What Is Organizational

Behavior?
 OB is the study of human behavior.

 Thestudy is about behavior in

organizations.

 Knowledge about human being would

be useful in improving organization
effectiveness.
“Organization Behavior is a field of study
that investigates the impact that individuals,
groups and structure have on behavior
within organizations, for the purpose of
applying such knowledge toward improving
an organization’s effectiveness.”
-Stephen P. Robbins
 Organization is a consciously coordinated
social unit, composed of a group of people,
which functions on a relatively continuous
basis to achieve a common goal or set of
goals.
 Behavior is a response to stimulation that

can be observed, thus it is any response or

reaction of an individual.
 People:
Individuals and Groups
 Structure:

Jobs and Relationships

 Technology:

Computers and Machines

 External Environment:

Government, Social & Competitive

 Organization systems level

Group level

Individual level
 Individual differences
 A whole person
 Behaviour of an individual is caused
 An individual has dignity
 Organizations are social systems
 Mutuality of interest among organizational
members
 Holistic organizational behavior
 To learn about yourself and how to deal with others

 You are part of an organization now, and will

continue to be a part of various organizations

 Organizations are increasingly expecting

individuals to be able to work in teams, at least
some of the time.

 All of you want to be managers or entrepreneurs

 It helps us make sense of workplace and predict

what people do under various conditions
 OB theories and concepts helps us influence
organizational events

 OB helps manager understand the basis of

motivation

 OB helps in understanding cause of problem,

predicting its course of action and controlling its
consequences

 OB is also useful in field of marketing as consumer

choice behavior is leading topic for behavior
research in this area
History
and Evolution of
management thought
 1.Early Approaches: Robert Oven, Charles
Babbage, Andrew Ure and Charles Dupin , Henry
Robinson

 2.Classical Approaches: Fredrick Taylor ( Scientific

app.), Frank and Lillian Gilbreth (Time & Motion
Study), Henry Fayol ( Administrative app.),
Bureaucratic approach.

 3.Behavioral Approaches: ( Human Relations app.):

Mary Parker Follet, Elton Mayo (Bank Wiring
Observation & Mass Interviewing Experiment),
Abraham Maslow (Need Hierarchy theory), Douglas
McGregor (Theory X, Theory Y)
 4.Quantitative Approaches: Management Science,
Operations management, Management Information
System.

 5.Modern Approaches : System Theory and

Contingency Theory or Situational Theory

 6.Emerging Approaches: Theory Z developed by

Japanese and American Management , Quality
management.
 Robert Owen:1771-1858
 In 1800 century, after Industrial Revolution
 Improving living conditions and cleanliness
 Restriction on child labor- below 10
 Limited no. of working hours to 10.5
 Rate of workers on daily basis openly
 Instill pride and encouraged healthy competition
 Beginning in direction of modern organizational
behavior
 Father of modern computing
 Work is divided into various tasks
 Believed in work specialization
 Each worker trained in one specific skill
 Employee incentive techniques
 Repetition of work increases efficiency
 Profit sharing plan
 1778-1857, 1784-1873
 Philosophy of manufacturing
 Included human factor as one of the factors

of production
 Provided workers with medical treatment and

sickness payment
 Explained various concept of manufacturing
 Management should be studied as science

 Principles should be developed that could be

used across various management situation

 On this basis Taylor developed the principles

of scientific management
Approach Rationale Focus

Scientific One best way to do Job level

each job
Approach

Administrative One best way to put Organization level

an organization
Approach together

Bureaucratic Rational and Organizational level

impersonal
Approach organizational
arrangement
 Frederick Taylor, Father of Scientific
Management.
 Early 1900, Management which conducts

business through systematic reasoning,

observation and experiment
 Selection of right people for right job
 Soldering: deliberately working at slower

pace than the capacity

 Replacement of rule thumb method
 Scientific selection & training of workers
 Cooperation between labor and

management
 Maximum output
 Equal division of responsibility
 Need for developing a scientific way of
performing each job
 Training and preparing those workers to

perform that particular job

 Establishing harmonious relations between

management and workers so that the job is

performed in the desired way
 Principles revolve round problems at
operational level
 People were rational and were motivated by

material gain. Ignored social needs

,emphasized their economic and physical
needs.
 Ignored the human desire for the job

satisfaction.
 Piece race incentive system:-
 Reward the worker who produced maximum

output
 Output exceeded set targets – wages would

increase proportionately
 Would motivate the workers to produce

more
 Father of motion study
 Finding the best sequence and minimum no.

