Managing People and Organisations 1-3

MANAGING PEOPLE AND

ORGANISATIONS
SEGMENTS 1-3
Segment: People at Work
Topic 1: Individual Characteristics
Individual Characteristics

Table of Contents

1. Managing People Problems .................................................................................................... 4

2. Changing Individual Characteristics ........................................................................................ 6
3. Personality ............................................................................................................................... 7
4. The "Big Five" Personality Dimensions ................................................................................... 8
4.1 Congruence or Heterogeneity in Teams ............................................................................ 10
4.2 Personalities in the Workplace ........................................................................................... 10
5. The Myers-Briggs® Type Indicator ........................................................................................ 16
6. More Personality Traits ......................................................................................................... 16
7. Summary ................................................................................................................................ 18
8. Glossary .................................................................................................................................. 19
9. References ............................................................................................................................. 20
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©COPYRIGHT 2019, ALL RIGHTS RESERVED. MANIPAL ACADEMY OF HIGHER EDUCATION
Introduction
All people are similar in some ways. For example, people have similar needs and most people
can be motivated to take action. However, people are motivated by different factors because
they have different personalities, belief systems and capabilities.
In this topic and the rest of the segment, we will discuss about people's personalities,
motivations and perceptions, and how people problems can be managed in an organisation.
Learning Objectives
At the end of this topic, you will be able to:

 describe the model of changing individual characteristics in the workplace
 discuss the “Big Five” personality dimensions theory
 describe the four personality scales in the Myers-Briggs® Type Indicator.
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1. Managing People Problems

Before starting this topic, complete the following exercise. You need to play the role of a
manager interacting with two employees. Your goal is to find a course of action that can result
in a favourable outcome for the employees in the scenario. At the end of this exercise, you will
be in a better position to appreciate people problems caused by differences in personalities,
motivations and perceptions.
Exercise: Identifying Perceptions and Expectations
Instructions
In this exercise, you will play the role of a manager interacting with two different employees to
see how they react to the same situation. The exercise begins with a description of a situation
and three choices of action you might take. Each decision renders more decisions, until you
come to the end of the exercise.
The goal of this exercise is to find the most favourable outcome for both employees.
Scenario
Paley Delillo provides logistics consultation for Fortune 500 companies. Many process
consultants have been with the company for several years. They have been praised for their
work, and clients frequently ask for specific consultants on subsequent jobs.
About a month ago, the manager in charge of the process consultants hired Sam Chmielski.
Sam has a reputation for performing at a very high level using innovative methods. The process
consultants aren’t sure whether Sam deserves his reputation, but they are a bit jealous,
nonetheless.
Paley Delillo has also acquired two new clients, both very large companies. These assignments
are considered to be very desirable and rewarding, and the consultants have discussed at
length who will work with these new companies.
Employee
First you will work through the exercise with one employee, then the other. Remember that
these two employees (Jorge and Irene) will react differently to the same situation.
Jorge
Your Role: Manager
Your best consultant, Jorge, is very upset about Sam’s hiring. He thinks he has been treated
unfairly and claims that Sam is making much money than he is and has better clients.
You can’t believe what he is saying. You helped Jorge get a $10,000 raise five months ago, and
he is the highest-paid consultant at this level of experience in the company. You pushed
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management to approve the raise because you believed he deserved it. You’re not sure what
to do. Jorge is angry with you and thinks that decisions are made unfairly. You wonder whether
you can do anything to satisfy him.
Some of the other managers are angry that you are paying him at the high end of the salary
range. You also assigned Jorge to the company’s most important clients as a reward for
outstanding work, and because you think he is the best. You even requested a promotion for
him.
You’re not sure what to do. Jorge is angry with you and thinks that decisions are made unfairly.
You wonder whether you can do anything to satisfy him.
What do you do?
A. You try to get another raise for Jorge. He is a key employee, works long hours, and does
excellent work. It’s true that Sam is making more than Jorge is.
B. You confront Jorge and tell him how ungrateful he is. Remind him that his recent raise
puts him above the salary range and that you fought with management to get that raise
for him. Ask whether anything would satisfy him and whether he is committed to the
company.
C. You ask Jorge why he thinks he is better treated unfairly. You ask him to explain which
elements of his compensation trouble him. Then you try to find out what the money
means to him.
Irene
Your Role: Manager
Your best consultant, Irene, is very upset. She thinks she has been treated unfairly and claims
that Sam is making much money than she is and has better clients.
You can’t believe what she is saying. You helped Irene get a $10,000 raise five months ago, and
she is now the highest-paid consultant at her level of experience. You pushed management to
approve the raise because you believed she deserved it. Some of the other managers are angry
that you are paying her at the high end of the salary range. You also assigned her to the
company’s most important clients as a reward for outstanding work and because you think she
is the best. You even requested a promotion for her.
You’re not sure what to do. Irene is angry with you and thinks decisions are made unfairly. You
wonder whether anything you can do to satisfy her.
What do you do?
A. You try to get another raise for Irene. She is a key employee, works long hours, and does
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excellent work. It’s true that Sam is making more than She is.
B. You confront Irene and tell her how ungrateful she is. Remind her that her recent raise puts
her above the salary range and that you fought with management to get that raise for her.
You ask whether anything would satisfy her and whether she is committed to the company.
C. You ask Irene why she thinks she is better treated unfairly. You ask her to explain which
elements of her compensation trouble her. Then you try to find out what the money means
to her.
2. Changing Individual Characteristics

The graphic below illustrates people's individual characteristics, the difficulty or ease with
which those characteristics can change, as well as the methods used to produce change.
Fig.1: Pyramid Diagram Illustrating the Difficulty and Ease of Changing Individual Characteristics
and the Methods to Produce Change
As the above model demonstrates, characteristics such as knowledge and skills can be most
easily changed through training and development. Other characteristics, such as demeanour
and personal networks, are more difficult to change. These characteristics take time to alter
and can be modified through incentives, ongoing coaching and counselling.
At the base of the triangle are characteristics that are very difficult to change such as values,
personality, aptitude and cognitive style. These characteristics are partly inborn and are
developed over many years. Training or coaching may not make significant changes in these
characteristics. In the case of these characteristics, managers must replace employees rather
than try to change them.
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Individuals differ in their general mental ability so that those with a high mental ability are able
to perform better on almost any job compared with those with a low ability. Therefore, there
are considerable economic gains to organisations through selecting their employees based on
tests of general mental ability.
Although all individual characteristics are important when studying people in the workplace,
this segment focuses on personality, aptitudes, networks and their consequences on the
workplace. The examples and readings in this segment offer strategies for effectively dealing
with these consequences.
3. Personality
Chu Chin and Khadijah both work as computer programmers for a small insurance firm. One
day, owing to a computer problem, business comes to a stop. All computer programmers are
asked to stop what they are doing and to focus their attention on solving this problem. Chu
Chin becomes enraged at the request to stop his work and handle the immediate situation.
Khadijah calmly works to solve the problem at hand. Why do Chu Chin and Khadijah respond
differently to the same situation? To put it simply, their personalities cause them to have
different reactions to the same situation.
Personality can be described as traits, characteristics and predispositions that differentiate
people from each other. The personality an individual has, tends to remain fairly constant over
time and because genes affect personality, it is, to a degree, set at birth. It is these more
fundamental and enduring aspects of the person that we are considering in this section on
personality. However, not all aspects of the behaviour of an individual are this stable. Some
aspects of an individual's behaviour are more fluid, and they can be changed by altering the
situation the individual is in.
For example, part of an individual's behaviour is caused by the communications he or she
receives, and so his or her behaviour can be changed by altering the communications he or she
receives, for instance, from co-workers. In this section, we will consider the more unchanging
aspects of individual behaviour, before turning later on to the major changeable aspects.
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4. The "Big Five" Personality Dimensions

One theory, the "Big Five" personality theory, describes personality differences as existing
across five dimensions.
1. conscientiousness
2. emotional stability
3. openness to experience
4. agreeableness
5. extroversion
According to this theory, people who score high or low on these scales may have difficulty
modifying their behaviour according to different work situations. For example, a person who
scores high on the extroversion scale may find it difficult to work alone; a person who scores in
the middle can easily work alone or with others.
Fig.2: Graphic Illustrating the 'Big Five' Personality Dimensions and the Personality Traits on Each
Dimension Scale
How can you identify these traits in co-workers? You can observe them and see how they
interact with people. For example, Bo, an energetic leader, loves new projects and rarely
misses work; when she does, she works from home. Based on these overt behaviours, you can
assume that Bo is extroverted, high in conscientiousness and open to new experiences.
Because Bo calmly meets multiple new challenges, you can also assume she has a great
amount of emotional stability.
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Personality, however, is not always reflected in people's overt behaviour. Despite a preference
to behave one way or another, many people are able to adjust their behaviour to different
situations. For example, a naturally introverted person may be able to perform daily work with
a team and meet group goals, and a naturally extroverted person may be able to work
productively alone. People can monitor their outward appearances to present a different view
of themselves. However, constantly controlling natural tendencies can become a source of
stress for some people, especially people with extreme personality traits. This may lead to
problems in the workplace and ineffective coping strategies.
Some characteristics are easier to modify than others and any attempt to do so must begin by
acknowledging a problem in a given situation and a desire to change. When people are unable
to adjust to their environment, they might find that the best strategy is to find a different,
better-suited work environment. For example, an introvert might find it stressful to work in a
constantly noisy office space. Stress could lead to decreased ability to cope and perform.
However, his or her performance may improve with a quieter work environment.
Effective managers use what they know about employees' personalities to place them in jobs,
to understand and cope with interpersonal conflicts between employees and to develop
employees. For example, imagine that a manager must choose one of two people to be a
project leader. The new project leader will launch a new product with little information and
many unknowns. Although both candidates are very conscientious, one is not comfortable with
unstructured work assignments. An effective manager would consider both personalities and
choose the candidate who is most comfortable working in an environment with little structure.
Overall, personality is difficult to assess. People often discover what a person's personality is
like by watching his or her behaviour. However, most people behave differently in different
situations and change the way they behave to give a specific impression of themselves. Many
managers incorrectly assume that the behaviour they observe is the only way an employee
acts, regardless of the situation or environment. An effective manager will consider how an
employee behaves in different circumstances and with certain co-workers before making
assumptions about an employee's personality.
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The kind of interactions people have with others at work may depend on where people fall on
the "Big Five" dimensions. Individuals at the extreme ends of dimensions may have some
difficulty in their relationships. For example, Ji Un and Amira work together on a daily basis. Ji
Un is high in agreeableness and openness and Amira is low in both dimensions. Because Amira
is low in agreeableness, she may find it difficult to accept any of Ji Un's ideas. In general,
individuals at low ends of the agreeableness dimension may have interpersonal difficulties
because they are not open to others' ideas.
4.1 Congruence or Heterogeneity in Teams

Teams may consist of people who are similar or different in personality traits. If six of seven
team members are extroverted, the team is considered trait congruent. However, if the team
members fall in different dimensions of the extroversion dimension, the group is trait
heterogeneous.
Trait congruence or heterogeneity is neither good nor bad. It does not matter if everyone in a
group demonstrates the same or different traits. What works best depends on the situation
and the mix of traits that each individual brings to the group. For example, although a group of
highly conscientious people may be diligent and hardworking, these people may also argue
constantly about the "right way" to do things. Highly conscientious workers may also be so
focused on doing things the "right way" that they do not innovate, even when a situation
suggests that new methods are needed. However, the group might argue less if some of these
highly conscientious people also rate high in agreeableness. Keep in mind, however, although a
group that mostly displays high agreeableness may create harmonious work relationships, it
may not debate issues enough, which will lead it to make popular but not well-tested
decisions.
Because the Big Five personality dimensions affect how people behave at work, there are gains
for organisations from selecting a variety of people, as Barrick and Mount (2000) explain.
4.2 Personalities in the Workplace

Read below to learn how to identify the different personality dimensions.
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Becton & Associates

Becton & Associates (B&A) is a midsize accounting firm located in Detroit, Michigan, in the US.
The company is divided into three business units:
 corporate accounts (CA)
 small business accounts (SBA)
 individual accounts (IA)
B&A is appropriately staffed to accommodate regular customer demand in each business
unit, and normally, staffing is not a problem. Things become chaotic during tax season,
however, especially during the last weeks of March through mid-April. Although there is
some predictability in the corporate and small business accounts (i.e., their customers' fiscal
years are staggered fairly evenly throughout the quarters), there is less predictability for
accountants in IA. Usually, this group puts in extra hours during the busy tax season to meet
customer needs.
This is an unusual year for IA in that an unusually low number of customers filed their taxes
early while fewer customers than usual requested extensions. The firm also picked up many
new last-minute customers. In total, B&A experienced a 65% increase in individual accounts
between 15 March and 15 April, creating a personnel crisis. This year, employees in the IA
unit will have to put in more extra time than usual. To get through the crisis, management
asks for volunteers from the other business units to help handle the unusual demand for
time.
Mei
Mei is a corporate accountant who enthusiastically volunteers to work with IA during this
crisis. She has worked at B&A for 20 years and views this as an opportunity to contribute to
the company. Although she normally puts in 10- to 12-hour days with her regular duties,
during this time she anticipates she will work about eight hours a day in the corporate
sector and another six hours a day with IA. She tends to work a little slower than others but
usually finds hidden benefits and deductions other accountants miss. In her opinion, this
personnel crisis can be handled if people work hard and focus.
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Wu Jiang
Wu Jiang, on the other hand, has an active social life outside of work and believes eight hours
is more than enough time to spend at work, regardless of any crisis. Even though he works in
IA, he refuses to stay late to handle the workload. He tends to work quickly but sometimes
misses sources of income or obvious deductions that clients do not explicitly bring to his
attention. He has been known to misplace documents and lose track of dates, especially
when he is under pressure from tight deadlines. On more than one occasion, he has filed his
clients' returns late, resulting in penalties for his customers. Regardless, Wu Jiang has no
plans to work extra hours this month.
Young Lee
Young Lee has worked in IA for 13 years and is considered easy-going and kind by his co-
workers. He normally sticks to eight-hour workdays for family reasons, but he does not
mind putting in the extra hours during this time of year. His family has learned to expect
that his schedule will change dramatically during tax season, and they make arrangements
to be without him. In some ways, Young Lee enjoys the shift in responsibilities and the
chance to interact more with his colleagues. He does not mind working the extra hours and
knows that if everyone cooperates, the crisis will be managed. As he says, "I can't
understand why so many people are complaining about this situation. After all, isn't this
what accounting is all about?"
Helen
Helen, whose workspace is next to Young Lee, hates this time of year. Helen's husband
Thomas hates it, too, because it means a month of endless evenings listening to her
complain about the company, the boss and the customers. Although Helen begrudgingly
puts in the longer days required, she is often angry and spends a great deal of time
complaining.
Ravi
Ravi is another IA accountant who is really upset by the situation. He chose accounting as a
profession because it is logical and systematic. He is upset by the need for so many extra
hours and the disorder that comes with bringing other accountants into "his" department.
He worries that if he has to rush, he will make mistakes for which he will be penalised. Ravi
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secretly feels this crisis is beyond his capacity and wishes the bosses had not accepted all
those new customers. He tends to get depressed at the beginning of every new year,
anticipating the stress of the next four months.
Sarah
Sarah is an accountant in the corporate sector who also volunteers to work a few additional
hours each evening in the IA unit during this time. Sarah's calm, easy-going demeanour
make her an excellent addition to the midnight team. When others become frantic or upset
because numbers or documents are missing, she works with them until they are able to
calm down and refocus. Even when she is not directly working with someone, her
composure and easy confidence serve as a calming influence on people around her.
Daoud
Daoud is a recent hire to B&A's small business accounts unit. He is excited by the
opportunity to volunteer extra time to IA and views this situation as an opportunity to learn
more about the business and how to deal with different kinds of financial situations. He
loves learning and craves new experiences. Daoud is not concerned about the extra hours
and believes the situation can be handled if people work creatively together.
Mario
Mario, on the other hand, has been working for the firm for 20 years and has had enough of
these "challenges". He has seen hotshots like Daoud come and go. As far as Mario is
concerned, all accounting is pretty much the same – as long as the debits and credits
balance, what is there to learn? Mario refuses to use any of the new programmes that the
company purchased to make the process faster and more efficient; the programme he's
been using for the past 10 years works just fine and he feels no need to change.
Keiko
Keiko also works in SBA and agrees to work in IA because she really likes the accountants in
that business unit. She enjoys her regular job because she supports, counsels and advises
entrepreneurs who have many questions and concerns. As a result, she interacts a great
deal with customers. Although she often finds the routine of accounting boring and
sometimes misses details when she gets distracted, she is highly effective with customers.
This unusual demand for time and effort is stressful, but the high level of camaraderie that
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results appeals to Keiko. She believes this crisis can be handled if everyone pulls together
and breaks up the work with a little fun along the way. She intends to instigate as many fun
and social activities as possible to keep things "light" during this crisis.
William
William, who works in IA, is upset that space was made for Keiko in a small workspace next
to his. Typically, William has plenty of quiet in his large cubicle area located in the back
corner of the office. He enjoys his work and has no problem putting in the required time,
but prefers to work in a quiet atmosphere. Too much conversation and interaction leave
him exhausted. In his words, "With Keiko in this area, people constantly drop by to talk,
gossip and let off steam. If people aren't stopping by, you can bet that Keiko will be talking
on the phone". When Keiko brings a radio to work, William finally complains to their boss.
Keiko defends herself by claiming that music helps her focus. The situation is resolved when
Keiko agrees to wear earphones, but it is still very disturbing to William. He will be very glad
when she moves back to her department and he has his corner back to himself.
Expert analysis
The "Big Five" Theory of Personality maintains that human behaviour can be categorised into
five core personality dimensions: conscientiousness, emotional stability, openness to
experience, agreeableness and extroversion. Most people are a combination of highs,
mediums and lows of all five dimensions. Many people are able to adapt their behaviours to
fit a situation rather than remaining rigidly controlled by personality preferences. For
example, people who are not highly conscientious by nature may become more so under
certain work conditions.
Under pressure, however, people tend to react more according to their instincts than their
learned behaviours. The B&A crisis created the kind of pressure that could throw
employees into their more primal, instinctive responses to situations. We can use the "Big
Five" personality traits to interpret the reactions of these 10 B&A employees to the unusual
request for time and energy required to meet their deadline.
Mei demonstrates high conscientiousness when confronted with the request for support in
another department. Although she regularly works long hours, she is more than willing to
work even more (up to 14 hours per day) to benefit the company. Her work style is slow
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and methodical, and she regularly finds details that others do not. Wu Jiang, who is
unwilling to put in the time and focus required to meet goals accurately and efficiently,
demonstrates the opposite end of this dimension.
Young Lee is described as easy-going and has no problem putting in the extra time, even
though he has family obligations. People who are cooperative, good-natured and courteous
are said to demonstrate an agreeable personality. Helen, who complains about the
company and customers, demonstrates disagreeableness, which is the opposite reaction.
Typically, people scoring high on disagreeableness demonstrate such behaviours as fault-
finding and bickering.
Ravi is upset by the demand for extra time and the disorder caused when other accountants
move into "his" department to help out. He is also worried about making mistakes and gets
depressed even anticipating a stressful time. He reflects the anxiety, insecurity and
depression of people low in emotional stability. The opposite end of this dimension is
characterised by Sarah's calm, quiet composure. People demonstrating high emotional
stability take crises in stride without becoming nervous or anxious about life's many ups and
downs.
Daoud is looking forward to learning more about the business by jumping into this
challenge. He reflects the broad-minded, curious and creative approach demonstrated by
people high on the openness to experience dimension. People who view situations from
narrow perspectives with few alternatives reflect the opposite end of this dimension,
closed-mindedness. Mario, who thinks he knows all there is to know about accounting and
who refuses to use the new programme, demonstrates this.
Keiko enjoys her job because of the social aspects of interacting with customers. She
volunteered to help during the crisis because she likes the employees in IA. She also intends
to keep things "light" during the crisis by finding ways to make the work fun. She reflects
the sociability, gregariousness and attraction for activity demonstrated by people high on
extroversion. William, who works best when there is little noise or distraction and actually
becomes fatigued when there is too much stimulation, exemplifies the other end of this
spectrum, introversion.
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5. The Myers-Briggs® Type Indicator

The Myers-Briggs® Type Indicator (MBTI®) is another widely used approach to studying and
measuring personality. This instrument was originally developed in the 1920s by a mother
(Katherine Briggs) and daughter (Isabel Briggs-Myers) team. They based their assessment on
the Swiss psychiatrist Carl Jung's theory which explains how people perceive their
environment, obtain information and make decisions about the information they perceive. The
MBTI® measures people's preferences along four distinct scales:
 Extroversion-Introversion: where people get their energy and how they focus attention
(outer world or inner world)
 Sensing-Intuition: how people collect information (through their five senses or through
inner, intuitive processes)
 Thinking- Feeling: how people make decisions about the information they collect through
either their senses or intuition
 Judging-Perceiving: how people prefer to approach and structure their world view
Assessment results place people into one of sixteen quadrants or types. Research on the
MBTI® has found very mixed support. Despite this fact, it is one of the most widely used
instruments in US corporations.
People can use information gained from the MBTI® to better manage their interpersonal
relationships. In addition to identifying one's own distinct type, an effective employee should
be aware of how his or her personality type interacts with the personality types of another,
and the manager should be aware of the combinations of MBTI® types that are an element of
all groups and teams.
6. More Personality Traits

There are other ways in which personality has been defined.
Read below to learn about two other personality traits; tolerance for ambiguity and rigidity
versus flexibility.
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Tolerance for Ambiguity

How comfortable are you with performing assignments that are not clearly explained? How
comfortable are you in roles that have not been clearly explained? Those who find unclear,
unspecified situations desirable are thought to have a high tolerance for ambiguity. When
asked to produce or perform without clear instruction, they can do so effectively. On the other
hand, those with a low tolerance for ambiguity find unclear tasks and role assignments very
stressful. For example, someone with a high tolerance for ambiguity may enjoy working on the
help desk of a large organisation. The variety and complexity of possible calls during the day
would make the work exciting. However, for someone with a low tolerance for ambiguity, this
situation may be very stressful, owing to the non-routine nature of the job.
What coping strategies are available if you have a low tolerance for ambiguity?
If possible ask for clarification from the person assigning the task. If the person that assigned
the task is not available, it may be possible to ask someone that has experience in the area.
Step back from the ambiguous situation until you have had an opportunity to think about how
you might approach the situation.
You can also try to change the way you perceive ambiguity. Look at the assignment as an
opportunity to use your creativity and insight in solving a particular problem or performing a
given role. In extreme cases, some people may leave an ambiguous situation in search of a less
ambiguous one.
Dyadic and group interactions are also affected by your tolerance for ambiguity. If you are
uncomfortable with ambiguity, you work best with people who can tell you what they want
done and how to do it.
Rigidity versus Flexibility

Rigidity refers to an allegiance to authority and the concern with following the rules of an
organisation. More flexible individuals are not as constrained by organisational roles and
responsibilities. For example, a more rigid person might be more comfortable with an
organisation maintaining the status quo; more flexible individuals may be less stressed by
organisational changes.
A person with a more rigid personality is more likely to strictly adhere to the values of the
organisation, despite what may be going on around him or her. People with more rigid
personalities may align themselves with people who embrace the same views as the
organisation and may have little tolerance for people with opposing views and ideas. In some
business situations, this intolerance may actually be desirable. For instance, if a person works
in a highly regulated industry or one in which an error can be disastrous (such as a nuclear
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power plant), the ability to strictly adhere to rules and policies is a positive trait. However, if a
person works in an industry or job where markets and products change rapidly (such as
software development), a rigid personality may be a poor fit for that environment.
There is a potential trap whereby aspects of an individual's behaviour that are really caused by
the situation may be wrongly attributed to his or her personality. When we say "it is just his (or
her) personality", we assume that the cause lies within the individual. This may not always be
the case. The cause of the individual's behaviour may lie in the situation, so that if the situation
shifts, the individual's behaviour will change. We should therefore beware of readily
interpreting everything as "his (or her) personality". This is especially important for us as
managers, in that we may be able to change the situation and thereby change the behaviour of
an individual, for example changing the job assignment of a subordinate. In subsequent topics
we will discuss these situational causes of behaviour that allow us to change the behaviour of
individual.
7. Summary
Here is a quick recap of what we have learnt so far:
 Personality refers to enduring traits, characteristics and predispositions that differentiate
one person from another.
 According to the "Big Five" personality dimension, people differ based on their levels of
conscientiousness, emotional stability, openess to experience, agreeableness and
extroversion.
 The Myers-Briggs® Type Indicator is another way of assessing personality by measuring
scales in four areas: extroversion–introversion, sensing–intuition, thinking–feeling and
judging–perceiving.
 Managers should use what they know about their employees' personalities so as to better
motivate, lead and develop them. However, caution should be exercised so that you avoid
over-attributing another's behaviour to his or her personality. This will also help you to
avoid overlooking or neglecting other important situational factors.
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8. Glossary
Demeanour The image projected to others by how one looks and acts (physical
appearance, non-verbal behaviour, verbal behaviour) rather than a
true reflection of who one really is.
Conscientiousness A "Big Five" dimension of personality that relates to one's
dependability and self-discipline. People high in this dimension tend
to be task-orientated and focused, while people lower on this
dimension tend to be easily distracted from the task at hand.
Emotional stability A "Big Five" dimension of personality that relates to one's poise and
stability. People high in this dimension tend to be relaxed under
pressure, while people low in this dimension may be indecisive and
anxious.
Openness to A "Big Five" dimension of personality that relates to diversity of
experience interests. People high in this dimension are sensitive, flexible,
creative and curious.
Agreeableness A "Big Five" dimension of personality that relates to the extent to
which one is courteous, good-natured, caring or accepting of norms.
People high in agreeableness tend to be more accepting of others'
ideas or norms than people low in agreeableness.
Extroversion A "Big Five" dimension of personality that relates to sociability and
assertiveness. People high in this dimension tend to be outgoing and
assertive, while people low in this dimension tend to be quieter and
more shy.
Overt Open and observable; not hidden, concealed or secret.
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9. References
 Barrick, M. and M.K. Mount. "Select on Conscientiousness and Emotional Stability." In The
Blackwell Handbook of Organizational Behavior, edited by E.A. Locke, 15-28. Oxford, UK:
Blackwell Publishers Ltd, 2000.
 Schmidt, F.L. and J.E. Hunter. "Select on Intelligence." In The Blackwell Handbook of
Organizational Behavior, edited by E.A. Locke, 3-14. Oxford, UK: Blackwell Publishers Ltd,
2000.
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Topic 2: Perceptions and Attitudes
Perception and Attitudes
Table of Contents
1. Cognitive Styles ............................................................................................................................... 4

