-
IMPACT OF EMOTIONAL INTELLIGENCE
ON ORGANIZATIONAL CLIMATE AND
ORGANIZATIONAL CITIZENSHIP BEHAVIOR
IN PRIVATE SECTOR BANKS.
Thesis Submitted to the
Padmashree Dr. D. Y. Patil University,
Department of Business Management
In partial fulfillment of the requirements
For the award of the Degree of
DOCTOR OF PHILOSOPHY
In
BUSINESS MANAGEMENT
Submitted by
DEEPA NAIR
(ENROLLMENT NO: DYP-Ph.D-09003)
Research Guide
Prof. Dr. R. GOPAL
DIRECTOR, DEAN& HEAD OF THE DEPARTMENT
PADMASHREE DR. D.Y. PATIL UNIVERSITY,
DEPARTMENT OF BUSINESS MANAGEMENT,
Sector 4, Plot No. 10,
CBD Belapur, Navi Mumbai 400 614
May 2012
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I
IMPACT OF EMOTIONAL INTELLIGENCE
ON ORGANIZATIONAL CLIMATE AND
ORGANIZATIONAL CITIZENSHIP BEHAVIOR
IN PRIVATE SECTOR BANKS.
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II
DECLARATION
I hereby declare that the thesis entitled Impact of Emotional
Intelligence
on the Organizational Climate and Organizational Citizenship
behavior
in Private sector Banks submitted for the Award of Doctor of
Philosophy in Business Management at the Padmashree Dr. D.Y.
Patil
University Department of Business Management is my original work
and
the thesis has not formed the basis for the award of any
degree,
associateship, fellowship or any other similar titles.
Place: Navi Mumbai
Date:
Dr. R. Gopal Dr. R. Gopal Deepa Nair
(Head of the department) (Research Guide) (Research Scholar)
-
III
CERTIFICATE
This is to certify that the thesis entitled Impact of Emotional
Intelligence
on the Organizational Climate and Organizational Citizenship
Behavior
in Private Sector Banks and submitted by Ms. Deepa Nair is a
bonafide
research work for the award of the Doctor of Philosophy in
Business
Management at the Padmashree Dr. D. Y. Patil University
Department of
Business Management in partial fulfillment of the requirements
for the
award of the Degree of Doctor of Philosophy in Business
Management
and that the thesis has not formed the basis for the award
previously of
any degree, diploma, associateship, fellowship or any other
similar title of
any University or Institution. Also certified that the thesis
represents an
independent work on the part of the candidate.
Place: Navi Mumbai
Date:
Prof. Dr. R. Gopal Prof. Dr. R. Gopal
(Head of the department) (Research Guide)
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IV
Acknowledgements
I am greatly indebted to the Padmashree Dr. D.Y. Patil
University,
Department of Business Management which has accepted me for
the
Doctoral Program and provided me with an excellent opportunity
to
carry out the present research work.
I, with deep gratitude and respect, acknowledge the constant
guidance
and support received from my research guide Prof Dr. R.Gopal. It
was
possible for me to bring this research work to a fruitful
conclusion
because of his positive demeanor and constant encouragement.
I would like to thank all the employees of the different banks
who have
cooperated with me in the data collection. I also wish to extend
my
heartfelt thanks to Mr. P. Ramkumar (Retd. From Catholic Syrian
Bank)
and countless other well wishers, relatives, friends who have
helped me in
my three year journey with their references and intellectual
inputs. My
special thanks to all the Banks who are the clients of Ameya
Infovision
Pvt. Ltd.
I am grateful to my parents who have always been encouraging me
in all
my endeavors. I thank my husband Mr. K Devidas Nair for his
unstinting
support at every stage especially during the data collection.
My
appreciation for my son Shiva for his patience while I was
busy
completing this research. Lastly I bow my head in reverence to
all my
deities in whom I seek my strength and support.
Place:
Date: Signature of the student
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V
Contents
Chapter
No.
Title Pg.
No.
List of Tables x
List of Exhibits xv
List of Abbreviations xvii
Executive Summary 1
1 Introduction 9
1.1 Origin of Banking 10
1.2. Banking in the Middle Ages 11
1.3. Banking in Ancient India 11
1.4. Establishment of Modern Banks 12
1.5. Private Banks in India 14
1.6. Emotions in the work place 16
1.7. Relation between individual and Organization 16
1.8. Changes in Financial Services Sector 19
1.9. Importance of Behavioral Dimensions in Banks 20
2 Literature Review 27
3 Problem Definition, Objectives of the Study and
Research Methodology
62
3.01 Introduction to the Problem 63
3.02 Research Problem 64
3.03 Objectives of the Study 65
3.04 Hypothesis 66
3.05 Research Design 69
3.06 Sampling Design 70
3.07 Data Acquisition 71
3.08 Pilot Study 71
3.09 Tools of Data Collection 72
3.09.a. Personal Interview Method 72
3.09.b. Questionnaire 73
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VI
3.10 Data Analysis 73
3.11 Presentation of Findings Recommendations and
Conclusion
74
3.12 Limitations of the research 74
4 Demographic Variables and Emotional
Intelligence, Organizational Climate and
Organizational Citizenship Behavior.
76
4.01 Reliability Tests 77
4.02 Demographic variables and Emotional Intelligence 79
4.02.1 Age and Emotional Intelligence 79
4.02.2 Position and Emotional Intelligence 81
4.02.3 Educational Qualification and Emotional
Intelligence
84
4.02.4 Experience and Emotional Intelligence 86
4.02.5 Gender and Emotional Intelligence 88
4.02.6 Marital Status and Emotional Intelligence 90
4.02.7 Comparison of Emotional Intelligence between
States
93
4.03 Demographic variables and Organizational
Climate
94
4.03.1 Employee Age & Organizational Climate 94
4.03.2 Relation between gender and Organizational
Climate
96
4.03.3 Qualification and Organizational Climate 98
4.03.4 Experience and Organizational Climate 99
4.03.5 Relation between marital status and
Organizational Climate
101
4.03.6 Position and Organizational Climate 102
4.03.7 State wise difference in Organizational Climate 104
4.04 Organizational Citizenship Behavior and
Demographic variables
106
4.04.1 Age and Organizational Citizenship Behavior 106
4.04.2 Gender and Organizational Citizenship Behavior 108
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VII
4.04.3 Qualification and Citizenship behavior 109
4.04.4 Experience and Organizational Citizenship
Behavior
111
4.04.5 Position and Organizational Citizenship Behavior 112
4.04.6 Marital Status and Organizational Citizenship
Behavior
114
4.05 Summary of findings of demographic variables in
relation to Emotional Intelligence
116
5 Emotional Intelligence and Organizational Climate 118
5.01 Introduction 119
5.02 Relation between Emotional Intelligence and
Organizational Climate
120
5.03 Emotional Intelligence and the sub variables of
Organizational Climate
121
5.03.1 Emotional Intelligence and Job Satisfaction 125
5.03.2 Emotional Intelligence & Customer Orientation 129
5.03.3 Emotional Intelligence and Involvement and
Empowerment
136
5.03.4 Emotional Intelligence & Teamwork Cooperation 138
5.03.5 Innovation 146
5.03.5.a Some Recent Innovations In Indian Banking 148
6 Emotional Intelligence and Organizational
Citizenship Behavior
152
6.01 Introduction 153
6.02 Relationship between Emotional Intelligence and
Organizational Citizenship Behavior
154
6.03 Emotional Intelligence &Interpersonal Helping 161
6.04 Emotional Intelligence & Individual Initiative 165
6.05 Emotional Intelligence & Personal Industry 167
6.06 Emotional Intelligence & Loyal Boosterism 169
6.07 Organizational Citizenship Behavior as a
Customer Acquisition and Retention Strategy.
171
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VIII
7 Organizational Climate and Organizational
Citizenship Behavior
174
7.01 Introduction 175
7.02 Impact of Organizational Climate upon
Organizational Citizenship Behavior
176
7.03 Correlations & Multiple regression analysis 182
7.03.1 Job Satisfaction 182
7.03.2 Customer Orientation 185
7.03.3 Involvement & Empowerment 187
7.03.4 Teamwork and Cooperation 189
7.03.5 Correlation Analysis 192
7.03.6 Multiple regression analysis 193
7.04 Employee Training and Information and
Knowledge Sharing
195
7.04.1 Employee Training 196
7.04.2 Information and Knowledge sharing 199
7.04.3 Multiple Regression 202
8 Implications and relevance of the Study 205
8.01 Introduction 206
8.02 Talent Management 207
8.03 Employee Retention 210
8.04 Human Resource Planning - Recruitment and
Selection
215
8.05 Training and Development 218
8.06 Team Work and Cooperation 224
8.07 Relevance of Organizational Citizenship
Behaviour
229
8.08 Customer and Client Management 230
9 An Overview 233
9.1 Model Developed in the Study 238
Annexure 240
Annexure I (Bibliography) 241
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IX
Annexure II (Questionnaire) 256
Annexure III (Operational Definitions) 264
Annexure IV (List of Banks) 267
Annexure V(SPSS Tables & Exhibits) 268
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X
List Of Tables
Table
No.
