STAGES OF ORGANISATIONAL GROWTH These are formation and development stage, stabilization and dynamic equilibrium stage, and change or decline and dissolution stage. In the formation and development stage, a basic task before the organization is the accomplishment of an increase in output. In the stabilization and dynamic equilibrium stage which is a middle stage for organizations, output tends to stabilize. In the last stage of change or decline and dissolution, the organization has to adjust or change to maintain its growth or will face decline and dissolution.
A variation on this theme is expounded by Lippitt and Schmidt. They suggest that there are three development stages in an organization: birth, youth and maturity. The critical concern at the birth stage is to create a new organization and to survive as a viable system; at the youth stage is to gain stability and to gain reputation and develop pride and at the maturity stage is to achieve uniqueness and adaptability and to contribute to society. Some organizations succeed in reaching higher stages of development then others. Organizations usually go into decline only because management fails to notice the need for change or because of drastic change in the external environment.
A very useful model of organizational growth has been developed by Greiner. He argues that each organization moves through five phases of development as it grows. Each phase contains a relatively calm period that he calls an evolutionary phase, which is ended by a management crisis marked by a substantial amount of internal turmoil. According to Greiner, each evolutionary period is characterized by the dominant management style used to achieve growth, while each revolutionary period is management style used to achieve growth, while each revolutionary period is characterized by the dominant problem that must be solved before growth will continue. Since each phase is strongly influenced by the previous one, acknowledge of the organizations history can aid management in determining its future.
The key dimensions used in this model are size and age. The age of an organization is critical because problems and decisions are rooted in time. Historical studies can gather data from different time periods and make comparisons to provide insight. The size of an organization is directly related to problems and solutions of matters such as sales volume, coordination and communication. If the size remains fairly stable, it can maintain the same management practices for long periods. Figure 25.5 presents the various stages of organizational growth.
As illustrated in Figure 25.5 there are five phases in organizational growth creativity, direction, delegation, coordination and collaboration followed by a particular crisis and management problems.
1.Creativity Stage: Growth through creativity is the first phase. This phase is dominated by the founders of the organization and the emphasis is on creating both a product and a market. Generally these founder are technically and entrepreneurially – oriented and they absorb there mental and physical energies entirely in producing and selling a product. However as the organization grows in size and complexity, the need for greater efficiency cannot be achieved through informal channels of communication. Thus many managerial problems occur which the founders may not solve effectively either because they may not be suited for the kind of job or they may nor be willing to handle such problems. Thus a crisis of leadership emerges and the first revolutionary period begins. Such questions as “who is going to lead the organization out of confusion and solve the management problems confronting the organization: who is acceptable to the founders and who can pull the organization together arise”. In order to solve these problems a new evolutionary phase – growth through direction – begins.
2.Direction stage: When leadership crisis leads to the founders relinquishing some of their power to professional mangers, organizational growth is achieved through direction. During this phase, the professional mangers and key staff take most of the responsibility for instituting direction, while lower level supervisors are treated more as functional specialists then autonomous decision – making managers. Thus directive management techniques enable the organization to grow, but they may become ineffective as the organization becomes more complex and diverse. Since lower level supervisors are most knowledgeable and demand more autonomy in decision – making a new period of crisis – crisis for autonomy – begins. In order to overcome this crisis, the third phase of growth – growth through delegation – emerges.
3.Delegation stage: Resolution of crisis for autonomy may be through powerful top mangers relinquishing some of their authority and a certain amount of power equalization. When the organization gets to the growth stage of delegation, it usually begins to develop a decentralized organization structure which heightens motivation of the lower levels. However with decentralization of authority to mangers, top executives may sense that they are losing control over a highly diversified operation. Field mangers want to run their won shows without coordinating plans, money, technology or manpower with the rest of the organization and a crisis of control emerges. This crisis can be dealt with the next evolutionary phase – the coordination stage.
