Business
Management 622
Year 2
Semester 2
i
FACULTY OF BUSINESS AND MANAGEMENT SCIENCES
STUDY GUIDE
MODULE: BUSINESS MANAGEMENT 622
(2ND SEMESTER)
Copyright © 2023
Richfield Graduate Institute of Technology (Pty) Ltd
Registration Number: 2000/000757/07
All rights reserved; no part of this publication may be reproduced in any form or by any means, including photocopying machines, without the
written permission of the Institution
ii
TABLE OF CONTENTS
Topics
Page no
Section A: Preface
1. Welcome
VI
2. Title of Modules
VI
3. Purpose of Module
VI
4. Learning Outcomes
VII
5. Method of Study
VII
6. Lectures and Tutorials
VII
7. Notices
VII
8. Prescribed & Recommended Material
VII
9. Assessment & Key Concepts in Assignments and Examinations
VIII
10. Work Readiness Programme
XI
11. Work Integrated Learning
XII
TOPIC 1: MANAGING CHANGE: CULTURE, INNOVATION AND TECHNOLOGY
1
1.1. Introduction
1
1.2. The change process
1
1.3. Areas of organisational change
2
1.4. Resistance to change
2
1.5. Methods used by managers to overcome resistance to change
2
1.6. Why efforts to change fail?
3
1.7. Culture and change
3
1.8. Changing the organisational culture
4
Assessment Questions
4
TOPIC 2 WAYS IN WHICH MANAGEMENT ADAPT CHANGE
7
2.1. Introduction
7
2.2. The Principle of Change
9
2.3. Types of Change
9
2.4. Change Management – The Professional Approach
22
2.5. Mega Trends
23
2.6. Encouraging Creativity
23
2.7. Resistance to Change
25
Assessment Questions
25
TOPIC 3: MANAGING DIVERSITY
26
3.1. Introduction
26
3.2. Misconceptions of Diversity
26
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3.3. What is diversity?
28
3.4. Reasons for the increased focus on managing workforce diversity
29
3.5. Managing Diversity
29
3.6. Cultural Diversity
30
3.7. South African cultural values
32
3.8. Synergistic solutions to problems of cultural difference
33
3.9. Diversity training
34
Assessment questions
34
TOPIC 4: LEADING
39
4.1 Introduction
39
4.2 The Nature of Leadership
39
4.3 Definition of leadership
39
4.4 The Components of Leadership
40
4.5 Leadership and Management
41
4.6 The Theoretical Foundations of Leadership
41
4.7 Leadership and political behaviour in organisations
42
4.8 Factors contributing to political behaviour in organisations
42
4.9 Political strategies and tactics
44
4.10 Exercising control over dysfunctional politics
48
Assessment questions
50
TOPIC 5 INDIVIDUALS IN THE ORGANISATION
53
5.1 Introduction
53
5.2 Key Attributes that influence the individual behaviour
53
5.3 Emotional Intelligence
54
5.4 Mentoring and Coaching
55
5.5 Types of Workplace Behaviour
56
Assessment questions
56
TOPIC 6: GROUPS AND TEAMS IN THE ORGANISATION
59
6.1 Introduction
59
6.2 Teams
60
6.3 Stages in group and Team Development
61
6.4 Variables that influence group and Team Behaviour
69
6.5 Organisation teams
69
6.6 Types of team
69
6.7 Developing individuals into Team Members
70
Assessment questions
70
TOPIC 7: CONTROLLING
71
7.1 Introduction
71
7.2 The Nature of Control
71
7.3 The Importance of Control
72
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7.4 Limitations of Control
73
7.5 The Control Process
73
7.6 Key Areas of Control
74
7.7 Levels of Control
74
7.8 Characteristics of an Effective Control System
75
Assessment questions
75
TOPIC 8: ETHICS, CORPORATE SOCIAL RESPONSIBILITY AND GOVERNANCE
77
8.1 Introduction
77
8.2 Ethics
77
8.3 Levels of Ethical Decision Making
77
8.4 Different Approaches to Ethical Decision Making
77
8.5 Steps in the Ethical Decision-Making Process
78
8.6 Corporate Social Responsibility
78
8.7 Levels of Social Responsibility
78
8.8 To whom is Business Responsible?
79
8.9 Corporate Governance
80
Assessment questions
80
TOPIC 9: NEW CHALLENGES FOR MANAGEMENT
82
9.1 Introduction
82
9.2 Forces that cause organisations to change
82
9.3 The classical model of the formal organisation
83
9.4 The new organisational model
83
Assessment questions
84
TOPIC 10: ADDENDUM 622 (A) TYPICAL EXIMINATION QUESTIONS
87
TOPIC 11: ADDENDUM 622 (B) TYPICAL EXIMINATION MEMO
95
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SECTION A: PREFACE
1. WELCOME
Welcome to the Faculty of Business and Management Sciences at Richfield Graduate Institute of Technology.
We trust you will find the contents and learning outcomes of this module both interesting and insightful as you
begin your academic journey and eventually your career in the business world.
The following lecturers will focus on the study units described.
SECTION A: WELCOME
Study unit 1: To teach students how to paraphrase and to reference using the Harvard
method of referencing
Lecture 1
Study unit 2: To teach students how to paraphrase and to reference using the Harvard
method of referencing.
Lecture 2
2. TITLE OF MODULES, CODE, NQF LEVEL, CREDITS & MODE OF DELIVERY
2nd Semester
Title of Module:
Code:
NQF Level:
Credits:
Mode of Delivery:
Business Management 622
BMN 622
NQF 6
10
Contact / Distance
3. PURPOSE OF MODULE
3.1 Business Management 622
The purpose of this module is to develop the student’s knowledge relating to the concepts and principles used in the
business management environment. Students will be able to gain further understanding of key concepts relating to
managing diversity, groups and teams, leadership, control, and change management.
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4. LEARNING OUTCOMES
On completion of these modules the student will be able to:
•
Depict and discuss the change process and recommend ways of overcoming resistance to change
•
Recommend strategies for managing diversity
•
Analyse the behavioural leadership theories and examine the occurrence of political behaviour in an
organisational context
•
Suggest ways of improving individual performance in the workplace
•
Expound how organisations could develop individuals into team members
•
Implement the steps in the control process in an organisation
•
Analyse the pillars that support good governance
5. METHOD OF STUDY
The sections that must be studied are indicated under each topic. These form the basis for tests, assignments,
and examination. To be able to do the activities and assignments for this module, and to achieve the learning
outcomes and ultimately to be successful in the tests and examination, you will need an in-depth understanding
of the content of these sections in the learning guide and prescribed book.
To master the learning material, you must accept responsibility for your own studies. Learning is not the same
as memorising. You are expected to show that you understand and can apply the information. Use will also be
made of lectures, tutorials, case studies and group discussions to present this module.
6. LECTURES AND TUTORIALS
Learners must refer to the notice boards on their respective campuses for details of the lecture and tutorial
timetables. The lecturer assigned to the module will also inform you of the number of lecture periods and
tutorials allocated to a particular module. Prior preparation is required for each lecture and tutorial. Learners are
encouraged to actively participate in lectures and tutorials to ensure success in tests, assignments, and
examinations.
7. NOTICES
All Business Management 622 notices will be uploaded on Moodle (e.g., change of test dates, tutorials, meetings
etc.). Students are advised to visit Moodle daily.
8. PRESCRIBED & RECOMMENDED MATERIAL
8.1 Prescribed Textbook
Smit, P. 2021. Management Principles: A Contemporary Edition for Africa .7th Ed. Cape Town: Juta and Company.
8.2 Recommended Material
Smit, P. 2016. Management Principles: A Contemporary Edition for Africa. 6th ed. Cape Town: Juta Publishers.
vii
8.3 Recommended E-books
Note: E-books are accessible via Moodle under libraries
https://link.springer.com/bookseries/15772
https://link.springer.com/book/10.1007/978-1-4899-7148-7
https://link.springer.com/book/10.1007/978-3-663-08307-8
8.3 Independent Research:
Students are encouraged to undertake independent research with emphasis on the value of strategic
thinking in companies and the implementation of public relations.
8.4 Library Infrastructure
The following services are available to you:
• Each campus keeps a limited quantity of the recommended reading titles and a larger variety of similar
titles which you may borrow. Please note that learners are required to purchase the prescribed materials.
•
Arrangements have been made with municipal, state, and other libraries to stock our recommended
reading and similar titles. You may use these on their premises or borrow them if available. It is your
responsibility to safe keeps all library books.
•
RGIT has also allocated one library period per week as to assist you with your formal research under
professional supervision.
•
RGIT has dedicated electronic libraries for use by its learners. The computers laboratories, when not in use
for academic purposes, may also be used for research purposes. Booking is essential for all electronic library
usage.
9. ASSESSMENT
Final Assessment for this module will comprise two CA tests, an assignment, and an examination. Your lecturer
will inform you of the dates, times, and the venues for each of these. You may also refer to the notice board on
your campus or the Academic Calendar which is displayed in all lecture rooms.
9.1. CA Tests
There are two compulsory tests for each module (in each semester).
9.2. Assignment
There is one compulsory assignment for each module in each semester. Your lecturer will inform you of the
Assessment questions at the commencement of this module.
9.3. Examination
There is one two-hour examination for each module. Make sure that you diarize the correct date, time and venue.
The examinations department will notify you of your results once all administrative matters are cleared and fees
are paid up.
viii
The examination may consist of multiple-choice questions, short questions and essay type questions. This requires
you to be thoroughly prepared as all the content matter of lectures, tutorials, all references to the prescribed text
and any other additional documentation/reference materials are examinable in both your tests and the
examinations.
The examination department will make available to you the details of the examination (date, time, and venue)
in due course. You must be seated in the examination room 15 minutes before the commencement of the
examination. If you arrive late, you will not be allowed any extra time. Your learner registration card must be
always in your possession.
9.4. Final Assessment
The final assessment for this module will be weighted as follows:
CA Test 1
CA Test 2
40%
Assignment 1
Examination
Total
60%
100%
9.5. Key Concepts in Assignments and Examinations
In assignment and examination questions you will notice certain key concepts (i.e., words/verbs) which tell you
what is expected of you. For example, you may be asked in a question to list, describe, illustrate, demonstrate,
compare, construct, relate, criticize, recommend, or design information / aspects / factors /situations. To help
you to know exactly what these key concepts or verbs mean so that you will know exactly what is expected of
you, we present the following taxonomy by Bloom, explaining the concepts and stating the level of cognitive
thinking that theses refer to.
Competence
Knowledge
Comprehension
Skills Demonstrated
Observation and recall of information
Knowledge of dates, events, places
Knowledge of major ideas
Mastery of subject matter
Question
Cues
list, define, tell, describe, identify, show, label, collect,
Examine, tabulate, quote, name, who, when, where, etc.
Understanding information
Grasp meaning
Translate knowledge into new context
Interpret facts, compare, contrast
Order, group, infer causes Predict
Consequences Question
Cues
summarize, describe, interpret, contrast, predict, associate, distinguish,
estimate, differentiate, discuss, extend
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Application
Use information
Use methods, concepts, theories in new situations
Solve problems using required skills or knowledge
Questions
Cues
apply,
demonstrate,
calculate, complete, illustrate, show,
solve, examine, modify, relate, change, classify, experiment, discover
Analysis
Seeing patterns
Organization of parts Recognition of
hidden meanings Identification of
components
Question
Cues
analyse, separate, order, explain, connect, classify,
arrange, divide, compare, select, explain, infer
Synthesis
Use old ideas to create new ones
Generalise from given facts
Relate knowledge from several areas
Predict, draw conclusions
Question
Cues
Combine, integrate, modify, rearrange, substitute, plan, create,
design, invent, what if? compose, formulate,
prepare, generalize, rewrite
Evaluation
Compare and discriminate between ideas
Assess value of theories, presentations Make choices based
on reasoned argument Verify value of evidence recognize
subjectivity
Question
Cues
assess, decide, rank, grade, test, measure, recommend,
convince, select, judge, explain, discriminate, support, conclude,
compare, summarise
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10. WORK READINESS PROGRAMME (WRP)
To prepare learners for the world of work, a series of interventions over and above the formal curriculum, are
concurrently implemented to prepare learners.
These include:
•
•
•
•
Soft skills
Employment skills
Life skills
End –User Computing (if not included in your curriculum)
The illustration below outlines some of the key concepts for Work Readiness that will be included in your
timetable.
SOFT SKILLS
LIFE SKILLS
Time Management
Working in Teams
Problem
Solving
Skills
Attitude
&
Goal
Setting
Etiquettes & E thics
C ommunication Skills
Manage Personal
Finance
Driving Skills
Basic Life Support &
First Aid
Entrepreneurial skills
Counselling skills
WORK
READINESS
PROGRAMM
EMPLOYMENT SKILLS
CV Writing
Interview Skills
Presentation Skills
Employer / Employee
Relationship
End User Computing
Email & E -Commerce
Spread Sheets
Data base
Presentation
Office Word
It is in your interest to attend these workshops, complete the Work Readiness Logbook and prepare for the
Working World.
xi
11. WORK INTEGRATED LEARNING (WIL)
Work Integrated Learning forms a core component of the curriculum for the completion of this programme. All
modules which form part of this qualification will be assessed in an integrated manner towards the end of the
programme or after completion of all other modules.
•
•
•
•
•
Completion of all tests & assignment
Success in examination
Payment of all arrear fees
Return of library books, etc.
Completion of the Work Readiness Programme.
Learners will be fully inducted on the Work Integrated Learning Module, the Workbooks & assessment requirements
before placement with employers. The partners in the Work Integrated Learning are the same as the Work Readiness
Programme (WRP):
Good luck and success in your studies…
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INTERACTIVE ICONS USED IN STUDENT GUIDES
Learning Outcomes
Study
Think Point
Research
Review Questions
Read
Glossary
Case Study
Questions and Answers
Writing Activity
Interactive Questions
Group work
Web Resource
Multimedia Resource
xiii
TOPIC ONE
MANAGING CHANGE, CULTURE, INNOVATION & TECHNOLOGY
After studying this topic, you should be able to:
•
Analyse how environmental change forces the organisation
to adapt.
•
Expound how internal change can be planned
•
Depict and discuss the change processes
•
Identify and discuss the four main areas of organisational
change
•
Explain uncertainty in the environment in terms of the
extent of change and the level of its complexity
•
Propose ways in which management can prepare for
environment changes
•
Explain what the organisational culture encompasses
•
Expound the causes of resistance to change
•
Critically explain the importance of aligning the
organisation’s culture with the chosen strategy
1.1 INTRODUCTION
Organisations face changes such as technological breakthroughs, pressure from environments for more
environmentally friendly production methods, transformation, international competition, mergers and take
overs, new work ethics and so on.
Change is a complicated process at the heart of which lie people and their natural resistance to it. The change
process therefore poses major challenges to South African managers and to managers in the rest of Africa and
world-wide. Managing change is one of the most difficult challenges facing management. Understanding how
and when to change is a vital function of management fast changing world.
1.2 THE CHANGE PROCESS
Changing an entire organisation or just certain sections of an organisation is a very challenging task. Managers
must understand how change affects the organisation and they must know when and how to set a change
process in motion.
1
Steps in the change process
1.
Determine the desired outcome of the change intervention
2.
Diagnose the causes
3.
Select an appropriate change technique
4.
Plan for implementation
5.
Implement
6.
Evaluate and follow up
1.3 AREARS OF ORGANISATIONAL CHANGE
The four major areas of change are:
• Strategy
• Structure
• Technology
• People
1.4 RESISTANCE TO CHANGE
Organisational change efforts often run into some form of employee resistance. Change trigger’s emotional
reaction because of the uncertainty involved. Therefore, in planning for change, management should always take
resistance into account.
Reasons for resistance to change are:
• Threatened self-interest
• Uncertainty
• Lack of trust /misunderstanding
• Different perceptions
• Low tolerance for change
• General: inertia; timing; surprise and peer pressure
1.5 METHODS USED BY MANAGEMENT TO OVERCOME RESISTANCE TO CHANGE
Resisting change is a human response and management should take steps to counter it. Reducing resistance may
cut down on the time needed for change to be accepted.
2
Methods used in reducing resistance to change are:
• Education and communication
• Participation and involvement
• Facilitation and support
• Negotiation and rewards
1.6 WHY EFFORTS TO CHANGE FAIL
Management experiences resistance to change. Kotter singles out the following reasons why change in an
organisation may fail:
1.
Too much complacency
2.
Failing to create a sufficient coalition to make change happen
3.
The absence of an exciting vision
4.
Under-communicating the vision
5.
Permitting obstacles to block the vision
6.
Failing to create a short-term win
7.
Neglecting to anchor changes firmly in the corporate culture
Strategic change management is the process of managing change
in a structured, thoughtful way to meet organizational goals,
objectives, and missions. Change is necessary for organizations to
continue to thrive and meet and exceed the competition of industry
competitors.
Identify the organisation of your choice and advise the Top
Management on the ways and strategies overcome resistance to
change.
1.7 CULTURE AND CHANGE
The changes that many organisations are forced to make in an ever-changing business environment are often so
fundamental that they involve transforming an organisation’s very essence - its corporate culture. Every
organisation has a particular culture which is most like a personality. It comprises an omnipresent set of
assumptions that is often difficult to fathom and that directs activities within an organisation.
Def: Corporate culture may be defined as the beliefs and values shared by people in an organisation. It refers
therefore to a set of basic assumptions that work so well that they are regarded as valid assumptions within the
organisation.
3
The term “basic assumptions” refers to the following;
▪ Beliefs or convictions about the world and how it works
▪ Values which are the community’s assumptions about which ideals are worth pursuing such as striving
for success or avoiding debt.
Elements that determine and express a corporate culture include;
•
Symbols
•
Rituals
•
Ideologies
•
Language
•
Tales
•
Assumptions
•
Relationships
•
Humour
1.8 CHANGING THE ORGANISATIONAL CULTURE
A change of culture is usually preceded by an organisational culture analysis (OCA). The OCA is an instrument
that can determine the difference between the current culture and the desired culture. There are basic
approaches that managers should follow in an attempt to change culture and these are;
• Getting people to subscribe to a new pattern of beliefs and values
• Inducting and socialising people into the organisation
• Strengthening the prevailing through appropriate communication and training
• In severe cases, making use of mergers and divestments to change an organisational culture
Read the case study below and answer the question that follows:
Read the case study below and answer the question that follows:
So, who needs a strategy?
Semco is a diversified Brazilian corporation that has a range of
international businesses which include marine engineering, facilities
management, internet services and software development. Since the
1980s growth has been impressive and over the last ten years’ turnover
has grown from $35 million to
$1 000 million. Its principal shareholder (he owns 90 percent of the firm)
is Ricardo Semler. He inherited Semco in 1980 from his father, an
engineer who had founded the marine pumps company in 1954,
4
although engineering now accounts for only 30% of sales. It has 3 000
employees (ten times as many as in 1980) and is structured as a
federation of ten companies ‘all of which are premium providers and
market leaders in their fields’.
Semler describes its principal purpose as ‘selling intelligence, the
capacity to think out service solutions, and to look at things from an
intellectual standpoint. Our rationale for everything we do is that it’s
heavily engineered or complex... businesses that have high entry barriers
and which people can’t get into easily and can’t get out of easily.’
Mr Semler’s reputation as an unconventional businessman rest on
books, articles and seminars that describe his unusual approach to doing
business. On taking over from his father, Mr Semler quickly started
making changes. He fired two-thirds of his father’s senior managers,
dismantled the company’s ‘very conservative’ structure, abandoned the
practice of searching employees as they left at the end of each day, and
did away with time clocks and controls over working hours.
His shaking up of the company continued. Semco has no official
structure. It has no organisational chart. There’s no business plan or
company strategy, no two-year or five-year plan, no goal or mission
statement, no long-term budget. The company does not have a fixed
CEO. There are no chief officers for information technology or
operations. There are no standards or practices. There’s no human
resource department. There are no career plans, job descriptions or
employee contracts.
No one approves reports or expense accounts. Supervision or monitoring
of workers is rare.
In addition:
•
Attendance at all company meetings is voluntary
•
Employees have no set working hours and can decide when to
take holidays and how much time off they need.
•
Staff can choose from a range of ways that they can get paid –
including a fixed salary, royalties on sales or profits, share options and
commissions or bonuses.
•
Employees choose their own training, and Semco’s Work n’ Stop
programme allows them to take up to three years off for any purpose.
•
Its ‘Lost in Space’ programme makes its young recruits roam the
company for a year to discover what they want to do.
Mr Semler sees it as his role to be disruptive and to encourage divergent
thinking, and claims that this is a bedrock for all the company’s practices
– “... ask why. Ask it all the time, ask it any day, every day, and always
ask it three time in a row”, even though this is something that he
recognises is often very difficult for people to do. However, Mr Semler is
adamant that this is necessary to prevent ‘calcified thinking’. This ethos
means that the company has few written plans, which he believes
encourages
5
people to follow them ‘like a Pied Piper – mindlessly’.
This philosophy means that the company has no written mission
statement or written statements of strategic objectives – although
Semler says the firm does have a mission: ‘to find a gratifying way of
spending your life doing something you like that is useful and fills a
need’. By not writing strategic objectives down he claims that employees
are forced to constantly re-think what they are doing. Mr Semler even
says he resists any attempts to make him define what the firm does:
“once you say what business you’re in, you put your employees into a
mental straitjacket, blocking them from thinking opportunistically. So
rather than trying to dictate Semco’s direction, he encourages
employees to shape it themselves through their own interests and
initiatives.
Every six months, Semco is ‘shut down’ and started again. Through a
budgeting and planning process all business units must justify their
continued existence. Executives similarly are forced to resign and be
rehired in an anonymous assessment process by subordinates whose
results are then made public. Such a ruthless focus leads to some being
moved ‘sideways, downwards or out’. Mr Semler says, ‘ultimately, all we
care about is performance’. How this is achieved is down to the
individual.
