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Organizational processes > Organizational processes - Pg. 128

128 Part 2 People and organizations brought together with the necessary skills to carry out the tasks and a system exists for directing, coordinating and controlling the group's activities. Informal groups are set up by people in organiza- tions who have some affinity for one another. It could be said that formal groups satisfy the needs of the organization while informal groups satisfy the needs of their members. Groups develop an ideology that affects the atti- tudes and actions of their members and the degree of satisfaction they feel. If the group ideology is strong and individual members identify closely with the group, it will become increasingly cohesive. Group norms or implicit rules will be evolved that define what is acceptable behaviour and what is not. This is described as a `reference group', which consists of the group of people with whom an individual identifies. The individual accepts the group's norms and if in doubt about what to do or say, reference is made to these norms or to other group members before action is taken. Most people in organizations belong to a reference group and this can significantly affect the ways in which they achieve the results expected of them. Goleman (2000) reported that a study by Hay McBer of 3,871 executives, selected from a database of more than 20,000 executives worldwide, established that leadership had a direct impact on organizational climate, and that climate in turn accounted for nearly one-third of the financial results of organ- izations. The conclusion from research conducted by Higgs (2006) was that leadership behaviour accounts for almost 50 per cent of the difference between change success and failure. Research by Northouse (2006) into 167 US firms in 13 industries established that over a 20-year period leadership accounted for more variations in performance than any other variable. Power Organizations exist to get things done and in the process of doing this, people or groups exercise power. Directly or indirectly, the use of power in influencing behaviour is a pervading feature of organizations, whether it is exerted by managers,