List of Tables Page
No.
3.1 Sampling 70
4.01.a Reliability for Emotional Intelligence 77
4.01.b Split half Reliability 78
4.02.a Reliability for climate 78
4.02.b Split half reliability for Organizational Climate 78
4.03.a Reliability for OCB 79
4.03.b. Split half reliability for OCB 79
4.04 Descriptive statistics of age and EI 80
4.05 ANOVA Relation between Age and EI 80
4.06 Position and EI (percentage analysis) 82
4.07 Chi-Square Tests- relation between position and
Emotional Intelligence
83
4.08 Symmetric Measures : Phi CramerV Tests 83
4.09 qualification level * EI Percentages 85
4.10 Chi-Square Tests Relation between Emotional
Intelligence and Qualification
86
4.11 Group Statistics Mean and Standard
Deviation(EI & Experience)
87
4.12 T Test- EI & experience 87
4.13 Group Statistics- Gender & EI 88
4.14 T Test for equality of means based on gender 89
4.15 Marital Status * Emotional Intelligence Level 91
4.16 Chi-Square Tests relation between Marital
Status and Emotional Intelligence
92
4.17 Symmetric Measures- Phi Cramer V Test 92
4.18 State wise Group Statistics 93
4.19 State wise Comparison with T Test 94
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XI
4.20 Group Statistics- Age and Organizational
Climate
95
4.21 ANOVA for Age and Organizational Climate 96
4.22 male or female * OC % Analysis 97
4.23 Chi-Square Tests-relation between gender and
perception of Climate
97
4.24 ANOVA- Qualification OC 98
4.25 experience * OC Percentage Analysis 99
4.26 Chi-Square Test Experience and OC 100
4.27 Group Statistics Marital Status and OC 101
4.28 Marital Status and OCT Test 102
4.29 Position* OC percentage Analysis 103
4.30 Position and OC chi square test 103
4.31 Group Statistics for States 105
4.32 T- Test for State differences in OC 105
4.33 age * Organizational Citizenship Behavior 106
4.34 Chi-Square Tests Age and OCB 106
4.35 Symmetric Measures 107
4.36 Group Statistics for Gender & OCB 108
4.37 T Test to compare OCB between gender 109
4.38 Descriptives- qualifications & OCB 110
4.39 ANOVA between Qualifications for OCB 111
4.40 Group Statistics Experience and OCB 111
4.41 T Test for difference in OCB due to experience 112
4.42 Chi-Square Tests for position and OCB 113
4.43 Symmetric Measures 113
4.44 Marital Status * OCB 114
4.45 Chi-Square Tests relation between marital
status and OCB
115
4.46 Symmetric Measures 115
5.01 Correlations between EI & OC 120
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XII
5.02 a. Regression: Model Summary 121
5.02 b. ANOVAb of Regression 121
5.02 c. Coefficients
Regression 121
5.02 d. Residuals Statisticsa 122
5.03 Correlation between EI and JS ,CO, IE and TC 125
5.04 a. Model Summary
of Regression (EI & JS) 126
5.04 b. ANOVAb
of Regression (EI & JS) 126
5.04 c. Coefficients of Regression (EI & JS) 126
5.04 d. Residuals Statisticsa (EI & JS) 128
5.05 Emotional intelligence * customer orientation 130
5.06 Chi-Square Tests- Relation between Emotional
Intelligence & Customer Orientation
131
5.07 a. Model Summary of Regression (EI & CO) 133
5.07 b. ANOVAb of Regression Analysis(EI & CO) 133
5.07 c. Coefficients of Regression Analysis(EI & CO) 133
5.08 a Model Summary of Regression (EI & IE) 136
5.08 b. ANOVAb of Regression Analysis (EI & IE) 137
5.08 c. Coefficients of Regression Analysis(EI & IE) 137
5.09 a. Model Summary (EI & TC) 139
5.09 b. ANOVAb of Regression Analysis(EI & TC) 140
5.09 c. Coefficients of Regression Analysis(EI & TC) 140
5.09 d. Residuals Statisticsa(EI & TC) 141
5.10 Chi-Square Tests(Emotional Intelligence &
Innovation)
146
5.11 Symmetric Measures(Cramer's V test) 147
6.01 OCB level of Employees 153
6.02 EI * OCB percentage analysis 155
6.03 Correlations between Emotional Intelligence
,OCB, IH, II, PI and LB
156
6.04 a. Model Summary of Regression(EI & OCB) 157
6.04 b. ANOVAb of Regression Analysis (EI & OCB) 157
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XIII
6.04 c. Coefficients of Regression Analysis (EI &
OCB)
157
6.04 d. Residuals Statisticsa (EI & OCB) 158
6.05 a. Model Summary (Regression for EI and IH) 162
6.05 b. ANOVAb of Regression Analysis (EI and IH) 162
6.05 c. Coefficients of Regression Analysis (EI and IH) 163
6.05 d. Residuals Statisticsa (EI and IH) 163
6.06 a. Model Summaryb (Regression Analysis EI&II) 166
6.06 b. ANOVAb(Regression Analysis EI&II) 166
6.06 c. Coefficientsa of Regression Analysis(Regression
Analysis EI&II)
167
6.06 d. Residuals Statisticsa(Regression Analysis
EI&II)
168
6.07 a. Model Summaryb(Regression Analysis EI&PI) 168
6.07 b. ANOVAb(Regression Analysis EI&PI) 168
6.07 c. Coefficientsa (Regression Analysis EI&PI) 168
6.08 a. Model Summaryb (Regression Analysis
EI&LB)
170
6.08 b. ANOVAb(Regression Analysis EI&LB) 170
6.08 c. Coefficients(Regression Analysis EI&LB) 171
7.01 Organizational climate (OC)* organizational
citizenship behavior (OCB)
177
7.02 Chi-Square Tests (OC & OCB) 178
7.03 Symmetric Measures 178
7.04 Correlations between OC & OCB 179
7.05 a. Model Summary (Regression OC & OCB) 179
7.05 b. ANOVAb(Regression OC & OCB) 180
7.05 c. Coefficientsa(Regression OC & OCB) 180
7.05 d. Residuals Statisticsa(Regression OC & OCB) 181
7.06 OCB* JS percentage analysis 184
7.07 Symmetric Measures 184
7.08 OCB* customer orientation 186
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XIV
7.09 OCB* Involvement /Empowerment 188
7.1 OCB* Teamwork/Cooperation % analysis 190
7.11 Symmetric Measures 191
7.12 Correlation between OCB & JS, CO, IE, IK, ET
,TC
192
7.13 a. Model Summary (Multiple regression Analysis) 193
7.13 b. ANOVAb(Multiple regression Analysis) 193
7.13 c. Coefficientsa(Multiple regression Analysis) 194
7.14 OCB* ET percentage Analysis 198
7.15 Symmetric Measures 199
7.16 OCB * IK 201
7.17 a. Model Summary(Multiple Regression ET, IK &
OCB)
202
7.17 b. ANOVAb(Multiple Regression ET, IK & OCB) 203
7.17 c. Coefficientsa(Multiple Regression ET, IK &
OCB)
203
8.1 % of Employees who desire to leave the Bank 214
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XV
LIST OF EXHIBITS
Ex.No. LIST OF EXHIBITS Pg.No.
