National University of Modern Languages
Submitted to:
Submitted by: Rimsha (L-21211)
Subject:
Class: MBA-4 (Morning)
Submission Date: 14-06-2020
Introduction:
Organizational Behavior has included two terms in it. Therefore, these two terms should be
detailed first:
Organization: It is a group of people who are collected to work for a common goal with
collective efforts. Organization works through two concepts i.e. coordination and
delegation among its group members.
Behavior: It is a verbal or physical response shown by a person as a consequence of the
impact of his/her surroundings. Individual Behavior varies in accordance with their
mental reactivity to particular circumstances because of their deeply imbibed morals and
value system.
Organizational Behavior is the observation of individual and/or group Behavior in response to
the other individuals or group as a whole. It studies Behavior of people or group to know their
attitude towards particular circumstances. Barnard recognized that individuals behave differently
when acting in their organizational role than when acting separately from the organization.
Organizational behavior researchers study the behavior of individuals primarily in their
organizational roles. One of the main goals of organizational behavior is "to revitalize
organizational theory and develop a better conceptualization of organizational life"
Definition:
Organizational behavior (OB) is the: "study of human behavior in organizational settings, the
interface between human behavior and the organization, and the organization itself". OB research
can be categorized in at least three ways:
individuals in organizations (micro-level)
work groups (meso-level)
how organizations behave (macro-level)
Explanation
Power and leadership:
· Definition: A capacity that A has to influence the behavior of B, so that B acts in
accordance with A’s wishes.
· The definition implies a potential that need not be actualized to be effective and
a dependency relationship. Power may exist but not be used. It is, therefore, a capacity or
potential.
Contrasting Leadership and Power
Leadership can be defined as the ability of the management to make sound decisions and inspire
others to perform well. It is the process of directing the behavior of others towards achieving a
common goal. In short, leadership is getting things done through others.
Essentially, leaders achieve goals, and power is a means of facilitating their achievement
· Leadership involves the goals of the leaders and followers - Power does not
· Leadership focuses on downward influence (leader - subordinate) - Power does not
Importance of Leadership
Leadership is very important in a firm as it leads to higher performance by the team members, it
improves motivation and morale within the members, and helps to respond to change.
Leadership facilitates organizational success by creating responsibility and accountability
among the members of the organization. In short, it increases value in an organization.
Poor leadership can seriously affect employee morale and even cause the company’s bottom line to
plunge. Bad leadership leads to poor employee retention and demotivates the remaining employees,
causing them to be much less productive
Lack of direction
Poor leaders are characterized by their lack of ability to provide direction to the team, which may stem
from their own lack of vision. It can cause frustration on both ends when the deliverables are not
completely in line with what the department needs.
Lack of coordination and teamwork
In most instances, a bad leader only looks after him or her. This involves trying to look good with the top
management at the expense of the other people, particularly his/her teammates. The result is distrust, not
just with the employees towards their head, but also with the top management toward their staff if they
believe what the bad leader is saying.
Loss of morale
As the saying goes, “People do not leave jobs, they leave managers.” Poor leadership is cited as the main
reason why employees leave, largely because of loss of morale.
Politics: Power in action
Political behavior are those activities that are not required as part of one’s formal role in the
organization, but that influence, or attempt to influence, the distribution of advantages and
disadvantages within the organization.
Legitimate and illegitimate political behaviors are common in organizations. Politics is a fact of
life in organizations.
Factors contributing to Political Behavior
Individual factors (e.g., personality traits, needs)
Organizational factors (e.g., when organizational resources decline, resources change,
low trust exists, high performance pressures, and the opportunity of promotion exists = political
behavior is likely)
Politics are a part of organizational life, because organizations are made up of different
interests that need to be aligned. In fact, 93% of managers surveyed reported that
workplace politics exist in their organization, and 70% felt that in order to be successful,
a person has to engage in politics. In the negative light, saying that someone is “political”
generally stirs up images of back-room dealing, manipulation, or hidden agendas for
personal gain. A person engaging in these types of political behaviors is said to be
engaging in self-serving behavior that is not sanctioned by the organization.
