Concept of Organizational Behaviour

The word organizational behavior is constituted with two words

consisting of organization and behavior. An organization is a
collection of people working together in a division of labour to
achieve a common purpose. Behaviour is concerned with series
of activities and interaction that individuals do in the
organization. Therefore, organizational behavior is concerned
with making study of individual and groups behavior at work
and managing them for better performance of the organization.
Organizational behavior (OB) predicting, and managing human
behavior in the organization for improving organizational is
concerned with analyzing, understanding effectiveness. It is the
study of what people do in the organization an show their
behavior affects in organizational performance. It is the
systematic study of the behavior of the individuals and groups
in the organization for better performance.
“Organizational behavior is the study and application at
knowledge about how people as individuals and a groups – act
within organization. It strives to identify ways in which people
can act more effectively.” -Keith Davis
“Organizational behavior can be defined as the understanding,
prediction, and management of the human behavior affects the
performance of the organization.” –Fred Luthans
“Organizational behavior is the study of what people think, feel
and do in and around organizations.” –McShane and glinow

Organizational behavior is multidisciplinary field devoted to

understanding individual and group behavior , interpersonal
process, and organizational dynamics. The study of
organizational behavior is very interesting and challenging task.
It is related to individuals and groups of people working
together in organization as teams to achieve common goals.
Organizational behavior involves many activities which is
essential for improving job performance, increasing job
satisfaction, promoting innovation and encouraging leadership.
In order to achieve the desired results, managers may adopt
different tactics, including reorganizing groups, modifying
compensation structures and changing the way of performance
evaluation.
Key points:
- Organizational behavior is about human side of
organization.
- It is concerned with human behavior at work.
- It focuses on the behavior of individuals and groups in
organizational settings.
- Organizational behavior is the study of what people think,
feel and do in and around organizations
 - It is the systematic study of the behavior of the individuals
and groups in the organization for better performance.
- It seeks answers to why people behave as they do at work
and what influences their work behavior in organization.
- It studies behavior under variety of situation.
- Organizational behavior (OB) predicting, and managing
human behavior in the organization for improving
organizational is concerned with analyzing, understanding
effectiveness
- It emphasizes behavior related to job, work, human
performance, productivity and employee turnover.
- It looks at relationship, causes and effects of people.

Characteristics of Organizational Behaviour

Organizational Behaviour is the study of what people do in the
organization and how their behavior affects in organizational
performance. It is human psychological aspect and directly
concerned with studying human behavior at work. The
following are the common characteristics of organizational
behavior:
1. Multidisciplinary Approach: organizational behavior is a
multi-disciplinary approach. It is heavily influenced by several
other behavioral sciences and social sciences like psychology,
sociology, anthropology and political science, it has
psychological functions.
2. A separate field: Organizational behavior is a separate field
of study which focuses on human behavior at work. It is not
only a discipline. It is the part of general management. It
represents behavioural approach to management, it helps to
analyze, understand, predict and manage human behavior at
work for achieving common goals.
3. Both Art and Science: it is both art and science. It is
considered as art because it contains knowledge about
behavior of individuals. It needs skills and efficiency to
understand individual behavior. It is considered as science
because it involves application of scientific knowledge. It
specially focuses on use of social science to solve behavior
related issues.
4. Focus on Objectives: It is goal oriented. Every organization is
formed for achievement of specific objectives. These objectives
involve earning profit, maximizing wealth, brand image, good
working environment, team work etc.
5. A Total System: Individual behavior can be analysed by
keeping in view his psychological framework, interpersonal-
orientation, group influence and social and cultural factors. It is
the reason that individuals nature is quite complex and difficult
to understand.
6. People Oriented: It is people oriented. People make the
internal social system of the organization. The involve
individuals and groups. People are dynamic in nature and
interact with each other in doing work. They also influence each
other while taking important decision.
7. Environmental Influence: It is influenced by changing social
environment. Environment is dynamic and changeable on the
basis of time and situation. On the basis of changing
environment of society, the perception, learning motivation,
attitude, and value of people would also be changed.

