Organization Theory and Management ASSIGNMENT A Q1. What do you understand by administrative management theory? How is it different from scientific management theory?

Answer: Administrative management theory attempts to find a rational way to design an organization as a whole. The theory generally calls for formalized administrative structure, a clear division of labor and delegation of power and authority to administrators relevant to their areas of responsibilities, on the other hand Scientific management theory is the systematic study of the relationships between people and tasks for the purpose o redesigning the work, it deals with analyzing and synthesizing workflows, its main objective is improving economic efficiency especially labor productivity.

Q2. Satisfying the claims of shareholder’s should be the paramount concern of a company. Discuss the arguments for and against this statement.

Answer:

Interests of shareholders must be the paramount concern of the corporation, an implication arising from the status of shareholders as being the 'owners' of the corporation, the corporation being a legal entity comprised of shares for which shareholders have a proprietary interest in. According to the authors however, giving primacy to the interests of shareholders in the context of corporate law and governance does not necessarily involve undermining or ignoring the interests of other stakeholders such as creditors, employees and other participants in society. Nor does it mean that the corporation is simply a legal construct devoid of any social role or influence. Rather, due to the enormous amount of economic activity for which corporations are responsible and the vast number of people employed by, or dependent on the financial success of corporations, the corporation must inevitably be seen as a social institution. Further, as the authors will argue, if we go back to basics and recognize that shareholders are individuals, and each and every aspect of individual activity-including the purchase and disposal of shares-is guided by the pursuit of personal Happiness (either explicitly or implicitly), then corporations can give primacy to the interests of shareholders, and still act in the best interests of other stakeholders (such as employees, creditors and the community in general).

Recent empirical studies show that there is (at best) a weak correlation between personal happiness and levels of material wealth. Corporations can still give primacy to the interests of shareholders whilst not having to explicitly set out to maximize profits. Once we appreciate the simple yet undisputable point that the corporation is just another form of human activity carried out to assist in the fulfillment of personal happiness, complex theories of the firm and books and articles pondering over how companies can manage shareholder interests can be assigned to the dustbin of legal history.

Q3.Discuss the factors that affect ethical and unethical behavior.

Answer: Individual factors; many individual factors affect a person’s ethical behavior at work, such as knowledge, values, personal goals, morals and personality.

• Values

Values are an individual's judgment or standard of behavior. They are another individual factor that affects ethical behavior. To some people, acting in an improper way is just a part of doing business. Some people's standard of behavior will feel that lying for a business financial win is not unethical.

• Morals

Morals are another individual characteristic that can affect an individual's ethics. Morals are the rules people develop as a result of cultural norms and values and are, traditionally, what employees learn from their childhood, culture, education, and or religion. They are usually described as good or bad behavior.

Q4. On what grounds can you suggest that all business houses must assume social responsibility?

An easy way for your company to build its brand, reputation and public profile Being socially responsible creates goodwill and a positive image for your brand. Trust and a good reputation are some of your company’s most valuable assets. You can nurture these important assets by being socially responsible. When socially responsible program is used properly, it will open up a myriad of new relationships and opportunities. Not only will your success grow, but so will your company’s culture. It will become a culture which you, your staff and the wider community genuinely believe in. Corporate Social Responsibility attracts and retains staff It is in us all to want to do ‘good’ (and perhaps be recognized for it). Our lives become meaningful when we realize our work has made a positive difference in some way. It makes all our striving worth it. By attracting, retaining and engaging staff, ‘doing good’ for others reduces your recruitment costs and improves work productivity. Customers are attracted to socially responsible companies Branding business as ‘socially responsible’ differentiates you from your competitors. Developing innovative products that are environmentally or socially responsible adds value and gives people a good reason to buy from you. Corporate Social Responsibility attracts investors Investors and financiers are attracted to companies who are socially responsible. These decision-makers know this reflects good management and a positive reputation. Corporate Social Responsibility encourages professional (and personal) growth staff can develop their leadership and project management skills through a well-designed corporate social responsibility program. This may be as simple as team building exercises, encouraging employees to form relationships with people they would not normally meet.

Corporate Social Responsibility helps to cut business costs Environmental initiatives such as recycling and conserving energy increase in-house efficiency and cut costs. Introducing a corporate social responsibility program gives you a good reason to examine and improve on spending.

Q5. What is power? Explain the various sources of power giving suitable example.

Answer: Power refers to a capacity that A has to influence the behavior of B so that B does something for her or she would not otherwise do.

