July 24, 2014

Strategies, Policies, and Planning Premises - Review Notes

Note: Strategic Management is now full subject and specialization in management. But it is essential to note from this chapter that strategy making is a part of management process and is a part of planning function of management. Every student of management has to learn strategy development. It is a core management step or activity as we stated earlier that planning is a primary function of management.


Some writers include both the end points (purpose, mission, goals, objectives) and the major means of achieving them (programs, policies, and plans) in strategy of the firm. Others emphasize the means.

Conceptually, strategic planning is very simple: Analyze the current and future environmental situation, assess the firm's capabilities, determine the direction of the firm (mission), and develop means of achieving the mission. In practice, it is a complex process.

The Strategic Planning Process


The goal inputs of various claimants on the organization have to be ascertained.

Enterprise Profile

Enterprise profile gives where the company is presently. It also gives present competitive situation in the industry and the position of the company in it.

Orientation of Top Managers

The enterprise profile is shaped by people, especially top managers. They set the organizational climate and they determine the direction of the firm.

Purpose and Major Objectives

External Environment

Internal Environment

Alternative Strategies

An organization may may focus on niche (one or two customer segments) and or produce and offer complete product line to cater to various customer segments. A firm can specialize in one product or it can diversify into multiple products. Growing internationally is another strategic choice. Retrenchment or sales of certain parts of the organization and liquidation are also strategic choices.

Evaluation and Choice of Strategies

Various strategic alternatives have to be carefully evaluated before the choice is made. Risk assessment also needs to be done as certain failures can bankrupt the organization.

SWOT Analysis or TOWS Matrix

External opportunities and threats and Internal strengths and weaknesses are to be evaluated by organizations as a part of strategic planning process. If an opportunity and strength match, the organization can exploit the opportunity with confidence. If there is a threat and company seems to be weak in the area, retrenchment can be an alternative.

The Product Portfolio Matrix

It classifies the products based on two dimensions: Business growth rate and relative market position.

Stars, Cash cows, Question marks and Dogs are the four quadrants.

Michael Porter outlined that as generic strategies organizations can follow cost leadership or differentiation to achieve competitive advantage or higher profit margins. Similarly focus on special groups of customers can also be a generic strategic choice.

Steps for successful Implementation Strategies

1.Communicating strategies to all key decision-making managers.
2. Developing and communicating planning premises
3. Ensuring that action plans contribute to and reflect major objectives and strategies.
4. Reviewing strategies regularly.
5. Developing contingency strategies and programs.
6. Making organization structure fit strategic needs
7. Continuing to emphasize planning and implementing strategy.
8. Creating a company climate that forces planning.


Policies - Definition and Types

Policies are guides to thinking in decision making. They reflect and interpret objectives and guide decisions to to achieve the objectives. They establish the framework for planning programs. They establish limits or boundaries to plans whereas planning premises provide the operational background.

Policies themselves are plans. They are also the result of planning and decision making. Policies also have levels. A policy can be a major as that of financing growth through retained profits.

Policies can be categorized as originated policy, appealed policy, implied policy, and externally imposed policy.

The most logical way of policy setting is that originated by managers at a certain level for the express purpose of guiding their decisions and the decisions of their subordinates in the operation of business.

The decisions made by superiors in the on problems referred to them can develop into policies and such policies are termed as appealed policy.

Many times policies develop from the actions that people see about them. If a company talks of high quality in speeches and slogans, but is frequently producing and selling shoddy goods, people working in the company assume that poor quality is the policy of the company. Implied policy emerges from instances where stated policy is not enforced.

Government, trade associations and trade unions impose certain policies on the organizations.

Guidelines for Effective Policies

Policies should reflect objectives and plans.

Policies should be consistent.

Policies should be flexible

Policies should be distinguished from rules and procedures.

Policies should be in writing.

Policies should be taught.

Policies should be controlled

Policies in Various Functional Areas of Business

In the following functional areas, policies are announced generally to guide decision making.

Product selection and development


Sales promotion

Distribution channels

Production and inventory


Personnel selection and training


Employee benefits


 Management: A Global Perspective, Heinz Weihrich, and  Harold Koontz, Tenth Edition,  McGraw-Hill, 1993

Principles of Management, Harold Koontz and Cyril O'Donnell, Fourth Edition, McGraw-Hill, 1968

Updated on 24 July 2014, 12 Dec 2011

Originally posted in

July 17, 2014

Psychological Capital

Psychological Capital , like widely recognized concepts  human and social capital, is a construct similar to  economic capital, where resources are invested and leveraged for a future return. Psychological Capital is different from  human (‘what you know’) and social (‘who you know’) capital, and is more directly concerned with ‘who you are’ and more importantly ‘who you are becoming’ (i.e., developing one’s actual self to become the possible self).

Luthans et al. operationally define Psychological Capital as follows:

An individual’s positive psychological state of development that is characterized by: (1) having
confidence (self-efficacy) to take on and put in the necessary effort to succeed at challenging tasks;
(2) making a positive attribution (optimism) about succeeding now and in the future; (3) persevering
toward goals, and when necessary, redirecting paths to goals (hope) in order to succeed; and (4)
when beset by problems and adversity, sustaining and bouncing back and even beyond (resiliency) to
attain success (Luthans, Youssef, & Avolio).

Luthans et al. used  the following criteria to include concepts and variables in the operations definition of PsyCap. (1) the concept must  grounded in theory and research; (2) valid measurement; (3)
relatively unique to the field of organizational behavior; (4) state-like (i.e., open to development as
opposed to trait-like and thus relatively fixed); and (5) have a positive impact on sustainable
performance  Note the variable must be amenable to development.

Input for Developing Hope Variable 

Positive psychologist Rick Snyder (2000) has done  extensive theory building and research on the concept of hope and also on the development processes of hope. He identifies the primary components of hope
to be agency, pathways, and goals. Luthans et al used  a three-pronged strategy embedded in a goal-oriented framework, which includes goal design, pathway generation, and overcoming obstacles in the exercise of developing hope.

Goal Design

The micro-intervention sessions (lasting from 1 to 3 hours depending on the number of participants
and exercises/video clips used) begin with participants identifying personally valuable goals. Once they have recorded these goals, the facilitator explains the ideal design for such goals includes: (1) concrete end points to measure success; (2) an approach (rather than an avoidance) framework, which allows participants to positively move toward goal accomplishment as opposed to away from desired goals (e.g., work toward quality targets instead of avoiding product rejects); and (3) the importance of identifying sub-goals in order to reap the benefits of even small ‘wins’ (what Snyder calls ‘stepping’ in his hope training). There is refinement of goals after this facilitation.

