24 June 2006

Organizational Climate and Work Motivation

Beyond doubt, the primary goal of business and industry is to create wealth – to achieve better returns on investment so that larger economic gains can be shared by employers, employees, and consumers. However, creation of wealth is not spontaneous. The goals of human organization are to be met in order to achieve the economic objectives. Organizations normally provide large number of material rewards, such as attractive salary and other benefits and comfortable working conditions. The implicit assumption underlying this approach is that the contented work force is better producing. This assumption has been seriously questioned in a number of studies1. Thus, organizations should evolve more ambitious schemes helpful for the realization of employee potential and morale.

In order to achieve this, an understanding of the conditions in an organization having bearing on employee morale and their motivation (desire) to work is necessary. Keeping this in view, this paper discusses some of the conditions in organizations under the headings: Organizational Climate; Socio-Cultural System of Employee Needs; Work Motivation; Organizational Climate Factors and Opportunities for Need Satisfaction and Need Dissatisfaction; Organizational Typologies and Work Motivation; and Indian Industrial and Business Organizations.

Organizational Climate

Any business and industrial organization is a techno-socio-psychological system. Technology is a broad term used to include means and procedures instrumental in discharging the functions of an organization. The “means and procedures” depend upon the goals of the organization. Let us consider, for instance, a company manufacturing pharmaceuticals. Machines and other automatic and semi-automatic devices are used in preparing pharmaceutical products. Apart from these, other means and procedures necessary for achieving the goals of a pharmaceutical company are also adopted. The pharmaceutical company purchases chemicals and other raw materials, keeps inventory of items, checks the quality, meets the needs of the consumer, develops new processes and techniques, expands and diversifies, etc. These functions are discharged appropriately by adopting the so-called modern management practices. Use of Techniques such as quality control, research and development, work or output measurement, operations research are some of the technological tools used by industry.
The management practices which a company adopts are interdependent in nature. This means that a company which adopts one management practice (called modern) will generally be predisposed favourably towards a number of other practices. For instance, the management which undertakes a systematic analysis of its product market will equally be concerned with controlling the quality of production. Baumgartel2 in a study on penetration of modern management practices in Indian business organizations found that the companies which are innovative adopt a number of modern management practices.

As opposed to technological practices, there are practices related to management of personnel. Personnel practices ail proper administration of labour resources just as technological practices help rationalizing methods and procedures. Some of the personnel practices are proper hiring practices, employee development programmes, use of job evaluation in developing job descriptions, salary administration, and so on.

Just as the technological practices reflect part of the larger organizational culture, the personnel management practices also reflect the larger organizational culture. This part of the organizational culture is referred to as organizational climate.

Organizational Climate Defined.
In production organizations, there is the task (mechanical)-individual interaction. The person deals with machines, materials, or data and behaves in prescribed ways, as per the dictates of the organization. The organization builds up certain expectations, provides certain need fulfillment opportunities, and controls certain actual and potential behaviours. These socio-personal interaction processes constitute organizational climate.

Baumgartel3 defines organizational climate along the following lines. “Organizational climate is a product of leadership practices, communication patterns, enduring and systematic characteristics of the working relationships among persons and divisions of any particular organization.” He considers the following characteristics observable in organizational life as determining the developmental organizational climate. They are :

1. Growth-orientation
2. Providing opportunity to executives to use new knowledge
3. Willingness to train the executives
4. Stimulate and approve of innovations, and experimentation
5. Higher management being considerate of lower management
6. Giving freedom to set own performance goals
7. Involving various hierarchical levels in decision-making
8. Showing confidence in competence and judgement of top management
9. Having free and open communication within management
10. Using performance as major criteria for promotions
11. Existence of interpersonal trust among executives
12. Not having restrictions through rules and procedures
13. Arranging conferences and group discussions
14. Absence of interpersonal conflict and rivalry
15. Planning new products.

Technological Practices and Organizational Climate
Both technological practices and organizational climate reflect in organizational structure, administrative practices, and management control systems. Although one may find certain technological practices co-existing with certain organizational climate factors, such associations are not universal. This fact has come out in a number of Indian studies4. Baumgartel5 correlated items on modern management practices with items on Organizational climate and found them yielding low correlations. This implies that the technological practices and organizational climate are mutually independent or orthogonal in nature.

Technological practices contribute to mechanical aspects of organizational production, whereas favourable organizational climate contributes to work efficiency vis-à-vis employee motivation. This view is attested by Basu6 when he says that “investment and technology are by themselves insufficient for the growth of the economy, it is only when competent management is brought to bear on enterprises that the latter can achieve the objectives for which they were created”.

Organizational climate can be described in terms of some of the following characteristics7 :

1. Risk-Taking versus Complacent
2. Compromising versus Unilateral
3. Unstructuring versus Structuring
4. Warmth and Support versus Lack of Warmth and Support
5. Decentralization versus Centralization
6. Expert Persuasion versus Coercion
7. Problem Solving Approach versus Status Approach to Authority
8. Co-operative versus Competitive Approach
9. Employee-Task Fit versus Lack of Employee-Task Fit
10. Performance-based Reward versus Expediency Reward
11. High Performance Goals versus Low Performance Goals

Some of the organizational actions which the above aspects characterize may be indicated.