1.1 Field Dependence and Independence .................................................................................... 4
2. How to Use Knowledge of Cognitive Styles .................................................................................... 6
3. Perceptual Process and Perceptual Errors ...................................................................................... 6
3.1 Perceptual Errors and Stereotypes ......................................................................................... 8
4. Stereotypes ................................................................................................................................... 13
4.1 Consequences of Stereotyping ............................................................................................. 14
5. Attribution Errors .......................................................................................................................... 23
5.1 Consequences of Attribution Errors ..................................................................................... 24
6. Impact of Attitudes on Relationships............................................................................................ 25
7. Emotions in the Workplace ........................................................................................................... 25
7.1 Consequences of Intense Emotions ...................................................................................... 25
7.2 Managing Intense Emotions ................................................................................................. 27
8. Summary ....................................................................................................................................... 28
9. Glossary ......................................................................................................................................... 28
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Introduction
Fig.1: Perception
Many people believe their understanding of events and other people are both accurate and
shared by others. In fact, most people have very different views of people, the workplace and
events they have witnessed. People interpret what they see and hear and develop very
different beliefs about them.
In this topic, you will learn about the different ways in which people perceive information on
other people and events, and how they might react towards them.
Learning Objectives

 describe the cognitive styles and perceptual process of people
 describe perceptual errors and stereotyping and how to minimise them
 describe attribution errors and how to minimise it
 apply strategies to manage emotions in the workplace.
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1. Cognitive Styles
The way people think, perceive and process information influences their perceptions and
attitudes. Cognitive styles are the patterns and habits people use to process information.
These styles reflect the way people think, perceive, solve problems, receive and retain
information, and form concepts. Differences in cognitive style do not reflect a person's ability
to learn; certain styles just increase a person's tendency to think in a certain manner.
No cognitive style is inherently better than another, and researchers have found that cognitive
style is not related to measured intelligence. However, because certain cognitive styles fit
better with certain tasks, people with equal learning abilities but different cognitive styles may
experience different levels of success in the same environment.
You have learned about personality, which relates to cognitive styles. Cognitive style refers to
how people learn and evaluate information. Personality refers to a set of traits, characteristics,
behaviour and predispositions that determine a person's response to life situations. For
instance, your particular cognitive style (the way you interpret information) may allow you to
learn best by putting things into a real-world context and by talking to other people. Or if you
have a different cognitive style, you may learn best by solitary reflection and by solving a
problem using a task. A person who prefers talking problems through with others might have a
more extroverted personality, while a person who learns best through solitary reflection would
display a more introverted personality. Thus, how people perceive, and process information
has an impact on their personality preferences and tendencies.
Many different cognitive styles have been identified and classified. Perhaps the best-known
cognitive style is field dependence versus field independence.
1.1 Field Dependence and Independence

Content Field dependence and independence refer to a person's tendency to view his or her
environment as either comprehensive and interconnected or independent and not related to
the situational context. Field dependence and independence indicate the degree to which a
learner's surroundings affect his or her perception or comprehension of information.
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Field-dependent people are better at learning inferential or relational concepts, learn more
easily when material is presented within its social context, prefer to work with others to
achieve a common goal, and tend to be sensitive to the feelings and opinions of others. Field-
independent people are better at learning abstract and theoretical concepts, prefer to work
independently, tend to be task-oriented and often have a personal set of goals and rewards to
strive for.
As a result, field-dependent people tend to excel in the humanities and social sciences whereas
field-independent people tend to excel in maths, science, engineering and other analytical
fields.
Fig.1: Graphic Showing the Cognitive Styles of Field Dependent Versus Field Independent
Learners
Read below to learn about another cognitive style, reflective versus active engagement.
Reflective versus Active Engagement

This cognitive style refers to a tendency to approach environmental stimuli in a
contemplative (instead of an impulsive) way. Reflective individuals prefer daily repetitions
and require time for internal reflection. Active individuals prefer experiential learning and
free-flowing movement from one task to another. Taking this into account, a manager
should allow an employee with a reflective cognitive style time to think about the material
being presented and allow an employee with an active cognitive style to immediately
engage with the material.
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2. How to Use Knowledge of Cognitive Styles

Understanding cognitive styles can help guide managers when they are assigning work,
developing instructional strategies or applying motivational techniques. For instance, by
ensuring that employees' cognitive styles fit with the kind of work that they do, managers can
help avoid negative consequences of cognitive styles.
At the individual level, a good manager should be aware of his or her own cognitive style and
seek out tasks and responsibilities that fit best with that style. When appropriate, he or she
should also defer non-compatible tasks to others with the compatible cognitive style. For
example, if a manager has a field-independent cognitive style, he or she should pursue
activities that draw on his or her strengths in being self-directed, learning analytical concepts
and taking a hypothesis-testing approach to learning.
Whether interacting with a client or supervising a co-worker, a manager should try to

determine the cognitive style of the person with whom he or she is interacting. For example, a
co-worker with a field-dependent cognitive style may need external goals and reinforcements
to function effectively. When assembling, leading or operating as part of a group, a manager
should be aware of internal group differences in cognitive style. For example, in assessing team
performance, a manager may find that the most effective teams display high levels of social
bonding and task focus. In trying to assemble such a team, the manager should consider mixing
field-dependent employees, who tend to have good social skills, with field-independent
employees, who tend to be task-orientated.
3. Perceptual Process and Perceptual Errors

As stated in the textbook (Champoux, J. Organizational Behavior: Integrating Individuals,
Groups and Organizations. 4th ed. Cincinnati, Ohio: South-Western College Publishing, 2007),
"Perception is a cognitive process that lets a person make sense out of stimuli from the
environment". You are constantly exposed to stimuli from your environment. In fact, you are
exposed to so much environmental stimulus that you only truly observe a portion of what goes
on around you. Think back to today's commute to work. How many people were wearing
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black? Were most people walking quickly or at a leisurely pace? How many people were
enjoying their morning cup of coffee during this commute? Few people would be able to
accurately answer these questions. The complexity of our environment forces people to
process information in a way that is meaningful. This is known as selective attention within the
perceptual process.
To absorb and later recall information, people create mental categories for people, places and
events based on their beliefs and experiences. The ability to swiftly place events, objects and
people into categories enables people to think and make decisions quickly. Unfortunately, this
process of creating categories can impair perceptions. For example, when people receive
information that does not fit within pre-established categories, they often dismiss the event or
person as being atypical or the "exception to the rule". When later asked to recall the event or
person, they will remember the person or event inaccurately; that is, they will fit the event or
person to a pre-existing mental model rather than recall the unique characteristics of the
event.
Sometimes, people receive information that is so new, different or important that it intensely
clashes with their created categories. In these cases, people will re-evaluate their original belief
and then create a subcategory that better describes the event or person.
Read the example given below.
Perceptual Process
For example, suppose Swee Hoon, a dynamic young woman, has been hired to lead a research
and development (R & D) division at an organisation. But John, a manager in the R & D division,
believes R & D is a place for older men who have had extensive experience in the industry.
Because Swee Hoon is a young woman, she likely does not fit into John's mental category of
the type of person suitable for an R & D position. This attitude is likely to affect John's
perceptions of and interactions with Swee Hoon.
But what happens if Swee Hoon reveals herself to be fully competent and successful at her
role? John might
 ignore her accomplishments and attribute them to external factors (e.g., the men in the
department or luck).
 consider her an exception and say, "Although she can perform the job well, most young
women would not be able to do so under identical circumstances".
 change his belief about the role of women as an R & D head.
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3.1 Perceptual Errors and Stereotypes

You generally don't notice everything that surrounds you in the world. The world contains too
much information for you to recognise and remember all of it. For example, consider the room
where you sit: what does the wall behind you look like? You certainly saw it when you entered
the room, but can you recall all of the details now? Because it's impossible for people to focus
on everything in their surroundings, they perceive what is important to them at the moment.
They also tend to view the world based on what they expect to see and therefore, perceive
things that aren't there.
Read below for more information about perceptual errors
Perceptual Errors
People cannot perceive everything around them; there is simply too much information. For
example, when you view a computer screen, you might be reading a sentence, but you might
not be paying attention to or processing the computer logo, the colour of your desktop, the
dust on the computer screen or the whir of the computer. These and a thousand other details
simply escape your moment-to-moment perception!
To make sense of overwhelming amounts of information, the human mind automatically does
several things.
 It groups together pieces of information, then responds to the groupings rather than
the specific information.
 It focuses on, and consciously perceives, only part of the available information.
 It alters the information to fit prior expectations and mental images.
The way people view the world in terms of groupings can be shown in visual exercises, which
demonstrate a universal tendency to "fill in the blanks" when we expect to see something (like
a picture of a dog or a triangle) even when the figure does not objectively exist. Focusing on
different aspects of a picture determines what you see.
Filling in the blanks also happens when we view other people. First, people selectively perceive
the aspects of people or situations that they expect to see. In practice, this means that if a
manager expects an employee to be creative, she will notice when the employee comes up
with creative ideas; those perceptions, in turn, will strengthen the manager's initial
assumptions.
Another phenomenon is differential or even erroneous interpretation of behaviour. For
example, a manager can have different interpretations of a particularly good or poor piece of
work. If the author of a document is already viewed as competent and professional, a poor job
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will be interpreted as an isolated incident and not an indicator of the author's usual
performance. However, if the author is already viewed as incompetent or unprofessional, then
the work will be viewed as typical and an accurate indicator of ability. Likewise, silence can be
interpreted as a sign of great intelligence (the person is deep in thought) or stupidity and lack
of understanding.
Most behaviours and outcomes can be interpreted many ways. Sometimes people go beyond
different or erroneous interpretations of what behaviour means; sometimes they even
perceive things that did not happen. Just as people mentally fill in the gaps in a picture to see a
triangle where none really exists, people also mentally fill in the gaps in others' behaviour in
order to meet their expectations. So, for example, statements made by one person in a
meeting may be attributed later to another person who was expected to make them. By the
same token, statements made by the "wrong" person are often simply not heard. Finally, even
when behaviours and outcomes are accurately perceived, they are often not remembered
unless they match expectations. This phenomenon is called selective retention.
These perceptual errors are not intentional; in fact, people are almost always unaware they are
making them, and if someone suggested they had made such an error, most people would
strongly deny it. The universal nature of these tendencies, however, means that all people
make them sometimes.
Reflection-Perceptual Process and Perceptual Errors

Look at the visual exercises given below. Each one is an example of ways in which people's
perceptions of reality are structured.
You may record your thoughts using the personal notepad, before reading the "Expert
Analysis" given below.
Activity: Errors and Stereotypes
1. Figure versus background

View the picture below. What do you see?
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2. What is real?
Examine the picture. Which line seems longer?
3. Seeing what you expect to see—part I

Look at the picture below. How many triangles do you see?
4. Seeing what you expect to see – part II

What do you see in the picture below?
5. What makes a group?

What do you see in each of the two pictures below?
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Expert Analysis
1. Figure versus background
Sometimes people see a white vase. Other times, people see two black faces looking at each
other. What you see depends on where you are focusing, or what part of the picture is the
"figure" and what part is the background. If you focus on one aspect of the picture, you see
one thing (a vase). Simply refocusing your attention on another aspect of the picture leads
you to see something entirely different (the faces). The same phenomenon occurs, though
far more subtly, in the way you perceive other people and situations. For example, a
wonderful job can become an awful job if you focus on different aspects of it. An excellent
co-worker can be viewed as a frustrating or poor co-worker if you focus on different aspects
of his or her behaviour.
2. What is real?
If you measure the lines, you will see that they are exactly the same length. However, most
people believe the top line is longer than the bottom line. Even if you know intellectually
that the two lines are the same length, looking at the picture quickly may give you the
impression that the top one is longer. People interpret the world around them and give
meaning to it depending on key aspects of the context and key details. Two things that are
measurably alike can seem to be quite different depending on the details. For example, a
comment from one person may seem insightful, while from another it may seem obvious.
3. Seeing what you expect to see—part I
Most people see two large triangles: a white triangle with a black border with its point
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toward the bottom, and an all-white triangle that overlaps it with its point toward the top.
Most people also perceive that the inside, top white triangle is brighter than the page
around it. In fact, there are no triangles in the picture. There are only three outlined corners
and three black near-circles with a wedge removed – with no difference at all in brightness.
People tend to identify and seek patterns they recognise. Once they find one, it is almost
impossible for them to consider that it's just random or circumstantial. Therefore what you
expect to see becomes what you see. This expectation comes from a process called "closure"
– you see things that are not there, in order to see things that are familiar to you.
4. Seeing what you expect to see – part II
If you look closely, you can find a Dalmatian walking along a path, nose near the ground,
moving from the lower right to the upper left side of the page. Once you see it, it is
extremely difficult to look at the picture and see anything else; the ambiguous group of spots
has disappeared and a clear picture of dog has replaced it. If a situation or event is confusing
or unclear, people try to interpret and create meaning for it. Once they have created that
meaning, however, it is extremely difficult for them to perceive events that are random or
unrelated to their "version" of the event. This is true of the way people interpret the
characteristics of others. For example, if people think their co-worker is arrogant or shy, they
seek evidence of that trait in the co-worker's behaviour. They interpret their co-worker's
behaviour in terms of their expectations, and they fail to notice behaviour that does not fit
into their interpretation. If they look at the pattern of their co-worker's actions, they focus
on and see, their "created" characteristics for that person – in this case, arrogance or
shyness.
5. What makes a group?
Most people see the first picture as a set of four horizontal rows of dots. This is because
people tend to group things that are physically close to one another, and these dots are
closer horizontally than vertically. Most people see the second picture as a set of vertical
lines of dots. The dots are equally distant from one another, but each vertical column looks
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different from the one next to it. This perception stems from people's tendency to group
things together that look alike. People tend to see things in terms of groups and entirities,
rather than as individual items. And they tend to assign groups on the basis of closeness and
similarity. The same factors affect people in work groups. People who are viewed as similar,
or who view themselves as similar, tend to form informal groups; people who are seen as
dissimilar are often viewed as outsiders. Similarity can be based on physical appearance (e.g.,
height, hair colour, and gender), occupation (e.g., secretary, accountant), work style,
attitudes, political beliefs or any factor that is important to those in the group or those
outside the group.
4. Stereotypes
Everyone creates mental categories of groups of people. Society groups people by age (babies,
children, teenagers, young adults) by the kind of work performed (secretaries, executives,
street cleaners), as well as by gender, race, religion and ethnic background. Mental categories,
or perceptual sets, allow people to quickly describe people based on their similarity to others
in that group. To see a group of young people under the age of 20 and call them "teenagers"
simply describes that group of young people based on age.
Fig.3: Stereotypes
However, people often develop beliefs about people belonging to a perceptual set that may or
may not be accurate. For example, if you believe that all teenagers are trouble-makers, then
you would be very wary of the group of young people standing on the corner. You might
behave defensively toward them because of a stereotype or perceptual set you hold about
teenagers being trouble.
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Because stereotypes result from mental categorising, virtually all people create and use them.
However, the content of each stereotype differs. For example, many people in the United
States stereotype lawyers as greedy, unprincipled and intelligent while they stereotype
accountants as precise, controlled and emotionally distant. Marketing personnel are similarly
preconceived as creative but unfocused and undisciplined. These preconceptions often lead
people to make errors in perceiving and interacting with others.
Stereotypes often lead to selective retention.. If an employee holds a positive stereotype of a

group to which a co-worker belongs, then after a conversation with this co-worker, the
employee will tend to recall all their points of agreement and strong ideas. If they hold a
negative stereotype of the co-worker's group, they will tend to remember the same
conversation in terms of disagreement and inaccurate statements. To avoid making this kind of
perceptual error, you can learn to recognise the stereotypes you hold and develop first-hand
knowledge (acquired in positive settings) of people from groups you have stereotyped. This
knowledge will likely contradict your stereotypes and naturally result in a greater
understanding of and identification with individuals from those groups in the future. You can
also check assumptions, reactions and memories to minimise the negative effects of
stereotypes.
4.1 Consequences of Stereotyping

Prejudice occurs when there are unfounded negative emotions toward people belonging to a
particular group. Discrimination occurs when treatment is based on class or category rather
than individual merit.
Although overt manifestations of prejudice and discrimination may be less prevalent today
than they once were, both still occur in more covert ways. They may be evident in the quality
and quantity of interaction between dominant and non-dominant group members.
Discrimination may also be manifested through performance appraisals, pay, training and
promotional opportunities. Some other potential consequences of stereotyping are as follows:
• In dyads and groups, stereotyping may lead to the self-fulfilling prophecy. For example, if
you are working with someone whom you believe is unqualified for the job, you will be
less willing to accept his or her opinions and input. As a result, the person you are working
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with may actually begin to offer less input and exhibit behaviours indicative of someone
unqualified for the job.
• Stereotypes may cause members of one group to perceive members of other groups in a
negative light. This serves to boost group members' social identity.
• Conflicts between the dominant group (in-group) and (out-group) may increase.
Intragroup differences may be minimised while intergroup differences are maximised.
• As group competition increases, stereotypes may become more prevalent and negative.
Competition within dyads may also cause more prevalent, negative stereotypes.
• When one or a few members of a stereotyped group are included in a dominant group,
the group's overall productivity and creativity may be limited. This is because dominant
group members may not be willing to accept the stereotyped members' ideas and
viewpoints as valid.
• In group and dyadic relationships, stereotypes may lead to the under-utilisation of talent
because the assignments and roles may not be based on true abilities. This may lead to
low morale and job satisfaction. Stereotyped individuals may eventually leave the
organisation in search of more rewarding assignments and roles.
What can be done to minimise the effects of stereotyping?
Read below to learn how you can minimise the effects of stereotyping.
Managing Stereotypes and Biases
Although it is unlikely bias will be completely eradicated from the workplace, some things can
be done to decrease the likelihood of these behaviours. Some options are to
 implement company-wide diversity training programmes. Although these programmes
do not help eradicate deeply-rooted prejudices, they serve several purposes: they show
employees the value of having a diverse workforce and they increase people's awareness
of biases and provide strategies on how to deal with them.
 provide other forums or activities within the organisation that will give employees the
opportunity to know each other better (e.g., staff retreats and focus groups).
 provide training on how biases affect performance appraisals which may ultimately affect
salary increases, promotions and other work-related rewards and incentives. Appraisals
may be less biased if based on objective criteria and various sources.
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People can also reduce bias if they

 take the time to evaluate their beliefs, values and expectations and allow others to
know more about them.
 acknowledge that everyone has biases in some form or another.
 avoid making snap judgements about other people.
 discuss their perceptions with others; the greater the consensus across people, the
more likely it is that interpretations are a more accurate reflection of reality.
Reflection-People Perception Exercise

Most people believe their perceptions of others are objective and accurate. However, your
views and judgements are affected by your expectations, comparisons, mood and many other
factors. Often two people will walk away from the same event or meeting with very different
understandings of what happened and very different impressions of the people involved.
The following exercises can give you insight into some of the ways your perceptions of people
are affected by your expectations and the context of the situation. To gain insight about your
own perceptual process, complete the following exercises.
Exercise 1
Read below to carry out two versions of an exercise about an employee, Marjorie. Based on
the description of Marjorie in each version, you are to rate your impression of Marjorie using
the scales provided.
Exercise 1:Version A
First, read the description of the employee below. Then read the illustrated vignette and
describe the employee using the scales provided.
Marjorie Bruning is a first-line manager in an insurance company. She is 31 years old, recently
married and has been working for the company for five years. Previously, she was employed in
a series of jobs in sales and human resources. She has a bachelor's degree in sociology and
travelled around Europe for several years after she graduated from university. She has
consistently received positive evaluations in her work. She is friendly and bright. She was
promoted to her present position a year ago.
The Report
Marjorie is working on a big presentation for her boss and her boss's boss. She has been
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working on the project for several weeks, collecting and organising information, preparing
charts and graphs, and documenting her findings.
Marjorie is learning to use a new software program to do presentations, charts and graphs,
because her boss wants this presentation to look very professional. If this report and
presentation are well received, it will be a big success for both her and her boss; it might lead
to a bonus and will almost certainly lead to a high evaluation. If it goes poorly, her reputation
and chances for advancement will suffer. Knowing this, she has been working late hours,
checking all her information and trying to make the most of the presentation software
package. She has spent hours printing, collating and assembling documents. Suddenly, she
knocks a cup of coffee on the painstakingly assembled original.
Describe Marjorie
Based on what you know, check on the response that corresponds with your impression of
Marjorie:
1. Careful: □ Strongly disagree □ Disagree □ Neutral □ Agree □ Strongly agree
2. Successful: □ Strongly disagree □ Disagree □ Neutral □ Agree □ Strongly agree
3. Capable: □ Strongly disagree □ Disagree □ Neutral □ Agree □ Strongly agree
4. Smart: □ Strongly disagree □ Disagree □ Neutral □ Agree □ Strongly agree
5. Motivated: □ Strongly disagree □ Disagree □ Neutral □ Agree □ Strongly agree
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Exercise 1: Version B
First, read the description of the employee below. Then read the illustrated vignette and
describe the employee using the scales provided.
Marjorie Bruning is a first-line manager in an insurance company. She is 31 years old, recently
married and has been working for the company for five years. Previously, she was employed in
a series of jobs in sales and human resources. She has a bachelor's degree in sociology and
travelled around Europe for several years after she graduated from University. She has
consistently received positive evaluations in her work. She is friendly but not very bright. She
was promoted to her present position a year ago.
The Report
Marjorie is working on a big presentation for her boss and her boss's boss. She has been
working on the project for several weeks, collecting and organising information, preparing
charts and graphs, and documenting her findings.
Marjorie is learning to use a new software program to do presentations, charts and graphs
because her boss wants this presentation to look very professional. If this report and
presentation are well received, it will be a big success for both her and her boss; it might lead
to a bonus, and will almost certainly lead to a high evaluation. If it goes poorly, her reputation
and chances for advancement will suffer. Knowing this, she has been working late hours,
checking all her information and trying to make the most of the presentation software
package. She has spent hours printing, collating and assembling documents. Suddenly, she
knocks a cup of coffee on the painstakingly assembled original.
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Describe Marjorie
Based on what you know, click on the response that corresponds with your impression of
Marjorie:
Once you have completed each activity, think of some terms you would use to describe
Marjorie. You may record your thoughts using the personal notepad.
Next, you may read below for an explanation of the exercise you did.
Explanation for Exercise 1: Version A

Marjorie's background is sufficiently neutral that people can interpret her abilities and nature
very differently. She could be viewed as successful or unsuccessful, capable or incapable, smart
or stupid, motivated or unmotivated. There is evidence to support all interpretations; for
example, her years spent travelling could be considered evidence of being unmotivated or
motivated. Her position as a first-level supervisor could be considered evidence of being
unsuccessful or successful.
Her spilling the coffee could be viewed as evidence of being careless or of being exhausted
from working long hours. The rest of the description in the vignette was purposely vague; it
described the task she had to do and her effort, but not her abilities or personality.
You were given one concrete piece of information that would have been reflected in your
evaluation: the version you read described Marjorie as "bright." You had that information
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before you learned about her behaviour when working on the project. This gave you a specific
expectation, or frame, from which to interpret her behaviour.
Most people who expect Marjorie to be bright interpret her spilling the coffee as evidence of
her concentration on the task she is working on. This leads them to evaluate her as having
higher levels of ability, success, intelligence and motivation.
Explanation for Exercise 1: Version B

Marjorie's background is sufficiently neutral that people can interpret her abilities and nature
very differently. She could be viewed as successful or unsuccessful, capable or incapable, smart
or stupid, motivated or unmotivated. There is evidence to support all interpretations; for
example, her years spent traveling could be considered evidence of being unmotivated or
motivated. Her position as a first-level supervisor could be considered evidence of being
unsuccessful or successful.
Her spilling the coffee could be viewed as evidence of being careless or of being exhausted
from working long hours. The rest of the description in the vignette was purposely vague; it
described the task she had to do and her effort, but not her abilities or personality.
You were given one concrete piece of information that would have been reflected in your
evaluation: the version you read described Marjorie as "not very bright." You had that
information before you learned about her behaviour when working on the project. This gave
you a specific expectation, or frame, from which to interpret her behaviour.
Most people who expect Marjorie to be not very bright interpret her spilling the coffee as
evidence of her inability. This leads them to evaluate her as having low levels of ability, success,
intelligence and motivation.
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Read below to carry out two versions of an exercise about the first meeting with your new lead
analyst, George. Based on the description of George in each version, you are to rate your first
impression of George using the scales provided.
George
You walk into the meeting room excited and nervous. Today is the day you get to meet your
new team. Your company, a midsized management consulting firm, was recently acquired by a
competitor in a purchase that was opposed by your company's management and board of
directors. The new joint company is being reorganised, but your job is secure. However, you
have been moved into a new position and have a new team with which to work. You have
heard that this company is very different from your old one, and has a different culture and
work habits.
You walk in to meet your new lead analyst, George Feil. This is your first meeting with him. You
have heard through the grapevine that George is extremely experienced and has worked for
your previous competitor for many years. You are anxious to get along well with him. You walk
in the room; what is your initial impression of George?
George is:
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George
You walk into the meeting room excited and nervous. Today is the day you get to meet your
new team. Your company, a midsized management consulting firm, was recently acquired by a
competitor in a purchase that was opposed by your company's management and board of
directors. The new joint company is being reorganized, but your job is secure. However, you
have been moved into a new position and have a new team with which to work. You have
heard that this company is very different from your old one, and has a different culture and
work habits.
You walk in to meet your new lead analyst, George Feil. This is your first meeting with him. You
have heard through the grapevine that George is extremely experienced and has worked for
your previous competitor for many years. You are anxious to get along well with him. You walk
into the room; what is your initial impression of George?


The exercise gives you very little objective information about George, other than his tenure
and power in the organization. You know that his organization is larger than yours, but he
could be careful or careless, friendly or unfriendly, capable or incapable, smart or stupid,
motivated or unmotivated. There is no evidence to support any extreme.
However, before you read about George, you looked at a picture of him. In this picture, he was
wearing a formal three-piece suit. This picture was placed above the text, so it formed your
first impression of George.
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Many people interpret formal attire to indicate formality in behavior, distance, intelligence,
precision, and motivation. On the other hand, it could certainly reflect nothing more than the
culture of the organization and the requirements of the position. In point of fact, it tells you
absolutely nothing about the employee on any of the dimensions that were assessed.
However, your initial impression might lead you to evaluate him as having high levels of
carefulness, ability, intelligence, and motivation. It might also have lead you to evaluate him as
being less friendly, depending on your view of whether formality is generally required of
professionals in his position.

