CHAPTER

1
AN INTRODUCTION
TO
ORGANISATIONAL
BEHAVIOUR (OB)
 LEARNING OUTCOMES

• Define the concept organisational behaviour (OB) and why the study of it is
relevant to organisations as well as your own professional success.
• Give an overview of contemporary organisational structures, and how
these influence organisational behaviour such as decision-making and
innovation.
• Describe the behaviours required of managers in a complex and ever-
changing environment.
• Describe challenges facing South African organisations and recommend
approaches towards dealing with them.
 INTRODUCTION
• The world of work is characterised by volatility, uncertainty, complexity and
ambiguity (VUCA).
• Organisations, leaders, managers, employees and you, need to foresee
and navigate change by developing an understanding of issues, events
and people, while remaining vigilant and resilient in the face of challenges
and surprises.
• The foci of OB are organisational design, leadership, management, teams
and the interaction between people and their working environment.
• Challenge is to create and develop an organisation that is managed in a
way that every person is energised and engaged in working towards a
shared vision.
• Alignment between organisational strategy, structure, culture and
performance is purposefully planned and managed in order to realise the
organisation’s vision.
 ORGANISATIONAL BEHAVIOUR (OB)
• An organisation is a collection of people working together to achieve a wide
variety of personal and collective goals.
• Personal goals – earning money, developing oneself and enjoying a satisfying
work experience.
• Collective goals – innovative goods and services, to make a profit to reward
shareholders, managers and employees.
• Behaviours are the actions of individuals and teams and include decision-making,
problem-solving, communication, conflict resolution and interaction.
• Organisational behaviour – a scientific field of study, which is dedicated to
understanding, explaining and appreciating the forces that influence the
behaviour in organisations.
• Purpose – making good decisions about how to coordinate and motivate people
and assign resources to achieve organisational goals.
 COMPONENTS OF ORGANISATIONAL
BEHAVIOUR (OB)
An organisation is essentially a social system in which the behaviour of
people is influenced by arrangements within the organisation in relation to
the external environment.

OB embraces the key areas of:

• people’s behaviour
• the management process
• the organisational context
• interaction with the external environment
 Components of organisational behaviour (OB) continued

Figure 1.1: The interrelated components of organisational behaviour (Textbook, page 6)

 Components of organisational behaviour (OB) continued

Interrelated dimensions of the organisation

• The individual – a central figure of OB and the focus of any behavioural
situation.
• The group/team – can be formally structured, while informal groups are
also developed to satisfy the social needs of people within an organisation.
• The organisation, including organisational structure and technology –
formal organisation refers to the hierarchy, levels, units and functions.
Structure is aimed at guiding management behaviour, as well as the
interaction of individuals and groups. Technology refers to the machines,
resources, tools and methods used to make the organisation competitive.
• The environment – organisations must adjust to changes experienced
within the external environment such as, new technology, economic
changes, social, cultural and political challenges.
 Components of organisational behaviour (OB) continued

The multidisciplinary nature of organisational

behaviour (OB)
Figure 1.2: Overt and covert aspects of organisational behaviour (Textbook, page 8)
 Components of organisational behaviour (OB) continued

The multidisciplinary nature of organisational behaviour (OB) continued

• Psychology – the study of human behaviour, concentrating on the traits of

the individual and membership of small social groups.

• Sociology – the study of social behaviour and the relationships between

social groups and societies. This encompasses the study of work groups
and teams, communication, influencing tactics and empowerment.

