Evaluation of the Effect of Environmental Factors and Management Strategies

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Q. (a) How do individual differences and environmental factors influence human behaviour in an organization? Justify your answer with examples (30) CH - 3, 5.


Human being is a social animal. Each individual reacts in a different way given a different set of stimuli's. Various theories of motivation, learning and leadership have been developed to explain how individuals behave under different situations. Socio-psychological theories have also been developed which indicate individual behaviour which depends on their attitude, beliefs, perceptions and value system. Human behaviour in an organization is influenced by both individual and variables.

Determinants of individual behaviour

Individual behaviour means some concrete action by a person. For instance, how a teacher behaves in the class reflects his behaviour. Human behaviour is influenced by various factors. Some of the factors lie within him, e.g., his instincts, personality traits, internal feelings, etc., while some lie outside him comprising the external environment of which he is a part, e.g., weather conditions, events conveying some information, and others peoples' behaviour that directly influence his behaviour. The process of human behaviour may thus be regarded as a 'stimulus-response' process.

Factors influencing Individual behaviour

The important factors which influence the behaviour of individuals are explained below:

Personality-The term 'personality' refers to traits that are restricted to one individual only. It differs from one person to another. Traits like dominance, aggressiveness, emotional range of a person etc. determine the type of activities that he /she is suited for and the person's ability to perform the task effectively and efficiently. For e.g. a person with a high emotional range is more suited for a creative job than an aggressive person.

Ability- A person is said to possess excellent ability when he/she has the actual skills and capabilities to perform a task or a job effectively. A person is carefully selected or is imparted necessary skills for the job through training. For e.g. a person with good communication skill will be more suited for a marketing job, than a person who is skilled at mathematics who will be more suited for a job in the finance department.

Perception- It is how a person perceives or makes an image of a particular situation. Perception differs from person to person. An organization expects the employees regarding the behaviour and activities performed by the employee. A key factor is that an individual's behaviour is influenced not by the organization's actual expectation of him, but by how these are perceived by the person.

Motivation-Motivation refers to all the forces operating within a person to cause him or her to engage in certain kinds of behaviour rather than others. Motivation may be internal, e.g., a person's skill etc. or external, e.g. incentives etc. Motivation is also influenced by a person's value and belief system.

Organizational factors- An organization's structure and hierarchy system influences the individual behaviour. It lays down what individuals do and how they do it. It also depends on various resources provided by the organization.

Socio-cultural factors- Every individual is surrounded by a social environment. Each and every individual working in an organization has a cultural background structuring his values and beliefs. It includes relationship with family members, friends, working colleagues, subordinates etc.


The degree of influence of the relevant factors on business operations in the past with a view to forecasting the possible impact of the same and other new factors on business activities during the strategic plan period is of utmost importance. Environment is an open system. Though external environment has more proportionate effect on the behaviour of business, the internal environment affects the working of the organisation in a big way.

Environmental factors affecting individual behaviour

Adequate pay- The employees must be paid their due share in the progress and prosperity of the firm. Concept of equitable pay must be re-incorporated to improve the quality of working life.

Favourable and Safer Environment- The working environment of an organization must be safe i.e. free from hazards occurring naturally or unnaturally. It must also promote favourable working conditions to conduct a job or a task. There are several labour laws protecting the workers interest in this regard.

Job Security- It refers to the stability of employment. An employee must feel a sense of belongingness towards his/her job in order to perform a task given efficiently and effectively. The workplace should offer security of employment.

Employment benefits- Nowadays, workers not only demand adequate pay but also expect and feel entitled to benefits like medical facilities etc. They want a share in the profits of the organization and avail various welfare facilities.

Job satisfaction- An organization cannot ignore the human element of its existence. It is run by human beings of various talents and skills. The jobs must be structured, designed or enriched in such a manner so that those talents and skills can be utilized to its full potential.

Scope of Advancement- With the improvement of technology and advancement of time, workers are not only concerned about their pay prospects, but also wishes to improve on the technical and academic side. They want to improve their knowledge and skill to be updated. It becomes the responsibility of the firm to provide opportunities and facilities to improve skills of an employee to improve their career prospects through training and development programmes.