4.Coordination stage: The crisis of control often results in a return to centralization, but his is now inappropriate and creates resentment and hostility among those who have been given freedom. Thus, instead of centralization, coordination becomes the more effective method for overcoming crisis of control. The coordination phase is characterized by the use of formal systems for achieving grater coordination with top management as the watch dog. The new coordination systems prove useful for achieving growth and more coordinated efforts by line mangers, but result in a task of conflict between line and staff, between headquarters and field. Line becomes resentful of staff: staff complains about un co – operative and uninformed line mangers; and everyone gets bogged down in the bureaucratic paper system. Procedure takes precedence over problem solving : the organization become too large and complex to be managed through formal programmes and rigid systems. Thus crisis of red –p tape begins. In order to overcome the crisis of red tape, the organization must move to the new evolutionary stage – the collaboration stage.
5.Collaboration stage: The collaboration stage involves more flexible and behavioral approaches to the problems of managing a large organization, Greiner observes that while the coordination stage was managed through formal systems and procedures, the collaboration stage emphasizes greater spontaneity in management action through teams and skillful confrontation of interpersonal differences. Social control and self discipline take over from formal control. Though Greiner is not certain what will be the next crisis around the psychological saturation of employees who grow emotionally and physically exhausted by the intensity of team work and of the heavy pressure for innovation solutions.
Hersey and Blanchard, however, feel that to overcome and even to avoid the various crises, mangers could attempt to move through the evolutionary periods more consistently with the sequencing that situational leadership theory would suggest – direction to coordination to collaboration to delegation – rather than the ordering depicted by Greiner. Though there may be controversy and is agreement over the sequencing arrangement of various actions and styles, the growth clearly presents problems of adjustments for the organizations. As organizations grow and evolve, thy change and present the problems of management of change, and ultimately the organizations policies, procedures, structure and so on, may have to change.
GROUP LEVEL CONFLICT
Conflict may occur at group level. A group constitutes two or more persons who interact in such a way that each person influences and is influences and is influenced by others. Groups exist in every organization and they affect the behavior of their members. They not only affect the behavior of their members, rather they impact on other groups and the organization as a whole. In this interaction process, there may be two types of conflict, intergroup and intergroup.
Intragroup conflict:
Intragroup may be though in terms of group characteristics and to some extent interpersonal conflict, specially if two persons are from the same group. A group is consisting of a number of persons’ whose interactions at a given time generate a system of values, norms and sanctions appropriate to the nature of the task on which they are working, which has created a set of well defined role and status relations which are interdependent. Intragroup conflict may arise in three situations
1. When group faces a novel problem of task.
2. Where new values are imported from the social environment into the group.
3. Where a person’s extra group role comes into conflict with his intragroup role.
Intragroup conflict is visualized more when people come from different socio – economic backgrounds and have different political and religious views. The disagreement may be over ethics, the way power should be exercised or moral considerations of assumptions, justice, fairness and so on are interpreted. Such differences may affect the choice of either goals or methods of achieving goals.
INTERGROUP CONFLICT
Intergroup conflict arises out of the interaction of various groups. There are many factors in the organization which determine the intergroup relationships. These factors can influence relations between two or more groups. If these factors are not positive they tend to create conflict among groups. These factors are goal incompatibility resource sharing, task relations, uncertainty absorption, and attitudinal set. These factors are described below to show how these can lead to co – operative or conflicts relations among groups.
1.Goal In compatibility: The goals of two groups can have a powerful impact on their relationship. Decision – makers often use goals to indicate their relative preference. The accomplishment of the state goals of each group may require interaction with one or more of other groups. The ideal state my exist when each group perceives its goals as the goals of the organization as a whole and the goals of the other groups as compatible with one another and mutually reinforcing. However goals are not always perceived or designed in such a way as to be quite compatible and mutually reinforcing.
Intergroup conflict arises because of goal incompatibility, that is goal attainment by one group may prevent or reduce the level of goal attainment by on or more other organization is a classic example of this conflict. Similar such conflicts arise in line because of incompatibility of goals . this conflict, however is affected more by distributive and integrative subprocess, discussed further.
Though goal incompatibility is the cause of intergroup conflict, it is unlikely that widespread goal incompatibility of win – lose variety with an organization is frequent. A win – lose situation exists when one group’s goal attainment is at the direct expense or cost of another group. Thus goal incompatibility among groups is more often a mixed, rather than a total win – lose variety. Thus the degree to which two or more groups perceive goal incompatibility will affect the degree of conflict.