Basic assumptions of OB
Assumptions about nature of
people
1.Individual differences
2.Selective perception
3.A whole person
4.Motivated behavior
Assumptions about nature of
organization
1.Social systems
2.Mutuality of interest
3.Ethical treatment

5.Desire for involvement

6.Value of the person

A.The assumption about nature of people

All the individuals have separate traits and quality. They are
guided by their special features. For understanding OB it is
necessary to understand the basic assumptions about the
nature of people. The following are the basic assumptions
about nature of individuals:
1. Individual differences
OB assumes individual differences. Individuals are
different from each other from their unique traits and
characteristics. People differ in terms of physique,
perception, intelligence, personality, learning capability,
attitude, personality and other traits. There is no one
standard way of dealing with employees.
2.Selective perception
OB assumes selective perception. Perception is an
individual’s own view of the world. It is the process of getting
information from environment and attempting to organize and
interpret it for making it meaningful. Each person has a unique
way to see, organize and interpret things. Employees behave on
the basis of perception. Their behavior is based on selective
perception of reality, not on actual reality. Perceptual
differences of employees are important for OB.
3.A whole person
OB assumes that an individual functions as a whole
person. Work life cannot be totally separated from home life.
Emotional conditions cannot be separated from physical
conditions. OB cares about the effect of job on the whole
person.
4. Motivational behavior
OB assumes that behavior is motivated. Motivation is
essential for the operation of organizations. Motivated
behavior is caused by needs and is directed towards goals.
Managerial actions either fulfill unsatisfied needs or threaten
the fulfillment of needs.
5. Desire for Involvement
 OB assumes that individuals have desire for involvement. It
believes that people have capabilities for task performance,
role fulfillment, meaningful, contribution and to get involved in
decision situations. They seek opportunities for meaningful
involvement of employees for contributing their talents and
ideas.
6. Value of the person
OB assumes that people shouldn’t be treated as economic
tools. They should be treated with respect and dignity. They
want to be valued for their abilities and skills. They want to be
provided with opportunities to develop themselves.
OB assumes that due recongnition should be given to the
aspirations and skills of employees. They should be given
human dignity.

B. Assumptions about nature of organization

The basic assumptions of OB about the nature of organization
are:
1. Social systems
OB assumes that organization are open social systems.
They are collection of people. People have roles and
status. Their behavior is influenced by group. Formal social
system and informal social system exist side-by-side in
organization.

2. Mutuality of Interests
OB assumes mutuality of interests in organizational
participants. Organizations need people. People need
organizations. Mutual interests facilitates integrated
efforts of employees and employer to achieve goals
through mutual cooperation.

3. Ethical Treatment
OB assures ethical treatment by organizations. Ethics
involves moral issues and choices. It deals with right or
wrong behavior. Ethical treatment of employees is
necessary for organizations to succeed. High standards of
ethical performance should be ensured.

Organizations should establish codes of ethics. They

should provide ethics training to managers and
employees. Ethical behavior should be rewarded.
 Contributing disciplines to the field of OB

Behavioural science Contribution to OB

Individual level
Psychology
*perception *Individual decision making

*learning *Employee selection

*Motivation *Work stress

*Satisfaction

*Personality

*Leadership

Group Level
Social Psychology
*Attitude change *Group process

*Communication *Group making

decision
Group level Organization
Sociology level
*Group dynamics
*Organizational
*Work Teams change

Anthropology *Leadership
Group level Organizational level

*Communication
*Comparative values *Organizational culture

*Power *Conflict
*Cross-cultural analysis

Group level
Political Science
*Conflict *Power
 Figure: Contributing Disciplines to OB

1.Psychology
Psychology is the study of human behavior which tries to
identify the characteristics of individuals and provides an
understanding why an individual behaves in a particular way. It
seeks to measure and explain the change in behavior of
humans. The level of analysis is an individual. The contribution
of psychology to OB has been through the theories of
perception, learning, motivation, personality, emotions, job
satisfactions and leadership. It has also contributed in the field
of individual decision making, performance appraisal, employee
selection, job design and work stress.
2. Social psychology
Social psychology is the study of human behavior in the
context of social situations. It is concerned with group behavior.
It focuses on the influence of people on one another. It blinds
concepts from psychology and sociology. The level of analysis is
group. The contribution of social psychology to OB has been in
the area of behavioral change, attitude change, communication
patterns, group process and group decision making.
3. Sociology
 Sociology is the study of social behavior, relationships among
social groups and societies and the maintenance of social order.
The main focus of attention is on the social system. The level of
analysis is group and the organization system. The contribution
of sociology to OB at group level has been in the area of group
dynamics, work teams, leadership, communication, power,
conflict and intergroup behavior. It focuses on interpersonal
aspects. At organizational system levels the contribution of
sociology has been in the area of organization culture,
organization technology and organizational change .
4. Anthropology
It is the study of societies and their culture. It focuses on
human beings and their activities and works. The level of
analysis is group and organization system. The contribution of
anthropology to OB at group level has been in the areas of
comparative values, attitudes and cross-cultural analysis. At
organization system level, it is in the areas of organizational
culture and environment. Culture has significant influence on
human behavior. Every organization has its own distinct
culture. National culture also differ.
5. Political Science
It is the study of power and politics. It studies the behavior of
individuals and groups within a political environment. The
contribution of political science to OB at organization system
 level has been in the areas of power, conflict, and intra-
organizational politics. Modern organizations are becoming
political entities. Political behavior of employees at work is
getting important.