1.1 Percentage of respondents who expected
moment of truth during 24 hours (From -
The McKinsey Quarterly Chart Focus
Newsletter)
18
2.1 MSCEIT Total (Adapted from Mayer, &
Caruso, 2002)
33
4.01 Position and Level of EI 82
4.02 Level of EI and Qualification 86
4.03 Marital Status and Emotional Intelligence 90
4.04 male or female * OC- Percentage Analysis 98
4.05 Experience and Organizational Climate 100
4.06 Position & Organizational Climate 104
4.07 Age and OCB 107
5.01 a. Histogram of standardized Residual(EI and
OC)
122
5.01b Scatter Plot (EI and OC) 123
5.01c Unstandardized residual plot(EI & OC 123
5.01d Studentized Residual Plot(EI and OC) 124
5.02a Histogram of standardized Residual(EI & JS) 127
5.02b Residual Plot(EI &JS) 129
5.02c Residual Plot(EI &JS) 129
5.03a Level of CO with Emotional Intelligence 130
5.04 Histogram of standardized Residual(EI&CO) 134
5.05. a Scatter Plot (TC&EI) 141
5.05. b Studentized Residual Plot(TC&EI) 142
5.05. c Unstandardized Residual Plot (TC & EI) 142
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XVI
6.01 Pie chart showing OCB level 154
6.02 a. Histogram of regression standardized
residual (EI &OCB)
159
6.02 b. Scatter Plot (EI &OCB) 159
6.02 c. Unstandardized residual Plot(EI&OCB) 160
6.02 d. Studentized residual Plot 160
6.03 .a. Residual Plot(EI &IH) 164
6.03 b. Studentized residual Plot 164
7.01 OCB Level 177
7.02 Scatter plot around the line of fit in the graph
of the linear equation
180
7.03 Histogram of Standardized residual 182
7.04 JS & OCB 185
7.05 OCB & CO 186
7.06 OCB & IE 188
7.07 OCB & TC 191
7.08 OCB & ET 198
7.09 Exhibit: OCB & IK 201
8.1 Talent Management Model 208
8.2 %of Employees who desire to leave the Bank 214
8.3 Stages of Team Formation 226
9.1 Model Developed in this Study 239
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XVII
LIST OF ABBREVIATIONS
EI (ei) Emotional Intelligence
EE (ee) Expressing Emotions
UE (ue) Understanding Emotions
BE (be) Balancing Emotions
OC (oc) Organizational Climate
OCB
(ocb)
Organizational Citizenship Behavior
JS (js) Job Satisfaction
TC (tc) Teamwork/Cooperation
IK (ik) Information /Knowledge Sharing
CO (oc) Customer Orientation
IE (ie) Involvement/Empowerment
ET (et) Employee Training
IH (ih) Interpersonal Helping
PI (pi) Personal Industry
II (ii) Individual Initiative
LB (lb) Loyal Boosterism
HDFC Housing Development Finance Corporation
ICICI Industrial Credit Investment Corporation of India
MSCEIT Mayer-Salovey-Caruso Emotional Intelligence Test
IQ Intelligence Quotient
SIB South Indian Bank
ATM Automated Teller Machines
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1
EXECUTIVE SUMMARY
Introduction
In a Business Environment that is extremely volatile, banks are
always
searching for answers and means to create a workforce with
competencies that
will make them globally competitive. In the Indian Banking
scenario a huge
expansion is taking place particularly in the private sector
banks. Expansion is
taking place in multiple moves; one is there is physical
expansion;
distribution, increased number of branches, automated teller
machine (ATM),
network. But importantly, there is another expansion which is
taking place is
that the product in the service range of the private sector
banks is becoming
bigger, more complex and more relevant to the dynamic economy in
which we
are today. One of the major challenges which banks face is
streamlining the
HR in the face of the rapid changes in the economy, and market
conditions.
There is already a crisis of talent. This study mainly focuses
on the behavioral
competencies of the employees and its contributions to the
growth of the bank.
Emotional Intelligence
Emotional Intelligence is a persons ability to be self aware,
detect emotions in
others, and manage emotional cues and informations. Different
models have
been proposed for the definition of EI and disagreement exists
as to how the
term should be used. The earliest roots of emotional
intelligence can be traced
to Darwin's work on the importance of emotional expression for
survival and
adaptation. In the 1900s, even though traditional definitions of
intelligence
emphasized cognitive aspects such as memory and problem-solving,
several
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2
influential researchers in the intelligence field of study had
begun to recognize
the importance of the non-cognitive aspects. For instance, as
early as 1920,
E.L. Thorndike used the term social intelligence to describe the
skill of
understanding and managing other people.
The first use of the term "emotional intelligence" is usually
attributed to
Wayne Payne's doctoral thesis, A Study of Emotion: Developing
Emotional
Intelligence from 1985. However, prior to this, the term
"emotional
intelligence" had appeared in Leuner (1966). Greenspan (1989)
also put
forward an EI model, followed by Salovey and Mayer (1990), and
Goleman
(1995). The distinction between trait emotional intelligence and
ability
emotional intelligence was introduced in 2000.
Organizational Climate
Climate can be defined as the incumbents perceptions of the
events, practices
procedures and kinds of behavior that get rewarded supported and
expected in
a setting (Schneider1990; pg.384). The climate of an
organization refers to
those aspects of the environment that are consciously perceived
by the
organizational members (Amstrong 2003). In short it refers to
how members
of the organization perceive it as they go about their daily
business. Reichers
and Schneider (1990.pg.22) defined organizational climate as
shared
perceptions of the way things are around here.
Organizational Citizenship Behavior.
Organizational citizenship behavior (OCB) has become a major
construct in
the fields of the psychology and management and received a great
deal of
-
3
attention in the literature (Bateman and Organ, 1983).
Organizational
citizenship behavior represents individual behavior that is
discretionary, not
directly or explicitly recognized by the formal reward system,
and in the
aggregate promotes the efficient and effective functioning of
the organization
(Organ, 1988, p. 4).
Most of the studies examining the structure of OCB have agreed
that it is a
multidimensional concept (e.g. Graham, 1989; Moorman and
Blakely, 1995;
Organ, 1988; Podsakoff et al., 1990). Graham (1989), for
example, proposed a
four-dimension model of OCB consisting of: interpersonal
helping, individual
initiative, personal industry, and loyal boosterism. 1995).
Research Gap
There is no study connecting the three organizational variables
- Emotional
intelligence (EI), organizational Climate (OC) and
Organizational citizenship
behavior (OCB) - together. There is a huge research gap in this
area and
therefore this research attempts to cover that by understanding
the relation
between employee Emotional Intelligence (EI) and Organizational
Climate
(OC) and Organizational citizenship behavior (OCB).
The primary Objectives of the Study:
Though this study has Eleven Objectives the three primary
Objectives of this
study are-
1. To explore the impact of Emotional Intelligence on
Organizational
Climate.
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4
2. To investigate the impact of Emotional Intelligence on
Organizational
Citizenship Behavior
3. To scrutinize the relationship between Organizational Climate
and
Organizational Citizenship Behavior.
Employee Emotional Intelligence is the independent variable in
this study and
its impact on Organizational Climate and Organizational
Citizenship Behavior
is studied. Since this study is totally focused on Private
Sector Banks in India,
Public Sector Banks were not considered. Sampling was done in
two stages.
In order to get a representative sample, the stratified sampling
technique was
first used and two strata developed based on size- one Large and
the other
medium. The parameters for size were Market Capitalization of
the bank and
employee strength. For the purpose of confidentiality the
randomly selected
large banks were coded as L1, L2, L3 and the other strata of
medium sized
banks were coded as M1, M2, M3, M4, M5. The suggested sample was
651
and the sample collected was 704.
Data Acquisition was through Primary and Secondary sources. The
Primary
Sources of Data Collection are the Questionnaire and the In
Depth Interviews.
The Secondary Sources of Information are from Annual Reports of
Banks,
Company Manuals and brochures, Articles, Internet Sources,
books,
periodicals, guides and directories, Journal and Newspaper.
Data Analysis
Data Analysis was done using the SPSS software. The chi square
test, Anova
T test correlation, regression and multiple regression analysis
was used to find
-
5
the relationship between the variables of Emotional
Intelligence,
Organizational Climate and Organizational Citizenship
behavior.
Findings
The correlation and regression analysis conducted revealed that
there was a
high degree of positive correlation between the independent
variable
Emotional Intelligence and the dependent variable Organizational
Climate.
The computed value of the F statistic as well as the computedt
values
showed a significant relation between the two variables. The
Regression
model was developed to show the impact of Emotional Intelligence
on
Organizational Climate .
To find the impact of Organizational Climate on Organizational
Citizenship
Behavior, correlation and regression analysis was conducted. The
Pearsons
Correlation showed a high degree of positive correlation between
the
independent variable Organizational Climate and the dependent
variable
Organizational Citizenship Behavior. Further the regression
analysis shows
the computed value of the F statistic as well as the computed t
values to be
significant. The Regression equation further proves the degree
of relation
between the two variables of Organizational Climate and
Organizational
Citizenship Behavior.
There is a high degree of positive correlation between Emotional
Intelligence
and Organizational Citizenship Behavior. Further the regression
analysis
shows the computed value of the F statistic as well as the
computed t values to
be significant. The Regression equation further proves the
degree of relation
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6
between the two variables of Emotional Intelligence and
Organizational
Citizenship Behavior.