Risk-Taking Versus Complacent

In running business and production, the organizations need take risks (acting under conditions of relative uncertainty). Risks might be of varied kinds, such as those taken in the event of technological decisions, which have bearing on employees and those which are related to personnel matters per se. Any issue throws us many courses (many a times mutually conflicting) of actions. No single approach is normally apparent in the solution of a problem. This is much more so in the complex world of business. Apart from the uncertainty of the situation, top managements might differ in the extent to which they encourage the employees to take risk. Some top managements may restrict the chance of their lower-level managers and workers taking risk by designing authoritarian set-up and practices; while others might encourage risk-taking at all levels by setting up decentralized structures.

Compromising Versus Unilateral

Certain top managements are unilateral in their approach. They resist compromise. They are more rigid than flexible. Dayal8 refers to such orientation of managements as “…absence of the ethics of collaboration”. He holds that in such organizations management-union and inter-departmental relationships breed suspicion and distrust. Unilateral organizations permit only low levels of conflict and confrontation. On the contrary, the compromising organizations think that the conflicts in interests and purposeful confrontations between different groups (like management and the workers or trade unions) are inevitable and healthy signs of openness in organizational communication. Critical attitudes are viewed by the management as helpful in receiving useful suggestion and feedback for its improvement.

Unstructuring Versus Structuring

Organizations may differ in the degree of clarity in roles at various hierarchical levels. In some cases, role ambiguity (opposite of role clarity) might be substantial. The role ambiguity is substantial when the job duties are extremely unstructured and unspecified. In a situation of high ambiguity, the job holders lack clear understanding of their duties, responsibilities, and positions in the authority structure. The deleterious effects of role ambiguity and role conflict (the situation in which a subordinate is under conflicting demands from more than one superior) in terms of tension and anxiety and poor efficiency have been brought out by Kahn et al.9 The study by Menon10 brings out certain interesting findings regarding clarity in tasks and in reporting relationships. More is the subordinate expectation that his superior should be specific in assigning work, and less the tendency of the superior to be specific, more is the former’s dissatisfaction with his superior’s leadership and less his feeling that his superior and colleagues support him. In such a situation, he hardly experiences learning and work responsibility. Even employees who want to do their best (achievement-oriented) look for role clarity.

Lack of role clarity encourages arbitrariness in decision making and management practices. In an ambiguous organizational situation, the manager’s action is determined by expediency of the situation and his personal skill and competence and individual personality. There is too much reliance on the individual executive. A study by Roy11 reveals that one of the dysfunctional elements in the working of private sector industry in India is the arbitrariness and nepotism on the part of management. There are hardly any work rules and procedures defining the authority and responsibility of the employees at different levels. Singh12, discussing the management practices in private organizations in India, says that “organizational structures of many of the largest Indian enterprises are haphazard; organizational charts are rate and even where they exist they are a secret. Managerial jobs are seldom defined or described.”

Although the above discussion points out the dysfunctional nature of role ambiguity, it is to be borne in mind that the other extreme, viz., high structure (role clarity), is also dysfunctional. High structuring delimits the freedom on the part of individual employees and even depersonalizes the work (this feature is commonly referred to as rule-orientation in bureaucratic settings). High-structure situation has the following characteristics of organizational behaviour. Interpersonal interaction, horizontal and vertical, is minimum. The work activities are hardly coordinated. Group goals are not visible for the individual employees. The opportunity for self-determination and participation is minimum. A number of investigators13 have found that job satisfaction, mental health, and level of performance are all directly related to opportunities for self-expression, self-control, participation, and individual freedom and responsibility. Menon14 found that the personal work efficiency of supervisors is high when their superiors provide them with personal support and encourage them by involving them in organizational decision-making.

Warmth and Support Versus Lack Of Warmth And Support

Organizations differ in the extent to which they provide personal and work-related support, and warmth and friendliness in interpersonal relationships. The members in the organization at various levels need know what is expected of them in relation to others. Those who are higher in the hierarchy and who have the role of coordinating activities at the lower levels communicate to those who are below them. The subordinates also look for friendly relationships with their superiors. Menon15 has pointed out the following important aspects of warmth and support in interpersonal relationships. He found that supervisors felt responsible and committed when they experienced satisfaction due to opportunities in the job for learning experience and due to opportunities in the job for learning experience and due to its challenging nature in interpersonal atmosphere characterized by support from superiors. The support from the supervisors seems to be instrumental to the development of responsibility and work commitment especially on the part of employees who do not look for detailed work instructions. Apart from the support facilitating goal achievement it also seems to lead to the feeling of prestige in the group particularly on the part of those who desire social relationships.

Decentralization Versus Centralization
In certain organizations, persons at different levels of hierarchy possess authority according to their levels of decision-making and task execution. Such organizations have a decentralized structure. In a decentralized set-up persons at lower levels interact with those in the parallel and interrelated levels as well as with those immediately higher. They have sufficient freedom in their areas of functioning and also in contributing to the overall objectives.16 The increased interaction helps build better coordination. Again, in such a participatory set-up, the persons are clear about their goals and their commitment is strengthened through group pressure. Participation in decision-making calls for better abilities than participation in executive functions. In a decentralized set-up, the superiors have confidence in the competence of their subordinates. There is mutual trust among persons. The organization grants adequate responsibility and commensurate authority.

In contrast, in centralized organizations, the authority rests in the hands of a few top echelons. The subordinates receive specific instructions. The freedom and the conditions for the expression of the individual’s talents are limited. The centralization of authority might take two forms: (i) formation of bureaucratic set-up (emphasis on rules and procedures), and (ii) an unstable and ill-defined organizational structures. The first condition is seen in the management system of Public enterprises in India17 and the second in the management of Private enterprises in India18.

