DEPARTMENT OF BUSINESS MANAGEMNT

AHMADU BELLO UNIVERSITY BUSINESS SCHOOL

AHMADU BELLO UNIVERSITY, ZARIA
AHMADU BELLO BUSINESS SCOOL
AHMADU BELLO UNIVERSITY, ZARIA

Programme: 300 Level BSc. Business Management

Semester: First Semester
Course Title: Human Behaviour In organization
Course Code: BUAM 313 (3 credit)
Lecturer: Dr. Sahnun Ladan

COURSE OBJECTIVES AND DISCREPTIONS

By the end of this study, the students should be able to describe the individuals and groups, manage organizational
politics, change and conflict. The students should be able to understand how to manage organizational climate, morale,
development and culture

STUDY MODULES

1.0 Module 1
Introduction
i. Understanding Organizational Behaviour
ii. Why Do We Study Human Behaviour in Organizations?
iii. Understanding Organizational Behaviour
iv. Managing Human Resources
v. Developing Organizational Ethics
vi. Managing a Diverse Workforce
a) Fairness & Justice
b) Decision-Making & Performance
c) Flexibility
2.0 Module 2
Introduction
i. Concepts of group dynamics
ii. Types of Work Groups
iii. Characteristics of Work Groups
iv. Social Facilitation
a. Audience Effects
b. Co-Action Effects
c. How Groups Control Their Members
3.0 Module 3
i. Introduction
ii. Organizations Structure
iii. Work Stress and Its Management
iv. Organizational Culture
v. Managing Change
vi. Power and Politics

READINGS
1. Lawal, A. A. Management in focus

2. Mullins, L. J. Management and Organisational Behaviour 9th Edition. India: Prentice Hall, 2007.

2. Stephen, P. et al. Organisational Behaviour 5th Edition. London: Pearson Education, 2008.
Understanding Organisational Behaviour
Organisational behaviour (OB) is a field of study that investigates the impact that individuals, groups and structure have on
behaviour within organisation, for the purpose of applying such knowledge towards improving an organisations effectiveness. It
studies three determinants of behaviour in organisations: individual, groups and structure. OB applies the knowledge gained
about individuals, groups and the effect of structure in order to make organisations work more effectively.

According to George & Jones (1999:3) organisational behaviour is the study of the many factors that have an impact on how
organisations manage their environment. The factors include:
• Leadership styles
• Motivators
• Hygiene factors
• Goals
• Government policy
• Economic factors.

To sum up the definition, OB is concerned with the study of what people do in organisations and how their behaviour affects the
organisations’ performance.

Why Do We Study Human Behaviour in Organisations?

Human behaviour provides concepts and theories that can help people understand, analyse and describe the behaviours
of people in an organisation. The concept will also help the manager to improve and manage changes in behaviour in a
workplace.
Analysis of behaviour in organisation is done on three levels viz:
- Individual
- Group controlled by the structure
- Organisational

Also, communication can have a serious impact on the behaviour of people. Behaviour varies in organisations from team to
group levels in the following ways:
Team: In a team there is a common goal, i.e., all members work towards the attainment of one goal.
Group: A group certainly has a goal, but not all the members work toward the attainment of all or the same/common goal of the
organisation. They all have different goals which they seek to achieve.

(B) Managing Human Resources

The ability of an organisation to produce goods and services that its customers want is the product of the behaviours of all its
members. An organisation seeking to obtain a competitive advantage, that is, the ability to outperform competitors that provide
similar goods and services can do so by increasing efficiency, quality, innovation and responsiveness to customers. The study of
organisational behaviour can help managers achieve these goals each of which is a part of managing human resources to gain a
competitive advantage.

(C) Developing Organisational Ethics: Organisational ethics are the rules, beliefs and values that specify what is right or
wrong behaviour and the ways managers and workers should behave when confronted with the situations in which their actions
may help or harm other people inside or outside an organisation. Ethical behaviour enhances the happiness, health and
prosperity of individuals, groups and the organisation and sometimes the environment in which they operate. Ethics specify
what actions an organisation engage in to make profits. In addition to defining right and wrong behaviour for employees, ethics
also defines an organisation’s social responsibility, its duty or obligation towards individuals, groups outside the organisation
that are directly affected by its action. Different organisation’s have different views about social responsibility.

(D) Managing a Diverse Workforce: George and Jones (1999) view diversity as differences among people, resulting from
race, ethnicity, age, gender, religion, socio economic background and capabilities or disabilities. Other characteristics
include attitudes and responsiveness to different things that happen in the organisation.

Basic elements of managing a diverse workforce include:

1. Fairness & Justice:This is when everyone is subjected to the same rules and regulation without preferences; it is the absence
of prejudice in an organisation. The concept can be manipulated from one organisation to the other.
2. Decision-Making & Performance: A manager should make decision on the basis of all members of the organisation rather
than only a few members. It should not be made on the basis age, gender, ethnicity, race (etc.), rather, it should be in the interest
of all members of the organisation. The most important factor that destroys organisations today is decision-making. People make
decision in favour of some variables (religion, ethnicity, race etc.) and reverse those decision in their favour (or around
individuals). This can create challenges in the organisation. Decision-making in organisation can also influence performance.
What a manager does to a worker will determine what the worker will do in return for the organisation.

3. Flexibility: It means creating different scenarios for difference groups of people, for example, maternity leave. Also some
organisation provide flex time by allowing members to adjust timings to suit their purpose.

Individual Differences
The Nature of Personality
1 Critical personality
2 Easy going personality
3 Excessively reserved personality
4 Outspoken personality

(B) Models of Personality

1 The Big Five Models
2 Extraversion
3 Neurotism:
4 Agreeableness
5 Conscientiousness:
6 Openness To Experience
(C) Personality Traits
1 Locus of Control
2 Self-Monitoring
3 Low Self-Monitors
4 Self-Esteem

Introduction
In this study session, you are about to learn that human behaviour is very complex. It is affected by various environmental
factors. It is based on various cultural factors in which an individual is brought up and various social systems in which he/she is
working. You should also know that individual behaves in a different manner, his/her behaviour is individualistic in nature, and
therefore cannot be changed easily without any strong stimuli. There exists a cause and effect relationship in individual
behaviour. All the activities of human beings cannot be measured, what goes psychologically or inside the thought process of an
individual cannot be categorically observed. Individual behaviour cannot be easily predicted due to interplay of various
variables that are very complex to examine and implement.
You will also learn that the job manager therefore, is to predict the behaviour based on his personal knowledge of the individual,
his experience with him/her in an identical situation and behaviour pattern prevailing, based on the organizational culture. A
manager at best can generalize a situation and should implement his managerial skills so that workers satisfaction level is
increased. No two individuals are alike; they behave different in similar situations. Also in relation to work, individuals differ in
so many respects.

Individual difference can also be sub-grouped into educational background and, personality. They are differences that can
influence performance in the organisation. It is the responsibility of the manager to modify these differences towards achieving
organisations goals.