Challenges and opportunities for Ob

There are a lot of challenges and opportunities today for
managers to use OB concepts. Human beings have brain and
their behavior is changeable and complex for instance, two
people behave differently in same situation and similarly a
person may act differently in different situation. At present
managers of business organizations are facing a number of
behavioral issues. This issues provide both challenges and
opportunities to the managers. The following are the major
challenges and opportunities for managers in an organization.

1.Responding to Globalisation
2.Managing work force diversity
3.Balance work-life needs
4.Improving Quality and
Productivity
Critical Behavioral
5.Improving people skills
Issues
6.Empowering Employees
7.Managing change
8.Improving Ethical Behaviour
 9.Managing Information technology

.
1.Responding to globalization
Globalization provide both challenges and scopes in doing
business. It provides scope for doing business not only in
national but also at international level. Business organizations
having quality goods and services can perform business at
worldwide without any barriers. It creates challenges to
business entities to work with people having difference in
culture, language, religion, beliefs, traditions, value e.t.c. Due to
the globalization many business organizations are expanding
their business activities at national as well as international level
by using mass communication, internet and modern
transportation systems. Globalization affects a managerial skills
in two ways , firstly managers have to manage work force
having different needs aspirations and attitudes. Secondly,
understanding the culture value of local people of different
countries.
2.Managing work force diversity
It is one of the emerging issues of organizational behavior. It
refers to the involvement of heterogeneous type of employees
in the organization having differences in education level,
intelligent, age, gender, race, ethnicity etc. Managers must
learn to manage workforce diversity. They should arrange
diversity awareness programs. They should provide diversity
friendly work environment. They shouldnot discriminate. They
should give high priority to diversity management. The main
reason to employ heterogeneous employees is to tap the
talents and potentialities and obtaining synergetic effects
among the diverse workforce. The major challenge of
workforce diversity for organization is to become more
accommodating to diverse groups of people by addressing their
different lifestyle, family needs and work styles. It has become
more difficult to manage inter-personal conflict.

4. Balance work-life needs

Managers should minimize conflicts between work and non-
work demands. They should make increasing use of innovative
programmes to balance work-life needs. They can be:
*Flextime: employees determine their work schedule
themselves.
*Four Day Week: Employees work 40 hours in four days.
*Job Sharing: Two or more people share a job and determine
their schedule themselves.
*Time Bank Plan: Employees save their personal leave and
holiday time and utilize it in any other way.
*Virtual Offices: Employees work from home through
computers and internet. They work in networked organizations.

5. Improving Quality and Productivity

Managers need to improve productivity and quality with
active participation of employees. The tools can be:
A) Total Quality Management (TQM) : TQM is a
management philosophy driven by the constant
attainment of customer satisfaction through continuous
improvement of quality. It represents key to improving
customer service.
B) Reengineering: It is radical rethinking and redesign of
work processes. It reconsiders how work would be done
and the organization restructured if beginning was done
 from scratch. The modality can be merger, acquisition,
divesting and reorganization.
*Managers need to realize that employee are a major
force for planning and implementation of change.
Resistance to change by employees can constrain
effectiveness.

5. Improving People Skills

People skills are important for all levels of managers. To
cope with globalization, work force diversity and
productivity improvements, managers need to learn a
variety of ways to motivate people, manage work teams,
and communicate effectively.
Paradigm shift is taking place in people-related practices.
Managers need to learn continuously in learning
organizations.