Under Bureaucratic set-up, the individual goes by rules. In such rule-oriented structures, the individual hardly takes any risk. With everyone following the fixed path, co-ordination of functions is hardly achieved. The persons in a Bureaucratic structure work for their individual goals rather than for the overall organizational goals. Lacking awareness of real goals, the employees derive satisfaction of goal achievement by ardently following the rules. In the context of increasing complexity of functions and specialization, persons who lack individual goal orientation and appreciation of common goals work for cross-purposes.
Unstable and ill-defined organizational climate is characterized by the following organizational actions. The subordinates are given specific instructions and are closely supervised. As many control checks as possible and are permitted by technology are instituted. This type of organization follows no line of command. The higher echelons have direct access to all levels and hardly any question of bypassing the authority arises.

Expert Persuasion Versus Coercive Approach
Persuasive approach in an organization is characterized by a number of following kinds of behaviours. Superior guides the subordinate towards larger organizational goals without unduly restricting freedom on the part of the latter. He makes available to him the facilities. He is friendly and accepting. He is consistent and fair in practices. He works towards the well-being of his subordinate. He lends adequate support and help.

In contrast, the superior who adopts a coercive approach exhibits certain other behaviours. His main concern is to see that his subordinate submits to him. He uses punishment to control his subordinate. His predominant set is to point out the mistakes of his subordinate rather than correcting him and making him learn new experience. He is, more often than not, inconsistent in administering punishments. Such a superior is hardly rated as fair by subordinates. Superior develops in the minds of subordinate feelings of failure and thus coerces compliance to his ways, which are right by virtue of his being a superior. Different kinds of punishments such as criticism, disapproval, withholding relevant task-related and personal information, withholding positive feedback, providing false feedback in the form of criticism, etc., are administered.

Problem-Solving Approach Versus Status Approach To Authority
In both types of structures, viz., decentralization and bureaucratic, there is a certain amount of authority at all levels either for making decisions or in the execution of tasks.

The employees might take to a status approach if the organization projects hierarchical distinctions more as reflection of status than as reflection of differential competence. Employees feel that the hierarchical levels reflect differential competence only when they share the feeling that the organization is fair in its hiring and promotion practices. Both bureaucratic and ill-defined organizations cannot convince the members that hierarchical distinctions are reflections of the differential competence of the members, because in neither set-up, persons are selected or placed on positions because they fit those positions well.
In the case of status approach, superiors see their ability to control their subordinates as source of their status rather than as a means to direct their work towards solving the problems. Status-conscious superiors will protect their status in the eyes of their subordinates by coercing them to submit to them. They will be less concerned about their subordinates’ contributions and more concerned about their subordinates’ recognition of their superiority. They are touchy and ego-defensive. One of the dysfunctions of centralization of authority is the operation of the status approach to authority at lower levels of the organization.
Problem-solving approach is a contrast to status approach. In problem-solving approach, the persons use their authority in helping subordinates to solve the problems.

Co-Operative Versus Individual Competitive Approach
Under co-operative approach, the employees are encouraged to work for common goals and no employee is put in competition with another as in the case of competitive approach. The rewards are linked with the performance of the group members rather than with the achievement of individual members. In the cooperative approach, an atmosphere of mutual understanding and trust prevails. The members are aware of each other’s strengths and weaknesses and capitalize on their knowledge. The co-operative approach develops an atmosphere where the functions are coordinated. In the group climate the mutual acceptance contributes to status and recognition. The ability of the group members to be mutually helpful also leads to the satisfaction of their need for power.

Employee-Task Fit Versus Lack Of Employee-Task Fit

In certain organizations, the tasks are assigned according to the ability and competence of the persons. For example, from among those having the same technical background the company might select some for the job of sales executives while it might emphasize interpersonal relations for the positions of technical supervisors in charge of sub-assemblies. The persons experience meaningfulness and challenge in their work when it calls for the best of their abilities and when the task is of moderate difficulty. He also learns the better way of doing the work. The person-task fit activates the higher-order needs.

Performance-Based Reward Versus Expediency Reward
Some organizations make conscious attempts to effectively link reward with the effort of the employees through the use of techniques such as Job Evaluation, Objective Performance Appraisal, Suggestion Scheme, and so on. According to theory of motivation to be discussed later, the management can expect the employee to work in a particular way only if the employee sees that he will be rewarded in terms of his various need satisfactions. This particular aspect of linking rewards with employee efforts and its bearing on their work motivation has been dealt with in detail by Porter and Lawler19. The employees will perceive that their effort is rewarded only if they feel (Vroom20 has pointed out that subjective feeling is more potent than reality in eliciting behaviour) that they have been assigned work which calls for their ability and that management rewards their efforts when warranted, through such measures as recognition of work (praise), giving promotions and merit increases, and assigning more responsibility. In a performance-based climate, the individual receives self-generating task-related feedback conducive for work motivation. The employees also feel that organization is objective in its approach21 and encourages employees initiative and growth.
Another aspect of performance-based reward is the question of individual versus group reward. The organization might be orienting towards individual approach in the sense it may reward individual’s behaviours such as the competitive output, or it might have group orientation, in the sense that it may reward behaviours which contribute to the goals of production in a section or Department such as the promptness with which people meet the demands of other sections, coordinative efforts, etc. In certain kinds of work such as those of supervisors in textile mills,22 pursuit towards the group goals weighs heavier than pursuits towards individual achievements.
In contrast, in the expediency-reward context, the employees do not feel that the organization rewards its employees either financially or otherwise according to their effort. They might feel that they should satisfy the membership requirements of an organization in order to justify the acceptance of the rewards.
High Performance Goals Versus Low Performance Goals
Certain organizations may set high goals of employee performance while others may rest content with the average level of employee performance which keeps the business going.
Likert23 points out the need for setting high performance goals. He says that the management system 4, which he advocates as successful and effective, “should have high performance aspirations, but this is not enough. Every member should have high performance aspirations as well. Since these high performance goals should not be imposed upon employees, there must be a mechanism through which employees can help set the high-level goals which the satisfaction of their own needs requires.”

