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UNIT - 4 ENVIRONMENTAL ISSUES IN MANAGERIAL EFFECTIVENESS Change is an important feature of modern organization. Significant take place every day in social, technological, political and other aspects of modern world. These changes create new challenges and opportunities for the managers world. The important environmental issues for the effectiveness of managers are discussed below: Changes in social environment Changes in economic environment Changes in technological environment Changes in political environment Changes in International environment Changes in social environment – Social factors which will shape future management strategies are as follows: Population explosion Education level Leisure time Public opinion Population explosion – population is increasingly rapidly. Increasing population will require new jobs, new methods of production and distribution and new modes of living. Education level – The government of various countries are taking steps to eradicate illiteracy and to increase the education level of their citizens. Leisure time – People will have more leisure time because of reduced working hours, increased automation and quick means of transport and communication. The effect of this trend are many and varied. Public opinion – Public opinion about business will shape the attitudes of future managers. If the people have distrust in the market system, they will prefer government controls to growing competition. Changes in economic environment – The degree of resource exploitation will have a direct bearing on the economic environment and through this on the business. As is obvious from the present trends, environment will not remain confined to land only, but would to oceans and space also. Changes in technological Environment – Technological changes will affect management in the future. In future all big organization will be actively engaged in technological forecasting. Automation – Automation has created new problems. Job have become routinized and unchallenging. Introduction of industrial robots has created a feeling of job insecurity among workers. Information technology – There will be remarkable impact of computerized information systems on management. The impact of IT on management are as follows: i. There will be use of electronic equipment to collect and process ii. Computers will help applications of quantitative techniques to management problems. iii. There will be simulation of higher order thinking through computer programs. Changes in political Environment – There will be greater government’s interference in business to safeguard the interest of workers, consumer and the public at large. The government may restrict the scope of private sector in certain areas. Changes in International Environment – Multilateral trade among the nation will increase. The role of IMF, World Bank and other international institutions will change and a new economic order will take place leading to globalization of economics. ORGANIZATIONAL PROCESSES Organization is an arrangement for an internal administration of the enterprise. It is mechanism of management by which group performance is achieved for the realization of objectives through definition and division of activities, responsibility and authority. According to Ralph C. Davis, “Organization is a group of people who cooperate under the direction of leaderships, for the accomplishment of a common end” According to Jones D. Mooney, “Organization is the form of every human association for the attainment of a common Nature/characteristics of Organization : The characteristics of organization are as follow Division of Labor – Division of labor leads to specialization which increases the efficiency of individual employees. Subdivision makes each task simpler and results in greater efficiency. Coordination – In any organization, different persons are assigned different functions and yet all these functions have only one aim ORGANIZATIONAL CLIMATE Meaning : Organizational climate is very important factor to be considered in studying and analyzing organizations because it has profound influence on the outlook, well-being and attitudes of organizational members and, thus on their total performance. It affects the behavior of people in three ways: i. Defining the stimuli that confront the individual ii. Placing constraints upon the individual’s freedom of choice. iii. Providing source of reward and punishment Organizational climate should be viewed from total system point of view. In organizations, there may be differences in climate in different work units, as commonly observed. It is because one type of climate may be suitable to one particular unit and the same may be unsuitable for another unit. According to Abuhamdeh & Csikszentmihalyi “An organizational climate of an organization is described by a certain set of characteristics depicted in the organization” According to Bowditch and Buono “organizational culture is with the nature of belief and expectations life, while climate is an indicator of whether those beliefs and expectations are being fulfilled”. Characteristics of organizational climate General perception – Organizational climate is a general expression of what the organization is. It represents the summary perception, which people have about an organization. Qualitative concept – It is an abstract and intangible concept. It is difficult to explain the components of organizational climate in quantifiable units. Enduring quality – It is built-up over a period time. It represents a relatively enduring quality of the internal environment that is experienced by the organizational members. Multidimensional concept – There are several dimensions of the concept of organizational climate such as individual autonomy, authority structure, leadership style, pattern of communication, degree of conflicts and cooperation, etc. FACTORS INFLUENCING ORGANIZATIONAL CLIMATE • Organizational values and norms – conformity, loyalty, impersonality and reciprocity. • Overt & Covert factors of Organization climate – Open factor: Hierarchy, Goals of organisation, Skills and abilities of employees – Closed factor: Values, attitudes, Norms FACTORS INFLUENCING ORGANIZATIONAL CLIMATE • Organizational context – mission, goals and objectives, function, etc. • Organization structure – size, degree of centralization and operating procedures. • Leadership process – leadership styles, communication, decision-making and related processes. • Physical environment – employee safety, environmental stresses and physical