The exercise gives you very little objective information about George, other than his tenure
and power in the organization. You know that his organization is larger than yours, but he
could be careful or careless, friendly or unfriendly, capable or incapable, smart or stupid,
motivated or unmotivated. There is no evidence to support any extreme.
However, before you read about George, you looked at a picture of him. In this picture, he was
wearing a casual sweatshirt. This picture was placed above the text, so it formed your first
impression of George.
Many people interpret casual attire to indicate informality in behavior, friendliness, sloppiness,
and demotivation. On the other hand, it could certainly reflect nothing more than the culture
of the organization and the requirements of the position. Another possibility is that it might
reflect performance that is so outstanding that the employee does not have to "dress up" to be
viewed as a professional.
In point of fact, it tells you absolutely nothing about the employee on any of the dimensions
that were assessed. However, your initial impression might lead you to evaluate him as having
lower (or, possibly, very high) levels of carefulness, ability, intelligence, and motivation. It
might also have lead you to evaluate him as being more friendly.
5. Attribution Errors
Your boss compliments you for writing a brilliant report. You take full credit, attributing your
success to hard work and intelligence. You mention your "win" to a colleague who comments
23
that you were lucky to have been given such an easy topic on which to write. Which of these
perceptions is correct?
Researchers have studied how people explain causes underlying certain events, including, who
or what is to blame for failures, and who or what should be credited for successes. One of the
most consistent findings from research in social psychology is that people tend to
 attribute external causes for failures when explaining personal failures

 attribute internal causes for success when explaining personal success
 attribute external causes for success when explaining the success of others
 attribute internal causes for failure when explaining the failure of others
A special case of these attribution errors is called the ""fundamental attribution error."
Fundamental attribution error happens when observers underestimate situational or
environmental factors (that is, external causes) and blame internal qualities and characteristics
of others for outcomes. For example, Caroline, a sales manager, receives a late report from
Francois, one of her field sales representatives. Rather than investigate to find out if external
causes are to blame (such as a busy client call schedule or technology problems), Caroline
decides Francois is lazy and not conscientious. When Caroline decides that something about
Francois as a person has caused the report to be late, rather than look for external causes,
Caroline has committed the fundamental attribution error.
5.1 Consequences of Attribution Errors

The most harmful consequence of attribution errors in the workplace is the misdiagnosis of
performance problems. It is rare that a person's individual characteristics are solely to blame
for problems. Nevertheless, people tend to blame internal dispositions of others for negative
outcomes, even when external causes are partially or fully responsible. A manager who makes
the fundamental attribution error may focus on changing employee attributes by sending them
to training, providing counselling, transferring or even firing them without fully considering
how external causes contribute to problems.
When these managers do not consider and address outside causes, new employees may soon
experience the same problems as former employees who were replaced. This process can lead
24
to a "revolving door" of employees, creating many unnecessary costs and compounding the
original problems. Thus, it is wise for all employees in an organisational system to fully consider
the range of causes underlying behaviours before making decisions or judgements about
others.
6. Impact of Attitudes on Relationships

Apart from the damage that negative attitudes or false perceptions can have, attitudes can
also affect the relationships between people at work in other ways. When a person senses that
another person has a similar attitude, he or she is more likely to seek that person's company
and have a feeling of solidarity with them. Thus, similar attitudes lead to integration between
members of an organisation, whereas dissimilar attitudes lead to a lack of integration between
members.
7. Emotions in the Workplace

Emotions are part of everyday life; people experience happiness when things go well and anger
and frustration when they encounter problems. For the most part, negative occurrences lead
to predictably negative emotions and vice versa. However, negative emotions may also move
people to do positive things. For example, anger may motivate people to do their part to
correct an injustice, and anxiety over project deadlines may motivate people to implement
better time-management techniques. However, there is a point at which these emotions
become so intense that they have negative consequences.
7.1 Consequences of Intense Emotions

Have you ever been emotionally overloaded to the point where you felt you could not think
clearly? If you have, then you have experienced one of the most common effects of intense
emotion. Intense emotion can have a negative effect on problem-solving and decision-making.
Effective decision-making and problem-solving require people to attend to all those things that
are critical to the task at hand. During times of intense emotion, this process is short-circuited.
Because some of the brain's resources are devoted to its increased arousal, fewer resources
are available for thinking and decision-making. This leads to less creative, more short-term
25
solutions and decisions. On the other hand, positive emotional states produce a positive
perceptual bias that can lead to more risky and adventurous decisions and solutions. Other
consequences of intense emotions on the decision-making process include an increased
potential for errors in judgment, poor memory and the tendency to become overwhelmed by
other thoughts.
What are the other consequences of intense emotions on people and their interactions with
others? People may vent their emotions on others in the belief that it will help them feel
better. However, although shouting and other forms of emotional release may provide
temporary satisfaction, they do little to restore calm and emotional equilibrium. In fact,
research has found that this only leads to more brain arousal and anger; this is referred to as
the "ventilation fallacy".
Someone who is experiencing intense emotion is more likely to respond negatively to a

situation that might otherwise have elicited a neutral response. For example, suppose that
while you are on your way to the office, someone knocks your coffee out of your hand and
does not apologise. When you get to the office, your colleague comments that you are late.
Under normal conditions, you would most likely ignore this comment or respond in a neutral or
apologetic manner. However, because of the earlier incident, you are more likely to respond to
the comment in a negative or belligerent manner.
Negative emotions build on each other. If such emotions are allowed to continue unchecked,
they may lead to burnout, aggression or violence. In organisations with low norms and
expectations of emotional control, negative emotions can erode basic civility. Working in this
kind of environment decreases people's creativity and productivity. For example, suppose your
team is developing a new recruiting strategy and your co-worker Joe is in charge of the effort.
When you present your ideas, Joe responds, "Your ideas seem shallow and are not well
thought out. Don't waste my time with such garbage." If you are new to the department and
unfamiliar with its norms of interacting, you may lose both your beliefs in your abilities and
your interest in working with Joe.
Long-term reactions to this type of situation include all the basic responses to chronic stress:
physical ailments, such as headaches and back pain; psychological reactions, such as
26
depression or mood swings; poor behavioural coping, such as alcohol or drug use; increased
illness owing to a depressed immune system; and, eventually, increased likelihood of
developing life-threatening illnesses, such as hypertension, heart attack or stroke.
Conversely, intense negative emotions may also be internalised to the point of "emotional
implosion". Internalising or controlling strong displays of emotion over a long period of time
can result in great amounts of stress. This typically leads to the same types of physiological and
physical problems that result from operating in situations with very little emotional control.
Although internalising emotions may keep one in line with the organisation's norms for
emotional display, the individual suffers.
7.2 Managing Intense Emotions

There are many effective strategies to manage intense emotions at work. For example, if you
find yourself getting angry, step away from the source of your anger and do something that
will actively take your mind off the situation. Although some experts suggest that getting away
from the situation is enough, others suggest that you should actively engage yourself in
activities, such as physical exercise, that make it difficult to remain focused on the emotional
episode.
If you are interacting with others and see the potential for some problems, then challenge the
beliefs or misconceptions that are feeding these emotions. Using "active listening", in which
you paraphrase back to people your understanding of the situation or what they have said, can
help identify misunderstandings and prevent you from rushing to judgement. However, this
has to occur before emotions escalate. Another tactic is to stop before you speak, count to 10,
and decide what words you want to use before you say them.
Organisations can provide training to help employees manage their emotions more effectively.
Tips for training include
 aligning training with the skills that are needed for a current or future position.
 motivating employees to improve emotional competencies by showing how it will
benefit them (e.g., promotion or raise).
27
 providing feedback on new learning and opportunities for employees to practise the
new learning.
 fostering change by identifying leaders in the organisation that can model these
competencies.
8. Summary
• As managers, we react to the world as we perceive it, which is not always how it really is.
Our attitudes filter and influence what we perceive.
• Cognitive styles refer to certain patterns and habits that people are prone to use when
processing information.
• One way of classifying cognitive styles is field dependency. In the field-dependent style,
learning is comprehensive and socially-orientated. However, in the field-independent
style, learning is abstract and independent.
• Perception refers to a cognitive process that allows a person to make use of the stimuli or
cues from the environment.
• Stereotyping, which is creating a caricature about a group of people by exaggerating their
characteristics, is one dysfunctional mode of perception. Negative consequences of
stereotyping include prejudice and discrimination.
• An attribution error occurs when one incorrectly ascribes others' success to external
factors and their failures to internal causes.
• Emotions are inevitable in the workplace and managers should learn to use techniques to
assist themselves and their employees to manage their emotions more effectively, e.g.,
reducing anger by moving away from the source and engaging in activity that generates
positive emotions.
9. Glossary
Cognitive styles The patterns and habits people use to process information. Styles can
be broadly classified as field dependent versus field independent or
28
reflective versus active engagement.

Ability The natural aptitudes and learned capabilities required to
successfully complete a task.
Stereotype A perceptual set that holds beliefs and perceived attributes of a
target person based on the group or category to which the target
belongs.
Selective retention The tendency to remember only some events, behaviours and
outcomes. People usually selectively remember information that
matches their previously formed beliefs and expectations about
people, jobs and situations.
Dyad Two individuals or units regarded as a pair.
Dominant group A group of people united by common beliefs, attitudes, or interests
that characteristically excludes outsiders; a clique. Also termed "in-
group".
Fundamental A perceptual error; the tendency to attribute others' successes to
attribution error external (situational) factors and their failures to internal (personal)
factors.
29
Topic 3: Motivation
Motivation
Table of Contents
1. The Relationship Between Motivation, Satisfaction and Performance .......................................... 4

2. Intrinsic and Extrinsic Rewards ....................................................................................................... 4
2.1 Consequences of Rewards ...................................................................................................... 5
2.2 External Rewards .................................................................................................................... 5
2.3 Internal Rewards ..................................................................................................................... 7
3. Managing Consequences of Rewards ............................................................................................. 9
4. Equity Theory ................................................................................................................................ 10
5. Expectancy Theory ........................................................................................................................ 10
6. Other Motivational Techniques .................................................................................................... 11
7. Summary ....................................................................................................................................... 12
8. Glossary ......................................................................................................................................... 12
9. References .................................................................................................................................... 13
2
Motivation
Introduction
Why do some people perform better than others? What drives people to perform at higher
levels? In this topic, we will look at how performance can be driven by motivation and
satisfaction, and the ways in which such behaviour can be directed.
Learning Objectives

 describe the relationship between motivation, satisfaction and performance
 distinguish between intrinsic and extrinsic rewards
 discuss the consequence of rewards and how to manage them
 describe the two major theories of motivation.
3
Motivation
1. The Relationship Between Motivation, Satisfaction and

Performance
The relationship of motivation, satisfaction and performance may not be as clear as you
previously expected. Satisfaction does not necessarily mean that employees will increase their
level of performance. Instead, employees may increase their level of performance when they
receive intrinsic or extrinsic rewards. When people expect that effort will lead to performance,
and that performance will be rewarded with valued rewards, they tend to be more motivated
to perform. But why are different rewards motivating to different people? This topic examines
that question.
2. Intrinsic and Extrinsic Rewards
Fig.1: Intrinsic and Extrinsic Rewards
People can be motivated by both extrinsic and intrinsic rewards. Some people are more
motivated by extrinsic rewards, while others are more motivated by intrinsic rewards. Extrinsic
rewards are rewards that come from outside the individual, such as money, benefits,
recognition and promotions. In contrast, intrinsic rewards are internal feelings of satisfaction,
such as a sense of accomplishment or pride in a job.
4
Motivation
Jobs in which employees feel they are doing meaningful work, where they are responsible for
their outcomes, and use feedback to gauge their performance tend to create intrinsic
motivation for performance.
2.1 Consequences of Rewards

An important role of the manager is to influence the behaviour of people to produce desired
results. Providing rewards is one way to induce performance. But how is a manager to know if
extrinsic or intrinsic rewards are more attractive to employees? What are the consequences of
applying the wrong motivational strategy?
2.2 External Rewards

Management that focuses only on extrinsic rewards has both positive and negative
consequences. On the positive side, many people value extrinsic rewards. When people who
value extrinsic rewards are paid on a piece-rate system, they will work harder to produce more
because more work results in greater earnings. This strategy is most effective when there is a
large management hierarchy to supervise and control a relatively unskilled pool of workers
who perform simple, routine tasks. This strategy can also be very effective for employees who
value security and for people who are most interested in meeting their physiological needs,
safety needs and some aspects of their belongingness or esteem needs (to the extent that
external rewards give them love and respect from others).
Although focusing on external rewards can increase individual production, this approach can
have negative consequences as well. One negative consequence is that by participating in a
system focused on external rewards, workers may feel like insignificant components in the
"company machinery".
Their loyalty may be based more on earnings potential rather than a feeling of pride or sense
of community with the company. Also, a focus on quantity of work (as is the case in a piece-
rate system of pay) often decreases the quality of work. In addition, providing rewards based
on individual effort can increase competition between employees and lead to a breakdown in
cooperation. Thus, the downside of focusing on externally-based rewards is that it can cause
5
Motivation
problems such as decreased cooperation and increased competition between individuals, and
a decrease in quality can cause the performance of the group to suffer.
Another problem with using extrinsic rewards to motivate employees is that it can undermine
the inherent intrinsic rewards of a job. For example, Jeong was an insurance sales person who
loved her job; she enjoyed talking with people, identifying their needs and selling products that
protected clients' health and financial well-being. It was very important to her that she was not
only helping her company but providing a valuable service and peace of mind to her
customers. A year and a half after Jeong started, the company changed the compensation
policy so that base salary was taken away.
Instead, Jeong was paid a sizeable commission for every new insurance policy she sold. After a
year of working under the new compensation policy, Jeong found herself focusing more on the
size of the commission she would make than the true needs of her customers. Because Jeong
received more commission for bigger policies, she began selling people more coverage than
they really needed. Her love of working with and helping people disappeared. When the
organisation later reduced its financial bonus for each policy, Jeong quit. What she had
previously done for enjoyment, she no longer enjoyed.
Money is the most widely used incentive to motivate people. The extraordinarily high salaries
and benefits given to many executives show that it is not only lower-level employees who are
rewarded with money. How can money be an effective motivator if extrinsic rewards decrease
intrinsic motivation?
One possible reason is that some extrinsic rewards also have a communication value. They are
symbols that communicate to employees and others how highly the employees are valued and
how well they are doing their work. This feeling of accomplishment and achievement can act
as an intrinsic, as well as extrinsic, reward.
6
Motivation
2.3 Internal Rewards
Fig.2: Internal Rewards
There are also positive and negative consequences of using intrinsic rewards to motivate
employees. Motivational strategies that rely on extrinsic rewards like money are not as
effective with workers who are motivated by internal factors. Employees who value
achievement and feel motivated when they can increase their competence, knowledge and
experience will be more motivated when they are provided work that allows them to adapt,
create and innovate. For people whose needs focus more on self-actualisation and growth,
external rewards are secondary to the rewards a particular job provides their ability to grow
and learn. For example, in many countries teachers are not paid well but feel a sense of
internal reward that comes from contributing to the growth and knowledge of children.
Positive consequences of intrinsic motivation include increased productivity, self-esteem,

satisfaction, communication and cooperation among employees who value intrinsically-
rewarding work. High achievers who rely on intrinsic motivation are more likely to be creative,
innovative and flexible achieving organisational and personal goals. Also, organisations can
change their tactics or strategies more easily, as long as employees are given a powerful vision
of the goal and the reasons why it is important.
In contrast, implementing a motivational system based on intrinsic rewards does not work for
all people. Some employees are more motivated by extrinsic factors such as money and do not
focus on their work as a source of accomplishment, achievement or pride. Another problem
with trying to use intrinsic rewards as a source of motivation is that managers often fail to use
this strategy properly. For example, intrinsically-motivated employees prefer autonomy and
freedom when making decisions. However, if a manager is unable to relinquish real decision-
7
Motivation
making power to subordinates, this can lead to mixed messages and a lack of genuine
participation. If this occurs, employees often develop distrust and lose their motivation.
Working with others can bring out other negative aspects of intrinsic motivation. Employees
with different work styles and goals can come into conflict as they hold different objectives to
be important. Individual goals can displace team goals, and team members may work against
each other.
In order to implement organisational strategy effectively, it is important to motivate

employees to work towards the strategy. Motivation is achieved by using external rewards to
produce extrinsic motivation and internal rewards to produce intrinsic motivation. Whether
external or internal rewards should be used, and in what combinations, depends upon the
strategy the organisation is seeking to pursue.
Exercise
Read the exercise that tests your understanding of internal and external rewards.
Exercise: Internal/External Rewards
8
Motivation
In this short exercise, you are provided a list of fourteen types of rewards. You are required to
categorise each reward into internal or external reward.
Rewards are often categorised into two areas: external and internal. An external reward is
something that can be created by someone else and is dependent of the person receiving it.
Internal rewards, on the other hand, are the personal consequences of doing something. They
are not easily controlled by someone other than the person doing the job.
3. Managing Consequences of Rewards

The most common technique for managing the negative consequences of intrinsic and
extrinsic rewards is to use both. Managers should be sensitive to the needs of different
employees and use a range of motivational techniques.
When relying on intrinsic rewards for employees who work in teams, managers can use team-
building techniques, implement conflict-resolution procedures, set team goals, implement
work process changes to reach those goals, and give feedback regarding their achievement.
These tools can minimise the negative effects of conflict and goal displacement.
When using intrinsic rewards, employees at all levels should be involved with developing ideas
and given responsibility to execute them. Subordinates should be socialised into the vision and
culture of the organisation and must receive the knowledge, skills and information they need
to make decisions. Work should be designed so that it is interesting and therefore motivates
concentrated effort.
When providing extrinsic rewards, managers must set goals that allow workers to realistically
obtain rewards. Rewards that are too difficult to reach because goals are set too high tend to
produce far lower levels of quality as well as increased accidents, injuries and low morale.
Managers must monitor workflow, seek employee feedback as needed and provide enough
resources to do the work. Organisations can use a number of different strategies to manage
the consequences of extrinsic reward systems by
9
Motivation
 acknowledging that not all people need extrinsic motivation beyond salary and that some
extrinsic motivators may undermine performance and satisfaction.
 adjusting management styles to deal with the needs of employees. For example, if a
member of the group is motivated by praise, his or her manager may need to offer a great
deal of verbal encouragement when dealing with this employee, even if it is not the
manager's usual style.
 offering a variety of extrinsic rewards.
 retaining employees who are highly intrinsically-motivated. Organisations and managers
should seek to enrich jobs and developmental opportunities for employees. This may also
lead to more overall job satisfaction.
4. Equity Theory
In considering whether he or she is being treated equitably, a person considers how much he
or she is getting out ("outcomes") relative to how much he or she is putting in ("inputs"). For
it to seem equitable, his or her outcomes must be reasonable given his or her input. Further,
in determining whether things are equitable, people make a social comparison. They
compare the ratio of their outcomes to inputs with the ratio of other people, such as co-
workers. To feel equitable, the person needs to see that the ratio of his or her outcomes to
inputs is the same as that of other people. If these comparisons make it seem equitable,
then the person is motivated to contribute their inputs. If it seems inequitable, such that the
person's ratio is less than other peoples', the person may only go ahead if their outcomes
can be increased, or he or she will reduce his or her input, or not participate at all.
Equity theory can be handily summarised in the following way:
5. Expectancy Theory
Expectancy theory says that a person will only be motivated to do something if he or she
perceives that it will lead to a reward, i.e., something he or she values. The person expends
10
Motivation
effort that produces performances which cause outcomes that have a certain valence (ie,
value). The person is more likely to expend great effort if he or she perceives that it will
probably lead to high enough performances to create outcomes that have positive valence.
The perceived links between effort and performances, and performances and outcomes must
be in place, as must the connection between outcomes and valence. Each of these three links
in the chain must be present to some minimum degree for the person to be motivated to do
the task. These links are in the mind of the person. They are his or her "expectancies" of the
link between effort and performances, and of the link between performances and outcomes.
Thus, the emphasis in expectancy theory is on the expectancies as perceived by the person
because it is these that drive his or her decision about whether to try to do the task and how
much effort to put into it.
Expectancy theory can be handily summarised in the following way:
Motivation = Expectancy that effort leads to performances × Expectancy that performances

lead to outcomes × Valence of the outcomes
This formula shows that if any of the expectancies or the valence is low, then motivation is low.
This brings out that motivation is "only as strong as the weakest link in the chain". For example,
in a bank if there is a monetary incentive scheme that rewards high performance, but if the
workers perceive that their efforts are repeatedly frustrated by computer breakdowns, then
the scheme will not motivate them because they perceive a low link between their effort and
performance. Thus, managers need to ensure that all the links in the chain are present, which
means that they are present in the minds of the employees. An example in another part of the
chain: senior management may be trying to motivate the middle managers by offering them
bonuses if the profit targets of their business units are met. However, the way the bonus is
calculated may be so complicated that the middle managers do not understand it, and so they
do not perceive profit outcomes as having high valence.
6. Other Motivational Techniques

One approach to motivation that is widely applicable is goal-setting. Another approach to
motivation works through improving a person's self-efficacy, that is, changing the perception
11
Motivation
he or she has of his or her own ability. Self-efficacy has been revealed to be a major factor
leading to successful performance, as explained by its leading exponent Albert Bandura of
Stanford University (Bandura, 2000).
7. Summary
 Employees can be motivated to perform by both intrinsic and extrinsic rewards.
 Extrinsic rewards refer to rewards that come from outside an individual such as money
and recognition. Intrinsic rewards are internal feelings of satisfaction such as the feeling
of accomplishing something meaningful.
 Managers should acknowledge that individuals differ in their preferences about
different types of rewards and so should use a variety of strategies to reward
employees.
 Equity theory says that people compare their outcomes relative to their inputs and also
compare others' inputs and outcomes in determining how fairly they are being treated.
 Expectancy theory suggests that people will be motivated to engage in a behaviour to
the degree that they believe that the behaviour will lead to an outcome and the degree
to which they value that outcome.
8. Glossary
Motivation The forces within a person that affect his or her direction, intensity
and persistence of voluntary behaviour.
Piece-rate system Providing monetary or other rewards for each unit a person
produces. For example, paying someone a dollar for each piece of
equipment he or she produces.
12
Motivation
9. Answers
Exercise: Internal/External Rewards
10. References
 Bandura, A. "Cultivate Self-Efficacy for Personal and Organizational Effectiveness." In the
Blackwell Handbook of Organizational Behaviour, edited by Edwin A. Locke, 120-36. Oxford,
UK: Blackwell Publishers Ltd, 2000.
 Latham, G.P. "Motivate Employee Performance Through Goal-Setting." In the Blackwell
Handbook of Organizational Behaviour, edited by Edwin A. Locke, 107-19. Oxford, UK:
Blackwell Publishers Ltd, 2000.
13
Segment: Managing Groups
Topic: Group Process
Group Process
Table of Contents
1. Leveraging Your Style in Group Processes ...................................................................................... 4

2. Stages of Group Development ........................................................................................................ 4
3. Balancing Group Goals .................................................................................................................... 5
3.1 Measuring Group Effectiveness .............................................................................................. 6
4. Strategies for Creating Effective Groups......................................................................................... 7
4.1 Analysing the group structure ................................................................................................ 7
5. What Is Empowerment? ............................................................................................................... 10
6. Summary ....................................................................................................................................... 16
7. References .................................................................................................................................... 16
2
Group Process
Introduction
Achieving objectives through groups and teamwork is generally viewed as a means of

increasing quality and managing organisational complexity. Unfortunately, group dynamics
often lead to more problems than solutions.
In this topic, we will discuss about group processes and the attributes of effective work groups.
Learning Objectives

• describe the five stages of group development
• describe the two main goals of work groups
• identify the various group roles of an effective work group
• discuss the impact of leadership styles on work groups.
3
Group Process
1. Leveraging Your Style in Group Processes
Working in groups and leading teams is a skill that requires more than just matching
employees to jobs. Organisations should recognise that it takes commitment, effort and
interpersonal skill from all group members to create an effective work team.
Directing workflow is often simplistic on paper but can be difficult in practice.
From your own work experience, you can probably describe a number of group achievements
and a number of group failures. To improve the group achievements and avoid group failures,
you should first learn how to analyse the structure of a group and then how to empower a
group.
2. Stages of Group Development
According to Champoux (2006), "A group is an interdependent set of people doing a task or
trying to reach a common goal." Teams are usually formal groups, organised for a specific
reason to accomplish specific goals. According to Tuckman (Tuckman and Jensen, 1977),
groups complete a series of developmental stages before emerging as high-performing teams:
forming, storming, norming, performing and adjourning.
Fig. 1: Stages of Group Development
4
Group Process
Stages of Group Development

1. Forming
Before a team can work cohesively and productively, members must first get to
know each other, called forming.
2. Storming
After an initially polite, friendly period, individuals will compete for desired roles,
responsibilities and positions within the team. Conflicts will emerge as people
compete and attempt to understand expectations. This stage of development is
called storming.
3. Norming
If roles, goals and expectations are clarified and people understand and embrace
their contribution to the team, the team develops cohesion and adopts a set of
norms that guide the group. This stage is called norming. Once norms are defined
and accepted, the team focuses on activities that will help them to accomplish goals.
4. Performing
The fourth stage of team development is called performing and represents a fully
functional, task-focused team. Although individual group members may continue
seeking for their social and emotional needs to be met through team membership,
the greater focus in this stage is on goal achievement.
5. Adjourning
The final stage of group development, adjourning, represents the end of the team's
work together. Team membership is an evolving and continuous process.
Although this model is a useful framework, it does not explain why some team members stay
longer than others, or how people come and go within a team. This model suggests that team
development is linear; however any change to team membership, goals or leadership could
send a performing team back to norming, storming, or forming. Many teams never successfully
perform because conflict that arises in the storming stage is not managed properly.
3. Balancing Group Goals

As noted above, teams have two key goals that must be satisfied, even though these often
conflict.
• Task completion: directly related to the goal or objective assigned to the group.
5
Group Process
• Socio-emotional needs of the group: related to the ability of diverse members to work
together efficiently and receive satisfaction in the process.
Some argue that both goals deserve equal attention and consideration for a group to succeed.
Other researchers suggest that socio-emotional needs have a bigger impact on the ultimate
success of the work group than the task goals. To achieve both goals in a satisfactory way, or to
decide which goal is a priority, you should be aware of what makes a group effective. Two
theorists, Bales and Hackman (1990), studied these conflicting goals.
Read below for more information on the results of their studies.
Bales and Hackman Studies

Arguably, the most important treatise concerning group processes is Bales' seminal work
in which he identified the two key goals of any group. Bales argued that all groups are
faced with two, often conflicting, needs: task and socio-emotional.
Although task needs are those directly relevant to the goal or objective to be met by the
group, socio-emotional needs are those that enhance the ability of diverse members to
work together and to receive satisfaction from the process. Bales stipulated that both
needs must be attended to and negotiated successfully by the group members to succeed.
Although Bales's work suggests that both needs are of equal importance or weight, i n
Groups That Work: And Those That Don't, Hackman suggests that socio-emotional needs
have even more bearing on the ultimate success of the work group than do task needs.
Because Hackman's work is derived from experiences with real-world groups, leaders of
organisations may find Hackman's mediational theory useful in managing group
effectiveness. As a quick caveat on theory: no theory is inherently right or wrong, but a
particular theory may have more explanatory power than another in certain
circumstances.
References
Hackman, R. Groups That Work: And Those That Don't. San Francisco: Jossey-Bass, 1990.
3.1 Measuring Group Effectiveness