Socio – Cultural System Of Employee Needs
Persons work in organizations for material and other gains. Studies on job satisfaction have shown that they try to satisfy monetary and non-monetary needs. Although doing something and that again well is itself encouraging to prompt action again, working calls for a number of physical and social conditions. The person enters the organization with certain dispositions and expectations rooted in the family, social, and cultural milieu. Organizations meet certain of their expectations and suppress others. The person undergoes a process of adaptation to organizational processes. Such individual adaptation is a constant and dynamic process. The persons as employees voluntarily submit to the organization by observing rules and codes of conduct. The persons accordingly behave in a formal organization in a more organized way than they do in their informal organizational life. The general outcome of the influence processes is winning of the organization over the employees. Such influence of the organization over the employees has direct bearing on their work performance, although the problems as to what kind of work performance is the consequence of what precise nature of influence, is not yet understood clearly.
Employee works or is prompted to work for the organization because, the organization fulfils certain of his needs or because the employee can expect in the organization opportunities for satisfaction of certain other needs. Conglomeration of needs is developed in the process of socio-cultural propensity for need satisfaction. The desire on the part of the employee to work in order to achieve certain things which he wants and which he can obtain in the process of work is referred to as motivation to work and the effort he actually puts in reflects in work performance.24
The needs which the employees seek to satisfy can be conveniently understood in terms of the Maslowian25 systems of needs, viz., (i) Physiological, (ii) Security, (iii) Social, (iv) Ego, and (v) Self-actualization. Each of the above classes of needs subsumes many specific needs. However, certain salient and specific needs which can be realized through certain conditions of specific organizational climate can be discussed. Physiological needs relate to food, shelter, and sex. Security needs include the need for continuous economic support, in the form of the job security, and steady income, the need for structure and the need to perceive consistency, and the related need of being able to predict a situation. In economic security, the concern is with economic gains. In emotional security, the concern is for structure and consistency in situations. The need for structure and consistency is reflected in the subordinate’s desire to anticipate the reaction of his boss. The subordinate wants his superior to be consistent. The need for security in the work setting reflects in the employee’s need for role clarity or the need to know about his tasks and procedures. Social needs involve the desire to maintain social relationships and involve acts instrumental to satisfaction of these. The need for nurturance, the need for succourance, seeking and granting approval, communicating (proper communication of work-related and personal issues by superiors to subordinates helps building up subordinates’ trust towards superiors), desire to subordinate individual interest to group interest, and so on are the reflections of the social needs. Ego needs include desires to dominate, to be powerful, to look respectful in the eyes of others (status), to control others, to keep others under surveillance, and so on. The need for power has been found to be negatively related to social need or the need for maintaining group relations26. The subordinate’s expectation that his superior allows him substantial freedom for action is a reflection of his need for power or the need to control the work situation by himself the work situation. There are studies showing that the needs for status and power do not contribute to task achievement. For instance, Menon27 found that high achievement-oriented supervisors in their task pursuits do not aspire for much freedom vis-à-vis satisfaction of their need for autonomy; they on the other hand, expect their superiors to provide them with support, involve them in organizational matters, share responsibility and power with them, and encourage their initiative. The need for self-actualization is referred to as the need for achievement28. Achievement need express itself in the desire to do a job well, using once knowledge and skills to be rewarded for accomplishment, to be recognized for good performance through feedback,29 to be able to control one’s situation for accomplishment of a task at hand through participation rather than through freedom per se, to be responsible for the job well done, to undertake work which is challenging and which involves moderate degree of risk or taking risk in relatively structured and predictive situations.30

