causal Variables: Causal variables are those factors that influence the course of development within an organization and its results or accomplishment. Likert states that causal variables are independent variables which determine the course of developments within an organization and the results achieved by the organization. These causal variables include only those independent variables which can be altered or changed by the organization and its management. Causal variables include the structure of the organization and its management. Causal variables include the structure of the organization and managements policies, decisions, business and leadership strategies, skills, and behaviour. 2. Intervening Variables: Intervening variables are those factors which are reflected as the internal state of organization. Many of these variables are caused by causal variables. Likert states that the intervening variables reflect the internal state and health of the organization, e.g., the loyalties, attitudes, motivations, performance goals, and perceptions of all members and their collective capacity for effective interaction, communication, and decision-making. The intervening variables may be divided into two broad categories: (i) the intervening attitudinal, motivational, and perceptual cluster, and (ii) the intervening behavioral cluster. Intervening variables are concerned with building and developing the organization, and they tend to be longterm goals. This is one part of effectiveness that many managers overlook because it emphasis long-term potential as well as short-term performance. 3. End result Variables: End-result variable are those factors which are caused by causal and intervening variable and are often in terms of the factors in which managers are interested or measure their effectiveness. According to Likert, end-result variables are the dependent variables

which reflect the achievements in the organization such as its productivity, costs, scrap loss, and earnings.
Q.2 Discuss the bases of social power.

Power exists in virtually all social situations. It is especially salient in coordinated activities such as those found in organizations. In fact, for organizations to function, an authority or power dimension is required. How do some people come to possess power? How is power generated, bestowed, or acquired? In this unit, we will examine four different views about who gets power and how: Emersons "Power-Dependence theory," French and Ravens "Bases of Social Power," Salancik and Pfeffers "Strategic-Contingency Model of Power," Mintzbergs Observations on the Genesis of Power in Organizations. Power-dependence theory states that power is inherent in any social relationship in which one person is dependent on another. The sociologist, Richard Emerson states that "the dependence of Actor A upon Actor B is (1) directly proportional to As motivational investment in the goals mediated by B, and (2) inversely proportional to the availability of those goals to A outside of the A-B relation." In other words, if a person has something we want badly and we cannot get it any other place, that person has power over us. The components of this theory are a social relation between two parties and resources (commodities, goals, rewards) that are controlled by one party, and desired by the other. Power-dependence theory is related to a broader framework of social interaction called social exchange theory, which posits that what goes on between persons is an exchange of social commodities: love, hate, respect, power, influence, information, praise, blame, attraction, rejection, and so forth. We enter into and continue in exchange relationships when what we receive from others is equivalent to or in excess of what we must give to others. When the net balance for us is positive, we will continue the exchange relationship; when the net balance for us is negative, we will terminate or alter the relationship. Social interaction represents an exchange of social goods and services. Viewed in this light, giving someone power over us is the commodity we exchange when we are dependent on that person for something we want. Closely related to these ideas is the classic statement by John R. P. French and Bertram Raven on "the bases of social power." These authors suggested five sources, or bases, of social power as follows:

1. Reward power power based on the ability of the powerholder to reward another, that is, to give something valued by the other. 2. Coercive power power based on the ability of the powerholder to punish another, that is, to give something negatively valued by the other. 3. Legitimate power power based on everyones belief that the powerholder has a legitimate right to exert influence and that the power-receiver has a legitimate obligation to accept the influence. 4. Referent power power based on the power-receiver having an identification with (attraction to, or feeling of oneness with) the power holder. 5. Expert power power based on the powerholder possessing expert knowledge or expertise needed by the other. Informational power is a form of expert power where the powerholder possesses important facts or information needed by the other. In this theory, power belongs to those persons who control or mediate desired commodities. Exchange theory and power-dependence theory are quite compatible with the ideas proposed by French and Raven. The strategic-contingency model of power asserts that power in organizations accrues to the subunits (individuals, units, or departments) most important for solving the organizations most critical problems. These critical problems are generally "uncertainties" posed by the environment. This theory, like the ones discussed previously, supports the notion that those who have something highly valued by- others-in this case, the special expertise needed for the organizations survival-have power. Salancik and Pfeffer further suggest how power is used: "Power is used by subunits, indeed, used by all who have it, to enhance their own survival through control of scarce critical resources, through the placement of allies in key positions, and through the definition of organizational problems and policies." These authors view organizational power as a good thing, for power in the hands of the critical problem solvers helps the organization cope with the various realities it faces. Henry Mintzberg has developed a theory of organizational power drawn from the organization theory literature and his own creative synthesis abilities. This theory, "is built on the premise that organizational behavior is a power game in which various players, called influencers, seek to control the organizations decisions and actions." The three basic conditions for the exercise of power are 1) Some source or basis of power, coupled with 2) The expenditure of energy in a 3) Politically skillful way.