Although there are many ways to study and measure group effectiveness, Bales and Hackman
developed the criteria below from experiences with actual work groups.
Based on Bales' work, Hackman concluded that group effectiveness can be measured by three
criteria.
6
Group Process
1. How much did the group's decisions meet the standards of quantity, quality and timeliness
as established by the people who receive, review or use the decision?
2. How much has the decision-making process increased the capability of the team to work
together in the future?
3. To what extent did the group experience contribute to the growth and development of
each member?
The importance of each criterion depends on the situation. For example, when a temporary
task force faces an immediate crisis, the effectiveness of its decision should be measured by
the first criterion only. If a group is a permanent group, however, the effectiveness of its first
task will be determined by the willingness and ability of each member to continue to work
together satisfactory on subsequent tasks and should be measured by the second criterion.
4. Strategies for Creating Effective Groups

To balance the group goals of task completion and socio-emotional needs and to satisfy the
criteria for group effectiveness, leaders and managers can analyse the group structure or
empower group members.
4.1 Analysing the group structure
Ideally, group membership and interaction centres on specific roles and predetermined
norms that help the group successfully navigate both task and socio- emotional needs. As
a result, task and relationship roles must be assigned for the group to be effective, as
shown in the table below.
Group Roles
Task Roles Relationship Roles
Task Leader: Responsible for the Socio-Emotional Leader: Responsible for the
direction and clarification of tasks; direction and clarification of group norms;
guides and finalises the process guides the social interaction process and
finalises the group's cohesion
Initiator: Proposes tasks or goals; Harmoniser: Attempts to reconcile

defines problems and suggests disagreements; reduces tension and gets
solutions people to explore differences
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Group Process
Seeker: Requests information, Gatekeeper: Helps to keep communication

opinions, suggestions, ideas or channels open; facilitates the participation of
expressions of feelings all and suggests procedures that permit
group members to share remarks
Opinionator: Offers facts and Encourager: Attempts to be friendly, warm

opinions and provides relevant and responsive to all team members;
information appears to consider and accept all
contributions
Clarifier: Interprets ideas or Compromiser: Offers a compromise that

suggestions; clears up confusion; yields status when one's idea or status is in
defines alternatives question; admits error or will modify
position in the interest of group cohesion
Summariser: Pulls together related Standard Setter: Helps the group set goals
ideas; offers a conclusion for the and assess the quality of the process itself
group to accept or reject
Consensus Tester: Asks the group if it Follower: Agrees with other members;
is nearing a decision; often takes an pursues ideas and suggestions of others;
informal poll to assess opinions and serves as a subordinate to the task or
emotional leader
Central Negative: Intentionally Group Observer: Monitors and critiques the

argues against an idea to test its group's process and cohesion; operates as an
validity; states drawbacks to outsider who is not responsible for the task
proposals, encourages alternatives production of the group but may have a
and guards against premature group vested interest in its success
decisions
One group member should assume the role of task leader and a different group member
should assume the role of socio-emotional leader. This division of roles will ensure a better
balance between the group's two main goals. If one group member assumes both roles, the
8
Group Process
chances are much higher that one group goal will be achieved at the expense of the other.
When the task and socio-emotional leadership roles are filled within the group, other group
members can fulfil the remaining roles and functions. Identifying the required roles and
establishing an optimal group structure is essential to leading an effective group.
9
Group Process
5. What Is Empowerment?
Mohrman et al. (1995) define an empowered workforce as an organisational system in which

employees are trained to make key decisions at the lowest level of management.
In practice, empowerment is a matter of degree with variations between organisations in the

importance of the decisions that are delegated to low levels, and to how low down in the
hierarchy decisions are delegated. In even weaker forms of empowerment, subordinates
contribute ideas and discuss them with their boss, who then takes the decision; this practice is
sometimes called "participation in decision- making".
While it is arguable that participation, or trivial degrees of empowerment should not be called
empowerment, there is some tendency today for all of them to be lumped together under the
term empowerment. The significance for leadership is that the more truly empowered the
group, the more its members take decisions through discussion among themselves and the less
the group is directed by a formal (organisationally-appointed) leader–the leadership is
emerging from within the group itself.
Although empowered teams still need some overall management and broad direction from
higher levels, the role of leadership in an empowered environment shifts from a managing
function to a facilitating function. In other words, your job as the manager overseeing an
empowered group is to take a "hands off" approach. It is to facilitate, for example by ensuring
that the team has adequate resources to do its job (including training of members) and
support from the rest of the organisation, rather than directing the team on what to do.
Similarly, as a member of an empowered group, one exercises leadership through influence,

persuasion and consideration of other group members, rather than by wielding any formal
authority conferred by higher management.
How can you use your leadership style to empower?

Click on your leadership style below to learn more about this. You should be aware of how the
strengths and weaknesses of your leadership profile emerge in groups and what roles you are
likely to assume. To explore the group roles typically associated with the other leadership
styles, click on the other tabs.
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Group Process
Leadership Styles and Group Roles
• Authoritarian
Authoritarians naturally assume the role of task leader. They are adept at defining the
group's goal and offering procedures for negotiating that goal. They are likely to direct
and help finalise the team's efforts as required by the role of task leader. Authoritarians
can easily work as clarifiers because they can quickly assess situations and generate
solutions. They are extremely effective with groups that lack an individual with strong
opinions and will likely assume that role to facilitate task achievement.
• Team Leader
Because you are a team leader, you are likely to assume the role of task leader. As a
result, you need to empower someone in your group to be the socio-emotional leader.
Your job is to engage in role clarification. Who among your team is well-liked, respected
and respectful of other team members? To empower another, you should create role
contracts and during group processes, reinforce the socio-emotional contributions of
your socio-emotional leader by praising and agreeing with that person's interactions.
• Reticent
Reticents naturally assume the roles of consensus tester and gatekeeper. They are
adept at facilitating the contributions of all members and getting members to accept
ownership of the group process and task completion. Because they depend on the skill
and motivation of their team members, they often serve as the group observer,
ensuring that the process and task follow corporate protocol and meet strategic
objectives. Reticents are extremely effective in groups comprised of highly-skilled and
vested employees.
• Socializer
Socializers naturally assume the roles of harmoniser and gatekeeper. They are adept at
reducing interpersonal tensions, facilitating participation, and encouraging
contributions, feelings and opinions from all group members. Because they are
concerned with team morale, they often serve as the encourager, ensuring that all
members are heard and respected in the group. They are extremely effective with
groups that lack a strong socio-emotional leader and will likely assume that role to 11
achieve group cohesion.
Group Process
Although your natural preferences and styles are necessary and useful for effective group
interaction, you cannot fulfil all the required roles and functions because that would defeat
the purpose of working in a group. By understanding your natural preferences and
tendencies, you can focus on areas in which you excel, and on empowering other team
members to take on other roles necessary for the team to work effectively.
When you lead a group, you can use analyses of the group structure and empowerment of
group members to enable a group to successfully navigate both the task and social
dimensions of group interaction. Effective use of both structure and empowerment can lead
to optimal results according to Bales's and Hackman's three criteria of group effectiveness
described earlier.
Read below on analysis of group structure and empowerment.
12
Group Process
Group Processes
Katie is a reticent leader. She knows that a clear task leader such as an authoritarian type
is required to enable group effectiveness but she is also concerned about the ability of
the group to work together again in the future. Katie will take several steps to handle the
situation.
She asks Carla to establish the ground rules and define the task, implicitly rewarding and
affirming Carla as the group's task leader.
After Carla explains the group's processes and outlines the details of the task at the first
meeting, Katie asks Tim what he "feels" about the group and their ability to get the job
done. By focusing on feelings, Katie affirms Tim's right and his ability to take over the
socio-emotional leadership of this team. As the group proceeds, Carla and Tim work
together: Carla directs the group task and Tim maintains the cohesion of the group.
Jennifer continues to ask probing questions and makes useful suggestions. Katie responds
by saying things like, "That's a great idea", or "We should consider this alternative". Katie is
empowering Jennifer to serve as the central negative for this team, a role that protects the
team from faulty analysis.
Finally, Katie asks Perry for his opinion when she thinks that the group is either stuck or,
conversely, nearing a decision. Katie is empowering Perry to serve as both a summariser
and consensus tester, roles that are comfortable for Perry and essential for the group.
Katie acts mainly as the group observer, encourager and harmoniser, roles that
uniquely work with Katie's strength as a reticent leader.
So, Katie has successfully empowered her editorial task force to fulfil the roles and
functions that she alone cannot fulfil. By analysing the structure of the group and using
empowerment, Katie has enabled Carla and Tim to each guide the group in their task
and in their social needs. She has also balanced the group with central quality checks
by empowering both Jennifer and Perry to serve in key critical roles.
13
Group Process
Exercise: Group Roles
Group Roles
As a senior-level executive in a high-tech industry, you are responsible for leading a

strategic planning committee. Your company has decided that, due to recent declines in
the market, it needs to have a contingency plan in place immediately.
You, along with five other senior members of your company, have been asked to draft
emergency recommendations. The members of the committee are as follows:
Susan, from the legal department, who is bright, assertive and well-organised;
Daryl, from the research department, who is aggressive, opinionated and highly
informed;
Naomi, from the executive office, who is considerate, thoughtful and introspective;
Carol, from development, who is witty, charming and highly motivated; and
Jim, from the finance department, who is abrupt, legal-minded, smart and aggressive.
Each member can contribute ample resources and information for the group to
successfully draft the emergency recommendations and achieve the corporate
objective.
First, analyse how you would engage in role fulfilment. Next, devise a strategy that
Next, based on the situation read above, complete the exercise on Group Roles.
empowers these role clarifications. Now, excluding you, who would you empower to be
the task leader?
14
Group Process
As you work on the exercise, think about role clarification and empowerment, and then
choose strategies that will help you reach your objectives. Also, remember that you are
appointing a task leader only. Although a particular team member may be an excellent
task leader, it is possible that a task leader may not succeed in other team roles.
Note: To carry out the exercise, refer to the online subject. There are a number of
decision points in this exercise. For each decision point, click the letter that corresponds
to your answer. When you arrive at the final point, you can return to the beginning by
clicking the top arrow. You may find it interesting to see how making different decisions
brings you to different outcomes.
Below is the first decision point.
What is your response?
A. You appoint Susan as the task leader. Because Susan is bright and well organised, you
believe she will be able to keep the group focused on task production. Additionally,
you see Susan as having the capacity to lead the team toward crafting excellent
strategic plans that will keep your company in its premier position.
B. You appoint Daryl as the task leader. Because Daryl is highly informed, you believe in
his ability to lead the team toward strategic plans that are likely to keep your firm in
its premier position. You believe Daryl, as task leader, will aggressively pursue the
standard of excellence required by your team's task.
C. You appoint Naomi as the task leader. Because Naomi is introspective, you believe she
will carefully and thoughtfully use each member's contributions and then craft
strategic plans that will not only keep your company afloat but will continue to keep
your firm in its current premier position.
D. You appoint Carol as the task leader. Because Carol is witty and highly motivated, you
believe her energy will help the team stay motivated. You also believe the motivation
Carol brings to this team will enable your group to craft superior strategic plans that
will lead to the firm's continued success.
E. You appoint Jim as the task leader. You believe Jim's abrupt and legal-minded style
will allow the team to function with efficiency and keep them focused on the
necessary task. You know that with Jim leading your team's task production, the
strategic plans they craft will be of superior quality.
15
Group Process
In this topic, you have examined group process, team roles, the impact of leadership styles
on teams, and how empowerment can enhance team effectiveness. These important
lessons, however, do not fully explain the dynamic nature of groups and group processes.
Groups are constantly changing and redefining themselves.
6. Summary
• A group is an interdependent set of people doing a task or trying to reach a common goal.
A group tends to go through the stages of forming, storming, norming, performing and
adjourning.
• The two key goals that a group needs to balance are the task completion goals and the
socio-emotional needs of the group. Therefore, both task and relationship roles must be
assigned for the group to be effective.
• By understanding the strengths and weaknesses of one's leadership style, a manager can
use his or her leadership style to empower group members.
7. References
• Blake, R.R. and J.S. Mouton. The Managerial Grid III: A New Look At The Classic That Has
Boosted Productivity and Profits for Thousands of Corporations Worldwide. Houston, TX:
Gulf Publishing Co., 1985.
• Champoux, J. Organizational Behavior: Integrating Individuals, Groups and Organizations.
3rd ed. Cincinnati, Ohio: South-Western College Publishing, 2006.
• Hersey, P. and K.H. Blanchard. “Life Cycle Theory of Leadership. “Training and Leadership
Journal33, no. 6 (June 1979). http://proquest.umi.com/pqdweb (accessed 14 December
2000).
• Hackman, R.Groups That Work: And Those That Don't. San Francisco: Jossey-Bass, 1990.
• Hewes, D.E."A Socio-Egocentric Model of Group Decision-Making."In Communication and
Group Decision-Making, edited by Randy Y. Hirokawa and M.S. Poole, 265-91. Beverly
Hills, Calif.: Sage, 1986.
• Mohrman, S., Cohen, S. and Mohrman Jr., A.M. Designing Team-Based Organizations:
New Forms for Knowledge Work. San Francisco: Jossey-Bass, 1995.
16
Group Process
• Okhuysen, G.A. and K.M. Eisenhardt “Excel Through Group Process. “In the Blackwell Handbook
of Organizational Behaviour, edited by Edwin A. Locke, 211-225. Oxford, UK: Blackwell Publishers
17
Topic : Teams
Teams
Table of Contents
1. Why Use Teams? ................................................................................................................................. 4

2. Exercise and Reflection ...................................................................................................................... 4
3. Team Set-up ....................................................................................................................................... 8
4. Team Dysfunction ............................................................................................................................ 22
5. Effective and Ineffective Teams ....................................................................................................... 24
5. Summary .......................................................................................................................................... 32
6. References........................................................................................................................................ 32
2
Teams
Introduction
Teams have become an integral part of the business environment. Whether the company is
trying to reduce costs, solve a problem, bring a product to market, or begin a recycling
programme, establishing a team to address the issue has become a way of corporate life.
Learning Objectives
 describe the four factors of team set-up in relation to the context in which it exists
 distinguish between effective and ineffective teams
 explain the concept of process loss and the seven conditions that may lead to it.
3
Teams
1. Why Use Teams?
Companies as diverse as General Electric, Burlington Northern and the Tallahassee Democrat
in the United States have used teams to streamline processes, respond to a competitive
industry and conquer business challenges.
By using the power of teams, these companies have been able to thrive in uncertain times.
Indeed, the ability to use teams effectively can become a competitive advantage for an
organisation. Therefore, it is important today for organisations, their managers and informal
leaders to know how to run teams effectively.
Read below for more information about why companies use teams.
Why Use a Team?

Teams help accomplish what individuals cannot accomplish alone. If the volume,
complexity or the sophistication of the work exceeds one person's ability, creating a team
to undertake the task may be a good solution.
Using a team is also a good strategy when the task requires support from many different
stakeholders. For instance, a company may have a problem that involves a number of
different functions. Bringing together those stakeholders intimate with the problem will
make it easier to find a solution that can be supported by all.
A team can also be used to develop the skills of team members. Participating on a team
gives team members a chance to learn different knowledge, skills and perspectives from
each other.
Keep in mind that forming teams does not guarantee success. Many factors influence the
performance of any team initiative. Even a team staffed with capable and committed members
can fail. A team is a sophisticated work arrangement that requires thoughtful set-up and
maintenance to perform effectively.
2. Exercise and Reflection

The following exercise will introduce you to an established team that is experiencing
difficulties. You will get to know the company, team members and the task that they are to
address.
4
Teams
Li Jinsong, President of Alexis Pharmaceutical, has created a team and charged the team
members with a crucial task – developing a process to bring a new product to market.
Read the memo from Li Jinsong given below .
To: Employees of Alexis
From: Li Jinsong, President
As you know, we're in a race with our major competitor, TX Drugs, to launch an entirely new
product – a medication designed to double patients' high-density lipoprotein, or "good"
cholesterol. The Marketing department estimates that this drug could save more than 25,000
lives per year in the United States and abroad. If we're first to market with this drug, we'll
dominate this market.
To that end, I've pulled together a high-powered team to speed up this product launch. The
team will report to the vice president of product development. Team members are
 Antonio Reyes, team leader and vice president of Marketing
 Anu Nallamothu, director of Corporate Public Relations
 Marie Andrada, Ph.D., research scientist
 Gerald Parks, Ph.D., manager of Research and Development for Mass Production
 Tommy Cho, general manager, US Operations
This product launch is crucial to our survival. Join me in supporting this team any way you can.
Li Jinsong
Now that you have been introduced to the team, you will be privy to a typical team meeting.
5
Teams
This is the team's seventh meeting. Although the team has been meeting weekly, it is
rumoured to be behind schedule.
Three members of the team, Antonio Reyes, Tommy Cho and Anu Nallamothu, seem to have
created a close and cohesive working relationship. They always have lunch together before the
team meetings. Today, another team member, Gerald Parks, is running late.
Read below for the team meeting.
Meet the Team
Tommy: We've got just six months before product launch. That's not a lot of time, but I think if
we all complete our assignments, we can get our product to the market before the
competition. I'm optimistic that we can meet this deadline. You can take a closer look at this
report later. I think it will help with the product launch.
Anu: These statistics are hard to believe. I mean, they look great, no offence, but they're not
credible without the lab results to back them up.
Antonio: He probably couldn't get them. I've been trying to get a password to the R and D
server, but information services keep dragging its feet.
Anu: Those guys are tough to deal with. I've left messages with them on several occasions.
Cell phone rings. Anu speaks into her phone.
Antonio: I've always said, "Just give us access to the lab server, and we can get the results we
need ourselves!"
Anu is still on the phone.
Tommy: I.S. wouldn't go for that. Last week I tried to get remote access while I was on the
road—it was a nightmare!
Antonio: Don't get started on I.S. We'll be here all day.
Gerald enters. Anu says goodbye and hangs up phone.
Anu: Mr. Parks, glad you could fit us in.
Group laughs.
Gerald: Actually, it may not have occurred to some of you, but I have another job to do. So, if
you don't mind, I'd like to give my report and go back to work.
Tommy: We were just about to hear from Antonio.
Antonio: Um, sure. I actually don't have much to share. I guess I could go over the marketing
research.
Anu's cell phone rings again.
Gerald: Really. This is a waste of time. I have more important things to do than be ignored.
Gerald storms out of the room.
Anu is still on the phone.
6
Teams
Antonio: These marketing research reports are self-explanatory. I don't think we need to spend
time going over them.
Tommy: OK. Well, since Gerald left, I guess that's it.
Now that you know about the company, the team and its task, what would you recommend to
help improve the team’s performance?
Read below to consider a list of possible suggestions.
What would you do?
Consider the following list of possible recommendations that could be made to help improve
this team's performance. These are a few of the most common options. Other options not
listed here may be equally feasible. Based on what you now know about the company, the
team and its task, think about what you would suggest to the team if you had the opportunity.
Read the feedback for the recommendation of your choice.
What would you do?
A. Call a meeting to ask the team to work together to get the job done
Appealing to everyone’s sense of commitment seems to be a quick and easy request to

make. However, if the team cannot agree on its purpose or how to complete the task, this
kind of request may stifle discussion or seriously undermine the airing of minority opinions.
This will just suppress conflict. It will resurface eventually.
B. Ask Gerald to resign from the team
Feedback: Asking someone in conflict with other team members to leave is a quick and
easy way to reduce the team’s tension. However, Gerald has the expertise needed to help
bring the product to market as quickly as possible. If he leaves the team, the team will lose
a very valuable source of information. This also sets a precedent-the team will deal with
conflict by asking someone to leave.
C. Ask for more time to complete the project

Feedback: Giving the team more time is a quick and easy way to help the team. However,
the company is depending on the success of this team for its very survival. Giving the team
more time will not help address the problem the team was asked to solve. If the team is
7
Teams
not responsible for meeting deadlines, this suggests the team’s work isn’t important, and
the team will be rescued whenever necessary.
D. Ask another team member to chair the meetings on an ongoing basis
Feedback: Appointing someone else to chair the meetings is a quick and easy way to bring
order to the meetings. However, it undermines the team leader position and the tram’s
responsibility for establishing and maintaining constructive relationships as well as holding
productive meetings. Every team member needs to engage in both identifying and
performing the work that needs to be done.
E. Introduce meeting rules, such as no cell phones, meetings start and end on time, etc
Feedback: The team does need to establish meeting guidelines, and it would be tempting
to give them some by decree. All too often, team members read their mail, answer cell
phones, or do other things that undermine the meeting. Sometimes they are trying to
manage their time and priorities, other times they are simply being rude. However, you
can’t legislate good behaviour. If you suppress behaviour with rules and regulations,
different symptoms may appear at a later date. Team members sometimes need help
setting their priorities and agreeing on meeting processes.
Reflection: Managing team problem
Once you have completed the Alexis Team Scenario exercise above, think about the following
question.
• Was there a better approach to managing the Alexis team problem?
3. Team Set-up
As a group evolves through its developmental stages, leaders and members must take steps to
ensure that the team is properly set up and designed. Poor team dynamics are difficult to
correct because they quickly become embodied in the character of the team. For that reason,
decisions made about the team's initial set-up and early operation are more important than
most other decisions. Although it takes time to set up a team well – and it is the period of time
when the team is most anxious to get started – it is time well spent if it enables the team to
perform effectively.
8
Teams
Read below to learn about the aspects of team set-up that can influence team performance.
Aspects that influence team performance

The following four aspects of team set-up can influence team performance:
 The way tasks are defined and distributed.
 The team members' skills and the departments they represent.
 The formal rules and structures created by the team.
 The informal norms and expectations that affect team behaviour.
These four aspects play a significant role in a team's success for the following reasons:
 Task distribution may make the work more difficult to do.
 Task assignments may not pair the skills of team members with the right type of work.
 The team's formal rules may make it more difficult to get the work done.
 The team's culture may lessen team commitment to completing the work necessary for
team success.
Team leaders and team members must be able to make the right decisions at the very
beginning if they are to avoid problems later. Team set-up is critical to team success. Although
you may not be able to decide who is assigned to your team, you can set up your team in a way
that will help it perform as effectively as possible. Many companies, team leaders, and team
members underestimate what is required to set up a successful team.
An effective team set-up helps team members
 understand why they are working together
 believe they can accomplish their goals together
 use their collective knowledge, skills and perspectives to contribute to the completion
of the task
 use processes and procedures to facilitate their work
Four factors to consider
There are four factors to consider when setting up an effective team: task, people, formal
organisation and informal organisation.
9
Teams
Fig.1: Factors to Consider when Setting up an Effective Team
Every team exists in a context. Someone creates a team to perform a specific task. That
someone identifies the task and assigns team members. The team is located somewhere in an
organisation, within a formal organisational structure with policies that affect the team and an
informal organisation of relationships, cultures and politics which also affect the team.
Once the team starts to operate, these same factors: task, people, formal organisation and
informal organisation, can be found within the team. The team task has to be divided into
smaller projects; team members are assigned to work on different aspects of the task and
interact within the team; the team creates processes and structures to do its work; and, within
the team, a culture develops. Unlike the context, however, the team leader and team
members have control over how they set up the team as it begins to function.
Read below for an overview of team set-up and how it relates to the team context wheel.
10
Teams
Team Set-up Wheel

Picture a team as a circle within a circle. The inner circle represents factors that are specific to
the set-up of each team. The outer circle is the context within which the team operates.
There are four aspects of teams, just as there are four aspects of any organisation. These are
the key elements that must be aligned if people are to work successfully together to
accomplish goals.
Task: During team set-up, the team's work must be divided into separate component tasks.
Each component task must be completed by individuals, subgroups, or the entire team, and
must be done in a logical order. Occasionally, the tasks performed by individuals must be
compared and integrated to turn them into one coherent approach.
People: During team set-up, each team member's skills must be utilised for the benefit of the
team. Teams must assign tasks and roles to different members. This requires matching the task
to the member's abilities, balancing the work among the members, and ensuring that
members working together in subgroups are compatible.
Formal Organisation: Setting up the formal organisation of the team involves creating
processes and structures that will help the team accomplish its task. These policies are specific
to the team, such as how it will make decisions and how work will be done. The team should
develop specific procedures that will help the team work efficiently, keep track of decisions,
stay on time, and hold productive discussions.
Informal Organisation: Another critical part of setting up a team is developing the team's
culture. In the first few team meetings, the team develops norms and values that will guide the
behaviour of its members.
Teams should adopt norms that are realistic, given the organisational context, and that help
team members work effectively. Norms can include expecting work to be prepared on time,
prioritising the work of the team, or listening to minority opinions.
The following sections describe in detail the set up of each factor of the team context wheel.
Setting Up the Task
Teams are usually assigned tasks that are large and complex. When you set up a team, you
need to decide how to divide the team's work into components – individual analyses need to
11
Teams
be conducted, products need to be created, decisions must be made, or individual actions

must be taken. Those components are usually assigned to individuals or team subgroups.
Some teams conduct all their work as a unit. This tends to be inefficient because all
components of the task generally do not require all members to perform them. But even in
these cases, the task must be divided into smaller components so that each meeting
accomplishes a discrete part of the overall team task.
A process to dividing tasks is as follows.
 Tasks should be divided in such a way that each piece is coherent and meaningful, but
small enough to be accomplished in a reasonable amount of time.
 Tasks need to be ordered logically and distributed in a fair manner.
 The individual tasks components needs to be integrated into a unified team product.
Many teams are successful at dividing their task into smaller components and creating
individual products, but they may fail at the last step, which is essential. For complex work, this
requires regular sharing of information among team members and intermittent integration of
individual tasks.
In other words, the team needs to follow a process such as the one below.
 Divide the team into subgroups to accomplish small tasks or assign small tasks to
individuals.
 As a team, share results and integrate the work.
 Assign new tasks to individuals or team subgroups.
 Repeat the process.
If a team does not regularly integrate the work performed by individuals or subgroups, it is
easy for those team members to take different directions, make different assumptions and
create components of different projects. If this happens, individuals may produce excellent
work, but the team's product will be inferior, and the team is not likely to achieve its goals.
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Setting Up Team Members
When starting a team, you must decide how to use team members. Each person has different
knowledge and skills, networks within the organisation, abilities, attitudes and needs. These
affect how each team member can best contribute to the team and how team members
interact with one another.
Read below for more information about the factors to consider when setting up a diverse
team.
What to Consider When Setting Up a Diverse Team
Working in teams gives team members the opportunity to include different perspectives in
their work. However, these different perspectives can challenge productivity. When addressing
diversity during team setup, consider
 recognising the different perspectives team members bring to the team and
acknowledging their value to the team
 helping team members agree on a goal that transcends their individual differences
 distributing tasks and influence according to each member's ability to contribute to the
task
 developing constructive working relationships built on mutual respect
 giving the team feedback on processes and outputs
References
Adler, N.J. International Dimensions of Organizational Behavior. 2nd ed. pp 139-141. Boston:
PWS-Kent Publishing, 1991.
Despite the diverse nature of most teams, there are times when team members do not have
the expertise or skills necessary to accomplish the team's task. An effective team will recognise
this gap and take steps to access or acquire the necessary expertise. The team might need to
consult with an outside expert, invite an employee with the necessary skills to join the team, or
provide training to an existing team member.
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During team set-up, teams must assign tasks and roles to different members. This requires
matching tasks to team members' abilities, balancing the work among the members, and
ensuring the compatibility of team members working together in subgroups.
Read the text below for more information and tips on teams and managing team meetings
Team Roles: What Role Do You Play on Your Team?
Here are examples of some of the informal roles that team members play. The informal roles
include the:
 Initiator
 Information seeker
 Information giver
 Coordinator
 Evaluator
 Summariser
 Orienter
 Harmoniser
 Gate Keeper
 Encourager
References
Benne, K.D. and P. Sheats. "Functional Roles of Group Members." Journal of Social Issues 4
(1948):41-49.
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Which Team Member Most Influences Others? The Scribe

