Unit - I

Concept and Meaning of

Organizational Behavior
What is Organisational Behaviour?
Organisation: -
A place where managers practice the art of management.
 An Institution or sub-units of an institution working together for a
common goal.
Organisation Behaviour: -
 Itis an study of human behaviour
 The study is about the behaviour of people in an organisation.
 Knowledge about human behaviour and its usefulness in improving
an organizations effectiveness.
Some Definitions
“OB is the study & applications of knowledge about how people act
within an organisation. It is a human tool for human benefit. It applies
broadly to the behaviour of people in all types of organizations such
as business, Govt. Schools & Service Organisations”.
Keith Davis & JW Newton in Human Behaviour @ work.
“OB is directly concerned with the understanding, predicting &
controlling of human behaviour in Organisations”.
-Fred Luthaus.

Organization behaviour encompasses a wide range of topics such as

human behaviour, change, leadership, teams etc. OB is also a field of
study. It studies 3 determinants of behaviour in organizations:-
• Individual.
• Group.
• Organisation.

To sum up OB is concerned with:-

• Study of what people do in the organization.

• How behaviour effects the performance of the organization.
MODELS of OB:

• Autocratic – The basis of this model is power with a managerial

orientation of authority
• Custodial – The basis of this model is economic resources with a
managerial orientation of money.
• Supportive – The basis of this model is leadership with the
managerial orientation of support.
• Collegial – The basis of this model is partnership with the
managerial orientation of team work.
OB offers both challenges and opportunities for managers. It
recognizes differences and helps managers to see the value of
workforce diversity and practices that need to be changed when
managing. It can help improve quality and employee productivity by
showing managers how to empower their people as well as how to
design and implement change programs. It offers specific insights to
improve a managers people’s skills. OB can help managers cope in
the world of temporariness and learn ways to stimulate innovation.
Finally, OB can offer managers guidance in creating an ethically
healthy work climate.
• Key Elements of OB
1. People
2. Structure
3. Technology
4. Environment
• Foundations of OB
1. Individual Differences
2. Whole Person
3. Caused Behaviour
4. Human Dignity
5. Organisations as Social System
6. Mutuality of Interest
7. Holistic Concept
8. Need for Management
• Scope of OB
1. Individuals
2. Groups of Individuals
3. Organisation as a whole

• Need for study OB

1. Helps to understand self and others better.
2. Effective management of people
3. Tackle human problems humanly
4. Predict the human behaviour
5. Effective utilisation of human resources.
 Contributions to the development of OB as
major subject in Modern Literature
1. Scientific Management: Frederick W. Taylor (1911):
• “Maximum prosperity for employers with maximum
prosperity for each employee”
• Disputes between Management & labour should be
centered on what each viewes as mutually exclusive goals.
• This theory can maximize goals.
• Management should view profit as a result of co-operation
between management & workers
• There should be proper divisions of work between
managers & workers.
 Four Principles of Scientific
Management
1. Standard work practices standardize the
tools for management.
2. Scientifically select each worker.
3. Management & workers must co-operate
to and work according to a standard
procedure.
4. Management must make plans & task
assignments; workers should carry out the
tasks assigned by the managers.
2. Theory of Administration: Henry Fayol
(1919):
Five functions of management:
1. Planning.
2. Organising.
3. Command/Directing.
4. Co-ordination. &
5. Control.
3. Bureaucracy: Max Webber (1922):
Max Webber was a German Political Scientist,
economist & sociologist. He suggested
Bureaucratic form of organisation & management
in order to form a successful & efficient
administration.
Bureaucracy also takes into it purview the following:
• Clearly defined specialize function
• Use of legal authority
• Hierarchal form
• Written rules & procedures
• Technically trained bureaucrats
• Apt to positions based on technical expertise.
• Promotions should be based on technical
expertise & Competence.
• Should clearly define career path. &
• There should be objectivity & impersonality of
decisions.
4.Observations on Organisations &
Management Mary Parker Follet (1925)
• Mary worked mainly as Social worker in Roxbury
Section of Boston.
• In 1920s – 1930’s; her main observations
regarding Organisation & Management were:
– Power: ‘Power is capacity’ & cannot be delegated but
authority can.
– Conflict: Studied integration of desires.
– Leadership: Good Leader “Tenacity, steadfastness of
purpose, tactfulness, steadiness in stormy periods.”
5. The Twentieth Century’s Management Guru
Peter F. Drucker 1995
• Austrian born, modern management guru.
• Propounded MBO & Self control concepts.
• Statistician and an analyst of things from different
Perspectives.
• Prediction up to 2010:
- Rise in alliance, partnership & joint ventures
on global scale. Technology will help in
‘Networking of Societies’.
- Need for decentralizing in an extremely
uncertain environment.
• Use of teams in Organisations.
• Number of knowledgable workers, blue collar
jobs and continuous learning.
• Evolution of knowledge societies in developed
countries. These societies will remain in 3 sectors
(1) Business (2) Government (3) Non-Profit
Organisations/NGO’s.
• World market will become more important than
domestic market.
5. Functions of the Executive: Chester I. Bernard
(1938):
• Organisations are formed because individuals have a
purpose but also limitations. Limitations could be
knowledge, financial resource or physical resource.
• Purpose + Limitation = System of Cooperative action.
• Two types of motivation in organisation:
• Motivation to participate.
• Motivation to perform.
• Chris Argyris, has further tried to elaborate it by
comparing bureaucratic system (with assumption) to more
human structure (Theory) because bureaucratic values
leads to poor or shallow relationships.
People - Organisation relationship.
 Whole person
 Whole groups
 Whole organisation &
 Whole Social System
ORGANISATION BEHAVIOUR ANCHOR
OB should draw on knowledge from other disciplines rather than own
research base:
1. Multidisciplinary Anchor
 Field of psychology & sociology has contributed the most to current
OB knowledge.
 Psychology – Understanding of individual & interpersonal behaviour
 Sociology – Team dynamics, organisation socializations organisation
power
 Anthropology – Organisation culture.
 Political Science – Power & politics in organisation.
 Engineering – Productivity issues.
 Economics – Power, negotiations & decision making.
2. The Scientific Method Anchor
 Testing their hypothesis in a scientific manner from collecting data,
analyzing & concluding.
 A set of principles & procedures is adhered.
3. The Contingency Anchor
 Clause ‘It depends’
 No single solution is best in all circumstances.
 “Different consequences in different situation, no single solution
applicable all the time”.
 Should be careful in this clause as well.
4. The multiple Level of Analysis anchor
 How people structure their work relationship & How organisations
interact with the environment?
 Discussion, power, Organisation politics and conflict.
5. The Open System Anchor
 Organisations are living systems.
 Phil Carrol, “Organisation consists of interdependent parts that works
together to continually monitor & transact with the external Environment”.
OB offers both challenges and opportunities for managers. It
recognizes differences and helps managers to see the value of
workforce diversity and practices that need to be changed when
managing. It can help improve quality and employee productivity by
showing managers how to empower their people as well as how to
design and implement change programs. It offers specific insights to
improve a managers people’s skills. OB can help managers cope in
the world of temporariness and learn ways to stimulate innovation.
Finally, OB can offer managers guidance in creating an ethically
healthy work climate.
ORGANIZATION:
An organization is a social arrangement which pursues collective goals and
which controls its own performance and which has boundaries separating it
from its environment. In social sciences, organizations are studied by
researchers from several disciplines which are as follows:-