(A) The Nature of Personality

According to George and Jones (1999), personality is the pattern of relatively enduring ways in which a person feels, thinks and
behaves. Research shows that fifty percent (50%) of our behaviours come from nature (i.e. biological) and fifty percent (50%)
from nurture (i.e. training). The feelings, thoughts and behaviours of people can be either normal or abnormal. Pattern of
behaviour is mostly by inheritance. Therefore, it can be deduced that when someone comes into an organisation, he will come
with the behaviour he has inherited from his parents and those he acquired from the environment he has lived in. Therefore, it is
the responsibility of the manager to modify such individual to the behaviour of his new organisation. The nature and types of
personality include:
 i. Critical personality: The management method here is of high standard. The manager will never close his eyes to any
situation.
ii. Easy going personality: The manager may turn his eyes away from situations.
iii. Excessively reserved personality: The manager may be slow to react to urgent issues.
iv. Outspoken personality: The manager may unwittingly offend customers and employees.

The Nature of Ability

1 Cognitive Ability
2 Physical Ability
3 Motor Skill
4 Physical Skill
(B) The Management of Abilities in an Organization
The Three Fundamental Ways of Managing Ability in an Organization
1 Selection
2 Placement
a. Training
b Summary

Introductin
In the previous study session, you learnt about the individual differences which have to do with personality. In this study
session, the individual differences that you are about to learn has to do with the nature of their ability.
Learning outcomes for study session 3
At the completion of this study session, you are expected to be able to:
1. Analyse the nature of individual ability.
2. Identify the types of abilities.
3. Explain the determinants of abilities.
4. Discuss how to manage abilities.

(A) The Nature of Ability

Ability has been defined as “what a person is capable of doing”. The ability of an individual determines his
performance. The effectiveness of an organisation is a product of the ability of people who make up the organisation.
That is to say, it is the aggregate or combined efforts of all members of the organisation, not just one person. There are
two basic types of abilities and each of them affects performance:
i. Cognitive ability
ii. Physical ability

i) Cognitive Ability

It deals with the mental makeup of an individual and it is generally represented by what is called general intelligence (GI).
When for example, you interview people,
acquire such through genes
(human nature).
ii) Physical Ability

People also differ in physical

ability. This is also of two types:
A. Motor skill
B. Physical skill
a) Motor Skill: The skill to physically
manipulate object in an
environment.
b) Physical Skill: Is a
person’s fitness and
strength.
Emotional Intelligence: This is a new kind of ability. Emotional intelligence (EI) is the ability to understand and manage
one’s own feelings and emotions and the feelings and emotions of others. Generally, many people find it difficult to
manage/control their emotions and feelings. People differ in the extent of how they feel from time to time. Many people act
on impulse. Every individual must know the reasons for his/her feelings. Getting answers to this how and why will help
them manage their feelings.
ITQ: What are the determinants of abilities?
ITA: Nature and nurture.
Needs for Achievement, Affiliation and Power
• Need For Achievement
People who have great desire to perform great task and give result equal to what is desired or better usually perform better
than expected.
• Need For Affiliation People who care very well about relationship between people, they do not want to see people
quarrelling among themselves, they like group work, e.g., labour union leaders.

• Need For Power

These are people with great desire to exert emotional and behavioural power. They believe their opinion must be the opinion
of the group. They believe that members of the group must strictly adhere to their orders.

(B) The Management of Abilities in an Organisation

For managers, the key issue regarding abilities in organisation is that, the workers must have high level of intelligence and
abilities. They must have the abilities to perform the jobs effectively. Every ability has a location within the organisation that
is best.

One’s personality must be enduring and continuous, but situations can modify a person’s personality.
ITQ: What is the nature of personality?
ITA: Critical personality, easy going personality, excessively reversed personality and outspoken personality.
(B) Models of Personality

Attraction-Selection-Attrition (ASA)
The aggregate of people’s behaviour in an organisation put together forms models of personality. People with similar
behaviours tend to be attracted to an organisation which will make up organisations personality.
Attraction: This is when people find certain variables (e.g., pay package) that are attracted to them in an organisation
(character of the organisation).
Selection: This means getting qualified people for a particular position to different locations. Selection is very critical
because of the personality of people with regards to their environment. For example, when organisation places advert for
employment, it means the organisation is requesting qualified people to apply, but by the time individuals come for
interview, the organisation looks at the personality of the individual i.e., whether it will fit the personality of the organisation
or not, even when an individual is the best.
Attrition: Once personnel pretend and come into an organisation, it is either they rediscover themselves and leave or are
thrown off later on by the organisation. This constitutes attrition.

The Big Five Models

The founders of this model believe that, it is extremely difficult for any human being to have only one of these five models.
They believe that whatever an individual’s disposition, he/she must be within these five models. It is impossible to exceed
the five models. The models are:
1. Extraversion: These are people with positive emotions who take visitors with warm hands. They have social interactions,
they have good personality traits and are usually found in departments such as marketing, customer care service, etc.
2. Neurotism: People classified here are those who have a lot of anxiety, always self-conscious and nervous. They do not
mix freely with people. E.g. some lecturers might be very intelligent, fully prepare their lecture notes, but when they
step into the class and see a large crowd, they begin to fidget and become confuse.
3. Agreeableness :Here, people tend to trust, tender mindedness, straight forward and easy going personality. But it is
always preferable that individuals do not easily trust and also do not easily distrust. It is better to be always straight
forward, there is no need to beat about the bush.
4. Conscientiousness: This has to do with competence, order and self-discipline. This means that everything of an
individual here is done in
 accordance to the laid down rules and procedures.(Such individuals are found in such departments as PR, HR,
administration and finance).
5. Openness to Experience: This is represented by fantasies, actions and ideas. People who are open to experience are filled
with lots of ideas without limitation. (They are usually found in R & D units).

(C) Personality Traits

There are severally other personality traits that are relevant to human behaviour in organisation. These include:
1. Locus of Control: One major personality attribute which affects organisational behaviour is locus of control. That is, the
degree to which people believe that they are masters of their own fate. It is the concept, which determines whether an
individual
controls events or the events control them and thus, become only the pawns of situations. People have both internal locus of
control and external locus of control but in varying degrees.
2. Self-Monitoring: This refers to the extent to which people try to present themselves and become accepted by another
group, that is, people who find any group accepted to them. They are very conscious of their behaviour, they try to adjust to
whatever situation they find themselves so as to be accepted by others.
3. Low Self-Monitors: These are not sensitive to situations, environment and people they interacts with. They only voice out
what they believe in. They are principled individuals and are very sincere. They guide the organisation to achieve its goals
and objectives.
4. Self-Esteem: This is the extent to which people have pride of themselves. These individuals can propel others to work
harder and not discourage those that try and fail, but rather encourage them. (See Maslow’s Hierarchy of Needs).

Type A and Type B Personalities

Type A: People having Type A personality are always moving and walking rapidly. They feel impatient with the speed that
events take place. They always strive to do two or three things at any one time and cannot cope with leisure. They are
generally obsessed with work involved with numbers.
Type B: People possessing Type B personality never suffer from sense of urgency and take thing as it comes coolly. They
do not discuss achievement and leave it to the superiors to identify. People having B type of personality play for fun and
relaxation rather than to show off. These people have the tendency to relax without guilt.
urgency and take things as they come coolly.

