Module 6

Organisation behaviour
Organisation behaviour
3 features in any definition of OB:
•OB is the study of human behaviour
•The study is about behaviour in
organisations
•Knowledge about human behaviour would
be useful in improving an organisations
effectiveness.
Definition
 OB refers to the behaviour of individuals
and groups within organisations and the
interaction between orgnl members and
their external environment.
 ‘OB is the understanding, prediction and
control of human behaviour in
organisations’
Contributing disciplines
 Psychology
 Sociology
 Social psychology
 Medicine
 Engineering
 Management
 Anthropology
 Political science
Contributing Disciplines to the OB Field

EXHIBIT 1-3a

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Contributing Disciplines to the OB Field

EXHIBIT 1-3c

6
Contributing Disciplines to the OB Field

EXHIBIT 1-3b

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Contributing Disciplines to the OB Field

EXHIBIT 1-3c

8
Contributing Disciplines to the OB Field

EXHIBIT 1-3d

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Contributing Disciplines to the OB Field

EXHIBIT 1-3f

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 5 OB Models

Given by Keith Davis and Newstrom are:

1) Autocratic
2) Custodial
3) Supportive
4) Collegial
5) Systems
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 AUTOCRATIC MODEL
 The basis of this model is power with a managerial
orientation of authority.
 The employees in turn are oriented towards obedience and
dependence on the boss.
 The employee need that is met is subsistence. The
performance result is minimal –
 most prevalent during industrial revolution – persons in
power can demand work from workers – pushing, directing
and persuading
 tight control – unfair practices, low payment and
exploitation – employees put in min work in the job to serve
the basic needs of the family - though harsh, it has worked
well in certain conditions, e.g., organisational crisis.
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 Custodial
 The basis of this model is economic resources with
a managerial orientation of money.
 The employees in turn are oriented towards security
and benefits and dependence on the organization.
 The employee need that is met is security. The
performance result is passive cooperation.
 To perk up the sagging morale of the workers under
the autocratic model employers began to offer
various welfare schemes in the 19th century –
paternalism – fringe benefits – job security.
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 E.g., IBM makes considerable efforts to stabilise the workforce and

preserve their jobs – reduces overtime, freezes hiring, allows job

transfers and offers retirement incentives and lessens sub-contracting

to adjust IT slow downs. The organisation should have considerable

resources to pay pension benefit from physical needs to security

needs.

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 Supportive
 The basis of this model is leadership with a managerial
orientation of support. The employees in turn are oriented
towards job performance and participation.
 The employee need that is met is status and recognition.
The performance result is awakened drives.
 “The leadership and other processes of the organisation
must be such as to ensure a maximum probability that in
all interactions and all relationships within the
organisation each member will, in the light of his or her
back ground, values, and expectations view the experience
as supportive and one which builds and maintains his or
her sense of personal worth and importance.” e.g., TATAs.
 Ensures organisational harmony.
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 Collegial
 The basis of this model is partnership with a managerial
orientation of teamwork. The employees in turn are
oriented towards responsible behavior and self-discipline.
 The employee need that is met is self-actualization. The
performance result is moderate enthusiasm.
 “Collegial” means a group of people working for a
common purpose. Manager is not addressed as ‘boss’ but is
a facilitator. Employees are self disciplined, self content
and self actualised. E.g., a R&D team or a project team.
 Although there are four separate models, almost no
organization operates exclusively in one. There will usually
be a predominate one, with one or more areas over-lapping
in the other models.
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 autocratic Custodial Supportive Collegial
 Autocratic Custodial Supportive Collegial
 Model
Model depends
depends on on Power Economic
Leadership Partnership
resources
 PowerEconomic resourcesLeadershipPartnershipManagerial
orientationAuthorityMoneySupportTeamworkEmployee
orientationObedienceSecurityJobResponsiblityEmployee
Managerial orientation Authority Money Support Teamwork
psychological resultDependence on bossDependence on
organizationParticipationSelf-disciplineEmployees needs
Employee orientation Obedience Security
metSubsistemceMaintenanceHigher-orderSelf- Job Responsibility
actualizationPerformance resultMinimumPassive
cooperationAwakened
Employee drivesModerate
psychological Dependence
Dependence enthusiasm
on Participation Self-discipline
result on boss
organization