Work Motivation
Labour efficiency is optimum when the labour costs per unit of production is lowest. Employees should put in their best effort as well as they should utilize their full time if labour cost per unit is to be kept lowest. The labour cost in the production cost per unit will increase if the employees work below the level of their optimum efficiency, or when they absent or fall sick. Although the employees do not have control over certain conditions such as falling sick which is due to factors outside their work life, they have control over their efficiency. Many of the studies such as reported by Roethlisberger and Dickson,31 and Whyte32 have shown that employees restrict their output voluntarily. Such voluntary restriction of output under wage incentive situations has also been found operating in the Indian business conditions.33 Apart from conscious restriction of efficiency, the employees withdraw their production effort through such mechanisms as absenting from work34 and involving in accidents35. Studies of job attitudes36 and motivation37 have brought out two main trends in the area of work motivation, viz., (i) Motivation versus Maintenance approach (also called Intrinsic Motivation versus Extrinsic Motivation), and (ii) Interaction of Multiple Need Satisfaction and Dissatisfaction.
Motivation versus Maintenance View
According to the motivation view, the individual put in their best and willing effort only when certain higher-order (task-related) needs as creative opportunity and challenge, and needs adjunct to these like responsibility and control over the task situation, are fulfilled. The permissible levels of output or work standard set in a work organization through techniques such as work study and collective bargaining are a step below the level which the employees can voluntarily make if they work assiduously and constructively. The sudden spurt in production when the employees respond to wage incentives illustrates the extra capacity of the employees. On the other hand, the employees meet the average levels according to maintenance view when the organizational conditions related to lower-order needs such as high wages, more fringe benefits, attractive and comfortable working conditions are met with. Failure to provide conditions related to lower-order needs makes the employees inefficient at work, through voluntary absenteeism, sickness and accidents, conflicts and rivalry, strikes and so on. Maintenance factors should be present before the motivational factors can operate. The need for the co-existence of conditions satisfying lower-order needs and those satisfying higher-order needs is shown in Menon’s study.38 He found that the high achievement-oriented supervisors are less efficient and lack satisfaction due to lack of chance for using their skill, for having learning experience, when their superiors do not lend support and do not encourage their initiative by means of their leadership style.
Interaction Of Multiple Need Satisfaction and Dissatisfaction
According to this approach, employees’ drive to work is determined by the net outcome of satisfactions and dissatisfactions of multiple needs at different hierarchical levels. The employees strive towards the achievement of organizational goals if (i) the needs satisfied predominate over those dissatisfied, and (ii) if the satisfaction follows the hierarchical order in ascending fashion.
The second condition means that it is not appropriate to bring into play the needs at the higher levels before sufficient opportunity is given for the satisfaction of need systems at the lower levels. An example of this condition may be cited. The individual employees should not be put in competition such as in a piece rate wage incentive system when the group is heterogeneous in ability and when there is strong unionism; otherwise it will lead to interpersonal conflict and rivalry leading to restriction of production.
Organizational Climate Factors and Opportunities for Need Satisfaction and Need Dissatisfaction
Organizational climate characteristics provide opportunity for the satisfaction of certain needs, while they restrict the chance for the satisfaction of others. At the present stage of knowledge, the exact relationship is not known. However, there are studies which provide direct or indirect support to the relationships discussed here relating to one or more factors. A pattern of relationships has been conceived and presented in Exhibit 1. Although the proposed relationships call for statistical testing, their discussion should be helpful in understanding human behaviour. Exhibit 1 brings out the following findings. High structuring provides opportunity for the satisfaction security need and curtails the satisfaction of the needs for status and power, and the need for achievement. Low structuring (reflecting role ambiguity) provides opportunity for the dissatisfaction of the need for security, social need, the need for status and power, and the need for achievement. Moderate structuring provides opportunity for the satisfaction of the need for security and the need for social relationships. Compromising approach provides opportunity for the satisfaction of the need for status and power whereas the unilateral approach deprives the need for status and power.
Exhibit 1. Relationship between climate factors and satisfaction-dissatisfaction of employee need systems

Climate factors Physi-ological Safety & Security Social Status & Power Achie-vement
1a High Structuring N S N D D
1b Low Structuring N D D D D
1c Moderate Structuring N S S N N
2a Compromising N N N S N
2b Unilateral N N N D N
3a Warmth and Support N S S N N
3b Lack of Warmth and Support N D D N N
4a Expert Persuasion N N N S S
4b Coercion N D D D N
5a Co-operation N S S N N
5b Competitiveness in Group Situation N D D S N
6a Problem Solving Approach to Authority N N N S S
6b Status Approach to Authority N D D S N
7a Employee-Task Fit N N N S S
7b Lack of Employee-Task Fit N D N N N
8a Performance Based Reward N N N S S
8b Expediency Based Reward N D D D N
9a Setting High Performance Goals N N N S S
9b Setting Low Performance Goals N S S N N
10a High Risk Taking N D N S N
10b Complacency N S N N N
10c Moderate Risk Taking N S N S S
11a Decentralization N D D S S
11b Centralization N D D D N

S stands for “the opportunity provided for the satisfaction of the need”
D stands for “the situation leading to dissatisfaction or deprivation of the need”.
N stands for “need satisfaction unaffected”.

Providing warmth and support allows the employees to satisfy their need for security and the need for social relationships. Lack of warmth and support deprives them of opportunity to satisfy their need for security and the need for social relationships. Expert persuasion provides room for the satisfaction of the need for status and power, and the need for achievement. The coercive approach restricts chance for the satisfaction of the need for security, the need for social relationships, and the need for status and power. Cooperation provides opportunity to satisfy the need for security and the need for social relationships. Competitiveness in a group situation, on the other hand, restricts the chance for the satisfaction of the need for security and the need for social relationships. It, however, provides opportunity for the satisfaction of the need for status and power. Problem-solving approach to authority offers chance for the satisfaction of the need for status and power, and the need for achievement. On the other hand, status approach to authority while offering chance for the satisfaction of the need for status and power, curtails the need for security, and the need for social relationships.
Employee-task fit creates situations helpful for the satisfaction of the need for status and power, and the need for achievement. Lack of employee-task fit thwarts the employees’ need for security. Performance-based reward creates conditions for the satisfaction of the need for status and power, and the need for achievement. Expediency-based reward creates conditions detrimental to the satisfaction of the need for security, the need for social relationships, and the need for status and power. Setting up high-performance goals creates conditions for the realization of the need for status and power, and the need for achievement. Setting up low performance goals contributes to the satisfaction of the need for security and the need for social relationships. Encouraging high risks thwarts the need for security, although it invokes the employee need for status and power. Encouraging complacency on the contrary, contributes only to the satisfaction of security needs. When the employee is encouraged to take moderate risk it contributes to the satisfaction of the need for security, the need for status and power, and the need for achievement. Decentralization opens up chances for the satisfaction of the need for status and power and the need for achievement, while centralization thwarts the needs for security, social relationships status and power, and achievement.

