HCM 433 MANGEMENT AND ORGANIZATIONAL BEHAVIOUR.pdf

The theory would predict that in an organization, employees who work in the same area of the
plant or office manages with offices close to one another would be more probably form into
groups than those who are not physically located together. There is some research evidence to
support the propinquity theory and on the surface it has a grate deal of merit for explaining
group formation. The drawback is that it is not analytical and does not begin some of the
complexities of group formation.
2. Interaction Theory: George Hormans based his theory on three elements that are directly
related. These are activities, interactions and sentiments. According to this theory, the more
activities persons share, the more numerous will be their interactions and the stronger will be
their sentiments (that is how much the other persons are liked or disliked); the more
interactions among persons, the more will be their shared activities and sentiments; and the
more sentiments persons have for one another, the more will be their shared activities and
interactions. The major element is interaction. It is believed that informal groups form as a
consequences of frequent interaction in common activities. The Horman’s theory tends a great
deal to the understanding of group formation and process. Participants in an organization
interact not just in the physical propinquity sense, but also to solve problems, attain goals,
facilitate coordination, reduce tension and achieve a balance tend to form into powerful
groups.
3. Balance Theory: This was propounded by Theodore Newcomb and it states that persons are
attracted to one another on the basis of similar attitudes towards commonly relevant objects
and goal. Many management specialists believe groups will be formed and maintained to the
degree that members are similar to each other. The more similar they are, the greater the
likelihood of group formation. Such similarities may be in the areas of work values, life
experiences, education, socioeconomic status, sex, age, religion, ethnic background and the
like.
4. Exchange Theory: This is one group formation theory receiving the greatest emphasis in
more recent times and it is similar in functioning to the work motivation theory. Exchange
theory of groups is based upon reward cost outcome of interaction. A minimum positive level
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