Self-
Employees needs met Subsistence Maintenance Higher-order
actualization

Passive Awakened Moderate

Performance result Minimum
cooperation drives enthusiasm
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Organisations as systems
 Task
 Structure
 People
 Technology
Foundations of OB
 Nature of people:
1. Individual differences
2. A whole person
3. Caused behaviour
4. Human dignity
Nature of organisations:
5. Organisations are social systems
6. Mutuality of interest
7. Holistic concept
Importance of OB
 OB provides a roadmap to our lives in organisations.
 Field of OB uses scientific research to help us
understand and predict organisational life.
 OB theories and concepts help us influence
organisational events
 OB helps an individual understand himself and others
better.
 OB will help managers understand the basis of
motivation and what he or she should do to
motivate subordinates.
 The field of OB is useful for maintaining
cordial industrial relations
 The subject of OB is useful in the field of
marketing.
 The most popular reason for studying OB
is that the reader is interested in pursuing
a career in management and wants to
learn how to predict behaviour.
Limitations of the study of OB
 The subject helps an individual understand
human behaviour better only in the workplace,
he or she maybe a failure in the domestic front.
 The subject has not contributed to improved
interpersonal relations in organisational
settings.
 OB is selfish and exploitative
 There is a tendency of managers to expect
quick fix solutions from behavioural problems
 OB cannot totally abolish conflict and
frustration, it can only reduce them.
Models of OB
 Autocratic model
 Custodial model
 Supportive model
 Collegial model
 Systems model
Emerging challenges of OB
 Managing diversity
 Changing demographics of workforce
 Changed employee expectations
 globalisation’
 Technology transformation
 Promoting ethical behaviour
 2
The Evolution
of organisation
behaviour
Introduction

 Modern management began in the late 20th

century.

 Early management movement was started

during the early 19th century

 An Overview of Management Theories

Contingency Approach Situational Approach

Systems Approach Organization- System

Management Science Mathematical technique

Behavioral School Human Relation Movement

Scientific Management School

Classical Organizational Theory School Administrative Management School
1.Scientific Management
 Defined by Frederick Taylor, late 1800’s.
 The systematic study of the relationships
between people and tasks to redesign the work
for higher efficiency.
◦ Taylor sought to reduce the time a worker spent on
each task by optimizing the way the task was done.
 The 4 Principles
 Four Principles to increase efficiency:
1. Study the way the job is performed now &
determine new ways to do it.
 Gather detailed, time and motion information.

 Try different methods to see which is best.

2. Codify the new method into rules.
 Teach to all workers.
3. Select workers whose skills match the rules set
in Step 2.
4. Establish a fair level of performance and pay
for higher performance.
 Workers should benefit from higher output.
2.Bureaucracy
 Seeks to create an organization that leads to
both efficiency and effectiveness.
 Max Weber developed the concept of
bureaucracy.
◦ A formal system of organization and administration
to ensure effectiveness and efficiency.
◦ Weber developed the Five principles shown in Figure
2.2.
 Bureaucratic Principles
Figure 2.2

