OM dec 2010

QUESTION 1
(a) List the major conclusions of the Hawthorne studies.


The Hawthorne studies, conducted at the Western Electric Company Works in Cicero Illinois, from 1924 through the early 1930s, exposed an experimental group of workers to various lighting intensities while providing a control group with constant intensity. As the level of light was increased in the experimental group, the output of both groups increased.
In later experiments, other variables were altered, such as wage levels, rest periods, and length of workday. Worker performance varied but tended to increase over time, leading Mayo and his colleagues to hypothesise what came to be known as the Hawthorne effect – namely, that employees worked harder if they received added attention, if they thought managers cared about their welfare and that supervisors paid special attention to them.


(b) Briefly describe TWO (2) types of locus of control that may influence behaviour in an organisation.


There are two types of locus of control:
Internal: those who believe that they control their own destiny
Attributes organisational success or failure to his or her own actions.
In organisation, the person with internal locus of control will have greater motivation and willingness to accept responsibility. Higher job satisfaction, less turnover, and greater attempt to control their environment.
External: those who see their lives as being controlled by outside forces.
Perceive themselves as having little control over the success or failure of the organisation.
These individuals will be less satisfied with jobs, higher absenteeism rates, more alienated from the work setting, less involved in their jobs. More compliant and willing to follow direction.


(c) What are the FOUR (4) possible employee responses towards job dissatisfaction?



Four possible responses to job dissatisfaction:
Exit:Behaviour directed toward leaving the organisation, including looking for a new position as well as resigning
Voice:Actively and constructively attempting to improve conditions, including suggesting improvements, and discussing problems with superior.
Loyalty:Passively but optimistically waiting for conditions to improve, including speaking up for the organisation in the face of external criticism and trusting the organisation and its management to “do the right thing.”
Neglect:Passively allowing conditions to worsen, including chronic absenteeism or lateness, reduced effort, and increased error rate.



(d) Briefly explain the hygiene factors and motivators in the Herzberg’s motivation-hygiene theory.



Herzberg‟s motivation – hygiene theory:
The theory believes that the opposite of satisfaction was not dissatisfaction. Removing dissatisfying characteristics from a job would not necessarily make the job satisfying
Factors leading to job satisfaction were separate and distinct from those that led to job dissatisfaction.
Hygiene Factors: factors that eliminate dissatisfaction. Include supervision, company policy, salary, working conditions, security, etc.
Motivators: factors that increase job satisfaction and hence motivation. Include achievement, recognition, responsibility, advancement, etc.



(e) What are the TWO (2) major differences between work groups and work teams?



Two major differences between work groups and work teams:
Goal:A work group interacts primarily to share information and to make decisions to help one another perform within each member‟s area of responsibility. On the other hand, work teams focus on achieving collective performance, and generating positive synergy through coordinated effort.
Skills:Work groups consist of members with random and varied skills, whereas, work teams consists of members possessing complementary skills. For work teams, the focus is on generating greater outputs with no increase in inputs, therefore, members are selected carefully so that a positive synergy can be achieved.



(f) What is upward communication?



Upward communication means:
This communication flows to a higher level in an organisation.
Information is transferred from lower level employees, to higher level managers for decisions, actions and evaluations.
It keeps managers aware of how employees feel about their jobs, their co-workers, and the organisation in general.
Managers also rely on upward communication for ideas on how things can be improved.



(g) Identify the TWO (2) factors that create dependency.



The factors that can create dependency are:
Importance: dependency is increased when the resources someone controls is important. If the resources possessed are not important, there will be no dependency created.
Scarcity: if resources are easily available, possession of them will not increase power. A resource needs to be perceived as scarce to create dependency. Resources may include both tangible (raw materials, money, equipments) and intangible (skills, knowledge, information).



(h) Briefly describe “reward power” and “coercive power”.



Reward power is to lead or influence another through the use of desired rewards by the other party. This is also known as the „carrot and stick‟ method of obtaining the cooperation of another. These rewards can be either financial-such as controlling pay rates, raises, and bonuses; or non financial-including recognition, promotions, interesting work assignments, friendly colleagues, and preferred work shifts or sales territories.
Coercive power is to lead or influence another by force. This may be physical but in the organisational context, this takes the form of the threat of being deprived if the desired behaviour at work is not forthcoming. One reacts to this power out of fear of the negative results that might occur if one failed to comply. For example, an employee may obey management to avoid being reprimanded or in extreme situation, to avoid being dismissed from work.



