Communication is once again important First, it is important to listen thoroughly

A manager who successfully develops a cooperative work group not only reduces barriers to pelformance but also enables employees to meet then; social needs. When employees see that they can help one another meet their social needs, a higher level of communication will exist among them. This communication, in turn, will foster a feeling of interdependence among group members, because they will see themselves as sharing certain goals that no single individual could achieve alone.Employees must also have the tools needed' to complete the job if they are to remain motivated and maintain a high level of performance. Sometimes it seems that subordinates are always "griping" about inadequate materials or old, worn-out equipment. These complaints put the manager in a awkward position because budget restraints often do not allow for the equipment and materials that subordinates would like to have. So what can a manager do? Communication is once again important First, it is important to listen thoroughly to the concerns of the employees without making premature decisions. Once the situation is fully understood, it is important that a manager explain why the new equipment can or cannot be purchased.

Managers often tend to. blame the inability to purchase on the budget or top management. While this is an easy out for the manager, it does little for the frust!ated employee who must work without that equipment. Giving a complete explanation of future possibilities for the equipment, discussing other alternatives that may be taken, and describing why other equipment may have a priority will prevent an employee from becoming demotivated due to equipment inadequacies. This also indicates to the employee that management is aware of the problem; even though no action is taken, at least management is listening.

The role that communication plays in obtaining necessary tools and equipment is demonstrated by a situation in which a secretary kept asking for a simple word processing system. Jerry was presently using an electronic typewriter, so it would not be too expensive to move up to a word processor. The move would increase productivity and probably reduce the number ofcomplaints receive about the slow level of productivity. Unfortunately, top management would not approve the word processor. Subsequently, Jerry was asked to write a rationale for the equipment so that the manager could again present the request to top management. Furthermore, Jerry was asked to accompany the manager when making the request. Once again the request was denied, but Jerry received a complete explanation fIrsthand and had an opportunity to ask questions. In addition, Jerry held a meeting with all those who produced the work Jerry typed to make clear what could be expected with the present equipment.

The discussion has covered all the elements that lead to job performance except one; instrumentality.

Integrative problemsolving strategies discussed in the chapter on conflict management

The final important element of expectations and feedback is that they should deal with those elements of the job over which the person has control. It would be extremely de motivating to tell sales clerks that sales are declining and that they should be selling more when the problem really lies i the fact that fewer customers are entering the store. Employees cannot be expected to control every element of their job, so feedback should relate only to those elements under their control. If elements outside an employee's control have profound impacts on her performance, demotivation may result unless her manager analyzes the next element of the performance model.

Cooperation and materials

Satisfactory job performance is not merely a product of effort and job knowledge. We also need cooperation from others along with the necessary tools. Imagine an accountant who works hard, is highly skilled, knows what is expected, but cannot get the necessary figures to complete his job. The cooperation of others with him is essential. While individual employees are responsible in pan for developing a cooperative work environment, the manager often plays the critical role.

A manager can develop cooperation in several different ways. First becau..;e managers generally have higher visibility and credibility in the organization than do their subordinates, managers can represent their subordinates in an effort to sll their projects and gain support. Second, a manager can call a group of employees together and analyze ways that the group can develop acooperative effort. She may use integrative problemsolving strategies discussed in the chapter on conflict management as well as the group meeting formats presented in the chapter on meetings. Regardless of the approach used, skilful communication is required.

Let us look at an example of developing cooperation. A company was about to introduce a new product and required that at least one member of the marketing staff attend product introduction meetings held throughout the country. The product marketing manager for the company stated that at least one member of the corporate staff must attend one introductory meeting even though it would be inconvenient. The corporate staff already spent a great deal of time travelling, and summer vacations were approaching; consequently, cooperative spirits were not high.

The manager developed cooperation by having a meeting to discuss the schedule rather thim "drawing straws" as suggested by one of the staff. During this meeting, each person listed the best time for his or her to travel. All the participants compared dates and arranged cooperative agreements on travel times. The manager listened to possibilities, asked for cooperation, and thus motivated the employees to work together.

work needs to be done before noon when we begin to have heavier customer traffic.

To determine if instructions are clear, a manager should check for the three C's. Is the instruction complete, concise, and concrete? For example, the instruction. "Take care of the shipment of new shirts when you get a chance," does not meet the C's. It may seem adequate because a manager may assume that the subordinate is thinking along the same lines. The instruction could be clearer: "Count the shipment of new shirts to make sure they're the same as the billing order. If they match the billing, place them on the appropriate shelves. If there are any discrepancies, let me know. This work needs to be done before noon when we begin to have heavier customer traffic." While this second instruction takes more time and effort than the first, it meets :he C's . If this instruction were not complete. the shirts might not be placed on a shelves until the end of the day, at which time the manager might think that the employee was not motivatedOf course, many jobs are more ambiguous, and the employees have a great deal of freedom to detennine what they should be working on and when they should do it. Even though managers and employees do not have constant contact in these jobs, feedback is still imponant According to Scanlon, the value of feedback varies according to the time interval between results, the extent to which the feedback deals with the total situation" and the extent to which it dwells on matters under the worker's control. This is the essence of establishing expectations through feedback.