Model Developed in the study
The brief of the entire study can be understood on the basis of
the model
developed in this study
TALENT
MANAGEMENT
EMPLOYEE
RETENTION
ABSENTIEEISM
(Curbing)
CUSTOMER &
CLIENT
MANAGEMENT
TRAINING &
DEVELOPMENT
RECRUITMENT
SELECTION
STRESS
MANAGEMENT
ORGANIZATIONAL
RELEVANCE
UNDERSTANDING
EMOTIONS
BALANCING
EMOTIONS
EXPRESSING
EMOTIONS
EMOTIONAL
INTELLIGENCE
CUSTOMER
ORIENTATION
INVOLVEMENT /
EMPOWRMENT
INFORMATION &
KNOWLEDGE
SHARING
TEAM WORK /
COOPERATION
OVERALL
SATISFACTION
EMPLOYEE
TRAINING
ORGANIZATIONAL
CLIMATE
INTERPERSONAL
HELPING
INDIVIDUAL
INITIATIVE
PERSONAL
INDUSTRY
LOYAL
BOOSTERISM
ORGANIZATIONAL
CITIZENSHIP
BEHAVIOR
OUTPUT
Organizational
System Level
HUMAN
OUTPUT
INDIVIDUAL
GROUP OR
TEAM LEVEL
INPUTS
MODAL DEVELOPED
Exhibit 9.1: Model Developed in the Study
Exhibit 9.1 which represents the model that has been developed
in this study
sums up the entire study. Emotional Intelligence (with its three
components
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7
Expressing Emotions, Balancing Emotions and Understanding
Emotions) is
the individual and group level inputs which affects
Organizational Climate
(measured by its components Customer Orientation,
involvement/Empowerment, Information/Knowledge sharing,
Employee
Training, Teamwork /Cooperation, and Job Satisfaction).The
Organizational
Climate in turn affects Organizational Citizenship Behavior(with
its
components being Interpersonal Helping, Personal Industry,
Individual
Initiative and Loyal Boosterism). All these three variables have
a positive
impact on each other as proved in the study. For the Banks an
increase in the
Emotional Intelligence of the Employees results in better
Organizational
Climate which in turn results in high Organizational Citizenship
Behavior by
the employees. The positive outcome of the interaction between
these variable
affects Talent Management, abets employee retention, curbs
absenteeism,
improves customer and client Management and helps in stress
management,
Recruitment and Selection and Employee Training.
Limitations of the research
Since the sample has been totally taken from the Private Indian
banks cultural
variations could occur across different countries. Differences
in values,
attitudes, motivations and perceptions could give different
results. This study
is focused mainly on Private Banks and can be replicated across
several
industries to get a more holistic picture of the influence of
Emotional
Intelligence on the Organizational Climate and consequently its
impact on
Organizational Citizenship Behavior. Public Sector Banks as well
as Foreign
Banks too were not considered in this study.
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8
Conclusion
Todays Banks operate in an increasingly uncertain and tumultuous
global
market economy that requires employees to demonstrate complex
and
multidimensional thinking, requiring traditional analytic or
linear thinking
skills, as well as more nonlinear modes such as intuition,
insight, emotional
assessments, creative thinking, and perceptual flexibility .This
study looks into
one such nonlinear behavioral skill i.e. Emotional Intelligence,
a recent
addition to Organizational Literature. An attempt has been made
to understand
the impact of Emotional Intelligence on Organizational Climate
and the
resulting impact it has on the final outcome Organizational
Citizenship
Behavior and its relevance to Private Sector Banks.
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9
Chapter 1
INTRODUCTION
Whether we like it or not, men and women are not the same in
nature,
temperament, emotions and emotional responses. Doing Business is
much
about using your Emotional Intelligence.
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10
CHAPTER 1
INTRODUCTION
1.1. Origin of Banking
The word bank has its origin in the French word Banque or the
Italian
word Banca, both of which mean an office for monetary
transactions over
the counter, benches or desks. Thus, in olden times, bank means
a bench or
desk on which transactions took place. In many parts of the
world some sort of
monetary dealings were prevalent even when barter system was
popular.
Excavations are said to reveal the existence of deposit banks in
Babylonian
/Assyrian civilization. The code of Babylonian's, the code of
Hammurabi, the
king of Babylon dealing with the morals, ethics of a good and
honest banking
also existed. Copper, silver and other metals with specified
weight were used
as a standard of valuation. The discovery of coin brought a
revolution in the
history of money and banking. Coinage helped banks to perform
more and
more functions which were not possible under practice of
granting loan was
widely prevalent. The books of Manu, also speaks of credit
system, credit
instruments, interest on loans and renewal of commercial papers.
In Rome, in
the 4 th century BC, the modern banking functions such as money
changing,
auctioning, discounting, advancing, and investment were
undertaken, People
were using cheque or draft on bank. During the ancient period,
the banking
business was mostly undertaken by private individuals.
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11
1.2. Banking in the Middle Ages
The middle ages saw the rise and spread of professional
moneylenders doing
business all over the world. But there were no general or
uniform principles
governing banking, lending and rates of interest. No code of
ethics existed.
The Jews exacted very high rate of interest and Henry III fixed
43% rate of
interest for the moneylenders. The goldsmiths established a
corporation of
goldsmiths in England and were charged with the safe keeping of
the royal
mint and the treasure. Due to ill treatment by the Government of
Charles II,
the goldsmiths vanished and it became a turning point in the
history of
banking in England. The Bank of Venice, established in 1157, is
supposed to
be the most ancient bank. Another bank Monte was established in
Florence
in 1336 in Italy. A public bank was established in Barcelona in
1401. It used
to exchange money, receive deposits and discount bills of
exchange. The Bank
of Genoa and the Bank of Amsterdam were established in 1457 and
1609
respectively. The bank of Amsterdam accepted all kinds of specie
on deposits.
Most of the European banks were formed on the model of this
bank, i.e. Bank
of Amsterdam. The bank of England was established in 1694.
1.3. Banking in Ancient India
Banking in India is older than the rest of the world. Acceptance
of deposits
and granting of loans were being performed by a section of
community in
Vedic period. The banker performed most of the functions of the
modern
banks during Smriti period. Vaishyas practiced banking during
Buddhist
period and later on Brahmins and Kshatriyas also entered into
the fray. In
Kautilyas Arthshastra, maximum rates of interest were fixed.
People who did
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12
this business were called as Sahukar of Mahajan or Sresthis..
During early
Muslim Rule in India, Indigenous banks performed banking
functions. The
bills of exchange, known as Hundie, were most commonly used. The
names of
Jagat Seth are very well known in India. According to U.P.
Banking enquiry
Committee Jagat Seths of the 17th and 18th Centuries, having all
the power
and influence as the other private banking house in any other
country and
fulfilled many of the functions of central bank.
1.4. Establishment of Modern Banks
Due to the advent of the East India company, the indigenous
banking declined
in the 18th century. The first joint stock bankthe Hindustan
Bankwas
established in 1770 by the Alexander and company at Calcutta but
it was
liquidated in 1832. The Bengal Bank was established in 1785 and
the General
Bank of India in 1786. Both the banks, however, failed by 1791.
The first
Presidency bank was established in Calcutta in 1806 in the name
of Bank of
Calcutta and was renamed as the Bank of Bengal in 1809. The
other two
Banksthe Bank of Bombay and the Bank of Madras were established
in
1840 and 1843 respectively. Most of the government business was
done by
these banks. In 1865, the Allahabad bank was established under
European
Management. The Commercial Bank, established in 1881, was the
first purely
Indian Bank. It was followed by the Punjab National Bank in 1894
and the
peoples Bank in 1901. In addition to this, a few banks like the
Bank of India
(in 1906), the Indian Bank (in 1907), the Bank of Baroda (in
1908). The
Central Bank of India (in 1911),were also established by the
Indians.
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13
Calcutta was the most active trading port in India, mainly due
to the trade of
the British Empire, and so became a banking center. By the
1960s, the Indian
banking industry had become an important tool to facilitate the
development
of the Indian Economy. At the same time, it had emerged as a
large employer,
and a debate had ensued about the possibility to nationalise the
banking
industry. Indira Gandhi the-then Prime Minister expressed the
intention of the
GOI in the annual conference of the All India Congress Meeting
in a paper
entitled "Stray thoughts on Bank Nationalization." The paper was
received
with positive enthusiasm. Thereafter, her move was swift and
sudden, and the
GOI issued an ordinance and nationalize the 14 largest
commercial banks with
effect from the midnight of July 19, 1969.Jayaprakash Narayan, a
national
leader of India, described the step as a "masterstroke of
political sagacity."
Within two weeks of the issue of the ordinance, the Parliament
passed the
Banking Companies (Acquisition and Transfer of Undertaking)
Bill, and it
received the presidential approval on 9 August 1969.
In the early 1990s, the then Narsimha Rao government embarked on
a policy
of liberalization licensing a small number of private banks.
These came to be
known as New Generation tech-savvy banks, and included Global
Trust Bank
(the first of such new generation banks to be set up), which
later amalgamated
with Oriental Bank of Commerce, Axis Bank(earlier as UTI Bank),
ICICI and
HDFC. This move, along with the rapid growth in the economy of
India
revitalized the banking sector in India, which has seen rapid
growth with
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14
strong contribution from all the three sectors of banks, namely,
government
banks, private banks and foreign banks.
The banking scenario in India has already gained all the
momentum, with the
domestic and international banks gathering pace. Indian banks,
the dominant
financial intermediaries in India, have made good Progress over
the last five
years, as is evident from several parameters, including annual
credit
growth, profitability, and trend in gross nonperforming assets
(NPAs). While
the annual rate of credit growth clocked 23% during the last
five years,
profitability (average Return on Net Worth) was maintained at
around 15%
during the same period, and gross NPAs fell from 3.3% as on
March 31,
2006 to 2.3% as on March 31, 2011.Good internal capital
generation,
reasonably active capital markets, and governmental support
ensured good
capitalization for most banks during the period under study,
with overall
capital adequacy touching 14% as on March 31, 2011. At the same
time, high
levels of public deposit ensured most banks had a comfortable
liquidity
profile.