Pathways for Goal Attainment

After the personal goals are determined, pathways are developed. First, using the stated personally
valuable goal, participants are asked to generate multiple pathways to this goal. They are encouraged to
brainstorm as many alternative pathways as possible, regardless of the practicality of implementation.
Next, small groups are formed in order for participants to hear from others, and provide to others,
alternative potential pathways to the group members’ various goals. The final step is to inventory
pathways. This process entails considering the resources required to pursue each pathway. After careful
deliberation, the unrealistic pathways are discarded and a smaller number of realistic pathways are

Overcoming Obstacles

Snyder (2000) posits there will be obstacles to virtually any goal. These obstacles may result in disengagement from pursuing the goal. Hence an attempt to anticipate and plan for overcoming  obstacles is an integral part of the exercise. Participants are instructed and given a few minutes to consider the potential obstacles or ‘what can stop you from accomplishing your goal?’ After time for self reflection, small groups are formed again to hear alternative perspectives on potential obstacles and strategies to overcome them. The facilitator focuses on utilizing this process to identify obstacles in advance and choose an alternate pathway to avoid pathway blockage.

At the completion of this hope dimension of the intervention session, participants have defined a
personally valuable goal in such a way as to take ownership, be prepared for obstacles, and be ready to
implement multiple pathways as contingency plans. Throughout this exercise,  the facilitator tries to acknowledge and encourage positive, rather than negative, self talk. The facilitator maintains focus on goal setting, pathway generation, and overcoming obstacles as a process that can and should be applied to an array of participants’ goals in the workplace. Transferability back to the job is constantly emphasized. The objective of the exercise is to increase participants’ level of hope in his PsyCap developmental process.

Psychological capital development: toward a micro-intervention
Department of Management, Gallup Leadership Institute, University of Nebraska-Lincoln, Lincoln,
Nebraska, U.S.A.
Journal of Organizational Behaviour
J. Organiz. Behav. 27, 387–393 (2006)

Positive Psychological Capital: Beyond Human and Social Capital
Business Horizons, Jan-Feb 2004

Managing and Leading for High Performance - Job Design and Goal Setting - Revision Notes

Job Design

Job design may be defined as the methods that management uses to develop the content of a job, including all relevant tasks, as well as processes by which jobs are constructed and revised.

Ideas about job design appeared in business and economics literature as early as the 1700s. Adam Smith in The Wealth of Nations pointed out that production per man of straight pins could be dramatically increased if each worker was assigned a small routine, repeated task in the process of making of pins instead of being assigned the task of doing all elements and complete one pin all by himself. Pioneering scientific management proponents like F.W. Taylor and Frank Gilbreth advocated that management should analyze the method of doing each operation in a process and identify the most economical method of doing it and standardize it or specify it to be adopted by each and every worker or operator employed by it in the operation. Task design is the most prominent single element in scientific management.  The scientific management approach evolved into a discipline called industrial engineering and it is concerned with product, process and tool design, plant layout, standard operating procedures, work measurement and standards, worker methods, and human-machine interaction. It has been the dominant form of job design analysis for over 100 years and it was adopted in various production technology improvements like automation, cybernation (use automatic feedback control systems) and use computers and sophisticated computer applications like artificial intelligence, expert systems and computer-assisted design. The job engineering produced cost savings. But there were negative effects on quality, absenteeism and turnover. So a deterioration in behavioral variables was observed. To take care of behavioral variable that were having an adverse impact on performance, certain measures were taken by managers. Job rotation and job enrichment were attempted by some companies.

Job enrichment is an exercise based on Herzberg theory on motivators related to job design. Between two jobs offering the same money income, the job that provides opportunities for achievement, recognition, responsibility, advancement, and growth provides more motivation.One can even see preference curves with these two as two variables - money income and job related motivators independent of money.

J. Ricahrd Hackman and Greg Oldham developed the most widely recognized model of job characteristics as a further extension of Herzberg model.

The core of the model identifies the follow characteristics

1. Skill variety involved in the job.
2. Task identity
3. Task significance
4. Autonomy
5. Feedback (Recognition Reward)

Quality of Work Life and Sociotechnical Design are also movements in the area of job design.

High Performance Work Practices approach narrows down for effective practice what began as a broad area in Quality of Work Life movement.

Goal Setting

A goal is a performance target that an individual or group seeks to accomplish at work. Goal setting isthe process of motivating employees by establishing effective and meaningful performance targets.

Detailed note on Goal Setting and Performance
Goal Setting and Performance

In case you feel the need for more details please revise the full chapter in  Luthans. 

Behavioral Performance Management - Revision Notes

Behavioral Performance Management Model

Identification of Performance Behaviors
Measurement of the Behavior
Functional Analysis of the Behavior
Development of Intervention Strategy
Evaluation to ensure Performance

The whole text on organizational behavior is concerned with the what and how of managing and leading people for high performance in today's organizations.

Learning Process - Change in Behavior

All organizational behavior is either directly or indirectly affected by learning. Hence managers of organizational behavior have to understand the learning mechanisms.

In operant conditioning, the organism must operate on the environment in a right way or appropriate way to get the desired reward.

Working is the operation a worker has to do to get food clothing and shelter for himself and his family.

Cognitive Learning

Tolman proposed cognitive learning.

Kohler discovered insight learning (insight is not based on experience)

Social Learning

Learning takes place via vicarious, or modeling, and self-control processes.

Behavioral Dimension Performance Management Process 

1. Identification of Performance Behaviors

Critical behavior that contribute to job performance in the organization are to be identified

2. Measurement of the Behavior

A baseline measure is obtained by determining by observing or by analysis of records the number of times the identified behavior is occurring or not occurring.

3. Functional Analysis of the Behavior

A functional analysis identifies both the antecedents (A) and consequences (C) of the target behavior (B), or simply stated, an A-B-C analysis is performed.

The antecedent cues that emit or elicit the behavior, and sometimes control it, and the consequences that are currently maintaining the behavior must be identified and understood before an effective intervention strategy can be developed.  If the employee cannot do the behavior even if he wants to do it, then intervention has to be in antecedent variables. If the employee can do but not doing it, then the intervention has to be in consequence variables.