The manufacturing company in which I am working as a HR manager is an automotive parts manufacturing company. There are 100 workers currently working in company and one foreman. The routine timings of workers are 09:00 hrs. - 17:00 hrs. There are five working days in a week from Monday to Friday. The workers are supposed to work for 7 hours a day with 1 hour lunch from 12:00 hrs.-13:00 hrs.


Workers working on the assembly line have poor attendance, leave for home early and are generally unproductive. They are fully unionized and resist any attempts by management to discipline them. Daily productivity is low as the workers are not working properly. Company is facing losses due to such behaviour of the workers. Workers are following a strict routine which leads to monotony. They have lost the sense of belongingness towards their job. Employees are not motivated to perform the task effectively and efficiently.


The various steps that would be taken as the HR Manager of the manufacturing company to increase the productivity of the workers working on the assembly line would be based on four parameters- motivation, leadership, participative management and quality circles.


Various theories of motivation that can be applied to improve the working situation of the company are:

McGregor's theory Y

MANAGER's assumptions about people in theory Y

View work as being as natural as rest or play

Will exercise self-direction and self-control if committed to objective

Challenge and responsibility would maximize motivation


According to McGregor's theory Y, I will motivate the workers by delegating the authority to them, job enlargement, and participative management. This theory places great emphasis on satisfaction of the needs, particularly the higher ones, of the employees. It does not rely heavily on the use of authority as an instrument of command and control. It assumes that employees exercise self-direction and self-control in the direction of the goals to which they feel themselves committed.

Herzberg's motivation-hygiene (Two factors) theory

Hygiene Factors are those JOBCONDITIONS that DISSATISFY employees when ABSENT but their PRESENCE does not motivate them in a strong way.

Motivation Factors are those JOBCONDITIONS that SATISFY employees when PRESENT but their ABSENCE does not dissatisfy them in strong way.


I as a manager will not only going to pay more attention only on hygiene factors; I will pay equal attention on motivation factors as stated above because according to Herzberg's theory one cannot achieve higher performance simply by improving wages and working conditions. The key to job satisfaction and high performance lies in job enrichment. I will try to make workers feel satisfied and work harder by offering hygiene factors as well as motivation factors. These motivational factors will help in fulfilling the self-esteem and self-actualization needs.


According to vroom, a person's motivation towards an action at any time would be determined by an individual's perception that a certain type of action would lead to a specific outcome and his personal preference for this outcome. There are three variables of vroom's model given in the form of an equation. If any of the variable approaches to zero, the probability of motivated performance approaches zero.

Valence - An individual's preference for a particular outcome

Expectancy- A belief that a particular level of effort will lead to a particular performance

Instrumentality - A belief that a particular level of performance will lead to a particular outcome/Reward

Motivation = valence*expectancy*instrumentality

Motivation is the product of valence, expectancy and insrumentality. These three factors in the expectancy model may exist in an infinite number of combinations depending upon the range of valence and the degrees of expectancy and instrumentality.


I will provide opportunities for training to improve skills in order to improve the relationship between efforts and performance.

I would revaluate the appraisal techniques and formulate policies that will strengthen performance-reward relationship as just and equitable.

Porter and Lawler's Expectancy Model (Cognitive Evaluation Theory, 1968)

It is based on four assumptions about behavior in organization:

Behavior is determined by a number of factors in the individual and environment

Individuals make conscious decisions about their behavior in the organization

Individuals have different needs and goals

Individuals decide between alternate behaviors' on the basis of their expectation that a given behavior would lead to a desired outcome

Intrinsic rewards are more motivating than Extrinsic Rewards

The introduction of extrinsic rewards for work (pay) that was previously intrinsically rewarding tends to decrease overall motivation

Verbal rewards increase intrinsic motivation, while tangible rewards undermine it


As a manager I will take the following steps to motivate the workers:

Determine the rewards valued by each subordinate- I will determine what rewards my workers seek by observing their reactions in different situations and by asking them what rewards they desire.