Many people underestimate the importance of the role of team note-taker, or scribe. The
team member who takes the notes for a team, particularly if this is done in a visible way such
as on a flip chart or whiteboard, can exercise a great degree of control over a team's decisions.
The scribe can
 let some ideas disappear by neglecting to write them down
 change the way team members view ideas by how they are phrased
 focus attention on ideas by making them larger or adding stars, underlines or check
marks to them
Even if the team has not agreed to this particular slant of an idea, team members are subtly
influenced by it, and it may, in fact, affect their perception of it. The scribe also determines
what ideas are carried forward to future meetings.
Raising Flags: Red, Yellow and Green Flags

Some teams use the term "raising a flag" to signal agreement when making decisions. Each
team member tells the others his or her opinion of a decision by using the terms "red",
"yellow" or "green flag".
 Raising a green flag means the team member fully supports the decision.
 Raising a yellow flag means the team member supports the decision if minor issues are
addressed in a certain way.
 Raising a red flag means the team member cannot support the decision. By raising a red
flag, the team member agrees to help develop a recommendation he or she can
support.
The "raising the flag" system formalises how a team reaches agreement and defines the
parameters for that agreement. It also means that team members cannot raise objections
without offering solutions or agreeing to re-work the recommendation to address their
concerns.
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Have you ever been to a team meeting where team members spend time debating the merits
of a particular agenda item, only to discover that it is something they cannot control? That
wastes time and is frustrating as well.
To avoid those types of problems, some teams adopt the "Information, Consultation,
Approval" code for agenda items.
Code “Information”
If an item is for information only, the first choice is to find another way to share the
information without spending meeting time discussing it. If the item will need clarification or is
likely to prompt questions, it is coded on the agenda as "information".
An example of an information item might be feedback from a presentation that has
implications for future team work.
Code “Consultation”
If an item requires team input, it is coded "consultation". The team will then discuss and
provide input on the item.
An example of a consultation item might be a subgroup requesting input from the team about
the options they are considering concerning their assignment to determine how to spend the
team's training budget.
Code “Approval”
If the item requires a team decision, the item is coded "approval".
An example of an item for approval might be the same subgroup bringing forward its final
recommendations concerning the team's training budget.
This process notifies team members to what type of discussion is expected, and sets up a
mechanism by which the team can delegate work to individuals and subgroups.
Setting Up the Team's Formal Organisation
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When setting up a team, you must create structures and processes that you will use to manage
the team and accomplish tasks. These may include role structure, decision-making processes
and assess team performance processes.
Read below to learn more about the aspects of the team’s formal organisation.
Role Structure
When setting up a team, you must create processes and structures that you will use to manage
the team and accomplish tasks. These include the rules the team follows, the roles played by
team members and team subgroups that may be created to perform the work. The team
should assign specific roles to team members that will help the team work efficiently, keep
track of decisions, stay on time and hold productive discussions. These roles include time-
keeper, discussion-facilitator, agenda-setter and team secretary or notetaker.
Some of these roles, such as agenda setter, come with a certain amount of power, whereas
others may be resented by the team. Many teams rotate roles to balance power within the
team, develop members' skills, and avoid resentment caused by having to perform unpleasant
tasks. During set-up, team members also begin to develop informal roles through the way they
behave and interact with others. Team leaders are usually assigned to teams, but informal
team leaders often develop as well. These members have no formal authority but tend to
participate, guide decisions, help coordinate tasks and support team harmony. This can be very
effective if they supplement the formal leader, but it can result in conflict if they try to move
the team in a different direction.
Decision-making process
A key function of teams is decision-making. When setting up a team, establishing a decision-
making process will help the team function more efficiently. Some processes will work better
than others. Deciding what process will work best for a team depends on its members and the
assigned task. For instance, generating ideas and options by brainstorming can lead to great
creativity. On the other hand, it can also lead to the most forceful and talkative team members
dominating the discussion. Using a decision-making process that allows ideas to be evaluated
through general discussion can also lead to minority views being ignored.
Other decision-making processes include
• taking turns sharing ideas to give everyone a chance to provide input
• having one team member solicit each person's opinion individually, integrate them into one
document, and share the summary with the team
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Although slower, these techniques tend to equalise the opportunity for all team members to
speak and focus on ideas rather than the people offering them.
Once ideas are generated and discussed, the final decision can be made in a number of ways
including by consensus, voting, or designating a team member or subgroup as the decision-
maker. Consensus can put pressure on team members with minority views to keep silent, as
even one person in opposition can stop a decision. Designating a team member or subgroup as
the decision-maker requires the team to trust certain knowledgeable people to make the right
decision.
Assess team performance

Another critical process to establish during team set-up is a means to assess team
performance. The team should create some way to measure the quality of its work and the
team's progress toward achieving its goal. For most teams, there is no objective measure of
work quality. However, teams can benchmark quality and progress. In fact, the team should
regularly examine its work for quality and progress towards completing its goal. Is the team on
schedule for achieving its goal? Will the quality of the team's work be acceptable to the target
audience?
The team should also examine how well it is operating. In other words,
• are the right processes in place for the team to effectively perform its task?
• is the team efficient?
• is the team experience rewarding to its members?
• is there dysfunctional conflict?
The team needs to know this type of information to keep on schedule and revise processes
when necessary.
Setting Up the Team's Informal Organisation
Another critical part of setting up a team is developing the culture within the team. The very
first meetings develop norms and values that will guide the behaviour of team members.
One of the reasons why teams need to discuss how they will operate is that not all members
join with an accurate understanding of what the word "team" means. When seeking to form a
team or to manage one, it is helpful to keep in mind that some members may join with a quite
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inadequate meaning of "team", which will undermine their ability to be good team members.
Hence it is important to discuss what it means to be in a team when forming one.
Read below to learn about establishing norms and values in a team set-up.
Establishing Norms and Values in Teams

 Establishing Norms
Each team will develop norms, or expectations, for how the members will behave.
Norms are either explicitly or implicitly set around issues such as whether
o meetings will start on time o members will be expected to meet deadlines
o the team's work will take priority over other, non-emergency work
o members will accept phone calls during meetings
o members engage in multiple conversations at once or take turns
o interruptions are acceptable
The more these types of norms are shared explicitly, the better the chance that each team
member will adhere to norms. Teams should adopt norms that are realistic given the
organisational context. For instance, a team that works in a hospital should not have a norm
that says "no pagers". Better rules might state "set your pagers to vibrate instead of to ring"
and "only answer messages that are work-related".
However, a wide range of norms can be effective if all team members share them. Once norms
are established, team members need to be able to give and receive constructive feedback
when norms are broken.
Teams must accept norms to follow them and teams are more likely to accept norms if they
themselves set the norms. Discussing norms at initial team meetings gives team members a
chance to share what is important to them. This can be the first step in building a bond among
team members.
 Establishing Values
Values are beliefs or standards that people consider important. Values are not rules about
specific behaviours but are general beliefs about how the team should operate.
For example, some teams value minority opinions because they believe the correctness of a
decision is not dependent on the number of people who take that view. Such teams often stop
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and listen to concerns expressed by a single member. Although this may slow down the
decision-making process, it may lead to higher-quality decisions than decisions made by teams
that value the majority opinion.
Other critical values involve hierarchy versus egalitarianism. If a group values hierarchy, the
emphasis is on formal roles and giving deference to the team leader. If a group values
egalitarianism, the emphasis is on informal roles and considering everyone's opinion equally.
Neither value is better than the other, but they support different decision making processes
and team roles. Teams should discuss their values during team set-up so members can adopt
values that help them achieve their goals.
Balancing Team Set-up
Fig.2: Balancing Team Set-up
The different aspects of the way teams are set up – the way tasks are divided and integrated
and the use of team members, formal processes and informal culture – affect one another.
Because of this, the decisions a team makes about one aspect must reflect the decisions made
about other aspects, as well as the context in which the team operates.
For example, if a team task requires creativity, a team may be more successful with diverse
team members or subgroups, a high value on minority opinions and formal policies to deal
with conflict. However, if a team task involves tactical decision-making, the team may need to
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reduce internal conflict, have homogeneous subgroups make decisions and place a value on
consensus and decisions made by the majority.
Exercise-Team Set-Up
In the following exercises, you will read about the process used by two companies to set up
cross-functional teams. In each case, you will see why the team was created, how it was
created and what task was assigned to it. Based on what you read, you will be asked to make
recommendations to help determine how the team should have been set up to function more
effectively.
Exercise: Team 1 Set-up

In this exercise, you begin by reading a scenario, then answer four questions by choosing the
options provided for each question. Feedback is provided for each option.
Dane, the owner and CEO of Tarun (a medium-sized construction company), formed a task
force of three to investigate the challenges and opportunities of conducting business in Brazil
and to report to him on whether to pursue business opportunity there. The team members
include Bill Wilson, Janelle Johnson and Dick Smith.
1. How should the team divide the tasks so that it can provide Dane with the best
recommendation on whether or not to pursue the Brazilian venture?
2. How should the team assign to the team members the various tasks that must be
performed to achieve the team's goal?
3. What formal decision-making processes should the team establish, particularly given
the team's inexperience with international issues and the CEO's distrust of teams?
4. What values does the team need to establish to be successful? Given that the
organisation has a culture that does not support effective teams, this group cannot
simply adopt all existing organisational values.
Exercise: Team 2 Set-up

In this exercise, you begin by reading a scenario, then answer four questions by choosing the
options provided for each question. Feedback is provided for each option.
George, CEO of New Life Networks, wants to offer a wider selection of customised products
and services than those offered by his competitors. To accomplish this, he has created a team
of six to identify existing products and services that can be customised for sale to different
markets.
George created a cross-functional team based on the recommendations of his top managers.
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The six team members represent finance, sales, marketing, research and development,
operations, and human resources.
George wants the team to identify custom packages for different potential markets and make
its recommendations one month from today. To help the team become productive as quickly
as possible, select the response you think best addresses the setup question.
1. How do you suggest the team divide the task into manageable projects and assign those
projects?
2. How can the skills and experience of the team's members best used to accomplish the
goal?
3. How should roles and responsibilities be assigned to team members?
4. How should the team establish norms?
4. Team Dysfunction
Not all teams perform well. Sometimes problems with the environment in which a team
operates, or poor decisions made during team set-up, cause the team to experience severe
dysfunction.
A dysfunctional team may experience extremes such as
 an unreasonable amount of conflict

 the inability to focus on the work at hand
 total agreement
 the inability to make good decisions
 an unwillingness to do work
 a conflict with other employees and groups of employees that prevent the team from
completing its work and implementing its decisions
Many factors need to be in place in order for the team to have high performance. The context
in which the team does its work has to be supportive, and the team must be set up to operate
in an effective manner. One kind of context is not always better than another, and one kind of
set-up is not better; instead, they have to be aligned. If that does not happen, teams are likely
to have problems.
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Teams are often offered as the cure to whatever problems an organisation may be
experiencing. But what if the team itself is "ailing" and cannot solve the organisation's
problems? Once a team has developed problems in the way it functions, it is much harder to
solve than if it had been aligned properly in the first place. For example, once one member has
started to dominate a group, others may learn to stop working as hard because they assume
they will not have the chance to affect decisions. This makes it much more difficult to stop the
individual from dominating the group
However, when teams have these kinds of problems they can be fixed with the right
interventions. Team leaders and team members must be able to identify the cause of
performance problems and solve them to ensure that the team is effective. Understanding the
type of problem affecting your team will go a long way toward improving its performance.
Read below for a tip on how to stay focused yet allow for creative digressions during team
meetings.
Staying Focused and Allow for Creative Digressions Using “aside coins”
The members of a team really enjoyed working together. During their meetings, they would
tell stories, make jokes, and generally never get to the work that needed to be done to
accomplish the team's task. When they realised how unproductive their meetings had become,
they found a way to manage the fun – and get the work done.
The team instituted "aside coins". At the beginning of each meeting, the team decided how
many aside coins each team member could use that meeting. Using poker chips as coins, team
members were charged one aside coin every time they digressed from the topic under
discussion. When that happened, the digressing team member would toss one coin, or poker
chip, into the centre of the table.
Team members who used all of their coins were not allowed to digress from the discussion
topic for the remainder of the meeting. If they did, they were charged a monetary fine. Any
team member could label a discussion as an "aside", including the offender.
This approach was a fun way for the team to stay focused on the topic while still allowing for
creative digressions. Eventually, members of the team traded and even bought and sold "aside
coins" from each other.
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5. Effective and Ineffective Teams

Signs of an Effective Team
What are signs of an effective team? Effective teams
 meet their objectives
 stay on schedule
 produce quality work
Within an effective team, team members
 work well together
 think the workload is fairly distributed
 know they are all working toward the same goal
Does that mean team members are always in agreement? No. Contrary to popular opinion,
conflict is not a symptom of an ineffective team. Conflict is a valuable way for a team to
identify and evaluate different ideas, actions, and approaches to achieving its task.
When Good Teams Go Bad
A number of actions, conflict being one of them, can be constructive or destructive to a team's
performance. If conflict is well-managed, it can be a powerful tool for team members to use to
consider a wide range of options available to them. If it is not managed, however, it can tear a
team apart.
The same holds true for process loss. "Process loss" refers to the time a team spends attending
to non-task-related issues, such as developing team norms and relationships, correcting
communication errors, and solving interpersonal problems. Some degree of process loss is
inevitable because running teams takes time. The challenge to the team leader is to determine
if the amount of process loss is acceptable or a result of an unproductive element, such as
conflict.
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Causes of Process Loss
Process loss results from seven common conditions.
 Individual dominance
 Social loafing and "free riding"
 Team procrastination
 Team conflict
 Groupthink
 Minority opinions ignored
 In group/out group
Individual dominance
Individual dominance occurs when one team member speaks much more often, takes on many
more tasks, or has much more influence than others on the team. Although team members'
contributions are not equal all the time, when one team member consistently overshadows
the others, team performance is likely to be negatively affected.
Why do some team members dominate a team? For some, it may be their nature or
personality. For others, however, it may be a vision they have for the team, a personal agenda,
or the belief that they are the only ones who contribute. Sometimes it is intentional, and
sometimes it is not.
As team leader, you can influence dominant team members in a number of ways.
Read below for suggestions on how to do this.

How to Influence Dominant Team Members
As team leader, you can influence dominant team members in a number of ways.
You may
 Provide feedback
You may meet with dominant team members one-on-one to give them feedback and
coach them on how they might temper their contributions.
You could suggest they help others in the team to encourage them to contribute more
or suggest they use their skills to take on an informal leadership role.
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 Conduct process check

You may invite team members to reflect on or change team processes to eliminate this
problem by conducting a process check.
To conduct a process check, you invite team members to examine how the team is
working together, including the members' individual contributions to the team. Are
they balanced? Are team members encouraging each other to contribute? Are team
members helping each other use their membership on the team to develop skills and
advance their knowledge base? Ask team members how they might change their
behaviours or the team's processes to improve effectiveness.
 Change team processes
You may change the process that the team uses if a team member is not able or willing
to stop dominating decisions.
Some decision-making processes, such as brainstorming or open discussion, invite
forceful team members to have more influence. Other decision-making processes, such
as taking turns, delegating decisions to the leader, requesting input in writing, or having
one team member integrate the views of others, can eliminate the excessive influence
of a dominant person.
Social loafing and free riding
Social loafing describes the tendency many people have to exert less effort when working in a
team than they would when working alone. This type of behaviour may occur in any type of
team; however, it typically occurs on larger teams where an individual contribution is more
difficult to identify. "Free riding" occurs when one individual exerts little effort, relying on
others to do the work.
The whole team suffers when team members engage in this type of behaviour. Not only does
the team lose the contributions these team members are capable of making, other team
members must work harder. Either way, the team's performance suffers.
As a team leader, you can minimise this type of behaviour in a number of ways.
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How to Minimise Social Loafing and Free Riding

As a team leader, you can minimise social loafing and free riding of team members in the
following ways:
 Highlight the importance of the team's task.
 Design interesting or specialised activities to engage team members.
 Measure individual performance.
 Form smaller groups within the team so that each person's work is more visible.
Keep in mind that sometimes the members of your team do not participate as much as they
would like. This is not social loafing. Team members may not have the time available to work
on the team's tasks, or they may not have the necessary knowledge or skills.
Team procrastination
Gersick discovered that most teams do not begin to actually work on their tasks until they are
half-way through their available time. Generally, team members are not wasting time on
purpose. They are busy discussing and generating a wide range of possibilities and making
plans that may not be realistic. When they reach this point, teams often realise how little
progress they have made. This is when the team first begins completing the work necessary to
achieve its goal.
The best solution for this common problem is to break the team's task into segments and set
deadlines for completing each one. Awareness of the problem can also help team members
avoid it.
Team conflict
Team conflict can be constructive. It can change perspectives, solve problems and increase the
involvement of team members; however, it can become a problem if it is left unchecked. It can
prevent a resolution from being reached, divert energy from the team's task, demotivate team
members, or cause them to leave the team.
Team conflict can arise from differences between team members in terms of power, values
and attitudes. It tends to arise when resources are scarce, the team situation is ambiguous,
members have different goals and the tasks assigned have some connection – if there is no
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relationship between tasks, there is no reason to disagree. On the other hand, if the tasks are
the same, then the goals are likely to be the same, so there is less reason to quarrel.
As a team leader, you need to identify, discuss and reduce team conflict before it gets out of
control. Symptoms of a team in conflict include indecisiveness, hostility and a lack of team
cohesiveness.
Read below to learn about strategies for managing conflict in teams.

How to Manage Team Conflict
Team conflict has both positive and negative consequences. You need to reduce conflict in
situations where it becomes personalised and disruptive to the team's performance. In some
instances, you can reduce conflict by solving the problems that are causing it. For example, if
two team members are in conflict over resources they both need, you can obtain more
resources or create rules to allocate or share resources. You can focus on the team's goal and
reward team members equally for achieving it.
To avoid the negative consequences of conflict, deal with disputes quickly and openly. Team
conflict usually remains unmanaged because team leaders do not expect conflict, do not
develop plans to address it and do not have the skills to effectively deal with it.
Managing team conflict constructively means
 having direct, open discussions about disagreements
 acknowledging the presence of conflict and normalising it
 acknowledging the importance of the issue being debated
 acknowledging how the conflict affects those involved
 focusing on the issue rather than the team members involved
 identifying and examining the differences in viewpoints
 developing rules of engagement that include active listening
Plan early to deal with conflict. Following are some processes and rules you can establish to
ensure that conflict is healthy instead of harmful.
 Help team members understand the role of conflict in a team.
 Set rules about expressing conflict.
o Keep all disagreements focused on work processes and not on people.
o Maintain a respectful tone and manner when speaking to others.
 Develop procedures for dealing with conflicting views.
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o Take turns presenting arguments.

o Agree to disagree.
o Put items to a vote.
o Consult an expert.
o Let a third person, such as the team leader, decide.
 Offer training in areas crucial to team building, such as facilitation skills, meeting
management, systematic problem solving, decision-making and conflict management.
Minority opinions
When teams ignore minority opinions, team members miss valuable input and marginalise that
team member's point of view.
Ignoring the minority opinion may happen in teams where "majority opinion rules" is a team
norm or in teams that do not value diverse opinions. It also happens on teams where
groupthink prevails.
As a team leader, how do you ensure the minority opinion gets heard?

How to Solicit Minority Opinions
You need to create a norm of listening to minority views which requires changing the way the
team works.
One way to do this is to have one team member solicit and sponsor minority opinions. This
team member's role is to invite team members who do not agree with the majority opinion to
share their views and to ensure that others listen to their perspective.
Other approaches include
 coaching team members who most often hold the minority opinion to help them better
present the minority view
 designing interesting or specialised activities to engage team members
 creating a specific time in team discussions for considering minority opinions
 instituting a decision-making process that does not reveal how many team members
back each position
This could be done by having the team communicate ideas to one team member who
integrates them and presents them to the team, or by using closed or secret ballots rather
than open voting as a way to make decisions.
If your opinion is often the minority on a team, the best way to get your point across or to
change the team's support of minority views is to find allies. The more powerful the allies, the
more help you will receive in getting your ideas considered.
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In group/out group
When team members bond together against external groups, an in group/out group situation
may develop. This may lead to conflict with employees outside the team and an us-versus-
them mentality within the team.
A number of problems may result from this type of situation. The team may begin to perceive
all information that comes from outside the team in a negative light. Team members may
distort outside information or view it as unbelievable. This may lead to the team's work
receiving no support from the rest of the organisation.
Collaborations with employees outside the team will be difficult if not impossible. This type of
situation may result from the closeness of team members or from an external political
situation.
As a team leader you will want to help your team focus on how its task and performance are
connected to the needs of the organisation.

How to Manage in Group/Out Group
To help your team focus on its task and performance and ensure that they are connected to
the needs of the organisation, you can publicise the team's mandate, along with its
performance, within the team and throughout the organisation.
You may want to examine how the team's relationship with the organisation affects its success
and how this behaviour contributes to the situation. Without effective relationships with
others in the company, team members will not receive the information and resources
necessary to perform their tasks and will need clear prediction, rules and agreement, and will
focus on the importance and well-being of the group over individuals. In these cultures, team
members are pressured to conform, group membership is important and the team leader is
viewed with respect and deference.
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Groupthink
"Groupthink" describes a decision-making process that occurs in highly-cohesive teams. With a

groupthink mentality, the team
 has an inflated view of its performance

 accepts consensus prematurely without determining that all team members are in
agreement. In this case, silence is read as approval.
 believes its members are morally superior, so there is no need to debate important issues
 underestimates its competitors by failing to critically examine them, their motives and their
capabilities
 fears disturbing consensus, so team members do not raise concerns
 protects itself from bad news
 coerces members who raise concerns into agreeing with the others
Groupthink commonly occurs in teams where the members have strongly bonded, are adverse
to conflict, have common backgrounds, have a strong leader and find it difficult to express
dissenting views. Some team members may find groupthink to be very appealing – there is
little overt conflict, team members appear to get along and the team seems to make good
progress.
As a team leader, if you think your team is experiencing groupthink, how do you involve your
team to adopt different perspectives?
How to Avoid Groupthink

As a team leader, if you think your team is experiencing groupthink, give team members
feedback on their behaviours and help them broaden their discussion. Consider inviting
stakeholders or employees with different viewpoints to advise the team. You may even want to
raise contradictory issues or offer minority opinions yourself.
Some teams deliberately adopt different perspectives when evaluating a problem. Members
are asked to evaluate a situation in terms of opportunity, growth potential, problem potential,
and resource constraints. Team members will raise objections, consider various outcome
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Teams
possibilities, and voice different points of view so that a problem is fully examined from all
positive and negative angles. In any group, some members will find looking for the positives
easier, while other team members will find looking for the negatives to be easier.
The key is to involve all team members in looking at problems from multiple perspectives.
5. Summary
 As teams form an important part of many business organisations, it is important for

managers to learn how to run teams effectively.
 The four aspects of team set-up that can influence team performance are the way tasks are
defined, the team member's skills, the formal rules and structures as well as the informal
norms and expectations in the team. The factors to consider when setting up an effective
team are task, people, formal organisation and informal organisation.
 Team leaders and members must be able to identify performance problems in order to
prevent team dysfunction.
 Process loss refers to the time a team spends on issues not relating to tasks and are caused
by individual dominance, social loafing, team procrastination, team conflict, groupthink,
neglect of minority opinions as well as in group/out group conflict. For each of these
causes, managers should learn ways and approaches in combating such problems in order
to build effective teams.
6. References
 Fischetti, M. "Team Doctors, Report to ER," FastCompany, February:March, 1998.
http://fastcompany.com/online/13/sickteams.html (accessed 28 January 2003).
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Topic: Team Performance
Team Performance
Table of Contents
1. Judging Team Success ........................................................................................................................ 4

2. Organisational Context ...................................................................................................................... 5
3. Four Factors of Context...................................................................................................................... 6
4. Analysing and Solving Team Problems............................................................................................. 17
5. Solving Team Performance Problems .............................................................................................. 20
6. Summary .......................................................................................................................................... 22
7. Glossary ............................................................................................................................................ 22
8. References ........................................................................................................................................ 23
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Team Performance
Introduction
How do you decide if a team is successful? What makes effective and ineffective teams? In this
topic, you will learn about the environmental factors necessary to create high-performing
teams; you will also learn how to solve team problems by analysing contextual factors.
Learning Objectives
 describe the three measures of team performance

 explain how the four factors of organisational context affect team performance
 describe the four-step approach to solving team performance problems.
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Team Performance
1. Judging Team Success
Fig.1: Judging team success
The success of a team can be measured in three ways: task completion, individual
contributions and team member commitment. Depending on your perspective – a team
leader, team member or executive sponsor – you may emphasise one area more than another
when measuring a team's success.
Read below to learn more about each area of measurement.

Measuring the Success of a Team
 Task completion
Most teams are created to address a specific task, solve a problem, or deliver a product or
service. When the success of a team is measured by task completion, consider both the quality
of the work and the timeliness of the work.
 Individual contribution
To perform effectively, individuals need to make strong contributions to the team. If some
team members do not produce as much work as others, or their work does not effectively
further the team's success, the team is using the time of its members inefficiently. Successful
and efficient teams maintain team member motivation by making sure that individuals
contribute their best.
 Team member commitment
The team's survival is also a measure of its success. Keeping team members committed to the
team's task is an important factor contributing to the team's performance. This is especially
true during team development when turmoil is a natural phenomenon. Successful teams, with
committed team members, can continue to attract new members and support.
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Team Performance
You will want to keep these measures in mind as you learn how to diagnose and solve team
problems. In the end, your efforts to lead, participate and work with teams will be judged by
these three criteria.
2. Organisational Context
Various factors enable teams to succeed. These factors should be considered when
establishing a team and when analysing the success or failure of a team after the fact. These
factors can be grouped into three categories: context, set-up and operations. All three
contribute to a team's success.
 Context describes the team's environment – an environment that may or may not support
the team.
 Set-up describes how the team leader adapts to the team's context and establishes
effective processes.
 Operations describes how the team functions, which must be monitored and changed if
you identify team performance problems.
Reflection-Organisational Context
Consider this scenario: you lead a team of stellar performers, yet nothing seems to get done.
You need four departments to work together to address a quality issue, yet they cannot seem
to fix the problem. Your design approval process takes too long to complete, yet those involved
cannot seem to streamline it. What can you do to get more from your teams?
To perform well, effective teams require more than proper set-up, more than productive team
members, and more than the ability to work well together. None of this, in fact, guarantees
team success. The best team will fail if it is operating in a context that does not support it.
Organisational context refers to the conditions, or environment, in which a team operates.