Individual Differences II
Introduction
In the previous study session, you learnt about the individual differences which has to do with personality. In this study
session, the individual differences that you are about to learn has to do with the nature of their ability.

(A) The Nature of Ability:

Ability has been defined as “what a person is capable of doing”. The ability of an individual determines his performance.
The effectiveness of an organisation is a product of the ability of people who make up the
organisation. That is to say, it is the aggregate or combined efforts of all members of the organisation, not just one
person. There are two basic types of abilities and each of them affects performance:
i. Cognitive ability
ii. Physical ability

i) Cognitive Ability

It deals with the mental makeup of an individual and it is generally represented by what is called general intelligence
(GI). When for example, you interview people,
you will find out that intelligence quotient (IQ) will be different from one person to the other. Individuals acquire such
through genes (human nature).
ii) Physical Ability: People also differ in physical ability. This is also of two types:
A. Motor skill
B. Physical skill
a) Motor Skill: The skill to physically manipulate object in an environment.
b) Physical Skill: Is a person’s fitness and strength.

Determinants of Abilities
Ability is also determined by nature and nurture i.e., that is, cognitive and physical abilities and, are determined by nature
and nurture.
General intelligence (GI): It is determined by the genes we inherit from our parents and this is nature and those acquired by
situational factors are nurtured. The psychologist concluded that both nature and nurture combine to make up the ability of
an individual.
Emotional Intelligence: This is a new kind of ability. Emotional intelligence (EI) is the ability to understand and manage
one’s own feelings and emotions and the feelings and emotions of others. Generally, many people find it difficult to
manage/control their emotions and feelings. People differ in the extent of how they feel from time to time. Many people act
on impulse. Every individual must know the reasons for his/her feelings. Getting answers to this how and why will help
them manage their feelings.
Needs for Achievement, Affiliation and Power
• Need For Achievement

People who have great desire to perform great task and give result equal to what is desired or better usually perform better
than expected.
• Need For Affiliation

People who care very well about relationship between people, they do not want to see people quarrelling among themselves,
they like group work, e.g., labour union leaders.
• Need For Power

These are people with great desire to exert emotional and behavioural power. They believe their opinion must be the opinion
of the group. They believe that members of the group must strictly adhere to their orders.

(B) The Management of Abilities in an Organisation

For managers, the key issue regarding abilities in organisation is that, the workers must have high level of intelligence and
abilities. They must have the abilities to perform the jobs effectively. Every ability has a location within the organisation that
is best.
The Three Fundamental Ways of Managing Ability in an Organisation
1. Selection: Managers can control abilities in organisation by selecting individuals who have certain abilities. This can be
done through studying, questioning etc.
2. Placement: Once a personnel is employed, the manager’s next task is to think of where to place him. Managers should
match each worker with the job that will capitalise on his ability.
3. Training: Selection and placements as ability management techniques are concerned with nature aspects of ability.
Training acknowledges that nurture also contribute to ability level.

The Experience of Work

Introduction
In this session, you will learn about the various individuals experience at work, what people think and feel about work in
general and about their jobs and organisation in particular affect not only how they behave at work, but also their overall
wellbeing.

(A) Work Values, Attitudes and Moods

The thoughts and feelings people have about work, their jobs and their organisations determine how they experience work.
1) Work Values: Some thoughts and feelings are fundamental and broad; they are concerned not so much with aspects of a
particular job or organisation, but with the nature of work in general. These thoughts and feelings called work values are
relatively long lasting (for years).
2) Work Attitudes: Other thoughts and feelings are more specific. Those that focus directly on a person’s current job or
organisation called work attitudes are not as long lasting as work values. It changes overtime.
3) Work Moods: This refers to how people feel while they are performing their jobs from day-to-day, hour-to-hour or even
minute-to-minute.
ITQ: What are those factors that affect behaviour at work and also the overall wellbeing?
ITA: Work values, work attitudes and work moods.
(B) The Nature of Work Values
Work values (WV) are a worker’s personal convictions about what outcomes one should expect from himself, and how one
should behave at work. Some people view work value as self-respect. The way people think they should behave in
organisation varies. Some people are very hard working while some others would want to believe that they are self
discipline, respectful to their superior and under no circumstances would they sacrifice their organisation.
Work values also guide ethical behaviour at work place. WV are very critical, and so, an employee should decide what type
of life he/she wants to live and what work values he would display at workplace. For example, an employee who studied
accounting and feels he should learn new things in an organisation but is placed as a cashier, would find out that he repeats
the same process every day and is therefore, likely to quit because he is probably not progressing.

Intrinsic Work Values

Intrinsic work values are values that are related to the nature of the work itself. The nature of the work is what we associate
with these intrinsic work values.
Extrinsic Work Values
Extrinsic work values are values that are related to the consequences of work, i.e., they are not related to work itself. For
example, the people with high extrinsic value are those whose sole aim at work is just to earn money or personal benefits.
These are people who take security very seriously to make themselves and families comfortable. They will work anywhere
no matter how monotonous the work is.
Job status given to a person is very critical to people who have extrinsic work value, for example, GM, MD, ES, etc. Some
people who have extrinsic work value also care about the time frame of their work, for example, bank work is tedious.

Relationship Between Intrinsic And Extrinsic Work Values

People cannot work for intrinsic WV alone without some elements of extrinsic WV, but it is possible for someone to have
extrinsic work value alone. They might differ in relation to one fact that some people give great relative importance to
intrinsic work value and less for extrinsic work value while some people give 100% relative importance to extrinsic work
value, neglecting intrinsic work values.

(C) The Nature of Work Attitudes

Work attitudes are collections of feelings, beliefs and thoughts about how to behave, that people currently hold about their
jobs and organisation. More specific than values, work attitudes are not as long lasting as values, because the way
people experience their work and organisation often changes overtime. Such changes are due to impact on changes in work
situations. Two work attitudes have important implications on organisational behaviour. They are:
1. Job satisfaction
2. Organisational commitments
a) Job Satisfaction: It is the collection of feelings and beliefs that people have about their current organisation jobs. These
feelings can change from extreme satisfaction to extreme dissatisfaction.

EXTREME SATISFACTION EXTREME DISSATISFACTION

There are people who feel very happy doing a particular job. In addition to having attitudes about their job as a whole,
people can also have attitudes about various aspects of their jobs. They may have attitudes towards their co-workers’ pay
package, their subordinates etc.
b) Organisational Commitments: This is the collection of feelings and beliefs that people have about their organisation as
a whole. Commitments can change from extremely high to extremely low.