4. Development of Intervention Strategy

The strategies to be used strengthen functional behaviors and weaken dysfunctional behaviors are positive reinforcement and punishment-positive reinforcement.

Under positive control, people come to work in order to be recognized for making a contribution to their department's goal of perfect attendance, and they keep busy irrespective of the supervisor's presence to receive incentive pay or recognition

If punishment is to be used or used, the supervisor must take the first opportunity to positively reinforce the alternative behavior.

5. Evaluation to ensure Performance

Kirkpatrick's four levels of evaluation to a behavior modification initiative are important. They are reaction, learning, behavioral change, and performance improvement.

July 16, 2014

The Focus and Purpose of Organizational Behavior - Robbins and Judge

Organizational behavior helps potential managers develop the people skills.

Dependent Variables in Organizational Behavior

A dependent variable is the key factor that you want to predict when some other factor is changed.

Productivity, absenteeism, turnover, and job satisfaction are the traditional dependent variables in Organizational behavior.  More  recently, two more variables: deviant work place behavior and organizational citizenship behavior have been added to the list.

July 15, 2014

Stress, Conflict and Negotiation Skills

Organizational behavior revision article series


The father of stress studies, Hans Selye, feels that complete freedom from stress is death. Stress is still one of the most important and serious problems facing the field of organizational behavior. Stress can be comprehensively defined as an adaptive response to an external situation that results in physical, psychological, and/or behavioral deviations for organizational participants. The causes of stress can be categorized into extraorganizational, organizational, and group stressors, as well as individual stressors and dispositions. In combination or singly, they represent a tremendous amount of potential stress impinging on today's jobholder-at every level and in every type of organization.


In addition to stress, the dynamics of interactive behavior at interpersonal and group levels, and the resulting conflict, play an increasingly important role in the analysis and study of organizational behavior. Conflict and stress are conceptually and practically similar, especially at the individual level. Conflict at the intraindividual level involves frustration, goal conflict, and role conflict and ambiguity. Frustration occurs when goal-directed behavior is blocked. Goal conflict can come about from approach-approach, approach-avoidance, or avoidance-avoidance situations. Role conflict and ambiguity result from a clash in the expectations of the various roles possessed by an individual and can take the forms of role conflict, intrarole conflict, or interrole conflict.

Interpersonal conflict is first examined in terms of its sources (personal differences, information deficiency, role incompatibility, and environmental stress). Then the analysis of interpersonal conflict is made through the response categories of forcing, accommodating, avoiding, compromising, and collaborating. Intergroup conflict has also become important. The antecedents to intergroup conflict are identified as competition for resources, task interdependence, jurisdictional ambiguity, and status struggles.

The effects of stress and intraindividual conflict can create physical problems (heart disease, ulcers, arthritis), psychological problems (mood changes, lowered self-esteem, resentment of supervision, inability to make decisions, and job dissatisfaction), and/or behavioral problems (tardiness, absenteeism, turnover, and accidents).

A number of individual and organizational strategies have been developed to cope with these stress-induced problems. Exercise, relaxation, behavioral self-control techniques, cognitive therapy techniques, and networking are some potentially useful coping strategies that individuals can apply to help combat existing stress. Taking a more proactive approach, management of organizations can try to eliminate stressors, reduce work-family conflict, and implement employee assistance programs (EAPs).

A special concern for organizations today is to deal with the stress resulting from downsizing that affects both those laid off and the survivors. To manage this stress, downsizing organizations must fully communicate and display fair procedural justice for those let go. To counter survivor syndrome, downsized organizations can follow such guidelines as being proactive, acknowledging survivors' emotions, communicating after the cuts, and clarifying new roles. In any case, whether on an individual or an organizational level, steps need to be taken to prevent or reduce the increasing job stress facing today's employees.

Negotiation Skills

Negotiation skills are becoming increasingly recognized as important to effective management and personal success.

Research at one time identified some common mistakes being made in negotiations.

1. Negotiating persons tend to be overly affected by the frame, or form of presentation, of information in a negotiation.
2. Even when a course of action is no longer the most reasonable alternative, negotiators tend to nonrationally escalate commitment to a previously selected or advocated course of action.
3. Negotiators tend to assume that their gain must come at the expense of the other party and thereby miss opportunities for mutually beneficial trade-offs  between the parties.
4. Negotiators judgments tend to be anchored on irrelevant information, such as initial offer.
5. Negotiators tend to rely on readily available information.
6. Negotiators tend to fail to consider information that is available by focusing on the opponent's perspective.
7. Negotiators tend to be overconfident concerning the likelihood of attaining outcomes that favor the individual(s) involved.

 Traditionally, negotiators have depended on distributed and positional bargaining. Distributed bargaining assumes a "fixed pie" and focuses on how to get the biggest share, or "slice of the pie" for the benefit of the negotiating party. Positional bargaining approach involved successively taking and then giving up, a sequence of positions. A position involves telling the other side what you want.

Strategies called soft and hard are used in traditional ways of negotiating.  Characteristics of the "hard strategy" include the following: the goal is victory, distrust others, dig into your position, make threats, try to win contest of will, apply pressure.

Soft strategy includes characteristics: The goal is agreement, trust others, change your position easily,  make offers,  try to avoid a contest of will, and yield to pressure.

The traditional approach is now being challenged by more effective alternative negotiation skills.

Whetten and Cameron suggest an approach that takes an "expanding the pie" perspective and advocates finding win-win outcomes. The approach recommends:
1. Establishing superordinate goals.
2. Separating people from the problem
3. Focusing on interests, not positions
4. Inventing options for mutual gain.
5. Using objective criteria.

In terms of negotiation techniques or manoevres the following are identified as in use by negotiators.

 Practical low-risk strategies include flattery, addressing the easy points first, silence, inflated opening position, and "oh, poor me."

High-risk strategies include unexpected temper losses, high-balling, Boulwarism, and waiting until the last moment.

Harvard Negotiation Project came up with principles negotiation approach or negotiation on the merits approach. This is an  integrative approach, which uses a problem-solving, collaborative strategy, and the principled, or negotiation on the merits approach, which emphasizes people, interests, options, and criteria. These negotiation skills  change the game, leading to a win-win, wise agreement.