Organizational Typologies and Work Motivation
At least five kinds of organizations can be distinguished in terms of the technological practices as well as the eleven organizational climate factors discussed earlier. They are :
1. Technologically Backward and Punitive
2. Technologically Progressive and Punitive
3. Technologically Backward and Maintenance-oriented
4. Technologically Progressive and Maintenance-oriented
5. Developmental

Technologically backward and Punitive, and Technologically Progressive and Punitive
In technologically backward and punitive organizations, the top management hardly introduces technological improvements and innovations. They are insensitive to the requirements of the changing market conditions. They tolerate profitability at a level lower than the maximum possible under efficient conditions. Such organizations are low on structure, unilateral, low on providing warmth and support, and enforce compliance. They encourage competition in the group through individual wage incentives, favouritism, etc. The members in such organizations, view authority as a source of status. The organization never makes conscious attempts to fit the employees to the jobs through proper selection procedure. The members do not perceive any relation between their work and the credit they get. The organization rewards its employees as a matter of expediency. If it finds that it can capitalize on certain abilities of an individual to serve its short-term goals, it puts him ahead of other employees who are generally assets to the organization. In other words, the Personnel Policy decisions are determined by the situational contingencies. The organization might set too high production goals to the individuals without creating the pre-conditions. It might encourage its employees to take high risks and once in a way reward such behaviour too. The authority and power for making all the decisions and even for administrative action is invested in the hands of the top few.
Technologically progressive and punitive organizations may create all the above conditions of organizational climate, except that it constantly watches for opportunities of technological improvements. It adopts a kind of Taylorian philosophy in the management of business.

Technologically Backward and Maintenance-Oriented versus Technologically Progressive and Maintenance-Oriented
In “technologically backward and maintenance-oriented” organizations, top managements are not competitive in running business. Technological changes are hardly introduced as a way to increase productivity of the plant. Rigidity in production planning is usually present, but not product innovation. Corresponding to the above technological practices, such organizations may be low on structuring, unilateral, enforce compliance, encourage competition, and relatively high on status approach to authority. It may hardly place the employees according to merit and establish link between effort and reward. Goals within easy reach of the individual are set. No particular incentive is provided for taking risk. Only persons at the top are involved in decision-making. The superiors are encouraged to provide warmth and support to their subordinates. The members are given economic security.
In the case of “technologically progressive and maintenance-oriented” organizations, the top management tries to innovate plants technologically as a way to productivity, while at the same time maintains a happy and contented work force by providing a welfare-oriented climate. It introduces the organizational climate conditions of maintenance discussed in the preceding paragraph. Top managements in such organizations believe in achieving production through mechanization. They also perceive that the employees are inevitable aids to production at a particular stage of technological development and so the need to keep them happy.
Developmental Organizations
Developmental organizations are aware of the potentialities of technology and their obligation for creating employment. Their decisions reflect not only economic considerations but also their socio-economic concerns. Such organizations develop managers who are not only masters of technology but those who have ability to make economic decisions in a particular socio-cultural context. They adapt technological innovations to the management of human organizations. Such organizations are technologically more innovative. Parallel to the technical system, they create the following conditions of organizational climate conducive for optimizing employee work motivation. The top management structures the tasks moderately and develops clarity of rules. It is compromising and flexible, and weighs the merit of the situation in making decisions. The employees are mutually helpful and supportive. They attempt to influence others by making them see the merits of the case rather than by coercion.
Such organizations prefer to encourage co-operative behaviour rather than making employees individually competitive. They do not make employees individually competitive especially if the situation is such that the social equity is thwarted. They adopt the problem-solving approach more often. Attempts are made to match the employees and their job requirements and reward them according to their efforts. They may use scientific selection procedures and techniques such as Job Analysis, Job Evaluation, Objective Performance Appraisal, and so on. They set high performance goals and encourage the employees to take good risks. The employees at all levels of the hierarchy share authority, power, and responsibility matched with their respective roles. Employees develop orientation towards the overall goals of the organization and towards coordination of functions.
Indian Industrial and Business Organizations
In the previous section, it was pointed out that the industrial organizations can be classified under one of the five types. In this section, let us attempt classification of Indian industrial organizations. Indian industrial organizations are too large and heterogeneous a universe that makes generalization difficult. However, as a first step in the direction, Indian industrial organizations may be classified into four types, viz., (i) small, privately-owned Indian family concerns, (ii) large companies having private Indian ownership, (iii) companies owned by state (the so-called public sector), and (iv) Indian Private enterprises having foreign collaboration
Small Privately-Owned Indian Companies
These companies may be said to reflect the features of “technologically backward and punitive” type of organizations. Certain conditions of organizational culture and climate as revealed in studies of these organizations may be discussed.