The negative side of organizational politics is more likely to flare up in times of
organizational change or when there are difficult decisions to be made and a scarcity of
resources that breeds competition among organizational groups. To minimize overly
political behavior, company leaders can provide equal access to information, model
collaborative behavior, and demonstrate that political maneuvering will not be rewarded
or tolerated. Furthermore, leaders should encourage managers throughout the
organization to provide high levels of feedback to employees about their performance.
High levels of feedback reduce the perception of organizational politics and improve
employee morale and work performance. Remember that politics can be a healthy way to
get things done within organizations.
Pakistan steel mill of Karachi:
Introduction:
Pakistan Steel Mills Corporation (Pvt.) Limited, also known as Pak Steels, is a producer of long
rolled steel and heavy metal products and entities in the country.
Headquartered in Karachi, Sindh Province of Pakistan, the PSM is the current largest industrial
mega-corporation, having a production capacity of 1.1–5.0 million tons of steel and iron
foundries. Built with the contributions of the Soviet Union in the 1970s, it is the largest industrial
mega-corporation complex, vastly expanded in an enormous dimensions construction inputs,
involving the use of 1.29Mn cubic meters of concrete and 5.70Mn cubic meters of earth work,
and containing ~330,000 tones of heavy machinery, steel structures and electrical equipment.
There are many leadership issues in Pakistan steel mill of Karachi that leads to the failure stage:
Leadership issues:
Pakistan steel mill require leaders:
Unfortunately this basic fact was forgotten as soon as the mill became operational. This actual or feigned
amnesia manifested itself in many ways. To continue on the visualised path, the Pakistan Steel required
leaders with social conscience and intellectual integrity who could initiate a debate on the objectives,
articulate the consensus and follow through by enunciating a mission statement that would balance its
economic, human and social purpose.
Within the organisation they had to set up administrative and instructional institutions that would create a
culture perfecting and perpetuating its work philosophy and ethics. There is evidence to suggest that there
were indeed a few among the crowd, who could have footed the bill, had they been allowed time. In the
archives of the Pakistan Steel there are manuscripts of strategies that aimed to integrate the mill
operations with requirements of an expanding economy. Their ideas fitted well into the original
philosophical framework and if put in practice would have effectively checked the reduction of the
Pakistan Steel to a producer of construction bars. Besides, it would not find itself in competition with
scrap based foundries and depend for staying afloat on preferential treatment from government.
With the benefit of hindsight it can be said that as soon as construction work was completed the battle for
booty was joined. That necessitated elimination of elements that could possibly prove a hindrance.
Regimes of accommodation to the powerful and subjugation of the conscientious followed and have
continued ever since. Managerial initiatives became minimal and status quo the watchword. In the
vacuum, trade unions gained ascendancy and in good time their musclemen virtually replaced the
managers. By 1989-90 utter lawlessness had come to prevail that was undoubtedly fanned and
compounded by the law and order situation in the city.
Exports of engineering goods project was not done:
The EDB was mandated to resolve problems of the engineering sector on fast track basis by
projecting strategic development plan with focus on plant modernisation and technology
upgrade, both for import substitution and export enhancement. To achieve the objectives, it
was to establish a national technology development fund and an engineering training fund.
This was not done.
The EDB was chartered to create a large base for export of engineering goods through
product diversification and latest technology acquisition. These objectives could not be
achieved for a variety of reasons, primarily due to the fact that successive governments failed
to accord priority to the engineering sector.
Pakistan’s engineering export proceeds are abysmally low, in spite of its high potential,
estimated to billions of dollars annually, given the enabling environments. Annual export of
engineering goods remains about four percent of national exports for the last ten years or so.