Along with social, emotional, behavioral, leadership, team, and communication skills, negotiation skills are becoming increasingly recognized as important to effective management.

Conducting Effective Negotiations
Joel Peterson
Stanford Graduate School of Business
31 January 2007


Updated on 15 July 2014, 7 Dec 2011

July - Management Knowledge Revision

One Year MBA Knowledge Revision Plan

January  - February  - March  - April  - May   -   June

July  - August     - September  - October  - November  - December

Article originally posted in

July 10, 2014

Reward Systems and Organizational Behavior - Review Notes

Reward systems is an important part of the organizational context for organizational behavior.

Luthans discussed why he has included this chapter in the OB book. In the social cognitive theory, the basis or foundation for the textbook, the environment variable forms a triad with the person and the organization. In the organization, the structural design and culture are already covered as important variables. The reward system is the third major organizational variable. Bandura has noted that human behavior cannot be fully understood without considering the regulatory effect influence of rewards.

One way to the importance of organizational rewards as simply as possible is to remember: "YOU GET WHAT YOUR REWARD!"

The rewards are discussed under pay, recognition and benefits topics.

Money as a Reward

Mitchell and Mickel has noted that money is a prime factor in the foundation of commerce, that is, people organize and start business to make money. Then do employees need money to continue working in an organization or not? We are not talking of participation in charity or social welfare organizations. For majority of people, the primary organization that they work for is an organization that provides them money for their living. Only after their primary need is satisfied through certain hours of working, that they choose other organization which do not provide them money, but provide satisfaction to them in other ways.

Money is also associated with four of the important symbolic attributes for which humans strive: achievement and recognition, status and respect, freedom and control, and power.

Despite the visible tendency of many organizational behavior theorists to downgrade the importance of pay as an organizational reward, there is ample evidence that money can be positively reinforcing for most people, and,  if the pay system is designed properly to fit the strategies, can have a positive impact on individual, team, and organizational performance. Money remains a very important motivator.

In order for money to be effective in the organizational reward system, the system must be as objective and fair as possible and be administered contingently on the employee's exhibiting critical performance behaviors. This has been made particularly clear by Kerr, who notes that an effective pay system for rewarding people has to address three considerations. First, the organization must ask itself what outcomes it is seeking. Examples include higher profits, increased sales, and greater market share. Second, the enterprise must be able to measure these results. Third, the organization must tie its rewards to these outcomes.

Traditional Methods of Administering Pay

Traditionally, organization have used two methods of administering pay: base pay and merit pay. These methods were supplemented by some with pay-for-performance plans and 'new pay" programs.

Base pay is paid for various categories or ranks of jobs and it is based on market conditions and the pay policy of the company. Merit pay is tied to some predetermined criteria that judges meritoriousness of people. The annual salary increases are based on merit pay systems only. In a way, merit pay is supposed to be a form of "pay for performance." However, there are problems in linking merit pay that is given throughout the career to performance in a single period. Therefore many organizations have created specific pay-for-performance plans.

Pay for Performance

There are two types basic types of "pay-for-performance" plans: invidividual plans and group incentive plans. Individual incentive plans have been around for many years. There were studied by many and F.W. Taylor who also studied them in the form of piece rate systems developed time study and  standard output based incentive systems. They became part of scientific management system of shop management or process management advocated by him.

Signing bonus is indicated by Luthans as a performance pay method. But it seems to be more a merit pay method than a performance pay method. Stock option plan is also an individual incentive pay.

Potential limitations of individual incentives: Individual incentives are practical only for jobs for which performance can be specified objectively and can be measured easily.

Group Incentives

Team working is being emphasized nowadays  by many companies and group incentives are being used to motivate teams for higher performance. One of the most common forms of group pay is gain sharing plan. In these plans, cost savings due to productivity improvements is shared with the group.

Another common group incentive plan is profit sharing. In a typical plan, some portion of the profit is paid into a profit-sharing pool, and this then distributed to all employees immediately or after retirement.

Employee Stock Ownership Plan (ESOP) is another group incentive plan.

New Pay Techniques

The following approaches were indicated as new techniques by Luthans

1. Commissions beyond sales to customers.
2. Rewarding leadership effectiveness
3. Rewarding new goals.
4. Pay for knowledge workers in teams.
5. Skill pay
6. Competency pay
7. Broadbanding.

Luthans stated in his conclusion that new pay techniques have a role and organizations have to utilize them to be effective in the areas of customer satisfaction, leadershi, satisfied employees, quality, teamwork, knowledge sharing, skill development, new competencies (e.g., technical, cross-cultural, and social), and employee growth without promotions.

Recognition as an Organizational Reward

Genuine social recognition can be given at any time by any body in the organization. Unlike many financial forms of reward, there is no limit to the number of people who can receive recognition reward and also how many times it is given.

Research shows that there are many types of recognition that can lead to enhanced performance and loyalty.  Helping employees in the discharge of their family responsibilities (recognition of their family responsibilities) increases employee loyalty.  Research also shows that employees would like their companies to focus on being fair to employees, caring about them, and exhibiting trust in them.

Some Steps that help in increasing the effectiveness of recognition reward systems and practices

1. Use all available communication channels to make all employees aware of the system or scheme.
2. Educate managers in using recognition reward as a part of the total compensation package.
3. Make recognition part of the performance management process.
4. Have site-specific recognition programs that are covered in company newsletters and websites.
5. Publicize the best practices and achievements of recognized employees so that every one knows some of the things they can do in order to earn recognition.
6. Also make all managers and supervisors know what best managers are doing to use recognition effectively.
7. Continually review the recognition process and procedures to improve them, to introduce new procedures and scrap those which are not delivering results.
8. Solicit ideas from all to know what is working and interesting.

Benefits As Organizational Rewards

Commonly offered benefits are categorized into those that are required by law and those that are offered by companies.

Federal Government-Mandated Benefits: Social security is the most important federal government mandated benefit. Another major benefit is workers' compensation.  The Family and Medical Leave Act of 1993 requires all organizations with 50 or more employees to grant any worker who has been employed there for at least one year an unpaid leave of 12 weeks to take care of personal medical issues or serious illness of family members.  ERISA (Employee Retirement Income Security Act of 1974) is also a benefit.

Companies are offering health insurance, life insurance, and pension benefits. Companies have vacation benefit, sick leave benefit and leave for some contingencies.