• Anthropology – the science of humankind and the study of human

behaviour as a collective. Includes the cultural system, beliefs, customs,
ideas and values within a group and issues of ethics and diversity.
 POSITIVE ORGANISATIONAL
SCHOLARSHIP (POS) AND POSITIVE
ORGANISATIONAL BEHAVIOUR (POB)
• The study of positive work environments that foster excellence and
extraordinary performance through meaningfulness, joy, optimism, hope,
resilience and self-efficacy.
• A workplace characterised by authenticity and authentic leadership.
• Authentic leaders – a process that draws from both positive psychological
capacities and a highly developed organisational context resulting in
greater self-awareness and self-regulated positive behaviours on the part
of leaders and associates, fostering positive self-development.
• Continental Tyres SA (illustrative case)
 ORGANISATIONAL DESIGN AND
STRUCTURE AND THE EFFECT ON
ORGANISATIONAL BEHAVIOUR (OB)
• Organisational structure – hierarchical arrangement that demarcates lines
of authority, departments, spans of control, work specialisation and
formalisation.
• Main elements – centralisation and decentralisation, which depict whether
decisions are made higher up or lower down the hierarchy.
• Importance of organisational design and structure in the context of
organisational behaviour is that structure shapers behaviour.
 Organisational design and structure and the effect on organisational behaviour (OB) continued

Purpose:
• To coordinate the efforts of interdependent groups towards attaining goals.
• To ensure information distribution and effective decision-making.
• To enable the organisation to adjust rapidly to challenges in its
environment.
 Organisational design and structure and the effect on organisational behaviour (OB) continued

Figure 1.3: Two organisational designs (Textbook page 11)

 Organisational design and structure and the effect on organisational behaviour (OB) continued

Mechanistic structures
• Traditional and bureaucratic
• Structures are more rigid
• Lack of change in the external and working environment
• High degree of specialisation
• Many rules, narrowly-defined tasks
• Top-down communication
 Organisational design and structure and the effect on organisational behaviour (OB) continued

Organic structures
• Flexible networks of multi-talented people performing a variety of tasks
• Change-oriented
• Foster creativity
• Generalists performing flexible tasks
• Authority is decentralised
• Broad-based decision-making
• Lateral communication patterns
 Organisational design and structure and the effect on organisational behaviour (OB) continued

Table 1.1: An organic versus a mechanistic organisation (Textbook, page 12)

 Organisational design and structure and the effect on organisational behaviour (OB) continued

Matrix structure and the effect on organisational

behaviour (OB)
• Members grouped by function and project team
• Reports to two managers
Figure 1.4: A matrix structure
(Textbook, page 13)
 Organisational design and structure and the effect on organisational behaviour (OB) continued

Matrix structure and the effect on organisational behaviour (OB) continued

Possible problems:
• Unclear lines of authority
• Leads to role conflict and role ambiguity
• Performance suffers due to poor coordination
• Individual contribution less definable
 Organisational design and structure and the effect on organisational behaviour (OB) continued

Other forms of organic organisations

• Virtual organisation
• Network organisation
• Boundaryless organisation
• Shamrock structure

Figure 1.5: Shamrock organisations (Textbook, page 18)

 MANAGING ORGANISATIONAL
BEHAVIOUR (OB) IN A COMPLEX
ENVIRONMENT: THE ROLE OF THE
21ST CENTURY MANAGER
• The complex environment in which managers find themselves is
characterised by:
– A great quantity of work to be performed at a hectic pace
– Issues and problems that are largely unplanned and initiated by others
– An unrelenting stream of information to be processed, prioritised and
acted upon
– Discussions, debates and deliberations with a variety of stakeholders
 Managing organisational behaviour (OB) in a complex environment: the role of the 21st century manager continued

• Management is the process of working with and through others to achieve

organisational objectives in an efficient and ethical manner.

• 21st century managers must constantly analyse the environment and adapt
to new circumstances.

• Most managers are involved in a variety of intense, brief and disconnected

activities.

• There is a preference towards action rather than reflection and work in

multiple roles, while empowering others to share in leadership and growth.
Managing organisational behaviour (OB) in a complex environment: the role of the 21st century manager continued

Table 1.2: The multiple roles of managers (Textbook, page 20)

 21ST CENTURY MANAGEMENT
BEHAVIOURS

• