Introduction to

Organizational
Behaviour

By Rajeev K Rajamohan
History and Evolution of
Organisational Behaviour

 Origin of Organisational Behaviour can trace its roots

back to Max Weber and earlier organizational studies.
 The Industrial Revolution is the period from
approximately 1760 when new technologies resulted in
the adoption of new manufacturing techniques,
including increased mechanization.
 The industrial revolution led to significant social and
cultural change, including new forms of organization.
 Analyzing these new organizational forms, sociologist
Max Weber described bureaucracy as an ideal type of
organization that rested on rational-legal principles and
maximized technical efficiency.
History and Evolution of
Organisational Behaviour(contd…)
 In the 1890’s; with the arrival of scientific management
and Taylorism, Organizational Behaviour Studies was
forming it as an academic discipline.
 Failure of scientific management gave birth to the human
relations movement which is characterized by a heavy
emphasis on employee cooperation and morale.
 Human Relations Movement from the 1930’s to 1950’s
contributed to shaping the Organizational Behavior
studies.
 Works of scholars like Elton Mayo, Chester Barnard, Henri
Fayol, Mary Parker Follett, Frederick Herzberg, Abraham
Mas low, David Mc Cellan and Victor Vroom contributed
to the growth of Organisational Behaviour as a discipline.
History and Evolution of
Organisational Behaviour(contd…)
 Herbert Simon’s Administrative Behaviour introduced a number of
important concepts to the study of organizational behaviour, most
notably decision making.
 Simon along with Chester Barnard; argued that people make
decisions differently in organizations than outside of them. Simon
was awarded the Nobel Prize in Economics for his work on
organizational decision making.
 In the 1960s and 1970s, the field became more quantitative and
produced such ideas as the informal organization, and resource
dependence. Contingency theory, institutional theory, and
organizational ecology also enraged.
 Starting in the 1980s, cultural explanations of organizations and
organizational change became areas of study.
 Informed by anthropology, psychology, and sociology, qualitative
research became more acceptable in OB.
Definition

 “Organisational behaviour is a subset of management

activities concerned with understanding, predicting
and influencing individual behaviour in organisational
setting.”—Callahan, Fleenor and Kudson.
 “Organisational behaviour is a branch of the Social
Sciences that seeks to build theories that can be
applied” to predicting, understanding and controlling
behaviour in work organisations.”—Raman J. Aldag.
 “Organisational behaviour is the study and application
of knowledge about how people act within an
organisation. It is a human tool for human benefit. It
applies broadly to the behaviour of people in all types
of organisation.”— Newstrom and Davis.
Fundamental components

Organisational behaviour revolves around two

fundamental components:

1. The nature of the man.

2. The nature of the organisation.

Organizational behaviour
and HRM
 Organisational behaviour is the basis of human
resource management and development. The former
is concept oriented whereas the latter is concerned
with the technology of human development. The
variables influencing human development are
scientifically studied under organisational behaviour.
 Human resource management, is activated, directed
and channelized by the application of the knowledge
of organisational behaviour which has become a field
of study, research and application for the
development of human resources and the organisation
as a whole. Thus, we can say that all these terms are
interrelated but not synonymous with each other.
Characteristics of Organisational
Behaviour
1. Behavioural Approach to Management:
Organisational behaviour is that part of whole management which
represents the behavioural approach to management.
Organisational behaviour has emerged as a distinct field of study
because of the importance of human behaviour in organisations.
2. Cause and Effect Relationship:
Human behaviour is generally taken in terms of cause and effect
relationship and not in philosophical terms. It helps in predicting the
behaviour of individuals. It provides generalizations that managers
can use to anticipate the effect of certain activities on human
behaviour.
3. Organisational Behaviour is a Branch of Social Sciences:
Organisational behaviour is heavily influenced by several other social
sciences viz. psychology, sociology and anthropology. It draws a rich
array of research from these disciplines.
Characteristics of Organisational
Behaviour(contd…)
4. Three Levels of Analysis:

Organisational behaviour encompasses the study of three levels of analysis

namely individual behaviour, inter-individual behaviour and the behaviour of
organisations themselves. The field of organisational behaviour embraces all
these levels as being complementary to each other.
5. A Science as well as an Art:
Organisational behaviour is a science as well as an art. The systematic
knowledge about human behaviour is a science and the application of
behavioural knowledge and skills is an art. Organisational behaviour is not an
exact science because it cannot exactly predict the behaviour of people in
organisations. At best a manager can generalize to a limited extent and in many
cases, he has to act on the basis of partial information.
6. A Body of Theory, Research and Application:
Organisational behaviour consists of a body of theory, research and application
which helps in understanding the human behaviour in organisation. All these
techniques help the managers to solve human problems in organisations.
Characteristics of Organisational
Behaviour(Contd..)