EXTREMELY HIGHEXTREMELY LOW

The commitment towards the organisation can manifest from the way an employee sees his organisation. Work attitudes like
job satisfaction and organisational commitments are made up of three (3) components:
• Feelings: This is the affective part of it
• Belief: This is cognitive
Thoughts: This refers to the way an employee thinks about the things that are happening in an organisation. This has to do
with behaviour.
(D) Nature Of Work Moods
Work moods (WM) are how people feel when they are actually performing their jobs. E.g. some workers feel happy doing
their jobs while others are sleepy, anxious etc. Work moods can change from hour to hour, minute to minute. They are never
stable. Moods can be categorised into negative or positive.
For some people, when they have negative mood they become fearful, hostile, nervous etc., but when it is positive mood,
some people become more active, very strong with no element of stress etc. Some may display less enthusiasm, some may
not be happy or worried and would not carry out their task properly.
An employee’s mood from outside the organisation can determine the job mood he/she will find himself. For example,
domestic problems/issues may have effect on performance of some employees. If, for instance, a couple quarreled from
home, this might affect the way he/she will behave at work.
Recent research suggests that, mood at work has important consequences for understanding and managing organisational
behaviour e.g. workers with positive mood at work are more likely to be helpful to each other and to those around them
including clients and customers and might be less-likely to be absent from their jobs.
According to this research, positive moods tend to promote creatively, but negative moods may result in members of an
organisation being especially inaccurate in their judgment. Managers and organisations can promote positive moods through
giving people attractive offices to work in, providing workers with social interactions which can reduce stress, and praising
those who deserve it.

ITQ: Work moods (WM) are how people feel when they are actually performing their jobs. Moods can be categorised into
negative or positive moods, what are their implications?
ITA: positive moods tends to promote creatively, but negative moods may result in members of an organisation being
especially inaccurate in their judgment.

(E) Job Satisfaction

Determinants of Job Satisfaction
Four factors affect the level of job satisfaction a person experiences:
1. Personality
2. Values
3. The work situation
4. Social influence

Personality: These are enduring ways a person has. It is the first determinant of how people think and feel about their job or
job satisfaction. An individual’s personality influences the extent to which thoughts and feelings about a job are negative or
positive, e.g., someone who is high on extraversion is likely to have a higher level of job satisfaction than the other who is
low on this trait. Given that personality helps to determine job satisfaction and that personality is partly determine by genes,
researchers have found out that people seek out jobs that are suited to their genetic makeup i.e., peoples personalities pre-
dispose them to choose certain kind of jobs. These findings suggest that part of job satisfaction is determined by workers
personalities which an organisation or manager cannot change in the short-run.
1.Values: Values have an impact on levels of job satisfaction because they reflect workers convictions about the outcomes
that work should lead to and how one should behave at work. E.g., someone with strong intrinsic work values is more likely
to be satisfied with job that is interesting and personally meaningful but does not have high pay than a person with weak
intrinsic values. A person with strong extrinsic work values is more likely to be satisfied with a job that pays well but is
monotonous than a person with weak extrinsic values.
2. The Work Situation: Perhaps the most important sources of job satisfaction are the work situation itself, the people a job
holder interacts with, the surrounding in which he/she works and the way the organisation treats him/her, e.g., working
hours, job security, the extent to which pay are generously unfair etc. Every aspect of the job and the employing organisation
are part of the work situation and can affect job satisfaction.
3. Social Influence: This is the influence that individuals or groups have on a person’s attitudes and behaviour. An
employee’s co-workers can influence his/her behaviour; labour unions can also influence employee’s behaviour. It can also
come from cultural influences. It is very important that the organisation or manager should not keep workers at a level of
dissatisfaction for a long time. This is to prevent dissatisfaction among new workers.

(F) Theories of Job Satisfaction

Theories or models ofjob satisfaction are numerous. They include:

1. The Facet Theory of Job Satisfaction: The facet theory or model of job satisfaction focuses primarily on work situation
factors by breaking a job into its constituent elements or job facets and looking at how satisfied workers are with each facet.
That is to say, breaking a job into small units and seeing how each component brings about satisfaction. Example of facets
include ability utilisation, advancement, compensation, recognition etc. This implies that, when you break a job, certain jobs
will require you to bring in your abilities to carry out the job. Also, is the pay attractive to make you satisfied with the job?
Recognition relates to praising an employee for carrying out a job as required.

The facet model is useful because, it forces managers to recognise that jobs affects workers in multiple ways. However,
managers who use this model to evaluate the work situations effect on job satisfaction always need to be aware that some job
facts may be more important than others for any given worker.

2. Herzberg’s Motivator-Hygiene Theory of Job Satisfaction: Herzberg’s motivator focuses on the effects of certain types
of job facts on job satisfaction. The theory proposes that, every worker has two sets of needs – motivator and hygiene.
a) Motivator Needs: These are associated with the actual work itself and how challenging it is. Job facets such as interesting
work, autonomy on the job and responsibility satisfy motivator needs. E.g. ,if a job provides employees room to make
suggestions or bring in their decisions, they will be motivated.
b) Hygiene Needs: They are associated with the physical and psychological contexts in which the work is performed. Job
facts such as the physical working conditions, the nature of supervision, pay package, and job security satisfy hygiene needs.
The context of work is something within which we are doing the job. As a manager, both context and content are very
important and critical to look into. Herzberg proposed the theoretical relationships among motivator needs, hygiene needs
and job satisfaction.
 When motivator needs are met, workers will be satisfied; when these needs are not met, workers will not be
satisfied.

 When hygiene needs are met, workers will not be dissatisfied; when these needs are not met, workers will be
dissatisfied.

worker could be satisfied because motivator needs are met by having interesting and challenging jobs, yet
dissatisfied because hygiene needs are not met because of low job security.

Herzberg proposed that dissatisfaction and satisfaction are two different/separate dimensions. One ranging from satisfaction
to no satisfaction and the other ranging from dissatisfaction to no dissatisfaction.
It is possible for a worker to be both satisfied and dissatisfied with his job at the same time. A workers location on the
satisfaction continuum depends on the extent to which motivator needs are met, and a worker location on the
dissatisfaction continuum depends on the extent to which hygiene needs are met.

3. The Discrepancy Model of Job Satisfaction: It is based on a simple idea – to determine how satisfied employees are
with their jobs, workers compare their jobs to some “ideal jobs”. This ideal job could be what one wants from the job, what
ones former job was like or what one thinks the job should be like.

According to the discrepancy model of job satisfaction, when workers expectation about their ideal job are high, and when
these expectations are not met, workers will be dissatisfied.
Discrepancy model are useful because they take into account that people often take a comparative approach to evaluation. It
is not so much the presence or absence of job facets that is important, but rather how a job stacks up against a worker’s ideal
job. The managers need to recognise this comparative approach and should ask workers what they want their jobs to be like.
ITQ: What is the focus of the discrepancy model of job satisfaction?
ITA:It is based on a simple idea: to determine how satisfied employees are with their jobs, workers compare their jobs to
some “ideal jobs”.
4. The Steady State Theory of Job Satisfaction: This suggests that, each worker has a typical state of job satisfaction
called the steady state or equilibrium level. Different structural factors at work may move a worker temporarily from this
steady state, but the worker will return eventually to his equilibrium level. If a bad thing happens to a worker (for example,
query), it will fall and after sometime it will go back to the steady state.
The influence of personality on job satisfaction is consistent with the steady state approach because, personality as one of the
determinants of job satisfaction is stable overtime to the extent that job satisfaction can exhibit some stability overtime.
Since personality determines job satisfaction, therefore, job satisfaction must also be stable. This is under the law of
transitivity.
The steady state theory suggests that, when managers make changes in the work situation with the hope of raising workers
level of job satisfaction, they need to determine whether resulting increases in job satisfaction are temporary or long lasting.
If it is temporary, it is easy to make changes; while if it is long lasting, it will be difficult to change.
Changes in some job facet may lead to longer lasting changes in job satisfaction than changes in other facts, e.g., if
somebody is teaching and complains about marking, then, a change from preparing essay type questions to objective type
questions may result.
(G) Potential Consequences of Job Satisfaction
The potential consequence of job satisfaction include job performance, absenteeism, turnover, organisational citizenship
behaviour and worker wellbeing.
1. Job Satisfaction and Job Performance: Most people believe that job satisfaction is positively associated with job
performance, i.e., workers who are more satisfied with their jobs will perform at higher level than those who are not. Many
studies conducted to verify this conventional wisdom indicated that job satisfaction is not strongly related to job
performance.