of motions needed
 Jobs are broken into various tasks or motions
 Unnecessary motions are removed to get best

way
 Each job is studied to find out how much

goods can be produced each day

 Objective is to ascertain and simpler , easier

and better way of performing a job.

 Henry Fayol:- 1841-1925
 Business operations could be divided into six

activities.
 Technical Activities –producing &

manufacturing.
 Commercial Activities –buying, selling,

exchange of goods & services.

 Financial Activities –use of capital
 Security Activities –protecting employees &

property.
 Accounting Activities –Maintaining balance
sheets, computing statistics.
 Managerial Activities –planning, organizing,

commanding, coordination.
 Fayol focused on last activity i.e. managerial
 He gave 14 principles of management

1. division of work
2. Authority & responsibility
3. Discipline
4. Unity in command
5. Unity of direction
6. Subordination of individual interests to the
general interest.
7. Remuneration
8. Centralization
9. Scalar chain
10. Order
11. Equity
12. Stability of tenure of personnel
13. Initiative
14. Espirit de corps “a sense of union”
Characteristic Description

Work Specialization and division of Duties and responsibilities are clearly

work defined

Abstract rules and regulations Rules and regulations are well

defined

Impersonality of managers Decisions and judgment are rational,

immune to feelings like affection,
hatred
Hierarchy of organizational structure Activities of employees are
monitored at each level
Name Period Contribution

Mary parker Follet 1868- Emphasized group influence and

1933 advocated the concept “power
sharing & “integration”

Elton mayo 1880- Recognized the influence of group

1949 and work place culture on job
performance

Abraham Maslow 1908- Human are motivated by hierarchy of

1970 need

Douglas M. McGregor 1906- Differentiated employees on basis X

1964 & Y theory
 Focused on group influences
 Based on principle power with rather than

power on
 Power should not be based on hierarchy ,

instead should be based on cooperation

 Involve both superiors and subordinates
 Or could be called as power sharing
 Human relations approach is a process of
effective motivation of individuals in a given
situation, in order to achieve a balance of
objectives which will yield greater human
satisfaction and help accomplish company
goals.
 Characteristics of human relation approach
 Focus is on human beings
 Goal of creating sound relations with workers
is to make workers more productive
 Concerned with motivating people
 Builds human cooperation towards
organizational goals
 Strives to create a positive environment
 People can fulfill their own goals as well as
the goals of the organization.
 Professors of Harward university and managers of
Hawthorne plant of western electric company of
USA conducted these experiments
1. Illumination experiment

2. Relay assembly test group experiment:-

 A group of workers was placed in a separate room

& a number of variables were altered like

 Wages increased

 Work hours reduced, work week shortened

 Performance tended to increase over the period of

time
• 12000 employees were interviewed for 3
years.
• Emphasis was on human relations not
working conditions
• Initially stereotyped answers
• Informal questions were asked and they
formed informal groups
 14 male workers were formed into a group
and extensively observed. For 7 months in a
bankk wiring room
 Individual wages and bonus paid on basis of

group
Result
Don’t turn out too much work
Not too little even
Don’t tell supervisors
Conform to group norms
 Work group norms, beliefs, sentiments, had
greater influence and impact in influencing
behavior.
 Thus results say that human beings are not