2.Resource sharing: The relations between two groups can ne affected by the degree two which the two groups draw from a common pool of resources, and the degree to which this common pool of resources is adequate to meet the demands of both the group. Thus conflict of this nature arises because of the discrepancy between aggregated demand and available resources. Each party to the conflict has an interest in making the total resources as large as possible, but also in securing as large a share of them as possible. The conflicts between management and labour union are quite common in all types of organizations. Such conflicts take place on the quantum of wages, amenities , working conditions and other related matters. The basic reasons for such conflicts are the identification of in incompatible goals followed by the distribution patterns of available resources. The group conflicts, particularly between management and conflicts are so important that some official machinery is provided for resolving these conflicts. For example various provisions have been made under the industrial disputers Act, 1947 for the reconciliation of labour – management conflicts.
3.Task Relationship: Each group in the organization is related with others as these are created though organization structure . Organization structure is the result of organizing process though which departments are created for achieving organizational goals. Thus, each group in some way or the other is interrelated. Depending upon the nature of such functional relationship, various groups may be related in two ways: interdependence and dependence. In some cases, groups may be independent, but this situation is quite uncommon in organizations. Two groups are independent if both of them have the discretion to withdraw from the relationship at will. Depending upon the type of task relationship, groups may perceive conflict.
Interdependent task relations exist when two groups coordinate or collaborate with one another. Coordination exists when the subtasks allocated to different groups need to be sequenced and agreed upon by the two groups. Collaboration occurs when the two groups share joint responsibility for certain tasks. A dependent takes relationship exists between two groups if one group is dependent upon the former for resources. A dependent task relationship may result in one group having the ability to dictate or unilaterally determine the outcome of their interaction. The conflicts arise in these relations if a group exceeds its authority. For example, if staff departments influence in the decision – making process well in excess of the advisory roles assigned to them, the conditions for conflict exist.
1. Absorption of Uncertainty: Since organizations are open systems, they and their elements – various groups – face uncertainty. Uncertainty is the gap between what is known to make correct decisions. In order to mange uncertainty, organizations assign certain groups or individuals to deal with it. Thus a group may absorb uncertainty of to her groups, thereby avoiding the uncertainty. For example, the accounting department may prescribe the rules for travelling. The conditions for conflicts exist if uncertainty absorption by one group is not in accordance with the expectations of other groups. For example, if marketing department finds the rules framed by the accounting department inadequate or inefficient, the conditions for conflict exists.
2. Attitudinal Sets: The sets of the attitudes that members of various groups hold towards each other can be cause and a consequence of the nature of their relationship. If the group relations begin with the attitudes of distrust, competitiveness, secrecy, and closed communications, there is a possibility of various factors of group relationship being emphasized in a negative way, consequently leading to conflicts. In the alternative case, the group relationship may be co – operative characterized by mutual trust and respect, greater acceptance of responsibility for mutual problems, greater considerations for others points of view, greater willingness to avoid blaming each other more open communication and so on, in such cases, so – operation, instead of conflict is visible.
POWER
Power is a term which is defined in different ways by different theorists because power can be used as a means of influence in different ways. Going way back, for example, Max Weber, the famous pioneering sociologists, has defined power as follows:
“ Power is the probability that one actor within the relationship will be in a position to cry out his own will despite resistance”
Nord has defined power in the context of mobilization of energy and resources to achieve one set of goals as against other sets of goals. He defines power as follows:
“ Power is the ability to influence flows of the available resources towards certain goals as opposed to other goals. Power is assumed to be exercised only when these goals are at least partially in conflict with each other”
Robbins has defined power in more elaborate way when he says:
“Power refers to a capacity that A has to influence the behavior of B, so that B does something he or she would not otherwise do. This definition implies :
1.a potential that need not be actualized to be effective.
2.a dependence relationship and
3.That B has some discretion over his or her own behavior.
Thus , the power has defined basically as the capacity to do something or get intended results from others. From this point of view, power has the following characteristics.
1. Power is one of the means to influence others for getting results. It implies that influence can be exercised by other means too, like use of authority, leadership and communication.
2. Influence process occurs in a particular way when it is attempted by the use of power.
3. Power is used not only in getting certain result achieved but it also includes negative decisions, or the action of non – decisions. Thus power is not only one’s influence over the decisions making, but also one’s capability of limiting the scope of actual decision making.