(i) List and briefly explain any TWO (2) advantages of a strong culture.



Advantages of strong culture:
Shared understanding: Shared understanding of values, beliefs and attitudes towards work and performance helps to reduce the complexity of in well with the corporate mindset.
Corporate identity: The sense of identity culture conveys can act as the „social glue‟ that holds the organisation together in setting the appropriate standards for what employees should say or do.



(j) Briefly describe and provide examples of rituals in organisations.



Rituals are events through which the organisation emphasises what is particularly important and can include formal and informal organisational processes. Rituals also can be defined as repetitive sequences of activities that express and reinforce the key values of the organisation, which goals are most important, which people are important, and so on.
Rituals form part of the culture of the company in that they represent shared values and beliefs that help to strengthen the sense of unity and belonging among its employees and induct newcomers into the organisation. Rituals commonly used in
organisations can include mentoring new staff, fixed interval meetings that have critical agendas, important feedback, and sensing mechanisms to monitor feelings, views and attitudes, grading and promotion.
(Any relevant example to be accepted)



SECTION B
QUESTION 2
Robert, the Production Manager of ABC factory realizes that for the plant to become profitable, productivity has to improve. ABC relies on the workers themselves to find ways to cut costs and boost output. To motivate the employees and align their efforts with the needs of the business, Robert designed a new pay system. It offers all employees an annual bonus of RM400 for coming up with any idea that can save an average of RM1000.
Robert also changed the way employees were paid for putting in expected longer hours during peak season. Instead of overtime pay, they build up an account of extra days off.
Referring to the above efforts to boost the employees’ motivation, explain why it is important for Robert to consider the issues highlighted by the Victor Vroom’s Expectancy Theory. Identify the implications of this theory to managers.



From the scenario, it is obvious that Robert is using goals and rewards to improve performance of the employees. This can be related to the Victor Vroom‟s Expectancy theory. This theory argues that the strength of a tendency to act in a certain way depends on the strength of an expectation that the act will be followed by a given outcome, and on the attractiveness of that outcome. Therefore, in motivating the workers to contribute in finding ways to cut costs and boost output, it is important for Robert to make the employees believe that their acts will be rewarded, and ensure that the rewards are valuable and attractive to the employees.
This theory focuses on three relationships:
Effort-performance (E-P) relationship
The probability perceived by an individual that exerting a given amount of effort would lead to performance.
The assessment may include: (i) evaluating own abilities (ii) considering the adequacy of contextual factors such as availability of resources

Performance-outcome (E-O) relationship
The degree to which the individual believes that performing at a particular level will lead to the attainment of a desired outcome.
Extrinsic rewards are rewards, such as bonuses, awards, or promotions, which are provided by others. Intrinsic rewards are rewards related to own internal experiences with successful performance, such as feelings of achievement, challenge, and growth.

Rewards-personal goals (valence) relationship
The degree to which organisational rewards satisfy an individual‟s personal goals or needs and the attractiveness of those potential rewards for the individual.
If the rewards are valued, valence is high. Rewards will have a motivating effect only if valence is high.
The key to expectancy theory is the understanding of an individual‟s goals and the linkage between effort and performance, between performance and rewards, and finally, between the rewards and individuals goals satisfaction. Therefore, it is important for Robert, as the production manager to clearly explain the goals and rewards that are promised to the workers and convince them on the attractiveness of the rewards.
Implications to managers will be seen as follows:
Managers need to encourage the formation of high P – O expectancies by being careful to link rewards with high performance.
Managers should foster a high E – P expectancy in subordinates by being clear about the performance expectations; setting challenging but attainable performance goals; ensuring that the employees have the necessary training and the resources; and providing encouragement.
Managers should ensure that performances are measured in a very systematic way by having good performance measurement techniques. This is crucial especially in ensuring the employees that they are fairly and equally treated or rewarded based on their performances
Managers can encourage motivation by offering opportunities for rewards that have a high valence to employees.



QUESTION 3
Groups offer various advantages to decision-making process. Some work groups are cohesive because the members have spent a great deal of time together, or the group’s small size facilitates high interaction, or the group has experienced external threats that have brought members close together. Cohesiveness has found to be related to the group’s productivity.
a) Explain group cohesion. Discuss the potential advantages and disadvantages of strong group cohesion.



Group cohesion is the degree to which members are motivated to remain in a group. Strengthening group cohesion is an ultimate objective of those managers and organisations that turn groups into teams.
Group cohesion is usually regarded as having many advantages and is highly desirable.
 Increase in quantity and quality of group interaction.
 Group has stronger influence on each member to conform to the group‟s standards or norms.
 Cohesive groups appear to be more effective in achieving goals that group members accept.
 Members tend to have greater satisfaction with the group.
High group cohesiveness may also be detrimental to the groups‟ performance, such as:
 If the groups‟ norms do not support the organisation‟s goals, then greater cohesion will be undesirable.
 Useful or creative ideas may be ignored if they deviate from established norms or values.
 Increased probability of developing groupthink.
 Potential decrease in intergroup cooperation.



(b) Explain how group development can be attained in the organisation.



Stages of Group Development:
The Forming Stage
Members of the group come together for the first time, for the group‟s purpose. The group structure is planned in terms of leadership, hierarchy, individual roles and responsibilities, its rules and regulations. There can be considerable anxiety at this stage as members create impressions, test each other‟s temperaments and establish their personal identity within the group.

The Storming Stage
As members become more familiar with each other, they may start to express themselves more openly and forcefully. Disagreements may arise and patterns of work and relationships laid down at the earlier stage may start to be challenged, not necessarily without justification. All this may lead to conflict and hostility but can be for good if the arguments lead to more meaningful work structures and processes.
The Norming Stage
If the storming stage is successfully passed, then the group will start to evolve its own norms of behaviour. These norms set the guidelines and standards of what is acceptable work behaviour within the group so that its members are clear as to how many group is supposed to behave and function as a harmonious entity. These norms can operate to contribute to the efficiency of the organization.
The Performing Stage
If the group successfully passes through all the stages above, it will be able to work cohesively and successfully as a unit. This is when the group is most effective as it concentrates on achieving its goals.
The Adjourning Stage
If the group was formed for a purpose over a specified period only, then it will disband once that is achieved. For example, a group handle a project that has been completed.



QUESTION 4
Scott Davis is the manager of a plant that manufactures camping equipment. The employees are highly trained and experienced in their jobs, and their performance has been excellent. Mr. Davis recently promoted Taylor to be the Supervisor of the Production Department. Taylor has worked in the plant for the past 12 years and has the best production record in the department.
After a month of Taylor’s supervision, his employees requested a meeting with Mr. Davis. They stated that Taylor was making it impossible for them to achieve their production goals. They complained Taylor is a dictator and a perfectionist. Taylor overly emphasised the need to achieve the established goals and targets without paying attention to the concerns and developmental needs of the employees. Rather than motivating them in the process of achieving the targets, Taylor intervenes only if standards are not met.
(a) Analyse the above situation in light of the Hersey and Blanchard’s Situational Leadership Model.



The feedback received from the employees on Taylor‟s leadership style indicates the importance of understanding the situations that a particular leader is dealing with, especially the employees or the followers. This means, a leader should select an appropriate leadership style, depending on the followers.
The Hersey and Blanchard‟s situational leadership model suggests that successful leaders adjust their style depending on the maturity of the followers, indicated by their readiness.
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Readiness refers to the extent to which people have the ability and willingness to accomplish a specific task. Based on the followers‟ readiness, leaders should select whether to adopt a supportive behaviour (relationship-oriented) or directive behaviour (task-oriented).
The scenario given indicates that the employees are highly trained and experienced in their jobs, and their performance has been excellent. This is an important element to be considered by Taylor in forming and adjusting his leadership style.
Four specific leadership styles highlighted by Hersey and Blanchard‟s situational leadership model are as follow:
 Telling (high directive, low supportive)
When followers are unable, unwilling and insecure
 Selling (high directive, high supportive)
When followers are unable, willing and confident
 Participating (low directive, high supportive)
When followers are able, unwilling and insecure
 Delegating (low directive, low supportive)
When followers able, willing and confident
Therefore, it is very clear that, having highly trained and experienced employees, it will be more appropriate for Taylor to use delegating or participating approach to leadership



(b) From the given scenario, does Taylor have the characteristics of a transactional or transformational leader? Elaborate.