Semco judges its businesses on their ability to generate profits and
therefore survive in the long term. But Semco does not set sales targets
for its businesses, if their profits remain healthy. And if profitability tails
off employees are encouraged to start anew. The company makes it ‘as
easy as possible’ for employees to propose new business ideas, and to
get fast and clear decisions. Proposals go through an executive board
that includes representatives from the major business units and the first
two employees that turn up to the board meeting, and which all
employees can attend.
Source: Adapted from Haberberg A and Rieple A (2013) Strategic
Management Theory and Application. Oxford University Press
QUESTIONS:
1. Does Semco have a strategy? Justify your answer.
2. Elucidate modes of strategy-making appear to be apparent at Semco.
6
TOPIC 2
WAYS IN WHICH MANAGEMENT ADAPT CHANGE
After studying this topic, you should be able to:
• Analyse the principle of change
• Implement the process of change
• Propose ways in which management can prepare for
environment changes
• Expound the causes of resistance to change
• Strategize around the resistance to change
• Apply in a practical way change management strategies
2.1 INTRODUCTION
At the end of the day the reality is that change models are created by people based on their research and
experience. None of them describe a perfect change process.
2.1.1 Planning the change journey
So, for all the change adventurers, who may decide to throw wisdom out the window and venture into change
with minimal planning, here are a few thoughts on the value of using a change management model so that you
don't end up paying the ultimate price.
EIGHT REASONS TO USE A CHANGE MANAGEMENT MODEL
1. Forecasting
Change models forecast the process change will take and prepare people for this. People can normalise their
experience using a model of change and change models provide a structure that gives everyone a sense that the
change is manageable. Employee performance is more likely to increase when staff feel supported and
understand the change process.
2.1.2 Measured results
No change effort should begin without an intended result and how this will be measured. Models of change
require objectives to be set, schedules created and budgets to be negotiated. Once in place a change model
provides baseline objectives against which actual experience can be measured. This provides valuable data
against which to measure results and create interventions. Change models provide a good way to measure how
individuals are managing change and what interventions may be most useful.
7
A change model provides an opportunity to measure:
•
•
•
the rate at which people are adopting changes (anticipated or slower than anticipated?),
professional efficacy (how effectively they have applied new knowledge and practices),
budget time
2.1.3 Accountability
A change management model describes and simplifies a process in a way everyone can understand. A model
creates an intention for change that allows people to consider their role in the process and holds people
accountable for their own transition. Not using a change model holds the risk of not achieving the intended
change or only achieving it in part.
Identify and briefly discuss five reasons why change in an
organization may fail. Recommend ways of overcoming potential
failure.
2.1.4 Increased confidence
Change models give people confidence to talk to others about change. Models of change help people make sense
of times that feel chaotic and out of control.
2.1.5 Reduce resistance
A change model helps to identify potential areas of resistance and implement strategies designed to reduce or
eliminate resistance before the change process starts. An aligned benefit is that a model of change helps to create
an effective communication strategy.
2.1.6 Return on Investment
Following a structured change model ensures that investments into the project are not lost and that budgets are
managed. Investments are not only financial but include people. A change model can assist in ensuring that
employees and productivity are maintained.
2.1.7 Role clarification
A change management model engages different professional roles and provides accountability for their role in
the success of the change process. These roles include executives and senior management, human resources,
communication specialists, supervisors, and learning and development professionals. A model of change
provides clarity regarding their role and when they are required.
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2.1.8 Shared approach
In large organizations change models provide a shared approach to managing change. It provides a focus for all
change management activities and helps to align resources within the organization.
2.2 THE PRINCIPLE OF CHANGE
Change is a movement from one state to another: As countries move from an agricultural base to a
manufacturing base this change is often very slow at first.
2.3 TYPES OF CHANGE
Planned change is proactive change instituted because of something in the environment that suggests that
change will be necessary. Planned change acknowledges that business operates in an open system and change
could come from any direction. A scenario (a futuristic story describing what may or may not happen) is
developed to suggest some ways of handling the anticipated change. Planned change would include a
contingency. The world’s currency market fluctuates daily as currencies try to reach equilibrium.
Reactive change happens when managers do not, or simply are not able to plan. Sudden changes such as
unexpected company mergers, technologically innovative products, new competitors, changes in sources of
supply or new social changes mean that managers must be ready to adapt to these changes.
Incremental changes occur in small steps, a slow build-up of skills to handle emerging changes. The business
drifts adjusting to change as it happens. Incremental changes can be thought of as a series of steps each step
building on the knowledge of the last; it is also a reactive change management system.
Turbulence is a condition of sharp ups and downs, a wave-like motion. This is very clearly demonstrated by the
rand/dollar exchange rate. For many years the Rand was stronger than the dollar, something few of us can
remember! A state of turbulence may suggest that both planned and reactive changes are required.
Each of these changes represents something in the macro environment, which caused the change. Each change
caused an increase in the price of imported goods but a decrease in the number of goods foreigners wanted from
South Africans. The exchange rate clearly demonstrates the effects of turbulence on prices.
Transformational change means a complete change in the way things are done. Managers take a fresh look at
things and develop new systems to take care of new situations. Transformational change defines the standards
of peak performance.
A paradigm shift occurs when the change driver is so strong that it forces the company to adapt to completely
new way of doing things. A paradigm occurs when we assume that as people have always to work to sit in
offices, that this will always be this way.
A paradigm will occur when cell phones, the personal computer and television screens converge into a single
piece of technology allowing workers to stay at home and communicate with customers all over the world.
9
Explain how top management can ensure that a change in
corporate culture becomes visible to all stakeholders.
2.3.1 Kotter's 8-Step Change Model
Implementing Change Powerfully and Successfully
Change is the only constant. – Heraclitus, Greek philosopher
What was true more than 2,000 years ago is just as true today? We live in a world where "business as usual" is
change. New initiatives, project-based working, technology improvements, staying ahead of the competition –
these things come together to drive ongoing changes to the way we work. Whether you're considering a small
change to one or two processes, or a system wide change to an organization, it's common to feel uneasy and
intimidated by the scale of the challenge. You know that the change needs to happen, but you don't really know
how to go about delivering it. Where do you start? Whom do you involve? How do you see it through to the end?
There are many theories about how to "do" change. Many originate with leadership and change management
guru, John Kotter. A professor at Harvard Business School and world-renowned change
expert, Kotter introduced his eight-step change process in his 1995 book, "Leading Change." We look at his
eight steps for leading change below.
Step 1: Create Urgency
For change to happen, it helps if the whole company really wants it. Develop a sense of urgency around the
need for change. This may help you spark the initial motivation to get things moving. This isn't simply a matter
of showing people poor sales statistics or talking about increased competition. Open an honest and convincing
dialogue about what's happening in the marketplace and with your competition. If many people start talking
about the change you propose, the urgency can build and feed on itself.
What you can do:
10
•
Identify potential threats ; and develop scenarios ; showing what could happen in the future.
Examine opportunities that should be, or could be, exploited.
•
Start honest discussions and give dynamic and convincing reasons to get people talking and thinking.
•
Request support from customers, outside stakeholders and industry people to strengthen your
argument.
Note:
Kotter suggests that for change to be successful, 75 percent of a company's management needs to "buy into"
the change. In other words, you must work really hard on Step 1, and spend significant time and energy
building urgency, before moving onto the next steps. Don't panic and jump in too fast because you don't want
to risk further short-term losses – if you act without proper preparation, you could be in for a very bumpy ride.
Step 2: Form a Powerful Coalition
Convince people that change is necessary. This often takes strong leadership and visible support from key
people within your organization. Managing change isn't enough – you must lead it.
You can find effective change leaders throughout your organization – they don't necessarily follow the
traditional company hierarchy. To lead change, you need to bring together a coalition, or team, of influential
people whose power comes from a variety of sources, including job title, status, expertise, and political
importance.
Once formed, your "change coalition" needs to work as a team, continuing to build urgency and momentum
around the need for change.
What you can do:
•
Identify the true leaders in your organization, as well as your key stakeholders
•
Ask for an emotional commitment from these key people.
•
Work on team building within your change coalition.
•
.
Check your team for weak areas and ensure that you have a good mix of people from different
departments and different levels within your company.
11
Step 3: Create a Vision for Change
When you first start thinking about change, there will probably be many great ideas and solutions floating
around. Link these concepts to an overall vision that people can grasp easily and remember. A clear vision can
help everyone understand why you're asking them to do something. When people see for themselves what
you're trying to achieve, then the directives they're given tend to make more sense.
What you can do:
•
Determine the values
•
Develop a short summary (one or two sentences) that captures what you "see" as the future of your
that are central to the change.
organization.
•
Create a strategy
•
Ensure that your change coalition can describe the vision in five minutes or less.
•
Practice
to execute that vision.
Step 4: Communicate the Vision
What you do with your vision after you create it will determine your success. Your message will probably have
strong competition from other day-to-day communications within the company, so you need to communicate
it frequently and powerfully, and embed it within everything that you do. Don't just call special meetings to
communicate your vision. Instead, talk about it every chance you get. Use the vision daily to make decisions
and solve problems. When you keep it fresh on everyone's minds, they'll remember it and respond to it.
It's also important to "walk the talk." What you do is far more important – and believable – than what you say.
Demonstrate the kind of behaviour that you want from others.
What you can do:
•
Talk often about your change vision.
•
Address peoples' concerns and anxieties, openly and honestly.
•
Apply your vision to all aspects of operations – from training to performance reviews. Tie everything
back to the vision.
•
Lead by example .
12
Step 5: Remove Obstacles
If you follow these steps and reach this point in the change process, you've been talking about your vision and
building buy-in from all levels of the organization. Hopefully, your staff wants to get busy and achieve the
benefits that you've been promoting.
But is anyone resisting the change? And are there processes or structures that are getting in its way? Put in
place the structure for change, and continually check for barriers to it. Removing obstacles can empower the
people you need to execute your vision, and it can help the change move forward.
What you can do:
•
Identify, or hire, change leaders whose main roles are to deliver the change.
•
Look at your organizational structure, job descriptions, and performance and compensation systems
to ensure they're in line with your vision.
•
Recognize and reward people for making change happen.
•
Identify people who are resisting the change and help them see what's needed.
•
Take action to quickly remove barriers (human or otherwise).
Step 6: Create Short-Term Wins
Nothing motivates more than success. Give your company a taste of victory early in the change process. Within
a short time frame (this could be a month or a year, depending on the type of change), you'll want to have
some "quick wins " that your staff can see. Without this, critics and negative thinkers might hurt your
progress.
Create short-term targets – not just one long-term goal. You want each smaller target to be achievable, with
little room for failure. Your change team may have to work very hard to come up with these targets, but each
"win" that you produce can further motivate the entire staff.
What you can do:
•
Look for sure-fire projects that you can implement without help from any strong critics of the change.
•
Don't choose early targets that are expensive. You want to be able to justify the investment in each
project.
•
Thoroughly analyse the potential pros and cons of your targets. If you don't succeed with an early goal,
it can hurt your entire change initiative.
•
Reward
the people who help you meet the targets.
13
Step 7: Build on the Change
Kotter argues that many change projects fail because victory is declared too early. Real change runs deep.
Quick wins are only the beginning of what needs to be done to achieve long-term change. Launching one new
product using a new system is great. But if you can launch 10 products, that means the new system is working.
To reach that 10th success, you need to keep looking for improvements.
Each success provides an opportunity to build on what went right and identify what you can improve.
What you can do:
•
After every win, analyse what went right, and what needs improving.
•
Set goals to continue building on the momentum you've achieved.
•
Learn about kaizen , the idea of continuous improvement.
•
Keep ideas fresh by bringing in new change agents and leaders for your change coalition.
Step 8: Anchor the Changes in Corporate Culture
Finally, to make any change stick, it should become part of the core of your organization. Your corporate culture
often determines what gets done, so the values behind your vision must show in day-to-day work.
Make continuous efforts to ensure that the change is seen in every aspect of your organization. This will help
give that change a solid place in your organization's culture. It's also important that your company's leaders
continue to support the change. This includes existing staff and new leaders who are brought in. If you lose the
support of these people, you might end up back where you started.
What you can do:
•
Talk about progress every chance you get. Tell success stories about the change process and repeat
other stories that you hear.
•
Include the change ideals and values when hiring and training new staff.
•
Publicly recognize key members of your original change coalition, and make sure the rest of the
staff – new and old – remembers their contributions.
•
Create plans to replace key leaders of change as they move on. This will help ensure that their
legacy is not lost or forgotten.
14
Explain three approaches that managers can follow to ensure that
change ids imbedded in the organisation.
2.3.2 "ADKAR" - a model for change management
For more detailed
information about
the ADKAR Model,
the first complete
text on ADKAR,
titled ADKAR: a
model for change in
business,
government and our
community, is now
available.
ADKAR is a goal-oriented change management model that allows change management teams to focus their
activities on specific business results. The model was initially used as a tool for determining if change
management activities like communications and training were having the desired results during organizational
change. The model has its origins in aligning traditional change management activities to a given result or goal.
For example, Awareness of the business reasons for change is a goal of early communications related to a
business change. Desire to engage and participate in the change is the goal of sponsorship and resistance
management. Knowledge about how to change is the goal of training and coaching. By identifying the required
outcomes or goals of change management, ADKAR becomes a useful framework for change management teams
in the planning and execution of their work.
The goals or outcomes defined by ADKAR are sequential and cumulative. An individual must obtain each element
in sequence in order for a change to be implemented and sustained. As a manager, you can use this model to
identify gaps in your change management process and to provide effective coaching for your employees.
15
The ADKAR model can be used to:
•
diagnose employee resistance to change
•
help employees transition through the change process
•
create a successful action plan for personal and professional advancement during change
•
develop a change management plan for your employees
The ADKAR model can identify why changes are not working and help you take the necessary steps to make the
change successful. You will be able to break down the change into parts, understand where the change is failing
and address that impact point.
To use the ADKAR model effectively, you will need to understand the underlying framework for change initiatives.
In the diagram below, change happens on two dimensions: the business dimension (vertical axis) and the people
dimension (horizontal axis). Successful change happens when both dimensions of change occur simultaneously.
Business dimension of change
The business dimension of change includes the typical project elements.
•
Business need or opportunity is identified.
•
Project is defined (scope and objectives).
•
Business solution is designed (new processes, systems, and organizational structure).
•
New processes and systems are developed.
•
Solution is implemented into the organization.
These are the standard elements of a business change that managers feel most comfortable managing.
16
People dimension of change
Research shows that problems with the people dimension of change is the most cited reason for project failures.
In a study with 248 companies, effective change management with employees was listed as one of the top-three
overall success factors for the project. Helping managers be effective sponsors of change was considered the
most critical success factor overall.
Effective management of the people dimension of change requires managing five key goals that form the basis
of the ADKAR model:
•
Awareness of the need to change
•
Desire to participate and support the change
•
Knowledge of how to change (and what the change looks like)
•
Ability to implement the change on a day-today basis
•
Reinforcement to keep the change in place
The ADKAR® model
In the following scenarios, we look at the ADKAR model with one work example and two personal examples.
After reviewing these examples, you can complete an exercise for a change that is personal to you. This exercise
is important for building understanding about the model and how it can be applied in different situations.
A work scenario
If you are an employee in an organization undergoing change, your reaction to the change and how you are
viewed by the organization will be directly affected by each of the five elements in the ADKAR model.
Take for example the implementation of a new software tool. If the change is implemented and you believe it
was not needed (i.e., you were not aware that any changes were required), then your reaction might be:
“This is a waste of time.”
“Why change if it was working just fine before?”
“If it ain't broke, don't fix it.”
“They never tell us what’s going on!”
Our natural reaction to change, even in the best circumstances, is to resist. Awareness of the business need to
change is a critical ingredient of any change and must come first.
17
If someone had taken the time to explain that the old software would no longer be supported by the vendor, and
that new software was necessary to meet the needs of your customers, then your reaction (based on this
awareness) would likely be very different:
“How soon will this happen?”
“How will this impact me?”
“Will I receive new training?”
Take this same example one step further. Assume you were made aware that a change was required, but you
had no desire to participate or support the change.
“What’s in it for me?”
“I doubt they are really serious about this.”
Now the tables are turned, and you may become the target of an emotional response from individuals within the
organization. You may be labelled as difficult, inflexible, or unsupportive. Some may say you lack initiative or
vision. You may be called a cynic or pessimist.
Awareness and desire are two critical components of the change model. In the personal examples that follow,
you will see how the other elements of the model play a role in a successful change.
Examples from personal experience
Changing a child's behaviour
Changing unwanted behaviour in children follows the ADKAR model well. Consider the five goals of ADKAR as it
relates to this example. Children first need to know what they are doing is wrong. This awareness often comes
when an upset parent tells the child he is doing something wrong. Simply knowing it is wrong, however, will not
stop most children. Their natural inclination is to test the boundaries and push the limits. Consequences, either
positive or negative, are usually required.
These consequences impact the child's desire to change. However, the process cannot stop here.
Given proper motivation to change, children need a role model to understand what the proper behaviour looks
like. They need examples so they can obtain the knowledge of what the correct behaviour is. Next, they need
practice in order to obtain the fourth result of ADKAR, ability. Few children can change immediately; it is an
ongoing process requiring them to develop new skills and habits. They need time to develop the ability to act in
a new way. Finally, children need reinforcement to keep the good behaviour going. This may be in the form of
positive encouragement or other types of rewards.
18
This example highlighted all five elements of the ADKAR model. Note that each element represents a particular
result that you are trying to achieve. Also consider that these results are cumulative and must be taken in
order.
Coaching a sport
In this case study example, a parent was attempting to improve the batting style and skill of his son playing
baseball. Dad was concerned that his son's batting was not up to the level of the other boys on the team. He
searched the Internet for batting videos and purchased a tape for his son. For weeks he tried to get his son to
watch the video on batting mechanics. With some parental persuasion, Dad was able to get his son to watch
part of the tape. After that, the video was left untouched.
The father's attempt to educate his son failed and resulted only in a frustrated parent. He finally sat down with
his son and asked him why he would not watch the tape and use it to improve his batting. His son replied that
he just enjoyed playing baseball with his friends, and it did not matter to him if his batting was as good as some
of the other boys.
In this example the father skipped elements of the ADKAR model (from awareness to knowledge). His son had
no desire to change and was content just to be out there playing the game. Dad’s efforts to build knowledge
failed because his son lacked the desire to change.
Power of ADKAR for managing change
The power of the ADKAR model is that it creates focus on the first element that is the root cause of failure. When
you approach change using this model, you can immediately identify where the process is breaking down and
which elements are being overlooked. This avoids generic conversations about the change that rarely produce
actionable steps. This results-oriented approach helps focus energy on the area that will produce the highest
probability for success.
19
ADKAR can help you plan effectively for a new change or diagnose why a current change is failing. In some cases,
corrective action can be taken, and the change successfully implemented. Here are the five elements of ADKAR
again.
1.
Awareness of the need for change.
2.
Desire to make the change happen.
3.
Knowledge about how to change.
4.
Ability to implement new skills and behaviours.
5.
Reinforcement to retain the change once it has been made.
Provide reasons why managers and employees resist change in an
organisation by highlighting personal dispositions that may lead to
the resistance.
Outside intervention or support may be required.
Finally, if reinforcement was the area identified, then you will need to investigate if the necessary elements are
present to keep the person from reverting to old behaviours. Address the incentives or consequences for not
continuing to act in the new way.
You can think of organizational and personal change in the context of the ADKAR model. If you are deploying a
major change in your organization, then a critical step in change management is organizational awareness of the
reasons for change. Desire to change at the employee level must be addressed as resistance will be a natural
reaction to change. As the change moves into implementation, your will need to develop knowledge about the
change and the ability to implement new skills and behaviours. Once the change is in place, you will need to
reinforce the change to avoid moving backwards to old behaviours. Each element of the ADKAR model
represents a business goal for managing change. This results-oriented model helps guide change management
activities for both organization and individual change management.
Significant advantages to the model are:
-
The process is an easy step-by-step model.
-
The focus is on preparing and accepting change, not the actual change.
-
Transition is easier with this model.
20
There are some disadvantages offered by this model:
-
Steps can’t be skipped.
-
The process takes a great deal of time.
It doesn’t matter if the proposed changed is a change in the process of project planning or general operations.
Adjusting to change is difficult for an organization and its employees. Using almost any model is helpful, because
it offers leaders a guideline to follow, along with the ability to determine expected results. This is helpful because
change is difficult to implement and manage
2.3.3 Lewin’s Change Management Model
By Bree Normandin
According to an article in Forbes, Change Management Guru is the
world’s oldest profession. Almost everyone has a few theories about change management.
This change management model was created in the 1950s by psychologist Kurt Lewin. Lewin noted that most
people tend to prefer and operate within certain zones of safety. He recognized three stages of change:
1.
Unfreeze – Most people make an active effort to resist change. In order to overcome this tendency, a
period of thawing or unfreezing must be initiated through motivation.
2.
Transition – Once change is initiated, the company moves into a transition period, which may last for
some time. Adequate leadership and reassurance are necessary for the process to be successful.
3.
Refreeze – After change has been accepted and successfully implemented, the company becomes stable
again, and staff refreezes as they operate under the new guidelines.
While this change management model remains widely used today, it is takes time to implement. Of course, since
it is easy to use, most companies tend to prefer this model to enact major changes.
21
McKinsey 7-S Model
The McKinsey 7-S model offers a holistic approach to organization. This model, created by Robert Waterman,
Tom Peters, Richard Pascale, and Anthony Athos during a meeting in 1978, has 7 factors that operate as
collective agent of change:
1. Shared values
2. Strategy
3. Structure
4. Systems
5. Style
6. Staff
7. Skills
The McKinsey 7-S Model offers four primary benefits:
• It offers an effective method to diagnose and understand an organization.