Organizational Climate
Most of these organizations have no organizational charts indicating the roles and the role relationships. They hardly induct the employees. The employees hardly know their duties, authority, accountability, and responsibility at the time of joining the organization. Their superiors and colleagues usually serve as sources of such information. Ambiguity in responsibility leads to conflict in organizational communication. For instance, it has been found that the bypassing of the lines of command is common. The chief executive will entrust the responsibility to the General Manager for the duties of Departmental Heads and at the same time allow the Departmental Heads to bypass the General Manager and report to him undermining the authority of the General Manager. There is hardly any job structuring. This creates a situation in which the job designations rarely reflect the duties, salary and authority (financial and personnel discretionary powers). Such ambiguity leads to lack of coordination. Lack of coordination is reflected in a situation in which one subordinate reports to two or more superiors in the line of command. Lack of coordination of roles also leads to interpersonal conflict and employee strains. There are hardly attempts to select and place the employees according to their merit. The Top Executive who is invariably an owner-manager is too possessive of his organization. He has no trust in his subordinates. This develops into a situation in which the people at different levels lack mutual trust. The Top Executive reserves to himself the authority in decision-making. He develops a trusted group of people in vital management functions. These people are related to the chief executive through family ties, social origin, etc. Trustworthiness and loyalty are emphasized as qualities required rather than merit. Top management selects persons for new jobs based on such ascriptive criteria as belonging to the community or caste to which the chief executive belongs. The organization is hardly interested in training and developing employees. It does not institute any systematic personnel appraisal programmes. Thus, a condition is created in which the employees do not perceive clearly the relationship between their efforts and the financial rewards administered by the organization. In controlling the employees, the organization uses coercive approach. The employees are criticized or punished for their faults. Competitive rather than cooperative approach is employed. The organization does not train the employees, with the result that wide variations in abilities among the employees exist. Yet it uses individual wage incentive. Punitive methods are used in dealing with the disciplinary problems emerging from the individual incentive situation. The organization does not set high goals of performance and output and is satisfied with the levels of output which are often below the optimum. The organization adopts a unilateral approach in the sense that it does not admit of any confrontations, with the result that it does not recognize and deal with unions.
Large Companies Having Private Indian Ownership
These companies are offshoots of the small privately-owned organizations. They thus show many of the climatic and cultural conditions witnessed in small organizations. They can be referred to as “Technologically Progressive and Maintenance-Oriented”. They are technologically more progressive than small organizations. They are low on structure in the sense that roles and role relationships lack clarity and line of command is violated by bypassing the positions. Rewards are not tied up with efforts and no scientific appraisal is followed. The employees are mot encouraged to take good risks. At times they are encouraged to take risks without providing the necessary support. Employee skills and abilities are not utilized properly. However, these large organizations are more favourably predisposed to hiring trained professionals. They employ specialists such as industrial engineers, marketing economists, personnel researchers and so on, although all of them are only in the advisory capacity. The authority for making decisions on policy matters and to a large extent on administrative matters rests with the top few individuals. There is one-way communication downward. Submission to and dependence upon authority is encouraged at all levels.
These large organizations differ from the small organizations in terms of (i) welfare orientation, and (ii) relative flexibility. They provide better wages, fringe benefits, social security measures and more security of jobs compared to small organizations. These organizations in fact provide much opportunity outside the work for the expression of certain higher-order needs of the employees such as the need for creative expression, need for responsibility, need for power, etc. The opportunities for the satisfaction of these needs within the plants are not encouraged.
These large organizations are more compromising in the sense that they permit opposing forces to co-exist. They do not view union growth and movement as a necessary evil. They deal with the problems of employment through unions, perhaps without bothering much about the canons of the bargaining process. They however attempt to live in peace with the unions.
The Indian Private companies having foreign collaboration retail most of the characteristic described above. Plum salaries and excellent employee well fare facilities are provided which are often much above those provided by large Indian companies are provided. More mechanization and computerization are introduced. Though some attempts are maid to introduce progressive and best HRM practices, not much success is achieved. The traditional Indian socio-cultural ethos seem to have strong hold with very little penetration of Global and universalistic work culture and technological practices.

State-Owned Companies (Public Enterprises)
Public Enterprises can be referred to as “Technologically Progressive and Maintenance-Oriented” organizations. The organizational culture and behaviour are comparable to those of large private-owned organizations in many respects. The roles are too structured. There is clarity in duties, reporting relationships, and authority and responsibility in the vertical structure of the organization (because of the emphasis on rules and procedures). This high structure provides emotional security to the employees. Due to rigidity in the structure, there is no horizontal coordination. Each channel in the hierarchical structure is relatively independent of other. As such, the employees in each function do not see their contribution to an overall goal. Rigidity in structure also restricts individual freedom. Adherence to procedures is emphasized as an end in itself. Employees are not selected to meet the requirements of the jobs. Often those making selections hardly know what a particular job requires in terms of human skills.39 This has its negative effects on employee appraisal. Skills and progress are not evaluated objectively. The rewards are not administered according to performance. Rewards such as promotions are given to employees based on criteria such as seniority, conformity to rules, conduct, etc. In all such reward procedures, the link between employee effort and reward is missing. The employees are not encouraged to take risks. Lack of employee freedom, absence of functional coordination, and the reward structure induce employee complacency. Correspondingly, the organization does not set up high performance goals. Public sector organizations are progressive technologically. They make heavy investments and use employee specialists. They are more progressive than other types of Indian industries in using specialists. They institute research and development programmes. They, however, do not involve these specialists in the mainstream of organizational activities. In employee control, the approach used differs from that prevalent in privately-owned organizations. In public enterprises, the superiors hardly use coercive approach. The approach used is one of status approach. The hierarchical levels reflect different levels of status. The subordinates submit to the superiors by virtue of their positional status. Thus, conformity is inbuilt in the structure, and the conformity pattern is predictable. The organization provides economic security and provides welfare and social insurance benefits. As the scope for interpersonal interaction is limited under Rule-orientation, the employees hardly derive any social satisfaction in their formal role relationships. However, as the organization does not restrict the cohesiveness of the group through Personnel And Technological Practices, an informal organization of employees develops for social satisfaction. Lack of ownership motivation at almost all the levels and lack of involvement in organizational decision-making encourage the development of groups and associations including members at higher levels.