Context factors affect how the team operates, how it accomplishes its tasks, what happens
once it completes its job and, ultimately, its success or failure.
Although it is difficult for team members to change the context in which the team operates,
being aware of the context and influencing it when possible will help the team avoid problems
it may encounter as it strives to achieve its goal. Those who create teams should be aware of
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Team Performance
how the context will affect teams, establish teams in a supportive context such as assigning
members, tasks and positions, and then provide resources for the team carefully.
3. Four Factors of Context

As introduced in the topic “Teams”, context includes four factors.
 "Task" or "mandate" describes the team's project.
 "People" describes those assigned to the team.
 "Formal organisation" describes the way the team fits into the company's formal
structure and any formal guidelines describing how the team will work.
 "Informal organisation" describes the way the team fits into the company's culture and
political structure.
These four factors play a significant role in how well or how badly a team performs. For
instance, the team may
 be assigned work that is more efficiently performed by an individual
 include the wrong mix of personnel
 lack the necessary resources, e.g., time, money, information
 work in a type of corporate culture that discourages taking time away from day-to-
day responsibilities to devote to team responsibilities
Team leaders and members must be able to identify problems caused by the context and solve
them to ensure their team's work leads to a positive outcome.
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Team Performance
Fig.2: Four Factors of Context
When you think of your team's context, picture your team as a circle within a circle. The outer
circle influences everything about the team's context. Knowing how that outer circle will affect
your team is key to your team's success.
Read the text below for an overview of team context and how it relates to the team context
wheel.
Team Context Wheel
Picture a team as a circle within a circle. Every action the team makes is influenced by the
outer circle, the team's context. Knowing how that outer circle affects the team is key to the
team's success.
Task: The task describes the team's overall assignment, or objective. Tasks are assigned to the
team before it begins, so they are a part of its context. It is important to acknowledge the
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Team Performance
contextual elements in the assigned tasks. Some tasks lend themselves to the team approach
and some do not. For example, a task that can easily be addressed by an individual, or a task
that needs immediate action, should not be assigned to a team.
People: Teams are usually assigned specific members when they are created. Team members
are appointed to the team before it begins, so they are also part of its context. A careful
analysis of the team task should reveal what kinds of team members a task requires. Also, the
company must have the human resources available to meet the needs of the team.
Formal Organisation: Formal organisation describes the formal support the team receives from
the company and includes the support from upper management and the allocation of
resources. It also includes the team's location within the organisational structure, and any
policies, roles, responsibilities, and rewards established for the team.
Informal Organisation: The informal organisation in which a team operates refers to the
company's political and cultural environment. There are aspects of the organisational culture
that affect team performance, such as whether the culture favours collective or individual
efforts. It is often difficult for teams to deal with the informal organisation of a company,
because the issues operating below the surface are often hard to identify.
Tasks
Teams usually form in an attempt to accomplish specific goals. Remember that a defining
characteristic of a team is mutual accountability for common goals. Certain tasks are ideal for a
team approach. For example, teams often lead re-engineering efforts in which they analyse
existing structures and strategically realign them to improve efficiency and cut costs. Working
with a team is an effective way to launch new products, respond to a crisis, monitor and
improve quality and set policies.
Teams are especially suited for complex tasks that require
 multiple types of expertise and sources of information such as cross-functional projects

and highly-technical projects
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Team Performance
 acceptance from employees throughout the organisation which can be obtained by

team members from different functional areas
 mutual interaction to accomplish a goal, as opposed to independent work to achieve a

goal, e.g., surgery with a surgical team as opposed to assembly on an assembly line
However, tasks that one person can easily do or tasks that require immediate action should be
assigned to an individual. Teams generally perform better when a task is well defined and
clearly stated.
Read below for more information about defining tasks.

Are Most Teams Given a Clearly-Defined Task?
Teams responding to international disasters, such as hurricanes or earthquakes, have clear
goals and marshal their resources to aid victims as quickly as possible. However, all tasks are
not that easily defined.
Many teams have a much more ambiguous goal because they are dealing with complex issues
or are operating in highly political situations. For example, teams formed after a merger,
acquisition or downsizing often have both stated and unstated goals. In this kind of politically
charged context, it is often not clear what hidden agendas may be in place, if the team's task is
to make decisions, or if the team was formed to give advice.
Click the link below for more information about team members and diversity.
Can a Team Be Too Diverse?

Research shows that diverse and homogeneous teams may be better suited to different kinds
of tasks. Moran and Riesenberger (1994) state that, "Diverse groups are better suited for
specialised tasks, whereas homogeneous groups are better suited for routine repetitive tasks".
Many other researchers have found that culturally diverse teams can produce higher-quality
decisions and more creative work than teams whose members are similar.
Cross-functional teams usually represent a range of different perspectives and skills that can
be brought to the task. In a manufacturing company, employees from sales, finance, research
and development, production, and customer service often differ in their perspectives.
Integrating these views when reviewing the product development process or deciding whether
to enter into a new market helps identify a range of issues up front. In today's increasingly
global market, teams should reflect functional and multicultural diversity.
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Team Performance
References
Moran, R.T. and J.R. Riesenberger. The Global Challenge: Building the New Worldwide
Enterprise. London: McGraw-Hill Ltd., 1994.
People
Teams are usually assigned specific members when they are created. Members are often
appointed to the team before it begins, so this is a part of the team's context. It is important,
though often difficult, to find the right mix of employees to accomplish the team's task.
Read below to learn about the important considerations when assigning members to a team.
Assigning Members to a Team

 Determining skills and resources
The first consideration in assigning employees to a team is getting the right mix of knowledge,
skills, abilities and personal networks necessary for the team to function effectively. A careful
analysis of the task should reveal what kinds of team members a task requires. Keep in mind
that if a team does not have a clearly-defined task, this is much more difficult. The team must
also have team members with different kinds of strengths who can dedicate enough time to
the task to complete all aspects successfully. This means that the company must have the
human resources available to meet the needs of the team. If the right employees are not
available, it may be necessary to draw from external resources.
 Creating the right size team
A second consideration is the size of the team. How many members should be assigned? The
team needs enough members to be able to complete the task in a reasonable amount of time,
but not too many or it will become cumbersome. Large teams are difficult to co-ordinate, work
with, or facilitate, and are more prone to conflict, disorganisation, low motivation and
inefficient operations.
 Balancing diversity with complementary skills
A third factor in assigning team members is the mix of people in terms of demographics,
interactive styles and expectations. Successful teams often include diverse members with
complementary skills. In a diverse team, however, members may have different expectations
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Team Performance
and interactive styles which could lead to conflict. Another potential problem with team
membership occurs when employees involved in a political struggle are assigned to the same
team. If the team is assigned too many members, too few members or the wrong mix of
members, you as team leader, must address the problem.
Read below for more information on team size.
Can a Team Be Too Big to Function Effectively?

Although team size may vary depending on the team's purpose or goals, optimum team size
seems to be less than 10 – you can use seven as a general guideline (Katzenback and Smith,
1993). Smaller teams are more likely to agree on a plan of action and work through any
conflicts. They also seem to find it easier to agree on a meeting time and location. Many times,
large teams will break into sub teams to do much of the work because it is easier.
Formal Organisation
The formal organisation refers to the company's structure and policies.
One aspect of organisational structure addresses how the team fits within the company. For
example, does the team exist within one division, or is it cross-functional? Another aspect of
organisational structure describes the managerial level and political power of the team leader,
team members, and the individual who created the team.
The effectiveness of the team is affected by the context in which it exists within the
organisation’s structure and the policies that support it.
Read below to learn about how teams may exist within the three types of organisational
structure.
Types of Organisational Structure
 Cross-functional organisation If the organisational structure is cross-functional, is the team
expected to link the divisions as well as accomplish its assigned task? Teams can serve as
the communication link between divisions, but this requires a great deal of interaction
among team members, a strong culture within the team, and additional time. This role
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Team Performance
proves effective only if the task involves extensive interaction among team members. In
this type of organisation, where cross-functional teams link divisions, the company's
organisational structure may appear as follows:
A team's ability to make changes or develop credible solutions for problems is closely linked to
the position of its leader, members and creator within the organisation. A team sponsored by a
manager with enough power to initiate action has more options available to it, and is more
likely to have its recommendations implemented than a team without that type of sponsor.
The same can be said for the team leader and team members. This is particularly true when
the recommendations involve changes in the organisation.
 Team-based organisation
Some organisations are structured around teams and rely on self-directed or self-managed
work teams to accomplish the tasks traditionally delegated through a departmental structure.
In this type of organisation, the autonomous cross-functional units are less hierarchical in
nature than in more traditional corporate structures. This type of company's organisational
structure may appear as follows:
This company has the same divisions and number of employees as a traditionally structured
company, such as the one illustrated by the department-based organisational chart that
follows (except with fewer levels).
Department-based organisation
Traditional, division-based organisations may have many more levels and more or fewer
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Team Performance
subordinates at each level than illustrated by the following organisational chart. This structure,
or one like it, exists under all division directors.
Within the framework of a company's policies, teams are created to play a specific role and
achieve specific goals. The team's role and goals need to be clearly communicated throughout
the organisation so all employees understand the team's purpose and so resources are made
available as needed. Otherwise, others in the organisation may resist or refuse to support the
team. The team must be formally assigned enough resources, such as time, budget,
information, tools and equipment – to perform well in a reasonable amount of time. The team
must also be able to get more resources, if needed. If teams are assigned powerful team
members, they are more likely to be able to acquire resources as needed. Many teams fail
because they lack the support and resources they need to perform their task. Over time, they
lose their momentum. Another policy issue is authority. A team must be assigned the authority
to make the decisions needed to fulfil its role and achieve its goals.
To support effective teams, a reward system must encourage, or at least not discourage,
teamwork. Recent research suggests that team-based rewards support the interdependence of
team members and promote a more cohesive working environment than individual rewards or
recognition. If the formal organisational context of a team is not supportive, then you must
adjust or make changes, or your team cannot succeed.
Read below to find out what you can do if the formal organisation does not support the team.
If the formal organisation does not support the team
What can you do if the formal organisation does not support the team?
Depending on what type of support is lacking, you can
 request more resources from the team's creator if the team does not have enough
time, budget, members, tools or information
 add more powerful team sponsors or members if a team does not have the support
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Team Performance
necessary to get resources

 clarify the team's goals, or mandate, or ask the team's sponsor to clarify it with the rest
of the organisation
 convince the team's creator to change the team's task or expand the amount of time
the team has to achieve its goals, if the team is also the link between departments
 ensure team processes involve interaction if the team is also the link between
departments
 request formal decision-making authority in areas where it is needed
 use the networks of the team sponsor, leader or members to obtain resources, or
promote support for the decisions made by the team
Team Context Affects Team Set-up
A team usually has little control over the context in which it operates. Since context affects
how the team operates and whether it succeeds or fails, what can a team do to work
effectively?
Though context cannot be controlled, the team does have control over its set-up. The four
context factors: task, people, formal organisation and informal organisation, in which a team
operates affect the way the team leader sets up the team's operation. Knowing how to use the
team set-up and changing elements to make the most of the team context to improve the
team's performance will help your team succeed.
Read below to learn how each context affects team set-up.

Impact of Context on Team Set-Up
 Task
The task assigned to the team affects decisions about how to use team members as well as
how to segment the task in to achievable goals. If the task assigned is ambiguous or overly
broad, the team needs to clarify it before assigning work to team members. If the task is
complex, the team needs to break it down into discrete units before proceeding.
 People
The composition of the team will influence how the team approaches its work. If team
members lack interpersonal skills, are from opposing factions within the organisation, or are
from different cultures, team building may be an integral part of team set-up. If team members
have diverse backgrounds and expectations, it may be better to use a structured process for
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Team Performance
generating ideas and making decisions to ensure everyone is heard, including minority
opinions.
 Formal organisation
Management's support and resource allocation affect how the team approaches its task. With
management's support, team members can dedicate more time to the team and accomplish
more than would otherwise be possible. With adequate resources, the team can focus on the
task, not on how to get by with less than adequate support. Before beginning team set-up, it
may be better to ensure your team has management's support and adequate resources. The
team's location in the formal structure of the organisation affects the processes the team
should use. If the team is the link between different divisions, then the team needs to
approach its work in an interactive manner so team members get to know, trust and share
information with each other.
 Informal organisation
The cultural and political environment in which the team operates influences team
assignments, the rules and roles developed by the team, and the expectations the team has
about its success. Depending on the corporate culture, team set-up must address issues, such
as how team members are rewarded, how tasks are assigned, how the team's
accomplishments and needs are evaluated and how performance expectations are addressed.
The team is created within a context that team leaders and team members cannot control.
They can influence it, however, in two ways – by addressing context issues as they arise and by
setting up the team in a way that is suited to the team's corporate context.
Exercise-Four Factors of Context
The following exercise is designed to help you identify context factors in a company setting. In
this exercise, Point-E manufactures handheld computer devices and accessories. Because the
company has recently lost market share, senior management has decided it needs a fresh
approach to product development. Because innovative features are critical to successfully
competing in this market, senior management has decided to use a team approach to
determine what new features to include in its next big product. To that end, management has
formed a cross-functional team and has given the team the task of identifying what product
features to include.
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Team Performance
Exercise: Target Context Game
Instructions
In this exercise, you will read about a new product development team at a high-tech company.
As you read the scenario, try to determine which context factors are influencing this team.
This exercise is meant to help you diagnose which areas of context you tend to focus on and
which you tend to think about less. There is some interpretation in any answer, so some
people may believe that one particular fact reflects a "task" issues, whereas others may believe
that it reflects a "formal organisation" issue. You may interpret facts by focusing on the aspects
of context that are already familiar to you. You may be less knowledgeable about or attentive
to some aspects of context. This tool will help you identify those areas.
The scenario is described below. Identify the sentences you believe are context factors.
Scenario
To date, management has assigned more than 40 employees to this team. Of the 40, 32 come
from the marketing department. Senior management did not designate a formal leader. Senior
management also did not identify to whom the team should report, nor how the team's work
will be evaluated. In the past, Point-E has emphasised individual performance, recognising and
rewarding individual efforts while allowing collaborative efforts to usually fall apart.
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Team Performance
At its first meeting, because no one volunteered, the team took a vote and named Lucy and
Max co-team leaders, responsible for conducting all team meetings. Today, the team begins its
fourth meeting.
As usual, Lucy and Max look to each other to decide where to begin, something they've done
at the previous three meetings. Because this requires some discussion, the meetings never
start on time. At least five people come in late, also typical, and three or four team members
will undoubtedly leave before the meeting ends. It doesn't help that the team meets in a
different location every time, but it has been hard to find a room large enough to
accommodate the team, especially on short notice. As usual, Lucy and Max forget to ask
someone to take notes, and no one volunteers. In fact, few team members volunteer anything
or even appear interested in contributing to the team's task of making product design
recommendations. Of course, one team member, Robert, may be partly responsible. Robert is
the director of the new product development department. Point-E employees, both on and off
the team, are wary of expressing opinions that differ from those of Robert because he has
been known to block promotions and make life difficult for those who disagree with him. If
anyone does volunteer a comment, it usually requires calling Jack in manufacturing or Liz in
research and development for more information or some clarification.
Privately, many team members wonder if the team is even necessary. Most of the work is
being done by two team members. Although senior management created the team with the
express purpose of identifying new product features, everyone knows that the real decisions
will continue to be made by management.
The four elements of team context: people, task, formal organisation and informal
organisation, all play a role in the effectiveness of any team. Too often, a team or a company
will focus on one aspect and ignore the effect the others might be having on a team. Keeping
all four aspects in mind will help you, as a team member and a team leader, get the most from
your team and the most out of your team experience.
4. Analysing and Solving Team Problems

Team leaders and members must be able to identify problems caused by the context, and
solve them, to ensure their team's work leads to a positive outcome. Solving problems and
improving a team's performance is easier once you consider the contextual, set-up and
operational factors that make a team a success. In thinking through context issues, it is critical
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Team Performance
to consider the complexities of the team environment, formal and informal, as well within the
team and within the organisation. If you do not consider all the possible causes of team
problems, you may not be able to create fully effective teams. There are so many factors that
affect teams that it is often confusing for team leaders and members to figure out how to
resolve problems.
When team leaders and team members do not take the time to go through a detailed
problem-solving process, they run the risk of reaching the wrong conclusions. This could lead
to a solution that addresses symptoms of the problem rather than the root causes of the
problem, or solutions that have unforeseen consequences. It is appropriate to learn something
about applying a systematic problem-solving process to team performance problems in this
topic.
Using the following process, team leaders and team members can identify a team performance
problem, identify its causes, and identify ways in which to solve it. Implementing the change
required to resolve the problem may involve thoughtful discussion with the team, the
executive sponsors, and potentially, other employees and support staff.
Read below to learn more about the steps to solving team problems.
A Process on Solving Team Problems

 Step 1: Identify performance gaps - compare present performance to desired goal
To identify a performance problem, compare what the team is actually accomplishing to what it
is supposed to accomplish.
For example, suppose you are the team leader of your company's quality improvement team.
You notice that the team addresses some quality issues some of the time, but not all and
certainly not on a regular basis. That is the team's performance gap – the difference between
expectations and actuality. If this occurs from time to time, it may not be a problem. But if it
occurs regularly, it indicates a performance gap.
Most performance gaps reflect outcomes that are lower than expectations; deadlines are
missed, projects contain errors, or products do not meet specifications. Sometimes, however,
teams perform exactly as expected, but the team's goals are too low. This type of performance
problem is called an "opportunity gap". The team could create work that is higher quality, more
effective, or more efficient than what is expected of it. Once you have identified the
performance or opportunity gap, you can proceed to the next step, which is analysing the cause.
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Team Performance
 Step 2: Analyse the factors that could be causing the problem

When analysing the factors that could be causing a performance problem, consider
 the context in which the team exists – the people and task assigned to the team, and the
team's location in the formal and informal organisation.
 the way the team was set up, the way the tasks are divided among team members, the
way individual work is integrated, and the formal and informal organisation within the
team itself.
 how the team operates – any processes that do not function effectively.
Without considering all factors, you may incorrectly conclude, for example, that a team
experiencing people problems must have unmotivated team members. The fact may be that
team members are doing their best, but the problems you are seeing result from other factors,
such as the task, the composition of the team, the interdependency between the team and the
organisation, the team set-up, or how the team operates.
To help identify the cause, ask the following questions about context, set-up and operation of
the team.
• Context of the team. Does this task warrant a team approach? Is the team composed of
employees with the right knowledge, skills and perspectives to perform this task? Do
team members understand the team mandate? Do others in the company understand it
as well? Has the team been given enough time, money, information, support and other
resources to perform well? Does the organisation's culture support the team approach?
• Setup of the team. What kinds of norms and values were put into place when the team
was set up? How was the task divided and assigned to team members? What kinds of
roles and processes were established when the team was set up? How are the
knowledge, skills and connections of team members being used?
• Operation of the team. Does the team operate efficiently and without excessive conflict?
Is the team limited by too much consensus? Are all team members contributing?
 Step 3: Consider the options to solve the problem
After you have analysed the causes of the problem, consider the options available to solving it.
For example, if the team's performance problem is caused by inadequate access to information
and resources, the team leader may clarify the team's mandate with the rest of the organisation
so their requests for information are honoured. Or, if the team's performance problem involves
a lack of participation by certain team members, the team leader may improve team discussions
by developing ground rules for meetings for the team to follow. Once the performance problem
has been identified, there are several ways the problem can be addressed.
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Team Performance
 Step 4: Identify the changes that will increase performance

Some changes may be harder than others to implement, and identifying which changes will
increase team performance is easier than implementing the changes. For example, a team
leader might address a performance problem by promoting the discussion of different opinions.
The resulting conflict, however, may be difficult to effectively manage.
Read below about the international considerations in solving team problems.
The different personalities, interests and work styles among the members of any team present
a challenge for team members and managers alike. When the international environment is the
team's setting and cultural differences come into play, the challenges intensify. Add different
cultural values and norms to different personalities, interests and work styles, and teamwork
becomes even harder to achieve. Being aware of some of the challenges associated with
cultural differences will help you be able to understand and address them.
Read below to learn about some of these challenges.
International Considerations
The different personalities, interests and work styles among the members of any team present
a challenge for team members and managers alike. When the international environment is the
team's setting and cultural differences come into play, the challenges intensify. Add different
cultural values and norms to different personalities, interests and work styles, and teamwork
becomes even harder to achieve. Being aware of some of the challenges associated with
cultural differences will help you be able to understand and address them. Click the tabs to
learn about some of these challenges.
Cross-cultural teams
In a global economy, teams are often composed of members from different cultures. Trying to
make these cross-cultural teams work is not always easy. One thing managers can do to help
these teams succeed is to select members who are homogeneous in ability but diverse in
cultural background. This can help facilitate communication between team members who have
a broad set of viewpoints.
5. Solving Team Performance Problems
Performance problems come in many forms and can be addressed in many ways. As a team
leader, you may have to address a performance issue. Before deciding how you will address a
particular performance problem, you will want to identify the potential ramifications of your
decision. This will help you determine the best, though not perfect, way to improve the
20
Team Performance
situation. Failing to consider the consequences of your decision may leave you with more of a
problem, not less.
The following exercise allows you to practice solving performance problems.
Exercise-Solving Team Performance Problems
In the following exercises, you will read about two teams experiencing a number of
performance problems. As you address one problem, you will see the effect that decision has
on the members of the team. With each decision, you can increase or decrease the team's
performance.
You are not required to complete both exercises, but you may find it helpful to do so.
Complete at least one of the two exercises before proceeding to the assessment.
Exercise: Trillonium Publishing
In this exercise, you will assist a team manager in making decisions about how to manage a
team through a series of four situational rounds. You will be able to monitor how each
decision affects each team member's quantity of work, quality of work, and conflict
behaviour. In each situation, you may perform as many actions as you want or none at all.
Your goal is to make good decisions so that the team will make progress towards its goal,
which is also monitored. As the exercise progresses, you may encounter special situations
that are triggered when certain conditions are met. For example, if a certain team member's
performance becomes particularly bad, a special situation will ask you what should be done to
help that team member.
Exercise: Ostrander Toys

In this exercise, you will assist a team manager in making decisions about how to manage a
team through a series of four situational rounds. You will be able to monitor how each decision
affects each team member's quantity of work, quality of work, and conflict behaviour. In each
situation, you may perform as many actions as you want, or none at all. Your goal is to make
good decisions so that the team will make progress towards its goal, which is also monitored.
As the exercise progresses, you may encounter special situations that are triggered when
certain conditions are met. For example, if a certain team member's performance becomes
particularly bad, a special situation will ask you what should be done to help that team
member.
21
Team Performance
6. Summary
 The success of a team can be measured in three ways: task completion, individual
contributions and team member commitment.
 In the organisational context, factors such as context, set-up and operations are
important for team performance. Teams perform better when a task is clearly stated,
when there is careful selection of people in the team with the right mix of skills and
when the formal and informal organisation supports the team.
 There are four steps in analysing and solving team problems: compare present
performance to desired goal, analyse factors that could be causing the problem,
consider options to solve the problem and to identify the changes that will increase
performance.
7. Glossary
context
The conditions, or environment, in which a team operates. Context
factors include task, people, formal organisation and informal
organisation. Context factors affect how the team works, how it
performs, what happens once it completes its job and, ultimately, its
success or failure.
set-up The first actions taken by team leaders or members to start a team
operating.
Operations How a team functions.
Cross-functional A team that is cross-functional is composed of members from a number
of different departments within an organisation. For example, a cross-
functional team may include members from marketing, operations,
finance and legal departments.
Culture The expectations, norms and values shared by members of an
organisation or a team.
22
Team Performance
Norms Informal rules and expectations established by teams or organisations to

regulate the behaviour of members.
8. References
 Ancona, D. and D. Caldwell. "Compose Teams to Assure Successful Boundary Activity."
In The Blackwell Handbook of Organizational Behavior, edited by Edwin A. Locke, 199-
210. Oxford, UK: Blackwell Publishers Ltd, 2000.
23
Segment: Work Structure and Design
Topic: Organizational Structure
Organizational Structure
Table of Contents
1. Organisational Structure ................................................................................................................. 4

2. Generic and Specific Forms of Organisational Design ..................................................................... 5
3. Contingency Factors in Organisational Design .............................................................................. 10
4. Groupings ...................................................................................................................................... 16
5. Linkages ......................................................................................................................................... 21
6. Summary ....................................................................................................................................... 23
7. Glossary ......................................................................................................................................... 24
8. References..................................................................................................................................... 24
2
Introduction
As a leader, you will have to influence organisational design throughout your career. As a junior
manager, you will influence the structure of your section or department. You may also serve
on a working party advising upper management about re-organisations. As a consultant, you
will advise various client organisations on their most appropriate structure, perhaps as part of
implementing their strategy. As a divisional general manager, you will shape the structure of
your division. And as a CEO, you will choose the overall design of the whole organisation.
What role does an organisation's structure play in meeting its goals and objectives? Why are
there so many different types of structures? Is there an optimal structure for any organisation?
What kinds of problems can arise when organisations do not have the "right" structure? What
makes up an organisation's structure? How can managers ensure that their organisation's
structure is contributing to the organisation's goals?
In this topic, we will begin by introducing the basic elements of organisational structure. We
will also analyse the various forms and groupings of organisational structure, and the
contingency factors that affect organisational design.
Learning Objectives
 describe the four basic elements of organisational structure

 distinguish between the generic and specific forms of organisational design and the two
models that are derived from them
 explain the contingency theory of organisational change
 describe the two kinds of groupings in organisational structure
 describe the use of linkage mechanisms to effectively integrate groups.
3
1. Organisational Structure
Before you continue, read below about organisational structure.
Organisational Structure
Organisational structure is the framework that supports the work of an organisation. The
organisation's goals and objectives are used to design the organisation's structure. The basic
elements of an organisation's structure are span of control, centralisation, formalisation and
departmentalisation. Span of control is the number of people reporting to a position in the
organisation. Centralisation refers to where in the organisation decisions are made. In a
highly centralised organisation, decisions are made at the top of the hierarchy. Formalisation
is the degree to which an organisation standardises its procedures. A highly formalised
organisation is sometimes referred to as being bureaucratic. Departmentalisation is the way
employees and their activities are grouped within an organisation.
As you saw above, centralisation refers to the level at which decisions are made in the
organisation. In a highly centralised organisation, decisions are made by a small group of
people, usually at the top of the organisational hierarchy. This type of decision-making
structure allows leadership to hold greater control over decisions, which ensures consistency.
However, this structure can also decrease the speed with which decisions are made. Many
companies with highly centralised structures are slow to respond to threats, concerns and
problems.
In a decentralised structure, decisions are made throughout the organisation. For example, a
department store famous for its customer service allows clerks to decide, without consulting
supervisors, whether or not a customer can return an item. This type of decision-making
structure allows for quicker decisions that consider the specific context of the problem. This is
an effective structure for companies in complex and rapidly changing industries. However, a
decentralised structure can lead to less consistency and less managerial control over important
decisions.
4
Fig.1: Putting organisational designs into one model
So many different forms and labels can make them seem bewildering, but actually they can all
be brought together into one, coherent model of organisational design. As discussed above,
fundamental differences in organisational design are their degrees of centralisation,
formalisation and departmentation.
2. Generic and Specific Forms of Organisational Design

Generic forms of organisational design: Mechanistic and Organic
Mechanistic organisational designs are centralised and formalised, whereas organic

organisational designs are decentralised and low on formalisation.
 Mechanistic: In routine operations, there is certainty about how to do the tasks and so they
can be pre-programmed through central directives (centralisation) and rules and standard
operating procedures (formalisation), so the mechanistic design allows high efficiency to be
attained.
 Organic: In contrast, in non-routine operations, there is task uncertainty, so they cannot be
pre-programmed and instead must be dealt with through lower-level personnel (often
technically qualified) using their initiative (decentralisation), free of rules and standard
operating procedures (low formalisation), so the organic design allows innovation to be
attained.
5
Table1: Aspects of mechanistic and organic designs
Read below to learn more about each aspect of the mechanistic and organic designs.
6
Mechanistic and Organic Forms of Organisational Designs

 Role
Mechanistic: A tight role is one where the employee is given a detailed job description he or
she must follow or where his or her supervisor gives detailed instructions.
Organic: A broad role is left more up to the initiative and discretion of the employee.
 Role definition
Mechanistic: A hierarchically defined role is where the employee is told what to do by his or
her superiors above him or her in the hierarchy.
Organic: A jointly defined role means that the employee decides what he or she will do by
discussing it with their peers (employees at the same hierarchical level).
 Communication
Mechanistic: Vertical communication means communicating to superiors or subordinates.
Organic: Horizontal communication means communicating with peers.
 Knowledge
Mechanistic: Knowledge is at the top when the knowledge needed to do the job is
concentrated in the senior managers and absent among middle managers and other
employees at lower hierarchical levels.
Organic: Knowledge is diffused when the knowledge needed to do the job is possessed by
middle managers and other employees at lower hierarchical levels.
 Style
Mechanistic: A command style means that managers and supervisors give orders and
instructions to their subordinates.
Organic: A consultation style means that managers and supervisors seek the views of their
subordinates before making decisions.
 Participation
Mechanistic: Small participation means there are few issues that subordinates influence.
Organic: Great participation means there are many issues that subordinates influence.
Read below about mechanistic and organic organisational designs.