• It provides guidance in organizational change.
• It combines rational and emotional components.
• All parts are integral and must be addressed in a unified manner.
The disadvantages of the McKinsey 7-S Model are:
-
When one-part changes, all parts change, because all factors are interrelated.
-
Differences are ignored.
-
The model is complex.
-
Companies using this model have been known to have a higher incidence of failure.
2.4 CHANGE MANAGEMENT – THE PROFESSIONAL APPROACH
The acceptance that a good business plan may have to be changed at the last minute or that change will become
part of everyday working life is all part of the professional approach to business.
2.5 MEGA TRENDS
The term “Future Shock” was coined by Alvin Toffler as far back as 1970 and over the years has come to be
associated with a hyper-turbulent operating environment
(http://www.absoluteastronomy.com/topics/Alvin_Toffler, accessed 20/08/2010). In such an environment, a
business may be required to develop new products or services on a continuing basis just to survive.
What will be different about South Africa in the year 2020?
Will computers and the Internet connect even remote Africa villages allowing the rural people to gain access to
rapid information?
22
With so much change, is the old idea of first conducting research into consumer needs and then developing a
product still valid? It is a question of innovate first and sell later.
Innovate first and sell later “Our plan is to lead the public with new products rather than ask them what
kind of products they want. The public do not know what is possible, we do. We examine our new
products and try to create a market by educating the public in its use.”
2.6 ENCOURAGING CREATIVITY
If the new business manager is to survive in this changing business environment, then it is essential that creativity
be encouraged within the firm.
Six steps in encouraging creativity
• Develop an acceptance of change – see the benefit not the problem
• Encourage new ideas – from the top to the lowest level worker
• Permit more interaction within the business – encourage new ideas and share useful information with
everyone
• Tolerate failure – professional managers realise it takes time to develop innovative good products,
especially if new techniques must be learnt
• Provide clear objectives and the freedom to achieve them – apply reasonable constraints and some
control over time and money invested in creative behaviour.
• Offer recognition – creative people will work hard on tasks they enjoy, but they will also want recognition
for their efforts.
2.7 RESISTANCE TO CHANGE
The authors Harvey and Brown in 2001 suggested that all people go through similar stages when confronted with
the need to change. Change is seen as dangerous, threatening the current state of equilibrium.
Harvey and Brown suggested that we go through a low period when we first deny and then resist the proposed
change. During this low period, we see the change as dangerous with high risk factors. It is at this stage that
people need help to overcome the fear of change.
Given sufficient help they will consider exploring their true feelings by drawing up their own force field. If the
advantages and disadvantages are clearly spelled out, they may consider making a commitment to the proposed
change if they can see it as an opportunity for self-betterment in some way.
In investigating the theory of a force field and the theories of Harvey and Brown we can see that people and their
feelings are important.
23
UNDERSTANDING: RESISTANCE TO CHANGE
Resistance is based on people’s feelings and these feelings are based on perception. Perception is not reality; it
is the reality as seen by the individual coloured by experience and current knowledge. The story of Josef highlights
how feelings play a strong role in resistance to change
Josef’s experience when confronted by a new situation
My perception is coloured by my circumstances, if I am miserable, I will see change as a threat. If I hear about
a change in the wrong surroundings, I will view change as a serious risk to my current state. I will react to
change with a sense of numbness and hope it will just go away.
If the change does not seem to be going away, I will be very unhappy, and this depression may cause me to
lose sleep and possibly get ill.
After some time, I may consider working with this new idea, but I may get very frustrated because I do not
know everything about it yet. I will have lots of new ideas and even get very keen to see how the new idea
will work out.
My sense of frustration will increase when I see that my new ideas may not all work. If I can get the right help,
I may soon decide to view the change as an opportunity. Maybe I will be able to improve my current
circumstances with this new idea!
The story of Josef proves just how important it is for the business manager to understand the theoretical concepts
of change. Kurt Lewin also studied the process by which change happens and how effective management can
increase the chance that change will be effective.
Lewin said two things;
• Behaviour - People resist change because they simply prefer the old way of doing things. Someone who
has never used a computer to write letters will simply prefer to keep on handwriting business letters rather
than undergoing the lengthy process of learning how to use a computer just to write a letter. The person
may experiment with the computer but if the new skill does not happen quickly enough, handwriting will
seem like a more effective way to write a letter. Once the new skill is mastered, he will wonder why he
spent so much time resisting the new idea!
• Attitude - This has to do with feelings rather than behaviour patterns. A new skill that requires manual
dexterity is simply a behavioural process of trial and error to achieve the right results. However, when we
24
discuss our feelings about something we get more emotionally involved with the idea. If a manager asks
an employee to consider being more polite to his fellow workers, strong feelings may cause a feeling of
resentment and the result may be more abusive behaviour rather than a changed attitude.
Because attitudes are set by long term emotional patterns, they are much more difficult to change than
behavioural patterns.
STRATEGIES TO HANDLE CHANGE SITUATIONS
In a managerial environment the business manager will have to strategise around the change situation.
Four-step process to handle change situations
• Explain the need for the change – conduct regular planning sessions and allow for the new idea to
discussed
• Hold meetings and let people talk about their problems
• Discuss new training needs – set short-term goals and let change happen in easy steps. Keep people
focussed on the change, do not let anyone slip back into their old ways.
• Set longer-term goals and hold team-building sessions. Reward new behaviour related to the new idea
Read the case study below and answer the question that follows:
During 2017 financial year, Jet stores faced the challenge of realigning its
strategy to fit the changes in its environment. Worsening economic
conditions had reduced real disposable income and changed customer
preference towards increased debt aversion and cost sensitivity. As
higher interest rates propelled customers into cash-based sales, retailers
could no longer win customers by offering better credit terms. Value had
become the most significant factor in the success of any retail company.
This put Jet stores in an unfavourable position characterised by losses in
market share and stagnating sales revenues. While the group had
pioneered some innovative concepts, its weakness in implementation
skills, coupled with underlying inefficiencies in the business, had not
allowed it to make a positive impact on the business. The group began
piloting insurance and micro lending in stores and took ownership of
some third-party debtor's book.
These initiatives could have delivered some benefit to the company had
the core retailing business been in shape. To bring customers back to the
Jet stores, management is relying on a few strategies with the emphasis
on growth rather than cost slashing.
Questions:
Suggest a change process to top management to ensure that the change
that the outlets are facing will be managed successfully.
25
TOPIC 3
MANAGING DIVERSITY
After studying this topic, you should be able to:
• Analyse the primary and secondary dimensions of diversity
• Recommend strategies for managing diversity
• Expound the opportunities and the challenges presented
by diversity
• Recognise and explain cultural differences
• Recommend approaches to managing cultural diversity
• Suggest ways of managing diversity effectively in
organisations
3.1 INTRODUCTION
Increasing globalization requires more interaction among people from diverse cultures, beliefs, and backgrounds
than ever before. People no longer live and work in an insular marketplace; they are now part of a worldwide
economy with competition coming from nearly every continent. For this reason, organizations need diversity to
become more creative and open to change.
Therefore, maximizing and capitalizing on workplace diversity has become an important issue for management
today. Since managing diversity remains a significant organizational challenge, managers must learn the
managerial skills needed in a multicultural work environment. Supervisors and managers must be prepared to
teach themselves and others within their organizations to value multicultural differences in both associates and
customers so that everyone is treated with dignity.
Diversity issues are now considered important and are projected to become even more important in the future
due to increasing differences in the population of many countries. Companies need to focus on diversity and look
for ways to become totally inclusive organizations because diversity has the potential of yielding greater
productivity and competitive advantages. Managing and valuing diversity is a key component of effective people
management, which can improve workplace productivity. Unmanaged diversity in the workplace might become
an obstacle for achieving organizational goals. Therefore, diversity can be perceived as a “double-edged sword”
Definition for Diversity
The concept of diversity encompasses acceptance and respect. It means understanding that everyone is unique
and recognizing our individual differences. These can be along the dimensions of race, ethnicity, gender, sexual
orientation, socio-economic status, age, physical abilities, religious beliefs, political beliefs, or other ideologies.
It is the exploration of these differences in a safe, positive, and nurturing environment. It is about understanding
each other and moving beyond simple tolerance to embracing and celebrating the rich dimensions of diversity
contained within everyone.
Diversity refers to the mosaic of people who bring a variety of backgrounds, styles, perspectives, values, and
beliefs as assets to the groups and organisations with whom they interact. (Prescribed textbook definition)
26
Diversity is a reality created by individuals and groups from a broad spectrum of demographic and philosophical
differences. It is extremely important to support and protect diversity because by valuing individuals and groups
free from prejudice, and by fostering a climate where equity and mutual respect are intrinsic.
Platinum rule
Treat others as they want to be treated
"Diversity" means more than just acknowledging and/or tolerating difference. Diversity is a set of conscious
practices that involve:
•
Understanding and appreciating interdependence of humanity, cultures, and the natural
environment.
•
•
•
Practicing mutual respect for qualities and experiences that are different from our own.
Understanding that diversity includes not only ways of being but also ways of knowing.
Recognizing that personal, cultural and institutionalized discrimination creates and sustains
privileges for some while creating and sustaining disadvantages for others.
•
Building alliances across differences so that we can work together to eradicate all forms of
discrimination.
Diversity includes, therefore, knowing how to relate to those qualities and conditions that are different from our
own and outside the groups to which we belong, yet are present in other individuals and groups. These include
but are not limited to age, ethnicity, class, gender, physical abilities/qualities, race, sexual orientation, as well as
religious status, gender expression, educational background, geographical location, income, marital status,
parental status, and work experiences. Finally, we acknowledge that categories of difference are not always fixed
but also can be fluid, we respect individual rights to self-identification, and we recognize that no one culture is
intrinsically superior to another.
Primary and secondary dimensions of diversity
Rosener (1991) describe two major dimensions of diversity: primary and secondary.
• Primary dimensions are things that we cannot change. They include age, race, ethnicity, gender, physical
qualities, and sexual orientation.
• Secondary dimensions include topics such as income, education, religious beliefs, military experience,
geographic location, parental status, and marital status. People are usually less sensitive about the
secondary dimensions because they are elements which we have some power to change. This model
vividly demonstrates that we are all similar and different on an infinite number of dimensions. By
positioning diversity as something that applies to everyone, it becomes something that everyone can care
about and support. Rasmussen (1996).
27
Characteristics of diversity
When managers speak of diverse workforces, they typically mean differences in gender and race. While gender
and race are important characteristics of diversity, others are also important. These differences can be divided
into primary and secondary characteristics of diversity. Age, gender, race, ethnicity, abilities, and sexual
orientation represent primary characteristics of diversity which are inborn and cannot be changed. Eight
secondary characteristics of diversity—work, background, income, marital status, military enterprise, religious
beliefs, geographic location, parental status, and education—which can be changed. We acquire, change, and
discard them as we progress through our lives.
Analyse why managing diversity and cultural differences are
important for South African organisations. Support your answer
with practical examples
Defining characteristics of diversity as either primary or secondary enhances our understanding, but we must
remember that each person is defined by the interrelation of all characteristics. In dealing with diversity in the
workforce, managers must consider the complete person’s differences.
Website: http://www.slideshare.net/aet0719/diversity-in-the-workplace8393215?next_slideshow=1
3.2 MISCONCEPTIONS OF DIVERSITY
• Diversity is not a culture
• Diversity is neither equal employment opportunities nor affirmative action
• Diversity is not an absence of standards
• Diversity is not a vendetta against white males
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3.3 WHAT IS DIVESRITY
Diversity is about demographics
Diversity is about profitability
Diversity is about values
Diversity is about behaviour
Diversity is a long-term process
3.4 REASONS FOR THE INCREASED FOCUS ON MANAGING WORKFORCE DIVERSITY
• Changing demographics in the labour force, legislation on affirmative action
Changing workforce demographics may pose challenges for small businesses. Some experts believe that
businesses face increased rates of younger and older workers, as workers in the middle age range decline.
Managers may experience increased training and compensation costs for younger and older workers,
respectively, which affect solvency and profitability. A growing international labour force is another factor that
may affect companies. Changing demographics have a direct impact on business models and strategies.
• Globalisation of businesses
Globalisation refers to the changes in the world where we are moving away from self-contained countries and
toward a more integrated world. Globalization of business is the change in a business from a company associated
with a single country to one that operates in multiple countries.
29
Impact of Globalisation
Imagine for a moment that you run a business that produces digital cameras. How would globalization impact
your company? The impact of globalisation on business can be placed into two broad categories: market
globalisation and production globalisation.
Market globalisation is the decline in barriers to selling in countries other than the home country. This change
will make it easier for your company to begin selling products internationally, since lower tariffs keep consumer
prices lower and fewer restrictions when crossing borders makes it easier for a company to enter a foreign
market. It also means that companies must consider other cultures when developing their business strategies
and potentially adjust the product and marketing messages if they aren't appropriate in the target country. This
may not be an issue in the camera industry, but a hamburger company entering India would need to revisit their
product and strategies to be successful!
3.5 MANAGING DIVERSITY
Managing diversity is different from valuing diversity because it addressed the organisational processes that can
reinforce or hinder the ability to create an environment that values diversity. These organisational processes
include hiring, promotion, communication, and power allocation in organisations.
Benefits of managing diversity
Diversity is beneficial to both associates and employers. Although associates are interdependent in the
workplace, respecting individual differences can increase productivity. Diversity in the workplace can reduce
lawsuits and increase marketing opportunities, recruitment, creativity, and business image (Esty, et al., 1995). In
an era when flexibility and creativity are keys to competitiveness, diversity is critical for an organization’s success.
Challenges for managing diversity
There are challenges to managing a diverse work population. Managing diversity is more than simply
acknowledging differences in people. It involves recognizing the value inclusiveness. Managers may also be
challenged with losses in personnel and work productivity due to prejudice and discrimination and complaints
and legal actions against the organization (Devoe, 1999).
Negative attitudes and behaviours can be barriers to organizational diversity because they can harm working
relationships and damage morale and work productivity (Esty, et al., 1995). Negative attitudes and behaviours in
the workplace include prejudice, stereotyping, and discrimination, which should never be used by management
for hiring, retention, and termination practices (could lead to costly litigation).
Required Tools for Managing Diversity
Effective managers are aware that certain skills are necessary for creating a successful, diverse workforce.
• First, managers must understand discrimination and its consequences.
• Second, managers must recognize their own cultural biases and prejudices (Koonce, 2001).
• Diversity is not about differences among groups, but rather about differences among individuals.
Everyone is unique and does not represent or speak for a particular group.
• Finally, managers must be willing to change the organization if necessary (Koonce, 2001). Organizations
need to learn how to manage diversity in the workplace to be successful in the future (Flagg, 2002).
Six arguments for managing cultural diversity
• Cost argument
• Resource acquisition argument
• Marketing argument
30
• Creativity argument
• Problem solving argument
• System flexibility argument
Approaches to managing diversity
a) The golden ruler approaches
According to this approach, it is best to treat everyone in the same way: “treat others you want to be treated.”
Thus, good intentions of not treating other people badly inspired this theory.
b) The “right the wrongs” approach
This approach takes the form of affirmative action. “We don’t have enough of the previously disadvantaged
people, such as black people and women- we would better hire some, to make up for all these years of
negligence.”
c) The “value of differences” approach
This approach recognises differences and acknowledges that they exist but does not require people to be
assimilated into the dominant culture. It allows for individual mosaic of people to create the aggregate picture
of an organisation.
Diversity Paradigms: Strategies for Diversity Management
1.
Discrimination and Fairness Paradigm
The motto behind this paradigm is “We are all the same, differences do not matter”. There are topdown rules
that order such organisations; there is pressure to assimilate. This isn’t pleasant for any of the staff, who may
feel alienated as a result and subsequently restricts productivity. In a way, it is undermining.
2.
Access and Legitimacy Paradigm
This paradigm is the one that we usually use when presenting the business case for diversity in the workplace.
It’s about differences emphasised, but not used as leverage.
Diversity in this paradigm is used to connect with clients: it is a resource. However, as a result, careers are
marginalised.
3.
Integration and Learning Paradigm
The philosophy behind this is “we are the same, with our differences not in spite of them”. Perspectives and
experiences are shared and with this paradigm, diversity is a resource for learning.
Read more - prescribed textbook page 284 (Table 10.6)
Discuss why managing diversity and cultural differences are
important for South African organisations. Support your arguments
with practical examples
31
3.6 CULTURAL DIVERSITY
Cultural diversity (also known as multiculturalism) is a group of diverse individuals from different cultures or
societies. Usually, cultural diversity takes into account language, religion, race, sexual orientation, gender, age
and ethnicity. Companies started to embrace corporate diversity in the early 2000s. This was due to many trends
in demographics and a changing workforce.
Cultural Diversity Trends and Examples
1. The growth of minority workforce.
Today's workforce is made up of a very diverse population of individuals from every part of the world, which
creates dynamic multiracial and multicultural organizations. Such diversity brings with it many differences in
skills, abilities, and experiences. Because C-Transport values having a very diverse workforce themselves, they
insured those human resources recruited a minority representation within the corporation. This created an
atmosphere where different viewpoints and ideas came out of brainstorming sessions and were welcomed.
2. The second trend is a growth of stereotyping and prejudices.
This can be hard to avoid when so many different cultures come together in a work environment. For example,
many of C-Transport's executives were against hiring female’s engineers. Many executives were from the old
school and thought that the female engineers would not be as dependable due to possible maternity breaks.
3. Another trend companies are embracing is the addition of sensitivity or diversity training.
This type of training educates all employees about cultural differences so that they can understand and
appreciate each other. The purpose of sensitivity training is to teach employees how to properly act and
communicate in a corporate environment. Topics covered in a sensitivity training session will include learning
proper etiquette, appropriate terminology, improvement of communication skills, anti-bullying management
styles and how to eliminate sexual harassment within a company. CTransport ran a sensitivity training class for
employees who were not accepting of female engineers.
4. The fourth trend is a large increase of females in the workforce.
In fact, over the past few decades, women's participation in the workforce has grown dramatically to account for
almost half of the labour force. It is not a surprise that many of C-Transport's recent job applicants were female
engineers. C-Transport found that they brought a unique approach to designing aircraft.
5. Another trend is that corporations became more open to hiring individuals with disabilities and accepting
different abilities.
Definition of Culture
• Culture refers to the cumulative deposit of knowledge, experience, beliefs, values, attitudes, meanings,
hierarchies, religion, notions of time, roles, spatial relations, concepts of the universe, and material objects
and possessions acquired by a group of people during generations through individual and group striving.
• Culture is the systems of knowledge shared by a relatively large group of people.
• Culture is communication, communication is culture.
• Culture in its broadest sense is cultivated behaviour; that is the totality of a person's learned,
accumulated experience which is socially transmitted, or more briefly, behaviour through social learning.
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• A culture is a way of life of a group of people--the behaviours, beliefs, values, and symbols that they
accept, generally without thinking about them, and that are passed along by communication and imitation
from one generation to the next.
Ethnocentrism
Ethnocentrism is judging another culture solely by the values and standards of one's own culture. Ethnocentric
individuals judge other groups relative to their own ethnic group or culture, especially with concern for language,
behaviour, customs, and religion. These ethnic distinctions and subdivisions serve to define each ethnicity's
unique cultural identity. Ethnocentrism may be overt or subtle, and while it is considered a natural proclivity of
human psychology, it has developed a generally negative connotation.
Three perceptual attitudes related to ethnocentrism
• Stereotyping: This is an assumption that group averages or tendencies are true for each member of the
group.
• Generalisation: This is the perception or assumption that a group of people has certain collective
characteristics.
• Prejudice: This is a preconceived judgement or opinion about a group of people.
3.7 SOUTH AFRICAN CULTURAL VALUES
The culture of South Africa is known for its ethnic and cultural diversity. The South African black majority still has
a substantial number of rural inhabitants who lead largely impoverished lives. It is among these people, however,
that cultural traditions survive most strongly; as blacks have become increasingly urbanized and Westernised,
aspects of traditional culture have declined. Urban blacks usually speak English or Afrikaans in addition to their
native tongue. There are smaller but still significant groups of speakers of Khoisan languages, not included in the
33
eleven official languages, but are one of the eight others officially recognised languages. There are small groups
of speakers of endangered languages, most of which are from the Khoisan family, that receive no official status;
however, some groups within South Africa are attempting to promote their use and revival.
Cultural dimensions in South Africa
3.8 SYNERGISTIC SOLUTIONS TO PROBLEMS OF CULTURAL DIFFERENCE
Guidelines for doing business across cultures in South Africa;
• Obtain appropriate information
• Be formal and respectful
3.9 DIVERSITY TRAINING
Diversity training should focus on;
• Programmes designed to raise participants’ conscious and awareness about differences in values,
attitudes, patterns of behaviour and communication that may exist across cultures
• Programmes designed to develop new skills and competencies, including communication competence.
Reasons for designing and implementing diversity training and development initiatives;
• There is an increasingly diverse customer population
• There is an increasingly diverse employee population
• It is important to retain top talent
• It is necessary to minimise the risk of litigation
• It is the right thing to do and is an aspect of corporate social responsibility
• It fosters learning and effectiveness in organisations
34
Management support
Training employees involved in valuing diversity must be complemented from the top by managerial example
and support through;
• Declaration of commitment to diversity in the mission statement
• An organisational climate that supports competence
• Managers who have diversity skills and competence
• Awareness raising
• Peer support in the workplace
• Open communication between subordinates and managers about diversity issues
• Recognition of employee development of diversity skills
• Recognition of employee contributions to enhancing diversity goals
• Organisational rewards for manager’s implementation of organisational diversity goals
Figure 3.1: Towards cultural synergistic outcomes
35
The Spheres of Activity for Managing Diversity
Once management accepts the need for a strategy to develop a truly diverse workplace, three major steps are
involved in implementing such a major change;
1.