6. Empowering Employees
Empowering is putting employees in charge of what they
do. It involves pushing down decision making power to
operating levels to solve related problems. Employees are
given autonomy to control their work. Self managed teams
are used.
Managers need to learn about how to give up control.
Employees need to learn about how to take responsibility
 and accountability for decision making. Empowerment is
having important implications for OB.
Managers need to deal with new forms of employment
relationships. The emerging concept of employability
requires employees to keep pace with changing
competency requirements by learning new skills.
Managers need to develop new skills to redesign jobs,
structures and systems for managing behavioral aspects of
changing employment relations. They need to create a
positive work environment.

7. Managing Change
Change is making things different. It is an on-going
activity for organizations.
Workers need to continually update their knowledge
and skills to cope with new job requirements. Managers
need to learn to cope with change. They need to manage
change, overcome resistance to change and create an
organization culture that thrives on change. They need to
stimulate employee creativity and tolerance for change.
They need to create a positive work environment for
change.

8. Improving Ethical Behaviour

 Ethics involves moral issues and choices. It deals with
right or wrong behavior. Managers of today face a host of
ethical dilemmas.
*Managers need to create an ethically healthy climate for
employees. They should establish codes of conduct. They
should value dignity of labour. They should offer training
and seminars to improve ethical behavior. Proactive
mechanisms should be established for unethical practices.
*Ethical behavior improves credibility of organization.

9. Managing Information Technology (IT)

IT affects every function within the organization. The rapid
change in information technology are changing tasks and skills
requirements of employees. Workers are getting knowledge
workers. Organization structures are getting flatter. E-comerce
is getting popular. Computer-based virtual offices are
increasing. Employment relationships are changing.
Managers should be able to manage the behavioural
dimensions of advancements in information technology,
including virtual work where employess perform their jobs from
home away from the physical workplace. Virtual teams are
getting important.
Environmental context of OB
1.Globalization: It provide both challenges and scopes in doing
business. It provides scope for doing business not only in
national but also at international level. Business organizations
having quality goods and services can perform business at
worldwide without any barriers. It creates challenges to
business entities to work with people having difference in
culture, language, religion, beliefs, traditions, value e.t.c. Due to
the globalization many business organizations are expanding
their business activities at national as well as international level
by using mass communication, internet and modern
transportation systems. Globalization affects a managerial skills
in two ways , firstly managers have to manage work force
having different needs aspirations and attitudes. Secondly,
understanding the culture value of local people of different
countries.
2. Diversity: It is one of the emerging issues of organizational
behavior. It refers to the involvement of heterogeneous type of
employees in the organization having differences in education
level, intelligent, age, gender, race, ethnicity etc. Managers
must learn to manage workforce diversity. They should arrange
diversity awareness programs. They should provide diversity
friendly work environment. They shouldnot discriminate. They
should give high priority to diversity management. The main
reason to employ heterogeneous employees is to tap the
talents and potentialities and obtaining synergetic effects
among the diverse workforce. The major challenge of
workforce diversity for organization is to become more
accommodating to diverse groups of people by addressing their
different lifestyle, family needs and work styles. It has become
more difficult to manage inter-personal conflict.
3.Ethics :Ethical behavior is the individual’s personal beliefs
regarding what is right and wrong or good and bad. Managers
need to create an ethically healthy environment for employees.
They should develop rules, regulations, procedures and system
in the organization. They should value all the employees and
reward for good behavior. They should provide seminar,
workshop, conference and other training to improve ethical
behavior. Besides, appointing consultants, lawyers, and
professionals to assist the organization for dealing with ethical
issues will ensure positive ethical behavior. Managers need to
create an ethically healthy climate for his employees where
they can do their work effectively.

Levels of OB Analysis

Organizational level analysis

 Group level analysis

Individual level analysis

1. Individual level analysis

This level studies the impact of psychological factors on
behavior and job performance of the behavior. It studies
their perception, motivation, values and attitudes.
6. Group level analysis
It analyses the function of groups in terms of :
a) Group dynamics – Role , status, norms,
size,composition, cohesiveness
b) Group performance – They can be tasks and
assignments.
c) Leadership – Influence of formal leadership on group
performance .
This level draws heavily from social psychology.
7. Organizational level (Macrolevel analysis )
The relationship between organization and its surrounding
environment is studied.
Studies of topics such as organizational culture,
organizational structure, cultural diversity,
interorganizational cooperation and conflict, change
technology and external environmental forces.
This level of analysis OB draws upon sociology,
anthropology and social science.