New Types of Benefits

Wellness programs, Life cycle benefits,Flexible-Cafeteria style benefit plans are some of the new developments in benefits provided to employees.

Updated 10 July 2014, 4 Dec 2011

July - Management Knowledge Revision

Personality and Attitudes - Review Notes

Personality and Attitudes - Main Essay

Organizational Citizenship Behavior
Definition by D.W. Organ

Individual behavior that is discretionary, not directly or explicitly recognized by formal reward system, and that in the aggregate promotes the effective functioning of the organization.

The personality foundation for the OCBs are the traits like cooperative, helpful, caring and conscientousness. Employees engage in OCBs to reciprocate the actions of their organizations. Studies found a strong relationship between justice in the organization and OCBs. Procedural justice in the organization creates positive attitudes toward organization and thus prompts employees to engages in OCBs that help in the effective functioning of the organization.

Organ, D.W., Organizational Citizenship Behavior: The Good Soldier Syndrome, Lexington Books, Lexington, Massachusetts, 1988, p.4 (Definition)
Should I do it or not? An Initial Model of Cognitive Processes Predicting Voice Behaviors by Dan S. Chiaburu et al.

Updated  10 July 2014, 4 Dec 2011

Decision Making and Creativity in Decision Making - Review Notes

Organizational behavior revision article series

Decision making is almost universally defined as choosing between alternatives. It is closely related to all the management functions, planning, organizing and control. Chester Barnard started a meaningful analysis of the decision making process in organizations.  He pointed out that the process of making decision uses techniques for narrowing choices. Herbert A. Simon conceptualized three major phases in the decision-making process:
1. Intelligence activity
2. Design activity:  developing possible courses of action
3. Choice activity: Choosing an alternative from set of courses developed.

Mintzberg proposed three phases.
1. The identification phase
2. The development phase
3. The selection phase

Behavioral Aspects and Theory of Decision Making

Classical management theory operated under the assumption of rationality and certainty. But new behavioral decision theory is developed on the assumption that individuals have cognitive limitations and also because of the complexity of organizations and the world in general, they act in situations where uncertainty prevails and information is often ambiguous and incomplete.

The Social Model: At the opposite extreme is social model implied by Sigmund Freud's view of a man.  Sigmund Freud viewed humans as bundles of feelings, emotions, and instincts, and their behavior was guided largely by their unconscious desires. Even though, most contemporary psychologists would take issue with Freudian description of humans, almost all would agree that psychological influences have a significant impact on decision-making behavior. Further more, social pressures may cause managers to make irrational decisions.

Simon's Bounded Rationality Model

Judgmental Heuristics and Biases Model

1. The availability heuristic
2. The representativeness heuristic
3. The anchoring and adjustment heuristics

Decision Making Styles

Directive style

Low tolerance for ambiguity and orientation toward task and the technical concern. The decision makers like to exercise power, want to be in control, and in general display an autocratic leadership style.

Analytical style

Analytical decision makers have a high tolerance for ambiguity and a strong task and technical orientation

Conceptual style
The style combines high tolerance for ambiguity with strong people and social concerns.

Behavioral style
Low tolerance for ambiguity is combined with strong people and social concerns.

Participative Decision-Making Techniques

Problem of Pseudoparticipation: Some managers ask for participation, but whenever subordindates make a suggestion or try to provide some input into a decision, they are put down. If managers claim to want participation from their people but never let them become intellectually and emotionally involved and never use their suggestions, the results may be negative.


The process of creativity
According to noted creativity researcher Teresa Amabile, creativity is a function of three major components: expertise, creative-thinking skills, and motivation.

Expertise consists of knowledge: technical, procedural, and intellectual.
Creative thinking skills determine how flexibly and imaginatively people can deal with problems and make effective decisions.
Motivation is the inner passion to solve the problem at hand.

Creative people are better able to do things such as abstracting, imaging, synthesizing, recognizing patterns, and empathizing. They are also good intuitive thinkers. Intuitive thinking is coming out with ideas to solve problems where logical and known procedures are not giving any valid solution.

Psychological Definition and Analysis of Creativity

Psychological definition of creativity is that it involves combining responses or ideas of individuals or groups in novel ways.

Two widely recognize dimensions of creativity that help in explaining the creative process.

1. Divergent thinking: Ability to generate novel, but still appropriate, responses to questions and problems.

2. Cognitive complexity: This refers to a person's use of and preference for elaborate, intricate, and complex stimuli and thinking patterns.

Creativity techniques for Management Decision Making

A survey found that top managers are using creativity enhancing techniques like guided imagery, self-hypnosis, journal keeping, and lateral styles of thinking.

In some Japanese companies, employee creativity is managed or developed through deliberate structural means to develop the employee's motivation, job satisfaction and teamwork.

A recent technique called empathic design was used by certain companies. In this customers were photographed and studied to interpret their reactions in using existing products and services as well as proposed products, services and product and service features.

Group Decision Making

The Delphi Technique

The Nominal Group Technique

Silent generation of ideas in writing. Although more research is needed, there is some evidence that NGT-led groups come with many more ideas than traditional interacting groups.

July - Management Knowledge Revision

One Year MBA Knowledge Revision Plan

January  - February  - March  - April  - May   -   June

July  - August     - September  - October  - November  - December

Updated 10 July 2014, 4 Dec 2011

July 9, 2014

Diversity and Ethics Issues - Relevance to Organizational Behavior

Specific characteristics of diversity


In USA, work force is getting progressively older. Now with no mandatory retirement age, number of age discrimination complaints are increasing.


Women are entering employment in record numbers. By end of century, that by end of 2000, in USA women are likely to make up half the workforce.


According to census projections by 2050 US population will increase to 392 million, and Latinos will emerge as the nation's largest minority overtaking African Americans.


Educational level of the US workforce is increasing.

In addition to the above language also may become diversity issue.

Organizational behavior recognizes the increasing diversity in the society and workforce and therefore is advocating development of multicultural organizations.

Some featues of multicultural organizations

1. They reflect the contributions and interests of diverse cultural and social groups in their mission, operations, and product or services.
2. Acts on a commitment to eradicate social oppression in all forms within the organization.
3. Includes the members of diverse cultural and social groups as full participants, especially in decisions that shape the organization.
4.Supports efforts in society and in other organizations efforts to eliminate all forms of social oppression.