7. Beneficial to both Organisation and Individuals:

Organisational behaviour creates an atmosphere
whereby both organisation and individuals are benefitted
by each other. A reasonable climate is created so that
employees may get much needed satisfaction and the
organisation may attain its objectives.
8. Rational Thinking:
Organisational behaviour provides a rational thinking
about people and their behaviour. The major objective of
organisational behaviour is to explain and predict human
behaviour in organisations, so that result yielding situations
can be created.
Nature of Organisational
Behavior
Organisational behaviour in the study of human behaviour in the
organisations. Whenever an individual joins an organisation he brings
with him unique set of personal characteristics, experiences from other
organisations and a personal background.
 At the first stage organisational behaviour must look at the unique
perspective that each individual brings to the work setting.
 The second stage of organisational behaviour is to study the
dynamics of how the incoming individuals interact with the
broader organisation.
 Over the time, he is affected by his work experience and the
organisation as well as his personal experiences and maturity. On
the other hand, the organisation is also affected by the presence
or absence of the individual. Thus, it is essential that OB must study
the ways in which the individuals and organisation interact with
each other.
Objectives of Organizational
Behaviour
The organizations in which people work have an effect on
their thoughts, feelings, and actions. These thoughts, feelings,
and actions, in turn, affect the organization itself.
1. Job Satisfaction.
2. Finding the Right People.
3. Organizational Culture.
4. Leadership and Conflict Resolution.
5. Understanding the Employees Better.
6. Understand how to Develop Good Leaders.
7. Develop a Good Team.
8. Higher Productivity.
Fundamental Concepts of
Organizational Behaviour
Organization Behavior is based on a few fundamental concepts
which revolve around the nature of people and organizations.
1. Individual Differences.
2. Perception.
3. A whole Person.
4. Motivated Behavior.
5. The desire for Involvement.
6. The value of the Person.
7. Human Dignity.
8. Organizations are Social System.
9. Mutuality of Interest.
10. Holistic Concept.
Limitations of Organizational
behaviour
Three major limitations of OB are;
1. Behavioral Bias.
2. The Law of Diminishing Returns.
3. Unethical Manipulation of People.
Factors affecting OB
Contributing Disciplines
Challenges and Opportunities of
Organizational Behaviour
Challenges and opportunities of organizational behavior are massive and
rapidly changing for improving productivity and meeting business goals.
1. Improving Peoples’ Skills.
2. Improving Quality and Productivity.
3. Total Quality Management (TQM).
4. Managing Workforce Diversity.
5. Responding to Globalization.
6. Empowering People.
7. Coping with Temporariness.
8. Stimulating Innovation and Change.
9. Emergence of E-Organisation & E-Commerce.
10. Improving Ethical Behavior.
11. Improving Customer Service.
12. Helping Employees Balance Work-Life Conflicts.
13. Flattening World.
Personality

 Personality can be described as the collective qualities,

characteristics, disposition and values of a person
which distinguish him or her from others, and which will
affect the manners he/she reacts toward or interacts
with other people and his/her environment
 A persons personality must be seen as an on-going
development process
 Every person has a different personality and set of traits
Determinants of Personality in
Organisational Behaviour