Sources of Power: Coercive Power Coercive power is derived from a person's ability to influence others via threats, punishments or sanctions. A junior staff member may work late to meet a deadline to avoid disciplinary action from his boss. Coercive power is, therefore, a person's ability to punish, fire or reprimand another employee. Coercive power helps control the behavior of employees by ensuring that they adhere to the organization's policies and norms. Reward Power Reward power arises from the ability of a person to influence the allocation of incentives in an organization. In an organization, people who wield reward power tend to influence the actions of other employees. Reward power, if used well, greatly motivates employees. But if it's applied through favoritism, reward power can greatly demoralize employees and diminish their output. Legitimate Power It represents the power a person receives as a result of his or her position in the formal hierarchy of an organization. An example of legitimate power is that held by a company's CEO.

Expert Power Expert power is derived from possessing knowledge or expertise in a particular area. Such people are highly valued by organizations for their problem solving skills. People who have expert power perform critical tasks and are therefore deemed indispensable. Example, just as physicians have expertise and hence expert power – most of us follow the advice our doctor gives us. Referent Power Referent power is derived from the interpersonal relationships that a person cultivates with other people in the organization. For example if I admire and identify with you, you can exercise power over me because I want to please you for example celebrities and sports people.

ASSIGNMENT B Q1. What is the relationship between Organisation Structure, Organisation Design and Organisation Culture? Answer: Organisation structure is the established pattern of relationships among the components of the organization; it refers to the network of relationships among individuals and positions in an organization. Organisation design refers to the process of coordinating the structural elements of the organizations in the most appropriate manner; organizational culture is a system of shared meaning within an organization that determines in large degree how employees act.

Q2.Compare and Contrast Maslow’s Need Hierarchy theory with that of Herzberg’s Two Factor theory. Answer:

1. Meaning

Maslow’s based on the concept of human needs and their satisfaction.

Hertzberg’s theory is based on the use of motivators which include achievement, recognition and opportunity for growth.

2. Basis of Theory

Maslow's theory is based on the hierarchy of human needs. He identified five sets of human needs (on priority basis) and their satisfaction in motivating employees.

Hertzberg refers to hygiene factors and motivating factors in his theory. Hygiene factors are dissatisfies while motivating factors motivate subordinates. Hierarchical arrangement of needs is not given.

3. Nature of Theory

Maslow's theory is rather simple and descriptive. The theory is based long experience about human needs.

Hertzberg's theory is more prescriptive. It suggests the motivating factors which can be used effectively. This theory is based on actual information collected by Hertzberg by interviewing 200 engineers and accountants.

4. Applicability of Theory

Maslow's theory is most popular and widely cited theory of motivation and has wide applicability. It is mostly applicable to poor and developing countries where money is still a big motivating factor.

Herzberg's theory is an extension of Maslow's theory of motivation. Its applicability is narrow. It is applicable to rich and developed countries where money is less important motivating factor.

5. Descriptive or Prescriptive

Maslow's theory or model is descriptive in nature.

Herzberg's theory or model is prescriptive in nature.

6. Motivators

According to Maslow's model, any need can act as motivator provided it is not satisfied or relatively less satisfied.

In the dual factor model of Hertzberg, hygiene factors (lower level needs) do not act as motivators. Only the higher order needs (achievement, recognition, challenging work) act as motivators.

Q3.a) What is Human Resource Planning? Explain its Significance. b) Explain in brief the sources of power? Answer: Human Resource planning is the process of anticipating and carrying out the movement of people in to, within and out of the organization. Significance of Human Resource planning

• Reservoir of Talent. People with requisite skills are readily available to carry out the assigned tasks.

• Prepare People for Future. People can be trained, motivated and developed in advance and this helps meeting future needs for high-quality employees quite easily. Likewise, manpower shortages can also be met comfortably through proper human resource planning.

• Expand or Contract. If the organisation wants to expand its scale of operations, it can go ahead easily. Advance planning ensures a continuous supply of people with requisite skills who can handle challenging jobs easily.

• Cut Costs. Planning facilitates the preparation of an appropriate manpower budget for each department or division, and helps in controlling manpower costs by avoiding shortages/excesses in manpower supply.

• Succession Planning. Human Resource Planning as pointed out previously prepares people for future challenges. The ‘stars’ can be picked up and kept ready for further promotions whenever they arise.

Sources of Power: Coercive Power Coercive power is derived from a person's ability to influence others via threats, punishments or sanctions. A junior staff member may work late to meet a deadline to avoid disciplinary action from his boss. Coercive power is, therefore, a person's ability to punish, fire or reprimand another employee. Coercive power helps control the behavior of employees by ensuring that they adhere to the organization's policies and norms. Reward Power Reward power arises from the ability of a person to influence the allocation of incentives in an organization. In an organization, people who wield reward power tend to influence the actions of other employees. Reward power, if used well, greatly motivates employees. But if it's applied through favoritism, reward power can greatly demoralize employees and diminish their output. Legitimate Power It represents the power a person receives as a result of his or her position in the formal hierarchy of an organization. Expert Power Expert power is derived from possessing knowledge or expertise in a particular area. Such people are highly valued by organizations for their problem solving skills. People who have expert power perform critical tasks and are therefore deemed indispensable Referent Power Referent power is derived from the interpersonal relationships that a person cultivates with other people in the organization.

CASE STUDY Mr. Sreenivas (55) working as manager in Alfa Chemicals, a large scale industrial establishment engaged in the production of Phosphate and Sulphur. He has 30 years of experience in Alfa Chemicals. He has an excellent track record as Manager Human Resources within the organization. Many times he got 'best employer award' to performance excellence. His area of expertise in recruitment and selection process, and performance appraisal has been widely acknowledged. The Information Technology division of Alfa Chemicals industry once faced acute shortage of manpower. Mr. Raj, Manager IT division put forward an immediate requirement of 10 employees in the IT division, to HR department, starting from junior level to senior level. As and when Mr. Sreenivas got the letter from Mr. Raj, in his department, he started processing of it. To get it done, he approached many sources. He had gone through the data bank of company and considered 100 resumes for recruitment from it. He also informed the employees and employers of the organization, in their respective departmental notice board, showing the immediate requirement of 10 employees to facilitate the internal recruitment procedures. From the employees and employers of Alfa Chemicals he got around 150 applications with resumes. In addition to that in order to give an opportunity to candidates' external to the organization he floated an advertisement in several daily news papers viz., Times of India, Sakal, and Indian Express. From external sources he got around 350 applications. Almost 600 candidates, including internal and external applicants, applied for 10 vacant posts. To ensure the reliability and dependability of the process, Sreenivas made his personal scrutiny at all levels, in the recruitment and selection process. Since the entire department function as a team in HR, all the members trust each other and extended their valuable contribution in the recruitment and selection. The department conducted a preliminary interview in order to made first screening process and filter the number of applicants. After the first screening process the HR department reduced the number of applicant list from 600 to 500 applicants. He conducted a written test and group discussion and there by further reduces the number of applicants to 300. These 300 candidates then exposed to one hour psychometric test and out of which 50 candidates selected for the final interview. From the final interview, 10 candidates finally selected. The entire process of recruitment and selection took almost 3 months. The selected candidates list then forwarded to the top management for the final approval. HR department informed the candidates that the appointment letters will be sent to those

who are selected for the post. Sreenivas approached several time to the top management about to get final approval of list of candidates for the IT department. Sreenivas informed the IT department also that the delay in the final list announcement as the top management take some more time. He waited almost 4 weeks. But, no reply at all. Mr. Raj, the IT manager every day enquired about the latest information about the final list of the candidates and tentative date of induction. Sreenivas faced the difficulty to make any comment on the subject as there was no information from the top management. HR department had to answer many phone calls from out side and inside the organization, as recruitment involved candidates from inside and outside. The employers and employees of the industry, whose relatives got into the final selection process, became regular visitors of the HR department, asking for the finalist. Sreenivas called a meeting of HR team members and once again made a close verification of the entire process. But he couldn't find any fault in any of the recruitment and selection process. As the time went on he became more suspicious about the delay in the announcement of the result. When the problem becomes so crucial Sreenivas got direction from the top management to meet Mr. Kartik, General Manager, one of the top officials in the organization. Mr.Kartik asked the entire process of recruitment and selection that made on IT professionals. Sreenivas furnished the entire details of the process in a precise report. Mr. Kartik read the entire report and soon after made a direct comment that the recruitment and selection process that for IT professionals need to be cancelled as he observed some discrepancies in the process made by his department. He further directed Sreenivas that the vacancies have to be filled through contract basis and no permanent vacancies to be made in these positions, for one year. Further he informed Sreenivas that another recruitment process to be done from external candidates applied and no internal application to be entertained. Sreenivas couldn't agree with the Mr. Kiran comment on his department's inefficiency in the recruitment and selection process. For a while he thought about quitting the organization, as he faced a baseless allegation from the top management. Till date there is no black mark in his functional dissemination. On many occasion he helped the industry to find out best possible solutions in order to tackle the many manpower crisis. Sreenivas became so depressed and felt quiet unhappy about the decision taken by the management. Mr. Sreenivas called an urgent meeting of his subordinates and communicated the management decision and directives. He shared with the