An effective manager must periodically establish

expectancies at a time interval appropriate to the nature of job. Simply stating from time to time "You're doing a fine job" does not meet the elements of the C's, and formal yearly performance review is too great a period of time
between feedback. A periodic conversation dealing with'specific expectations of the job helps to guarantee continued performance. In fact, the element that makes sports so exciting is that a definite scoring system provides feedback. The players know exactly where they stand relative to the goals and know what they have to do to win the game. Most jobs do not have a precise scoring system, but an insightful manager can provide accurate and timely feedback.

This feedback needs to be provided at both a micro and a macro level. As suggested by Scanlon's comment, feedback must deal with the total situation as well as with the elements within the situation. It is valuable feedback for an accountant to know that his or her audits are taking longer than they should; however, an in-depth discussion may reveal what particular type accounts or systems are causing the problem. Then, too, the person needs to knowprecisely the areas in which he is doing excellent work as well.

manager must determine the abilities and skills of employees without threatening the employees

Managers establish this climate by resisting the urge to criticize every time subordinates err. Continuous criticism will force a person to hide inabilities. Also,'employees should have the opportunity to ask questions even when it appears that they should already know the
answers. One can quickly inhibit questions by acting as if they are so simple that everyone should know the answers.
The tactful use of open-ended questions is also important when determining if a person has the
appropriate skills to do a job. Rather than saying, "Bill, "can you type up the report on the word processor? it is better to say, "I know you haven't been here long. How confident are you on this work processor?" Another approach might be, "Bill, how do we set up this process; it's been a while since I've looked at it." Doing so gives the manager an opportunity to work together to determine Bill's level of knowledge without directly challenging him.

Clearly, a manager must determine the abilities and skills of employees without threatening the employees. A manager must be able to listen carefully and ask open ended, non-threatening questions. If a person has successfully completed the job before, then it is possible to confidently assume that it can be done again. However, if this is not the case, effective communication helps to ensure that the employee possesses the necessary skills.

Clear instructions and expectations

Of course, hard work and excellent skills are of no avail when a person is doing the wrong thing. Not only must employees receive clear insu'uctions, they must clearly know what is expected of them. Feedback is the key here, and questioning is the most important skill a manager possesses to obtain feedback.

tactful practice is less challenging to the receiver than is that of asking cl\)sed questions and puts the responsibility on the .sender of the message. Another strategy might be to say, "Sometimes I forgot important parts when giving instructions; tell me exactly what you're going to do now just to make sure that I haven't skipped anything." Once again the sender takes responsibility for the message's accuracy.

This strategy not only assures greater clarity of the message, but it serves to help meet the ego needs of the ubordinate. It shows that the subordinate is important and that his or her thoughts are important to the completion of the task. Managers establish a cooperative climate rather than a "tattletale' climate in which the subordinate is always responsible for any en-ors that may result.

A manager must establish a climate in which a subordinate can admit deficiencies without fear of criticism

A last category of persuasive strategies demands inclusion not because we advocate their use but becauseyou ought to be protected from individuals who use them. Propaganda devices involve deception and emotionalism rather than sound, rational argument. As miller puts it, "They make us believe and do something we would not believe or do if we thought about it calmly, dispassionatelyJob Knowledge Effon alone, no matter how great, cannot guarantee high level of performance. Besides effort, one needs job knowledge, which results from two separate factors:
(1)abilities and skills; and
(2) clear instructions and expectations. With thee extra elements added, our performance model now looks like Figure.

Abilities and Skills

Managers often assign employees to a job because they have assumed that the employees know how to perform it. Ironically, when their performance is rated sub-standard, these employees may be accused of being poorly motivated or sloppy when in fact they lacked the requisite ability or skill. This situation arises frequently when a manager assumes that an employee has the appropriate skill d the employee is afraid to admit that he cannot do the job.

Consider an employee, Bill, who joined the office staff of an insurance company shortly after graduating from a business school. While in school Bill had some experience, three day's training, on a word processing system. During the interview, Bill's boss asked him if he knew how to operate a word processor; he qQickly replied that he did. Now that he is on the job, he has been asked to complete a repon using a new word processing system in the office. Unfortunately, the new system is entirely different from the one bill trained on. After all, he has just started the job and is afraid of looking slow or unskilled. When the manager asks Bill if he thinks he will have any trouble, Bill acts enthusiastically about the project. Clearly, this could be the beginning of many problems.

How can a manager prevent such a problem? Taking the safe route and always assuming that subordinates cannot do a job may only insult the subordinates by casting doubt on their skills. At the same time, it is dangerous to assume that people can do something they cannot. The answer is open, trusting communication. A manager must establish a climate in which a subordinate can admit deficiencies without fear of criticism. The climate established should be "What can we do to improve? "rather than a climate that continually challenges people to prove their self-worth.