only economic but social and psychological

beings
 Employees would work better if they believed

that management was concerned about their

welfare.
 Maslow’s need hierarchy theory

 McGregor
 Theory X and theory Y
 The managers, government officials and
scientists used some mathematical approaches to
use the resources more efficiently
 after many years the organizations applied these
techniques
 it includes the application of statistics
,optimization models, computer simulations.
 Three branches of quantitative approach
 Management science
 Operations management
 Management information system
 Use of matehmatical and statistical models
for decision making
 Also called operations research
 Capital budgeting and cash flow management
 Production sheduling
 Planning for human resource development
 Maitainance of optimal inventory
 Aircraft sheduling
 Waiting line theory and queuing theory
 Linear programming
 Program evaluation review technique
 Critical path method
 Decision theory
 Simulation theory
 Time series analysis
 Require a team approach
 Is criticised for over emphasis on
mathematical tools
 It’s the applied form of management science
 Is considered with
 Inventory management
 Work scheduling
 Production planning
 Facilities location and design
 Quality assurance
 Forecasting
 Inventory analysis
 Materials requirement planning systems
 Networking models
 Statistical quality control methods
 Project planning
 Focuses on designing and implementing
computer based information systems
 Converts raw data into information
 Provides the needed information to the

manager at relevant time.

 Two of the modern approaches are
 A Systems theory
 Contingency theory
 This theory views organization as a part of

the larger external environment.

 Organization cannot be isolated , without

considering external environment

 It has 4 components
 Also known as situational theory
 Widely used in recent years to integrate

management theory with increasing

complexity of organizations
 According to this theory there is no best way

to handle or manage all the situation.

 It depends on
 External environment
 Technology
 individuals
 A new theory called theory Z was developed by
Japanese and American management
 It involves providing job security to employees to

ensure their loyalty and long term association with

the company.
 Involves job rotation to develop cross functional

skills.
 It advocates participation of employees in decision

making
 Informal control in the organization

 Show concern for employees , lay emphasis on

training and development

 It directs the efforts of management towards
bringing a continuous improvement in
product and service quality to achieve higher
level customer of satisfaction and hence
build customer loyalty.
 Understanding Individual behavior in
Organization
 Each person in an organization has unique

behavioral patterns, which varies from those

of other individuals.
 We will discuss the various perspectives on

the basis of which human behavior could be

understood.
 Its said that human behavior is caused by
certain external or internal stimuli.
 Its not random in nature.
 Its directed towards achievement of some

goals.
 Can be understood from 3 perspectives
 Traditional perspective
 Behavioral perspective
 Perspective based on input-output system
 Early behavioral theorists regarded human
behavior as a stimulus response (S-R)
perspective.
 The stimulus causes a certain corresponding

response, and evokes certain behaviorial

action.
 S-O-R model
 Where O represents human bieng
 Situation refers to various physical socio-
cultural and technological aspects of
environment.
 Behavior refers to both physiological and
psychological aspects of individual
 Physiological include:- heredity, nervous
systems, sense organs and muscles.
 Psychological aspects include cognitive and
psychological aspects, personality of the
individual.
 The situation and human being interact with
each other, it is called perception, which is in
the personality of individual
 stimuli is the form of input
 Processed in the CPU
 Converted into outputs
 Cognition is responsible for the results
 It includes reasoning, problem solving,

decision making.
 Or the act of knowing something
 This knowledge proceeds behavior
 Inputs:-
 Different stimuli which indiviual receives from
environment
 Receives information- arranges it ,based on past
experiences – converted into sensations by sense
organs
 Finally it leads to results
 Processing
 Information arranged in logical and meanigful
manner
 Personality traits and experiences and social settings
affect the process of arrangement of information.
 Thinking, reasoning, problem solving takes place.
 Refers to various actions by the indiviual.
 Verbal or non verbal reactions
 Stays in memory for future, to take similar