4. Power is extra organizational in nature and any one in the organization may have this type of influence through the use of power provided one is capable of doing so.
IMPORTANCE OF POWER
Power, though personal and lacks legitimacy, is a crucial factor in influencing the behavior in organizational situation. Thus power, is one of the essential components of practically every organization.
Power has been compared with electricity in a motor by Hicks and Gullett. Thus state, ‘consider an electric motor for comparison. The motor like an organization can be explained partially by a description of its
1. external appearance and operation.
2. gears, inner mechanisms and relationships; however the essence of the motor cannot be understood without an appreciation of a third factor, how electricity as the power source makes the motor run, which may cause gears to turn, which operate mechanisms and so forth. So it is also with power: it is force that makes organizations operate. The importance of power can be analyzed in two ways.
1. Necessary for Coordinated Activities: Power is required in the organization for the effective performance of activities of the people. In its absence , there may be chaos which is undesirable because
i. people become upset and insecure in the presence of chaos and
ii. chaos precludes the synergistic benefits that ate gained from effective organizations. Thus many benefits of modern organizations cannot be obtained without the viable exercise of power in some form. People may be willing to obey the power, although without nay legitimacy. It has been observed that a person may like success more than he dislikes being controlled by another’s power.
2. Basis for Authority and Responsibility: Power is commonly recognized as the basis for authority and responsibility. In own way, authority can be viewed as one of the perquisites of power. If the source of authority system in the form of formalization is traced, it may be found in power. For example, the dominant values of society have become of the society are nothing but power in the society which is gradually transformed into these systems. In modern organizations too, the authority system is backed by the power system. This is why some persons may have less formal authority but hey are bale to exercise more authority, but actually their exercise of authority is limited because of the power system which operates in the organization.
TYPES OF POWER
The understanding of different types of power ( also known as bases or sources of power) is important because a particular type of power is effective in a particular situation. However researchers on power do not full agreement about the sources from power is derived. It has to be derived from some where because it is not fully legitimized. For example, long back, Lasswell and Kaplan have suggested eight forms of influence: physical power, respect, rectitude, affection, well being , wealth , skills and enlightenment. “ though these forms of influence are important, these do not serve the purpose of applying power in the context of present – day organizations. Etzioni has identified three bases of power: coercive, remunerative and normative. The most important classification of power has been provided by French and Raven. According to them, there are five types of power: reward, coercive, legitimate, referent and expert. However Bacharach and Lawler feel that French and Raven have confused bases of power with source of power which has led to overlapping. The term ‘ sources of power’ denotes from where the power holder derives his power, that is how a person happens to control his base of power: e.g. coercion, reward, etc. Based on this, they have suggested four sources of power: position personal, expert and opportunity. Nevertheless, classification provided by French and Raven is used by researchers on power. In this text, we also take that view. Different types of power are derived from different bases. Thus coercive, reward and legitimate powers are derived from different bases. Thus coercive, reward and legitimate powers are derived almost entirely from the organizations. Organizations awards these powers and these go with the positions of power holders. Referent and expert powers reside in individuals and relate to their won characteristics. Given below is the description of various types of power.
Coercive power: Coercive power is defined as the power which rests upon the application or the threat of application of physical sanctions. The physical sanctions, out of the exercise of coercive power, may be in any form depending upon the situation. Thus it can in the form of infliction of pain, deformity, or death; generation of frustration through restriction of movement; or controlling the satisfaction of basic needs such as those for food, sex, comfort or the like. In organizational situation, it may be in the form of action for or threat for dismissal, suspension, demotion or other method of embarrassment for the people.
Reward power: Reward power is opposite of coercive influence. It is based on one’s control and allocation of material resources and rewards. This power is based on the old saying that ‘wealth is power’. In the organizational situation, this power is based on the control of salaries, wages, commissions, fringe benefits and amenities. People comply with this power because they get benefits out of compliance. Reward power may be in the form of normative power also. Normative power is based on the allocation and manipulation of symbolic rewards which may be important for the people. The symbolic rewards may be in the form of prestige, affection, esteem etc. Thus anybody who can allocate or deny these holds the normative power. It can be exercised in limited interpersonal context or in wide context. Thus it may also include manipulation of the communication system and ability to control rituals.