team members that the management had greater dissatisfaction on the recruitment and selection process done by the department. He enquired that any one made any mistake in the process. All members denied the probability of any mistake. As there were clear norms and regulations related to each step and there was no dual command, they found no possibility of creeping errors in the selection process. In the meeting he informed his subordinates that the management freezes the appointment process for IT professionals and asked for external recruitment on contract basis. It was shocking news to members. They asked several questions to get a proper clarification from Sreenivas. As Mr. Sreenivas himself unaware of the reasons behind management decision, he informed his subordinate his inability to give a proper reply in this regard. Sreenivas also informed this matter to Mr. Raj. During the evening hours, in the same day, Sreenivas got a call from Mr. George, one of his senior-level Managers, with whom he had friendly and informal relationship. Mr. George asked Srinivas to come to his cabin. As per the call Mr. Sreenivas met George in his cabin. George enquired about his family and many unofficial matters in the informal interaction. Half an hour later, Mr. George enquired about the recruitment and selection process of IT professionals. He shared with George all those things happened with top management. Leaving aside the informal interaction, George initiated formal discussion with Sreenivas. He told Sreenivas that the selected list of IT professionals consisted two names, Mr. Avdesh and Mr. Praveen, they are the relatives of two trade union leaders of the organization. The management felt that being the relatives of two trade union leaders, in the long run, they could be a threat to organization. It may create an image that the trade unions still have a control over the decision making process in organization. Further, the hold of trade union may expand if this selection process materializes. Mr. Geroge informed Sreenivas that management didn't have any doubt about the dependability and exactness of the recruitment processes that HR departmentr did. George further informed Sreenivas that as per the intimation from top management he called Mr. Sreenivas and briefed about the undercurrents of this episode. The entire news was shocking to Mr. Sreenivas. He didn't know that the management decision had this much of undercurrents. After hearing entire story Sreenivas become so silent and returned to his cabin. While sitting inside his cabin, he made a silent comment that, "what a useless effort.

Questions 1. What are the undercurrents of selection process in Alfa Chemicals? Answer .The selected list of IT professionals consisted two names, Mr. Avdesh and Mr. Praveen, they are the relatives of two trade union leaders of the organization. 2. How management decision justifies management effort in the maintenance of harmonious industrial relation? Answer. The management freezes the appointment process for IT professionals and asked for external recruitment on contract basis. 3. Do you believe that as HR Manager, Mr. Sreenivas failed to gather direct and indirect information about the candidates? Answer .Mr Sreenivas collected all information that was required. 4. How 'cancellation of appointment' decision that affect the moral of organizational members? Answer .Organizational members lost trust in the decision making of management. 5. How you interpret the dilemma of HR managers have to face in such kind of situations. ANSWER - HR Manager’s inability to comment because of no information from top management. - Difficulties in responding to the inquiries made about the selection from prospective candidates. - The HR Manager may have uncertainty over the selection process he administered. 6. What would be your decision if you have to face such situation? Answer. Follow management decision 7. Do you believe that trade unions have 'quota' in appointments? Answer. No

8. How the decision affect the reduction of wastages and improvement of resources. ANSWER - It increased the wastages and loss of resources because more money and resources have been used in recruitment and selection process. Another recruitment and selection would require more money, time and resources again. This would lead to increased wastage and reduction in resources. 9. Is the decision reflecting management fear towards trade union or inability to develop a congenial industrial relationship within the organization? Answer. Management decision reflects inability to develop a congenial industrial relationship within the organization 10. How you interpret the silence of Mr. Sreenivas? Answer. That he wasted his effort in the processes of selection while management had other information they did not reveal. ASSIGNMENT C 1 B 11 B 21 A 31 C 2 C 12 B 22 A 32 B 3 B 13 C 23 A 33 B 4 C 14 A 24 C 34 B 5 A 15 B 25 B 35 C 6 B 16 C 26 A 36 A 7 C 17 C 27 B 37 B 8 B 18 A 28 C 38 A 9 B 19 C 29 C 39 A 10 B 20 A 30 A 40 C