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Chapter: Business Science : Managerial Behavior and Effectiveness : Environmental Issues in Managerial Effectiveness

Environmental Issues in Managerial Effectiveness

1 Organisational Processes 2 Organisational Climate 3 Leader 4 Group Influences 5 Job Challenge 6 Competition 7 Managerial Styles



1 Organisational Processes

2 Organisational Climate

3 Leader

4 Group Influences

5 Job Challenge

6 Competition

7 Managerial Styles


1 Organisational Processes


Managerial Effectiveness Developed Through Organizational Interventions


—    Organizational development (OD) it is a term used to encompass a collection of planned-change interventions, built on humanistic-democratic values, that seek to improve organizational effectiveness and employee well being.


OD Values


—    Respect for employees


—    Trust and support


—    Power equalization


—    Participation


OD Interventions Techniques


—    Sensitivity Training


—    Refer to a method of changing behaviour through unstructured group interaction.


—    The group is process-oriented, which means that individuals learn through observing and participating rather than being told.


—    The objectives of the T-groups are to provide the subjects with increased awareness of their own behaviour and how others perceive them, greater sensitivity to the behaviour of others, and increased understanding of group processes.




—    Increased ability to empathize with other, improved listening skills, greater openness, increased tolerance of individual differences, and improved conflict resolution skills




Survey Feedback


—    One tool for assessing attitudes held by organizational members, identifying discrepancies among member perceptions, solving differences is the survey feedback approach.


—    The questionnaire typically asks members for their perceptions and attitudes on a broad range of topics, including decision making practices; communication effectiveness; coordination between units; and satisfaction with organization, job, peers, and their immediate supervisor.


Process Consultation


—    Managers often sense that their unit‘s performance can be improved, but they are unable to identify what can be improved and how it can be improved.


—    The purpose of process consultation is for an outside consultant to assist a client, usually a manager, ―to perceive, understand, and act upon process events‖ with which he or she must deal.


—    Consultants in PC are there to ―give the client ‗insight‘ into what is going on around him, within him, and between him and other people.‖ They do not solve the organization‘s problems.


—    Rather, the consultant is a guide or each who advises on the process to help the client solve his or her own problems.


Team Building


—    Team building can be applied within groups or at the inter group level where activities are interdependent.


—    The objective is to improve coordinative efforts of team members, which will result in increasing the group‘s performance.


—    The activities considered in team building typically include goal setting, development of interpersonal relations among team members, role analysis to clarify each member‘s role and responsibilities, and team process analysis.


Inter-group Development


—    Inter-group development seeks to change the attitudes, stereotypes, and perceptions that groups have of each other.


—    Each group meet independently to develop lists of its perception of itself, the other group, and how it believes the other group perceives it.



2 Organisational Climate


Organizational climate (sometimes known as Corporate Climate) is the process of quantifying the ―culture‖ of an organization, it precedes the notion of organizational culture.


There are two difficulties in defining organization climate: how to define climate, and how to measure it effectively on different levels of analysis. Furthermore, there are several approaches to the concept of climate. Two in particular have received substantial patronage: the cognitive schema approach and the shared perception approach.


The cognitive schema approach regards the concept of climate as an individual perception and cognitive representation of the work environment. From this perspective climate assessments should be conducted at an individual level.

The shared perception approach emphasizes the importance of shared perceptions as underpinning the notion of climate. Organisational climate has also been defined as "the shared perception of the way things are around here". There is great deal of overlap in the two approaches..


Features of organisational climate


·        Organisational climate is an abstract and intangible concept. But it exercises a significant impact on the behaviour and performance of organisational members.


·        It is the perceived aspect of organisational internal environment.

·        It refers to the relatively enduring characteristics which remain stable over a period of time.

·        It gives a distinct identity to organisation and do difference from one to other organisations.

·        Total expression of what the organisation is all about.

·        It provide the view of people behaviour about the organisation.

·        It's a multi- dimensional concept .


Elements of organisational climate


Individual autonomy-It implies the degree to which employees are free to manage themselves, have considerable decision- making power and are not continuously accountable to higher management.


Position structure-The degree to which objectives of jobs and methods for accomplishing it are established and communicated to the employees.


Reward orientation-It means the degree to which an organisation rewards individuals for hard work or achievement. It is high when an organisation orients people to perform better and rewards them for do the work.


Task orientation-If the management is task oriented , the leadership style will be automatic do the work.


Relations orientation or consideration-The organisational climate will be considerate and supportive if the managers are Relation- oriented while dealing with employees. Employee needs are very important in any organisations. This will give motivation to employees.