A review of many studies concluded that levels of job satisfaction accounted for only about two percent in the differences of
performance level of the workers.
2. Absenteeism: Research focusing on the relationship between absenteeism and job satisfaction indicated that job
satisfaction has a weak negative relationship with absenteeism i.e., workers who are satisfied with their jobs are less likely to
be absent.

A worker’s inability to go to work is influenced by illness and accidents, transportation problems and family responsibilities.
Absenteeism is a behaviour that organisations can never eliminate, but can control and manage it through policies.
Organisations should not force workers to come to work when they are ill (it is highly unethical).
3. Turnover: It is the permanent withdrawal of a worker from the employing organisation (for example, resigning, retiring
etc). Job satisfaction shows a weak-to-moderate negative relationship to turnover, i.e., high job satisfaction leads to low
turnover. When workers who are satisfied with their jobs, they are less likely to quit than those who are not satisfied. Some
dissatisfied workers never leave their jobs because of so many reasons. According to Bill Mobley (1977),job satisfaction
triggers turnover process. Workers who are very satisfied with their job may never even think of quitting. For those who are
dissatisfied, it is the dissatisfaction that starts the process of thinking about quitting.

Cost of Turnover
Cost of hiring and training, replacement of workers, disruptions for existing members of an organisation, delays important
projects etc. Turnover can be costly to the organisation it can also have benefit if poor performers are quitting and good
performers are staying. This is an ideal situation. Turnover can result in the introduction of new ideas if the organisation
hires newcomers with new ideas to replace workers who have left. Turnover in the upper ranks of the organisation frees up
some positions (i.e. create vacancies) for lower level members to be promoted into them.
Organisational Citizenship Behaviour (OCB)
New research suggests that job satisfaction is related to work behaviours that are of a more voluntary nature and not
specifically required of workers OCB is behaviour that is above and beyond the call of duty i.e., behaviour that is not
required of organisational members but is nonetheless necessary for organisation’s survival and effectiveness. If this
voluntary work is not done, the organisation can collapse, but it is not mandatory on anybody. It is mostly undertaken by
those who are satisfied with their work environment e.g. OCB helps co-workers, protects the organisation from fire, theft,
vandalism and other misfortunes; spreads goodwill in the larger community; develops one’s skills and capabilities and
makes constructive suggestions.

Worker Wellbeing
This refers to how happy, healthy and prosperous workers are. Workers’wellbeing focuses on the worker rather than the
organisation. Research suggests that job satisfaction contributes to overall wellbeing in life.

(H) Organisational Commitment

It is a feeling and belief of employees in theorganisation as a whole. Researchers have identified two distinct types of
organisational commitment. They are:
1) Affective Commitment: It existswhen workers are happy to be members of an organisation, believe and feel good about
the organisation and what it stands for, are attached to the organisation and intend to do what is good for the organisation.
2) Continuous Commitment: It exists when workers are committed not so much because they want to be, but because they
have to be. The cost of leaving the organisation is too great.

Determinants of Affective Commitment

A wide range of personality and situational factors can affect levels of affective commitments, for example, workers may be
more committed to organisation that behave in a socially responsible manner; workers may be more likely committed to an
organisation that cares about its employees and values them as individuals than those that do not. Managers cannot expect
workers to be committed to an organisation if the organisation is not committed to its workers.

Potential Consequences of Affective Commitment

Managers may believe that workers who are committed to an organisation will work harder and research has found affective
commitments to have a weak positive relationship with job performance.
However, affective commitment may be highly related to organisational citizenship behaviour (OCB) which is above and
beyond the call of duty. Because these behaviours are voluntary, they tend to be more related directly to workers’ attitudes
towards an organisation when continuous commitment is high, workers are not expected to go beyond or above the call of
duty because their commitment is based more on necessity than a beliefin what the organisation stands for.
A strong negative relationship existsbetween affective commitment and turnover. Workers who are committed to an
organisation are less likely to quit; their positive attitude towards the organisation itself makes them reluctant to leave.

Motivation
Introduction
It is essential that you know that to increase overall efficiency of human beings is to improve performance of anorganisation.
While machines, processes, technology of high order can be made availableto the individuals, high productivity can only be
achieved if workers are highly skilledand adequately motivated. In this study session, you will appreciate the fact that
motivation, perhaps, is a single most important factor of thestudy of organisational behaviour that concerns each and every
executive today.

(A) Motivation Defined: Work motivation can be defined as the psychological forces within a person that determine the
direction of the person’s behaviour in an organisation, it is someone’s level of effort and level of persistence in the face of
obstacles.
The key elements of work motivation are:
• Direction of behaviour.
• Level of effort
• Level of persistence

Motivation and Performance

Motivation and performance are two distinct aspects of behaviour in organisation. Performance is an evaluation of the result
of someone’s behaviour. It involves determining how well or poor someone has accomplished a task or done a job.
Motivation is only one factor among many that contributes to a workers job performance.
ITQ: What are the key elements of work motivation?
ITA: They are direction of behaviour, level of effort and, level of persistence
Intrinsic and Extrinsic Motivation
Intrinsically work behaviour is behaviour that is performed for its own sake; the source of motivation is actually performing
the behaviour.
Extrinsically motivated work behaviour is one that is performed to acquire material or social reward or to avoid punishment.
(B) Theories of Work Motivation
The key challenges facing mangers in terms of motivation is how to encourage workers to make meaningful input to their
jobs and to the organisations. Managers want workers to be motivated and make input because, inputs influence job
performance and organisational performance. Workers are concerned withattaining extrinsic and intrinsic outcomes from the
organisation.
(1) Needs Theory
Needs theory purpose that, workers seek to satisfy many of their needs at work and that their behaviour at work is therefore
oriented towards need satisfaction. A need is a requirement for survival and wellbeing. To determine what will motivate a
worker, a manager must find out what needs a worker is trying to satisfy on the job, and then must ensure that a worker can
satisfy his need by engaging in behaviours that contribute to organisational effectiveness. Examples of needs theory include:
• Maslow’s hierarchy of needs.
• Alderfer’s ERG (Existence, Relatedness and Growth).