Organisational Design
Mechanistic organisations are centralised, formal structures that function on set tasks that are
pre-programmed through central directives, rules and standard operating procedures. In
comparison, organic organisations are decentralised, informal structures that perform diverse
tasks that cannot be pre-programmed. These tasks are dealt with through lower level, but
7
generally technically qualified, personnel who use their initiative, unhindered by rules and
standard operating procedures.
Six aspects differentiate each model: role, role definition, communication, knowledge, style
and participation.
Mechanistic organisations outline tight roles or job descriptions for all employees. They adhere
to these descriptions except when a supervisor delegates other task. On the other hand,
organic organisations have broad roles that encourage employees to use their initiative and
discretion while performing tasks.
A hierarchically defined role is where the employee is told what to do by his or her superiors. A
jointly defined role means that the employee decides what he or she will do by discussing it
with peers.
By their nature, communication in mechanistic organisations is vertical, from senior

management to supervisors to subordinates. However, communication in organic
organisations involves interaction between peers on a horizontal basis. Typically, mechanistic
organisations hold knowledge at the top of the organisation, in its senior positions. This can
prevent middle management or employees at other hierarchical levels from knowing
important information. Generally, organic organisations diffuse knowledge throughout the
entire workforce.
Mechanistic organisations use a command style in which supervisors delegate tasks to their
subordinates. Organic organisations consult with their employees whereby everything is
discussed and decided mutually before employees proceed with their tasks.
The mechanistic structure limits the participation of employees at all levels. Employee input is
small because decisions are made centrally at a high level. The organic structure encourages
greater employee participation, and there are many issues that subordinates influence.
Each organisational design fits a particular level of task uncertainty. Where task uncertainty is
low, a mechanistic structure produces the most efficiency. Where task uncertainty is high,
because the work entails solving novel problems, an organic structure produces the most
innovation.
8
Integrating the generic and specific forms of organisational design

The generic (mechanistic-organic and defender-prospector) and specific (functional-divisional)
forms of organisational design can be brought together into one coherent model. The
organisational design can be of the following two models:
 Defender-Mechanistic-Functional
 Prospector-Organic-Divisional
Read below to learn more about the two models of organisational design.
Integrated Models of the Generic and Specific Forms of Organisational Design
 Defender-Mechanistic-Functional
The defender faces a stable environment and recurrently produces a fixed range of products or
services. Therefore, its operations are routine, and a mechanistic design is used. The defender
is seeking to lower its costs, either in reaction to price competition or to obtain the advantages
of being a low-cost competitor. Thus, the efficiency gains of the mechanistic design suit its cost
strategy. The defender also has a particular type of departmentation (i.e., a specific form of
organisational design). The major organisational sub-units tend towards functions, such as
manufacturing or sales. The functional structure fits the low level of diversification of the
defender. Moreover, the functions centralise control so that standardisation can be imposed,
which assists tight cost control. For example, a central purchasing function can negotiate with
suppliers on behalf of the whole company.
 Prospector-Organic-Divisional
The prospector faces an unstable environment and is constantly trying to create new products
or services. Therefore, its operations are non-routine and an organic design is used. The
prospector also has a particular type of departmentation. The major organisational sub-units
tend towards divisions, such as a division for each product. The divisional structure fits the high
level of diversification that results from the constant extension into new product-markets of
the prospector. Each division has a complete set of operating functions (e.g., research and
development, manufacturing and sales), which allow it to design-make-sell the product as a
self-contained organisation. This facilitates the close interaction between functions that is
required to solve the novel problems involved in innovation and to respond quickly to the
customers of that product or service.
An empirical study of organisations in the financial services industry shows that organisations
that chose the defender strategy performed highest when they adopted a mechanistic type of
9
organisational design, whereas those that chose the prospector strategy performed highest
when they adopted an organic type of design.
3. Contingency Factors in Organisational Design

Design or contingency theory states that different organisational forms (or designs) are more
or less contingent on factors such
 environment
 size
 technology
 strategy
An organisation's form should provide harmony and fit among its key elements. For example,
behaviours based on efficiency and routine are more appropriate in stable environments.
Conversely, flexible and adaptive behaviours are more appropriate in dynamic, rapidly
changing environments.
Choosing Organisational Design to fit Changing Contingencies
Let us now consider how a manager uses this knowledge to adjust organisational design as the
contingency factors (such as the strategy) of his or her organisation change over time.
Read below to learn how the organisation design change as the organisation grows.
Changes in Organisational Design
 Start-up
When an organisation is starting up, it is usually small, consisting of the owner/manager and a
few employees. The manager can make most of the decisions and directly supervise the few
employees. Thus, the structure that fits small size is
 centralised in decision-making
 low on formalization (it is flat and has few rules)
 functional
A start-up is usually focused on one product or service, so a functional structure fits it.
Employees are specialised by functions, such as production, sales and accounting. Many small
businesses show this kind of structure.
10
 As sales increases
As the organisation succeeds in attaining more sales, it expands its employee numbers. As the
span of control of the manager grows too large, subordinate managers needs to be appointed
to provide effective supervision of the employees.
Therefore, the owner/manager becomes the CEO and a hierarchy of managers and supervisors
is created, which grows taller with further size increases. The organisation now has some
degree of complexity and the CEO is separated from the frontline by layers of hierarchy.
The CEO must delegate an increasing number of decisions to the managers and supervisors in
the hierarchy, so that the organisation becomes more decentralised.
Also, the work of each manager and employee becomes more specialised functionally. The
administration of the company, such as its personnel processes (e.g., recruitment, induction
and payment), will experience some decisions that happen recurrently, so that they are routine
and predictable. Such routine decisions will be handled by formalisation (e.g., rules, standard
forms and computer programs) to reduce cost, increase consistency and foster even more
predictability. This increase in formalisation is often labelled as "bureaucracy" and viewed
negatively by popular opinion.
While formalisation can lead to rigidity of behaviour, which is counterproductive, there are
benefits from the low-cost administration it produces. One benefit is the saving in managerial
time when a decision is governed by rules implemented by clerks. Moreover, the widely feared
rapid growth in managers and administrative staff relative to productive employees is rare
because the formalisation and functional specialisation that results from increasing size leads
to less need for managers. This is reflected in increasing spans of control as organisations grow
larger.
 As volume of output increases

If the CEO sticks with the existing product or service, i.e., has a strategy of being a focused
organisation, then the expansion in the volume of output leads the operations to become
routine. This low task uncertainty allows operations to be governed by central plans and
standard operating procedures, ie, centralisation and formalisation. The resulting organisation
fully enjoys economies of scale, with consequent cost advantages. Such an organisation is
following the defender strategy.
11
However, if the CEO constantly pioneers new products or services and has a prospector
strategy for his or her organisation, then the emphasis is on innovation, even though the
organisation may be large. Expertise needs to be acquired and fostered by recruiting
technically qualified professionals and setting up a research and development unit in the
organisation. The work in R&D, and in solving novel problems in other parts of the
organisation, requires use of initiative, so that these processes are handled by decentralisation
and lack of formalisation (the organic design). This organisation needs lack of formalisation in
its innovatory tasks but formalisation in its administration (because of the routine of dealing
with its many employees).
 As organisation diversify in location

At some point, often when the organisation has outgrown its geographic area of operations,
the CEO may decide to diversify into a new area of the country or to new countries, thus
becoming a global corporation. The organisation may be divisionalised so that each geographic
area becomes a division. Each division has a range of operational functions so that it can be
self-sufficient and operate autonomously. Each area division is held accountable for its
profitability. The more local tastes differ, and transportation costs and other factors encourage
local production, the more each area has a full range of functions and is more autonomous. For
example, tinned food has low price relative to its weight and so local manufacture is more
sensible than exporting worldwide from one central location.
 As organisation diversify in related products or services

At another point, the CEO may decide to diversify into products or services that differ from
those originally offered by the organisation but which are related to the original offerings, e.g.,
by similarities in materials, technologies or distribution of customers. As the product markets
served become more distinct, co-ordinating each of them through a functional structure
becomes too complex and ineffectual. Therefore, the organisation adopts the divisional
structure, in which each division specialises in a product or service. Each division has a range of
operational functions that allows it some autonomy and a degree of profit accountability.
However, the relatedness of the products or services means that synergies can be obtained by
having their similar functions centralised at the corporate level. This provides cost savings and
makes for standardisation and control of the divisions.
Cooper Industries is a corporation that controls a set of divisions that are similar in their
involvement in manufacturing. Cooper extracts the synergies by having an expert central
12
manufacturing function. This, and how they turned around the ailing Champion Spark Plug
after acquiring it, by subjecting it to the Cooper approach to manufacturing, is described in
"Cooper Industries" (Goold et al., 1994).
While related diversified product or service organisations are often divisional, some use a
functional structure. Divisionalisation is a fit in which the "related" organisation wishes to
maximise innovation, because the self-contained divisions focused on their product-market
facilitate problem-solving, speed and customer responsiveness.
However, some other "related" organisations wish primarily to control costs. They need to
extract the potential synergies by centralising control into powerful functions that run the
organisation in an integrated way. Thus, some organisations that have diversified into related
products or services nevertheless retain a functional structure and that fits their contingencies
(related diversification but cost rather than innovation emphasis). And some organisations that
have diversified into related products or services and then divisionalised to attain high
innovation have subsequently returned to a functional structure, because that fits their
changed contingency (i.e., from innovation to cost emphasis). Donaldson (1979) gives an
example of a large Japanese corporation that had divisionalised, but then reverted to a
functional structure because its contingency changed in that way.
If the organisation produces products or services that use the same resources in production
and the strategy is not to maximise either innovation or cost control, but to attain some
degree of both objectives, then a functional product (or service) matrix should be chosen by
management. For the managers who are in the matrix, having two bosses is potentially
confusing and stressful. However, this can be reduced by having the two bosses meet and
become comfortable with each other so that they can recognise and rectify any cases in which
they may give conflicting instructions to their shared subordinate.
 As organisation diversity into unrelated industries

At another, usually later point, often when the organisation has outgrown its original industry,
the CEO may decide to diversify into other industries, to offer new products or services
unrelated to the original offerings of the organisation. Because of the lack of synergies to be
extracted, this unrelated or highly diversified organisation needs a highly decentralised
structure. Each division is almost entirely self-contained. The corporate level has only
administrative functions (e.g., accounting) and can be small in the number of staffs.
13
In these ways, the CEO and other managers of the organisation, need to adjust the structure
from time to time, so that it is in line with the changes in its size, intended innovation rate and
diversification strategy (i.e., the contingencies).
The organisation may have products or services that are related or unrelated and needs each
product or service to be a division. It may be operating in several different countries, which
require a country or regional manager to orchestrate the way the organisation relates to the
local customers and government. If this is the case, then an area-product (or service) matrix is
required. Therefore, this structure is found in many multinational corporations.
This coherent model of organisational design is presented in Donaldson (1985).
Fig.2: Knowledge management in organisation
Knowledge management emphasises sharing information. Knowledge management

organisations value data, information and contextual understanding.
Read below to learn how knowledge is captured, shared, applied and retained.
Knowledge in Organisations
The following are ways that organisations create, capture, share, apply and retain knowledge.
Knowledge creation
Knowledge creation refers to the creation of a context where people learn. This means giving
employees the opportunity to learn, encouraging them to learn, and giving them protection
from any negative consequences resulting from their learning process.
14
Knowledge capturing
Knowledge capturing refers to codifying all the necessary information, so it can be shared,
without leaving out important aspects. This process entails careful quality control, making tacit
knowledge explicit, and codifying the "know-whys" and the "know-whos" along with the
"know-hows". Capturing knowledge makes a system less dependent on the expert knowledge
of a few individuals and more dependent on good process.
Knowledge sharing
Knowledge sharing refers to sharing learning across the organisation without losing its
richness. Because knowledge can be very context specific, sharing must be more than through
IT; it must include formal and informal networks. Measurements and incentives to encourage
knowledge sharing might be part of the organisational structure.
Knowledge application
Knowledge application refers to customising existing knowledge (to specific situations) rather
than "reinventing the wheel", while still adapting knowledge to new circumstances.
Knowledge retention
Knowledge retention refers to committing knowledge to institutional memory, without
stunting new learning. This may be done by codifying knowledge so that it becomes easily
accessible, updating existing knowledge, eliminating old useless knowledge, and retaining
knowledgeable employees.
Many MBA students aspire to work for a major consulting company. Knowledge is a vital asset
for such companies, which entails generating, sharing and applying it. Increasingly, computers
are used to storing and sharing knowledge around these companies, including between offices
in different countries.
For a description of the knowledge management processes in the famous McKinsey

consultancy and how they are used in working on client cases, you may read the McKinsey case
study (HBS 9-396-357).
As discussed above, the increase in formalisation is often labelled as "bureaucracy" and viewed
negatively by popular opinion.
15
Read below to find out more the negative consequences.
Negative Consequences of Formalisation

Organisations with formal, bureaucratic structures can experience negative consequences. A
formal structure may increase efficiency, but it can reduce organisational flexibility and
encourage employees to follow prescribed behaviours, even when a situation calls for a
customised response. For example, an employee who overcharges a loyal customer might say,
"I'm sorry, but you will have to fill out these forms and talk to the manager to get your money
back. It's our policy". In a more flexible organisation, the employee might customise his
response to the situation and immediately return the money with a sincere apology.
Workers can feel powerless when they are required to follow a rigid set of rules without
exception and can actually start to focus more on rules than on organisational goals. Also,
extremely formal organisations are more likely to have outdated or inefficient rules which can
hurt an organisation's productivity and progress.
4. Groupings
Having considered some of the generic and specific forms of organisational design and how
different forms need to be used as the organisation changes over time, we now need to
consider some more detailed issues of organisational structure: groupings and (in the next
section) linkages.
There are two kinds of groupings in an organisational structure.
1. Vertical groupings
2. Horizontal groupings
Vertical groupings
Vertical groupings refer to the levels of hierarchy in an organisation. A hierarchical company

has connections that link key decision-makers, allow many managers to control and coordinate
the efforts of others, and give employees greater access to more managers. However,
organisations can have too many levels in the hierarchy.
16
A "tall" structure may make communication more difficult because of the many layers between
workers at the bottom of the hierarchy and senior executives. In organisations with tall
structures, management may become unaware of activity in lower levels of the hierarchy and
workers may not understand why new policies, procedures or changes are implemented by
upper management.
The corollary of the number of levels in a hierarchy is the span of control. If an organisation
retains the same number of employees at the bottom of its hierarchy, the number of levels can
only be reduced if the span of control is increased. Thus, flattening the hierarchy necessarily
means increasing the number of people who are the direct subordinates of the managers and
supervisors. Thus, a flatter hierarchy means a wider span of control, while a taller hierarchy
means a narrower span of control.
Fig.3: Tall structure/Narrow span of control
Fewer levels in a hierarchy (a "flat" structure) allows for a more egalitarian work place, quicker
communication between people at all levels in the company and allows the staff who are
involved with daily work inside the organisation to make decisions.
Fig.4: Flat structure/Wide span of control
17
However, beware the current fad for "flatter structures". Hierarchies that are too flat also have
problems.
Read below about the effects of tall and flat structures on span of control and the
consequences.
Consequences of Span of Control
If an organisation has a tall structure and hence narrow span of control, workers may feel that
they have too much supervision. For example, if managers have only a few subordinates to
manage, they might watch their subordinates too closely, make them uncomfortable and
reduce employees' level of authority, decision-making and accountability. Also, multiple levels
of management can increase communication problems and decrease efficiency. If employees
must request approval for even small decisions, their jobs and the jobs of their boss may be
redundant.
However, if an organisation has a flat structure and hence wide span of control, a supervisor
has too many employees for whom he or she is responsible, so employees may not get
answers to questions as needed. Also, they may not get sufficient access to resources, because
their bosses have too many people and too many projects to champion. Thus, overall efficiency
is reduced because supervisors in this situation are overwhelmed.
There are, however, ways to manage these kinds of negative consequences of too wide a span
of control. One way is to select and train subordinates so that they require less supervision.
Another way is to give the supervising manager a deputy, assistant or assistant to, who can do
some of the supervising. Another way is to allow the supervising manager to spend more time
on supervision by reducing the amount of personal work that he or she does. For example, the
managing partner in an accounting firm could spend less time doing client work, so that he or
she has more time to supervise others.
Horizontal groupings
Horizontal groupings refer to the groups or departments across the organisation. There is a
trade-off between the ease of linking (or co-ordinating) the groups and the degree of
specialisation in the organisation. When there are too few groups, they are easy to link but
18
specialisation is limited. When there are too many groups, they are harder to link but there is
extensive specialisation. For example, if a firm had only three departments, it would be easy to
link them. However, they would be limited in their degree of specialisation because of the
small number of different groups. If a firm had 50 groups, it would have far greater
specialisation (i.e., it would be able to do different activities). However, it would be more
complicated to link the various groups.
Groups may overlap (e.g., when teams share members) or there may be gaps between them
(for example, when there are no liaisons). Overlapping or having gaps is not necessarily right or
wrong, depending on the objectives of the organisation. For example, if an organisation wants
every group to know what other groups are doing, it might create mechanisms for co-
ordinating groups, including forming overlapping groups. However, if an organisation was
concerned about conserving resources, it might eliminate redundancies, to avoid overlaps.
Organisations can be grouped into appropriate units by function, product, geographic region,
user or any combination of these.
An organisational structure arranged by geography might look like this:
Fig.5: Departmentalisation by geography
Another way an organisation can be structured is by product, as shown below.
Fig.6: Departmentalisation by product
19
Each kind of grouping has advantages and disadvantages, depending on the environment and
the needs of the organisation among other factors.
Creating groups along geographic area lines fosters specialisation and the accumulation of
knowledge about each area within each group. Similarly, product groups foster specialisation
and knowledge about products within each group.
A key organisational design concept is that sets of activities that relate more to each other
than to other activities in the organisation should be grouped together. The basis of a group is
an island of activity that is relatively independent of the rest of the organisation. Activities that
are highly interdependent should be grouped together, while activities that are low in
interdependency should be placed in separate groups. Thus, advertising should be grouped
with marketing rather than with manufacturing because advertising is more closely linked with
marketing than with manufacturing.
Read below to learn about the consequences of groupings in organisations, as well as the
consequences of grouping by user, customer and geography.
Consequences of Groupings in Organisations

Passing and processing information is easier within small groups. When an organisation creates
groups, it does so to enhance communication and focus. Unfortunately, small and focused
groups can find it more difficult to share information with outside groups. Also, "creating a
group" can often be perceived as "creating a boundary", which can create conflict and
competition in organisations.
Imagine that a company forms three sales groups based on geography: East, West and South.
Each group can now pass and process information more easily because it is smaller and more
focused. However, because the groups are no longer under one general sales unit,
communication might become more difficult across geographic groups. Also, competition
might arise among the three groups instead of co-operation to meet common goals.
Consequences of Grouping by User, Customer and Geography
In organisations in which people are grouped by market segment, customer need or

geographical location, the focus will be on user needs. The needs of the organisation will be
20
de-emphasised. For example, the customer's requirements will tend to dominate, even if that
means producing a unique product variation that pleases a customer but upsets the product
standardisation policy of the organisation and so inflates its costs.
Read below about groupings in organisations.
Groupings
Organisations can be grouped both horizontally and vertically.
Organisations can be horizontally grouped across an organisation by activity like sales, by
output like product or service, by user like geographical region or market, or by a combination
of these.
When an organisation has a small number of groupings, they are easily linked. With a large
number of groupings, linking them becomes increasingly difficult.
Organisations can also be grouped vertically. This refers to the number of levels in the
hierarchy.
An organisation with few levels has a "flat" structure and an organisation with many levels has
a "tall" structure.
5. Linkages
Differentiation and Integration
As we have seen, some groups are very low on interdependence with other groups in the
organisation and have little need to co-ordinate their work with them. However, some groups
have substantial interdependence with other groups. While it is not enough to merge them
into one group, their work does need to be co-ordinated. They need to use integration
mechanisms. The more interdependence there is between any two groups, the stronger the
integration mechanism that is required to provide effective co-ordination.
These integration mechanisms are in order of strength:
 Use of direct chain of command, which means that the boss to whom the two groups
report co-ordinates them.
21
 Rules and procedures, which means that the two groups are co-ordinated by following
a rule or procedure (e.g., when Sales books an order, they send a copy to Production).
 Direct contact between functions, interfunctional committees, which means managers

from Marketing and Production meet at a regular meeting.
 Co-ordinating individuals, integrators, project leaders, which means someone has the
job of helping co-ordination between the two groups.
 Co-ordinating departments, which means a whole department of integrators or project

teams are formed and members of each of the groups (e.g., Marketing, Production) are
assigned to them.
As we go down this list of five integrating mechanisms, we can see that the organisation has to
go to progressively more and more trouble and cost. For effective organisation design, the key
idea is not to use a stronger, more expensive integration mechanism than is required, given
the interdependence between the groups.
An instance of low interdependence between two groups, Sales-Marketing and Production,

was revealed in a study of firms making cardboard containers, a standardised product that
competes on costs and deliveries. In the most effective firms, Sales received the order from
the customer and passed all the orders to the CEO. The CEO combined them into the
production schedule, which he passed to Production. Then, Production made the containers
and delivered them according to the schedule. The simple nature of the task meant that there
was no discussion required between the two groups (Sales-Marketing and Production), so
interdependence was at a low level. It could be handled efficiently by the use of the direct
chain of command, i.e., a decision by their common boss. This was also a cheap and quick
integration mechanism, thereby meeting the goals of the organisation.
An important instance of high interdependence is those organisations that seek innovation by

creating new products or services. This was revealed in a study of firms in the plastics industry.
Their separate departments, such as research and development, manufacturing and
marketing, each worked on part of the problem but needed to co-ordinate, because the
problems faced in designing, making and selling new products required intense discussion back
and forth between the departments. This was made more difficult in practice by the high
22
differentiation between those departments in the plastics industry. Differentiation here refers
to differences on four dimensions:
 goals (e.g., innovation for R&D, but cost containment for Production)
 time horizon (e.g., long for R&D, but short for Production)
 interpersonal style (e.g., permissive for R&D but directive for Production)
 formality of structure (e.g., low for R&D, but high for Production).
To achieve effective co-ordination, the successful plastics firms had to use all five of the
integration mechanisms: direct chain of command, rules and procedures, direct contact
between functions, co-ordinating departments and project teams. Thus, integration was a
costly investment that, nevertheless, paid off for them. The integrators and project leaders had
to have an orientation that was intermediate between that of the departments, so that they
could be seen as impartial and help each department communicate with the other.
6. Summary
 Organisations differ in their degrees of centralisation, formalisation and

departmentalisation.
 Mechanistic organisational designs are centralised and formalised while organic
organisational designs are decentralised and low on formalisation.
 Contingency theory states that different organisational designs are more or less dependent
on factors such as environment, size, technology and strategy.
 Vertical groupings refer to the levels of hierarchy in the organisation, whereas horizontal
groupings refer to the departments across the organisation.
 Integration mechanisms, such as rules and procedures, direct contact and co-ordinating
departments, can be used to provide effective co-ordination among interdependent
groups.
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7. Glossary
Hierarchy Refers to the levels or layers of management in an organisation.
Liaisons People who take on the role of communicating between groups.
For example, if one person belongs to two different teams, he or
she can be the linking mechanism between the teams.
8. References
 Bartlett, C.A. McKinsey & Company. Managing Knowledge and Learning, HBS Case #9-396-357
Boston: Harvard Business School Publishing, June 28, 1996. Revised Jan 04, 2000.
 Burns, T. and G. M. Stalker. "Mechanistic and Organic Systems of Management." In the
Management of Innovation, 96-125. London: Tavistock Publications, 1961.
 Chadderdon, L. et al., Tyco International (a), HBS case #9-798-061 Boston: Harvard Business
School Publishing, March 03, 1998.
 Donaldson, L. "Regaining Control at Nipont," Journal of General Management 4 (Summer
1979): 14-30.
 Donaldson, L. "The Design of Organizations." In Defence of Organization Theory: A Reply to the
Critics, 155-72. Cambridge: Cambridge University Press, 1985.
 Donaldson, L. "Product Development at Toyota." In Handbook of Principles of Organizational
Behavior, edited by Edwin A. Locke, 300-01. Oxford: Blackwell, 2000.
 Goold, M., A. Campbell and M. Alexander. "Cooper Industries." In Corporate-Level Strategy:
Creating Value in the Multibusiness Company, 191-99. New York: Wiley, 1994.
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Segment: Work Structure and Design
Topic: The Informal Organization
Informal Organization
Table of Contents
1. Organisational Culture .................................................................................................................... 4

