Unit:1

Organizational Behaviour

The Dynamics of people and organizations

A primary goal of management education is to develop students into managers who
can think ahead, exercise good judgment, make ethical decisions, and take into
consideration the implications of their proposed actions
Jane Schmidt-Wilk
Premises
Organizations are complex systems.
Need to understand how the system operates esp. in a sociotechnical system
humanity and technology. Human behavior in organizations is sometimes unpredictable
Behaviors may come from deep-seated needs, lifetime experiences and personal value
systems Human behavior in a organization can be partially understood Applying the
frameworks of behavioral science, management and other disciplines.
There are no perfect solutions to organizational problems Increase the understanding
and skills work relationships can substantially upgraded We do not have the luxury of
not working with or relate to other people.
Learn human behavior.
Explore how to improve he interpersonal skills
Begin to mange ones relationships with others at work.

Definitions of Organizational Behaviour:

Organizational Behavior is a discipline that deals with the study and application of
knowledge about how people as individual and as group act within organizations.

Organizational behaviour is a field of study that investigates the impact that individuals,
groups and organizational structure have on behaviour within the organization, for the
purpose of applying such knowledge towards improving an organizational
effectiveness .
--Stephen P Robins

Organisational behavior is to understand, predicting and controlling human behavior at

work
-- Fred Luthans

OB is systematic study and careful application of knowledge about how people as

individuals and as groups act within organizations.
Strive to identify ways in which people can act more efficiently
A large number of research studies and conceptual developments constantly adds up to
its knowledge base.
An applied science
Provides useful set of tools at many levels of analysis from individual, interpersonal
relations, intergroup,and whole system
GOALS OF OB
Describe People Behavior
Understand People Behavior
Predict Employee Behavior
Control Human Activity

Describe
how people behave under a variety of conditions.
Understand
Why people behave behave as they do.
Probe for underlying explanations
Predict
Predict future employee behavior (tardiness, productive & unproductive etc.)
Provide preventive actions
Control
At least partially and develop some human activity at work.
Managers need to remember that organizational behavior is a tool for human benefit

Contributing Disciplines to the OB Field

Psychology
Sociology
Social Psychology
Anthropology
Political Science

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. This thus provides us with useful insight into areas such as human
motivation, perceptual processes or personality characteristics.

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. This helps us to appreciate the functioning of individuals within the
organization which is essentially a socio-technical entity.
Social psychology: Social psychology is the study of human behaviour in the context
of social situations. This essentially addresses the problem of understanding the typical
behavioural patterns to be expected from an individual when he takes part in a group.

Anthropology: Anthropology is the science of mankind and the study of human

behaviour as a whole. The main focus of attention is on the cultural system, beliefs,
customs, ideas and values within a group or society and the comparison of behaviour
among different cultures. In the context of today s organizational scenario. It is very
important to appreciate the differences that exist among people coming from different
cultural backgrounds as people are often found to work with others from the other side
of the globe.
Economics:
nomics: Any organization to survive and sustain must be aware of the economic
viability of their effort. This applies even to the non
non-profit
profit and voluntary organizations as
well.

Political Science: Although frequently overlooked, the contributions of polit political

ical
scientists are significant to the understand arrangement in organizations. It studies
individuals and groups within specific conditions concerning the power dynamics.
Important topics under here include structuring Of Conflict, allocation of power.
Fundamental Concepts of OB

Nature of people

Individual differences
differenceš
Nature vs. nurture

Perception
The unique way in which each person sees, organizes and interprets things.
Selective perception cause misinterpretation
A whole person
We employ the whole person not just their brains or skills
Ergonomics is the science of fitting workplace conditions and job demands to the capabilities
of the working population

Motivated behavior
A path towards increased need fulfilment is a better approach

Desire for involvement

Hunger for a change to chare what they know and to learn from the experience.
Organizations need to provide opportunities for meaningful involvement employee
empowerment

Value of the person

Worth before the word
meal before the message
they want to be treated differently from other factors of production

Nature of organization
Social systems
or social structure in general refer to entities or groups in definite relation to each other, to
relatively enduring patterns of behavior and relationship within social systems, or to social
institutions and norms becoming embedded into social systems in such a way that they
shape the behavior of actors within those social systems. Social systems can be said to be
the patterns of behavior of a group of people possessing similar characteristics due to their
existence in same society.
Formal and informal social systems
The idea of a social system provides a framework for analyzing organizational behavior issues.
It helps make OB problems understandable and manageable

Mutual interest
Symbiotic relationship between organizations and people
Provides a superordinate goal one that can attained only through the integral effort of
individuals and their employers.

