UNIT – I

FOCUS AND PURPOSE

DEFINITION: (MANAGEMENT AND ORGANISATIONAL BEHAVIOUR -

K.Aswathappa, G.sudarsana Reddy)

Organizational Behaviour refers to the behavior of individuals and groups within

organizations and the interaction between organizational members and their external
environments. Organizational Behaviour is a field of study that investigates the impact that
individuals, groups and structure have on behaviour within organizations for the purpose of
applying such knowledge towards improving an organization’s effectiveness. Organizational
Behaviour is the study of human behavior, the study is about behavior in organiszations; and
the knowledge about human behavior would be useful in improving an organization’s
effectiveness. People generally possess physical strength, skills of some kind, executive skills,
and organizing abilities. So OB helps to shape these qualities and use them for achieving
organization goals. OB may be understood to be the study of human behavior in organizational
settings, of the interface between human behavior and the organization, and of the
organization itself. Knowledge gained from such a study is useful in improving organizational
effectiveness.

NEED OF ORGANIZATIONAL BEHAVIOUR: (ORGANIZATIONAL BEHAVIOUR –

Dr.S.S.Khanka)

Organizational behavior is the study of people at work in organizations. And we

study organizations because we spend our lives interacting with them. If all the world is a
stage, it is a stage filled with organizations. Regardless of the part we play as a student,
employee, manager or customer, we play our roles/parts on an organizational stage. By acting
our parts, we influence organizations and organizations also influence us.

1.Understand Ourselves:

Firstly, the study of OB helps us understand ourselves and others in a better way.
This helps greatly in improving our inter-personal relations in the organizations. Friendly and
cordial relations between employees and management and also among the employees create a
congenial work environment in organizations.

2.Motivating Employees:

Secondly, the knowledge of OB helps the managers know individual employees

better and motivate employees to work for better results. It helps managers apply appropriate
motivational techniques in accordance to the nature of individual employees who exhibit
glaring differences in many respects.

3.Human in Nature:

Thirdly, one of the basic characteristics of OB is that it is human in nature. So to

say, OB tackles human problems humanly. It helps understand the cause of the problem,
predicts its future course of action and controls its evil consequences. Thus, treating
employees as human beings enables the managers to maintain cordial industrial relations
which, in turn, creates peace and harmony in the organizations.

4.Predict Human Behaviour:

Fourthly, the most popular reason for studying OB is to learn how to predict
human behavior and, then, apply it in some useful way to make the organization more
effective. Thus, knowledge of OB becomes a pre-requirement for a person like you the
students of MBA who is going to assume a managerial job and succeed as a manager.

5.Run by Man:
 Finally, all organizations are run by man. It is man working in the organizations
makes all the difference. Then, it implies that effective utilization of people working in the
organization guarantees success of the organization. This is where OB comes into the picture.
OB helps managers how to efficiently manage human resources in the organization. It enables
managers to inspire and motivate employees towards higher productivity and better results.

FEATURES OF ORGANISATIONAL BEHAVIOUR: (ORGANISATIONAL BEHAVIOUR –

M.N. MISHRA)

Organisational behavior is the study and use of information relating to the behavior of
people at work. The majority of work takes place within the structured organization wherein groups of
individuals put in unified common effort in the environment. People use technology to get work done
for achieving the common objectives of the organization. Therefore organizational behavior
concentrates on the individual, the group, structure, technology and environment.

Individual:

Individual employees are the focal points of an organization. They work in the
organization to satisfy their needs, egos and experiences. Each employee has his own physical,
psychological and social needs for which he uses his own traits and experiences. His work behavior is
influenced not only by his biological inheritance, but is also affected by his interactive environment, viz.
family relationships, racial background, social setup, religious beliefs, technological innovations and so
on. Individuals are made up of all these factors, although they have their own perceptions, learning and
personality to shape their behavior. Their desires, needs, wants, attitudes, drives, goals and
experiences have specific work behavior. It requires knowledge of psychology and sociology. There
may be a number of psycho-social and economic factors shaping human behavior at work. The study ,
research and use of these factors help management to mould and modify the behavior of employees for
achieving organizational objectives through increasing their efficiency and effectiveness.

Group:

People at work consist of individuals and groups. Individual behavior and group
behavior are distinctively observed in an organization. Group performance is more effective than
individual performance. This synergy is observed in group behavior. The organization consists of formal
and informal groups, large and small groups, official and unofficial groups. Groups are dynamic,
changing, forming and disbanding. A knowledge of sociology, anthropology, political science and
philosophy is helpful to study group behavior. Group dynamics has become a useful force in leadership,
morale building and personal relations. The group is a separate entity that needs to e studied and
researched. It is an accepted fact that a group sets goals, behaves, thinks and acts. Groups have
synergy and synthesis as compared to the energy and mentality of an individual. If group power is
channelized towards goal achievement, it can put in an outstanding performance.