Brief reviews given about Indian Business and Industry clearly show to change all of them into a Developmental type of Organization, a typology developed by the author. This typology can be used for bringing about the desired changes in the Indian Organizations for all round benefits.

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2.H.Baumgartel, “The Penetration of Modern Management Technology and Organizational Practices in Indian Business Organizations”, Indian Administrative and Management Review, 1971, 3,2.
3. Ibid
4. H.Baumgartel, op. cit.; and K.Chowdhry and A.K.Pal, “Production Planning and Organizational Morale : A Case from India”, Human Organizations, 1957, 15, 4, 11-16.
5.Baumgartel, op. cit.
6.K.S.Basu, “Management Gap in Indian Industry”, Commerce, Annual Number, 1968, 117, 40-42.
7. See, for example, G.H.Litwin and R.A.Stringer, Motivation and Organizational Climate, Harvard University, Division of Research, Graduate School of Business Administration, 1968.
8. I.Dayal, “Management”, Seminar, Annual 149, January 1972, 64-69.
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10. A.Sreekumar Menon, “Performance Effects”, New Delhi, Shri Ram Centre for Industrial Relations and Human Resources, 1971, unpublished manuscript.
11. S.K.Roy, Corporate Image in India, new Delhi, Shri Ram Centre for Industrial Relations and Human Resources, 1974.
12. J.Singh, “Management Practices in India Today : A Critique”, Indian Management, 1970, 9, 9, 3-9.
13. W.F.White, Money and Motivation : An Analysis of Incentives in Industry, New York, Harper, 1955; V.H.Vroom, Work and Motivation, New York, John Wiley, 1964; and A.W.Kornhauser, Mental health of the Industrial Worker : A Detroit Study, New York, John Wiley, 1965.
14. A.Sreekumar Menon, 1971, op. cit.
15. Ibid.
16. R.Likert, Human Organization : Its Management and Value, New York, McGraw-Hill, 1967.
17. I.Dayal, “Management”, op. cit.
18. J.Singh, op. cit.
19. L.W.Porter nd E.E.Lawler, III Managerial Attitudes and Performance, New York, Irwin Dorsey, 1968.
20. V.H.Vroom, Some Personality Determinants of the Effects of Participation, Englewood Cliffs, New Jersey, Prentice-Hall, 1960.
21. P.Chattopadhay, “Managerial Revolution in India”, Indian Manager, July 1969, 8
22. V.K.Pathak, “Wage Incentive, Productive Efforts and Perception Change”, Indian Journal of Industrial Relations, 1969, 4, 4.
23. R.Likert, op.cit.
24. A.Sreekumar Menon, “Effectiveness of Wage Incentives: Analysis of Behavioural Processes”, in G.K.Suri (ed.), Wage Incentives: Theory and Practice, New Delhi, Shri Ram Centre for Industrial Relations and human Resources, 1973.
25. A.H.Maslow, Motivation and Personality, New York, Harper and Row, 1954.
26. G.h.Litwin and r.a. Striner, op.cit.
27. A.Sreekumar Menon, 1971, op. cit.
28. F.Herberg, B,Mausner and B.B.Snyderman, The Motivation to work, New York, John Wiley, Second Edn. 1966; D.C. Mc-Clelland and S.K.Winter, Motivating Economic Achievement, New York, Collier-MacMillan, 1971; and G.H.Litwin and R.A.Stringer, op.cit.
29. E.E.Lawler, Pay and Organizational Effectiveness. New York, McGRaw-Hill, 1971.
30. J.W.Atkinson, “Motivational Determinants of Risk-Taking Behavior”, in J.W.Atkinson and N.T.Feather (eds.), A Theory of Achievement Motivation, New York, John Wiley, 1966.
31. F.J.Roethlisberger and W.J.Dickson, Management and the Worker, Masschusetts, Cambridge, Harvard University Press, 1964.
32. W.F.Whyte, op. cit.
33. G.K.Suri, “Continuing Effectiveness of an Incentive Application; A Quantitative Evaluation”, New Delhi, Shri Ram Centre for Industrial Relations and Human Resources, 1972, mimeo.
34. A.Sreekumar Menon and H.Hanumanthiah, “Productive Drive and Absenteeism”, Business Herald, April, 1969, 4, 10-12.
35. A.Sreekumar Menon, “Interpersonal Relations and Industrial Safety”, Kerala Productivity Journal, October-December, 1969, 4, 4.
36. F.Herzberg et al., op. cit.
37. L.W.Porter and E.E.Lawler, op. cit.; and v.h.vroom, op. cit.
38. A Sreekumar Menon, 1971, op. cit.
39. K.Chowdhry, Change-in Organizations, Bombay, Lalvani Publishing House, 1970.

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