Ethics
Treatment of employees in an ethical fashion
Establish code of ethics, publicized statements of wthical values, provide ethics trainings,
reward employees for notable ethical behaviors, set up internal procedure to handle
misconduct.
 Importance of OB

Understanding of self and others

-- Individual Behavior
-- Inter-Personal Behavior
-- Group Behavior
Motivation of Human Resources
Effective Communication (behavioral science helps to improve communication)
Effective Organizational Climate
Good Human Relations
Introduction of change in the organization (benefits of change should be highlighted)

Why - Organizational Behavior (OB)

The attitudes and behaviors of individuals and groups in organizations

Why study OB?
To learn about yourself and others
Help you to retain the people who came up with the good ideas
Solve new problems and adapt to new situations
OB focuses on improving productivity, reducing absenteeism and turnover, and
increasing employee job satisfaction and organizational commitment
OB studies how people behave, the reasons for that behaviour and how the behaviour
affects the performance of the organisation
Predicts the future course of action
Control the activity
It motivates employees towards higher productivity

Why Study Organizational Behavior

Understand
organizational
events

Why study
Influence organizational Predict
organizational behavior organizational
events events
 Key forces/Elements complex set of forces affects the
nature of organizations

Elements of OB
People
Structure (formal and informal system)
Technology (cost as well as benefits)
Environment (no organisation exists alone)

People
Make up the internal social system of an organization
Melting pot of diversity talents, background and perspectives to their jobs
Managers need to be tuned in to these diverse patterns and trends.
Changes in the labor force
» Decline in work ethic and rise in emphasis on leisure, self
expression, fulfillment and personal growth
» Decreased automatic acceptance of authority and increase in the
desire for participation, autonomy and control.
» Skills become obsolete due to rapid technological advances
retrain or be displaced
» Security needs are prime concern and loyalty diminishes because
of downsizing and outsourcing
» Absence of meaningful salary growth has placed renewed
emphasis on money as a motivator
Companies address diversity by becoming compassionate and caring, building
pride without de-valuing others, empowering some without exploiting,
demonstrating openness, confidence, authentic compassion and vulnerability.
 Structure
Defines the formal relationship and use of people in organizations.
Effective coordination of work
Create complex problems of cooperation, negotiation and decision making

Technology
Provides the resources with which people work and affects the tasks they
perform
Benefit of technology does more and better work however it restricts people in
various ways
OB s challenge is to maintain the delicate balance between technical and social
systems.

Environment
Internal or external
Organizations are part of a larger system and factors influence them like:
Citizens expect organizations to be socially responsible
New products and competition for customers come from around the
globe (globalization)
The direct impact of unions diminishes
Dramatic pace of change in society.
The external environment influences the attitudes of people, affects working
conditions, and provides competitions for resources and power.

Nature of OB

An Integral Part of Management

A Field of Study
Inter-Disciplinary Approach
Levels of Analysis (behavior)
Goal-Oriented
Human Tool
Science and Art
Satisfaction of Employees Needs
Humanistic and optimistic
Oriented towards Organizational Objective

Scope of OB

Individuals (differ from personality, perception, values and attitude)

Group of Individuals (group conflicts, communication, structure, power and politics)
Organisation Structure
The scope of organizational behaviour:

Elements of the Organizational Behaviour

People, structure, technology and the external environment are the key elements of the
organizational behaviour. First three elements are micro-level and last one is macro level.
These elements can be undertaken as a part of the OB scope. Understanding people is not
sufficient and hence OB extends its scope to structure, technology and the environment also.

Impact of personality on performance

It s also essential to understand the impact of personality of an employee or other members of
the team on performance.

The motivation of employees of organization:

The study helps to understand employee behaviour. This helps to understand what kind of
Monetary & Non-Monetory benefits will help to motivate employees and to create a positive
attitude.

Other important points under the scope of OB are:

· Leadership
· Structure of teams and groups
· Perception·
Development of the Soft Skills
· Organizational structures: Their Study and Development
· Improvement/Enhancement of Individual & Organizational development
· Individual behaviour, Group behaviour, power and politics, attitude and learning
· Organization Design
· Job design
· Culture and Environment factors
· Management of change, conflict and stress
· Organizational development
· Study of emotions
· Transactional analysis

This is the scope of Organizational behaviour. In the current scenario, Organizational Behaviour
i.e. behaviour of employees in an organization is becoming the main thing for organization
management.
Models of Organizational Behavior
Autocratic Model
Custodial Model
Supportive Model
Collegial Model

Autocratic Model
Managerial orientation is towards power
Manager see authority means get the things done
Employees expected to follow
High dependence on boss
Under autocratic model, employees usually give minimum performance and in turn get
minimum wages
This model is largely based on Theory X Assumption

Custodial Model
Employees managed under autocratic model feel insecurity and stress
The manager felt some way to develop employee relationships
The managerial orientation is towards the use of money to pay benefits
Employees hope to obtain security and benefits
Organisational dependence
Since employees are getting adequate rewards and security, they are happy
Family-managed business organisation
Not suitable for matured employees

Supportive Model
The model depends on Leadership
Supports Employee Job Performance
The focus in primarily on participation and involvement of employees in decision making
Creates Sense of Participation
Manager s role is to help employees to achieve their work rather than supervision
Manager is a coach builds a better team
Assumption of Theory Y
Organisation with sophisticated technology and professional people can apply this model