actions
 Influenced by temperature, humidity, noise
 Motivation is the basis of this
 The biographical characteristics affect the performance of the
employees .
 They effect the productivity, satisfaction, absenteeism, turnover rate
of employees
 Age
 Older employees make valuable contribution by virtue of experience
and sound judgment.
 High work ethics and are quality conscious
 Inflexible, unwilling to adopt new technologies
 Gender
 Women have problem solving abilities, analytical skills, inter
personal skills, learning abilities.
 Higher absenteeism
 Marital status
 Married are steady and reliable.
 Tenure
 Vast experience are likely to be more productive
 Heredity:-the process by which
characteristics are given from a parent to the
child through the genes.
 A person’s behavior is determined by its

physical traits and intellectual abilities, which

is inherited
 Which give rise to unique behavioral patterns.
 The biological development of the indiviual
 The nervous system
 It refers to various higher mental processes of human beings
such as thinking , problem solving.
 Thinking
 Man’s thinking capacity enables him to react to actions,
words, or images.
 Thinking involves perception of relationships between
objects.
 Thinking has a following process
 Person identifies and defines the problem
 Associates the problem with concepts based on personal
experiences
 Verifies that the concepts hold true in present situation, it is
applied to present situation
 Sorting and discrimination varies from person to person
 Both personal and group biases affect individual problem
solving
 Studies show that concepts are learned
faster under following situations
 When individual faces specific incidents which allow him to
respond only in limited ways.
 When individual faces similar instances.
 When the instance has had a positive impact on individual.
 When a series of instances unite to give rise to a final
instance, generate a response in the individual
 In order to survive in the changing scenario
of business, people must learn new skills
 Learning could be defined as the acquisition

of knowledge or skills through study ,

practice or experience.
 Learning usually causes a relatively

permanent in behavior of a person.

 To predict and explain the behaviour of the

people we must understand their learning

pattern.
 There are four theories which explain how
learning occurs:-
 Classical conditioning
 Operant conditioning
 Cognitive theory
 Social learning theory
 This theory grew from the experiments
conducted on dogs by Russian psychologist
Ivan Pavlov.
 In organization reference at one

manufacturing plant when top executives

visited , windows were washed and cleaned
 Employees would be best in their behaviour.
 People associated cleaning of windows with

visit of executives.
 Best viewed in police department
 Modern theorists believe that it represents
only a small part of total human learning.
 Classical conditioning explains only

reflexing behaviour
 Complex Human behaviour cant be

explained with classical conditioning alone

 Is also called reinforcement theory or instrumental conditioning
theory.
 Behaviour produces certain consequences and how we behave in
future will depend on those consequences are.
 If actions have positive effects behaviour will be repeated.
 B.F.Skinner has given this theory.
 Skinner box ,a hungry rat was placed maze
 It had a lever, when pressed food use to drop
 It happened by chance the Rat pressed the lever
 The rat soon learned to press the lever to get food
 This reward acted as reinforcing the action
 Consequence determine the behaviour

 People learn to behave in a particular manner to obtain what they

want
 Behaviors consequences
 Works is paid
 Talks to others meets more people
 Enters a restaurant obtains food
 Enters a library finds a book
 Completes a difficult receives praise
Assignment and
 promotion

 Operant conditioning has a much greater impact on

human learning
 Stimulus Response
 Watches favorite player win Jumps with joy
 Touches a hot vessel Moves away hand
 Hears good music Hums, rocks gently
 Steps on nail Screams in pain
 Response Stimuli
 Browses internet obtain desired information
 Uses power carefully saves money on bill
 Carries a credit card find convenient shopping
 Achieves sales targets obtains incentive
 Edward tolman stated
 Cognitive learning consists of a relationship
between cognitive environmental cues and
expectation.
 He conducted controlled experiments on white rats
 Rats were allowed to run through a complicated
maze in search of food
 The food was placed at a certain point in the maze
 They began to associate the presence of food with
ceratin cognitive cue.
 Based on the assumption that learning can also
take place through modeling process and self
control process.
 Is also known as observational theory.
 Known as vicarious(explicit) learning.
 Process is :- 1)Attention
 2) retention
 3)Practice of model’s Behaviour
4) motivation
 Increases self - efficacy of learner.(can do attitude)
 Enables to shape behaviour