MAN 1163

Organisational Behaviour

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Course Learning Outcomes

1. Explain the core concepts and applications of organizational behaviour.

1.1 Define organizational behaviour.
1.2 Determine the importance of organizational behaviour.
1.3 Identify and assess research methods used to study organizational behaviour.
1.4 Identify and evaluate the challenges and opportunities that exist for organizational
behaviour

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Behavioural Science

Physics, Chemistry, Engineering

Social
Science
Science
The Why’s
The How’s

Philosophy, Sociology, Psychology

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What is OB ?

• Simply, it is the study of behaviour in organisations

What is behaviour?
• Behaviour is the manifestation of expressions by individuals.
• Simply, it refers to the action, reaction or even functioning of a system under normal or
specific circumstances.

And what is organisation?

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 Organisations are all about people

“Take away my people, but leave my factories, and soon grass will grow on the
factory floors. Take away my factories, but leave my people, and soon we will have
a new and better factory.”
- Andrew Carnegie (1835-1919), Industrialist & founder Carnegie Mellon University

“People are definitely a company’s greatest asset. It doesn’t make any difference
whether the product is cars or cosmetics. A company is only as good as the
people it keeps”.
– Mary Ash Kay (1918-2001), founder Mary Ash Inc.

By Source, Fair use, https://en.wikipedia.org/w/index.php?curid=33209357

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OB Defined

• OB is a branch of social science that seeks to build theories that can be applied to
predicting, understanding and controlling behaviour in work organisations. – Ramon J
Aldag

• Organizational behavior (OB) is defined as the systematic study and application of

knowledge about how individuals and groups act within the organizations where they
work.

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OB Described

• Study of the behaviour of the individuals and people in organisations as well as the
behaviour of the organisation as a whole.

• It is part of management and not the whole management. It is related to the behavioural
approach to management that emphasizes human element in organisations.

• It contains a body of theory, research and applications associated with human behaviour at
work.

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OB Described

• It is science as well as an art. The systematic knowledge about human behaviour is a

science; and of course inexact science; and the application of such knowledge is an art.

• OB also seeks to fulfil the objectives of the individuals as well as that of the organisation

• OB is influenced by many disciplines

• OB is contingency based

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Why to study OB ?

• Helps understand and predict behaviour of people in organisation

• Provides us the knowledge tools to work with others that helps in team work, and
reducing stress
• OB is not a career but it does make a difference to any career success
• OB knowledge is essential in every organisation as research shows more OB activities
contribute to organisational health and productivity.

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Does OB matter?

• Yes, because people care for it. Top 5 personal qualities/skills while
evaluating employees:
• Yes, because organisations must care for it.
1. Communication skills (verbal and
written)
2. Honesty/integrity
3. Interpersonal skills (relates well to
others)
We know that organizations that value their employees 4. Motivation/initiative
are more profitable than those that do not (Huselid, 1995; 5. Strong work ethic
Pfeffer, 1998; Pfeffer & Veiga, 1999; Welbourne &
Andrews, 1996). Research shows that successful - (NACE 2007 Job Outlook Survey,
organizations have a number of things in common, such as 2008)
providing employment security, engaging in selective hiring, - National Association of Colleges
utilizing self-managed teams, being decentralized, paying and Employers
well, training employees, reducing status differences, and
sharing information (Pfeffer & Veiga, 1999).

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Isn’t OB just a common sense!! Make a Poll

Explain if you agree or disagree to the following –

1. A happy worker is a productive worker

2. Organisations are effective when they are able to minimize conflict among employees
3. Effectiveness in decision making increases when there are more choices available.
4. With a strong culture companies become more successful.
5. Employees perform better with least amount of stress
6. The best decisions are made without emotions

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Isn’t OB just a common sense!!

These are organisational myths.

OB research has proved it otherwise time and again.

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Levels of OB

Organisational Behaviour

Individual Level
(Ability, Learning, Values, Attitudes, Beliefs, Personality, Perception,
Motivation etc.)

Group Level
(Group Dynamics, Leadership, Power & Politics, Conflict etc.)

Organisational Level
(Structure, Culture, Change, Communication etc.)

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Research Methods to study OB

• Working hypotheses are created, tested to understand the relationship between different
variables.
• Several research methods are adopted such as
• Surveys
• Field Studies
• Lab Studies
• Case Studies
• Meta Analysis

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Surveys

• Collecting responses by using a questionnaire, where questions may be open ended or

close ended.
• open-ended surveys can be time consuming to summarize and hard to interpret at a
glance
• Close ended questions are more specific and the response could be gathered by analysing
rating method.
• In today’s context surveys have become easier and quicker due to online access and instant
data is gathered.