During the six-month (July-December) period of the current financial year 2016-17 export
proceeds of engineering goods were valuing $409.40 million compared to $434.84 million
during the same period last year, registering six percent decrease.
On the other hand, the imports of engineering goods increased to 24 percent during the same
period, accounting for $9,521.42 million compared to $7,685.88 million during the same
period of the previous year. The share of Pakistan’s engineering goods in overall global
exports is negligible, at 0.0151 percent, whereas engineering goods constitute around 50
percent of the world trade.
Neglect the Low productivity, technological obsolescence, high cost of
production:
The engineering sector is generally characterised by low productivity, technological obsolescence,
high cost of production, and non-competitiveness. The EDB has not taken effective steps in this
direction either. Nonetheless, the EDB’s achievement of developing automobile sector is remarkable
that has resulted in higher contents of indigenisation, and significant investment in the sub-sector.
However, the Ministry of Industries and Production abused the EDB in the recent past by engaging it
on non-related assignments, such as promotion of soap industry, development of chemical sector, and
facilitation to energy projects, obviously at the cost of engineering industry.
Retired employees get their dues:
There was a time when working for Pakistan Steel Mills meant a secure future, just like working
for any other government entity. A stable income, being able to build a house by the time you
retire, and, after receiving provident fund and gratuity, a stable pension. But several people who
work for the Mills with these hopes are struggling. There are nearly 6,500 such retired
employees and nearly 1,000 have already passed away as their heirs await the dues they were
entitled to receive.
The case is currently in the Sindh High Court as 3,225 retired employees petitioned the court
against the PSM. It has directed the Mills and the government to pay the petitioners’ dues by
August 31 and also called for a list of the remaining retired employees during the next
hearing on September 3.
Sheikh Muhammad Hashim, the secretary of the PSM Retired Employees Action Committee,
said the group has been pushing for the government to first pay the dues to the widows of the
deceased retired employees so that their dignity is not hurt and they don’t have to run from pillar
to post. The court has already directed the government to pay the retired employees their dues.
According to Hashim, the government has submitted Rs1.3 billion, 10% of the total dues claimed
by the petitioners, and says it will approve the remainder in the 2020-21 budget. “The SHC,
which has already given its verdict in retired employees’ favour, has pointed out that the
government doesn’t need any approval when they carry on the retrenchment of the Steel Mills
and announced Rs18 billion for it while it needs approval in the budget when payment has to be
made to retired employees, which was already due,” said Mirza Maqsood, chairman of the
Pakistan Steel Officers Association.
Federal Minister for Industries and Production Hammad Azhar and Information Minister Shibli
Faraz did not respond to requests for a comment. The government’s response will be added to
the story if and when received.
The government is at the moment looking to partially privatized the Mills by keeping the land to
itself and terminating all current employees. They plan to fire 9,350 and offer them an average
Rs2.3 million severance package each.
The Pakistan Steel Mills employees approached the Sindh High Court over the
Economic Coordination Committee’s decision to fire them.
The petition said that the decision was supposed to be discussed by the Council of Common
Interest as per the rules set by the Supreme Court in 2006.
A two-member bench, headed by Justice Omar Sial, is expected to hear the case.
The Pakistan Steel Mills, which is owned by the federation, is engaged in the manufacture
and sale of iron and steel. It is spread over 18,642 acres, of which 10,000 acres is for the
Mills while 8,000 is for Steel Town, a residential area, hospital and school.
The Mills have been running in a loss since 2008 and were eventually shut down in 2015. It
has caused losses of Rs229 billion to the national treasury.
The Supreme Court is expected to take up the case of the Pakistan Steel Mills employees. A
bench headed by Chief Justice Gulzar Ahmed and comprising justices Ijazul Ahsan and
Sayyed Mazahar Ali Akbar Naqvi will take it up.