1.5. Private Banks in India
It is well documented in economic literature that financial
development makes
fundamental contributions to economic growth. Private Banks are
one of the
main participants of the financial system in India. Past
experiences also
provide ample support to this fact. In theory it goes back to
Schumpeter (1911)
who argued that well functioning banks are able to identify
innovative
entrepreneurs that allow funds being channeled to the most
promising
investment projects. Indian banking has worked up to the
competitive
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15
dynamics and is addressing the relevant issues to take the
multifarious
challenges of globalization. These private banks are futuristic
and proactive
players who are constantly reorienting their strategies to bring
about total
systemic transformation. In this context of constant
transformation and quest
for excellence these banks have to have a multipronged strategy
to survive in
the market. One of the most interesting areas of development
would naturally
be to start from within the Banks by improving the quality of
workforce. This
study tries to probe a very important dynamic aspect of human
nature i.e
emotions and its management in the workplace context.
The focus of all banks in India has shifted their approach to
'cost', determined
by revenue minus profit. This means that all the resources
should be used
efficiently to better the productivity and ensure a win-win
situation. To survive
in the long run, it is essential to focus on cost saving.
Previously, banks
focused on the 'revenue' model which is equal to cost plus
profit. Post the
banking reforms, banks shifted their approach to the 'profit'
model, which
meant that banks aimed at higher profit maximization. The
banking industry is
slated for growth in future with a more qualitative rather than
quantitative
approach. For this growth to occur it is very important to
understand the
human forces acting to bring about these changes. This study
looks at the
private sector banks and its workforce in the context of the
relationship
between the employee Emotional Intelligence and The resulting
organizational
Climate and the resulting output of the two Organizational
Citizenship
Behavior.
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16
1.6. Emotions in the work place
Most social and behavioral scientists reason either implicitly
or explicitly
,that observed behavior is a function of the salience or meaning
of situations
for people (Schneider). Except for extreme behaviorists,
behavior is
conceptualized as the outcome of a sense making process wherein
stimuli are
processed by humans who then behave in , or construct (Weick,
1995), the
situations to which they respond. Response to stimuli is the
result of the
emotions people experience. Given the obvious role that emotions
play in
work and everyday lives, the field of Organizational Behavior
has given no
importance to the topic till late. There could be two possible
explanations for
this .The first is the myth of rationality. From the late
nineteenth century and
the rise of Management until very recently was to keep emotions
in the back
burner. The second reason was that strong emotions of any kind
are disruptive
by nature. The need of the hour is to recognize emotions as an
integral part of
any working climate and instead of relegating it what is
important is how to
learn to manage it for increasing the productivity performance
and efficiency
of the employees.
1.7. Relation between individual and Organization
Each individual working in a system (organization) should
understand his
basic behavioral orientations if he has to perform effectively.
The relationship
between the individual and the organization (system) is
reciprocal. Any
organizations, whatever be its size, activity, its success
depends upon the
employees decisions and behavior. All the other factors
contributing to
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17
organizational success like technology are subject to rapid
change but one
factor contributing to organizational outcomes which has always
held a
position of primacy is the human element or the human factors
that contribute
to the triumph of organizations. Employee performance is the
outcome of a
number of factors both intrinsic to the employee at the
individual level and at
the same time a variety of extrinsic factors which are
organizational.
Banks too understand that in order to stay in the competition
they have to
increase their profitability and revenue which means they have
to improve
their performance .Yet many banks find it increasingly difficult
to achieve the
performance goals. .As banks try to manage risks, improve branch
operations,
design and execute more effective marketing campaigns, attract
and retain
more customers and increase customer profitability, they have to
understand
that it is only possible to achieve these performance goals with
the high level
of commitment and involvement of its important stakeholder its
employees.
Therefore the performance of the individual which is dependent
upon his
behavioral component is possible in a conducive environment
i.e
organizational climate.
This study thus aims to establish whether there exists a
relation between a very
important individual behavioral components Emotional
Intelligence and
whether it affects the organizational factor of climate and
ultimately whether it
results in organizational citizenship behavior. Every employee
expends
physical and mental labour when they put their bodies and
cognitive abilities,
respectively into their job but do employees also have to put
in
organizationally desired emotions into their work in order to
function
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18
effectively. Felt emotions and expressed emotions and
organizationally
desired emotions can cause a lot of emotional dissonance which
in turn could
affect the overall environment of the organizations.
(From -The McKinsey Quarterly Chart Focus Newsletter)
Exhibit 1.1:% of people who experienced their moments of truth
during 24
hours.
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19
Many consumer-facing businesses perform poorly on the front
line. Their
employees should make use of emotional intelligence, or EQ,
during
moments of truththose few interactions when the customer feels
strongly
about the outcome. At banks, for example, they involve
activities such as
receiving financial advice and negotiating mortgages as opposed
to more
mundane matters, like buying travelers checks. After a positive
moment of
truth at a bank, more than 85 percent of the consumers in a
survey increased
their value to it by purchasing additional products or investing
additional
assets; when things turned sour, upward of 70 percent reduced
their
commitment, though not all of them ended it totally.
1.8. Changes in Financial Services Sector
Financial Services sector has undergone a sea change in the past
two decades.
The financial sector reforms in India like any other country are
based on two
approaches. The first is focused on liberalization which seeks
to reduce the
number of direct controls over banks to introduce efficiency and
productivity
in the system. The second is focused on stronger regulation of
the financial
sector for its stability. The major reforms introduced in the
financial sector
since the past two decades include
Interest rate deregulation and liberalization on deposits and
lending
Entry deregulated for private and foreign players
Reduction of reserve requirement
Recapitalization of public sector banks
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20
Prudential supervision to enhance market transparency and
introduction of international best practices
Ownership of public sector is broadened through
disinvestment
These reforms have unleashed severe competition where to survive
calls for
innovation even in the best practices. In this new and emergent
marketplace,
the occurrence of loyal and often inherited relationships
between a customer
and his or her bank has become increasingly scarce (Levesque
and
McDougall,1996).In the Western world ,banking is one of the many
services
industries where research on customer satisfaction has been the
focus. Several
strategies have been tried and adopted to retain customers. With
the intention
of increasing customer loyalty many banks have introduced
innovative
products and services (Median,1996).
1.9. Importance of Behavioral Dimensions in Banks
This phase of banking revolution has made it mandatory for banks
to look for
ways and means to reinvent itself. Decision making, negotiation
skills, conflict
management, working in teams, maintenance of relations with peer
group
employees, subordinates as well as superiors, handling
frustrations,
disappointments interactions with customers clients certain
skills and abilities
beyond the technical are of prime importance. This is where
emotional
Intelligence comes into play affecting the overall climate of
the organization.
One of the most provocative ideas to emerge from recent
discussions of
management concerns the possibility that a new form of
intelligence
pertaining to emotions is related to the performance of
organization members
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21
(Goleman, 1998; Caruso and Salovey, 2004). According to this
idea, some
organization members may perform effectively because they have
high
emotional intelligence. Emotional intelligence is a set of
abilities that includes
the abilities to perceive emotions in the self and in others,
use emotions to
facilitate performance, understand emotions and emotional
knowledge, and
regulate emotions in the self and in others (Mayer and Salovey,
1997). The
concept of emotional intelligence has had an unusually important
impact on
managerial practice (Ashkanasy and Daus, 2002). Several
organizations have
incorporated emotional intelligence into their employee
development
programs (Fast Company, 2000), and some business schools have
added the
training of emotional competencies to their curriculums
(Boyatzis, Stubbs, and
Taylor, 2002). The appeal of emotional intelligence may reflect
the idea that
success is not simply determined by well-known abilities, such
as verbal and
quantitative abilities, but also by abilities pertaining to
emotions. Researchers
have built the case for emotional intelligence, in part, by
arguing that it
explains variance in job performance that is not explained by
extant constructs
such as cognitive intelligence (Mayer and Salovey, 1997;
Goleman, 1998;
Mayer, Salovey, and Caruso, 2000).
In a Business Environment that is extremely volatile, banks are
always
searching for answers and means to create a workforce with
competencies that
will make them globally competitive. This study mainly focuses
on the
behavioral competencies of the employees and its contributions
to the growth
of the bank. An often overlooked area especially in the private
banks where
-
22
there is a great deal of focus on all the other stakeholders and
not much on the
employees.
Is the study of Organizational Climate so vital to the
understanding of life
within the organization? Organizational Climate is the
measureable
psychological life space (Lewin) within organizations. Climate
research
languished as an increasingly large number of dimensions were
added to its
conceptualization; with new facets added each time a researcher
thought that
climate might be useful to understand some interesting
phenomenon. Climate
is useful when it has strategic focus (Schneider 1975). For
example there is
good evidence to support the idea that the service climate
experienced by
employees in organizations is shared also by the customers those
employees
serve (Schneider, White & Paul, 1998).Organizations have
climates that
individuals feel immediately upon entering them. Climate is
embedded in the
physical look of the place, the emotionality exhibited by
employees, the
experiences of visitors or new employees upon entry.(Schein).