Managers have to learn about personal values of various constituent groups and how the individuals would like to be treated. They also have to practice empathy. They have put themselves in the place of others and see things from their point of view to know their challenges.

Organizational Approaches to Managing Diversity

Testing: Test conducted for recruitment were modified to prevent culturally bias that leads to handicap for certain groups.

Mentoring: Mentors used to remove handicaps faced by disadvantaged groups.

Work/Family Programs: To take care of gender diversity,  very innovative family-friendly programs are emerging.

Ethics and Ethical Behavior in Organizations

Ethics involves moral issues and deals with right and wrong behavior. Cultural , organizational and external environment determine ethical behavior. Cultural influences on ethical behavior come from family, friends, neighbors, education, religion, and the media. Organizational influences come from ethical codes, role models, policies and practices, and reward and punishment systems. The external forces that impact ethical behavior include political, legal, economic, and international developments.

Luthans indicated that in the area of ethical behavior, issues related to sexual harassment, discrimination in pay and promotion, and the right to privacy are especially relevant to the study of organizational behavior.

Sexual harassment: Sexual harassment in the workplace can be defined as unwelcome sexual advances, requests for sexual favors, or other verbal or physical conduct of a sexual nature. Employers have to uphold the rights of employees to a work environment free of sexual harassment.

One of the important organizational mechanism is to created a state of the art policy.

Pay and Promotion discrimination

Organizations must design and implement programs that systematically attack discrimination and segregation at multiple levels of the structure.

Employee Privacy Issues

The Electronic Communication Privacy Act (ECPA) makes employers potentially liable for invading employees' email or stored communications.

July - Management Knowledge Revision

Updated   9.7.2014, 24.2.2014

July 8, 2014

Code Halos - Book Information, Summaries and Related YouTube Videos

Google Books Link for Browsing


Authors: Malcolm Frank, Paul Roehrig, Ben Pring

Copyright: Cognizant Technology Solutions
Published by John Wiley & Sons, 2014

Chapter 1 "Will It Happen to Us"?   - An Extinction Event.
Code halo is the field of digital information that surrounds any noun - any person, place, or thing.

More often than not, businesses can generate more value from this digital field around an entity with the currently available technologies. The authors use the term 'Code Halos" to denote products that use the code halo - digital information around entities and create useful information and services. Without doubt they are based on analytics and big data technologies.

Is Your Business Being Disrupted by Code Halos?


The Code Halos - The Future of Data Science and Analytics.
Dr. Paul Roehrig


Chapter 3. The Five Business Code Halos

Five types of code halo solutions are emerging from various companies and businesses.

Customer code halos: They provide information related to customers and provide opportunities to sell more based on customer preferences and customised offers. They may provide new product ideas also. They can help in pricing. An airplane may be able to reach a flier who wants to fly if he gets a ticket at less than a price or a ticket on a particular day. It may his comment on a social media platform but the company may be able to pick it up and offer him the ticket.

Product Code Halos: These product provide information on improving the products. Can value engineering ideas come from these products? Yes, We may see big data based value engineering packages that offer suggestions to value engineer your products.

Employee Code Halos: Provide knowledge management capabilities by highlighting your employee skills and achievements that help companies to solve problems in novel ways by connecting people within the organization.

Partner Code Halos: Help connecting supply chain participants to come out with efficiency, effectiveness and innovation.

Enterprise Code Halo: The enterprise halo include the above four products, but it can become the source of market truth for the organization. Are you gaining or losing competitive advantage and market acceptance? Are your products keeping up with the technology or not? What is your company's position in the talent market? Enterprise Code Halos answer these questions in real time and provide the action opportunities to enterprises.

Chapter 4. The Anatomy of a Winning Code Halo Solution

A code halo solution has five essential elements.

1. Amplifier - a device that captures digital data around the entities.

2. Data: The data captured by the amplifier has to be stored in a database.

3. Algorithm:  Analytic engine

4. Application interface: Means to communicate with the user.

5. Business model: How do you monetize the service you are giving to the user.

Anatomy Lessons

1.  Connect an amplifier to every device worth $50 or more.
2. Algorithms are the foundation of the Code Halo experience
3. You need a bigger boat. You need the capability to acquire and analyze big data.
4. Don't Zune out. Microsoft's Zune was abandoned because of an inadequate business model. Put in place a business model for the code halo solution as an integral part.

Chapter 5. The SMAC Stack: The New Technology of Code


Social Technologies: Blogs, Wikis,email, instant messaging,social network services and software services that make collaboration and partnering feasible and economical.

Mobile technologies: All portable devices

Analytics technologies

Cloud Computing

SMAC technologies  are giving rise to fifth wave of corporate IT innovation and transformation.

First wave: Main frame computer
Second wave: Mini computers
Third wave: Client Server architecture - ERP
Fourth wave: Internet PC  - E Commerce
Fifth wave: SMAC stack

SNAC Stack


Chapter 6: The Pattern of Digital Disruption: The Crossroads Model

The stages are:

1. Ionization
2. Spark
3. Enrichment
4. The Crossroads
5. After the Crossroads

The crossroad is when two competitors fight out the final battle. Whoever wins has momentum behind him after the crossroads.

Crossroads Model Explained


Four Principles for Success in the Code Economy

Delivering Beautiful Products and Experiences
Don't Be Evil 2.0 - Short note by Malcolm Frank in Wall Street Journal Blogs
Winning in the Wirearchy
Make IT Your Halo Heroes

Download a summary of the book - Code Rules - a white paper by the authors of the book circulated in 2013

July 4, 2014

Managing Change in Improvement Projects - Comfort Zone to Comfort Zone

Industrial engineers have to take care of comfort of the employees/operators/workers. While the basic focus of industrial engineering is speed, it has to consider the comfort of the operator along with it and any speed improvement in the machine or in human effort should not create any discomfort to the operator.

But a change in method can always create discomfort. The new method has to be learned by the operator. Recently there is a change in fares of taxis and autorickshaws in Mumbai and Thane. The meters are not changed for increase in fares but a new rate card is issued. Because a driver is not familiar with the new fare, he has to consult his card frequently to find the fare. So there is more work now for him. But after some more days, he will remember the computation and he need not consult the card.

Every change initiative goes through that process. The change managers have to assure the operators that the new process does not create any extra trouble for them once it is stabilized and also have to inform the operators the steps that they have taken to make the transition stage also comfortable.