Death of employees:
The Pakistan Steel was back in a crisis of management. Death of nine employees at work
place signified the failure of a number of its systems. It is difficult to class it as a normal
industrial accident. An accident by definition is caused by an isolated instance of
misjudgment on the part of a particular individual. Where more than one person are involved
it is at best failure of the system and at worst a conspiracy. Some people are heard saying that
the supplier had moulded the aluminium that caused the accident from hazardous scrapped
material. If there is even an iota of substance in that how would one class the cause of
mishap?
Poor information and weak analysis of market forces:
Equally important was the inability of the mills to cope with the fallout of the budgetary
proposals. It showed lack of liaison, poor information and weak analysis of market forces on
the one hand and lack of flexibility in marketing plans on the other. Then there are on-going
investigations against a dozen senior management personnel. In case the issues involved are
substantial then the system of training and promotion would seem to be suspect. If however
the cases are insubstantial and are meant to keep people in line then it points towards the
constant threat of blackmail that managers have to work under. Either way the situation
affects the credibility of the management.
Political issues:
Another model that could be tried would separate top administration from the operational
management. Top layer should embody the personality of the organization and articulate its
vision, values and principles. Its responsibilities will include general direction, strategic
planning, design and research. It will interface with main allies, associates, trade unions and
government agencies. It ought to have full power over personnel and finance and be
constantly engaged in the evaluation of organization’s performance, structure and intra-
corporation relationships. The second layer should be responsible for all operational
functions, production, logistics, marketing, and administration.
Arrangements:
The previous arrangement of having chairman and managing director with overlapping powers and
responsibilities was dichotomous and had proved unworkable. But equally the era of CEO as the
superman is gone. In the past ten years a large proportion of CEOs in big US companies were fired as
failures within a year or two. History of the Pakistan Steel has not been much different.
The government may like to institute a commission that should delve deeply into the continuing
management failures at the mills and recommend a permanent administrative solution to the woes of the
hapless organization. Privatization is not an option in the case of the Pakistan Steel. The country is
destined to retain the model of mixed economy for a very long time to come and in that model
rejuvenated, expanded Pakistan Steel has a pivotal role.
The incompetent and unqualified persons the incompetent and unqualified persons are
appointed as the chief executive officer (CEO) and board members of the organisation, primarily on
political considerations, and they are allowed to mess up with the institutions with nepotism,
inefficiency, mismanagement and irregularities, without any checks or balances.
When the organisation becomes sick over a period of time, it is put on sale or closed down. A typical
example is that of Pakistan Steel Mills in Karachi, which has been non-operational for the last two
years, and the government is least bothered. It has been continuously incurring huge losses that now
amount to over Rs70 billion. There are no chances of reviving Pakistan Steel and going into
production at a time when various infrastructure projects under the China-Pakistan Economic
Corridor (CPEC) require, over subsequent years, millions of tons of iron and steel products, valuing
billions of dollars annually.
Appointment of CEO:
The Cabinet Committee on Energy, in a meeting presided over by Prime Minister Nawaz
Sharif, has observed that the EDB was not performing any function, either in terms of
regulation or promotion of engineering enterprises. Earlier, there were reports of the EDB
being dysfunctional due to massive shakeup in the organisation’s administrative structure
without approval of the competent authority, and resultantly, persistent deterioration of the
overall performance of the organisation. Federal Audit, a wing of Auditor General of
Pakistan, has detected as many as 31 violations in the EDB ranging from appointment of its
CEO to arbitrary increase in the CEO’s salary to misuse of his authority.
The contract of the controversial CEO, whose degrees remained in question, expired on
March 31, and the EDB is being run on ad hoc basis, like some other national institutions, as
adhocism has become order of the day.
It thus remained a constituent of the State Engineering Corporation (SEC) practically for all
purposes as its chairman was given additional charge of CEO of the EDB. Unfortunately,
EDB was never allowed to establish as an independent organisation for the reason of deep-
rooted vested interests. For many years, no full-time CEO was appointed, until the board was
transferred to the Ministry of Industries and Production in the Musharraf period, and was
merged with its Experts Advisory Cell.