1. Cultural Factors:
The accepted norms of social behaviour are known as
culture. Culture was traditionally considered as the major
determinant of an individual's personality. The way in
which people behave with others and the driving force of
such functions are considered significant components of
culture. The ideology of the culture is imitated by the
following generations. The personality attributes of
independence, aggression, competition and cooperation
are the outcomes of cultural interaction.
Determinants of Personality in
Organisational Behaviour(contd…)
2. Religion:
Religion plays a significant role in shaping one's personality.
Hindus have different personalities from those of Sikhs and
Muslims.Children in Hindu societies learn from the very
beginning about hard work and god-fearing attitudes.
Christians are open, independent, and cooperative.
3. Family:
Children learn from their parents, sisters and brothers. family is
the first factor affecting personality development, after
hereditary characteristics are endowed. Rich people have
different personalities from those of poor. Children nurtured
under a warm, loving environment are positive and active as
compared to children neglected by their parents.
Determinants of Personality in
Organisational Behaviour(contd…)
4. Parental Influences:
The positive and negative personalities of children are dependent on
their parents characteristics and mutual behaviour. Children develop
negative personalities if their parents don't have good relationship.
Proper parental guidance to children makes them active and
efficient.
5. Situation:
Situation further influences the effects of heredity and environment on
personality. A individual's personality, while generally stable and
consistent, does change in different situations. Different demands in
different situations call forth different aspects of one's personality.
It has been observed that many arrogant and indisciplined
employees become humble and disciplined in a particular situation.
Those having a criminal background may become powerful and
strong administrators, dominant politicians, etc.
Perception

 Perception is an intellectual process of transforming

sensory stimuli to meaningful information. It is the
process of interpreting something that we see or hear
in our mind and use it later to judge and give a verdict
on a situation, person, group etc.
Types of Perception

It can be divided into six types −

 Of sound − The ability to receive sound by identifying vibrations.
 Of speech − The competence of interpreting and understanding the
sounds of language heard.
 Touch − Identifying objects through patterns of its surface by touching
it.
 Taste − The ability to receive flavor of substances by tasting it through
sensory organs known as taste buds.
 Other senses − They approve perception through body, like balance,
acceleration, pain, time, sensation felt in throat and lungs etc.
 Of the social world − It permits people to understand other individuals
and groups of their social world. Ex. Shravan goes to a restaurant and
likes their customer service, so she will perceive that it is a good place
to hang out and will recommend it to her friends, who may or may not
like it. Shravan’s perception about the restaurant is good.
Perceptual Process
Perceptual process(contd…)

Perceptual process are the different stages of perception

we go through. The different stages are −
 Receiving
 Selecting
 Organizing
 Interpreting
Perceptual process(contd…)

Receiving
Receiving is the first and most important stage in the process of
perception. It is the initial stage in which a person collects all
information and receives the information through the sense organs.
Selecting
Selecting is the second stage in the process. Here a person doesn’t
receive the data randomly but selectively. A person selects some
information out of all in accordance with his interest or needs. The
selection of data is dominated by various external and internal
factors.
 External factors − The factors that influence the perception of an
individual externally are intensity, size, contrast, movement,
repetition, familiarity, and novelty.
 Internal factors − The factors that influence the perception of an
individual internally are psychological requirements, learning,
background, experience, self-acceptance, and interest.
Perceptual process(contd…)

Organizing
Keeping things in order or say in a synchronized way is organizing. In order
to make sense of the data received, it is important to organize them.
We can organize the data by −
 Grouping them on the basis of their similarity, proximity, closure, continuity.
 Establishing a figure ground is the basic process in perception. Here by figure
we mean what is kept as main focus and by ground we mean background
stimuli, which are not given attention.
 Perceptual constancy that is the tendency to stabilize perception so that
contextual changes don’t affect them.
Interpreting
 Finally, we have the process of interpreting which means forming an
idea about a particular object depending upon the need or interest.
Interpretation means that the information we have sensed and
organized, is finally given a meaning by turning it into something that
can be categorized. It includes stereotyping, halo effect etc.
Factors Influencing perception -
External Factors
 1. Size : Bigger size attracts the attention of the perceiver
 2. Intensity : A loud sound, strong odor or bright light is noticed
more as compared to a soft sound, weak odour or dimlight.
 3. Repetition : A repeated external stimulus is more attention
getting than a single one. Advertisers use this principle.
 4. Novelty and Familiarity : A novel or a familiar external situation
can serve as attention getter.
 5. Contrast : It is a kind of uniqueness which can be used for
attention getting. Letters of bold types, persons dressed differently
than others, etc., get more attention.
 6. Motion : A moving object draws more attention as compared to
a stationary object. Advertisers use this principle.
Factors Influencing
perception - Internal Factors