Structure:

The formal relationships of people forms the structure of an organization. Different

jobs and their construes and the employees assigned to these jobs are formally related. The methods of
establishing the relationship shape the behavior of employees either individually or in a group. For
example, the managers, the office staff, the workers and the other people in the organization have to be
related in some structural way so that their work can be effectively coordinated and controlled. The
structural relations are instrumental in the behavior of employees at work. The structured relationship
is the basis of formalized policies, procedures, organizational culture, hierarchical authority and
responsibilities. The structure of the organization is not always formal. Many times informal
organizations have more fruitful effects on the effectiveness and efficiency of the organization. The
organizational objectives are reduced to different goals of structural points for their prompt
achievement. Structural behavior of individuals and groups have their own identity and entity.

Technology:

Technology has its own behavior and functions. It has a significant influence on work,
the work environment and working relationships. Better work is a source of satisfaction to the
employees. Technology results in better work, because it incorporates technical skills which encompass
the ability to apply specialized knowledge. When people develop their technical skill, they get
satisfaction at work. Interpersonal roles, informational roles and managerial functions are improved
with the use of technology. Consequently , human skills as well as conceptual skills are developed. The
use of scientific methods and research techniques are helpful for understanding technological behavior.

Environment:
 The internal and external environment of the organization creates a certain type of work
behavior. It may be favourable or unfavourable for efficient performance of the organizational
activities. The environment has its own behavior which influences the people’s behavior at work.
Government policies, social systems, religious beliefs, family and economic conditions, national
philosophies, employees’ psychology and other factors inside and outside the organization have a
mutual influence on each other’s behavior. The behavior of an organization cannot be segregated
from the behavior of the environment. It influences the perception and personality of people, working
conditions, productivity and proficiency, individuals inside and outside the organization. Environmental
factors influence work behavior, use of authority and responsibility, relationships, the perceptual
framework of employees and other related factors of behavior.

Organisational behavior is an interdisciplinary approach as it has borrowed concepts,

theories, models and practices of physical sciences as well as social sciences. The main features of
organizational behavior are primarily based on behavioural sciences. The behavior of individuals,
groups, structure, technology and environment is thoroughly studied in relation to psychology,
sociology, political science, anthropology, economies, science, technology and environmental sciences.

IMPORTANCE OF ORGANISATIONAL BEHAVIOUR : (INTERNET)

The co-operative relationships help the organisation in achieving its objectives.

Organisational behaviour provides means to understand and achieve co-operative group
relationships through interaction, rotation of members among groups, avoidance of win-lose
situation and focussing on total group objectives.

 Controlling and Directing Behaviour: After understanding the mechanism of human

behaviour, managers are required to control and direct the behaviour so that it conforms
to the standards required for achieving the organisational objectives. Thus, managers are
required to control and direct the behaviour at all levels of individual interaction.
Therefore, organisational behaviour helps managers in controlling and directing in
different areas such as use of power and sanction, leadership, communication and
building organisational climate favourable for better interaction.

 Use of Power and Sanction: The behaviours can be controlled and directed by the use of
power and sanction, which are formally defined by the organisation. Power is referred to
 as the capacity of an individual to take certain action and may be utilised in many ways.
Organisational behaviour explains how various means of power and sanction can ,be
utilised so that both organisational and individual objectives are achieved simultaneously.

 Leadership: Organisational behaviour brings new insights and understanding to the

practice and theory of leadership. It identifies various leadership styles available to a
manager and analyses which style is more appropriate in a given situation. Thus,
managers can adopt styles keeping in view the various dimensions of organisations,
individuals and situations.

 Communication: Communication helps people to come in contact with each other. To

achieve organisational objectives, the communication must be effective. The
communication process and its work in inter-personal dynamics have been evaluated by
organisational behaviour.

 Organisational Climate: Organisational climate refers to the total organisational

situations affecting human behaviour. Organisational climate takes a system perspective
that affect human behaviour. Besides improving the satisfactory working conditions and
adequate compensation, organisational climate includes creation of an atmosphere of
effective supervision; the opportunity for the realisation of personal goals, congenial
relations with others at the work place and a sense of accomplishment.

 Organisational Adaptation: Organisations, as dynamic entities are characterised by

pervasive changes. Organisations have to adapt themselves to the environmental changes
by making suitable, internal arrangements such as convincing employees who normally
have the tendency of resisting any changes.