2. Components of Culture ................................................................................................................. 10
3. National Culture ............................................................................................................................ 14
4. Two Frameworks for Understanding Culture ............................................................................... 15
5. Summary ....................................................................................................................................... 19
6. Answers ......................................................................................................................................... 19
2
Introduction
In the prior segments, you learned about organisational design and structure – topics that are
usually associated with the formal organisation. Now you will shift your attention to the less
visible yet powerful forces that shape organisational behaviour. These forces make up the
"informal organisation" and include topics such as organisational and national culture, values,
norms and politics.
Learning Objectives
 describe the three elements of organisational behaviour

 describe the three components of culture
 describe the impact of national culture on organisation
 distinguish between the two principle frameworks use to understand culture.
3
1. Organisational Culture
What is organisational culture? Start by thinking about the company you work for (or one you
have worked for). Does your organisation celebrate with parties, drinks and food when it
meets goals? Or does your organisation reserve parties for holidays? Are employees expected
to wear suits and dresses to work? Or do employees wear casual shoes and T-shirts? Are
employees expected to answer the phone in a formal, professional manner at your
organisation? Or do they answer the phone with an informal "Hello?"
Generally, behaviours at the surface-level stem from less visible, often unconscious values. If
your company values formality, the dress code will require employees to wear suits and
dresses rather than allow informal dress. But how does a set of values become the dominant
values for a company?
Definition of Organisational Culture
Edgar Schein, a leading researcher in this field, wrote that organisational culture can be
defined as "a pattern of shared basic assumptions that the group learned as it solved its
problems of external adaptation and internal integration, that has worked well enough to be
considered valid and, therefore, to be taught to new members as the correct ways to perceive,
think and feel in relation to those problems." What does that mean? It tells us that values
evolve as a company learns to adapt and survive. The values that have helped a company to
grow and prosper are the ones that become integrated into its core identity. Values that are
deemed important for the organisation's survival are then taught to new employees so that
these values are continually reinforced by organisational members.
An organisation's culture, in the simplest terms, is the accepted behaviour, beliefs and
processes people use in organisations to get work done. Several key elements of organisational
behaviour include socialisation, response to adaptation and shared assumptions.
4
Read below to learn more about organisational culture.
Key Aspects of Organisational Culture

 Socialisation
Providing formal orientation and training, as well as informal discussion with experienced
employees are ways to transmit assumptions, values and norms to new employees. In other
words, experienced organisational members "socialise" new workers by shaping their beliefs
and educating them in the "right" ways to think and act within an organisation. If the
socialisation process is successful, new employees succeed at fitting into the organisation's
culture. Socialisation is a process of learning by new members of which an important part is
their acquisition of information about their new organisation. Socialisation can occur quickly.
 Response to adaptation
As companies grow, they change. The most successful companies are those that are able to
adapt by adopting successful responses to threats and opportunities. Companies grow
successfully not only by adapting to external pressures (such as competition, market forces and
political changes), but also by integrating their infrastructures (for example, setting strategy
and goals, designing an organisational structure and developing control processes and
mechanisms). The methods, behaviours and values that help companies grow become
ingrained and incorporated into a company's work culture. For example, Southwest Airlines
began as a tiny player in the huge airline industry. Up against multiple threats to their survival,
their founder, Herb Kelleher, refused to let the large airlines stop Southwest Airlines from
success. His focus on low costs, fun and teamwork allowed the fledgling airline to grow into a
very successful airline in the United States (as measured by on-time arrivals, customer
satisfaction and profitability). Today, all Southwest Airlines employees are extensively trained
to incorporate the company's fundamental values, such as teamwork, cost consciousness and
having fun, into their daily work activities. The values that allowed the airline to thrive and
prosper are continually reinforced through leadership practices, work processes, training and
rewards. Because these values allowed the airline to evolve, adapt and grow, they are
considered valid and are therefore taught to new members.
 Shared assumptions
Culture strength can be measured by the extent to which group members share their beliefs,
worldviews, perspectives, philosophies and values. The more employees at work agree about
the "right" way to do things, the stronger an organisation's culture tends to be. The more
disagreement between individual employees, departments or functional/geographical business
units, the weaker the organisational culture tends to become.
5
Read below about Social Influence.

Social Influence
Social influence occurs when you use another person's desire to belong in order to change
what they do or think so that you can attain your wishes.
Social influence is possible because people are affected by a situation's context and by others'
actions.
Robert Cialdini has written extensively on the topic of social influence and argues that
influence occurs in all social and organisational settings – both consciously and unconsciously.
Social influence is a subtle and powerful process that can give individuals and groups a
competitive advantage. Yet, it can also detract from an organisation's effectiveness when it is
used inappropriately.
One such inappropriate use of social influence is to stop new employees from working too
hard. This occurs often enough that it has its own vocabulary: New employees who are seen as
working too hard are called "rate-busters" and are often subjected to pressure from their
peers to change their behaviour.
The desire to avoid being visibly "different" from a group supports social influence tactics.
Most people unconsciously want to agree with others so that they will be accepted. Simply
put, people want to belong.
Groups tend to reward members who are similar to existing members and who agree with a
group's shared behaviours and values. There are three tactics that are especially effective in
applying social influence in groups.
The first tactic uses peoples' desire to avoid being inconsistent by exerting social influence.
The desire to be consistent can be manipulated by getting people to make a small, initial
commitment. Once they have made that commitment, they often feel compelled to behave in
a way that is consistent with it – especially if they made that commitment or took a stand in
the presence of others.
For example, if a person announces to her co-workers (who are mostly vegetarian) that she is
committing to a vegetarian diet, she is likely to remain on the vegetarian diet (at least at work)
to appear consistent and dedicated to the commitment in the eyes of her co-workers.
The second tactic is called social proof and it works because people have a tendency to rely on
6
the judgement of others to help them form an opinion and to follow their examples. Social
proof is commonly used as a shortcut in gathering information to deal with complex issues or
environments.
For instance, if Jim is hiring new employees, he may need to look at resumes and files for about
100 applicants – a time-consuming task. However, if a co-worker tells Jim that he has heard
that a particular candidate is "outstanding and a great team player," Jim may then use this
information to help him make a hiring decision – even without concrete evidence. This reduces
the amount of work he has to do to reach a conclusion about the applicant.
A third tactic used to exert social influence is to use the degree to which people like each other
in order to get them to agree to requests.
This concept of "liking" relies on the fact that in social and organisational situations, people are
most likely to agree to requests made by someone they like or whom they believe likes them.
According to Cialdini, liking others is based on a number of factors, including:
 Compliments and flattery: people react positively when others express positive
sentiments toward them or show affection for them.
 Contact and co-operation: people tend to like other people whom they know well and
with whom they share common goals.
 Positive associations: people tend to like people who bring good news and dislike the
bearers of bad news. Similarity and physical attraction: most research indicate that
attractive people are liked better and considered more likable.
Finally, it is useful to remember that the effectiveness of these tactics of social influence can
and will be affected by cultural factors. They also operate both consciously and unconsciously,
inside and outside of organisations.
Read below about the concept of internal culture.
Internal Culture
All organisations have a culture – a set of unspoken values and expectations that act as an
informal social control system and that govern how members behave.
An organisation's culture can be identified by observing its people and their interactions in the
organisation over a period of time.
7
An organisation's members may interact in a specific way that sets them apart from people
working in other organisations. They may use specialised jargon, share common work phrases
and have specific rituals. Language, stories and rituals are important ways that culture is
transmitted and maintained.
Culture also is communicated in a variety of ways that create taken-for-granted assumptions

about how to perceive, think, and feel.
Culture forms a common understanding among group members about what attitudes and
behaviours are appropriate.
It may be strong or weak, harmful or helpful, depending on the given situation.
And, culture has a powerful influence on employee behaviour and is highly resistant to change.
Most large organisations have a dominant culture and numerous subcultures.
A dominant culture expresses the core values shared by the majority of the organisation's
members; it affects the entire organisation – from the CEO to the workers on the line.
Subcultures develop as a result of shared problems, situations or experiences.
For example, employees who work in an Accounting department may develop a subculture
that values accuracy and precision, with less attention paid to creativity. Employees in product
development, however, may form their own subculture that values creativity and flexibility,
with less attention to accuracy.
Below is an exercise to test your understanding of what you have just learned about
organisational culture.
Q1. Which is NOT a true statement about social influence?

1. Social influence occurs in all social settings in unconscious, rather than conscious, ways
2. Social influence is possible because humans are affected by others' actions and the
situational context
3. Social influence happens when you convince others to conform to group norms
8
4. Social influence can contribute to or detract from organisational effectiveness
Q2. Which is an important aspect of commitment and consistency?

1. The notion that changes in behaviour are usually short-lived
2. Social influence can detract from organisational effectiveness
3. Social proof can be used with social influence
4. People accept responsibility for a behaviour when they choose to perform it in the
absence of strong outside pressure
Q3. Making small requests of someone, followed by larger requests, is a tactic to gain influence
and compliance. Is this statement true or false?
1. True
2. False
Q4. Which of the following describes the use of social proof?

1. People make small requests to gain compliance
2. People rely on the judgement of others to help them form an opinion
3. Compliments and flattery are given
4. Consistency is required
Q5. Which of the following is not a factor in how much a person likes another?
1. Physical attraction
2. Contact and co-operation
3. Association with positive events
4. Consistent behaviour
Q6. In general, social influence is more powerful in less connected groups. Is this statement
true or false?
1. True
2. False
9
2. Components of Culture
Culture is transmitted to employees in a number of ways, including stories, rituals, material
symbols and language. Values, norms and roles are important components of organisational
culture.
Read more about each component.
Components of Culture
 Values
Values are basic, general beliefs about right and wrong. For instance, some common values at
work include safety, high quality and efficiency. Values can be both conscious and unconscious
and are often the basis for attitudes about appropriate or inappropriate forms of behaviour
(i.e., norms). There are two types of values, espoused values and "values in use". Espoused
values are values that companies say are important. Values in use, on the other hand, are the
values that actually govern behaviour. For example, a company may say they value teamwork,
but actually reward individual contribution. When espoused values differ from values in use,
employees may become confused, which can lead to a dysfunctional company.
 Norms
Norms are specific behaviours that are expected of all members of a group. They are socially
created standards that guide interpretations and evaluations of events. Norms are typically
unwritten and rarely discussed openly in organisations. For example, an organisation that
strongly values safety may have norms that include checking all machinery daily or requiring
people to always use handrails when using the stairs.
Norms have a powerful effect on group and organisational behaviour. If you know the norms
of a given group, you can generally explain the attitudes and behaviours of its members.
Norms develop in a variety of ways, including through explicit statements by supervisors or co-
workers or critical events in an organisation's history.
Typically, group members positively reinforce individuals who adhere to norms and criticise or
reject those who do not conform. Managers can influence group norms by making explicit
statements about desirable behaviours and by regularly reinforcing these preferred
behaviours.
Norms can exist around a wide variety of issues, for instance, dress codes, quality of
10
performance, flexibility or methods of dealing with conflict. For example, a newcomer's refusal
to participate in the office soccer team may not be overtly criticised, but team members may
notice that she did not join and may question her reason for choosing not to join.
 Roles
Roles are sets of behaviours that are expected of persons in a specific position. Individuals
generally play a number of diverse roles both on and off the job. Roles are different from
norms; people generally play different roles from one another, but everyone is expected to
follow the group norms. For example, the person who plays the role of informal leader is
expected to tell others what to do; if another group member suddenly did so, he or she would
be challenged.
The following are four aspects of roles. Understanding these aspects will help you better
understand organisational culture.
 Role identity: a set of attitudes and actual behaviours required of a person in a particular
role
 Role perception: a person's belief about how to act given a particular role and situation
 Role expectations: others' beliefs about how a person in a particular role should act
 Role conflict: conflict that occurs when different, and sometimes contradictory,
expectations of different roles exists (for example, when a person plays the role of a friend
and a boss, conflict can occur)
Read below the concept of norm and role enforcement.
Norm and Role Enforcement

Many kinds of social influences are used to get people to follow norms at work.
Generally speaking, social pressure is what keeps people behaving as expected. Norm
enforcement or influence activities can be applied directly or indirectly in two ways.
First, enforcement can happen indirectly by simply applying social pressure – as if to suggest,
"Everyone else is following the rules (even if it's unspoken), so you should too."
Say, for example, if everyone wears a white shirt and blue-striped tie to work, social pressure
11
makes it very difficult to show up dressed in an orange T-shirt and blue jeans.
Enforcement can also happen directly or indirectly by providing feedback on individual

behaviors. People expect others to follow norms, and they will respond – directly and indirectly
– with surprise or disapproval when someone fails to do so. This feedback can occur in a
number of ways.
For example, think about what might happen if you were to wear a swimsuit to work tomorrow
– assuming that you are not a lifeguard. You would definitely get feedback, and here is how it
might happen:
People could nonverbally communicate that you have broken a norm by staring, grinning,
rolling their eyes or using any number of non-verbal behaviours that communicate you are
doing something odd or different. Simply being pointed out as different is often enough to get
people to follow norms.
Or, they might enforce the appropriate dress norm verbally by joking, using sarcasm or directly
commenting on your behaviour. Joking is an extremely effective way of enforcing norms. It can
encourage others to laugh at the person violating the norms and increase the likelihood that
the norm violation will stop.
Finally, the norms can be enforced directly with a warning such as, "Hey, if the boss sees you
dressed like that, you're going to be in big trouble."
For the most part, these techniques are successful in getting people to follow norms. At the
extreme, norm enforcement may involve ostracising the "rebel" from the group and eventually
drive that person to leave the group.
Unlike norms, which apply to all people within an organisation, roles are behaviour
expectations that are different for different people. Additionally, there is often less rigid
enforcement of roles than norms.
Roles can be chosen or ascribed to an individual by other group members. This is particularly
true for the "tokens" in groups who have been stereotyped.
12
When a person chooses a role – such as playing the role of "clown" by injecting humour into
groups, making jokes and even playfully making light of problems – others expect him or her to
stay in that role. In fact, they come to rely on that person to play that role.
In essence, roles are enforced, no matter how they are acquired.
Roles tend to be enforced by decisions and speech that "frame" people in the eyes of others –
and at times, even in the person's own eyes.
For example, group "consensus" decisions about who will make coffee and take notes will
"frame" that person into a subordinate role.
When people refuse a role – as in a woman refusing to make the coffee or take the meeting's
notes – they typically encounter negative feedback for that refusal.
Perhaps the most difficult aspect of norm and role enforcement activities is their informal,
subtle and often unconscious nature.
Dealing with inappropriate role enforcement often takes a conscious action of raising the issue
to change the pattern of enforcement.
In the example of the woman refusing to make coffee or take notes, she would need to openly
question why the role was assigned to her. This questioning can be risky behaviour, and thus, it
is not often done.
Finally, when dealing with role and norm enforcement, you should be careful to recognise and
manage these activities to ensure that they are being used appropriately in the workplace.
13
3. National Culture
Fig.1: National Culture
The behaviour of organisations and the people within them is heavily influenced by national
culture. National culture refers to the ways in which your geographical region influences your
beliefs and norms. Research has found that organisational culture does not erase or diminish
the influence of national culture and that most people are unaware of how their culture has
shaped and influenced their attitudes and behaviour.
The differences among national cultures become important in a workplace with diverse
employees. Managers and employees from different national cultures bring diversity and a
wide range of experience and ideas to the workplace. However, differences in national culture
can also create conflict. Understanding and managing the differences among national cultures
is key to understanding and managing the behaviour of individuals in the workplace.
As you have learned, values can be conscious or unconscious. A value reflects beliefs about
what is right and wrong, as well as broad notions about what is important to people. Values
can be expressed by members of a group as attitudes, or as a tendency to act/react in a certain
way. For example, one nation may value hiring family members; another may consider this
practice unethical and unacceptable.
Norms are unwritten rules about what people are supposed to do in specific situations.
National cultural norms, therefore, are common and accepted patterns of behaviours in
certain countries. For example, multinational firms operating in Latin American countries
would be violating a norm if they chose to hire exclusively on the basis of individual
achievement without considering family connections. As this example shows, norms of how
people should act can reflect deep underlying values of a nation or group.
National cultural norms also include verbal and nonverbal communication. Examples of
nonverbal communication are clothing and adornment, the sense of personal space, styles of
14
moving and gestures, the approach to touching others and other aspects of body language
such as eye contact.
4. Two Frameworks for Understanding Culture

There are two principal approaches to understanding the variations among cultures, the
Kluckhohn-Strodbeck framework and the Hofstede framework.
1. The Kluckhohn-Strodbeck identifies six basic dimensions for understanding the differences
between national cultures.
2. Hofstede, on the other hand, identifies five dimensions in which cultures differ in their
work-related values and behaviours.
Both approaches provide information managers can use to understand the behaviours and
attitudes of employees and customers from different cultures.
The characteristics described by these two frameworks are accurate for many members of a
culture, but there is much variability among individuals and groups.
Kluckhohn-Strodbeck framework
The six basic cultural dimensions found in this framework are:
1. relationship to the environment
2. time orientation
3. nature of people
4. activity orientation
5. focus of responsibility
6. conception of space
Many individuals from different cultures vary along these dimensions. Click each tab to learn
more about these dimensions.
The Kluckhohn-Strodbeck Framework of Cultural Dimensions
 Relationship to the environment
This refers to a culture's view of whether people should be dominated by their environment,
15
harmonise with it, or dominate it themselves. For example, most people in the United States
and Canada view their relationship to the environment as something they are able to shape,
control and dominate. This translates into specific behaviours, such as bioengineering the grain
"canola", which is resistant to climatic variations and extremely low in cholesterol. On the
other hand, nations with cultures that view people and the environment as operating in
harmony, such as China and many Middle Eastern countries, focus on planting the right crops
in the right places at the right times rather than changing the crops or the land.
 Time orientation
This dimension measures how much a culture focuses on the past, present and future. A
culture that focuses on the past follows traditions and seeks to preserve historical practices. A
focus on the present means that time is viewed as a scarce resource; this culture would have a
short-term orientation. A focus on the future produces a long-term orientation, as seen in the
commitment of some Japanese firms to hire employees for life.
 Nature of people
This is a measure of whether a culture views people as good, evil or a mixture of the two.
North Americans tend to see people as a mixture of good and evil, and they tend to believe
people can change. People in many undeveloped countries see themselves and others as
honest and trustworthy, whereas people in the former Soviet Union tended to view human
nature as generally evil. Understandably then, a culture's views about people have a significant
effect on its leadership styles.
 Activity orientation
This is a measure of whether the emphasis is on doing, being, or controlling as a mode of
activity. Cultures that emphasise "doing" stress accomplishments, and employees maximise
their time at work. Cultures that emphasise "being," or living for the moment, focus on
experiencing life and working only as much as needed to live. People in cultures that value
control focus on logic and detachment in their work decisions.
 Focus of responsibility
This is a dimension of culture that focuses on where the responsibility lies for the welfare of
others. Individualistic cultures (eg, the United States) believe people are responsible for taking
care of themselves and emphasise personal achievements. Group cultures (eg, Malaysia)
emphasise reliance on the group for the welfare of individuals; thus, getting along with others
16
is likely to be emphasised. Hierarchical cultures (eg, Great Britain) place people into a ranking
that remains stable over time and is the basis for decisions about their welfare.
 Conception of space
This is a dimension of the Kluckhohn-Strodbeck framework that deals with ownership of space.
Some cultures are very open and conduct business in public. At the other extreme are cultures
that believe business should be conducted in private. Some cultures are a mix of the two.
Cultures that see space as public will have few private offices, and meetings will be held with
open doors. Cultures that emphasise private space will use offices and privacy to reflect status,
and meetings will be held in large rooms behind closed doors. Cultures that are a mix might
tend to blend the two by offering "limited privacy", perhaps via a large office with walls that
are only six-feet high.
The Hofstede framework
Hofstede's framework focuses on the differences in work-related values and attitudes that are
based in national culture. It has five dimensions:
1. individualism-collectivism
2. power distance
3. uncertainty avoidance
4. femininity versus masculinity
5. Confucian dynamism
Read more about these dimensions.

The Hofstede Framework of Cultural Dimensions
 Individualism-collectivism
This dimension describes the extent to which a society is organised around groups or
individuals. Cultures that emphasise individual choice and action have a loosely knit social
framework with lots of freedom. In such cultures, people tend to look after their own interests
and those of their immediate family. Cultures with a focus on collectivism will have a tight
social framework where people expect others in their groups (e.g., their organisation) to look
after and protect them.
 Power distance
17
This dimension describes the extent to which a society accepts unequally distributed power in
institutions and organisations. A society in which power distance is high (e.g., Singapore)
accepts a wide range of power in organisations. Employees in those cultures tend to show a
great deal of respect to those in authority. However, a society in which power distance is low
(e.g., Sweden) is less accepting of power differences. In such a culture, subordinates will feel
free to question their bosses' decisions. Titles, status and formality are also less important in
countries with low-power distance.
 Uncertainty avoidance
This is a measure of the extent to which people feel threatened by uncertain and ambiguous
situations and try to avoid them. The higher the level of security is, the greater the tolerance
for difference and the less the need for rules and procedures. Lifetime employment is more
common in countries such as Japan, where uncertainty avoidance is high. High job mobility is
more common in countries like Singapore or the United States, where uncertainty avoidance is
low.
 Femininity versus masculinity
This is sometimes referred to as quality versus quantity of life. It represents a dichotomy
between the degree to which members of a culture are focused on career, success and
materialism, and the degree to which they are focused more broadly on relationships and
quality of life. This has important implications for motivation issues. Japan's orientation to
masculinity/quantity can be seen in the wide use of "quality circles", which focus primarily on
solving problems that limit production and are directed toward work outcomes. In contrast,
many Swedish companies design work to be done in groups. These groups are designed to
focus more on job satisfaction and work flexibility (ie, on "feminine" issues, rather than on
work outcomes.
 Confucian dynamism
This results from later research Hofstede conducted with Michael Bond, when they studied
Chinese managers and employees. It focuses on maintaining a long-term orientation, which
involves patience, perseverance and a work ethic of investing for future results. Cultures with
low levels of Confucian dynamism tend to take a short-term focus, orienting to the past or the
present. The tendency of US companies to closely observe quarterly reports to evaluate
management decisions in terms of their effect within a year's time, exemplifies low Confucian
dynamism.
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Neither the Kluckhohn-Strodbeck framework nor the Hofstede framework explains all aspects
of national culture. However, these ideas can help people understand human behaviour and
values – and thus how to work with and motivate others.
5. Summary
 Organisational culture refers to the values and norms that are shared by the members
of an organisation. It also includes the shared basic assumptions that a group considers
valid and, therefore, is taught to new members as the correct ways to perceive, think
and feel, i.e., socialisation into the organisational culture and roles.
 National culture refers to the ways in which one's geographic region influences one's
beliefs. The Kluckhohn-Strodbeck framework and Hofstede framework are two
principal approaches to understanding variations among national cultures.
6. Answers
Exercise: Organisational culture
Question 1: Correct answer is option 1, Social influence occurs in all social settings in
unconscious, rather than conscious ways.
Question 2: Correct answer is option 4, People accept responsibility for a behaviour when they
choose to perform it in the absence of strong outside pressure.
Question 3: Correct answer is option 1, True
Question 4: Correct answer is option 2, People rely on the judgement of others to help them
form an opinion.
Question 5: Correct answer is Option 4, Consistent behaviour
Question 6: Correct answer is option 2, False
19

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MANAGING PEOPLE AND

1. Managing People Problems .................................................................................................... 4

At the end of this topic, you will be able to:

1. Managing People Problems

2. Changing Individual Characteristics

4. The "Big Five" Personality Dimensions

4.1 Congruence or Heterogeneity in Teams

4.2 Personalities in the Workplace

Becton & Associates

5. The Myers-Briggs® Type Indicator

6. More Personality Traits

Tolerance for Ambiguity

Rigidity versus Flexibility

1. Cognitive Styles ............................................................................................................................... 4

At the end of this topic, you will be able to:

1.1 Field Dependence and Independence

Reflective versus Active Engagement

2. How to Use Knowledge of Cognitive Styles

Whether interacting with a client or supervising a co-worker, a manager should try to

3. Perceptual Process and Perceptual Errors

Read the example given below.

3.1 Perceptual Errors and Stereotypes

Reflection-Perceptual Process and Perceptual Errors

Activity: Errors and Stereotypes

1. Figure versus background

3. Seeing what you expect to see—part I

4. Seeing what you expect to see – part II

5. What makes a group?

3. Seeing what you expect to see—part I

4. Seeing what you expect to see – part II

5. What makes a group?

Stereotypes often lead to selective retention.. If an employee holds a positive stereotype of a

4.1 Consequences of Stereotyping

People can also reduce bias if they

Reflection-People Perception Exercise

Explanation for Exercise 1: Version A

Explanation for Exercise 1: Version B

Explanation for Exercise 2: Version A

Explanation for Exercise 2: Version B

1. Careful: □ Strongly disagree □ Disagree □ Neutral □ Agree □ Strongly agree

Explanation for Exercise 2: Version A

Explanation for Exercise 2: Version B

 attribute external causes for failures when explaining personal failures

5.1 Consequences of Attribution Errors

6. Impact of Attitudes on Relationships

7. Emotions in the Workplace

7.1 Consequences of Intense Emotions

Someone who is experiencing intense emotion is more likely to respond negatively to a

7.2 Managing Intense Emotions

reflective versus active engagement.

1. The Relationship Between Motivation, Satisfaction and Performance .......................................... 4

At the end of this topic, you will be able to:

1. The Relationship Between Motivation, Satisfaction and

2. Intrinsic and Extrinsic Rewards

Fig.1: Intrinsic and Extrinsic Rewards

2.1 Consequences of Rewards

2.2 External Rewards

2.3 Internal Rewards

Fig.2: Internal Rewards

Positive consequences of intrinsic motivation include increased productivity, self-esteem,