To
understand climate fully one must understand what goes on in
organizations
and why it happens the way it does.
Changes in the nature of banking clearly have a knock-on effect
on employee
relations (defined broadly to include industrial relations,
communications,
training, remuneration policy, etc.) as banks move towards being
more market
driven organizations with a culture consistent with that, and
with staff being
regarded more as a resource than a cost (Wilkinson, 1990).
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23
Historically, it has been the case that employee relations have
been relegated
to a second order strategy, purely facilitative and not fully
integrated into
overall business strategy (e.g. Timperley, 1980; Purcell, 1983;
Wilkinson,
1990). Hence, there was little consideration of employee
relations at the top
corporate level implications unless the level of unrest was such
that labour was
seen as a problem, as for instance in the car industry (e.g.
Willman and Winch,
1985). Although there has been a gradual rise in the number of
personnel
professionals at Board level, these are still a minority. Lack
of serious
consideration of employee relations has also been said to owe
something to the
dominance of financial control at this level (Batstone, 1984,
pp.70-2).
Research in the 1970s discovered an avoidance strategy whereby
industrial
relations were regarded as somehow external to the enterprise
(Winkler,
1974). In the corporate planning agenda the human resources
occupy a
secondary position. However, there are dangers of looking at HR
issues in
this way. The importance of ensuring the active co-operation of
employees in
industry has been emphasized for example by Walton (1985), who
examined
the shift away from emphasizing control to one of commitment,
and this can
be even more significant for the service sector. In retail
banking, for example
where the product differentiations between the banks are not
significantly
different the consumer is influenced more by convenience and
image. This is
largely created by contact with staff, and there is thus a clear
strategic link
with quality of service and staff quality. Yet, in banking
though traditionally
staff have not been recruited or developed for customer contact
skills but for
technical and administrative ability, the scene is now changing.
Most banks
-
24
wanting to move away from being regarded merely as providers of
a money
transmission service to the selling of a range of financial
products and services
with tellers becoming sellers, the organization will, need to
become more
organic and less mechanistic, (Burns and Stalker, 1961) which
will require far
greater commitment and co-operation rather than mere compliance
from staff.
The notion of (OCB) was introduced by Bateman and Organ (1983,
p.4) and
defined as individual behavior that is discretionary, not
directly or explicitly
recognized by the formal reward system, and that in the
aggregate promotes
the effective functioning of the organization (Organ, 1988,
p.4). Although
there is an increasing research interest in OCB, a consensus is
yet to be
reached regarding what the different types of behaviors
constitute OCB.
However, Organizational Citizenship Behavior is reported to have
seven
common themes. These are: Helping behavior, sportsmanship,
organizational
loyalty, organizational compliance, individual initiative, civic
virtue and self-
development. OCB, therefore, may contribute to organizational
success for the
following reasons: enhanced co-worker and managerial
productivity, freeing
up resources that can be used for more productive purposes,
helping to
coordinate activities within and across groups, strengthening
the
organizations ability to attract and retain the best employees,
increasing the
stability of the organizations performance and allowing the
organization to
adapt more effectively to organizational changes (Podsakoff et
al., 2000). It is
positively related to both the quantity and quality of product
output (Podsakoff
et al., 1997), contributes to team effectiveness (MacKenzie,
Podsakoff, and
Ahearne, 1996, as cited in Podsakoff and MacKenzie, 1997). OCB
has also
-
25
been found to contribute to overall performance (Podsakoff and
MacKenzie,
1994) as well as overall operating efficiency and customer
satisfaction (Walz
and Niehoff, 1996 as cited in Podsakoff and MacKenzie,
1997).
The recent emphasis on human resource management, suggests that
not only is
the management of labour being given more attention, but that
the issues
discussed are broader and more strategic as well as tactical.
Miller (borrowing
from Porter (1985)) defines strategic human resource management
as those
decisions and actions which concern the management of employees
at all
levels in the business and which are related to the
implementation of strategies
directed towards creating and sustaining competitive advantage.
Thus, unlike
the traditional peripheral function of many personnel managers,
the newer
style of human resource managers attempts to: relate personnel
practices to
beliefs, to link each and every process of the recruitment,
induction, training,
appraisal rewarding of individuals to an overall set of
articulated beliefs of
organization.
Every organization, therefore, strikes for greater productivity,
elimination of
wastes, lower costs and higher wages, so the industry needs a
stable and
energetic labor force that can boast of production by increased
productivity.
To achieve these objectives a good recruitment process is
essential. By which
industry strikes right number of persons and right kind of
persons at the right
time and at right places through and the planning period without
hampering
productivity. An organization is nothing without human
resources.
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26
The HR function in contemporary Indian Business settings is more
integrated
with the strategic objectives of the company (Budhwar and
Khatri,2001;
Budhwar and Sparrow,1997) and HR policies and procedures are
derived from
the business strategy. In the current scenario the HR functions
are changing
rapidly by realizing that the functions have to be integrated
into the strategic
business goals . Hence the focus has shifted to the individual
within the
organization with individual oriented stress being directed to
areas of Job
satisfaction, employee involvement, intrinsic motivation,
perceptions work
place emotions, learning and other extra role behavior. It is no
longer enough
for the employee to perform well , he has to now cross the
barriers of just what
his role demands from him to give something beyond that. This is
where Extra
role behavior like Organizational Citizenship behavior is of
such prime
importance.
All HR strategies of the future must look at every employee
aspect so that they
can be both drivers and catalysts for change understanding the
complexities
of the new business environment. Without any argument the most
important
area that HR must look into is the behavioral aspects and
Emotional
intelligence of employees is one of the most important
behavioral aspects of
improving Organizational Climate and thus enhancing
Organizational
Citizenship Behavior.
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27
CHAPTER 2
LITERATURE REVIEW
It is not the strongest of the species that survives, or the
most intelligent, but
the one most responsive to change.
Charles Darwin
-
28
CHAPTER 2
LITERATURE REVIEW
Big Five and other Personality theories have considered
Emotional Stability as
a very important Personality trait. Different models have been
proposed for the
definition of EI and disagreement exists as to how the term
should be used.
The earliest roots of emotional intelligence can be traced to
Darwin's work on
the importance of emotional expression for survival and
adaptation. In the
1900s, even though traditional definitions of intelligence
emphasized
cognitive aspects such as memory and problem-solving, several
influential
researchers in the intelligence field of study had begun to
recognize the
importance of the non-cognitive aspects. For instance, as early
as 1920, E.L.
Thorndike used the term social intelligence to describe the
skill of
understanding and managing other people. The first use of the
term "emotional
intelligence" is usually attributed to Wayne Payne's doctoral
thesis, - A Study
of Emotion: Developing Emotional Intelligence from 1985.
However, prior to
this, the term "emotional intelligence" had appeared in Leuner
(1966).
Greenspan (1989) also put forward an Emotional Intelligence
model, followed
by Salovey and Mayer (1990), and Goleman (1995). The distinction
between
trait emotional intelligence and ability emotional intelligence
was introduced
in 2000.
Similarly, in 1940 David Wechsler described the influence of
non-intellective
factors on intelligent behavior, and further argued that our
models of
intelligence would not be complete until we can adequately
describe these
-
29
factors. In 1983, Howard Gardner's - Frames of Mind: The Theory
of Multiple
Intelligences introduced the idea of multiple intelligences
which included both
Interpersonal intelligence (the capacity to understand the
intentions,
motivations and desires of other people) and Intrapersonal
intelligence (the
capacity to understand oneself, to appreciate one's feelings,
fears and
motivations). In Gardner's view, traditional types of
intelligence, such as IQ,
fail to fully explain cognitive ability. Thus, even though the
names given to
the concept varied, there was a common belief that traditional
definitions of
intelligence are lacking in ability to fully explain performance
outcomes.
The concept of Emotional Intelligence also overlaps with
Gardners notion of
Social Intelligence (1983) which he refers to as Personal
Intelligence. Part of
Gardners definition focuses specifically on the processing of
affective
information. Interpersonal intelligence includes the ability to
understand other
people and know what they feel. Intrapersonal intelligence
involves access to
one's own feelings, the capacity to effect discriminations among
these feelings
and draw on them as a means of guiding behavior. In attempting
to locate
these "intelligences" within the traditional psychometric
domain, Carroll
(1993) suggested that interpersonal intelligence is a
specialized type of
acquired knowledge (i.e., crystallized ability). However,
Gardner's
intrapersonal intelligence (access to one's own feelings) finds
no counterpart in
Carroll's taxonomic model. Arguably, this situation has arisen
because
adequate assessment of this type of ability has never appeared
in the extant
factor-analytic literature.