space characteristics. APPROACHES TO LEADERSHIP Early Approaches Trait Theory Behaviour Theory Situational Theory Stogdill’s Trait Factor University Iowa Studies Fiedler’s Contingency Model Leader Continuum Hersey and Blanchard’s Situational Leadership Ohio State University Studies Leadership Participation Michingan Research Tannenbaum & Schmidt’s Situational Continuum Managerial Grid Path Goal Theory Ghiselli ‘s Personal Traits Reddin’s Three Dimensional Model Contemporary Approaches Transactional – Transformational Leaders Charismatic Leadership Theory STOGDILL’S TRAIT FACTORS 1. Intelligence 2. Physical Features 3. Inner Motivation Drive 4. Maturity 5. Vision and Foresight 6. Acceptance of Responsibility 7. Open-mind and Adaptability 8. Self-Confidence 9. Human Relations Attitude 10.Fairness of Objectivity GHISELLI ‘S PERSONAL TRAITS 1. Very Important Decisiveness Intellectual capacity Job achievement orientation Self-actualization feelings Self-confidence Management ability – Team builder 2. Moderately Important Affinity for working class Drive and initiative Need for a lot of money Need for job security Personal maturity 3. Almost No Importance Masculinity versus femininity UNIVERSITY IOWA STUDIES Behaviour Theories are based on 1. Employee-Centered 2. Job-Centered University Iowa Studies • Autocratic Leadership Style • Democratic Leadership Style LEADER CONTINUUM • Autocratic • Laissez – Faire • Democratic • Benevolent Autocrat OHIO STATE UNIVERSITY STUDIES • Initiating Structure • Consideration The findings of the study: 1. Initiating Structure: Positively related to performance and negatively related to absenteeism & Grievances. 2. Consideration: Negatively related to performance and positively related to absenteeism & Grievances. 3. Both: High performance and satisfaction MICHINGAN RESEARCH • Employee Centered Behaviour • Production Centered Behaviour Job Centered Employee Centered Leaders will not be able to have an employee centered behaviour and production centered behaviour at the same time. MANAGERIAL GRID • Concern for Production • Concern for People FIEDLER’S CONTINGENCY MODEL • Task-oriented or controlling: Leader gains satisfaction from seeing tasks performed • Relationship-oriented or considerate: Leader tries to achieve good interpersonal relations with the subordinates. HERSEY AND BLANCHARD’S SITUATIONAL LEADERSHIP LEADERSHIP PARTICIPATION Leadership Styles • Decide: Leader makes the decision alone and either announces or sells it to the group. • Consult Individually: Leader presents the problem to group members individually and get their suggestions. • Consult Group: Leader presents the problem to group in a meeting and then makes a decision. • Facilitate: Leader presents the group about the problem and the boundaries within which a decision should be made. • Delegate: Leader permits the group to make the decision within prescribed limits. TANNENBAUM AND SCHMIDT’S SITUATIONAL CONTINUUM PATH GOAL THEORY The theory states that a leader's behavior is dependent to the satisfaction, motivation and performance of her or his subordinates. REDDIN’S THREE DIMENSIONAL MODEL Basic Style Less Effective Managerial Style More Effective Managerial Style Separated Deserter Bureaucrat Related Missionary Developer Dedicated Autocrat Benevolent Autocrat Integrated Compromiser Executive • High relationship orientation & high task orientation is called as INTEGRATED TYPE. • High relationship orientation & low task orientation is called as RELATED TYPE. • Low relationship orientation & high task orientation is called as DEDICATED TYPE. • Low relationship orientation & low task orientation is called as SEPARATED TYPE TRANSACTIONAL –TRANSFORMATIONAL LEADERS • Transactional Leaders: Leaders who guide or motivate their followers in the direction of established goals by clarifying role and task requirements. • Transformational Leaders: Leaders who inspire followers to transcend their own self-interests and who are capable of having a profound and extraordinary effect on followers. CHARISMATIC LEADERSHIP THEORY • Followers make attributions of heroic or extraordinary leadership abilities when they observe certain behaviors. • The leader Communicates an attractive vision. • Charismatic leader is the one who use his personal charm to get things done. This can be an extremely powerful way to lead others. • The leader then communicates high performance expectations and expresses confidence that followers can attain them. GROUP INFLUENCES • Group may be defined as two or more individuals interacting and interdependent, who have come together to achieve particular objectives. DIFFERENT TYPES OF GROUPS • Formal group • Informal groups • Psychological groups– extension of informal groups • Virtual Groups • Interacting, Co-acting, and Counteracting Groups • Open and Closed Groups • Closed groups • Membership and Referent Groups • In and out groups: In FACTORS INFLUENCING GROUP EFFECTIVENESS • Work Team Structure Issues: – – – – Goals & Objectives Guidelines Performance measures Role specification. • Work Team Process Issues – – Managing cooperative behaviors Managing competitive behaviors • Diversity in Teams – – Plays a large role in groups’ effectiveness. Members contribute to team in one of four styles: • • • • • Contributor Collaborator Communicator Challenger Integrator • Dissimilarity in Teams – – – Demographic dissimilarity influences absenteeism, commitment, turnover intentions, beliefs, workgroup relationships, self-esteem, and organizational citizenship behavior. Can have positive or negative effects on teams Value dissimilarity negatively related to team involvement • Structural Diversity JOB CHALLENGE • Job Challenge refers to the opportunity for professionals to make fullest use of their Skills. JOB CHALLENGES FACED BY MANAGERS • Unfamiliar Responsibilities • Inherited Problems • High Stakes • External Pressure • Work Across Cultures • New Directions • Problems with Employees • Scope and Scale • Influence without authority • Work Group Diversity COMPETITIVENESS The degree to which a country can, under free and fair market conditions, produce goods and services which meet the test of international markets, while simultaneously maintaining and expanding the real incomes of its people over the long-term FACTORS INFLUENCING COMPETITIVENESS • Domestic economy • Internationalization • Government • Finance • Infrastructure • Management • Science and technology • Quality of people MANAGERIAL STYLES •Democratic Style •Affliative Style •Pacesetting Style •Authoritative Style •Coercive Style •Coaching Style