Job satisfaction-Employee satisfaction are very important for any organisation, and it is very important in organisational climate. It gives motivation to employees to work more and more.


Morale-It gives attitudes and sentiments of organisational members towards the organisation members. If it is high , there will be an atmoshphere of cooperation in the organisation. But if the morale is low, there will be conflicts between employees.


Control-Having full control over the workers. Control is either two types either flexible or flexible.



Factors Affecting Organizational Climate and Retention


Organisational change-Change refers to new reporting relationships, responsibilities, procedures, policies, equipment, tools, and/or software used on the job. Think about how an organization or work unit responds to change as a whole, rather than how individuals respond. Communication.

Service-Service is defined as meeting the needs and expectations of the persons (children, youth and families) for whom you are performing your work. This does not refer to the management, but the persons who benefit from the work.


Compensation-Monetary compensation is an employee's gross payroll pay rate and benefits programs funded by an organization or agency. Flextime and benefits like agency-based childcare are closely related to compensation.




3 Leader


"Leadership is a function of knowing yourself, having a vision that is well communicated, building trust among colleagues, and taking effective action to realize your own leadership potential."


Prof. Warren Bennis


Types of Leadership Style




–  Leader makes decisions without reference to anyone else


–  High degree of dependency on the leader


Can create de-motivation and alienation of staff


May be valuable in some types of business where decisions need to be made quickly and decisively




Encourages decision making


from different perspectives – leadership may be emphasised throughout the organisation


–  Consultative: process of consultation before decisions are taken


Persuasive: Leader takes decision and seeks to persuade others that the decision is correct




‗Let it be‘ – the leadership responsibilities are shared by all


Can be very useful in businesses where creative ideas are important



–  Can be highly motivational,


as people have control over their working life


Can make coordination and decision making time-consuming and lacking in overall direction


–  Relies on good team work


–  Relies on good interpersonal relations




1.     Leader acts as a ‗father figure‘


2.     Paternalistic leader makes decision but may consult


3.     Believes in the need to support staff


4.     Theories of Leadership


Early Theories:


Great Man Theories


      Leaders are exceptional people, born with innate qualities, destined to lead


      Term 'man' was intentional - concept was primarily male, military and Western Trait Theories


      Research on traits or qualities associated with leadership are numerous


      Traits are hard to measure. For example, how do we measure honesty or integrity? Leadership Traits


Group Exercise:


      Choose leaders YOU admire


      What personality traits and skills do they have?




      Adaptable to situations


      Alert to social environment


      Ambitious and achievement orientated











      Dominant (desire to influence others)


      Energetic (high activity level)






      Tolerant of stress


      Willing to assume responsibility




      Clever (intelligent)


      Conceptually skilled




      Diplomatic and tactful


      Fluent in speaking


      Knowledgeable about group task


      Organised (administrative ability)




      Socially skilled


Functional Theories (John Adair, Action Centred Leadership, 1970)


Leader is concerned with the interaction of 3 areas:


      Task – goal setting, methods and process


      Team – effective interaction/communication, clarify roles, team morale


      Individual – attention to behaviour, feelings, coaching, CPD


Behaviourist Theories (Blake and Mouton, Managerial grid, 1964)


         Leaders behaviour and actions, rather than their traits and skills e.g. production orientated or people orientated



         Different leadership behaviours categorised as ‗leadership styles‘ e.g. autocratic, persuasive, consultative, democratic


         Doesn‘t provide guide to effective leadership in different situations


Situational/contingency Leadership (Hersey-Blanchard, 1970/80)


Leadership style changes according to the 'situation‗ and in response to the individuals being managed – their competency and motivation


Transformational Theory (Bass and Avolio, 1994)


      Leaders inspire individuals, develop trust, and encourage creativity and personal growth


      Individuals develop a sense of purpose to benefit the group, organisation or society. This goes beyond their own self-interests and an exchange of rewards or recognition for effort or loyalty.



4 Group Influences


A collection of individuals who have regular contact and frequent interaction, mutual influence, common feeling of camaraderie, and who work together to achieve a common set of goals.