According to Mintzberg, the five possible bases of power are, first, control of a resource; second, control of a technical skill; and, third, control of a body of knowledge. All of these must be critical to the organization. The fourth basis is legal prerogatives-being given exclusive rights to impose choices. A fifth basis of power is access to those who have power based on the first four bases. In addition to a base of power, the influencer must have both the "will" and the "skill" to use it. An organization has many potential influencers, such as the board of directors, the managers, the top executives, the employees, the unions, suppliers, customers, regulators, and so forth. The important aspects of Mintzbergs theory are that the sources of power derive from possession of a commodity desired by others, that power-in-action requires will and skill, and that the organization is the context for the exercise of power. In summary, these four views of the sources of power are remarkably similar power stems from possession of or mediation of desired resources. The resources may be ability to reward and punish, being in control of critical skills, knowledge, or information, the ability to solve critical problems or exigencies-anything that creates dependence of one actor or set of actors on another.
Q.3 Explain the process of management by objectives.

Management by objectives (MBO), though not strictly an OD intervention in the sense in which other interventions have been discussed so far, is a technique and system which helps in improving organizational performance. Its basic idea has been derived from the concept of participative goal setting as a technique of OD. The term MBO was coined by Drucker in 1964 when he emphasized the concept of managing by results. Since then, many business and nonbusiness organizations have adopted this in some form or the other. Though there are some variations in the practices of MBO and, therefore, its definitional aspect, it has been defined as follows: MBO is a comprehensive managerial system that integrates many key managerial activities in a systematic manner, consciously directed towards the effective and efficient achievement of organizational objectives. The integration of individual and organizational objectives through MBO has been emphasized by Chakravarty when he has defined MBO as follows: MBO is a result-centered, non-specialist, operational managerial process for the effective utilization of material, physical, and human resources of the organization by integrating the individual with organization and organization with the environment. Based on the definition of MBO, its features can be identified as follows: 1. MBO is an approach and philosophy to management and not merely a technique. A management technique can be applied in selected parts of the organization and will have limited implications for its other parts. On the other hand, MBO is likely to affect every management

practice in the organization. MBO employs several techniques but it is not merely the sum total of all these techniques. It is a particular way of thinking about management. 2. As an approach to management, with objective orientation as its essence, MBO is bound to have some relationship with every management technique. Certain degree of overlapping is there. In fact, often MBO provides the stimulus for the introduction of new techniques of management and enhances the relevance and utility of the existing ones. MBO is the joint application of a number of principles and techniques. It works as an integrating device. 3. The basic emphasis of MBO is on objectives. Whereas the various techniques of management help in measurement of results in resources, MBO is also concerned with determining what these results and resources should be. This is possible because MBO tries to match objectives and resources. Objectives are established for all the levels of the organization, including the corporate level, all the units or departments and individual manager. Objectives provide the means for integrating the organization with its environment, its subsystems and people. 4. The MBO is characterized by the participation of concerned managers in objective setting and performance reviews. Therefore, each manager takes active part in setting objectives for himself and also in evaluating his performance as to how he is performing. The total management process revolves round the objectives set jointly by the superior and the subordinate. Therefore, managers have the opportunities for clarifying their job relationships with peers, superiors and subordinates. This process clarifies the role very sharply in terms of what one is expected to achieve. 5. Periodic review of performance is an important feature of MBO. The performance review is held regularly, normally once a year. It emphasises initiative and active role by the manger who is responsible for achieving objectives. The review is future-oriented because it provides basis for planning and corrective actions. 6. Objectives in MBO provide guidelines for appropriate system and procedures. Resource allocation, delegation of authority, etc., are determined on the basis of objectives. Similarly, reward and punishment system is attached with the achievement of the objectives. Process of MBO MBO is a system for achieving organizational objectives, enhancement of employee commitment and participation. Therefore, its process should facilitate translation of basic concepts into management practice. The MBO process is characterized by the emphasis on the rigorous analysis, the clarity and balance of objectives, and participation of the managers with accountability for results. The MBO process is not as simple as it appears to be. Managers need training and experience for developing the required skills. 1. Setting of Organizational Purpose and Objectives: The first step in MBO is the definition of organizational purpose and objectives. Questions, such as, why does the organization exist?. What business are we in? and what should be our business? provide guidelines for the statement of purpose. This, in interaction with external factors, then determines the long-range