The change management literature has to talk of comfort zone to comfort zone transition. I thought I brought up this idea today (24.10.2010), but I found an article by Nigel Brooks which is already there.
Migrating Through the Change Response Cycle From Comfort Zone to Comfort Zone


A good detailed model of comfort zone to comfort zone is provided by Alasdair White. He talks of increasing skills which reduce anxiety in due course to take a person from a comfort zone with a steady state performance through a performance improvement zone to another level of steady state performance in a comfort zone. The idea is how enhanced performance comes with a person being always in comfort zone only even though skills are increasing and performance is increasing. Training and behavioral support must be provided adequately so that comfort zone is maintained.
Read Alasdair's article - From Comfort Zone to Performance Management: Understanding Development and Performance

Originally posted in

Updated on 4 July 2014, 2 Dec 2011,24 Oct 2010

Advertainment - Component of Interactive Marketing - Kotler

Full Definition of ADVERTAINMENT

:  a form of entertainment (such as a movie or television show) that is created primarily to advertise something :  advertisement presented in the form of entertainment.
Merriam Webster Dictionary

Advertainment: Branded content or brand clips, commercials vignettes that are packaged like mini-movies and barely mention the advertiser’s name are a fast-growing trend.

Advertainment by Spotify

Follow Phoenix




Top 10 Advertainments

July 3, 2014

Organizing for Industrial Engineering Department and Function

Industrial Engineering ArticleSeries
The organization of an industrial engineering department demands three steps [1].

1. The authority, responsibility and accountability of the department must be clearly mentioned.

2. The department must be integrated in the company plan of organization.

3. Every provision must be made so that the department can effectively perform its assigned tasks.

The Basis for Organization

The organization of an industrial engineering department demands three steps [1].

1. The authority, responsibility and accountability of the department must be clearly mentioned.

2. The department must be integrated in the company plan of organization.

3. Every provision must be made so that the department can effectively perform its assigned tasks.

According to Tully Shelley [1], Principal at McKinsey & Company, the basic objectives of an IE department are (1) Establishment of methods for controlling production costs and (2) Development of programs for reducing those costs. Shelley discussed his organization plan based on these objectives.

Suggested Organization Patterns

Shelley proposed the following sections under a Chief Industrial Engineer [1]

Methods Section

Operations analysis

Motion study

Materials handling

Plant layout

Time Study Section

Time study of direct labor

Measurement of indirect labor

Measurement of machine interference

Training Section

Operator training

Supervisor training

Wage Programs Section

Job evaluation

Wage incentives

Merit rating

Product Section

Product design

Tool design


Equipment selection

Operations Research Section

Mathematical model building

If the company has variety of production facilities, the organization can be patterned along production divisions.

Heavy Machine Shop Section

Light Machine Shop Section

Assembly Department Section

General IE Techniques Section

Management Duties of IE Department Head

Establishing priorities for projects

Programming the work

Reviewing the progress of projects

Proposal By Narayana K.V.S.S.

Industrial Engineering department can undertake activities under three major sections.

1. Human Effort Engineering
2. Systems Efficiency Engineering
3. Systems Design, Installation,and Improvement Management.

Areas under Each of the proposed sections

1. Human Effort Engineering

Work Station Design
Interface Device Design: Jigs and Fixtures
Motion Design: Motion Study
Posture Design
Comfort Design: fatigue analysis
Safety Design: Safety Aids
Occupational Hazard Analysis Certification
Work Measurement
Operator Training
Job Evaluation
Incentive scheme design

2. Systems Efficiency Engineering

Methods Study
Value Engineering
Statistical Quality Control
Operations Research

3. Systems Design, Installation,and Improvement Management.

Facilities Design
Production Systems Design
Quality Systems Design
Supply Chain Systems Design
Information Systems Design
Project Management


1. Tully Shelley, “Organizing for Industrial Engineering’, Chapter 3 in Industrial Engineering Handbook, H.B. Maynard (Editor-in-chief), 2nd Edition, McGraw – Hill.

Industrial Engineering Knowledge Revision Plan - One Year Plan

January - February - March - April - May - June

July - MBA Management Knowledge Revision Plan

Originally posted at

Updated 3 July 2014, 14 Dec 2011

Digital Volunteer Marketing

Digital volunteer marketing can have two interpretations. One is the marketing of products, services and ideas by volunteers in the digital media. They are volunteers in the sense that they take up the activity on their own without any explicit call by the related organizations as digital media provides them an opportunity to do so. Some of them may earn some money out of it. But many are happy to be of service to the society and they are content with the comments and visits to their digital pages. They may spend significant amount of time in this activity. Elections in democracies are events in which digital volunteer marketers are coming forward in large numbers to support the parties they prefer and candidate they prefer. Recently in India (2014), the parties made special efforts to organize these volunteer marketers. They are quite active and vocal on Twitter, Facebook and Google+. There is a good amount of communication between the volunteers also as they are visible on the platform through various search facilities on the platform. Even the casual remarks of the persons become visible on the platform and volunteers can interact with the persons concerned.

Digital volunteer marketing is clearly evident in the case of digital media articles and videos as people are sharing interesting articles and videos.

Digital voluntary marketing can also be interpreted as the use of digital volunteer marketers by a firm. The firm can see this as a channel of marketing communication and organize them. London Olympics 2012 organizers provided a good source of information to digital marketing volunteers especially journalists. Videos and photos were provided to registered journalists for inclusion in their blogs, papers and magazines. Online marketers for goods can make use of this digital volunteer marketing channel. For example, Amazon can use the services of this channel to communicate its new offering say books to potential buyers. Digital marketing volunteers  may review the books and publish it in their blogs. Even now many are doing book reviews on their own. But when amazon recognizes them as a part of their marketing communications channel and provides them advance information regarding its book releases and provides some facilitating material, the volunteer marketers can provide greater benefit to the organization.

Digital Volunteers

Digital volunteers are already popular and Red Cross is using them in an exemplary way. There are case studies describing Red Cross's practices.

Came across an article wherein the issue of using digital alumni volunteers to support their institution is mentioned.

A blog post by a person showing his willingness to be a digital volunteer.