Although various authors have proposed that emotional
intelligence is a type
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30
of intelligence, in the traditional sense, contemporary research
and theorizing
lack any conceptual model of intelligence within which the
construct might be
placed. The theory of fluid and crystallized ability proposed by
Cattell (1987),
Horn (1988), and their associates (see, e.g., Horn & Noll,
1994; Horn &
Stankov, 1982) is arguably the most efficacious empirically
based
psychometric model of intelligence (see Stankov, Boyle, &
Cattell, 1995). It
may be speculated that, within this theory, emotional
intelligence will
constitute an additional aspect of (possibly one or more primary
mental
abilities underlying) crystallized ability. This assertion is
based on the
assumption that the appraisal, expression, regulation, and use
of emotion
develop through experience and social interaction in much the
same way as do
other psychological processes constituting crystallized
intelligence.
If emotional intelligence is a type of intelligence, then its
distinguishability
from various personality traits found in the literature must be
demonstrated
(cf. H. J. Eysenck & Eysenck, 1991). As Mayer and Salovey
have pointed out,
"a trait is a behavioral preference, rather than ability". As is
the case with
many measures of emotional intelligence, the typical instruments
for assessing
personality rely on selfreport techniques. If emotional
intelligence is to qualify
as a form of intelligence, it must be shown to be independent
from the
personality traits assessed by these instruments. The inclusion
of the Eysenck
Personality Questionnaire-Revised (EPQR) the Trait-Self
Description
Inventory (TSDI; Christal, 1994), and the NEO Personality
Inventory (Costa
& McCrae, 1985) in each of the three studies (respectively)
allowed this issue
to be addressed. These instruments have been shown to provide
both valid and
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31
reliable assessments of several personality constructs:
Extraversion,
Neuroticism, and Psychoticism (EPQ-R) and Extraversion,
Neuroticism,
Conscientiousness, Agreeableness, and Openness (NEO Personality
Inventory
and TSDI). A number of tests measuring aspects of emotional
intelligence are
already known to have moderate to high correlations with
personality
constructs. Consider, for example, the four subscales derived
from the
Emotional Control Questionnaire (Roger &Najarian, 1989).
Rehearsal
(specifically, dissatisfaction with interpersonal encounters and
an inability to
resolve interpersonal conflict) has been found to have a
significant correlation
with Neuroticism. Similarly, Emotional Inhibition has been found
to have a
noteworthy negative correlation with Extraversion. Furthermore,
Benign
Control, which is viewed primarily as an index of impulsivity,
correlates with
the Psychoticism scale of the EPQ (Roger & Najarian, 1989).
This finding is
not surprising given that the Psychoticism scale contains items
assessing an
individual's tendency to act impulsively.
In 1990, Mayer and Salovey published two articles on emotional
intelligence.
The first article (Salovey & Mayer, 1990) reviewed
literature throughout the
disciplines of psychology and psychiatry, artificial
intelligence, and other
areas, and concluded that there might exist a human ability
fairly called
emotional intelligence. The idea was that some people reasoned
with emotions
better than others, and also, that some peoples reasoning was
more enhanced
by emotions than others. The companion article (Mayer, DiPaolo,
& Salovey,
1990) presented a first ability model of emotional intelligence
a suggestion
that emotional intelligence, measured as a true intelligence,
might exist. Since
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32
that time, Mayer, Salovey, and their colleagues refined their
model of
emotional intelligence (see Mayer & Salovey, 1997), and
expended
considerable efforts toward developing a high-quality ability
measure in the
area. The newly developed Mayer-Salovey-Caruso Emotional
Intelligence
Test (MSCEIT V2.0; Pronounced "Mes-keet"; Mayer, et al., 1999,
2000) is the
result of this theoretical and empirical research. The MSCEIT is
an ability
model of emotional intelligence. The model consists of four
classes or
branches of emotional abilities (Mayer, Caruso, & Salovey,
2000b; Mayer &
Salovey, 1997; Mayer, et al., 2000a; Salovey & Mayer, 1990).
The MSCEIT
(Mayer & Salovey, 1997), measures ones potential or set of
abilities to
reason with emotions and emotional signals, and to use emotion
to enhance
thought; hence the term emotional intelligence.
The term Emotional Intelligence (EI) to refer to the mental
processes involved
in the recognition, use, understanding, and management of ones
own and
others emotional states to solve problems and regulate behavior
(Mayer &
Salovey, 1997; Salovey & Mayer, 1990). That is, we view EI
as ability- or
competency-based (cf. Saarni, 1999), as distinguished from being
rooted in
personality attributes (see Brackett & Mayer, 2003; Mayer,
Salovey, &
Caruso, 2000 for theoretical and empirical distinctions).
Emotional
intelligence from this tradition refers to an individuals
capacity to reason
about emotions and to process emotional information in order to
enhance
cognitive processes.
Two journal articles in 1990, formally defined EI and presented
a preliminary
demonstration of how the construct could be measured as an
ability (Mayer,
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33
DiPaolo, & Salovey, 1990; Salovey & Mayer, 1990). Their
initial definition of
EI was the ability to monitor ones own and others feelings and
emotions, to
discriminate among them and to use this information to guide
ones thinking
and actions (Salovey & Mayer, 1990, ). They then refined
their thinking
about Emotional Intelligence and published a four-branch model,
which
defined Emotional Intelligence as the ability to (a) perceive
emotion, (b) use
emotion to facilitate thought, (c) understand emotions, and (d)
manage
emotion (Mayer &Salovey, 1997). Here, they describe the
MSCEIT, its
psychometric properties, and recent validation studies with the
instrument (see
also Mayer, Salovey, & Caruso, 2002b). Evidence supports the
idea that EI
(operationalized by the MSCEIT) meets classical criteria of a
standard
intelligence and predicts outcomes of social importance (Mayer,
Salovey,
Caruso, & Sitarenios, 2001, 2003). To acquaint the reader
with our theory of
EI, they begin with a brief review of the four-branch model.
Elsewhere, the
theory is described in more detail (Salovey, Mayer, &
Caruso, 2002).
Exhibit -2.1: MSCEIT Total - Adapted from Mayer, & Caruso,
2002
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34
Four-Branch model of emotional intelligence their analyses of
emotion-related
abilities led them to conceive of EI as comprising of four
branches or abilities,
as illustrated in Exhibit 2. Whereas the perception,
understanding, and
management of emotions (Branches 1, 3, and 4) involve reasoning
about
emotions, Branch 2 (the use of emotions to facilitate thought)
involves using
emotions to enhance reasoning.
An example of the research on the limits of IQ as a predictor is
the
Sommerville study, a 40 year longitudinal investigation of 450
boys who grew
up in Sommerville, Massachusetts. Two thirds of the boys were
from welfare
families, and one-third had IQ.s below 90. However, IQ had
little relation to
how well they did at work or in the rest of their lives. What
made the biggest
difference was childhood abilities such as being able to handle
frustration,
control emotions, and get along with other people (Snarey &
Vaillant,
1985).Another good example is a study of 80 Ph.D.s in science
who
underwent a battery of personality tests, IQ tests, and
interviews in the 1950s
when they were graduate students at Berkeley. Forty years later,
when they
were in their early seventies, they were tracked down and
estimates were made
of their success based on resumes, evaluations by experts in
their own fields,
and sources like - American Men and Women of Science. It turned
out that
social and emotional abilities were four times more important
than IQ in
determining professional success and prestige (Feist &
Barron, 1996)
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35
In their paper ,Dr. Silva Karkoulian, Nour Al Harake, and Dr.
Leila Canaan
Messarra Correlates of Organizational Commitment and Knowledge
Sharing
via Emotional Intelligence: An Empirical Investigation ,they
investigate the
relationship between organizational commitment and knowledge
sharing via
emotional intelligence.. However, emotional intelligence
mediated the
relationships in organizations such that the relationship
between normative
commitment and knowledge sharing remained positive, but
affective
commitment was not a function of knowledge sharing anymore.
In the paper Emotional Intelligence: In Search of an Elusive
Construct
Michaela Davies and Lazar Stankov, Richard D. Roberts viewed
that
emotional intelligence should be included within the traditional
cognitive
abilities framework was explored in 3 studies by investigating
the relations
among measures of emotional intelligence, traditional human
cognitive
abilities, and personality. The studies suggest that the status
of the emotional
intelligence construct is limited by measurement properties of
its tests.
Measures based on consensual scoring exhibited low reliability.
Self-report
measures had salient loadings on well-established personality
factors,
indicating a lack of divergent validity. These data provide
controvertible
evidence for the existence of a separate Emotion Perception
factor that
(perhaps) represents the ability to monitor another individual's
emotions. This
factor is narrower than that postulated within current models of
emotional
intelligence.