Legitimate Power: Legitimate power is based an agreement and commonly held values allowing one persons to have power over another person. Such legitimacy may be either formal, as is the case with the organization, or may be informal, as is the case with social units. For example, in our culture, age has certain premium and aged people have certain binding force over others even without having any other characteristics. In organizational setting, this legitimacy is in the form of authority which is delegated to the positions of organizational members. Though a persons may derive authority from other sources in the organization, the superior – subordinate relationship is enough to comply subordinates behavior as directed, particularly in bureaucratic organizations.
Referent Power: Referent power is based on identification. Identification is the process of learning wherein a person copies the behavior of other person whom he takes as an ideal. This may occur in the context of power also. Thus referent power is based on identification with the person who may have some form of power. The target of the influence feels attracted towards the persons having power because of his personality characteristics and tries to behave accordingly. Then this becomes the basis of power exercise. Such identification process may take place without organizational context as most of the people take somebody as ideal and behave accordingly up to a certain stage.
Expert power: Expert power is based on the famous proverb “knowledge is power’. Expert power is that influence which one wields as a result of one’s experience, special skill or knowledge. This power occurs when the expert threatens to withhold his knowledge or skill. The implication of expert power is important in the sense that this is related with the individual’s personal characteristics. Since more organizations are gradually falling under the category of high technology, they will have to utilize their services of these individuals. Consequently organizational choice of replacing these people will be limited. Since any person who is not easily replaceable has more power as compared to those who are easily replaceable, these people will have greater power over others.
POLITICS
Politics is universal phenomenon in organized society. Political behavior is not limited to those who hold public positions. We can expect political behavior in every organization. In the previous section, we have seen how people and groups in organization use politics to gain more power. Pfiffner and Sherwood have commented that “the ‘who gets what’ (politics) is endemic to every organization, regardless of size, function or character of ownership. Furthermore, it is to be found at every level of the hierarchy, and it intensifies as the stakes become more important and the area of decision possibilities greater”. One survey of 400 managers provides that insight into their views towards organizational politics. To a larger extent, mangers agreed that
1. Politics is common in most organizations.
2. Managers must be good at the politics to succeed.
3. Politics becomes more important at higher levels.
4. Politics can detract from organizational efficiency.
Thus it is necessary for managers to understand the dynamics of politics sot that they can take suitable course of actions to minimize its dysfunctional consequences.
CONCEPT OF POLITICS
It can be delivered that everyone plays some kind of politics at some point of time in the organization. We can find references that define politics as one or more of the following: self – serving behavior, acquisition of power, protection of one’s own domain, building of support though group formation, or influence maneuvering. In all these cases, politics involves acquisition of power or be around power and engage in self serving behavior. Therefore, politics can be referred to as actions for seizing, holding, extracting and executing of power by individuals and groups for achieving personal goals. Because of organizational politics, organizational decisions are affected in such a way that they contribute to personal goals rather than organizational goals. Tushman has defined politics as follows:
“Politics refers to the structure and process of the use of authority and power to affect definition of goals, directions and the other major parameters of the organization. Decisions are not made in a rational or formal way but rather through compromise, accommodation and bargaining.”
This definition, though explains the process of politics and its effect on decision making which does not remain rational, does not specifically indicate self – serving behavior of the people engaged in politics. Miles has included self – interest concept in defining politics. He says that:
“ Organizational politics is the process whereby individuals or groups use whatever power they can amass to influence organizational decisions in the direction of their own interests”
On the basis of the review of various definitions of organizational politics, Drory and Romm have arrived at the following definition of organizational politics.
“Organizational politics refers to intentional behaviors that are designed to enhance or protect a person’s influence and self interest”.
Based on the definition of politics, its main features can be described as follows:
1. Political behavior involves some kind of power wither directly or indirectly. Power can be exercised by those who are in formal positions and enjoy authority. It can also be influenced by other persons close to those who hold formal authority.
2. Politics involves behavior that is self – serving. It suggests that either organizational resources are used for personal benefits or benefits to be given to one person are given to another. In the both the cases, the decision in not rational from organization’s point of view.