2.
3.
Building a corporate culture that values diversity
Changing structures policies, and systems to support diversity
Providing diversity awareness and cultural competency training
36
Figure 3.2: The spheres of activity for managing diversity
Read the case study below and answer the question that follows:
Brian Horlock: Aero Tech Incorporated (ATI) takes a proactive approach
to diversity
Brian Horlock, Chief Executive Officer (CEO) of ATI since 1996, has gained
the admiration and respect of many diversity scholars and diversity
advocates. Through his leadership, ATI – a highly diversified, advancedtechnology corporation with approximately R100 billion in annual sales
and approximately 110 000 employees – has one of the most successful
diversity programmes in South Africa today. Harlock is most admired for
his efforts at creating a work environment that fosters greater
awareness and sensitivity to the needs of ATI’s diverse employee
37
population. These efforts include crafting a “mission success” statement
that clearly delineates the corporation’s commitment to diversity and
also hiring executives with the skills and commitment to implementing
the corporation’s diversity initiates.
Another diversity initiative of ATI has been the creation of ATI has been
the creation of employee organisations. Examples of social support
networks of this kind include members of the physical challenged groups
at ATI (GLOBAL) organisation, and the Previously Disadvantaged Support
Team (PDST). Social networks such as these are important because they
tailor their training and mentoring to the specific issues of a particular
subculture, says Mike Botha, research specialist with the Missiles and
Space division.
Dimakatso Molefe, Director of Equal Employment Opportunity Office
(EEOO), observed that the specialised unit of Missiles and Space was
understaffed, and proactively initiated a skills audit and engaged Botha
to build capacity in the unit. She was shocked at the realisation that the
whole unit comprises only five per cent blacks and females of its one
thousand employees. She was even more surprised to realise to realise
that neither of these groupings from any part of specialists nor
management in the unit. After a lengthy engagement with Botha, he
indicated to her that they only recruit the best for the unit and due to
the demanding nature of the unit, he prefers to maintain likemindedness to ensure continuity of performance excellence.
This audit is threatening the diversity leadership that Horlock and his
team had for so long enjoyed.
Questions:
1.1 Explore ways which ATI has taken a proactive approach toward
supporting and encouraging diversity?
1.2 Identify and discuss diversity dimensions from the case study.
1.3 How would you suggest that Ms Molefe move forward in
addressing findings of her report in line with Horlock’s vision?
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TOPIC 4
LEADING
After studying this topic, you should be able to:
• Explain leading as a management function
• Expound on the nature and importance of leadership
in an organisation
• Differentiate between leadership and management
• Evaluate the components of leadership
• Critically evaluate the trait, behavioural and
situational approaches to leadership
• Identify and comment on some contemporary
perspectives on leadership
• Analyse the roles of leaders
• Present viewpoints regarding the management of
political behaviour in organisations
4.1 INTRODUCTION
It is the people who give the contemporary organisation a competitive advantage. Technology and capital are no
longer the only factors which create and sustain the competitive advantage of an organisation. Technology can
be acquired, and capital can be accessed relatively easily. The challenge for managers has therefore shifted from
managing technology and capital to managing people. But managing people requires a unique skill that inspires
them to excel in their jobs.
To be an effective manager in today’s changing environment requires leadership skills. Leadership is defined as
“the activity of influencing people to strive willingly for group objectives” (Brewster et al, 2009). Global
competition for leadership skills has placed attracting and retaining world class leaders on the agenda of all
organisations.
4.2 THE NATURE OF LEADERSHIP
It is essentially the task of management to combine and coordinate human resources and their performance to
accomplish the objectives of the organisation as productively as possible. Leadership is that element of
management that injects energy into the organisation to activate its members to get things moving and to keep
things moving (Smit et al, 2011).
4.3 DEFINITION OF LEADERSHIP
Leadership can be defined as the process of influencing and directing the behaviour of individuals and groups in
such a way that they work willingly to pursue the objectives and goals of the organisation (Smit et al, 2011).
39
4.4 THE COMPONENTS OF LEADERSHIP
Critically analyse the individual and organizational factors
contribute to political behaviour in an organisation.
4.4.1 Types of Power
Legitimate power: Also known as position power or official power comes to the leader when the organization’s
authority is accepted. It comes from the rules of the organization. It gives leaders the power to control resources
and to reward and punish others. People accept this power because they believe that it is desirable and necessary
to maintain order and discipline in a society. For example, parents, teachers, managers, police etc. have
legitimate power only when their authority is accepted in the positions they hold.
Charismatic power: Power of personality comes from each leader individually. This is the power of attraction or
devotion, the desire of one person to admire another. The leaders have a personal magnetism, an air of
confidence and a belief in objectives that attracts and holds followers. People follow because their emotions tell
them to do so. A subordinate feels a positive attraction towards a leader by identifying himself with the leader.
Expert power: Also known as the authority of knowledge comes from specialized learning. This is the power of
knowledge and skill of a special kind that are important in getting the job done. A persons’ professional
competence or knowledge gives him expert power. His credibility increases. He can lead other persons to trust
his judgments and decisions.
Reward power: This power comes from authority. This arises from the ability to reward worthy behaviour. The
leader has the power to give tangible rewards such as promotion, time off from work and attractive work
assignments to the subordinate. Also, psychological rewards like praise, appreciation, approval, and recognition
can be given by the leader to the subordinate. The subordinate must believe that he has access to higher
authorities and therefore he can give rewards. This reward power can also increase the leader’s charismatic and
legitimate power.
40
Coercive power: This power comes from authority. It is the ability to threaten or punish. The leader can give
tangible punishments like dismissal, demotion, low rating etc. Psychological punishments include criticism,
avoidance, disapproval, satirical remarks to the subordinate. The reward power helps to avoid something
undesirable.
Political power: This power comes from the support of a group. It arises from a leader’s ability to work with
people and social systems to gain their allegiance and support. It develops in all organizations. There are several
tactics that leaders can use to gain political power. One such tactic is social exchange which implies, ‘If you do
something for me, I will do something for you.’
It relies on the norm of reciprocity in society where two persons in a continuing relationship feel a strong
obligation to repay their social debts to each other. When these trade-offs are successful, both parties get
something they want. Another way to acquire political power is to give selective service to supporters.
4.5 LEADERSHIP AND MANAGEMENT
Although leadership and management are considered related concepts, different activities are associated with
each of the roles. Managers are not necessarily leaders and leaders are not necessarily managers. Study section
11.3 and ensure you understand the difference.
4.6 THE THEORETICAL FOUNDATIONS OF LEADERSHIP
Study
Study the theoretical foundations of leadership in your prescribed book on page 316-319
In your notebooks make summaries of the various leadership theories below.
•
Leadership characteristics or traits.
•
The behavioural approach to leadership.
41
•
The contingency or situational approach to leadership.
leadership.
•
•
•
•
The Fiedler’s contingency theory of
Hersey and Blanchard’s leadership cycle model
The Vroom-Yetton-Jago model
Path-goal theory
Some Contemporary perspective on leadership
4.7 LEADERSHIP AND POLITICAL BEHAVIOR IN ORGANISATIONS
Study
Refer to Smit, et al. 2020: 54 prescribed book on page 316-319
4.8 FACTORS CONTRIBUTING TO POLITICAL BEHAVIOR IN ORGANIZATIONS
(Morgan, 1986, p.142) It is useful to remember that in its original meaning, the idea of politics stems from the
view that, where interests are divergent, society should provide a means of allowing individuals to reconcile their
differences through consultation and negotiation. In ancient Greece, Aristotle advocated politics as a means of
reconciling the need for unity in the Greek polis (city-state) with the fact that the polis was an "aggregate of many
members." Politics, for him, provided a means of creating order out of diversity while avoiding forms of
totalitarian rule. Political science and many systems of government have built on this basic idea, advocating
politics, and the recognition and interplay of competing interests that politics implies, as a means of creating a
non-coercive form of social order.
(Source?) Organizational politics are a natural result of the fact that people think differently and want to act
differently. This diversity creates a tension that must be resolved through political means. There are many ways
in which this can be done, for example: autocratically ("We'll do it this way"); bureaucratically ("We're supposed
to do it this way"); technocratically ("It's best to do it this way"); or democratically ("How shall we do it?"). In
each case the choice between alternative paths of action usually hinges on the power relations between the
actors involved.
(Morgan, p.148) An organization's politics is most clearly manifested in the conflicts and power plays that
sometimes occupy centre stage, and in the countless interpersonal intrigues that provide diversions in the flow
of organizational activity. Politics occurs on an ongoing basis, often in a way that is invisible to all but those
directly involved. (Morgan, p.155) As Scottish sociologist Tom Burns has pointed out, most modern organizations
promote various kinds of political behaviour because they are designed as systems of simultaneous competition
and collaboration. People must collaborate in pursuit of a common task yet are often pitted against each other
in competition for limited resources, status, and career advancement. These conflicting dimensions of
organization are most clearly symbolized in the hierarchical organization chart, which is both a system of
cooperation, in that it reflects a rational subdivision of tasks, and a career ladder up which people are motivated
to climb. The fact that there are more jobs at the bottom than at the top means that competition for the top
places is likely to be keen, and that in any career race there are likely to be far fewer winners than losers. Along
42
with the fact that different individuals and groups are mandated to exercise authority and influence over others,
the hierarchy ensures the kinds of competitive struggle on which organizational politics thrives.
One does not have to be consciously cunning or deviously political to end up playing organizational politics.
Political behaviour is a natural response to the tensions created between individuals and their organizations. The
setting of budgets and work standards, the day-to-day supervision and control of work, as well as the pursuit of
opportunity and career, are often characterized by sophisticated forms of gamesmanship. Take, for example, the
situations that reveal the guile with which factory workers can control their pace of work and level of earnings,
even when under the close eye of their supervisors or of efficiency experts trying to find ways of increasing
productivity. The workers know that to maintain their positions they have to find ways of beating the system and
do so with great skill and ingenuity. Individuals who systematically wheel and deal their way through
organizational affairs merely illustrate the most extreme and fully developed form of a latent tendency present
in most aspects of organizational life.
Would you prefer to work for a leader who has an initiating
structure or a consideration style? Substantiate your answer.
(Source?) The potential complexity of organizational politics is mindboggling, even before we take account of the
personalities and personality clashes that usually bring roles and their conflicts to life. Sometimes the conflicts
generated will be quite explicit and open for all to see, while at other times they will lie beneath the surface of
day-today events. For example, relations in meetings may be governed by various hidden agendas of which even
the participants are unaware. In some organizations disputes may have a long history, decisions and actions in
the present being shaped by conflicts, grudges, or differences that others believe long forgotten or settled. The
manager of a production department may align with the marketing manager to block a proposal from the
production engineer not because he disagrees with the basic ideas, but because of resentments associated with
the fact that he and the production engineer have never gotten along. Though such resentments may seem petty,
they are often powerful forces in organizational life.
Several individual and organizational factors contribute to political behaviour (following adapted from Dubrin,
2001, p.204-5):
1. Pyramid-shaped organization structure:
A pyramid concentrates power at the top. Only so much power is therefore available to distribute among the
many people who would like more of it. Each successive layer on the organization chart has less power than the
layer above. At the very bottom of the organization, workers have virtually no power. Since most organizations
today have fewer layers than they previously had, the competition for power has become more intense.
2. Subjective standards of performance:
People often resort to organizational politics because they do not believe that the organization has an objective
and fair way of judging their performance and suitability for promotion. Similarly, when managers have no
objective way of differentiating effective people from the less effective, they will resort to favouritism.
3. Environmental uncertainty and turbulence:
43
When people operate in an unstable and unpredictable environment, they tend to behave politically. They rely
on organizational politics to create a favourable impression because uncertainty makes it difficult to determine
what they should really be accomplishing. The uncertainty, turbulence, and insecurity created by corporate
mergers or downsizing is a major contributor to office politics.
4. Emotional insecurity:
Some people resort to political manoeuvres to ingratiate themselves with superiors because they lack confidence
in their talents and skills.
5. Manipulative tendencies:
Some people engage in political behaviour because they want to manipulate others, sometimes for their own
personal advantage.
6. Disagreements that prevent rational decision making:
Many executives attempt to use rational criteria when making major decisions, but rational decision making is
constrained by major disagreements over what the organization should be doing. Unless strategy and goals are
shared strongly among key organizational members, political motivation is inevitable in organizational decision
making.
4.9 POLITICAL STRATEGIES AND TACTICS
To make effective use of organizational politics, leaders must be able to make appropriate use of specific political
strategies and tactics. Remember that ethical behaviour is regarded as an important requirement for effective
leadership.
(Source?) As one of many guidelines, The Center for Business Ethics at Bentley College has developed six
questions to help evaluate the ethics of a specific decision. Before engaging in a particular influence act or
political tactic, they recommend that a person seek answers to the following questions;
•
•
•
•
Is it right? (Based on absolute principles of moral rights)
Is it fair? (Based on absolute principles of justice)
Who gets hurt? (The fewer the better)
Would you be comfortable if the details of your decision or actions were made public in the
media or through electronic mail? (Based on the principle of disclosure)
•
What would you tell your child, sibling, or young relative to do? (Based on the principle of
reversibility)
•
How does it smell? (Based on common sense and intuition)
Let's look at a representative group of political tactics and strategies, categorized in the following two sections
as ethical or unethical, although many of the strategies and tactics could fall into either category, depending on
motivations and methods of implementing them. Used with tact, diplomacy, and good intent, ethical influence
tactics can be quite effective. Sequencing of tactics is another important consideration. In general, it is best to
begin with the most positive, or least abrasive, tactic. If you do not gain the advantage you seek, proceed to a
stronger tactic. Also, begin with low-cost, low-risk tactics.
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Essentially Ethical Political Strategies and Tactics
(Slightly modified from Dubrin, p.198-203) This section describes a sampling of ethical political behaviours,
divided into three related and overlapping groups: strategies and tactics aimed at (a) directly gaining power, (b)
building relationships with superiors and co-workers, and (c) avoiding political blunders. All these approaches
help a leader gain or retain power. They also help the leader cope with the fact that organizations are not entirely
rational.
Strategies and Tactics Aimed Directly at Gaining Power. It could be argued that all political tactics are aimed at
acquiring and maintaining power if we consider power in a broad scope. Tom Peters says that, although power
can often be abused, it can also be used to benefit many people, "and as a career building tool, the slow and
steady (and subtle) amassing of power is the surest road to success."
1.
Develop Power Contacts and Relationships. After powerful people have been identified, alliances
with them must be established. Cultivating friendly, cooperative relationships with powerful
organizational members and outsiders can make the leader's cause much easier to advance. These
contacts can benefit a person by supporting his or her ideas in meetings and other public forums. One
way to develop these contacts is to be more social, for example, throwing parties and inviting powerful
people, although they may not be available.
2.
Make an Early Showing. A display of dramatic results can help gain acceptance for one's efforts.
Once a person has impressed management with his or her ability to solve an important problem, that
person can look forward to working on problems that will bring greater power.
3.
Keep Informed. It is politically important to keep informed. Successful leaders develop a network
to help them keep abreast, or ahead, of developments within the firm. For this reason, a politically astute
individual befriends key staff members and executive administrative assistants, for example.
4.
Control Vital Information. Power accrues to those who control vital information. For example,
many former government or military officials have found power niches for themselves in industry as a
Washington representative of a firm that does business with the government. The vital information they
control is knowledge of whom to contact to shorten some of the complicated procedures in getting
government contracts approved.
5.
Control Lines of Communication. Related to controlling information is controlling lines of
communication, particularly access to key people. Administrative assistants and staff assistants frequently
control an executive's calendar. Both insiders and outsiders must curry favor with the conduit in order to
see an important executive. Although many people attempt to contact executives directly through email,
some executives delegate the responsibility of screening email messages to an assistant.
Strategies and Tactics Aimed at Building Relationships. Much of organizational politics involves building positive
relationships with network members who can be helpful now or later. This network includes superiors,
subordinates, other lower-ranking people, co-workers, external customers, and suppliers. The following are
several representative strategies and tactics:
6.
Provide Favors and Develop Ingratiation. A skilful leader always has a positive balance of favours
given and can draw on that balance when something is needed in return.
7.
Display Loyalty. A loyal worker is valued because organizations prosper more with loyal than with
disloyal employees. Blind loyalty--the belief that the organization cannot make a mistake--is not called
45
for; most rational organizations welcome constructive criticism. An obvious form of loyalty to the
organization is longevity, although its value varies.
8.
Develop a Reputation as a Subject Matter Expert. Expertise is one of the major sources of power.
Others come to and ask help from an expert.
9.
Rational Persuasion. Using this form of influence helps create an impression that you are
reasonable and fair, and avoids creating resentment that can result from heavy-handed influence tactics.
10.
Manage Impressions of You. Impression management includes behaviours directed at enhancing
one's image by drawing positive attention to oneself. Although this can deal with clothing and grooming,
it also deals with deeper aspects of behaviour, such as speaking well and presenting one's ideas
coherently. Another part of impression management is to tell people about your success or imply that
you are an "insider."
11.
Bring in Outside Experts for Support. To help legitimate their positions, executives will often hire
a consultant to conduct a study or cast an opinion. One possible problem to avoid is that, consciously or
unconsciously, some consultants may slant things to support the executive's position. This tactic would
be considered unethical if the executive is intentionally seeking a non-objective opinion.
12.
Consult With and Ask Advice of Others. Consulting with others, even when not required, helps
build support for a decision or action. Consulting and asking advice on work-related topics build
relationships with other employees. Asking another person for advice--someone whose job does not
require giving it--will usually be perceived as a compliment, and asking advice transmits a message of trust
in the other person's judgment.
13.
Ask Satisfied Customers to Contact your Boss. A favourable comment by a customer receives
considerable weight because customer satisfaction is a top corporate priority. If a customer says
something nice, the comment will carry more weight than one from a co-worker or subordinate.
14.
Be Courteous, Pleasant, and Positive. It has been argued that courteous, pleasant, and positive
people are the first to be hired and the last to be fired (assuming they also have other important
qualifications).
15.
Send Thank-you Notes to Large Numbers of People. One of the most basic political tactics,
sending thank-you notes profusely, is simply an application of sound human relations. Many successful
people take the time to send handwritten notes to employees and customers to help create a bond with
those people.
16.
Flatter Others Sensibly. Flattery in the form of sincere, specific praise can be an effective
relationship builder. By being generous in your positive feedback and comments, you can build
relationships with work associates and make them more receptive to your ideas.
17.
Develop Coalitions. Sometimes coalitions are initiated by less powerful actors who seek the
support of others. At other times they may be developed by the powerful to consolidate their power.
Whether formal or informal, confined to the organization or extended to include key interests outside,
coalitions and interest groups often provide important means of securing desired ends.
46
Avoiding Political Blunders. (Adapted from Dubrin, p.203-4) A strategy for retaining power is to refrain from
making power-eroding blunders. Committing such politically insensitive acts can also prevent one from attaining
power. Several leading blunders to avoid are described next.
18.
Embarrassing or criticizing the boss in a public forum. One of the oldest saws in human relations
is to "praise in public and criticize in private." Yet, in a moment of anger or stupidity, we may blurt out
something that can be costly.
19.
Surprising the boss. Surprises, particularly negative ones, are not appreciated.
20.
Bypassing the boss. Protocol is still highly valued in a hierarchical organization. Going around the
boss to resolve a problem is therefore hazardous. You might be able to accomplish the bypass, but your
career could be damaged, and your recourses limited.
21.
Declining an offer from top management. Turning down top management, especially more than
once, is a political blunder. You thus must balance your other interests against the blunder of refusing a
request from someone powerful in the organization. An increasing number of managers and professionals
today decline opportunities for promotion when the new job requires geographic relocation. For these
individuals, family and lifestyle preferences are more important than gaining political advantage on the
job.
Apply Fiedler’s least refereed co-worker’s (LPCW) model to your
own manager and analyse the context of the section or department
he or she manages. Expound why the manager’s leadership style is
effective or ineffective in that specific situation.
Potentially Unethical Political Strategies and Tactics
(Adapted from Dubrin p.203-4, 227-8) Any technique of gaining power can be unethical if practiced in the
extreme and with negative intentions. For example, a person who supports a boss by feeding him or her insider
information that could affect the price of company stock is being unethical. Some approaches are almost
unequivocally unethical, such as those described next. In the long run they can erode a leader's effectiveness by
lowering his or her credibility.
1.
Backstabbing. The ubiquitous back stab requires that you pretend to be nice, but all the while plan
someone's demise. A frequent form of backstabbing is to initiate a conversation with a rival about the
weaknesses of a common boss, encouraging negative commentary and making careful mental notes of what
the person says. When these comments are passed along to the boss, the rival appears disloyal and foolish.
Email has become a medium for backstabbing. The sender of the message documents a mistake made by
another individual and includes key people on the distribution list. A sample message sent by one manager to
a rival began as follows, "Hi, Sam. I'm sorry you couldn't make our important meeting. I guess you had some
other important priorities. But we need your input on the following major agenda item we tackled . . .."
2.
Purge All but Loyalists. The ancient strategy of purge those you have conquered suggests that you
remove from the organization rivals who suffered past hurts through your efforts; otherwise, the wounded
rivals might retaliate at a vulnerable moment. This kind of strategy is common after a hostile takeover or even
a Amerger of equals, @ e.g., the purge of former Chrysler Corporation executives by the former Daimler-Benz
executives after the merger to form DaimlerChrysler.
47
3.
Set a Person Up for Failure. The object of a setup is to place a person in a position where he or she will
either fail outright or look ineffective. For example, an executive whom the CEO dislikes might be given
responsibility for a troubled division whose market is rapidly collapsing. The newly assigned division president
cannot stop the decline and is then fired for poor performance.