 Self-concept : The way a person views the world depends a great deal on
the concept or image he has about himself. The concept plays an internal
role in perceptual selectivity.
 Beliefs : A person's beliefs have profound influence on his perception. Thus, a
fact is conceived not on what it is but what a person believes it to be.
 Expectations : These affect what a person perceives. A technical manager
may expect ignorance about the technical features of a product from non-
technical people.
 Inner Needs : The need is a feeling of tension or discomfort, when one thinks
he is missing something. People with different needs experience different
stimuli. According to Freud, wishful thinking is the means by which the Id
attempts to achieve tension reduction.
 Response Disposition : It refers to a person's tendency to perceive familiar
stimuli rather than unfamiliar ones.
 Response Salience : It is the set of disposition which are determined not by
the familiarity of the stimulus situations, but by the person's own cognitive
predispositions. Thus, a particular problem may be viewed as a marketing
problem by marketing personnel, a control problem by accounting people
and human relations problem by personnel people.
Perceptual Defence

It refers to the screening of those elements which create

conflict and threatening situation in people.
1. Denying the existence or importance of conflicting
information.
2. Distorting the new information to match the old one.
3. Acknowledging the new information but treating it as a
non-representation exception. The factors that influence
perception may be broadly divided into three categories :
 1. Factors that reside in the 'Perceiver' (i.e., attitude, motives,
interests, past experiences and personality, expectations)
 2. Factors of the 'situation' and-factors connected with the
'Target'.
 3. Factors that determine the preferred location of a brand on
each of the relevant dimension in perceptive mapping.
Learning

Definition
 Learning can be defined as the permanent change in
behavior due to direct and indirect experience. It means
change in behavior, attitude due to education and
training, practice and experience. It is completed by
acquisition of knowledge and skills, which are relatively
permanent.
Nature of Learning
 Nature of learning means the characteristic features of
learning. Learning involves change; it may or may not
guarantee improvement. It should be permanent in
nature, that is learning is for lifelong.
 The change in behavior is the result of experience,
practice and training. Learning is reflected through
behavior.
Factors Affecting Learning

The key elements or the major factors that affect learning are motivation,
practice, environment, and mental group.
 Motivation − The encouragement, the support one gets to complete a task,
to achieve a goal is known as motivation. It is a very important aspect of
learning as it acts gives us a positive energy to complete a task. Example −
The coach motivated the players to win the match.
 Practice − We all know that ”Practice makes us perfect”. In order to be a
perfectionist or at least complete the task, it is very important to practice
what we have learnt. Example − We can be a programmer only when we
execute the codes we have written.
 Environment − We learn from our surroundings, we learn from the people
around us. They are of two types of environment – internal and external.
Example − A child when at home learns from the family which is an internal
environment, but when sent to school it is an external environment.
 Mental group − It describes our thinking by the group of people we chose to
hang out with. In simple words, we make a group of those people with
whom we connect. It can be for a social cause where people with the same
mentality work in the same direction. Example − A group of readers,
travelers, etc.
Components of learning process
 The components of learning process are: drive, cue stimuli, response,
reinforcement and retention.
 Drive: Learning frequently occurs in the presence of drive – any strong stimulus
that impels action. Drives are basically of two types -primary (or
physiological); and secondary (or psychological). These two categories of
drives often interact with each other. Individuals operate under many drives
at the same time. To predict a behavior, it is necessary to establish which
drives are stimulating the most.
 Cue Stimuli: Cue stimuli are those factors that exist in the environment as
perceived by the individual. The idea is to discover the conditions under
which stimulus will increase the probability of eliciting a specific response.
There may be two types of stimuli with respect to their results in terms of
response concerned: stimulus generalization and stimulus discrimination.
 Generalization occurs when a response is elicited by a similar but new stimulus. If two
stimuli are exactly alike, they will have the same probability of evoking a specified
response. The principle of generalization has important implications for human
learning. Because of generalization, a person does not have to completely relearn
each of the new tasks. It allows the members to adapt to overall changing
conditions and specific new assignments. The individual can borrow from past
learning experiences to adjust more smoothly to new learning situations.
 Discrimination is a procedure in which an organization learns to emit a response to a
stimulus but avoids making the same response to a similar but somewhat different
stimulus. Discrimination has wide applications in organizational behavior. For
example, a supervisor can discriminate between two equally high producing
workers, one with low quality and other with high quality.
Components of learning
process(contd…)
 Responses: The stimulus results in responses. Responses may be in
the physical form or may be in terms of attitudes, familiarity,
perception or other complex phenomena. In the above example,
the supervisor discriminates between the worker producing low
quality products and the worker producing high quality products,
and positively responds only to the quality conscious worker.
 Reinforcement: Reinforcement is a fundamental condition of
learning. Without reinforcement, no measurable modification of
behaviour takes place. Reinforcement may be defined as the
environmental event’s affecting the probability of occurrence of
responses with which they are associated.
 Retention: The stability of learned behaviour over time is defined as
retention and its contrary is known as forgetting. Some of the
learning is retained over a period of time while others may be
forgotten.
Theories of Learning