Written rules

System of task A Bureaucracy Hierarchy of

relationships should have authority

Fair evaluation
and reward
Key points of Bureaucracy
Authority is the power to hold people accountable
for their actions.
Positions in the firm should be held based on
performance not social contacts.
Position duties are clearly identified. People
should know what is expected of them.
Lines of authority should be clearly identified.
Workers know who reports to who.
Rules, Standard Operating Procedures (SOPs), &
Norms used to determine how the firm operates.
 Sometimes, these lead to “red-tape” and other
problems.
 3.Administrative Management, Fayol’s
Principles
 Henri Fayol, developed a set of 14
principles:
1. Division of Labor: allows for job specialization.
 Fayol noted firms can have too much specialization leading to
poor quality and worker involvement.
2. Authority and Responsibility: Fayol included both formal
and informal authority resulting from special expertise.
3. Unity of Command: Employees should have only one
boss.
4. Line of Authority: a clear chain from top to bottom of
the firm.
5. Centralization: the degree to which authority rests at the
very top.
Fayol’s Principles
6. Unity of Direction: One plan of action to guide the
organization.
7. Equity: Treat all employees fairly in justice and
respect.
8. Order: Each employee is put where they have the
most value.
9. Initiative: Encourage innovation.
10. Discipline: obedient, applied, respectful employees
needed.
 Fayol’s Principles
11. Remuneration of Personnel: The payment system
contributes to success.
12. Stability of Tenure: Long-term employment is
important.
13. General interest over individual interest: The
organization takes precedence over the individual.
14. Esprit de corps: Share enthusiasm or devotion to the
organization.
Behavioral Management
 Focuses on the way a manager should
personally manage to motivate employees.
 Mary Parker Follett: an influential leader in
early managerial theory.
◦ Suggested workers help in analyzing their jobs for
improvements.
◦ The worker knows the best way to improve the
job.
◦ If workers have the knowledge of the task, then
they should control the task.
The Hawthorne Studies
 Study of worker efficiency at the
Hawthorne Works of the Western Electric
Co. during 1924-1932.
◦ Worker productivity was measured at
various levels of light illumination.
◦ Researchers found that regardless of whether the
light levels were raised or lowered, productivity
rose.
 Actually, it appears that the workers enjoyed
the attention they received as part of the
study and were more productive.
Theory X and Y
 Douglas McGregor proposed the two
different sets of worker assumptions.
Theory X: Assumes the average worker is lazy,
dislikes work and will do as little as possible.
 Managers must closely supervise and control through
reward and punishment.
Theory Y: Assumes workers are not lazy, want to
do a good job and the job itself will determine if
the worker likes the work.
 Managers should allow the worker great latitude, and
create an organization to stimulate the worker.
 Theory X v. Theory Y
Figure 2.3

Theory X Theory Y
Employee is Employee is not
lazy lazy

Must create work

Managers must
setting to build
closely
initiative
supervise
Provide authority
Create strict
to workers
rules & defined
rewards
 Theory Z
 William Ouchi researched the cultural
differences between Japan and USA.
◦ USA culture emphasizes the individual, and managers
tend to feel workers follow the Theory X model.
◦ Japan culture expects worker committed to the
organization first and thus behave differently than USA
workers.
 Theory Z combines parts of both the
USA and Japan structure.
◦ Managers stress long-term employment, work-group, and
organizational focus.
Management Science
 Uses rigorous quantitative techniques to
maximize resources.
Quantitative management: utilizes linear
programming, modeling, simulation systems.
Operations management: techniques to analyze
all aspects of the production system.
Total Quality Management (TQM): focuses on
improved quality.
Management Information Systems (MIS):
provides information about the organization.
Organization-Environment Theory
 Considers relationships inside and
outside the organization.
◦ The environment consists of forces, conditions, and
influences outside the organization.
 Systems theory considers the impact of
stages:
Input: acquire external resources.
Conversion: inputs are processed into goods and
services.
Output: finished goods are released into the
environment.
Systems Considerations
 An open system interacts with the
environment. A closed system is self-
contained.
◦ Closed systems lose the ability to control itself,
and fails.
 Synergy: performance gains of the
whole surpass the components.
◦ Synergy is only possible in a coordinated system.
 The Organization as an Open System
Figure 2.4

Input Stage Conversion Output

Stage Stage
Raw
Materials Machines Goods
Human skills Services

Sales of outputs
Firm can then buy inputs
Contingency Theory
 Assumes there is no one best way to
manage.
◦ The environment impacts the organization and
managers must be flexible to react to
environmental changes.
◦ The way the organization is designed, control
systems selected, depend on the environment.
 Technological environments change
rapidly, so must managers.
Structures
 Mechanistic: Authority is centralized at
the top. (Theory X)
◦ Employees closely monitored and managed.
◦ Very efficient in a stable environment.
 Organic: Authority is decentralized
throughout employees. (Theory Y)
◦ Much looser control than mechanistic.
◦ Managers can react quickly to changing
environment.