4. Exert Undue Pressure. Even if you have the power to do this, it would be unethical if used to further your
interests at the expense of others. In any case, it may have longer-term repercussions.
5.
Divide and conquer. An ancient military and governmental strategy, this tactic is also used in business.
The object is to have peers struggle among themselves, therefore yielding the balance of power to another
person. If team members are not aligned with one another, there is an improved chance that they will align
with a common superior. One way of getting subordinates to fight with one another is to place them in intense
competition for resources.
6.
Play Territorial Games. Also referred to as turf wars, territorial games involve protecting and hoarding
resources that give one power, such as information, relationships, and decision-making authority. A
relationship is "hoarded" in such ways as not encouraging others to visit a key customer or blocking a high
performer from getting a promotion or transfer. Other examples of territorial games include monopolizing
time with clients, scheduling meetings so someone cannot attend, and shutting out co-workers from joining
you on an important assignment.
A Caveat
(Adapted from Morgan, p.195-8) There is a danger when becoming sensitized to political behaviour that one
begins to see everything as political, to develop a Machiavellian interpretation that suggests that everyone is
trying to outwit and outmanoeuvre everyone else. We begin to see politics everywhere, and to look for hidden
agendas even where there are none. Rather than use politics to generate new insights and understandings that
can help deal with divergent interests, there is a temptation to reduce the concept to a tool to be used to advance
our own personal interests.
This kind of manipulative stance is reflected in many contemporary writings on the politics of organization, which
have a tendency to emphasize the cynical, selfish, ruthless, get-ahead-at-all-costs mentality that so often turns
organizations into corporate jungles. These writings sell through statements such as: "Find out where the real
power is and use it" and "Win through intimidation;" This use of a political metaphor breeds mistrust and
encourages the idea that organization involves a zero-sum game where there must be winners and losers. While
there may be a measure of truth in this, in that many organizations are dominated by competitive relations, the
effect is to reduce the scope for genuine openness and collaboration.
4.10 EXERCISING CONTROL OVER DYSFUNCTIONAL POLITICS
(Loosely based on Culbert & McDonough, 1985; Dubrin, 2001, and Pettigrew, 2003) Although necessary,
organizational politics can hurt an organization and its members when carried to excess. Too much politicking
can result in lower morale, higher turnover, and wasted time and effort, thereby lowering performance. To avoid
these negative consequences, leaders should combat political behaviour when it is excessive and dysfunctional.
Some steps that can help accomplish this follow.
1. To control politics, organizational leaders must be aware of its causes and techniques. For example,
during a downsizing, the CEO can be on the alert for instances of backstabbing and transparent attempts to
please him or her.
2.
Open communication also can constrain the impact of political behaviour. For instance, open
communication can let everyone know the basis for allocating resources, thus reducing the amount of political
48
behaviour. When communication is open, it also makes it more difficult for some people to control information
and pass along gossip as a political weapon.
3.
Avoiding favouritism is a potent way of minimizing politics within a work group. If group members believe
that getting the boss to like them is much less important than good job performance in obtaining rewards,
they will try to impress the boss through task-related activities.
4.
Setting good examples at the top of the organization can help reduce the frequency and intensity of
organizational politics. When leaders are non-political in their actions, they demonstrate in subtle ways that
political behaviour is not welcome. It may be helpful for the leader to announce during a staff meeting those
devious political behaviours is undesirable and unprofessional.
5.
Another way of reducing the extent of political behaviours is for individuals and the organization to have
goal congruence, i.e., share the same goals, with thorough understanding of what they mean. If political
behaviour will interfere with the company and individuals achieving their goals, workers with goal congruence
are less likely to play office politics excessively.
6.
Politics can sometimes be constrained by a threat to discuss questionable information in a public forum.
People who practice devious politics usually want to operate secretly and privately. They are willing to drop
hints and innuendoes and make direct derogatory comments about someone else, provided they will not be
identified as the source. An effective way of stopping the discrediting of others is to offer to discuss the topic
publicly.
Perform an internet search to identify a prominent South African
transformational business leader. Write an essay on his or her leadership
style using the theory on transformational leadership as a framework for
your discussion.
4.11 CONCLUSION
(Adapted from Morgan, p.194-5) After reflecting on the realities of political dynamics and behaviours in
organizations, it seems appropriate to revaluate the myth of a highly rational, objective, non-political
organization. The idea of rationality seems to be invoked to overcome the contradictions inherent in the fact that
an organization is simultaneously a system of competition and a system of cooperation. An emphasis on
rationality could lead us to construct an organization that does not manage the diversity of interests present and,
therefore, is ineffective and unstable.
I believe skilful and appropriate use of organizational politics is necessary for a leader to acquire and retain power
and to accomplish major goals. Although political behaviour can be unethical and destructive, it also can and
should be ethical and contribute to a balanced set of interests. Perhaps we can join Aristotle in viewing
organizational politics as a means of reconciling differences through consultation and negotiation, and as a
means of creating order out of diversity while avoiding abuses. As Adolf Berle wrote in 1969 (p.562-3):
Your democratic institutions... must foster, defend, and enlarge institutions by which knowledge can be made
greater and choices wider and more certain. ...The real function of power and the order it creates... is the
liberation of men and women to think and be and make the most of themselves.
49
Read the case study below and answer the question that follows:
CAPITEC South Africa-based Capitec Bank is a retail bank
employing between 7,500 and 8,000 people that provides
accessible and affordable banking services to low-income clients
via the innovative use of technology. The bank’s innovative
practices have been so successful that the Financial Mail (a
weekly South African financial magazine) placed Capitec first
among the FM’s Top Companies rankings. Capitec Bank’s
innovative Global One facility proves that there is a real
alternative to the local traditional banks when it comes to
financial products and services. This single banking facility offers
a range of transacting; saving and lending options which are all
accessed using a paperless, card driven process in real-time.
Capitec Bank was established on March 1, 2001, and Capitec Bank
Holdings Limited was listed on the JSE Securities Exchange on
February 18, 2002.
Managing Growth and Compliance Objectives:
•
•
•
•
Manage rapid growth without jeopardising unparalleled
customer service
Comply with new legislation on lending policies
Track learning activities across bank branches
Overhaul paper-based training system
Overview Capitec Bank’s underlying philosophy is to use innovative
technology to drive down costs, to increase accessibility and to simplify
client processes. In terms of talent management, Capitec’s approach is
to recruit for potential and train for skill. Backing that up, over the last
three years, the bank has spent 51 million South African rand on
developing its people. Several forces caused Capitec to study the way it
managed its talent. First, the bank is rapidly growing. Second,
management wanted to ensure that, despite all that growth, its
commitment to delivering unparalleled customer service was not
compromised. And third, South Africa marked entered the final phase of
its National Credit Act (NCA) that was to be implemented by all banks.
The NCA, among other things, required banks to give consumers a
clearer picture of lending practices. “Part of complying with the new act
forced us to make changes to our loan products,” said Riaan Stassen, CEO
of Capitec Bank. “We had to train employees about the NCA, about the
changes to our services and products, and how they would have to adjust
their way of working to comply with the act.” Capitec had a paper-based
training system in place, but among its shortcomings was an inability to
track whether or not branch staff had received instruction. “We couldn’t
see whether the branches had taken training,” added Riaan. “And if they
50
had taken training, we couldn’t determine how much they learned.”
Riaan added, “The more informed the branch staff is, the better the
customer can be served. Customers can sense when staff are unsure or
uninformed. We wanted the staff to be confident with our new changes
and new systems. We wanted them to get information in time and with
our paper-based system, it wasn’t timely.”
Capitec Bank: Case Study 13LRMG’s Xperience LRMG partners with
world-leading people and learning technology partners to offer the best
products to our South African and African clients. LRMG analysed the
Capitec Bank requirements and shaped a solution based on Sum Total’s
Total LMS learning management module of the Sum Total Talent
Development Suite. “We wanted to deliver and implement an online
learning ecosystem,” said Gavin Janse van Rensburg (LRMG’s GM:
SumTotal CoE), “including content and technology, which would develop
and train employees in a way that boosted performance and customer
satisfaction.”
Our Approach on March 1, 2007, Capitec, with LRMG, launched a
companywide talent management programme dubbed “e-village.”
Capitec’s e-village delivers, tracks, and analyses the progress of online
learning. One of Capitec’s challenges in getting e-village built was how to
fit it the existing network architecture and utilise bandwidth effectively.
The bank’s production system runs over the same network as e-village,
so Capitec found a way to work alongside the bank’s centralised server.
“We have decentralised servers in each branch,” said Riaan Stassen
(CEO, Capitec Bank). “So, we chose to distribute our e-village learning
content to each server when we have content to share with staff. This is
the first time we have implemented a system in this way, but it’s an
excellent way to overcome the challenges of bandwidth.”
To publicize e-village, Capitec created a buzz with internal marketing
that excited employees and drove them to log onto the online “village”.
Capitec published an internal newsletter to educate employees about evillage months in advance of the launch of the system. “To inform and
energise employees about e-village, we also gave out more than 2,000
earphones wrapped in packaging with the e-village logo,” said Stassen.
“Employees could use the earphones to listen to their customised
learning and development programmes.”
Deployment and Usage Among the first online courses delivered to bank
employees was one on the NCA, which integrated training with
simulations as well as assessments. With e-village in place, Capitec was
able to determine whether employees were learning and understanding
the business changes tied to the National Credit Act. With e-village,
Capitec’s staff can sign on for training at their workstations, and the
bank’s trainers are able to analyse what workers are learning and mentor
them.
The e-village automatically prompts staff when a new course becomes
available, or the content of a course has changed, or an assignment is
51
overdue. “The coaching capabilities of this system provide our managers
with the opportunity to provide immediate feedback and direction, if
necessary,” said Stassen. Successes Quick and effective training delivery
was reached. LRMG with Sum Total, were able to run and deliver a wellexecuted project, according to Stassen. “Our roll out and launch went as
we planned, and the implementation was smoothly done. We’re able to
bring training to our workforce quickly and cost effectively as compared
to our previous methods.”
“Our e-village gives employees more personal access to learning; they
can achieve more on their own schedule, and take assessments to
reinforce that what they’ve learned,” said Stassen. “In the future, we
hope to be able to do simulations on our banking system and product
flows.”
Results:
•
•
Replaced paper-based processes quickly and cost-effectively
Provides managers the opportunity to give immediate
feedback and direction
• Gives employees more personal access to learning
• Enables employees to drive their training and development
• Improves tracking and reporting of learning activities
Source: Adapted From www.lrmg.co.za/download_files/how-we-canhelp-you/technology/talent-learningmanagement-systems/capitecbank.pdf
Questions
1. Critically analyse the impact of Capitec’s leadership on the success of
the strategy with regards to strategy development.
2. Expound how specific critical success factors can impact on the choice
of alternative strategies that can improve Capitec’s competitive
performance.
52
TOPIC 5
INDIVIDUALS IN THE ORGANISATION
After studying this topic, you should be able to:
• Analyse why managers must know how individuals’
function in an organisation
• Critically explain the key variables that determine human
behaviour in an organisation.
• Suggest ways of improving individual performance in the
workplace
• Highlight the use of mentoring and coaching as a
management intervention to help individuals realise their
potential in the organisation
•
•
Evaluate how emotional intelligence can be used by
management to ensure that their workforce performs
optimally
Expound four types of workplace behaviours
5.1 INTRODUCTION
Management is essentially about getting things done through other people to attain the mission and goals of the
organisation. Managers need to understand the key determinants of the behaviour of their workers to lead them
to attain the organisation’s mission and goals
The importance of human dimension in management
• People spend a large part of their day at work
• People are the lifeblood of an organisation
• Knowledge workers are at the centre of success for many organisations
• People are part of a social system
People as a subsystem
• A system is complex
• A system can either be open or closed
• People in turn influence the environment in which they function
• A system strives for equilibrium
5.2 KEY ATTRIBUTES THAT INFLUENCE THE INDIVIDUAL BEHAVIOUR
• Values and attitudes
• Personality
• Perception
• Motivation
53
• Learning
• Ability
Refer to the prescribed book for more information on key variables that influence people behaviour in the
organisation: page 337 - 346
Read the following extract by Peter Drucker on the individual
5.3 EMOTIONAL INTELLIGENCE
Def: it is the ability to access, manage and make use of one’s own feelings in the workplace as well as those of
other people.
54
EI was thoroughly researched by Goleman, who found that it is more important to work success than the
rational intelligence quotient (IQ) or technical skill. The emotional competencies that differentiate superior
from average performers are:
• Self-awareness
• Self-management (managing one’s own emotions)
• Social awareness (empathy)
• Social skills (managing relationships)
Analyse four workplace behaviours and how each can directly or
indirectly influence organizational effectiveness.
5.4 MENTORING AND COACHING
Mentoring: refers to a situation in which an experienced member of the organisation (called the mentor)
provides advice, information, and guidance to a less experienced individual (called protégé) for the protégé’s
personal and professional development.
In mentoring, the immediate manager is indirectly involved. Although she or he may offer suggestions to the
employee on how to best use the mentoring experience or may provide a recommendation to the matching
committee on what would constitute a good match, the manager has no link to the mentor, and they do not
communicate at all during the mentoring relationship. This helps maintain the mentoring relationship's integrity.
Coaching: focuses on improved performance in the protégé’s job and imparts skills that the protégé needs to
accept new responsibilities.
The coacher’s immediate manager is a critical partner in coaching. She or he often provides the coach with
feedback on areas in which his or her employee is in need of coaching. This coach uses this information to guide
the coaching process.
NB: Mentoring is about your career: coaching is about your job.
When to consider coaching:
• When a company is seeking to develop its employees in specific competencies using performance
management tools and involving the immediate manager
• When a company has several talented employees who are not meeting expectations
• When a company is introducing a new system or program
• When a company has a small group of individuals (5-8) in need of increased competency in specific areas
• When a leader or executive needs assistance in acquiring a new skill as an additional responsibility
When to consider mentoring:
• When a company is seeking to develop its leaders or talent pool as part of succession planning
• When a company seeks to develop its diverse employees to remove barriers that hinder their success
55
• When a company seeks to develop its employees more completely in ways that are additional to the
acquisition of specific skills/competencies
• When a company seeks to retain its internal expertise and experience residing in its baby boomer
employees for future generations
• When a company wants to create a workforce that balances the professional and the personal
Convince a newly appointed manager why it is important for
managers to understand how individuals’ function in an
organisation.
5.5 TYPES OF WORKPLACE BEHAVIOUR
WP refers to how individual differences can directly or indirectly influence the effectiveness of an organisation.
Important workplace behaviours include;
a)
b)
c)
d)
Performance behaviours
Withdrawal behaviours
Organisational citizenship
Dysfunctional behaviours
Study prescribed textbook page 349 -350 for further explanations on the above types of workplace
behaviours
Study prescribed textbook on page 351: CASE STUDY – Red Peppers CC and answer
questions that follow.
Answer all multiple-choice questions from the prescribed text book: page 352 – 353
Read the case study below and answer the question that follows:
Brewing beer and other alcoholic drinks are among the world’s
oldest and most universal industries. As brewing became more
organised and began to exploit scale economies, dedicated
regional and national brewers emerged, including Carlsberg of
Denmark. Founded in Copenhagen by J C Jacobsen in 1847,
Carlsberg is a very late comer, judged against brewers such as
Stella Artois (Belgium), Kronenbourg (France) and Oettinger
(Germany).
In 1875 the Carlsberg Laboratory began to explore the science of yeast
fermentation when brewing pilsner (lager) beer. This successful venture
evolved later into the world-renowned Carlsberg Research Centre, a
56
pioneering institution in yeast genetics, biotechnology, and biomedical
research. In 1876 Jacobsen formed the philanthropic Carlsberg
Foundation, to which he bequeathed ownership of his brewery.
Meanwhile his son, Carl had founded his own Carlsberg brewery; the two
companies were reunited in 1906. Today the Foundation remains the
majority owner of Carlsberg A/S, the brewing company, and supports
various Carlsberg foundations and research interests.
After 1868 Carlsberg slowly developed an export business. NonEuropean destinations included South America; after 1903 and
collaboration with the East Asiatic Company, China and other east Asian
countries became significant markets for Carlsberg bottled beers. By
1939 Britain had become one of Carlsberg’s biggest export markets.
From the 1950s onwards Carlsberg appointed European licensees such
as Charrington and Tetley in Britain to brew and bottle Carlsberg beer.
During the 1970s Carlsberg became joint and later sole owner of the
Carlsberg breweries in Britain. A joint venture with Scottish & Newcastle
(S&N) created Baltic Beverages Holding, which Carlsberg now wholly
owns, extending its presence to Russia, Ukraine, Kazakhstan, Uzbekistan,
and the Baltic states. When Heineken and Carlsberg jointly acquired and
dismembered S & N, Carlsberg gained additional operations in France,
Vietnam, and China.
In 1970 Carlsberg became the senior partner in a merger with Danish
rival, Tuborg. In 1972 it opened a brewery in Malaysia. In 1980 it began
a joint venture brewery in Hong Kong, which it subsequently acquired
and then transferred production to the Huizhou brewery in mainland
China, another licensee in which Carlsberg acquired a majority share in
1995. Today, Carlsberg owns 20 breweries in China, fully or partially. It
owns three breweries in India. In 2000 it merged with Orkla of Norway,
a major brewing and soft drinks enterprise covering the Nordic area and
Russia. Initially Carlsberg owned 60% of the merged enterprise, called
Carlsberg A/S, becoming 100% owner in 2004.
Through its multiple acquisitions and overseas investments, the
Carlsberg Group has become a global brewer. In 2012 it had 7.5% global
share by volume, making it the fourth largest brewing corporation after
AB InBev (Belgium, 21% share by volume), SABMiller (UK, 13%) and
Heineken (Netherlands, 9%). Its 2009 sales were 59.4 billion Danish
Kroner, on which it achieved a 15.8% operating profit margin. It
employed 43000 people and marketed over 500 brands and sub-brands
of beer. These include prestige international brands such as Carlsberg
Pilsner, Tuborg, Kronenbourg 1664 and Baltika; and country-specific
brands such as Tetley’s (Britain), Ringnes (Norway), Feldschlösschen
(Switzerland), Lav (Serbia) and ‘Wind Flower Snow and Moon’ (China).
Its advertising strap line ‘probably the best beer in the world’ and its
variants are widely recognised in many of the 150 countries where it
competes.
57
Carlsberg’s strategy focuses on the geographic regions of Northern and
Western Europe; Eastern Europe; and Asia (including China). Its future
strategy emphasises innovation in its core brewing activities and
premium brand positioning wherever possible. It will continue investing
in its own assets where these constitute a core capability. Where it does
not own brewing facilities it will export or maintain local licensing
agreements.
Source: Adapted from Pitt, M and Koufopoulos, D (2012) Essentials of
Strategic Management Sage Publications
Questions:
1.1 Expound and analyse the proposition that Carlsberg should
rationalise its facilities and focus on far fewer brands.
1.2 Despite its international strategy, Carlsberg is still only the fourth
largest brewing group, much smaller than AB InBev, which like
others has grown dramatically through acquisitions and mergers.
Explore the extent to which Carlsberg is a future acquisition target
and how it should respond to a future bid.
58
TOPIC 6
GROUPS AND TEAMS IN THE ORGANISATION
After studying this topic, you should be able to:
• Distinguish between groups and teams in the organisation
• Critically explain the important role that groups, and teams
play in a contemporary organisation
•
Differentiate between the various types of informal and
formal groups that we find in an organisation
•
•
Explore the reasons why people join groups
Depict and explain the stages in group and team
development
Analyse the different variables that influence group and
team behaviour in terms of the Group Behaviour Model.
Defend the use of teams in an organisation
Recommend ways of introducing teams in the workplace
•
•
•
6.1 INTRODUCTION
Group definition: Refers to two or more individuals, interacting and interdependent who come together to
achieve organisational goals.
In the setting of an organisation, a group is the collection of people who are located, grouped, or gathered
together, either by classification or in a more general sense. People are often put in groups, such as a department,
or groups are created by the same culture or objectives within an organisation.
Team definition: A team in an organisation is defined to be more competitive than a group, with the intention of
this grouping of people to be able to achieve a common goal, reach the same objectives.
Reasons for people to join a group
• Groups offer security to people
• An individual can achieve a certain status by joining a group
• Self-esteem is the way that people feel about themselves
• Joining groups can satisfy the social needs of people
• Groups represent power because group action can achieve what individuals often cannot achieve by
themselves
• People join groups to achieve goals they cannot achieve alone
Categories and types of organisational group
There two types of groups namely
• Formal group
• Informal group
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Formal group
•
•
•
It is also known as the work group
It is a unit of two or more people who interact to share information and make decisions that will help
each group m ember to perform within his or her own area of responsibility.
Formal groups are divided into command and task groups
Informal group
• It is the group that develops out of the day-to-day activities and interactions of people working in the
same organisation
• Formal organisation has a considerable influence on the formation of informal groups
• Informal groups are divided into interest and friendship groups
6.2 TEAMS
Definition of team - a group of people with a full set of complementary skills required to complete a task, job,
or project. A team is a special kind of group and turning groups into teams is a process that requires special
management skills.
Characteristics of team members
• operate with a high degree of interdependence,
• share authority and responsibility for self-management,
• are accountable for the collective performance, and
• work toward a common goal and shared rewards(s).
A team becomes more than just a collection of people when a strong sense of mutual commitment creates
synergy, thus generating performance greater than the sum of the performance of its individual members.
Analyse a situation where you experience the effects of groupthink
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6.3 STAGES IN GROUP AND TEAM DEVELOPMENT
The first four stages of team growth were first developed by Bruce Wayne Tuckman and published in 1965. His
theory, called “Tuckman’s Stages” was based on research he conducted on team dynamics. He believed (as is a
common belief today) that these stages are inevitable for a team to grow to the point where they are functioning
effectively together and delivering high quality results.