Research on Digital Volunteers

"Voluntweeters" - Self Organizing by Digital Volunteers in Times of Crisis
A research study on the volunteers activity during Haiti Crisis - 12 Jan 2010
Kate Starbird and Leysia Palen, University of Colarado at Boulder
2011 paper

Related Article

Word of Mouth Marketing

July 2, 2014

Another Milestone for the Blog - 100 Google +1s - 3 July 2014

You can see g+1 100

Thank you all the advocates of this blog. Your 100 +1s brought a million page views so far. I am sure they will bring one more million in the next three years. Look forward to your continued support and engagement..

July 1, 2014

System Engineering Process and Its Management

Industrial Engineering Article Series

Can industrial engineers design systems internally in IE departments?

They may not be able to design any complex system without the involvement of technical personnel belonging to the area of technology or management. But they can take the role of management of system design.

System Engineering and Industrial Engineering

The definition of Industrial engineering says that it is concerned with design, improvement and installation of systems of men, materials, machines, information, and energy.

Some industrial engineers describe themselves as system designers. Some industrial engineering programs have renamed themselves as industrial and systems engineering. Why such name change was required? Are industrial engineering and system engineering different? If they were different, were they defined differently by the sponsors of these programs? The issue is worthy of exploration.

I advocate that industrial engineering has two core areas of focus: human effort engineering and system efficiency engineering. Therefore, they have a specific role in design of systems of men, materials, machines, information, and energy. The profession included in its definition concern related to design, improvement and installation of systems of men, materials, machines, information, and energy. Can industrial engineers design systems internally in IE departments. They may not be able to design any complex system without the involvement of technical personnel belonging to the area of technology or management. But they can take the role of management of system design.

Hence in industrial engineering curriculums management of system design has to be a subject.

I came across the book, Systems Engineering Guidebook by James Martin published by CRC Press, Boca Raton, Florida, USA in 1996. This book is a description of a process framework for implementing the methods of engineering a system. This book describes the management of system design adequately to be a beginning point for exploring the subject. This book is also an outcome of the two internal editions of AT&T process document, which was prepared or chartered by the systems engineering process management team. James Martin was Editor-in-Chief for the second edition of the process document.

Definition of Systems Engineering

Systems Engineering (SE) basically consists of four elements:

1. SE Management plans, organizes, controls and directs the technical development of a system or its products.
2. Requirements and Architecture Definition defines the technical requirements based on stakeholder requirements, defines a strucute (or an architecture) for the system components, and allocates these requirements to the components of this architecuture.
3. Development of Sub Systems
4. System Integration and Verification integrates the components of the architecture at each level of the architecture and verifies that the system requirements for those components are met.

At any level in the architecture, a component can be passed to a development team for detail design of that component. Its means IE team will receive the component of human effort engineering and system efficiency engineering during some state of a system's design.

To support systems engineering process four types of teams are typically used.

1. SE Management Team
2. Requirements and Architecture Team
3. Development Team
4. System Integration and Verification Team

SE Management Subprocess

Essential activities of this subprocess are:

Overall objectives of the system design, development and deployment program are defined.

Management processes for various technical activities involved System DDD including methods and techniques for evaluation of effectiveness, risk, quality, and efficiency are specified.

The SE process to be applied to the project is to be documented in a SE Management Plan.

Project's progress will be tracked and managed.

Configuration management (CM) activity will control configuration change requests and the necessary changes to requirements.

Risk management will be undertaken

Requirements and Architecture Definition Subprocess

Essential activities

Customer needs and requirements are ascertained or defined or refined as appropriate.

Assessment of available technologies is done to determine the constraints on the requirements and architecture definition subprocess.

Requirements are analyzed, and are derived and further refined where necessary.

Optimization analysis is done to identify desired characteristics of the system.

System behavior is defined through functional analysis, and functional performance requirements are allocated to these functions.

Architecture is defined and requirements are traced to all system elements.

Requirements for each system element are documented in specifications, drawings and interface documents.

Design. Production and Deployment Subprocess

Eight primary functions are associated with system life cycle. They are development, production, test, deployment, operations, training, support, and disposition. The products in the system engineering process associated with operations are termed as end products and products associated with other phases are termed enabling products.

Core Design teams develop the operations end products and the test enabling products.

Integrated Logistics Support teams develop the support and training enabling products.

Production teams develop the production enabling products.

Deployment teams develop the deployment and disposition enabling products.

System management teams and other teams develop development enabling products.

Systems Integration and Verification Subprocess

Essential Elements

System integration and verification plan is developed.

Test and evaluation requirements are defined.

Test activities are developed for each element.

Integration activities are developed for each pair of elements.

Key Elements of Systems Engineering

1. Systems Engineering Management Plan
2. Systems Engineering Master Schedule - Key Milestones and events
3. Systems Engineering Detailed Schedule - Task oriented schedule.
4. Work Breakdown Structure (WBS)- Products and process development plan and due dates.
5. Requirements
6. Technical Performance Measurement: of the system
7. Technical Review and Audits: Technical review of the progress of the project

Key Questions of Systems Engineering


What needs are we trying to fill

Operations Concept

Who are the intended users

Functional Requirements

What specific services will we provide

System Architecture

What elements make up the overall approach?

Allocated Requirements

Which elements address which requirements?

Detailed Design

Are the details correct?
Do they meet requirements?


Will the solution be satisfactory in terms of cost and schedule?


What is our evidence of success?


James Martin, Systems Engineering Guidebook, CRC Press, Boca Raton, Florida, USA , 1996.

Updated 1 July 2014, 14 Dec 2011

System Engineering Course Pages, Articles and Papers

Course on Design in Space Systems http://www.aoe.vt.edu/~cdhall/courses/aoe4065/
A good Presentation on System Engineering http://www.aoe.vt.edu/~cdhall/courses/aoe4065/SE.pdf
The System Architecture Process: http://www.gaudisite.nl/SystemArchitectureProcessPaper.pdf
What is Systems Engineering? A Consensus of the INCOSE Fellows

Related Knols

Industrial Engineering and Systems Design

System Engineering Process and Its Management
Systems Engineering - INCOSE View

Systems Engineering Fundamentals - Book Information and Review.
Systems Engineering and Management - Smith and Rowland
Systems Efficiency Engineering - A Focus Area of Industrial Engineering
Human Effort Engineering

Originally posted

Industrial Engineering Knowledge Revision Plan - One Year Plan

January - February - March - April - May - June