Learning can be understood clearly with the help of some

theories that will explain our behavior. Some of the
remarkable theories are −
 Classical Conditioning Theory
 Operant Conditioning Theory
 Social Learning Theory
 Cognitive Learning Theory
Learning Process in OB

1. Stimulus
 In learning process, there should be stimulus to the learner. Stimulus is the
source of motivation or incentives. Learner should be clear about stimulus.
There will be no learning takes place if there is no stimulus or learner has not
understood the stimulus. Such stimulus can be -

1. expansion of knowledge, skills and abilities,

2. improving quality of work life,
3. productivity and profitability,
4. effectiveness,
5. career advancement,
6. financial and non financial rewards.
2. Response
 Response is the reaction of learner towards the stimulus. This means, response
in learning process is the outcome of first step. To take place the learning,
learner should have positive response. Only if learner is convinced for positive
changes in behavior, s/he responds positive otherwise negative response.
Thus, organization management must encourage employees for learning
with ensuring the rewards. Employees should be allowed and encouraged to
practice the performance response.
Learning Process in
OB(contd…)
3. Motivation
Motivation is the drive to encourage individual to learn. Without drive
or motivation, learning cannot take place. This provides interest and
attitude to learn. Whatever learning and understanding ability of the
person, without motivation, none of the person can learn.

4. Rewards
Rewards are incentives satisfying the motive. There should be proper
reward system in learning process. It should be transparent and
predictive. Employees should know what will be their return or rewards
when they learn at different levels. For examples, praise is the
incentive which satisfies the motive of social approval. Salary
increment is the incentive which satisfies the motive of financial
security. Rewards can be financial as well as non financial.
Group Dynamics

 A group is defined as a number of individuals who come

together to achieve a particular task or goal. Group
dynamics refers to the attitudinal and behavioural
characteristics of a group.
 Group dynamics concerns organizational success
because it consists of various groups and a lot depends on
how groups form, how they configuration and process,
and most importantly how they function. Group dynamics
are pertinent in both formal and informal groups of all
types.
 Margaret Mead’s quotes “Never doubt that a small group
of thoughtful committed citizens can change the world;
indeed it’s the only thing that ever has” this sums what
group dynamics is all about beautifully.
Foundations of Group
behaviour - Theories
There are several theories on why groups develop.
 The classic theory, developed by George Homans,
advocates that group development is based on
activities, interactions, and feelings. What it means is
when individuals share common activities; they will
have more interaction and will develop attitudes which
could be positive or negative toward each other.
 The major element in this theory is what kinds of
interaction are shared by the individuals involved in the
group.
Foundations of Group behaviour
- Theories(contd…)
 Social exchange theory offers an alternative explanation
for group development. According to this theory,
individuals form relationships based on the implied
expectation of mutually beneficial exchanges based on
trust and felt obligation towards each other. Thus, an
insight that in relationships exchange of thoughts and
ideas is positive and essential if individuals are to be
attracted to and affiliate with a group.
 Social identity theory suggests that individuals get a sense
of identity and self-esteem based upon their membership
in outstanding groups. The nature of the group may be
demographically based, culturally suitable, or
organizationally based. Individuals are motivated to
belong to and contribute to identical as their character
groups because of the sense of belongingness and self-
worth membership in the group imparts.
Foundations of Group behaviour
- Theories(contd…)

 According to Tuckman’s theory, there are five stages of

group development:
1. forming,
2. storming,
3. norming,
4. performing, and
5. adjourning.
 During these stages group members go through lot of
pains as they need to address several issues and the
way in which these issues are resolved decides whether
the group will succeed in accomplishing its tasks or the
group will break up.
Foundations of Group
behaviour - Theories(contd…)
Group Effectiveness