Based on the comments expressed by the employees on Taylor‟s leadership style, we can characterise Taylor as a transactional leader. This is due to the consistencies between Taylor‟s leadership styles with the characteristics that describe transactional leaders as follow:
 Management by exception (active): watches and searches for deviations from rules and standards, takes corrective action
 Management by exception (passive): intervenes only if standards are not met
 Contingent reward: contracts exchange of rewards for effort, promises rewards for good performance, recognises accomplishments
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 Laissez-faire: abdicates responsibilities, avoids making decisions
Taylor‟s leadership styles match the above characteristics of a transactional leader. Transactional leaders guide or motivate their followers in the direction of established goals by clarifying role and task requirements. Less concern is given on the developmental needs of the followers.



QUESTION 5
An organisational structure defines how job tasks are formally divided, grouped, and coordinated. Organisations structures help define the corporate culture, expectations and management style. When the structure and design of an organizational work together, they create a productive and efficient working environment where employees are motivated and customers are satisfied.
(a) Discuss the following THREE (3) new structural design options: team structure, virtual organisation, and boundaryless organisation.



Three new structural design options:
 Team Structure:
o Breaks down departmental barriers and decentralises decision making to the level of the work team. Team structures require employees to be generalists as well as specialists.
o In small companies, team structure can define the entire organisation
o Among larger organisations, the team structure complements bureaucracy. This allow the organisation to achieve efficiency of bureaucracy‟s standardisation while gaining the flexibility that teams provide
o Common types: self-managed teams and cross-functional teams
 Virtual Organisation:
o A small, core organisation that outsource major business functions. It is highly centralised, with little or no departmentalisation.
o Virtual organisation create networks of relationships that allow them to contract out manufacturing, distribution, marketing, or any other business function where management feels others can do it better or cheaper.
o It is contrast to bureaucracy that has many vertical levels of management and most business functions done by own employees.
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 Boundaryless Organisation
o An organisation that seeks to eliminate the chain of command, have limitless spans of control, and replace departments with empowered teams.
o By removing vertical boundaries, management flattens the hierarchy. Status and rank are minimised. Cross hierarchical teams, participative decision-making practices, and 360-degree performance appraisals are among the examples of breaking down vertical boundaries.
o Horizontal boundaries (functional departments) can be reduced by having cross-functional teams and organise activities around processes.
o Boundaryless organisation also breaks down barriers to external constituencies and barriers created by geography. This is done through globalisation, strategic alliances, telecommuting, etc.



(b) Identify and elaborate any FOUR (4) common forms of departmentalisation.



Four common forms of departmentalisation:
Functional Departmentalisation: Jobs are grouped by the functions (marketing, finance, human resource, etc)
Product Departmentalisation: Jobs are grouped by product line.
Geographical Departmentalisation: Jobs are grouped on the basis of territory.
Process Departmentalisation: Jobs grouped on the basis of product or customer flow.



QUESTION 6
One of the well-documented findings from studies of individual and organisational behaviour is that organisations and their members resist change. Resistance to change can stimulate a healthy debate over the merits of an idea and result in a better decision. But, there is a definite downside to resistance to change, it hinders adaptations and progress.
Identify the possible sources for the resistance to change. Discuss the major possible ways of reducing resistance to change.



Sources of Resistance to Change
 Individual Sources
o Habit
o Security
o Economic factors
o Fear of unknown
o Selective information processing
 Organisational Sources
o Structural inertia
o Limited focus of change
o Group inertia
o Threat to expertise
o Threat to established resource allocation
Possible ways of overcoming resistance to change:
Education and communication: The communication process should take place prior to the change implementation in order to create a perception among the employees that their full commitment is crucial for the success of the initiated change. Leader should clear up any misunderstandings, doubts, or confusions that the employees might have.
Participation: Rather than simply providing the justification for change, leaders should show clearly to the employees on how they are actually involved in the change process.
Facilitation and Support: Supportive efforts in a continuous basis are highly needed in preserving the employees‟ confidence towards the benefit of the change process. (E.g.: counselling, training, team support)
Negotiation: When the resistance comes from powerful source, leaders should think of exchanging the change with something of value as reward.
Manipulation and Cooptation: Should be considered as the last option due to its high risk of leaders loosing their credibility once the tactics discovered. Leader might choose to manipulate the facts to appear more attractive or withhold undesirable information to gain commitment.
Coercion: Leaders apply direct threats or force on the resisters. Although having various drawbacks, this approach is desirable when immediate support for change is needed.