Group influence

n    Group types


n    Primary


n    Secondary


n    Brand community


n    Formal v. informal groups


n    Aspiration v. dissociative


n    Conformity


n    Peer pressure


Social Power


Types of power

n    Referent


n    Legitimate


n    Expert


n    Reward


n    Coercive


Reference Group Influences

n    Types


n    Informational


n    Utilitarian


n    Value-expressive


n    Value & Reference groups


n    Utilitarian


n    Hedonic


Reference Group Influence


What makes people susceptible to group influence?

n    Attention to social comparison information


n    Separateness-connectedness


n    Connected self-schema


n    Social influence and embarrassment


Word-of-mouth Marketing

n    Characteristics


n    Organic


n    Amplified


n    Cheaper and more influential


n    Positive & negative word-of-mouth


n    Consumer expertise


n    Online capabilities


n    Social networking


Word-of-mouth Marketing

n    Buzz marketing


n    Guerilla marketing



n    Ford Focus


n    Viral marketing


n    Cloverfield


n    The Dark Knight


n    Stealth marketing


n    Tactics


Word-of-mouth Marketing

n    Opinion leaders


n    Characteristics


n    Market mavens


n    Surrogate consumers


n    Rachel on Friends


n    Diffusion processes


Household Decision-Making

n    Traditional Structure


n    Family


n    Nuclear


n    Extended


n    Emerging trends


Household life cycle

n    Boomerang kids


n    Sandwich generation


n    Household Decision-Making


n    Purchasing roles


n    Influencer


n    Gatekeeper


n    User



n    Decision-maker


n    Purchaser


n    Sex roles


n    Power of children


n    Consumer socialization


5 Job Challenge


The Job Challenge Profile (JCP) is a self-assessment that will gauge workplace challenges and highlights prime learning experiences. This profile can show you or your employees how to seek, challenge and develop the valuable skills needed within ones professional life.


What does the Job Challenge Profile assess?


There are five clusters of job components that represent major aspects of managerial work:


  Experiencing a job transition


  Creating change


  Managing high levels of responsibility


  Managing boundaries


  Dealing with diversity




Need a change in your career?  Accept a new job challenge.

The benefits of using the Job Challenge Profile:


  Versatile: can be administered to managers and leaders at all levels and organization types


  Quick, easy to understand and administer


  Comprehensive Facilitator‘s Guide



Job assignments are one of the oldest and most important forms of leader development. It can give you the opportunity to learn by doing, and more importantly, allow you to grow as a leader. But not every job can help develop leadership, however. It must be something that stretches you, pushes you out of your comfort zone, and requires you to think and act differently.



Research into what makes a job developmental has identified five broad sources of challenge related to learning:



1.     Job transitions. A change in work role whether change in content, level of responsibility or location – requires you to handle responsibilities that are in some way unfamiliar and where the usual routines and behaviors are no longer adequate.


2.     Creating change. Jobs that require you to create change call for actions and decisions in the face of uncertainty and ambiguity. You are responsible for new directions, must address inherited problems and face problems with employees who are dealing with change.


3.     High levels of responsibility. Assignments with high levels of responsibility have greater breadth, visibility and complexity; they also expose you to pressure and high-stakes decisions.


4.     Managing boundaries. Most leaders are accustomed to managing downward. In situations where you must work across lateral boundaries your new challenge is to work with people over whom you have no formal or direct authority.


5.     Dealing with diversity. Most organizations are experiencing rapid and substantial increases in diversity, not only in the domestic workforce but also in the demands of operating in the global arena. This requires you to learn to work with and manage people from different cultures or countries as well as with people of both genders and of different racial and ethnic backgrounds.


4.6 Competition


From a managerial perspective, competition generally falls into the external environment, though it can also take shape in the internal environment through rivalry between strategic business units (SBUs). For managers, understanding the external competitive landscape is a critical factor in assessing company strategies and benchmarking appropriately to ensure the competitiveness of the firm. Businesses that fail to keep pace with their rivals will eventually be overpowered and often forced to develop an exit strategy.


Avoiding the risks of competitive factors demands a strong understanding of operational efficiency (low cost), quality production, differentiation, and competitive advantage or who you target and whether or not you have a cost or quality advantage (see figure below).


Cost vs. quality


Companies generally achieve either a cost or a quality advantage (very rarely, both). Low-Cost and Branding


The simplest perspective on competition is in industries where products are homogeneous (or very alike). In such a situation, companies compete directly. For example, bottled-water producers are directly involved in such a framework and thus adopt two basic competitive strategies: low-cost and branding.


Low-cost suppliers find ways to optimize their production and distribution to offer consumers the lowest possible price on one bottle of water. Low-cost suppliers often benefit largely from economies of scale. Branding, on the other hand, aims to convince the consumer that a higher price point is worth paying based upon the company's name, reputation, or other distinguishing characteristic. For example, Dasani brand water costs more than generic store brand water, despite being essentially the same product. Commercials, aesthetic presentation, goodwill, and factors other than price may then influence a consumer's purchasing decision.