One frequently successful approach involves the establishment of common ground

Want to take it for a ride?- thus demonstrating interest on our part, providing information about the product, and giving impetus to further conversation. If the customr is interested in a specific item, the merchandise approach seems best; if she or he seems to be merely wandering
around, a "service" opening may be more effective.

Requires custom-designed'strategies, some general strategy patterns applicable to all persuasive situations can be identified. One frequently successful approach involves the establishment of common ground .between you and the persuadee, that, finding the beliefs and attitudes you have in common and using these as points from which other disagreements and conflicts might be resolved. Stewart and Cash describe three common-ground strategies: Yesbut, where the persuader begins the interview in areas of agreement and gradually moves to areas of conflict; yesyes, where a series of agreements or yes answers is used to build a habitual response which in tUl11 produces more favourable reactions when controversial issues are reached; and implicative, where the interviewer uses several agreements to imply a conclusion which, if stated explicitly, might be rejected by the persuadee. This last method requires considerable skill, however, for the persuadee may miss the implication and see no point to the questioning. It should therefore be used only after we have become skilled in interviewing-or when we are desperate because nothing else has worked.

Another persuasive strategy takes into account the order in which arguments in support of your position are presented. Should your stronger arguments be presented

first, saved for last, or sandwiched between lesser arguments? Researchers have termed these patterns the anticlimax, climax, and pyramidal orders, respectively. Many studies have investigated the effectiveness of each order. Lund, Jersild, and Hovland found SUPP0l1 for the anticlimax order. Sponberg Gilkinson et aI. and Gulley and Berlo supported the climax sequence. No one has found an advantage in placing the strongest arguments in the middle of the message. While evidence seems equallydivided between the climax and anticlimax orders, then; the only certainty is that strong arguments should not be placed in the middle of the message. .

Some miscellaneous strategies also seem useful in the persuasive situation. Should we present only our 'side of the issue, or should we present both sides, refuting the arguments the other side holds? Studies summarized by Bettinghaus suggest that two-sided presentations are more effective with well-educated persuadees, people who initially disagree with your position, and people who are likely to receive later messages opposing your views. On the other hand, one-sided appeals are more effective when the receiver already agrees with you and is not likely to be exposed to later opposing messages. Should we employ appeals to fear in an eff0l1 to persuade people by "scaring hell out of them?" If the interviewee thinks you trustworthy, and if the topic is important to her or him, fear appeals usually are effective. To what extent should we use evidence or supporting materials to document our arguments? If the receiver thinks us untrustworthy, is well-educated or intelligent, or already is familiar with the evidence, we should present it. Should humour be used to enhance out appeals? Studies to date of the effect of humour have shown no appreciable gain in persuasive effect produced by its inclusion. However, a recent investigation discovered that a humorous source was rated more trustworthy than a serious one, suggesting that inclusion of humour might be helpful if the receiver perceives you to rehttively untrustworthy. Final determination of the role of humour awaits further research.

Implied Power to Compromise/Arrangement

Companies may need to enter into agreements compromising claims or modifying rights which other persons have against them, or which they have against other persons. A company has an implied power to compromise disputes in which it is involved with outsiders or with its own members-Re Norwich Provident Insurance Society, Bath’s case [1878] 8 Ch. D 384, and it probably also has implied power to enter into arrangements with such persons modifying the undoubted rights which they or the company has: In any case, the express power to do these things is usually inserted in objects clause of its Memorandum of Association as one of the standard provisions. The reason why the subject of compromises and arrangements is deserving a separate treatment is that rights enforceable against companies are often vested in large classes of persons with whom it would be practically impossible to negotiate individually, and in such cases a machinery is required by which the claims of the classes collectively may be compromised or their rights modified with the assent of a majority of their number given at meetings called for the purpose:”

This machinery may be provided by the original agreements between the company and the classes of persons entitled to the rights, but whether such machinery is provided by agreement or not, it is provided by the Companies Act. 1956.

Procedure

The Companies Act, 1956 empowers a company to make compromise or arrangement with its creditors (or any class of them) or members (or any class of them) and makes suitable provisions under Sections 391 to 393.

ABC Limited doing business of limestone quarrying

ABC Limited doing business of limestone quarrying, being unable to arrange necessary funds, passes a resolution for voluntary winding up. As a result, a

liquidator is appointed, who paid out all the liabilities of the company, but could not complete the formalities required under the Companies Act for dissolution. In the meantime at an extraordinary general meeting, shareholders assembled unanimously, resolved to revive the company and to obtain injunction against the ‘dissolution’. Certain shareholders, who were in a minority and did not attend the extraordinary general meeting, object to the decision taken by the vast majority of shareholders, on the ground that once the winding up had commenced, the majority had no right to restrain the company from being dissolved. Decide giving reasons:

(i) Whether the resolutionpassed at the extraordinary general meeting is valid and the majority shareholders would succeed in restraining the company from being dissolved?

(ii) Whether the objection of the majority would be tenable?

[May, 1992]

16.

(a) When is a company deemed to be ‘unable to pay its debts’?

(b) Explain the term ‘contributory’? Who may be held liable as a contributory under the Companies Act, 1956? [November, 19911