(2)Expectancy Theory
Needs theory tries to explain what motivates workers. Expectancy theory focuses on how workers decide which specific
behaviours to perform and how much effort
to exert. In order words, expectancy theory is concerned with how workers make choices between alternative behaviours and
levels of efforts. Expectancy theories seeks to explain how workers go about making these various decisions.
Because these choices determine what workers do on the job and how hard they work, they have profound efforts on
organisation effectiveness.
ITQ: What is the difference between need theory and expectancy theory?
ITA:Need theories try to explain what motivates workers while expectancy theory is concerned with how workers make
choices between alternative behaviours and levels of efforts.
The theory assumes that workers are essentially pleasure seeking i.e., they are motivated to achieve positive outcomes and
to avoid negative outcomes. Expectancy theory identifies three major factors that determine a workers motivation: valence,
instrumentality and expectancy.
i. Valence

The term refers to the desirability of an outcome to an individual worker. Valence can be positive or negative and can
vary in size or magnitude. If an outcome has a positive valence, a worker prefers having the outcome to not having
it. If an outcome has negative valence, a worker prefers not having the outcome. The magnitude of valence is how
desirable or undesirable an outcome is for a worker.

ii. Instrumentality:

It is a worker’s perception about the extent to which performing certain behaviour level will lead to the attainment of a
particular outcome. In organisation, workers engage in desired behaviour and be motivated to perform them at a high level
only if they perceive that high performance and desired behaviours will lead to the positively valent outcomes.
Instrumentality can be positive or negative and varies in size or magnitude. It can be measure on a scale from -1 to+ 1

An instrumentality of -1 means that a worker perceives that performance will definitely not result in obtaining the
outcome.
An instrumentality of +1 means that a worker perceives that performances will definitely result in obtaining the outcome.
Instrumentality that are, in fact high, and that workers belief are high are effective motivators. Managers must make sure that
workers who perform at a high level do in fact, receive the outcomes that they desire, i.e., outcomes with high positive
valence.
ITQ:What is instrumentality?
ITA: It is a worker’s perception of the extent to which performing certain behaviour level will lead to the attainment of a
particular outcome.
iii. Expectancy

It is a worker’s perception about the extent to which his efforts will result in a certain level of job performance.
Expectancy varies from 0 – 1 and reflects the chances that, putting forth a certain amount of effort will result in a certain
level of performance.
75
Expectation = Probability (it can never be negative). An expectancy of zero (0) means that a worker believes that there is no
chance that his efforts will result in a certain level of performance.
An expectancy of 1 signifies that a worker is absolutely certain that his efforts will lead to a certain level of performance.
Expectancies between 0 & 1 reflect the extent to which a person perceives that his effort will result in a certain level of
performance.
ITQ: Expectancy theory identifies three major factors that determines a workers motivation namely:
ITA:valence, instrumentality and expectancy.
(3)Equity Theory
Equity exist when an individual’s outcome over input (outcome/input) ratio is equal to the output over input ratio of the
referents because the comparison of the ratios is what determines the presence or absence of equity. Equity can exist even if
the referent receives more than the individual who is making the comparison.
Equity exists if A and B perceive that their respective outcome/input (outcome/input ratio) are proportional. When workers
perceive that the workers and the referent outcome/input ratios are proportionally equal, they are motivated, either to
maintain the status quo, or to increase their input to receive more outcome.
ITQ: What determines the presence or absence of equity?
ITA: The comparison of the ratios is what determines the presence or absence of equity.
Inequity
Inequity exist when outcome over input ratios are not proportionally equal. Inequity creates tension and unpleasant feelings
in a worker and a desire to restore equity. Two basic types of inequity are overpayment and underpayment inequities.
Overpayment inequity exists when an individual perceives that his outcome over input ratio is less than that of a referent.
ITQ: Where does equity exist?
ITA: Equity exists if A and B perceive that their respective outcome/input (outcome/input ratio) are proportional.
Ways to Restore Equity
1) Workers can change their input or outcomes
2) Workers can reduce quality level of input
3) Workers try to change their referent input/outcome e.g., the hardworking worker will complain about the slow worker
with the hope that the supervisor will alter the slow workers input or outcomes
4) Workers can change the referent, e.g., if the referent is a friend of the MD, you change your referent
5) Workers leave the job or organisation in order to restore equity.

(4)Procedural Justice Theory (PJT)

PJT is concerned with the perceived fairness of the procedures used to make decision about the distribution of outcomes.
Procedural decisions pertain to how performance levels are evaluated, how grievances or disputes are

handled, and how outcomes are distributed across workers. Is the outcome fair?

PJT holds that, workers are going to be more motivated to perform at a high level when they perceive the procedures used in
making decisions about the distribution of outcomes as fair.

Group Dynamics

Introduction
In organizational behavior, individual members of groups bring with them certain individual characteristics that may
have an influence on group behaviour. An individual’s typical behavioural patterns such as how he reacts to others, and
his available skill and abilities will have an impact on the overall performance of a group. This study session will enable
you to learn what group dynamics is all about in an organizational setting.

(A) Concepts of group dynamics

The discussion of individual characteristics and group behaviour includes four main components: 1) biographical and
physical characteristics, 2) abilities and intelligence, 3) personality and, 4) expectations. The structure of the group
provides norms, social ranking influence, and the position or role that each member occupies in the group. It is a group
or set of two or more people who interact to achieve a common goal. A formal group is formed to achieve specific
goals.
 Dynamics is a Greek word meaning “force” which means that when you have a group, they will have a force. For
example, if you put two people to sweep a class, they will work faster than if it is only one person since the force is
greater, therefore a group has a synergistic effect.
1 + 1 = 3, or 1+1 = 1, i.e., the force which a group has will make them work more effectively. Groups have properties of
their own, different from the properties of those who make them.

Reasons Why People Form Groups

Informal Group
1. Economic reason (demand for higher pay, allowance etc.)
2. Security
3. Social reason.

Group Cohesiveness
Cohesiveness may be defined as the pressures that a group members face to remain part of their groups, this leads to “ we
feelings”.

(B) Types of Work Groups

Managers establish formal work groups to help the organisation achieve its goals. The goals of these groups are determined
by the needs of the organisation e.g., formal work groups include marketing department, product quality committee etc.
Informal Work Groups
Informal work groups emerge naturally in organisation because organisation members perceive that membership in this
group will help them achieve their goals or meet their needs, for example, labour union; where members feel that there are
certain interest that might not be addressed by the formal work group and management.
Types of Formal Work Groups
a. Command Group: A command group is a collection of subordinates who report to the same supervisor. They are
frequently represented on organisational charts as departments. E.g. marketing, finance, R&D, production, etc.
Command groups are the vehicle through which much of the work in organisation gets accomplished. The
supervisors of command groups can determine the effectiveness of the group. Generally, people who are
unfortunate to fall under command group tend to have the least benefit. People who work as line have greater
benefit than those who work as staff.

b. Taskforce: It is a group of people who come together to accomplish a specific goal. Once the goal is achieved, the
taskforce is usually disbanded. Sometimes, when taskforce addresses a problem of long term concern to an organisation,
they are never distended. To capture their enduring or permanent nature, these kinds of taskforces are sometimes
referred to as standing committees or task groups.

b. Team: A team is a formal work group with high level of interaction among its members who work intensely
together to achieve a common goal, for example, developing a new software package. When team are effective,
they draw on the abilities and experience of their members to accomplish things that could not be achieved by
individuals working separately or by other kinds of work groups. A team with no manager to lead it is called “a
self-managed work team”. Members of self-managed work team are responsible for ensuring that the team
accomplishes its goals and for performing leadership tasks such as determining how the group should go about
achieving its goals, assigning task to individual members, discipline group members who are not performing at an
adequate level, coordinating efforts across group members and, hiring and firing.