In 1977, Tuckman, jointly with Mary Ann Jensen, added a fifth stage to the 4 stages: “Adjourning.” The adjourning
stage is when the team is completing the current project. They will be joining other teams and moving on to
other work soon. For a high performing team, the end of a project brings on feelings of sadness as the team
members have effectively become as one and now are going their separate ways.
The five stages:
• Stage 1: Forming
• Stage 2: Storming
• Stage 3: Norming
• Stage 4: Performing
• Stage 5: Adjourning
Stage 1: Forming
The "forming" stage takes place when the team first meets each other. In this first meeting, team members are
introduced to each. They share information about their backgrounds, interests and experience and form first
impressions of each other. They learn about the project they will be working on, discuss the project's
objectives/goals and start to think about what role they will play on the project team. They are not yet working
on the project. They are, effectively, "feeling each other out" and finding their way around how they might work
together.
During this initial stage of team growth, it is important for the team leader to be very clear about team goals and
provide clear direction regarding the project. The team leader should ensure that all the members are involved
in determining team roles and responsibilities and should work with the team to help them establish how they
will work together ("team norms"). The team is dependent on the team leader to guide them.
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Stage 2: Storming
As the team begins to work together, they move into the "storming" stage. This stage is not avoidable; every
team - most especially a new team who has never worked together before - goes through this part of developing
as a team. In this stage, the team members compete for status and for acceptance of their ideas. They have
different opinions on what should be done and how it should be done - which causes conflict within the team.
As they go progress through this stage, with the guidance of the team leader, they learn how to solve problems
together, function both independently and together as a team, and settle into roles and responsibilities on the
team. For team members who do not like conflict, this is a difficult stage to go through.
The team leader needs to be adept at facilitating the team through this stage - ensuring the team members learn
to listen to each other and respect their differences and ideas. This includes not allowing any one team member
to control all conversations and to facilitate contributions from all members of the team. The team leader will
need to coach some team members to be more assertive and other team members on how to be more effective
listeners.
This stage will come to a closure when the team becomes more accepting of each other and learns how to work
together for the good of the project. At this point, the team leader should start transitioning some decision
making to the team to allow them more independence, but still stay involved to resolve any conflicts as quickly
as possible.
Some teams, however, do not move beyond this stage and the entire project is spent in conflict and low morale
and motivation, making it difficult to get the project completed. Usually, teams comprised of members who are
professionally immature will have a difficult time getting past this stage.
Stage 3: Norming
When the team moves into the "norming" stage, they are beginning to work more effectively as a team. They
are no longer focused on their individual goals, but rather are focused on developing a way of working together
(processes and procedures). They respect each other's opinions and value their differences. They begin to see
the value in those differences on the team. Working together as a team seems more natural. In this stage, the
team has agreed on their team rules for working together, how they will share information and resolve team
conflict, and what tools and processes they will use to get the job done. The team members begin to trust each
other and actively seek each other out for assistance and input. Rather than compete against each other, they
are now helping each other to work toward a common goal. The team members also start to make significant
progress on the project as they begin working together more effectively.
In this stage, the team leader may not be as involved in decision making and problem solving since the team
members are working better together and can take on more responsibility in these areas. The team has greater
self-direction and can resolve issues and conflict as a group. On occasion, however, the team leader may step in
to move things along if the team gets stuck. The team leader should always ensure that the team members are
working collaboratively and may begin to function as a coach to the members of the team.
Stage 4: Performing
In the "performing" stage, teams are functioning at a very high level. The focus is on reaching the goal as a group.
The team members have gotten to know each other, trust each other and rely on each other.
Not every team makes it to this level of team growth; some teams stop at Stage 3: Norming. The highly
performing team functions without oversight and the members have become interdependent. The team is highly
motivated to get the job done. They can make decisions and problem solve quickly and effectively. When they
disagree, the team members can work through it and come to consensus without interrupting the project's
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progress. If there needs to be a change in team processes - the team will come to agreement on changing
processes on their own without reliance on the team leader.
In this stage, the team leader is not involved in decision making, problem solving or other such activities involving
the day-to-day work of the team. The team members work effectively as a group and do not need the oversight
that is required at the other stages. The team leader will continue to monitor the progress of the team and
celebrate milestone achievements with the team to continue to build team camaraderie. The team leader will
also serve as the gateway when decisions need to be reached at a higher level within the organisation.
Even in this stage, there is a possibility that the team may revert to another stage. For example, it is possible for
the team to revert to the "storming" stage if one of the members starts working independently. Or the team
could revert back to the "forming" stage if a new member joins the team. If there are significant changes that
throw a wrench into the works, it is possible for the team to revert to an earlier stage until they can manage
through the change.
Stage 5: Adjourning
In the "adjourning" stage the project is coming to an end and the team members are moving off into different
directions. This stage looks at the team from the perspective of the well-being of the team rather than from the
perspective of managing a team through the original four stages of team growth.
The team leader should ensure that there is time for the team to celebrate the success of the project and capture
best practices for future use. (Or, if it was not a successful project - to evaluate what happened and capture
lessons learned for future projects). This also provides the team the opportunity to say good-bye to each other
and wish each other luck as they pursue their next endeavour. It is likely that any group that reached Stage 4:
Performing will keep in touch with each other as they have become a very close-knit group and there will be
sadness at separating and moving on to other projects independently.
Is the Team Effective or Not?
There are various indicators of whether a team is working effectively together as a group. The characteristics of
effective, successful teams include:
• Clear communication among all members
• Regular brainstorming session with all members participating
• Consensus among team members
• Problem solving done by the group
• Commitment to the project and the other team members
• Regular team meetings are effective and inclusive
• Timely hand off from team members to others to ensure the project keeps moving in the right direction
• Positive, supportive working relationships among all team members
• Teams that are not working effectively together will display the characteristics listed below. The team
leader will need to be actively involved with such teams. The sooner the team leader addresses issues and
helps the team move to a more effective way of working together, the more likely the project is to end
successfully.
• Lack of communication among team members
• No clear roles and responsibilities for team members
• Team members "throw work over the wall" to other team members, with lack of concern for timelines
or work quality
• Team members work alone, rarely sharing information and offering assistance
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• Team members blame others for what goes wrong, no one accepts responsibility
• Team members do not support others on the team
• Team members are frequently absent thereby causing slippage in the timeline and additional work for
their team members
Example of a Team Moving Through the Five Stages
Background and Team Members
A team has been pulled together from various parts of a large service organisation to
work on a new process improvement project that is needed to improve how the company
manages and supports its client base. The team lead on this project is Sandra from the
Chicago office who has 15 years’ experience as a project manager/team lead managing
process improvement project.
The other members of the team include:
Peter: 10 years’ experience on various types of projects, expertise in scheduling and
budget control (office location: San Diego)
Sarah: 5 years’ experience as an individual contributor on projects, strong programming
background, some experience developing databases (office location: Chicago)
Mohammed: 8 years’ experience working on various projects, expertise in earned value
management, stakeholder analysis and problem solving (office location: New York)
Donna: 2 years’ experience as an individual contributor on projects (office location: New
York)
Ameya: 7 years’ experience on process improvement projects, background in developing
databases, expertise in earned value management (office location:
San Diego) Sandra has worked on projects with Sarah and Mohammed but has never
worked with the others. Donna has worked with Mohammed. No one else has worked
with other members of this team. Sandra has been given a very tight deadline to get this
project completed.
Sandra has decided that it would be best if the team met face-to-face initially, even
though they will be working virtually for the project. She has arranged a meeting at the
New York office (company headquarters) for the entire team. They will spend 2 days
getting introduced to each other and learning about the project.
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The Initial Meeting (Stage 1: Forming)
The day of the face-to-face meeting in New York has arrived. All team members are
present. The agenda includes:
•
•
•
•
•
•
Personal introductions
Team building exercises
Information about the process improvement project
Discussion around team roles and responsibilities
Discussion around team norms for working together
Introduction on how to use the SharePoint site that will be used for this
project to share ideas, brainstorm, store project documentation, etc.
The team members are very excited to meet each other. Each of them has heard of one
another, although they have not worked together as a team before. They believe they
each bring value to this project. The team building exercises have gone well; everyone
participated and seemed to enjoy the exercises. While there was some discussion
around roles and responsibilities - with team members vying for "key" positions on the
team - overall there was agreement on what needed to get done and who was
responsible for components of the project.
The onsite meeting is going well. The team members are getting to know each other and
have been discussing their personal lives outside of work - hobbies, family, etc. Sandra
is thinking that this is a great sign that they will get along well - they are engaged with
each other and genuinely seem to like each other!
The Project Work Begins (Stage 2: Storming)
The team members have gone back to their home offices and are beginning work on
their project. They are interacting via the SharePoint site and the project is off to a good
start. And then the arguments begin.
Peter has put up the project schedule based on conversations with only
Mohammed and Ameya on the team. Donna and Sarah feel as if their input to the
schedule was not considered. They believe because they are more junior on the team,
Peter has completely disregarded their concerns about the timeline for the project. They
challenged Peter's schedule, stating that it was impossible to achieve and was setting up
the team for failure. At the same time, Sarah was arguing with Ameya over who should
lead the database design and development effort for this project. While Sarah
acknowledges that Ameya has a few years more experience than she does in database
development, she only agreed to be on this project to take a lead role and develop her
skills further so she could advance at the company. If she knew Ameya was going to be
the lead she wouldn't have bothered joining this project team. Additionally, Mohammed
appears to be off and running on his own, not keeping the others apprised of progress
nor keeping his information up to date on the SharePoint site. No one really knows what
he has been working on or how much progress is being made.
Sandra had initially taken a side role during these exchanges, hoping that the team
would work it out for themselves. However, she understands from experience managing
many project teams that it is important for her to take control and guide the team
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through this difficult time. She convenes all the team members for a virtual meeting to
reiterate their roles and responsibilities
(Which were agreed to in the kick-off meeting) and to ensure that they understand the
goals and objectives of the project. She made some decisions since the team couldn't
come to agreement. She determined that Ameya would lead the database development
design component of the project, working closely with Sarah so she can develop further
experience in this area. She reviewed the schedule that Peter created with the team,
making adjustments where necessary to address the concerns of Donna and Sarah. She
reminded Mohammed that this is a team effort, and he needs to work closely with the
others on the team.
During the virtual meeting session, Sandra referred to the ground rules the team set in
their face-to-face meeting and worked with the team to ensure that there was a plan in
place for how decisions are made on the team and who has responsibility for making
decisions.
Over the next few weeks, Sandra noticed that arguments/disagreements were at a
minimum and when they did occur, they were worked out quickly, by the team, without
her involvement being necessary. Still, she monitored how things were going and held
regular virtual meetings to ensure the team was moving in the right direction. On a
monthly basis, Sandra brings the team together for a face-to-face meeting. As the
working relationships of the team members started improving, Sandra started seeing
significant progress on the project.
All is Going Smoothly (Stage 3: Norming)
The team has now been working together for nearly 3 months. There is a sense of
teamwork among the group. There are few arguments and disagreements that can't be
resolved among the team. They support each other on the project - problem solving
issues, making decisions as a team, sharing information, and ensuring that the ground
rules put in place for the team are followed.
Additionally, the team members are helping each other to grow and develop their skills.
For example, Ameya has worked closely with Sarah to teach her many of the skills he
has learned in database design and development, and she has been able to take the lead
on accomplishing some of the components of their aspect of the project.
Overall, the team members are becoming friends. They enjoy each other's company both while working on the project and after hours via communicating on email, via
instant messaging, on Twitter, or over the telephone.
Significant Progress is Made! (Stage 4: Performing)
The team is now considered a "high performing team." It wasn't easy getting to this
stage, but they made it! They are working effectively as a group - supporting each other
and relying on the group to make decisions on the project. They can brainstorm
effectively to solve problems and are highly motivated to reach the end goal as a group.
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When there is conflict on the team - such as a disagreement on how to go about
accomplishing a task - the group can work it out on their own without relying on the team
leader to intervene and make decisions for them. The more junior members - Donna and
Sarah - have really developed their skills with the support and help of the others. They
have taken on leadership roles for some components of the project.
Sandra checks in with the team - praising them for their hard work and their progress.
The team celebrates the milestones reached along the way. When necessary, Sandra
provides a link from the team to the executives for decisions that need to come from
higher up or when additional support is needed.
The project is on time and within budget. Milestones are being met - some are even
ahead of schedule. The team is pleased with how well the project is going along, as is
Sandra and the executives of the organisation.
Time to Wrap Up (Stage 5: Adjourning)
The project has ended. It was a huge success! The internal customer is pleased and there
is an improvement in how the company supports its clients. It has been a great 8 months
working together…with some ups and downs of course. Each of the individuals on the
project will be moving to other projects within the organisation, but no one is going to
be on the same project. They will miss working with each other but have vowed to remain
friends and keep in touch on a personal level - hopefully to work together again soon!
The team has gotten together in the New York office to discuss the project, including
documenting best practices, and discussing what worked effectively and what they
would improve upon given the chance to do it again. Sandra has taken the team out to
dinner. They are joined by the project sponsor and some other executives who are
extremely pleased with the result.
The End!
This is a simplistic view of a team working through the five stages of team
development. I hope it provides some benefit to you.
Remember that at any time this team could revert to a previous stage. Let's assume
that another individual joins the team - the team will revert to the "forming" stage as
they learn how to work with the new team member; re-establishing team guidelines,
finding their way again, and learning how to work cohesively as a team. Or let's assume
that Mohammed slips back into his old ways of keeping to himself and not sharing
information with the team - this may cause the team to revert back to the "storming"
stage.
Summary
It is important to remember that every team - regardless of what the team is working on
- will follow these stages of team development. It is the job of the team leader to help
see the team through these stages; to bring them to the point where they are working
as effectively as possible toward a common goal.
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6.4 VARIABLES THAT INFLUENCE GROUP AND TEAM BEHAVIOUR
There are different variables in the Group Behaviour Model that influence group behaviour in organisations, and
these include:
• Organisational context
• Group member resources
• Group structure
• Group processes
• Group tasks
Identify the company of your choice and analyse what the
managers could do to promote more effective teamwork in an
organisation.
6.5 ORGANISATIONAL TEAMS
In contrast to a work group, a work team consists of a smaller number of employees with complementary
competencies who work together on a project, are committed to a common purpose and are performing tasks
that contribute to achieving an organisation’s goals.
Characteristics of work teams
• Complementary competencies
• Commitment to the common purpose
• Shared mission and collective responsibility
• Individual and mutual accountability and rewards
• Synergy (the individual efforts of team members result in a level of performance that is greater than the
sum of their individual inputs)
• Shared leadership
• Equality
Reasons why organisations use teams
• Innovation (enhances creativity)
• Speed (reduced time requirement)
• Cost (reduces costs)
• Quality (shared accountability and commitments result in excellent quality)
6.6 TYPES OF TEAMS
• Problem solving teams
• Self-managed work teams
• Cross functional teams
• Virtual teams
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6.7 DEVELOPING INDIVIDUALS INTO TEAM MEMBERS
There are several options available to organisations wishing to introduce teams in the workplace and these
include following a strict selection process to ensure that the right king of people are employed, training
existing and new employees to become effective team members and implementing a reward system that
encourages team work. This process is depicted below:
Read the case study below and answer the question that follows:
Managers at Cape industries, a clothing manufacturing company
in the Western Cape, were struggling to improve productivity and
profits. If things did not get better, they and their 500 employees
would be out of work. One last effort to turn the company around
was a shift to teamwork.
Top managers told managers to abandon the traditional assembly
system, where workers performed a single task, such as sewing zippers
or attaching belt loops. In the new team system, teams of 30 to 50
workers coordinated their activities to assemble complete garments.
Employees received training to help them master new machinery and
attended brief team-building and problem-solving seminars for an
afternoon and it took a month for everyone to attend a session. As an
introduction to the seminar, facilitators told the employees that the new
system would improve their work lives by giving them more autonomy,
eliminate the monotony of the old assembly system and reduce the
number of injuries they receive from repeating the same task.
Cape Industries also revised their pay system. Previously, the worker’s
output determined their wages. A skilled worker could frequently exceed
his or her quota of belt loops or fly stitching by 20 percent or more, which
resulted in a considerable increase in wages. However, in the new
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system, the total output of the team determined an individual worker’s
wages. In many cases, top performers received far lower wages because
slower, inexperienced, or inefficient team members affected the teams’
performance adversely. Skilled workers were frustrated because they
had to wait for slower colleagues to complete their part of a garment,
and they resented having to help less-skilled workers to speed up the
production process.
Supervisors, who were unaccustomed to the team system, provided
little direction except for telling their subordinate to resolve workflow
and personality issues amongst themselves. The idea was to empower
employees to have more control over their own work. The experiment
in teamwork was a dismal failure. The quantity of garments produced
per hour declined 25 percent from pre-team levels. Labour costs went
down, but the morale was terrible.
Source: Adapted from Daft, R.2005. The leadership experience. 3rd ed.
Canada: Thomson, South-Western 421 -422.
Questions:
2.1 Why do you think the experiment in teamwork at Cape Industries
was unsuccessful?
2.2 Analyse what the managers could do to promote more effective
teamwork at Cape Industries.
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TOPIC 7
CONTROLLING
After studying this topic, you should be able to:
• Analyse control as a management function
• Expound the nature of control
• Depict and discuss control as a process that comprises
certain steps
• Analyse the focus areas of control in the organisation
• Differentiate between control at top management level
and operational level
•
•
Design a basic control system for a business unit
Present recommendations on the design of a control
system
7.1 INTRODUCTION
Organisations use the control process to ensure that they are progressing towards their goals and that their
resources are being used productively. Controlling means the regulation of organisational activities to ensure
that performance remains within acceptable limits. Control is the final step in the management process, and it is
the important link in the cycle of the process.
Def: Controlling measures whether actual results coincide with planned goals.
7.2 THE NATURE OF CONTROL
•
•
•
•
•
•
•
•
Aim is to ensure that actual results meet the planned results
It is the regulatory task of management in that it correlates action with plans
It supervises and measures the progress made towards achieving a particular goal
Determines whether there has been a deviation in the plans so that steps can be taken to prevent
and rectify errors
It is continuous process
It is interwoven with planning, organising and leading
It is the final stage in the management process
It implements planning because it knows when deviations are encountered, that plans, and goals
need to be revised
Controls serve other important roles including helping managers cope with uncertainty, detecting irregularities,
identifying opportunities, handling complex situations, and decentralizing authority. Like planning, controlling
responsibilities differ by managerial level with control responsibilities paralleling planning responsibilities at the
strategic, tactical, and operational level.
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Relationship between planning and controlling
“Planning is required at the very outset of management whereas control is required at the last stages. If planning
is looking ahead, control is looking back.”
Control and planning are interrelated so closely that they cannot be separated from each other. Without control
all the planning is fruitless because control consists of the steps taken to ensure that the performance of the
organization conforms to the plans.
In other words, control is concerned with the actual performance in relation to the standards set in advance and
the correction of deviations to ensure attainment of objectives. Planning is required at the very outset of
management whereas control is required at the last stages.
If planning is looking ahead, control is looking back. In fact, control is the process of checking to determine
whether proper progress is being made towards the objectives and goals set by management while doing
planning.
Often it is said that planning is the basis, action is the essence, delegation is the key, information is the guide and
control is the lifeblood of the success of any business enterprise. Organizational objectives cannot be achieved
without planning and planning alone cannot be successful. If extra efforts are put in planning and control is
ignored, a business may suffer from several administrative problems. These difficulties may be highly detrimental
for the business in the long run.
Effective control through efficient superiors can only be a guarantee for success. The control system must be
appropriate to the needs and circumstances of the enterprise.
Critically explain how an organisation can use preliminary control to
ensure that it has the necessary human resources to help to achieve its
mission and goals
7.3 IMPORTANCE OF CONTROL
•
•
•
•
•
•
•
Control ensures that all activities at all levels in the organisation are in accordance with the
organisation’s mission and goals
Ensures that organisational resources are deployed in such a way that it achieves its goals Results
in better quality
Enables management to cope with environmental change and complexity
Helps in minimising costs and limit the accumulation of errors
Facilitates delegation and teamwork
Competition
Complexity of the organisation
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7.4 LIMITATIONS OF CONTROL
1. Difficulty in setting quantitative standards:
Control system loses its effectiveness when standard of performance cannot be defined in quantitative terms
and it is very difficult to set quantitative standard for human behaviour, efficiency level, job satisfaction,
employee’s morale, etc. In such cases judgment depends upon the discretion of manager.
2. No control on external factors:
An enterprise cannot control the external factors such as government policy, technological changes, change in
fashion, change in competitor’s policy, etc.
3. Resistance from employees:
Employees often resist control and as a result effectiveness of control reduces. Employees feel control reduces
or curtails their freedom. Employees may resist and go against the use of cameras, to observe them minutely.
4. Costly affair:
Control is an expensive process it involves lot of time and effort as sufficient attention must be paid to observe
the performance of the employees. To install an expensive control system organisations, have to spend large
amount. Management must compare the benefits of controlling system with the cost involved in installing them.
The benefits must be more than the cost involved then only controlling will be effective otherwise it will lead to
inefficiency.
7.5 THE CONTROL PROCESS
The control process comprises of four steps namely
• Setting standards against actual performance
• Measuring actual performance
• Evaluating any deviations that might occur
• Taking steps to rectify deviations
7.6 KEY AREAS OF CONTROL
Most organisations define areas of control in terms of the four basic types of resources that they use, and these
include
• Physical resources (controlling inventory, quality, and equipment)
• Financial resources (control measures such as budgets, sales, production costs, market share)
• Information resources (market forecasting, adequate environmental scanning)
• Human resources (meeting standards of recruitment)
Design a control system for a small business that will enable its
management to detect and rectify any deviations from the planned
goals as soon as they appear.
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Key areas of control
Physical
resources
Financial
resources
Human
resources
Information
resources
7.7 LEVELS OF CONTROL
The three basic levels of control within an organisation are:
• Strategic control
• Structural control
• Operations and financial control
7.8 CHARACTERISTICS OF AN EFFECTIVE CONTROL SYSTEM
•
•
•
•
•
Integration
Flexibility
Accuracy
Timeliness
Unnecessary complexity/Simple
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Read the case study below and answer the question that follows:
Johnson and Johnson
The company introduced various product safety, ingredient safety and
product quality and safety measures to prevent the repetition of such an
event. These measures are indicated in the sections that follow:
Product Safety
As far as product safety is concerned, J&J ensures that every product that
the company sells must meet their high standards of quality, safety and
efficacy. Safety professionals at J&J companies conduct through safety
assessments as part of the detailed testing of quality, safety and
effectiveness before any new product is introduced to the market. These
professionals make assessments of each raw material, to identify safe
and effective ingredients, and the finished product, to ensure it works
the way that it is intended to work. J&J also assesses their products after
they have reached their market in order to identify any safety issue that
may occur.
Ingredient safety
The J&J companies buy and manufacture an array of raw materials,
active ingredients, packaging components and other supplies to make
their products. They also use advance technologies to deliver products
with superior performance features. The safety and quality of these
materials and technologies is critical to the success and safety of their
final products.
Product quality and safety compliance
As the J&J companies evolve to operate under a single quality framework
with a common set of quality and compliance elements, these action
help to ensure the highest quality products on which their customers
have relied upon for more than 125 years. Each J&J operating company
is expected to ensure that:
•
•
•
•
Products meet safety and quality requirements and perform as
required throughout their shelf life.
All products and ingredients that they purchase from suppliers
meet their requirements.
Change to materials, product labelling, packaging, processes,
systems, facilities, methods, and equipment are reviewed and
approved before they are made.
Procedures are in place to prevent diversion of their products
from their intended distribution channels and to protect them
from counterfeiting.
Many of the J&J businesses and facilities have been certified to meet the
International Organisation for Standardisation (ISO) requirements for
quality management. ISO certification means that a quality management
system has been through a through reviewed process by an outside audit
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committee and found to satisfy rigorous standards. J&J’s commitment to
compliance also extends to their external manufactures.
Source: Johnson & Johnson. nd. Available at:
www.jnj.com/connect/about-jnj/our-citizenship/
http://www.jnj.com/connect/about-jnj/comp-history/
http://www.jnj.com/connect/about-jnj/our-care/
(Accessed: 15 September 2016)
Questions:
1.1 Control should be exercised at various levels of an organisation.
Identify and analyse the levels of control as evident from the J&J case
study.
1.2 Expound the steps in the control process. Enhance your analysis with
practical examples.
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TOPIC 8
ETHICS, CORPORATE SOCIAL RESPONSIBILTY AND CORPORATE GOVERNANCE
After studying this topic, you should be able to:
• Analyse what “ethics” means in business terms
• Present reasons why organisations should behave ethically
• Expound what ethical decision-making entails
• Make suggestions regarding the management of ethics in
an organisation
• Defend the viewpoint that organisations should be socially
responsible
• Cite reasons why managers in South Africa should know the
content of
• King Code of Governance for South Africa IV
8.1 INTRODUCTION
Ethics and corporate social responsibility are important and much debated contemporary management issues
because of the scale and influence of the modern organisation on society. Organisations and managers have a
real and potential impact on a wide variety of issues that extend far beyond their normal business, and which
affect individuals and the entire world.
8.2 ETHICS
Definition:
A set of principles of right conduct. Or a theory or a system of moral values: "An ethic of service is at war with a
craving for gain" (Gregg Easterbrook).
8.3 LEVELS OF ETHICAL DECISION MAKING
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•
•
Individual level
Organisational level
Association level
Societal level
International level
8.4 DIFFERENT APPROACHES TO ETHICAL DECISION MAKING
The three fundamental ethical approaches that managers can use in decision making on ethical matters are;
• The utilitarian approach
• The human rights approach
• The justice approach
8.5 STEPS IN THE ETHICAL DECISION-MAKING PROCESS
• Step 1: Identify the problem
• Step 2: Determine whose interests are involved
• Step 3: Determine the relevant facts
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•
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Step 4: Determine the expectations of those involved
Step 5: Weigh up the various interests
Step 6: Determine the range of choices
Step 7: Determine the consequences of these choices for all those involved
Step 8: Make your choice
Write an essay on the management of ethics in an organisation. In your
essay explain which approach, in your view would be the most effective for
shaping long term ethical behaviour in an organisation.
Managing ethics in the organisation
What can organisations do to ensure ethical decision making?
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Lead by example
Develop a corporate
Create ethical structures
Manage “whistle blowing”
8.6 CORPORATE SOCIAL RESPONSIBILITY
CPR implies that a manager is obliged to take actions that protect and enhances society’s interests. The overall
effect is to improve the quality of life in the broadest possible way, regardless of how “quality of life” is defined
by society. The manager becomes concerned with the social and economic outputs and with the total effect of
the organisation’s actions on society.
8.7 LEVELS OF SOCIAL RESPONISBILITY
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Social obligation
Social reaction
Social responsiveness
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8.8 TO WHOM IS BUSINESS RESPONSIBLE?
A stakeholder is “any individual or group who can affect or is affected by the actions, decisions, policies or goals
of the organisation”.
• Primary stakeholders: these are stakeholders identified in the micro and market environments.
The primary stakeholders who are affected by social involvement of enterprises include; Owners,
shareholders, employees, suppliers and customers
• Secondary stakeholders; these are stakeholders present in the macro environment of the organisation
Secondary stakeholders include the local community, the country as a whole and the international environment.
Critically analyse how good corporate governance can benefit the
organisation, the economy, the environment, and society.
Sustainability reporting
A sustainability report is a report published by a company or organization about the economic, environmental,
and social impacts caused by its everyday activities. A sustainability report also presents the organization's values
and governance model and demonstrates the link between its strategy and its commitment to a sustainable
global economy.
Sustainability reporting can help organizations to measure, understand and communicate their economic,
environmental, and social and governance performance, and then set goals, and manage change more
effectively. A sustainability report is the key platform for communicating sustainability performance and impacts
– whether positive or negative.
Sustainability reporting can be considered as synonymous with other terms for non-financial reporting; triple
bottom line reporting, corporate social responsibility (CSR) reporting, and more. It is also an intrinsic element of
integrated reporting; a more recent development that combines the analysis of financial and non-financial
performance.
8.9 CORPORATE GOVERNANCE
CP is the system of reference according to which organisations are managed and controlled and from which the
organisation’s values and ethics emerge.
According to Prof king, they believe that this has been achieved because of focus on the importance of conducting
business reporting annually in an integrated manner i.e., putting the financial results in perspective by also
reporting on;
•
•
How a company has both positively and negatively impacted on the economic life of the community
in which it operated during the year under review?
How the company intends to enhance those positive aspects and eradicate or ameliorate the negative
aspects in the year ahead
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There is no standard recipe for moral corporate governance, but there are some guidelines than can be adjusted
to the specific needs of each organisation:
• Appoint to the board, people who are sensitive to the moral performance of business
• Set moral objectives
• The moral objectives of the organisation must be visible to both internal and external stakeholders
• The board should provide guidelines about how managers should use their authority to integrate
moral behaviour in an organisation
• The board must ensure that procedures are in pace to introduce all employees to and train them in
moral behaviour in the organisation
• The board should monitor moral behaviour in the organisation
• The board should institute moral compliance procedures to check whether employees comply with or
deviate from the stated moral objectives
• The board should report on the moral performance of the organisation to all its stakeholders
• External auditors can verify the reliability of the board ‘s report on moral performance and their
assessment of future risks
THE KING IV REPORT AND ITS PARTS
The King IV Report consists of seven parts:
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•
Part 1: Glossary of Terms. This was placed upfront as an understanding of the meaning of terms used in
King IV is essential for its application.
Part 2: Fundamental Concepts. This part contains the fundamental concepts and philosophy on which King
IV is based, the distinguishing features of King IV, and how the various developments in corporate
governance locally and internationally since King III came into effect in 2009 have influenced the principles
and practices in the Code.
Part 3: King IV Application and Disclosure. This explains the application regime of King IV, and where and
how King IV disclosures need to be made.
Part 4: King IV on a Page. This part constitutes an executive summary of King IV and demonstrates how all
the parts form an integrated whole.
Part 5: King IV Code on Corporate Governance. Part 5 is the heart of the King IV Report, and consists of the
governance outcomes, principles, and practices.
Part 6: Sector Supplements. Sector supplements are provided for municipalities, small and medium-sized
enterprises (SMEs), state-owned enterprises (SOEs), non-profit organisations (NPOs) and retirement funds.
Part 7: Content Development Process and King Committee
DIFFERENCES BETWEEN KING III AND KING IV
King IV’s principles and practices do not differ substantially from King III; the main difference between the two lies in
King IV’s approach. Specific points to notice include:
• King III addressed boards and companies while King IV addresses governing bodies and organisations
generally to be more inclusive.
• Structurally, the King IV Code is built on practices implemented to support principles which lead towards
governance outcomes. In King III, this differentiation between practices, principles and outcomes is not so
distinct.
• The application regime of King III was “apply or explain” whereas for King IV it is “apply and explain”.
• King IV addresses how to apply practices proportionally, something that King III only implied.
• King IV includes supplements to assist various types of organisations to implement King IV. These
organisations are municipalities, SMEs, SOEs, NPOs and retirement funds.
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Read the case study below and answer the question that follows:
China Sky Reprimanded for Lack of Compliance
On 15 December, China Sky issued a statement on SGXNET saying it
would not appoint a special auditor as directed by SGX, maintaining that
such a move was unwarranted and not in the best interests of the
company and its shareholders. China Sky argued that while the SGX had
regarded the transactions as unusual, there had been no express
allegations of accounting irregularities or fraudulent practices. Hence,
China Sky found that the usual reasons that gave rise to concerns
necessitating the appointment of special auditors for companies listed
on the SGX were absent and “[accused] the Exchange of taking an
intimate interest in the corporate and strategic management and the
day-to-day operations of the Company”.
On 16 December, SGX issued a statement reprimanding China Sky and
each of its directors for persistently failing to comply with directives from
the exchange “despite every opportunity offered to the company and its
board”. This was in response to the queries from the SGX to the company
that were met with contradictory statements and disclosures which
were not substantiated.
China Sky released a string of responses to SGX’s reprimand on 21
December 2017, saying that the reprimand was “issued without any
merit and clearly showed a total disregard of the interests of the
shareholders.” China Sky added that it was shocked by this directive, as
it had responded to a series of demands for information and queries
from the SGX officers since April 2015.
Source: http://governanceforstakeholders.com
Questions:
1.1 Examine the importance of corporate governance.
1.2 Advise China Sky on the principles of good corporate governance.
1.3 Explain the role of the board of directors in corporate
governance.
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TOPIC 9
NEW CHALLENGES FOR MANAGEMENT
After studying this topic, you should be able to:
• Cite reasons why organisations change
• Identify and analyse the forces that stimulate change in
organisations
• Defend the statement that bureaucracy fails to provide for
the needs of modern organisations
• Expound on the features of the new emerging organisation
• Evaluate the challenges faced by managers of the new
organisation
9.1 INTRODUCTION
Managers meet radical change in the workplace and these pose as challenges. Some of these changes are so
revolutionary that organisational theorists are talking about a new king of emerging
9.2 FORCES THAT CAUSE ORGANISATIONS TO CHANGE
Why do organisations change?
Globalisation and global economy
The global organisation is a sequence of several new and sophisticated forces influencing the world economy
over the last decade, and these forces include;
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International transportation and communications have become cheaper
An increasing number of organisations can copy and apply new product or process technologies
Markets are becoming more homogenous because consumers are acquiring tastes for foreign
products
Cost structures differ from country to country making it possible for organisations to take advantage
of lower cost locations for support activities or production
Cross border learning increases the possibility of organisations expanding their capabilities
Financial markets are open 24 hours a day around the world
Global standards and regulations for trade and commerce, finance, products and services have
emerged
Advance in technology
Radical transformation of the world of work
Increased power and demands of the customer
Customers are now able to choose the products and services they want in terms of: Cost; quality; time;
service; innovation and customisation
Growing importance of intellectual capital and learning
Intellectual capital is the sum and synergy of an organisation’s knowledge, relationships, experience, discoveries,
processes, innovations, market presence, and influence on the community. Three major categories of IC include;
structural, customer and human capital New roles and expectations of workers
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The changing job requirements of workers;
Industrial era
Knowledge era
Repetitive skills
Knowledge to deal with the unexpected
Depending on memory and facts
Being spontaneous and creative
Risk avoidance
Risk taking
Focussing on politics and procedures
Collaborating with people
Do an internet search on a global South African organisation. Analyse the
major changes the organisation faced during the last decade and the
challenges it presented to the managers of the organisation.
9.3 THE CLASSICAL MODEL OF THE FORMAL ORGANISATION
Weber’s model provides a blueprint of how an entire organisation could operate by subscribing to seven
desirable characteristics such as;
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•
•
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•
Division of labour
Hierarchy of authority
Rules and procedures
Impersonality
Employee selection and promotion
9.4 THE NEW ORGANISATION MODEL
The new organisation model has characteristics that differ substantially from those embodied in the bureaucracy.
It is important to remember that the new organisation is by no means the prototype of all modern organisations
– few if any real-life organisations possess all the features of the model.
The following are specific features of the new organisation:
• Global
• Networked
• Flatter and learn
• Flexible
• Workforce diversity
Analyse how can contemporary organisations have to respond to the
changing needs of customers and employees to compete with local and
global organisations.
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Read the case study below and answer the question that follows:
APPLE’S PROFITABLE BUT RISKY STRATEGY
Early beginnings
To understand any company’s strategy, it is helpful to begin by looking
back at its roots. Founded in 1976, Apple built its early reputation on
innovative personal computers that were particularly easy for customers
to use and as a result were priced higher than those of competitors. The
inspiration for this strategy came from a visit by the founders of the
company – Steven Jobs and Steven Wozniack – to the Palo Alto research
laboratories of Xerox in 1979. They observed that Xerox had developed
an early version of a computer interface screen with the drop-down
menus that are widely used today on all personal computers. Most
computers in the late 1970s still used complicated technical interfaces
for even simple tasks like typing – still called ‘word-processing’ at the
time.
Jobs and Wozniack took the concept back to Apple and developed their
own computer – the Apple Macintosh (Mac) – that used this consumerfriendly interface. The Macintosh was launched in 1984. However, Apple
did not sell to, or share the software with, rival companies. Over the next
few years, this non-co-operation strategy turned out to be a major
weakness for Apple.
Battle with Microsoft
Although the Mac had some initial success, its software was threatened
by the introduction of Windows 1.0 from the rival company Microsoft,
whose chief executive was the well-known Bill Gates. Microsoft’s
strategy was to make this software widely available to other computer
manufacturers for a license fee – quite unlike Apple. A legal dispute
arose between Apple and Microsoft because Windows had many onscreen similarities to the Apple product. Eventually, Microsoft signed an
agreement with Apple saying that it would not use Mac technology in
Windows 1.0. Microsoft retained the right to develop its own interface
software like the original Xerox concept.
Apple’s innovative products
Unlike Microsoft with its focus on a software-only strategy, Apple
remained a full-line computer manufacturer from that time, supplying
both the hardware and the software. Apple continued to develop various
innovative computers and related products. Early successes included the
Mac2 and PowerBooks along with the world’s first desktop publishing
programme – PageMaker. This latter remains today the leading
programme of its kind. It is widely used around the world in publishing
and fashion houses. It remains exclusive to Apple and means that the
company has a specialist market where it has real competitive advantage
and can charge higher prices.
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Not all Apple’s new products were successful – the Newton personal
digital assistant did not sell well. Apple’s high price policy for its products
and difficulties in manufacturing also meant that innovative products
like the iBook had trouble competing in the personal computer
marketplace.
So, why was the Apple strategy risky?
By 2007, Apple’s music player – the iPod – was the premium-priced,
stylish market leader with around 60 per cent of world sales and the
largest single contributor to Apple’s turnover. Its iTunes download
software had been re-developed to allow it to work with all Windowscompatible computers (about 90 per cent of all PCs) and it had around
75 per cent of the world music download market, the market being
worth around US$1000 million per annum. Although this was only some
6 per cent of the total recorded music market, it was growing fast. The
rest of the market consisted of sales of CDs and DVDs direct from the
leading recording companies.
In 2007, Apple’s mobile telephone – the iPhone – had only just been
launched. The sales objective was to sell 10 million phones in the first
year: this needed to be compared with the annual mobile sales of the
global market leader, Nokia, of around 350 million handsets. However,
Apple had achieved what some commentators regarded as a significant
technical breakthrough: the touch screen. This made the iPhone
different in that its screen was no longer limited by the fixed buttons and
small screens that applied to competitive handsets. As readers will be
aware, the iPhone went on to beat these earlier sales estimates and was
followed by a new design, the iPhone 4, in 2010.
Apple’s competitive reaction
As a short-term measure, Apple hit back by negotiating supply contracts
for flash memory for its iPod that were cheaper than its rivals. Moreover,
it launched a new model, the iPhone 4 that made further technology
advances. Apple was still the market leader and was able to demonstrate
major increases in sales and profits from the development of the iPod
and iTunes. To follow up this development, Apple launched the Apple
Tablet in 2010 – again an element of risk because no one new how well
such a product would be received or what its function really was. The
second-generation Apple tablet was then launched in 2011 after the
success of the initial model. But there was no denying that the first Apple
tablet carried some initial risks for the company.
All during this period, Apple’s strategic difficulty was that other powerful
companies had also recognised the importance of innovation and
flexibility in the response to the new markets that Apple itself had
developed. For example, Nokia itself was arguing that the markets for
mobile telephones and recorded music would converge over the next
five years. Nokia’s Chief Executive explained that much greater strategic
flexibility was needed as a result: ‘Five or ten years ago, you would set
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your strategy and then start following it. That does not work anymore.
Now you have to be alerted every day, week and month to renew your
strategy.’
If the Nokia view was correct, then the problem for Apple was that it
could find its market-leading position in recorded music being overtaken
by a more flexible rival – perhaps leading to a repeat of the Apple failure
20 years earlier to win against Microsoft. But Apple had at last found the
best, if risky, strategy.
Source: Adapted from: http://www.global-strategy.net
Questions:
1.1 Critically analyse with predictions on the problems with predicting
how the market and the competition will change over the next few
years and analyse the implications of these for strategy development?
1.2 Highlight the lessons that other companies can learn from
Apple’s strategies over the years?
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TOPIC 10:
TYPICAL EXIMINATION QUESTIONS
RICHFIELD GRADUATE INSTITUTE OF TECHNOLOGY (PTY) LTD
HIGHER EDUCATION AND TRAINING
FACULTY OF LEADERSHIP AND BUSINESS ADMINISTRATION
BUSINESS MANAGEMENT 622
2ND SEMESTER NATIONAL EXAM
DURATION:
MARKS: 100
DATE:
EXAMINER:
INTERNAL MODERATOR:
EXTERNAL MODERATOR:
This paper consists of 5 questions of 9 pages including this page.
PLEASE NOTE THE FOLLOWING:
1. Ensure that you are writing the correct examination paper, and that there are no missing pages.
2. You are obliged to enter your student details on the answer sheet. The answer sheet provided are the property
of Richfield Graduate Institute of Technology (Pty) Ltd and all extra sheets must be handed to the invigilator
before you leave the examination room.
3. If you are found copying or if there are any documents / study material in your possession, or writing on parts of
your body, tissue, pencil case, desk etc. your answer sheet will be taken away from you and endorsed
accordingly. Appropriate disciplinary measures will be taken against you for violating the code of conduct of
Richfield Graduate Institute of Technology (Pty) Ltd Examinations Board. Therefore, if any of these materials are
in your possession you are requested to hand these over to the invigilator before the official commencement of
this paper.
4. The question paper consists of 3 sections.
4.1. Sections A and B are compulsory.
4.2. Section C comprises of 3 questions; you are required to answer any 2 questions.
NUMBERS
1
2
3
4
5
SUGGESTED TIME REQUIRED TO ANSWER THIS QUESTION PAPER
QUESTIONS
MARKS
TIME IN MINUTES
SECTION A: MULTIPLE CHOICE QUESTIONS COMPULSORY
Question One
30
SECTION B: SHORT QUESTIONS COMPULSORY
Question Two
30
SECTION C: ANSWER ANY TWO QUESTIONS
Question Three
20
Question Four
20
Question Five
20
TOTAL
100
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35
35
25
25
25
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SECTION A: ANSWER ALL QUESTIONS
QUESTION ONE
(30 MARKS)
Four (4) alternatives are provided for each of the following questions. Choose the correct alternative for each of
the questions/statements and write down the alphabet corresponding to your choice next to the question number
in the answer sheet provided.
1.1 Former South African President Nelson Mandela, among others, had a huge impact in transforming the country
from the segregation regime to a more inclusive and democratic state with his charming and revered personality.
Which form of leadership can he be associated with?
(1)
A. Substitutes for leadership
B. Attribution theory of leadership
C. Female leadership
D. Charismatic leadership
1.2 Power obtained from intimate knowledge of technical aspects of a subject or organisation is __. (1)
A. coercive power
B. legitimate
C. referent
D. expertise power
1.3 The following not part of ethical political behaviours that divided into three related and overlapping groups:
strategies and tactics aimed at ____________.