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Field Studies

• conducting experiments at the actual workplace.

• These experimental designs at the workplace were conducted at Hawthorne plant of GE in
1920’s famous as Hawthorne Experiments.
• Dividing the employees into two groups one as a treatment group to have the experiments
conducted on them to compare it with the other group

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Laboratory Studies

• conducting experiments on controlled conditions on created groups

• One example could be Stanford Prison experiment, which went horribly wrong
• https://www.youtube.com/watch?v=3XN2X72jrFk
• https://www.youtube.com/watch?v=DsWJPNhLCUU

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Case Studies

• In depth descriptions given on a company or event to understand the situation well

• provide rich information for drawing conclusions about the circumstances and people
involved in the topics studied
• downside is that it is sometimes difficult to generalize what worked in a single situation at a
single organization to other situations and organizations

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Meta Analysis

• A technique used by researchers to summarize what other researchers have found on a

given topic. This analysis is based on taking observed correlations from multiple studies,
weighting them by the number of observations in each study, and finding out if, overall, the
effect holds or not.

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Measurement issues in OB

• Reliability & Validity

• Reliability refers to consistency in measurement. Across time (test-retest), across items (internal)
and across ratings (interrater). A weighing machine when shows different results for the same
item is unreliable across time, when weighs individuals and vegetables differently is internally
unreliable and when shows different results while being used by different people is unreliable
across rating.
• Validity refers to the instrument must measure what it intends to measure. For example, a
weighing machine if showing results in Lbs rather than in KGs , then the machine is invalid.

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Measurement issues in OB

• Correlation and Causation:

• Causation is establishing a cause and effect relationship between two variables. It means
occurrence of one item is directly caused by another item.

• Correlation establishes some relationship between two variables except a cause and effect
relationship for examples, it may be observed that when sale of gold increase the crime rate
increases ; however, we can not conclude that sale of gold is the direct causation for increase in
crime rate.

https://www.youtube.com/watch?v=VMUQSMFGBDo

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Challenges & Opportunities

• Ethical Challenges: CEO Salary, the Sarbanes-Oxley Act

• Lack of Employee Engagement – An engaged employee is a person who is fully involved in and
enthusiastic about their work. When employees have choices, they will act in a way that furthers their
organization’s interests.

• Technology – Ease of operation

• Flattening World – Access to information
• Sustainability & Green Business Practices – Tripple Botom line – People, Profit, Planet
• Aging workforce & the Millennial generation
• Outsourcing

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Lack of Employee Engagement

• When employees have choices, they will act in a way that furthers their organization’s
interests.
• An engaged employee is a person who is fully involved in and enthusiastic about their
work1. They perform at the top of their abilities and are happy about it.
• Engaged employees are not just committed. They are not just passionate or proud having a
line-of-sight on their own future and on the organization’s mission and goals2.
• According to Gallup Survey, 75%–80% of employees are either “disengaged” or “actively
disengaged” 3

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Sustainability & Green Business Practices

• Triple Bottom Line – Three CSR practices, Economic (Profit), Social (People) and
Environmental (Planet)
• Green Washing - marketing of products or processes as green to gain customers without
truly engaging in sustainable business practices.
• Sustainability - to meet the present needs without compromising the needs of future
generations.
Thus,
Economic Sustainability – Not how much you gain rather how much of an impact your
business has on its economic environment.
Environmental Sustainability – consuming fewer natural resources, reducing waste and
emissions
Social Sustainability - making your workplace better so that people would like to be a part of
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Aging workforce & Millennial generation

• The aging workforce is going to create a number of challenges

• The Millennial Generation (1980-2000) more tech savvy, prone to multitasking, technology
embedded in their lives. In addition, they value teamwork, feedback, and challenging work
that allows them to develop new skills.

• The challenge for organizational behavior is to keep individuals from different generations
communicating effectively and managing people across generational lines despite different
values placed on teamwork, organizational rewards, work–life balance, and desired levels of
instruction.

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Outsourcing

• Outsourcing refers to someone outside the formal ongoing organisation to some inhouse work. This
practice includes temporary workers, independent workers, consultants and even offshoring workers.
• Offshoring refers to sending jobs previously done in one country to another country. 80% of the
BOD in US wants offshoring1 and 94% of software outsourcing goes to India, Singapore, Russia and
China.2
• Shamrock Organisation3 refers to an organization comprising one-third regular employees, one-
third temporary employees, and one-third consultants and contractors. All organisations are heading
towards this. Bright side – flexible staffing for employers, flexibility for workers, increased exposure for
workers. Dark side – potential unemployment, insecurity

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