Types of Informal Work Groups

a. Friendship Group: A friendship group is a collection of organisational members who enjoy each other’s company and
socialise with each other, e.g., a group of salesmen who have lunch together.
b. Interest Group: Members of an organisation form an interest group when they have common objectives that they are
trying to achieve by uniting their efforts.Interest group is often formed in response to pressing concerns among certain
members of an organisation such as organisation sponsored elder care, or extending maternity leave to cover fathers.
Interest groups help members of an organisation to voice their concerns that can provide an important impetus for needed
organisational changes.

(C) Characteristics of Work Groups

In addition to varying in types, work groups vary in many other respects such as group size, composition, function and
status.
a. Group Size

The size of a group is measured by the members who are full-time and work together to achieve the group goals. Group size
is an important determinate of the way group members behave. When groups are small, it is relatively easy for members to
share information, recognise individual contribution to the group and thus identify with the group goals.
Strong identification with the group and its goals may lead to increased motivation and commitment to group goals and to
higher levels of satisfaction. In large groups, members are less likely to know one another and may have little personal
contact with each other on a day-to-day basis. This low level of interaction among members of large groups makes sharing
of information difficult and the individuals may consider their own contributions to the groups unimportant because of the
contributions of very many other members. For these reasons, people usually tend to be less satisfied in large groups than in
smaller groups.

Advantages of Large Groups

Availability of skills, abilities, accumulated work experiences, knowledge and possibility of reaping the benefits of a
division of labour. One of the primary reasons why groups exist is to make division of labour possible.

Disadvantages of Large Groups

Communication and coordination problems
b. Group Composition
Group composition is the degree of similarity among group members. Members of a homogenous group have many
characteristics in common. These characteristics can be demographic, personality traits, skills, abilities, beliefs, attitudes,
values or types of work experience.

Each of these characteristics may play a vital role in the attainment of organisational goals and objectives. Members of
heterogeneous groups do not have many characteristics in common. People tend to have interest in others who are similar to
them, thus, members of homogenous groups may find it easier to share information, may have lower levels of conflicts and
fewer problems in communicating and coordinating than members of heterogeneous groups.
On these grounds, one may expect the performance and goal attainment of homogenous groups to be higher than that of
heterogeneous groups.
Performance is not solely dependent on the group, there are other variables which determine performance. Because group
members are more likely to get along with each other in homogenous groups, you might also expect their motivation and
satisfaction to be high as well.

On the other hand, a group that is composed of people with different backgrounds, abilities, experiences, personalities and
“views of the world” may be better able than a homogenous group to make good decisions because more points of view are
represented. A heterogonous group may also be able to perform at a high level because the group has a variety of resources
at its disposal. Due to their differences, group members may be more likely to challenge each other and existing ways of
doing things, and the outcome may be valuable and the needed differences may increase performance. To reap the
advantages of heterogeneity, it is important for group members to understand each other’s differences and points of view
and use these diverse perspectives to enable the groups to perform at a high level.

(D) Social Facilitation

It is the effect that the physical presence of others has on an individual’s performance. The presence of other group members
tends to arouse individuals often because the individuals feel that others will evaluate their performance and give them
positive or negative outcomes dependent on how well or poorly they do.
Two types of social facilitation effects have been studied. They are:
b. Audience Effects
Audience effects are the effect of passive spectators on individual performance. In this case, other group members are not
engaged in this task itself, but they are present.

c. Co-Action Effects
Co-action effects are the effects of the presence of other group members on the performance of an individual when the other
group members are performing the same task as the individual e.g. a typist in a typing pool.
Research on both types of social facilitation effects has produced some contradictory results. The presence of other group
members enhances the performance of well-learned behaviours that have been performed repeatedly in the past. However,
the presence of other group members impairs the performance of difficult, complex or novel behaviours that involve
considerable expenditure of efforts.
When people realise that the presence of others is interfering with their performance of a difficult task, they often isolate
themselves by locking their offices doors, or findings a quiet place to work alone.

(E) How Groups Control Their Members

In order for any group to accomplish its goals, the group must control its members’ behaviours. Controlling members’
behaviours is crucial whether a group’s goal is providing excellent customer service or raising quality levels. Effective
groups have control over their members’ behaviour and channel it in the direction of high performance and the attainment of
group and organisational goals. Three mechanisms through which groups control their members’ behaviour are:
• Roles
• Rules
• Norms.
1. Roles

The division of labour that occurs in groups and organisations necessitates the development of roles. When a group divides
up its work and assigns particular tasks to individual members, different roles are established within the group. Associated
with each role in a group are certain responsibilities and rights. All behaviours expected of a role occupant, are the role
occupant’s responsibility.

Each role occupant also has rights or privileges, such as the right to use resources assigned to the role, e.g., materials
assigned to MBA should be given to the MBA Coordinator. Resources can include money, specialised machineries etc.
Roles facilitate the control of group members’ behaviour for several reasons. Roles tell group members what they should do,
enable a group to hold its members accountable for their behaviour, provide the group with a standard from which to
evaluate behaviour and help managers determine how to reward group members who perform the behaviours that make up
their various roles.
In establishing a set of roles in a group, group members specify role relationship, i.e., the ways in which groups and
organizational members interact with one another to perform their specific roles. Role relationships may be formally
specified in a written job description that outlines how a role occupant is expected to interact with others to accomplish the
group goals.
Roles relationship may also emerge informally overtime, as group members workout among themselves methods for getting
the groups job done. A large part of a person’s role in group may not be specified, but may emerge overtime as members
interact with each other, e.g., one member of a group may assume a significant task responsibility for the group and emerge
as an informal leader because he has demonstrated that he can perform these responsibilities effectively.
The process of taking the initiative to create a role by assuming certain responsibilities that are not part of an assigned role is
called role making. In contrast, role taking is the performance of responsibilities that are required as part of an assigned role.
Role making can be an important process in self-managed teams in which group members jointly try to find innovative ways
of accomplishing group goals.

2. Rules
Effective groups sometimes use written rules to control their members’ behaviour to ensure high level of performance
and the attainment of group goals. Rules that a group adopts are those that best allow the group to meet its goals. Some
rules that groups develop do specify in writing the best way to perform a particular task (standard operating procedures).
These rules help a group to ensure that the task will be performed in the correct and most efficient manner. Rules facilitate
the evaluation of individual group members performance levels because their behaviour can be compared to the behaviour
specified in the rule. When the membership of a group changes rules it helps newcomers learn the right way to perform their
roles.
3. Norms
Groups also control their members’ behaviour and channel it in the direction of high performance and group goal attainment
by development and enforcing norms. Group norms tell the members how they are expected to behave. Group norms are
informal rules of conduct for behaviours that are considered important by most members; often they are not put in writing.
Groups enforce their norms by rewarding members who conform with the norm by behaving in the specified manner and
punishing members who deviate from the norm. Reward can include being treated in a friendly manner by other group
members, verbal praise, receiving help from members when needed and tangible rewards. Punishment for deviating from
norm can include being ignored by other group members, being criticised, losing certain privileges, and being expelled from
the group.
MODULE 3
Organizations Structure, Organizational Culture, Managing Change, Work Stress and Its
Management.