 Sociology.
 Economics.
 Political Science.
 Psychology.
 Management.
 Organizational Communication.

Types of organizations:
 Soleproprietorship
 Partnership
 Corporation
 Non-profit organization/NGO’s.
 Trusts
Organizational Structures:
Organization structure defines how job tasks are formally divided,
grouped & coordinated. There are 6 elements for organization structure
which are as follows:-

 Work Specialization
 Departmentalization
 Chain of Command
 Span of control
 Centralization & Decentralization
 Formalization

Organizational Design:
 SimpleStructure
 The Bureaucracy
 The Matrix Structure
 Pyramid or Hierarchies Structure
Simple Structure
Bureaucratic Structure
Pyramid Structure
Organization Culture:
Organizational culture, or corporate culture, comprises of the attitudes,
experiences, beliefs and values of an organization.
 It has been defined as "the specific collection of values and norms that are
shared by people and groups in an organization and that control the way they
interact with each other and with stakeholders outside the organization.”
 From organizational values develop organizational norms, guidelines or
expectations that prescribe appropriate kinds of behavior by employees in
particular situations and control the behavior of organizational members
towards one another" Senior management may try to determine a corporate
culture.
 In addition, there will also be an extant internal culture within the workforce.
Work-groups within the organization have their own behavioral quirks and
interactions which, to an extent, affect the whole system.
Strong/weak cultures:
 Strong culture is said to exist where staff respond to stimulus because of
their alignment to organizational values.
 Conversely, there is weak culture where there is little alignment with
organizational values and control must be exercised through extensive
Elements
A number of elements that can be used to describe or influence
Organizational Culture:
 The Paradigm
 Control Systems
 Organizational Structures
 Power Structures
 Symbols
 Rituals and Routines
 Stories and Myths
Characteristics of Organization Culture:
Research suggests that there are 7 primary characteristics:
 Innovation and risk taking
 Attention to detail
 Outcome orientation
 People orientation
 Team orientation
 Aggressiveness
 Stability
Each of these characteristics exists from low to high. Appraising the
organization on these 7 characteristics then, gives a composite
picture of the organization.
Organizational Climate
Climate is often defined as the recurring patterns of behaviour, attitudes &
feelings that categorize life in the organization. Although culture and climate
are related, climate often proves easier to assess & change. At an individual
level of analysis the concept is called individual psychological climate.
These individual perceptions are often aggregated or collected for analysis
and understanding at the team or group level, or the divisional, functional or
overall organizational level.

There are several approaches to the concept of climate of which 2 have received
substantial patronage which are as follows:

 Cognitive Scheme Approach:

 Shared Perception Approach:

It is important to realize that among these 2 approaches, there is no best

approach and they actually have a great deal of overlap.
While an organisation and its leaders cannot remove every stressor in the daily
life of its employees, Organisational Climate studies have identified a
Organizational Climate Assessment:
The objective of performing an employee climate assessment is to identify
the key areas which are hindering production, reducing effectiveness &
which might generate unexpected cost in near future. The idea &
approach is for the organization not to simply perform an academic
exercise, but to critically examine themselves to see where the company
and the employees might be finely tuned to generate higher levels of
performance. Once identified, opportunities to strengthen existing
approaches which are working well, as well as selecting appropriate
interventions for addressing weakest areas should be aggressively
pursued for maximum benefit of everyone.
The assessment is designed with the following assumptions in
mind:-
 Fundamental care of employee as an asset
 Respect for the dignity of the employee and the sensitiveness of human
beings
 Full understanding of the realities of business
 Embracing optimization and improvement
 Key to motivation and commitment