3. Politics takes place when an individual recognizes that achievement of his goals is influenced by the behavior of others. In such a case, politicking involves the elimination of adversaries by the influential maneuvers of a member of the organization.
4. All self – serving behaviors which do not involve use of power or threat of use of power cannot be termed as politics. For example, an employee’s asking for a rise in pay is not political behavior, but the use of threat to unionize to obtain in pay rise amounts to political behavior
RESONS FOR ORGANISATIONAL POLITICS
Organizational politics is a natural phenomenon of every human group organization, when the group or the organization works for certain time, it tends to generate political behavior. There may be several reasons for this. Some more prominent factors which contribute to political behavior are as follows:
1. Competition for Power: Political behavior emerges because people want to derive power, that is, over and above the authority delegated to them formally. They want to acquire power because it is satisfying to them. Since amount of power like other resources is limited, often there is competition for acquiring power. In this process, people feel it rational to maneuver the things in such a way that ir gives them more power and consequently use of resources then others. Thus, their behavior becomes dysfunctional from organization point of view.
2. Discretionary Authority: Organizations provide positions with discretionary authority to use such powers in the case of special needs like emergency in organizations. Such authority is used based on individual judgment. For example, a production manager may be given discretionary authority to appoint personnel of certain category in the case of emergency without making reference to personnel department. Such discretionary authority, then, becomes the basis for organizational politics. Normally, those in discretionary positions seek to maintain power at least equal to or greater then these dependence on organizational members. If their discretionary power is less, they will try to form coalition to achieve more power. This will result in political behavior.
3. Ambiguity in Organization: Ambiguity in organization, particularly of roles and authority, generates politics. The more ambiguous the formal roles and authority of organization members, the more developed will be the internal system of political competition. Ambiguity puts people to settle their roles through mutual interactions. In these interactions, people may try to enact their roles most suited to them so that they can show better performance. It is to be noted that better performance leads to more incentives and rewards. However, roles enacted in such a way may not be functional for the organization.
4. Subjective Evaluation of Performance: Subjective evaluation of performance may also lead to political behavior. In many cases, performance evaluation cannot be based on any concrete achievement, and it is the judgment of a superior which is taken as the basis for performance evaluation. This may happen where performance evaluation. This may happen where performance cannot be measured quantitatively, for example, the job of a personnel manager or research and development manager. When subjective evaluation of performance is taken and members may think some bias in superior’s evaluation, they may be forced into dysfunctional political behavior. For example, in such a case, a subordinate may like to be closer to his superior by providing him personal satisfaction rather than organizational performance. Therefore, the lesser the objectivity in defining and measuring performance evaluation criteria, the greater is the room for the individuals to engage in dysfunctional behavior.
5. Saturation in Promotion: People have a feeling that they have reached saturation level of promotion. When they reach the maximum level as per their talent and skills, they resort to political behavior. This is what Peter principle describes, that is in a hierarchy, every employee tends to rise to the levels of incompetence and he will have no other business than to engage in politics that have undesirable consequences. However this may not be true for all the persons. Some persons may emphasize work achievement more than positional achievement and may not involve in politics.
GROUP DYNAMICS
The terms group dynamics contains two terms: group and dynamics. Group is basically a collectivity of two or more persons. Dynamics comes from Greek word meaning force. Theory of dynamics is used in physical sciences and engineering which explains the phenomena of universe by some immanent energy: operation of force. Thus group dynamics refers to the interaction of forces between group members in a social situation. However the term group dynamics is defined in different ways. One view is that group dynamics describes how a group should be organized and operated. This includes democratic leadership, participation and co – operation. Another view takes group dynamics as a set of techniques such as ole playing, brainstorming, leaderless group, group therapy, sensitivity training etc. according to the third view, group dynamics is viewed from the internal nature of groups, their formation, structure and processes and the way they affect individual members, other groups and the organization. This view is more prevalent. For example, Group dynamics has been defined as follows:
“the social process by which people interact face to face in small groups is called group dynamics.”
Thus group dynamics encompasses the dynamic of interaction patterns within the group, the subtle and the non – subtle pressures exerted by group members, the manner in which decisions are made in the group, how work gets done, and how members needs are satisfied. Understanding of all these will enable mangers to manage groups effectively leading to organizational effectiveness.