NATURE OF ORGANISATIONAL BEHAVIOUR: (MANAGEMENT AND ORGANISATIONAL

BEHAVIOUR – K.ASWATHAPPA , G.SUDARSANA REDDY)

Few things touch our daily life as much as organizations do. We depend on
organizations for education, employment, food, clothing, shelter, health, wealth, recreation,
travel, and much more. They touch every aspect of human life. But most of us have a casual
attitude towards organizations. We notice their importance when they fail to deliver their
goods and services to us. For example, when trains stop running we take notice of the
indifferent services rendered by railways. When electricity fails , we blame the state electricity
board for its incompetent and corrupt administration. When doctors in a government hospital
strike work, we blame the government, and so on. It is essential for us to understand what
these organizations are, how do they function and how to make them more effective in their
functioning.

1.To Increase Specialization and the Division of Labour:

People who work in organizations may become more productive and efficient at
what they do than people who work alone. For many kinds of productive work, the use of an
organization allows the development of specialization and division of labour. The collective
nature of organization allows individuals to focus on a narrow area of expertise, which allows
them to become more skilled or specialized at what they do.

There are several firms, such as Wipro, which have provided enabling
environments for individuals to enhance their skills for organization and individual growth.

2.To Use Large-scale Technology:

Organisations are able to take advantage of the economies of scale and scope
that result from the use of modern automated computerized technology. Economies of scale
are the cost savings that result when goods and services are produced in large volumes by
automated production. Economies of scope are the cost savings that result when an
organization is able to use under-utilized resources more effectively because they can be shared
across several different products or tasks. Economies of scope can be achieved, for example,
when it is possible to design an automated production line that can make several different
types of products simultaneously.

3.To Manage the External Environment:

Pressures from the environment in which organizations operate necessitate

organizing productive resources. An organization’s environment includes not only economic,
social and political factors but also the sources from which it obtains inputs and the market-
place into which it releases its outputs. Managing complex environments is a task beyond the
abilities of most individuals, but an organization has the resources to develop specialists to
anticipate or attempt to influence the many demands from the environment. This
specialization allows the organization to create more value for itself, its members, and its
customers.

4.To Economize on Transaction Costs:

When people cooperate to produce goods and services, certain problems arise
as they learn what to do and how to work with others to perform a task effectively. People
have to jointly decide who will do which tasks (the division of labour), who will get paid what
amounts, and how to decide if each worker is doing his or her share of the work. The costs
associated with negotiating, monitoring, and governing exchanges between people are called
transaction costs. Organization’s ability to control the exchanges between people reduces the
transaction costs associated with the exchanges.

5.To Exert Power and Control:

Organizations can exert great pressure on individuals to conform to task and

production requirements in order to increase production efficiency. To get a job done
efficiently, it is important for people to come to work in a predictable fashion, to behave in the
interest of the organization, and to accept the authority of the organization and its managers.
All these requirements make production less costly and more efficient but put a burden on
individuals who must conform to these regulations. When individuals work for themselves,
they need to address only their own needs. When they work for an organization, however,
they must pay attention to the organization’s needs as well as their own. Organizations can
discipline or fire workers who fail to conform and can reward good performance with
promotion and increased rewards are important and often scarce, organizations can use them
to exert power over individuals.
SCOPE OF ORGANIZATIONAL BEHAVIOUR:(ORGANISATIONAL BEHAVIOUR –
Dr.S.S. KHANKA)

Organisational behavior is the study of human behavior at work in organizations. Accordingly,

the scope of OB includes the study of individuals, groups and organization/structure.

Individuals:

Organisations are the associations of individuals. Individuals differ in many

respects. The study of individuals, therefore, includes aspects such as personality, perception,
attitudes, values, job satisfaction, learning and motivation.

Groups of Individuals:

Groups include aspects such as group dynamics, group conflicts, communication,

leadership, power and politics, and the like.

Organisation/Structure:

The study of organization/structure includes aspects such as formation of

organizational structure, culture and change and development.

In nutshell, OB studies how organizations influence people or how people

influence organizations.

ORGANISATIONAL BEHAVIOUR MODELS: (ORGANISATIONAL BEHAVIOUR : M.N.

MISHRA)

The basic purpose of model development is to understand human behaviour in

an organization. Prediction and control of human behaviour are also used in models of
organizational behaviour. The behaviour approach is used for controlling and modifying the
behaviour of individuals and groups for effective performances. Models of organizational
behaviour deals with development of organizational behavour models and types of models of
organizational behaviour.

I)Developing Model of Organisational Behaviour

This model illustrates the goals, parameters and factors of organizational

behaviour. The model describes the abstraction of reality and simplifies the representation of
real world phenomena. A model of organizational behaviour explains the behaviour of
individual, group and organizational levels. The models are developed on the basis of
dependent and independent variables.

1.Dependent variables:

The dependent variables o