Determine the desired performance- I will identify what performance level I want so that I can tell subordinates what they must do to be rewarded.

Make the performance level attainable

Link rewards to performance

Goal-Setting Theory-Edwin Locke, 1968

Goals lay down targets to be achieved in future. They influence the behavior of employees and also their motivation.

Goals increase performance when the goals are:

Specific - Identify target in quantitative terms

Accepted - Involve subordinates in goal formulation

Performance feedback -Accompanied by feedback (especially self-generated feedback)

Challenge- Difficult but feasible goals

Contingencies in goal-setting theory:

Goal Commitment - Public goals and self-set goals are more likely to be achieved

Task Characteristics - Simple & familiar better

National Culture - Western culture suits best


As a manager I will involve the workers in goal formulation, identify the target in quantitative term, provide essential feedback and the goals would be challenging so that workers will compete in order to perform better.



As a result of the studies conducted by The Institute of Social research at the University of Michigan to identify styles of leader behaviour that results in higher performance and satisfaction of a group, two distinct styles were identified as follows:

Production-centred (task oriented) leadership: Task oriented leaders emphasize the use of rules and procedures and close supervision of subordinates.

Employee-centred (relation oriented) leadership: Relation oriented leaders emphasizes on employees welfare, advancement and focus on delegation of responsibility.


As a manager, I will act according to the employee centred leadership because employee-centred approach led to improved work-flow procedures and more cohesion in interactions resulting in increased satisfaction and decreased turnover and absenteeism. I will not give much attention to production-centred leadership because the use of direct pressure and close supervision led to decreased satisfaction and increased turnover and absenteeism.


The leadership studies initiated by the Bureau of research at Ohio State University identified two dimensions of leader behaviour:

Initiating structure - Attempts to organize work, work relationships, and goals

Consideration - Concern for followers' comfort, well-being, status, and satisfaction

The initiating structure and consideration are two distinct dimensions and not mutually exclusive.



As a manager, I would like to choose high initiating structure and low consideration because if I would choose high consideration than the workers will take benefit of it and there would be more absenteeism and less work. High initiating structure would help in organizing the work, establishing well defined patterns of organization, channels of communication and methods or procedures.


Involvement of employees in making significant decisions is known as participative management. There must be an atmosphere of trust and employee participation must be based on informed choice.


I will hold a meeting involving all employees in the meeting. I will ask employees about the problems or challenges that they are facing. What are the reasons for their poor attendance and indiscipline?

After taking the views and answers from the employees I will try to solve their problems if they are valid.


Quality Circles are a participatory management technique that evolved in Japanese manufacturing sector in 1940's

A quality circle consists of a small group of 8-10 employees who meet regularly to identify, analyze, and solve problems related to product quality, production and operations.

Quality circles spread to the manufacturing sector in other parts of the world due to the research and writings of EDWARD DEMING in 1970's

Workers often make better suggestions for improving product quality and production process than management alone.

Employees are better motivated and more productive if allowed to participate in management decision making


As a manager, I will form a quality circle including 8-10 employees and I will ask them the problems that they are facing and then try to work out on these problems to bring efficiency in work. Through the set of employees I will try to judge the main problem, analyze and find out a solution for the various problems regarding working conditions, job structure etc. using this technique as a facilitator.


Ignorant attitude of the employees, low motivation and high absenteeism due to monotonous schedule with no job enrichment and job rotation are the main problems of the workers. Incentives are not given as there is no standard benchmark. Different motivational, leadership theories etc. are practically implemented to check on easy-going attitude, high absenteeism etc. Role of the employees must be clearly defined and the management must convey the standard of output they expect from them. Participation of employees must be encouraged through various techniques like quality circles and participative management. Efforts of the workers must be rewarded through monetary and non-monetary incentives. Job enlargement, job enrichment or job rotation must be done. The workers must be given chances to improve their skills and abilities through conducting various training and development workshops.