Collegial Model
Collegial model is an extension of supportive model
It is based on team concept
Employee develops high degree of understanding
Shares common goals
Employees need little direction and control from management
Creates Favorable Working Climate
Fulfillment of Employees
 Additional Reading Material on History of Organizational Behaviour

Though the practice of management can definitely be traced back to ancient time say, during the
era of building huge structures like pyramids in Egypt or temples in India or the churches, but the
formal discipline of management as we find it today evolved only during the later part of
nineteenth century. Following are the disciplines of management:

Scientific management
Classical administration
The human relations approach
The systems approach
The contingency approach

Scientific Management
Frederick Taylor (1865-1915) was among the first to argue that management should be based on the
following principle instead of depending on more or less hazy ideas:
Well-matched,
Clearly defined and
Fixed principles
He pioneered the scientific management movement which suggested that systematic analysis
could indicate accurate methods, standards and timings for each operation in an organization s
activities. The duty of management was to select, train and help workers to perform their jobs
properly . The responsibility of workers was simply to accept the new meth- ods and perform
accordingly. The practical application of this approach was to break each job down into its
smallest and simplest component pans or motions : each single motion in effect became a
separate, specialized job to be allocated to a separate worker. Workers were selected and
trained to perform such Jobs in the most efficient way possible, eliminating all wasted motions or
unnecessary physical movement.
A summary of scientific management, in Taylor s own words, might be as follows.
(a) The man who is fit to work at any particular trade is unable to understand the science of that
trade without the kind help and co-operation of men of a totally different type of education.
(b) It is one of the principles of scientific management to ask men to do things in the right way,
to learn something new, to change their ways in accordance with the science and in return to
receive an increase of from 30% to 100% in pay.

Classical Administration Theory of Management Henri Fayol (1941-1925) was a French

industrialist who put forward and popularized the concept of the universality of management
principles : In other words, he advocated that all organizations could be structured and managed
according to certain rational principles. Fayol himself recognised that applying such principles in
practice was not simple: Seldom do we have to apply the same principles twice in identical condi-
tions; Contribution must be made for different changing circumstances. Among his principles of
rational organization, however, were the following influential ideas.

1. Division of work. Dividing the work into small convenient components and giving each
component to one employee. It encourages employees for continuous improvement in skills and
the development of improvements in methods.
2. Authority. The right to give orders and the power to exact obedience.
3. Discipline. No slacking, bending of rules.
 4. Unity of command. Each employee has one and only one boss.
5. Unity of direction. A single mind generates a single plan and all play their part in that plan.
6. Subordination of Individual Interests. When at work, only work things should be pursued or
thought about.
7. Remuneration. Employees receive fair payment for services, not what the company can get
away with.
8. Centralization. Consolidation of management functions. Decisions are made from the top.
9. Scalar Chain (line of authority). Formal chain of command running from top to bottom of the
organization, like military
10. Order. All materials and personnel have a prescribed place, and they must remain there.
11. Equity. Equality of treatment (but not necessarily identical treatment)
12. Personnel Tenure. Limited turnover of personnel. Lifetime employment for good workers.
13. Initiative. Thinking out a plan and do what it takes to make it happen.
14. Esprit de corps. Harmony, cohesion among personnel.

Out of the 14, the most important elements are specialization, unity of command, scalar chain,
and, coordination by managers (an amalgam of authority and unity of direction).

Human Relations Movement and Behaviouristic Schools of Management

The human relations movements actually started with the series of experiments conducted by
George Elton Mayo, professor of Industrial Research at the Harvard Graduate School of
Business and his colleagues at the Hawthorne plant of Western Electric Company. This
company was a manufacturer of equipment for the Bell telephone system and at the time of the
experiments, there was an acute problem of employee dissatisfaction at the plant. It was also
quite evident that the employees were not producing up to their fullest capability. This happened
in spite of the fact that it was one of the most progressive companies with pension schemes,
sickness benefit schemes, and numerous other facilities offered to its employees. The earlier
attempts of the efficiency experts produced inconclusive findings. So the company sought help
from the group of university professors to find a solution to the problem. The study continued
for an extended period of time and had gone through various phases, which is briefly described
here.
Phase I: Illumination Experiments
Phase II: Relay Assembly Test Room
Phase III: Interviewing Programme
Phase IV: Bank Wiring Test Room

Contingency Theory
The contingency approach to organization developed as a reaction to the idea that there are nothing
like One best way for designing organizations, motivating staff and so on. The basic tenet of
contingency theory can be put essentially as follows: appropriate management approach depends on
situational factors faced by an organization
Newer research indicated that different forms of organizational structure could be equally successful,
that there was no inevi- table-link between classical organization structures and
Effectiveness, and that there were a number of variables to be considered in the design of organizations
and their style of management. Essentially, it all depends on the total strength and weakness of
organization and opportunities and threats which lies out in the environment of each organization.
Managers have to find a best fit between the demands of:
(a) The tasks
(b) The people
(c) The environment
In other word Manager should consider situation .We will note contingency approaches to various
aspects of management as we proceed through this module.
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