STRESS & CORPORATE MANAGEMENT – INDIAN PERPECTIVE

Unit Objectives• Define Stress• Identify Stress and its types• Identify the reasons and ways to prevent stress• Measures to reduce stress • Define corporate governance and its structure

Definition of Stress• Adoptive response, mediated by individual

characteristics and/or psychological processes, that is a consequence of any external action, situation or event that places special physical and/or psychological demands upon a person.

John M. Wancevich and Michel T. Matterson

Chronic WorryHigh Blood PressureDigestive ProblemsTensionEmotional instabilityDrug AddictionUncooperative AttitudeSleeping ProblemsFeeling of Defeat

Mental and Physical

Disorders

Forms of Stress and their final Result

General Adaptation Syndrome (GAS) • The GAS refers to the development of individuals’

responses to stressful events in the form of physiological, psychological, and behaviour patterns. They follow a fairly consistent pattern. The three types of GAS as classified by Hans Selve are:

1. Alarm Stage: muscles become tense, pupils dilate and there is increased hormonal flow, increased respiration, heart trouble, hypertension etc

2. Resistance Stage: unable to rest, develops iriitating behaviour, increased nervousness, tension, frustration, uneasiness, develops ulcer, loss of appetite and illness.

3. Exhaustion: the body and psyche is affected, moodiness, negative attitude, looks fatigued, displays helplessness, may go into a depression or nervous breakdown

Sources of Job Stress

1. Organizational Stressors

• Mission Statement• Strategies and Policies• Organizational Structure and Design• Reporting Channels• Communication• Various processing systems• Working conditions

2. Group stressors• Lack of cohesiveness creates conflicts• Group social events and group activities must be

organized on a regular basis• Managers must form and be a part of a group which

is not rank and position based• Employee morale must be kept high to avoid group

stress

3. Individual Stressors

• Personal Life• Marriage, divorce, death in family etc.

4. Job Security

• Job and career enhancement• Insecurity of jobs (specially during times of

recession)• The prospect of losing a job, especially when

the person is the sole bread earner, is very stressful

• Promotions• Job commensurate with qualificaton

5. Relocation• Transfer to different locations upsets the daily

routine of individuals• Fear of working at new locations and with new

people• Unpredictability about the new work

environment and creating new relationships• Transfers create problems for family members,

if spouse is also working and kids are in school• Even language may add to the stress

6. Change in life structure

• Socio-economic environment, culture, system, religion, race, education etc.

• If all these aspects are favorable, then stress is minimal

• Ability of the persons to cope with stress

7. Stresses and Performance

8. Physiological Responses

• Increase in heart beat rate and heightening of all body senses

• Serious health problems occur as the body faces stress for long period of time

• Stress could lead to breakdown of body’s immune systems and may result in serious health problems such as high blood pressure, ulcer, diabetes and even heart attack.

9. Psychological Responses

• lack-of self-confidence, as they feel they have lost the battle in handling a situation and develop a feeling of helplessness and elicit sympathy from others

• They fear the unknown, display an irritating behaviour, become impatient and tend to blame others for their own inefficiency

• Display low productivity

Stressors intrinsic to a job1. Nature of the job (e.g. an engine driver’s job)

2. Role ambiguity• Psychological strain and dissatisfaction• Leads to underutilization of human resources• Leads to feeling of futility on how to cope with the

organizational environment

3. Role Conflict• Intensified internal conflicts• Increased tension associated with various aspects of the job• Reduced satisfaction with the job and its various contents• Decreased level of confidence in their superiors

4. Role overload / under load5. Responsibility

Stressors intrinsic to a job

Behavioural Responses

1. Frustration2. Anxiety

BURNOUTBURNOUT & EMPLOYEES• People who experience burnout may no longer view their job as

meaningful. • They feel the work to be tedious, redundant and insignificant. • They experience total fatigue • They have very little concern for quality, creativity, enthusiasm

and contribution towards the organizational goal.• Serious health problems occur as the body faces stress for long

period of time• Stress could lead to breakdown of body’s immune systems and

may result in serious health problems such as high blood pressure, ulcer, diabetes and even heart attack.

Predictable burnout behaviora. Tendency to blame others in the organization for

their burnoutb. To complain bitterly about aspects of work which in

the past were not areas of concernc. To miss work because of non-specific and

increasingly prevalent illnessd. To day dream and sleep on the jobe. To be the last to come and the first to leavef. To bicker with co-workers or appear uncooperative

and to become increasingly isolated from others

Causes of Burnout

• Work Estimation (Chaotic, unstable environment)• Job Mismatch (going for jobs just for money / power)• Organizational Productivity (low productivity due to

shortage of RM, Govt Rules, market demand etc.)• Personal Problems (unhappy married life, financial

instability, childrens’ education , terminal illnesses in the family etc.)

Preventive Measures1. Diagnosis– Feeling of Lethargy– Lack of productivity– Lack of interest in the present job– Feeling of loneliness, forced isolation and acute discomfort– Feeling directionless– Traumatic personal problems like death or major accident

Preventive Measures2. Prevention– Seeking a fit between characteristics of the individual,

complexity of the job and the type of organizational structure

– Developing programmes, which help individuals cope with causes of stress that lead to burnout

– Teaching and supporting self-diagnosis and individual adaptation strategies for addressing burnout symptoms.

Preventive Measures3. Treatment– Determine the change both personal and organizational

to return to normal work-related functioning– Develop sensitivity to the signs of burnout to cope with

the likelihood of the same in future– Develop skills to deal with feelings and emotions to avoid

burnout to fellow employees.

Management of Stress(Individual Level Strategies)

1. Define an objective for yourself2. Plan your life3. Social support4. Physical fitness5. Biofeedback6. Yoga7. Meditation8. Time management9. Live a simple life

Management of Stress(Organizational Level Strategies)

1. Realistic Goals2. Clearly defined policies3. Clearly defined authorities and responsibilities4. Effective communication channels5. Physical work environment suitable for higher

productivity6. Updated systems and processes7. Healthy working environment8. Career plan for employees9. Employee empowerment

Corporate Governance

• Corporate Governance can be defined as a set of systems and processes which ensure that a company is managed to the best interests of all the stakeholders. – L.V.V. Iyer

Need for better Corporate Governance

a. Discourage mismanagementb. Promote Investmentc. Promotion of small investors and subsidiariesd. National Growth

Structure of Corporate Governance

a. Board of Directorsb. AGM or Shareholders’ meetingsc. CEOd. Analysts meet / Creditors meete. Employee empowerment and promotion of open

culture