strategic objectives like (i) whether to achieve growth through expansion in the same line of business or diversity: (ii) what should be blending of trading and manufacturing activities; (iii) what should be the degree of vertical integration and so on. Usually the objective setting starts at the top level of the organization and moves downward to the lowest managerial levels. This will go in a sequence like this (i) defining the purpose of the organization, (ii) long-range and strategic objectives, (iii) short-term organizational objectives, (iv) divisional/departmental/sectional objectives, (v) individual managers objectives. 2. Key Result Areas: Organizational objective and planning premises together provide the basis for the identification of key result areas (KRAs). It may be emphasized that KRAs are derived from the expectations of various stakeholders and indicate the priorities for organizational performance. KRAs also indicate the present state of an organizations health and the top management perspective for the future. Examples of KRAs applicable to most of the business organizations are (i) profitability, (ii) market standing, (iii) innovation, (iv) productivity, (v) worker performance, (vi) financial and physical resources, (vii) manager performance, and (viii) public responsibility. Even though KRAs are most durable, the list of KRAs gets considerably changed over the period in response to new needs and opportunities. Sometimes, the achievement in a particular KRA also provides the impetus for a new KRA in future. 3. Setting Subordinates Objectives: The organizational objectives are achieved through individuals. Therefore, each individual manager must know in advance what he is expected to achieve. Every manager in the managerial hierarchy is both superior and subordinate except the person at the top level and lowest level. Therefore, there is a series of superior and subordinate relationships. The process of objective setting begins with superiors proposed recommendations for his subordinates objectives. In turn, the subordinate states his own objectives as perceived by him. Thereafter, the final objectives for the subordinate are set by the mutual negotiation between superior and subordinate. In the beginning of MBO process in an organization, there may be wide gap between the recommended objectives by the superior and subordinates stated objectives because the latter may like to put lesser burden on him by setting easily achievable objectives. However, with the experience gained over the period of time, this gap narrows because of narrowing down of perception of superior and subordinate about what can be done at a particular level. 4. Matching Resources with Objectives: When objectives are set carefully, they also indicate the resource requirement. In fact, resource availability becomes an important aspect of objective setting because it is the proper application of resources which ensures objective achievement. Therefore, there should be matching between objectives and resources. By relating these to objectives, a superior manager is better able to set the need and economy of allocating resources. By relating these to objectives, a superior manger is better able to see the need and economy of allocating resources. The allocation and movement of resources should be done in consultation with the subordinate manager. 5. Appraisal: Appraisal aspect of MBO tries to measure whether the subordinate is achieving his objective or not. If not, what are the problems and how these problems can be overcome?

Appraisal is undertaken as an ongoing process with a view to find out deficiency in the working and also to remove it promptly. It is not taken merely to punish the non-performer or to reward the performer. It is taken as a matter of system to ensure that everything is going as planned and the organization is able to achieve its objectives. 6. Recycling: Though appraisal is the last aspect of MBO process, it is used as an input for recycling objectives and other actions. Objectives are neither set at the top and communicated to the bottom nor are they set at the bottom and go up. Objective setting is a joint process through interaction between superior and subordinate. Therefore, what happens at each level may affect other levels also. The outcome of appraisal at one level is recycled to see if the objectives have been set properly at the level concerned and also at the next higher level.