Sanjay Kumar Singh (2009) meta-analyzes available research
findings on
Emotional Intelligence to develop a framework to be used by
industry
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36
practitioners in the paper Leveraging Emotional Intelligence for
managing
Executives Job Stress: A Framework. Kavita Singh(2008) discusses
the link
between Emotional Intelligence and Work place Effectiveness in
an article by
the same title. Mamta Mohapatra and Abhinav Gupta (2010) explore
the
relationship between Emotional Intelligence , Work Values and
Internal Locus
of Control among working executives taking the case of Indian
public Sector
organization in their work Relationship of Emotional
Intelligence with Work
Values & Internal Locus of Control: A Study of Managers in a
Public Sector
Organization. Findings of this study suggest a high correlation
between work-
values and all factors of Emotional Intelligence. The study also
shows that
executives internal locus of control has a significant
correlation with factors
such as managing emotions in self, social skills and utilizing
emotions.
In the article Emotionally Intelligent Managers &
Transformational
Leadership Styles Omar Bin Sayeed & Meera Shanker (2009)
examines
multivariate relationships between Emotional Intelligence
and
Transformational Leadership dimensions. The canonical
correlation between
Emotional Intelligence and Transformational leadership
dimensions revealed
significant relationships. The paper Emotional Intelligence
& Managerial
Effectiveness: Role of Rational Emotive behavior Nivedita
Srivastava &
Sreekumar K.Nair (2010) undertakes an empirical study to see the
influence of
emotional Intelligence and rational emotive behavior on
managerial
effectiveness. The results show that both the variables
positively influence
managerial effectiveness.
Examining Managerial Thinking Style, EQ, and Organizational
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37
Commitment- Kevin S. Groves ,Charles M. Vance examine the
relationship
between linear and nonlinear dimensions of managerial thinking
style and
emotional intelligence. Results demonstrate that linear thinking
style was
positively associated with the regulation of emotions, nonlinear
thinking was
related to utilizing emotions to facilitate thinking, and a
balanced use of linear
and nonlinear thinking was a predictor of overall EI.
The relationship between emotional intelligence and work
attitudes, behavior
and Outcomes An examination among senior managers Abraham
Carmeli.
suggests that managerial skills in general, and emotional
intelligence in
particular, play a significant role in the success of senior
managers in the
workplace. This argument, despite its popularity, remains
elusive. This can be
attributed to the fact that although a few studies have provided
evidence to
support this argument, it has not received an appropriate
empirical
investigation. He attempts to narrow this gap by empirically
examining the
extent to which senior managers with a high emotional
intelligence employed
in public sector organizations develop positive work attitudes,
behavior and
outcomes. The results indicate that emotional intelligence
augments positive
work attitudes, altruistic behavior and work outcomes, and
moderates the
effect of work-family conflict on career commitment but not the
effect on job
satisfaction.
Emotional Intelligence and Negotiation: The Tension between
creating and
claiming value Maw Der Foo , Hillary Anger Elfenbein, Hwee Hoon
Tan ,
Voon Chuan Aik .As a departure from past research on emotional
intelligence
(El), which generally examines the influence of an individual's
level of El on
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38
that individual's consequences, they examined relationships
between the
emotional intelligence (El) of both members of dyads involved in
a
negotiation in order to explain objective and subjective
outcomes. As
expected, individuals high in El reported a more positive
experience.
However, surprisingly, such individuals also achieved
significantly lower
objective scores than their counterparts. By contrast, having a
partner high in
El predicted greater objective gain, and a more positive
negotiating
experience. Thus, high El individuals appeared to benefit in
affective terms,
but appeared to create objective value that they were less able
to claim. They
discuss the tension between creating and claiming value, and
implications for
emotion in organizations.
As a result of the growing acknowledgement by professionals of
the
importance and relevance of emotions to work outcomes, the
research on the
topic continued to gain momentum, but it wasn't until the
publication of
Daniel Goleman's best seller - Emotional Intelligence: Why It
Can Matter
More Than IQ that the term became widely popularized. Nancy
Gibbs' 1995
Time magazine article highlighted Goleman's book and was the
first in a
string of mainstream media interest in EI.
Defining Emotional Intelligence: Substantial disagreement exists
regarding
the definition of EI, with respect to both terminology and
operationalizations.
There has been much confusion regarding the exact meaning of
this construct.
The definitions are so varied, and the field is growing so
rapidly, that
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39
researchers are constantly re-evaluating even their own
definitions of the
construct. At the present time, there are three main models of
EI:
Ability EI models
Mixed models of EI
Trait EI model
The Ability Based Model: Salovey and Mayer's conception of EI
strives to
define EI within the confines of the standard criteria for a new
intelligence.
Following their continuing research, their initial definition of
EI was revised to
"The ability to perceive emotion, integrate emotion to
facilitate thought,
understand emotions and to regulate emotions to promote personal
growth."
The ability based model views emotions as useful sources of
information that
help one to make sense of and navigate the social environment.
The model
proposes that individuals vary in their ability to process
information of an
emotional nature and in their ability to relate emotional
processing to a wider
cognition. This ability is seen to manifest itself in certain
adaptive behaviors.
The model claims that EI includes four types of abilities:
1. Perceiving emotions the ability to detect and decipher
emotions in
faces, pictures, voices, and cultural artifactsincluding the
ability to
identify one's own emotions.
2. Using emotions the ability to harness emotions to facilitate
various
cognitive activities, such as thinking and problem solving.
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40
3. Understanding emotions the ability to comprehend emotion
language
and to appreciate complicated relationships among emotions.
4. Managing emotions the ability to regulate emotions in both
ourselves
and in others.
The model introduced by Daniel Goleman focuses on EI as a wide
array of
competencies and skills that drive leadership performance.
Goleman's model
outlines four main EI constructs:
1. Self-awareness the ability to read one's emotions and
recognize their
impact while using gut feelings to guide decisions.
2. Self-management involves controlling one's emotions and
impulses
and adapting to changing circumstances.
3. Social awareness the ability to sense, understand, and react
to others'
emotions while comprehending social networks.
4. Relationship management the ability to inspire, influence,
and
develop others while managing conflict.
Goleman includes a set of emotional competencies within each
construct of
EI. Emotional competencies are not innate talents, but rather
learned
capabilities that must be worked on and can be developed to
achieve
outstanding performance Goleman posits that individuals are born
with a
general emotional intelligence that determines their potential
for learning
emotional competencies.
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41
Organizational Climate
Decades of research has emphasized on the importance of
Organizational
Climate on important business outcomes (e.g. Boruci and
Burke,1991; Collins
and Smith 2006; Schneider ,Enhart, Mayer, Saltz, Niles &
Jolly2005;
Schneider, Parkington & Buxton,1980;Schneider,White and Paul
1998).
Reichers and Schneider (1990) provides a historical overview of
Climate.
Climate research derives from a confluence of field theory and
the quantitative
study of attitudes within organizations. Field theory is the
label
Lewin(1948,1951) and his colleagues gave to their attempts to
represent any
social processes as part of larger context or field. Their
emphasis on Gestalt
psychology of perception being developed by other German
immigrants to the
United States during the middle decades of the 20th
century. Climate was a
way of characterizing context and it was not complex. It fell
into three
categories of autocratic, democratic and laissez-faire. These
styles of
leadership were not important as behaviors but as a dependable
means of
producing a social situation , a climate.
When the same concept appeared in organizational studies, the
meaning of
climate changed. It is not certain how the idea would have
developed had it
not been for Lewins premature death in 1947.Shortly thereafter
,his successor
as director of the Research center for Group Dynamics, Dorwin
Cartwright,
moved the center to the University of Michigan to become part of
the Survey
Research Center within the Institute for Social Research (ISR).
Cartwright
followed interests at the group level rather than at the
organizational or
societal level. Eventually that move brought Lewins legacy into
direct contact
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42
with another quite different line of work at ISR, that of Rensis
Likert. Likerts
contribution to climate study was System 4 view of effective
Management
(Likert,1961). His problem was how best to capture the climate
of an
organization so that he could work with the organizations senior
Managers to
monitor and promote its comprehensive improvement. The Likert
scale that he
invented for sociological and psychological research provided
the starting
point to capture an organizations climate. Climate came to be
represented by
an aggregation of individual data from attitude scales.
One conceptual framework of climate (Litwin and Stringer, 1968)
emphasizes
motivational linkages. This framework seems to be quite relevant
for studying
Organizational Climate. The six factors propounded are -
Achievemement,
Expert Influence, Control, Extension, and Dependency. Likert
(1967)
proposed six dimensions of Organizational Climate: leadership,
motivation,
communication, decision, goals and control. Likert and Stringer
(1968)
proposed seven dimensions: conformity, responsibility standards,
rewards,
organizational clarity, warmth and support, and leadership as
important
components of organizational climate. Uday Parekh after review
and
discussions with managers suggested the following 12 processes-
Orientation,
Interpersonal Relationships, Supervision, Problem Management,
Management
of Mistakes, Conflict Management, Communication, Decision
Making, Trust,
Management of rewards, Risk Taking , Innovation and Change.
Stringer' identified the six dimensions of OC as
organizational