Most products and services are not homogeneous, however, allowing incumbents in an industry to compete with one another by means of various competitive strategies. Differentiation is a competitive tactic wherein companies approach certain niche needs within an industry to capture a segment of the market share.


An example of differentiation might be cereal. There are hundreds of different kinds of cereals. The need being filled is sustenance: people need to eat. The producers of these cereals use differentiation to capture a share of the cereal market: some brands focus on their organic nature, others their sugary appeal, and still others on being "cool." Branding plays an important role here as well, though assessing niche consumer needs and filling them is the principal focus.




Finally, there is the potential to compete externally based upon quality. Toyota makes both the Corolla and the Lexus, thereby targeting both ordinary automobile drivers and those in the luxury-car consumer bracket. Quality competitive strategies, while related to branding, provide a particular level of quality to capture a specific income or interest demographic. The opportunity cost of efficiency is associated with quality, which generally sees higher price points. Quality is therefore a strong antithesis to the low-cost strategy.


Internal Competition


Businesses also compete internally, an intrinsically complex issue. On the surface, internal competition involves either direct product substitutes or funding competition (among different business units). An example of internal competition is PepsiCo. Pepsi makes both colas and sports drinks, all of which sit on the shelf next to one another. When a customer sees the sports drink and chooses it over the cola, the cola has lost a sale to an internal competitor. Pepsi, however, did not lose a sale; it merely lost one segment of the business while gaining another.


With these points in mind, managers must thoroughly understand the products they are pitching and which strategy will help them avoid going toe-to-toe with other businesses with whom they cannot compete. Starting up a car manufacturing business to compete with Hyundai in the low-cost market is extremely difficult, as Hyundai has economies of scale in place that will almost always beat smaller competition on a low-cost strategy. This example illustrates an extremely important point in business: rely on strengths. Managers must understand their own competitive advantage (what they do better than the competition) to adopt the appropriate competitive strategy to gain market share and remain profitable



7 Managerial Styles


Management Styles


According to Hay-McBer there are six key leadership or management styles.




The DIRECTIVE (Coercive) style has the primary objective of immediate compliance from employees:


·        The ―do it the way I tell you‖ manager

·        Closely controls employees

·        Motivates by threats and discipline


Effective when:


·        There is a crisis

·        When deviations are risky



Not effective when:


·        Employees are underdeveloped – little learning happens with this style

·        Employees are highly skilled – they become frustrated and resentful at the micromanaging.




The AUTHORITATIVE (Visionary) style has the primary objective of providing long-term direction and vision for employees:


·        The ―firm but fair‖ manager


·        Gives employees clear direction

·        Motivates by persuasion and feedback on task performance


Effective when:


·        Clear directions and standards needed


·        The leader is credible Ineffective when:


·        Employees are underdeveloped – they need guidance on what to do

·        The leader is not credible – people won‘t follow your vision if they don‘t believe in it




The AFFILIATIVE style has the primary objective of creating harmony among employees and between manager and employees:


·        The ―people first, task second‖ manager

·        Avoids conflict and emphasizes good personal relationships among employees


·        Motivates by trying to keep people happy


Effective when:


·        Used with other styles


·        Tasks routine, performance adequate

·        Counselling, helping


·     Managing conflict Least effective when:

·        Performance is inadequate – affiliation does not emphasise performance

·        There are crisis situations needing direction




The PARTICIPATIVE (Democratic) style has the primary objective of building commitment and consensus among employees:


·        The ―everyone has input‖ manager

·        Encourages employee input in decision making

·     Motivates by rewarding team effort


Effective when:


·        Employees working together


·        Staff have experience and credibility

·        Steady working environment


Least effective when:


·        Employees must be coordinated

·        There is a crisis – no time for meetings

·        There is a lack of competency – close supervision required




The PACESETTING style has the primary objective of accomplishing tasks to a high standard of excellence:


·        The ―do it myself‖ manager

·        Performs many tasks personally and expects employees to follow his/her example

·        Motivates by setting high standards and expects self-direction from employees


Effective when:


·        People are highly motivated, competent

·        Little direction/coordination required

·        When managing experts


Least effective when:


·        When workload requires assistance from others

·        When development, coaching & coordination required




The COACHING style has the primary objective of long-term professional development of employees:


·        The ―developmental‖ manager

·     Helps and encourages employees to develop their strengths and improve their performance


·        Motivates by providing opportunities for professional development


Effective when:



·        Skill needs to be developed


·        Employees are motivated and wanting development Ineffective when:


·        The leader lacks expertise


·        When performance discrepancy is too great – coaching managers may persist rather than exit a poor performer


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