(A) Organisation Structure

The structure is the pattern of relationships among positions in the organisation. The structure makes possible the
application of the process of management, and creates a framework of orders and command through which the
activities of the organisation can be planned, organised, directed and controlled. The structure in turn defines the
jobs and responsibilities, task roles and relationships, and channels of communication (Mullins, 2007). The main
objective of a structure is the division of job among members of the organisation and the coordination of their
work so they are directed towards the goals and objectives of the organisation.
An organisation’s structure could be described by looking at its chart. It shows the positions in the organisation and how
they are arranged, and depicts a picture of the reporting structure and the various activities that are carried out by the
different members of the organisation.
(B) Fundamental Concepts of Organisation Structure
Simon (1960) stresses that, organisations are grand strategies individuals create to achieve objectives that require the
efforts of many. Gallagher et al (1997) see organisation as a clearly bound group of people interacting together to achieve a
particular goal (or goals) in a formally structured and coordinated way.
Although, the organisation chart shows clearly some vital structural features, it does not obviously depict some fundamental
concepts around which organisations are structured. These fundamental concepts are differentiation and integration. To start
it simple, differentiation connotes that the organisation is an amalgamation of different units that work on many different
kinds of jobs, using different skills and techniques. On the other hand, integration signifies the degree to which these
differentiated units work together and coordinate their activities. According to Snell (2002), these concepts can be elaborated
as follows:
a. Structural Differentiation

Structural differentiation is one of the aspects of the organisation’s internal

environment which may be created by division of labour and job specialisation.
Division of labour implies that the job of the organisation is sub-divided into
smaller tasks, and many people and units perform different jobs. The job
structure on the other hand means different individuals or groups normally
perform specific parts of the whole task. The natures of the various jobs that are
performed in an organisation make division of labour and job specialisation of
paramount importance. For instance, activities in finance, marketing and sales are
divided among different departments and performed by specialists. On the whole,
it was found that organisations in simple, stable environments had low levels of
differentiation. Organisations in intermediate environments had intermediate
differentiation. Organisations in complex, dynamic environments have high degree of differentiation in order to cope with
the complex challenges (Lawrence & Lorsch, 1969 – see Snell, p.257).
b. Integration

Jobs in an organisation cannot be performed completely independently, as such, organisations must integrate their
specialised tasks. Integration is achieved through structural mechanisms that encourage collaboration and coordination in an
organisation. Different parts of the organisation must be linked together to perform an integrative function in order to
achieve the organisation goal and objective. Therefore, some degree of cooperation and communication must subsist among
the different units of the organisation.
ITQ: What are the fundamental concepts of organisational structure according to Snell (2002)?
(C)The Vertical Structure
Issues that would be considered here include authority, hierarchical structure and decentralisation.
1. Authority: In organisations, authority is the legitimate right to make decisions and give an order to subordinates on what
to do. Authority can also be seen as the legitimate right to guide or directs the action of others and extract from them
responses that appropriate to the attainment of an organisation’s goals (Buchanan & Huchzynski, 2004). Under normal
circumstances, authority resides in the positions rather than in the people. For example, the job of a Vice Chancellor of a
particular university has authority over that university in spite of how many Vice Chancellors come and go in that
position. Thus, the authority is vested in organisational positions, and not in the persons who occupy them. Since
 authority flows down the vertical hierarchy of the organisation, we will begin our discussion of the authority structure
from the board of directors.

ii) The Board of Directors

In public limited companies, the shareholders elect the board of directors to oversee the organisation:
a) Selecting, assessing, remunerating and replacing the chief executive officer
b) Determining the organisation’s strategic direction and reviewing its financial performance and
c) Ensuring legal and ethical conducts

iii)The Chief Executive Officer

The CEO is an organisation’s most important officer to whom all other top manager (who establish organisational goals and
monitor the performance of middle managers) report. He is ultimately responsible for the success or failure of the
organisation (George & Jones, 2003). The CEO occupies the top of the organisational pyramidand is personally accountable
to the board and to the shareholders for the organisation’s performance. In some cases, the CEO is also the chairman of the
board.
The most worrisome aspect of the CEO in developing countries is whether their incomes will keep pace with that of
advanced countries. For instance, in the year 2000, the average CEO salary of USA organisations was five hundred and
thirty one times greater than that of a manufacturing worker .

2. Hierarchical Structure: In practice, organisations are layered. Different individuals at different levels make decisions
and execute them throughout the organisations structure. Organisations can be divided into three interrelated levels:

a) Technical level (TL)

b) Managerial level (ML) (Middle Management/Organisational level)
c) Community level (CL) (Senior Management/Institutional level)

The TL does the actual job of the of the organisation, such as physical production of goods in manufacturing organisation,
giving direct service in banks and the process of delivering lecture in universities.
The ML is concerned with coordination, integration and control of operations at the technical level. The ML is also
concerned with the administration of the internal affairs of the organisation, the resources necessary for performance of the
TL and its welfare as well as mediation between the organisation and its external environment (procurement of resources and
customers).
The CL serves as a mediating link between the ML and the coordination of activities of the TL and the broader community
interests. It is also concerned with the strategic decision-making and broad objectives of the organisation. Examples of CL
include directors of public liability companies (Plc), trustees of nonprofit companies and governing councils/bodies of
educational institutions.
When one uses a strategic approach to organisation structure, it will be clear that dynamic organisations may not necessarily
follow the three levels of organisation dutifully. In such organisations, there is no demarcation between determination of
policy and decision-making, coordination of work and actual execution especially when everybody is expected to be carried
along. Mullins (2007) stresses that, if the organisation as a whole is to perform effectively, there must be clear objectives, a
soundly designed structure, and a good communication both upwards and downwards among the different levels of the
organisation.

3. Decentralisation: A decentralised organisation is an organisation in which lower-level managers make important

decisions. More decisions are made at lower levels, where people who are directly affected and have the most intimate about
the problem at hand. Decentralisation allows an organisation and its employees to behave in a flexible way, especially the
business environment is fast-changing and decisions must be made quickly. If managers give lower-level employees the
right to make vital decisions and only management by exception, then the problems of slow and distorted communication are
kept to a minimum.
Many USA executives understand the advantages of pushing decision-making authority down to the point of action . The
level that deals most directly with the problems has the relevant information and can best foresee the consequences of
decision (Snell, 2002). The desirability of decentralisation is normally considered in terms of the following variables:
a. The nature of the product or service of the organisation
b. Policy making
c. The daily management of the organisation
 d. The need for standardisation of procedures, and
e. Terms of employment of staff.

For decentralisation to be effective, senior managers must maintain effective coordination and overall control of the
activities of the organisation as a whole. Therefore, managers must seek the balance between centralisation and
decentralisation that best suit their organisations.