There are again some common manifestations of the

group effectiveness. Such as;
 Conformity – many people go along with the group
regardless of what they themselves might think as
individuals.
 Group polarization – it’s a phenomenon which shows
that deliberation can intensify people’s attitudes,
leading to more extreme decisions.
Organizational culture

 Organizational culture can be defined as the group

norms, values, beliefs and assumptions practiced in an
organization. It brings stability and control within the
firm. The organization is more stable and its objective
can be understood more clearly.
Elements of Organizational
Culture

The two key elements seen in organizational culture are;

 Visible elements − These elements are seen by the
outer world. Example, dress code, activities, setup, etc.
 Invisible elements − These inner elements of the group
cannot be seen by people outside the group or firm.
Example, values, norms, assumptions, etc.
Elements of Organizational
Culture(contd…)
Other elements of organizational culture. They are −
 Stories − Stories regarding the history of the firm, or founder.
 Rituals − Precise practices an organization follows as a habit.
 Symbol − The logo or signature or the style statement of a company.
 Language − A common language that can be followed by all, like
English.
 Practice − Discipline, daily routine or say the tight schedule everyone
follows without any failure.
 Values and Norms − The idea over which a company is based or the
thought of the firm is considered as its value and the condition to
adopt them are called norms.
 Assumptions − It means we consider something to be true without any
facts. Assumptions can be used as the standard of working, means the
employees prepare themselves to remain above standard.
Different Types of Organizational
Culture

The culture a firm follows can be further classified into

different types. They are −
 Mechanistic and Organic culture
 Authoritarian and Participative culture
 Subculture and Dominant culture
 Strong and Weak culture
 Entrepreneurial and Market culture
Creating an Organizational
Culture
 An organizational culture is created with the combination of
certain criteria that are mentioned below −
 The founder of the organization may partly set a culture.
 The environment within which the organization standards may
influence its activities to set a culture.
 Sometimes interchange of culture in between different
organizations create different new cultures.
 The members of the organization may set a culture that is flexible
to adapt.
 New cultures are also created in an organization due to demand
of time and situation.
 The culture of an organizational can change due to composition
of workforce, merger and acquisition, planned organizational
change, and influence of other organizational culture.
Sustaining Organizational
Culture
Organizational culture to
Organizational effectiveness
Organizational Climate

 According to Forehand and Gilmer, “Climate consists of a

set of characteristics that describe an organisation,
distinguish it from other organisations are relatively
enduring over time and influence the behaviour of people
in it.”
 According to Campbell, “Organisational climate can be
defined as a set of attributes specific to a particular
organisation that may be induced from the way that
organisation deals with its members and its environment.
For the individual members within the organisation, climate
takes the form of a set of attitudes and experiences which
describe the organisation in terms of both static
characteristics (such as degree of autonomy) and
behaviour outcome and outcome- outcome
contingencies.”
Characteristics of
Organisational Climate
1. General Perception:
Organisational climate is a general expression of what the organisation is. It is the
summary perception which people have about the organisation. It conveys the
impressions people have of the organisational internal environment within which they
work.
2. Abstract and Intangible Concept:
Organisational climate is a qualitative concept. It is very difficult to explain the
components of organisational climate in quantitative or measurable units.
3. Unique and District Identity:
Organisational climate gives a distinct identity to the organisation. It explains how one
organisation is different from other organisations.
4. Enduring Quality:
Organisational climate built up over a period of time. It represents a relatively enduring
quality of the internal environment that is experienced by the organisational members.
5. Multi-Dimensional Concept:
Organisational climate is a multi- dimensional concept. The various dimensions of the
organisational climate are individual autonomy, authority structure, leadership style,
pattern of communication, degree of conflicts and cooperation etc.
Organizational climate

 Richard M. Hodgetts has classified organisational

climate into two major categories.
 He has given an analogy with an iceberg where there
is a part of the iceberg that can be seen from the
surface and another part that is under the water and
cannot be seen.
 The factors in the visible part that can be observed and
measured are called OVERT factors and the factors
that are not visible and quantifiable are called covert
factors.
 Both these factors are shown in the following figure in
the form of an iceberg
Influences of Organizational
Climate