(1)
A. directly gaining power
B. building relationships with superiors and co-workers
C. avoiding political blunders.
D. a caveat
1.4 Management is essentially about getting things done through other ___________to attain the mission and
goals of the organisation.
(1)
A. material
B. equipment
C. people
D. capital
1.5 Which of the following is not an importance of human dimension in management?
A. Personality
B. People are the lifeblood of an organisation
C. Knowledge workers are at the centre of success for many organisations
D. People are part of a social system
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(1)
1.6 A ______ is defined as a small number of people with complementary skills, who are committed to a common
purpose, set of performance goals, and approach for which they hold themselves mutually accountable.
(1)
A. group
B. team
C. formal group
D. informal group
1.7 A team that is given the authority for their own planning, scheduling, monitoring, and staffing is/are an
example of a ____________.
(1)
A. task team
B. formal group
C. self-managed team
D. quality circle
1.8 When everyone in a team defines the rationale, significance, and specific duties of his or her role with the
inputs of other team members, s/he is engaged in __________.
(1)
A. role negotiation technique
B. role analysis technique
C. responsibility charting
D. planning
1.9 A series of unstructured meetings with no formal agenda, where participants share observations and feelings
about team processes can be considered part of _________.
(1)
A. self-assessment inventories
B. structured feedback procedures
C. sensitivity training
D. synergies
1.10 Referent power is based on the subordinate’s perception that the leader has a right to exercise influence
because of the leader’s _______________.
(1)
A. role or position within the organisation
B. personal charisma
C. ability to punish or reward
D. expertise and knowledge
1.11 Delegation creates a special manager-subordinate relationship based on ______.
A. authority, power, control
B. knowledge, skill, attitude
C. power, ability, willingness
D. authority, responsibility, accountability
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(1)
1.12 Which of the following is a possible reason for a lack of delegation?
(1)
A. The manager fears the subordinate will be too good a job and show the manager in a bad light
B. The manager has had no guidance support and training
C. The manager has no terms of reference
D. Planning
1.13 Encouraging, harmonising, and setting group standards are activities associated with which of the following?
(1)
A. Task roles
B. Maintenance roles
C. Personal roles
D. Power roles
1.14 Common goals, success experience, high status, and cooperation among members are part of the set of eight
factors that facilitate ____________.
(1)
A. group cohesiveness
B. group membership
C. group storming
D. group adjourning
1.15 A state in groups where pressures for conformity are so great that they dominate member's abilities to
realistically appraise alternative decision options is known as _______.
(1)
A. social loafing
B. group conflict
C. social norming
D. groupthink
1.16 The tendency for individuals to exert less effort when working in a group than when working individually is
called _______.
(1)
A. social loafing
B. synergy
C. groupthink
D. organising
1.17 In Adair’s approach, needs such as training the group, setting standards, and maintaining discipline, and
appointing sub-leaders may be called _____________.
(1)
A. team functions
B. work functions
C. task functions
D. individual functions
1.18 On what belief are contingency theories of leadership based?
A. That there is a single style of leadership appropriate to all managers
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(1)
B. That there is no single style of leadership appropriate to all situations
C. That there is a single style of leadership appropriate to all situations
D. Market share
1.19 Which of the following statements is incorrect about formal group?
(1)
A. It is also known as the work group
B. It is a unit of two or more people who interact to share information and make decisions that will help each group
m ember to perform within his or her own area of responsibility
C. It is the group that develops out of the day-to-day activities and interactions of people working in the same
organisation
D. Formal groups are divided into command and task groups
1.20 Choose the correct alternative for each of the questions/statements and write down the alphabet
corresponding to your choice next to the question number in the answer sheet provided. Budgeting is
associated with the management functions of planning and _____________.
(1)
A. directing
B. organizing
C. leading
D. controlling
1.21 According to the concept of emotional intelligence, self-awareness refers to ______.
A. self-consciousness
B. empathy
C. being in touch with one’s strengths and weaknesses
D. self-assertiveness
(1)
1.22 Which of the following is NOT a criterion used to classify groups?
A. Membership
B. Strength of social tie
C. Number of members
D. Type of contact
(1)
1.23 Which type of group's presumed perspectives or values are being used by an individual as the basis for his or
her current behaviour?
(1)
A. Cohort group
B. Generation group
C. Community group
D. Reference group
1.24 Which group classification variable refers to the closeness and intimacy of the group linkages? (1)
A. Membership
B. Strength of social tie
C. Number of members
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D. Type of contact
1.25 Which option is NOT an approach to theoretical leadership studies?
A. Behavioural
B. Charismatic
C. Dynamic
D. Non-committal
(1)
1.26 Identify the option which BEST defines a democratic leader.
A. Is very consultative
B. Is a know it all individual
C. Fearful
D. Selfish
(1)
1.27 _______ refers to those things which guide people in their day-to-day endeavours and influence their conduct.
(1)
A. Personality
B. Ability
C. Values
D. Learning
1.28 Someone who belies in respecting everyone in life regardless of their status in society of community is an
example of _______.
(1)
A. personal value
B. attitude
C. perception
D. organising
1.29 A situation where individuals are expected to contribute to the realisation of the organisation’s objectives and
in return gets valuable benefits from the organisation is an example of a(n)____.
(1)
A. corporate citizenship
B. organisational citizenship
C. psychological contract
D. perception
1.30 Which of the following will NOT result in employees becoming effective team members? (1)
A. Realigning reward systems to reward teams and individuals
B. Training existing and new employees to become effective team members
C. Following a strict selection process to ensure that the organisation employs the right people
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D. Rewarding teams for in inputs not outcomes
SECTION B: COMPULSORY
(30 MARKS)
QUESTION TWO
(30 MARKS)
Read the following case study and answer the questions that follow:
Brian Horlock: Aero Tech Incorporated (ATI) takes a proactive approach to diversity
Brian Horlock, Chief Executive Officer (CEO) of ATI since 1996, has gained the admiration and respect of many diversity
scholars and diversity advocates. Through his leadership, ATI – a highly diversified, advanced-technology corporation
with approximately R100 billion in annual sales and approximately 110 000 employees – has one of the most
successful diversity programmes in South Africa today. Harlock is most admired for his efforts at creating a work
environment that fosters greater awareness and sensitivity to the needs of ATI’s diverse employee population. These
efforts include crafting a “mission success” statement that clearly delineates the corporation’s commitment to
diversity and also hiring executives with the skills and commitment to implementing the corporation’s diversity
initiates.
Another diversity initiative of ATI has been the creation of ATI has been the creation of employee organisations.
Examples of social support networks of this kind include members of the physical challenged groups at ATI (GLOBAL)
organisation, and the Previously Disadvantaged Support Team (PDST). Social networks such as these are important
because they tailor their training and mentoring to the specific issues of a particular subculture, says Mike Botha,
research specialist with the Missiles and Space division.
Dimakatso Molefe, Director of Equal Employment Opportunity Office (EEOO), observed that the specialised unit of
Missiles and Space was understaffed, and proactively initiated a skills audit and engaged Botha to build capacity in
the unit. She was shocked at the realisation that the whole unit comprises only five per cent blacks and females of its
one thousand employees. She was even more surprised to realise to realise that neither of these groupings from any
part of specialists nor management in the unit. After a lengthy engagement with Botha, he indicated to her that they
only recruit the best for the unit and due to the demanding nature of the unit, he prefers to maintain like-mindedness
to ensure continuity of performance excellence.
This audit is threatening the diversity leadership that Horlock and his team had for so long enjoyed.
Questions:
1.4 Explore ways which ATI has taken a proactive approach toward supporting and encouraging diversity?
(10)
1.5 Identify and discuss diversity dimensions from the case study.
(10)
1.6 How would you suggest that Ms Molefe move forward in addressing findings of her report in line with Horlock’s
vision?
(10)
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SECTION C: ANSWER ANY TWO QUESTIONS
(40 MARKS)
QUESTION THREE
(20 MARKS)
Strategic change management is the process of managing change in a structured, thoughtful way in order to meet
organizational goals, objectives, and missions. Change is necessary for organizations to continue to thrive and meet
and exceed the competition of industry competitors.
Identify the organisation of your choice and advise the Top Management on the ways and strategies overcome
resistance to change.
QUESTION FOUR
(20 MARKS)
Organisations in South Africa have generally not been highly successful in managing women and cultural diversity in
the workplace. Managing the issues of diversity and multiculturalism is of high importance in organisational
success.
Recommend approaches that can be employed by managers in managing diversity in an organisation and give
relevant examples to support your answer.
QUESTION FIVE
(20 MARKS)
The control process involves carefully collecting information about a system, process, person, or group of people to
make necessary decisions about each.
Critically analyse the steps in the control process. Enhance your analysis with practical examples. (20)
END OF PAPER – ALL THE BEST!!!
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TOPIC 11: TYPICAL EXIMINATION MEMO
RICHFIELD GRADUATE INSTITUTE OF TECHNOLOGY (PTY) LTD
HIGHER EDUCATION AND TRAINING
FACULTY OF LEADERSHIP AND BUSINESS ADMINISTRATION
BUSINESS MANAGEMENT 622
MEMO
2ND SEMESTER NATIONAL EXAM
DURATION:
MARKS: 100
DATE:
EXAMINER:
INTERNAL MODERATOR:
EXTERNAL MODERATOR:
This paper consists of 5 questions of 10 pages including this page.
PLEASE NOTE THE FOLLOWING:
5. Ensure that you are writing the correct examination paper, and that there are no missing pages.
6. You are obliged to enter your student details on the answer sheet. The answer sheet provided are the property
of Richfield Graduate Institute of Technology (Pty) Ltd and all extra sheets must be handed to the invigilator
before you leave the examination room.
7. If you are found copying or if there are any documents / study material in your possession, or writing on parts
of your body, tissue, pencil case, desk etc. your answer sheet will be taken away from you and endorsed
accordingly. Appropriate disciplinary measures will be taken against you for violating the code of conduct of
Richfield Graduate Institute of Technology (Pty) Ltd Examinations Board. Therefore, if any of these materials
are in your possession you are requested to hand these over to the invigilator before the official
commencement of this paper.
8. The question paper consists of 3 sections.
8.1. Sections A and B are compulsory.
8.2. Section C comprises of 3 questions; you are required to answer any 2 questions.
NUMBERS
1
2
3
4
5
SUGGESTED TIME REQUIRED TO ANSWER THIS QUESTION PAPER
QUESTIONS
MARKS
TIME IN MINUTES
SECTION A: MULTIPLE CHOICE QUESTIONS COMPULSORY
Question One
30
SECTION B: SHORT QUESTIONS COMPULSORY
Question Two
30
SECTION C: ANSWER ANY TWO QUESTIONS
Question Three
20
Question Four
20
Question Five
20
TOTAL
100
95
35
35
25
25
25
120
SECTION A: ANSWER ALL QUESTIONS
QUESTION ONE
(30 MARKS)
Four (4) alternatives are provided for each of the following questions. Choose the correct alternative for each of
the questions/statements and write down the alphabet corresponding to your choice next to the question number
in the answer sheet provided.
1.1 Former South African president Nelson Mandela, among others, had a huge impact in transforming the country
from the segregation regime to a more inclusive and democratic state with his charming and revered personality.
Which form of leadership can he be associated with?
(1)
A. Substitutes for leadership
B. Attribution theory of leadership
C. Female leadership
D. Charismatic leadership
ANSWER: D
1.2 Power obtained from intimate knowledge of technical aspects of a subject or organisation is __.
A. Coercive power
B. Legitimate
C. Referent
D. Expertise power
ANSWER: D
(1)
1.3 The following not part of ethical political behaviours that divided into three related and overlapping groups:
strategies and tactics aimed at ____________.
(1)
A. Directly gaining power
B. Building relationships with superiors and co-workers
C. Avoiding political blunders.
D. A Caveat
ANSWER: D
1.4 Management is essentially about getting things done through other ___________to attain the mission and
goals of the organisation.
(1)
A. Material
B. Equipment
C. People
D. Capital
ANSWER: C
1.5 Which of the following is not an importance of human dimension in management?
A. Personality
B. People are the lifeblood of an organisation
C. Knowledge workers are at the centre of success for many organisations
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(1)
D. People are part of a social system
ANSWER: A
1.6 A ______ is defined as a small number of people with complementary skills, who are committed to a common
purpose, set of performance goals, and approach for which they hold themselves mutually accountable.
(1)
A. Group
B. Team
C. Formal group
D. Informal group
ANSWER: C
1.7 A team that is given the authority for their own planning, scheduling, monitoring, and staffing is/are an
example of a ____________.
(1)
A. task team
B. formal group
C. self-managed team
D. quality circle
ANSWER: C
1.8 When each individual in a team defines the rationale, significance, and specific duties of his or her role with the
inputs of other team members, s/he is engaged in __________.
(1)
A. role negotiation technique.
B. role analysis technique.
C. responsibility charting.
D. planning
ANSWER: B
1.9 A series of unstructured meetings with no formal agenda, where participants share observations and feelings
about team processes can be considered part of _________.
(1)
A. self-assessment inventories.
B. structured feedback procedures.
C. sensitivity training.
D. synergies.
ANSWER: C
1.10 Referent power is based on the subordinate’s perception that the leader has a right to exercise influence
because of the leader’s _______________.
(1)
A. role or position within the organisation
B. personal charisma
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C. ability to punish or reward
D. expertise and knowledge
ANSWER: C
1.11 Delegation creates a special manager-subordinate relationship based on:
A. Authority, power, control
B. Knowledge, skill, attitude
C. Power, ability, willingness
D. Authority, responsibility, accountability
ANSWER: D
(1)
1.12 Which of the following is a possible reason for a lack of delegation?
A. The manager fears the subordinate will be too good a job and show the manager in a bad light
B. The manager has had no guidance support and training
C. The manager has no terms of reference
D. Planning
ANSWER: A
(1)
1.13 Encouraging, harmonising, and setting group standards are activities associated with which of the following?
(1)
A. Task Roles
B. Maintenance Roles
C. Personal Roles
D. Power Roles
ANSWER: B
1.14 Common goals, success experience, high status, and cooperation among members are part of the set of eight
factors that facilitate ____________.
(1)
A. Group Cohesiveness
B. Group Membership
C. Group Storming
D. Group Adjourning
ANSWER: A
1.15 A state in groups where pressures for conformity are so great that they dominate member's abilities to
realistically appraise alternative decision options is known as _______.
(1)
A. Social Loafing
B. Group Conflict
C. Social Norming
D. Groupthink
ANSWER: C
1.16 The tendency for individuals to exert less effort when working in a group than when working individually is
called _______.
(1)
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A. Social loafing
B. Synergy
C. Groupthink
D. Organising
ANSWER: C
1.17 In Adair’s approach, needs such as training the group, setting standards, and maintaining discipline, and
appointing sub-leaders may be called _____________.
(1)
A. Team functions
B. Work functions
C. Task functions
D. Individual functions
ANSWER: A
1.18 On what belief are contingency theories of leadership based?
A. That there is a single style of leadership appropriate to all managers
B. That there is no single style of leadership appropriate to all situations
C. That there is a single style of leadership appropriate to all situations
D. Market share
ANSWER: B
(1)
1.19 Which of the following statements is incorrect about formal group?
(1)
A. It is also known as the work group
B. It is a unit of two or more people who interact to share information and make decisions that will help each group
m ember to perform within his or her own area of responsibility.
C. It is the group that develops out of the day-to-day activities and interactions of people working in the same
organisation
D. Formal groups are divided into command and task groups
ANSWER: C
1.20 Choose the correct alternative for each of the questions/statements and write down the alphabet
corresponding to your choice next to the question number in the answer sheet provided. Budgeting is
associated with the management functions of planning and _____________.
(1)
A. Directing
B. Organizing
C. Leading
D. Controlling
ANSWER: D
1.21 According to the concept of emotional intelligence, self-awareness refers to ______.
A. Self-consciousness
B. Empathy
C. Being in touch with one’s strengths and weaknesses
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(1)
D. Self-assertiveness
ANSWER: C
1.22 Which of the following is NOT a criterion used to classify groups?
A. Membership
B. Strength of social tie
C. Number of members
D. Type of contact
ANSWER: C
(1)
1.23 Which type of group's presumed perspectives or values are being used by an individual as the basis for his or
her current behaviour?
(1)
A. Cohort group
B. Generation group
C. Community group
D. Reference group
ANSWER: D
1.24 Which group classification variable refers to the closeness and intimacy of the group linkages? (1)
A. Membership
B. Strength of social tie
C. Number of members
D. Type of contact
ANSWER: B
1.25 Which option is NOT an approach to theoretical leadership studies?
A. Behavioural
B. Charismatic
C. Dynamic
D. Non-committal
ANSWER: D
(1)
1.26 Identify the option which BEST defines a democratic leader.
A. Is very consultative
B. Is a know it all individual
C. Fearful
D. Selfish
ANSWER: A
(1)
1.27 _______ refers to those things which guide people in their day-to-day endeavours and influence their conduct.
(1)
A. Personality
B. Ability
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C. Values
D. Learning
ANSWER: C
1.28 Someone who belies in respecting everyone in life regardless of their status in society of community is an
example of _______.
(1)
A. personal value
B. attitude
C. perception
D. organising
ANSWER: C
1.29 A situation where individuals are expected to contribute to the realisation of the organisation’s objectives and
in return gets valuable benefits from the organisation is an example of a(n)____.
(1)
A. Corporate citizenship
B. Organisational citizenship
C. Psychological contract
D. Perception
ANSWER: C
1.30 Which of the following will NOT result in employees becoming effective team members?
A. Realigning reward systems to reward teams and individuals
B. Training existing and new employees to become effective team members
C. Following a strict selection process to ensure that the organisation employs the right people
D. Rewarding teams for in inputs not outcomes
ANSWER: D
SECTION B: COMPULSORY
(30 MARKS)
QUESTION TWO
(30 MARKS)
(1)
Read the following case study and answer the questions that follow:
Brian Horlock: Aero Tech Incorporated (ATI) takes a proactive approach to diversity
Brian Horlock, Chief Executive Officer (CEO) of ATI since 1996, has gained the admiration and respect of many diversity
scholars and diversity advocates. Through his leadership, ATI – a highly diversified, advanced-technology corporation
with approximately R100 billion in annual sales and approximately 110 000 employees – has one of the most
successful diversity programmes in South Africa today. Harlock is most admired for his efforts at creating a work
environment that fosters greater awareness and sensitivity to the needs of ATI’s diverse employee population. These
efforts include crafting a “mission success” statement that clearly delineates the corporation’s commitment to
diversity and also hiring executives with the skills and commitment to implementing the corporation’s diversity
initiates.
Another diversity initiative of ATI has been the creation of ATI has been the creation of employee organisations.
Examples of social support networks of this kind include members of the physical challenged groups at ATI (GLOBAL)
organisation, and the Previously Disadvantaged Support Team (PDST). Social networks such as these are important
101
because they tailor their training and mentoring to the specific issues of a particular subculture, says Mike Botha,
research specialist with the Missiles and Space division.
Dimakatso Molefe, Director of Equal Employment Opportunity Office (EEOO), observed that the specialised unit of
Missiles and Space was understaffed, and proactively initiated a skills audit and engaged Botha in an attempt to build
capacity in the unit. She was shocked at the realisation that the whole unit comprises only five per cent blacks and
females of its one thousand employees. She was even more surprised to realise to realise that neither of these
groupings from any part of specialists nor management in the unit. After a lengthy engagement with Botha, he
indicated to her that they only recruit the best for the unit and due to the demanding nature of the unit, he prefers
to maintain like-mindedness to ensure continuity of performance excellence.
This audit is threatening the diversity leadership that Horlock and his team had for so long enjoyed.
Questions:
1.7 In what ways has ATI taken a proactive approach toward supporting and encouraging diversity? (10)
1.8 Can you identify any diversity dimensions from the case study? Explain.
(10)
1.9 How would you suggest that Ms Molefe move forward in addressing findings of her report in line with Horlock’s
vision?
(10)
Lecturers to use their discretion when marking this question
SECTION C: ANSWER ANY TWO QUESTIONS
(40 MARKS)
QUESTION THREE
(20 MARKS)
Strategic change management is the process of managing change in a structured, thoughtful way in order to meet
organizational goals, objectives, and missions. Change is necessary for organizations to continue to thrive and meet
and exceed the competition of industry competitors.
Identify the organisation of your choice and advise the Top Management on the ways and strategies overcome
resistance to change.
• Overcome opposition
• Implement change in several stages
• Effectively engage employees
• Communicate change effectively
Other marks for explanation and examples
QUESTION FOUR
(20 MARKS)
Organisations in South Africa have generally not been highly successful in managing women and cultural diversity in
the workplace. Managing the issues of diversity and multiculturalism is of high importance in organisational
success.
Recommend approaches that can be employed by managers in managing diversity in an organisation and give
relevant examples to support your answer.
•
The golden ruler approach
102
According to this approach, it is best to treat everyone in the same way:  “treat others you want to be treated.”
Thus good intentions of not treating other people badly inspired this theory. 
• The “right the wrongs” approach
This approach takes the form of affirmative action.  “We don’t have enough of the previously disadvantaged people,
such as black people and women- we would better hire some, to make up for all these years of negligence.” 
• The “value of differences” approach
This approach recognises differences and acknowledges that they exist but does not require people to be assimilated
into the dominant culture. It allows for individual mosaic of people to create the aggregate picture of an
organisation. 
Other marks for explanation and examples
QUESTION FIVE
(20 MARKS)
The control process involves carefully collecting information about a system, process, person, or group of people to
make necessary decisions about each.
Critically analyse the steps in the control process. Enhance your analysis with practical examples. (20)
•
•
•
•
Setting standards against actual performance 
Measuring actual performance 
Evaluating any deviations that might occur 
Taking steps to rectify deviations 
Other marks for explanation and examples 
END OF PAPER – ALL THE BEST!!!
103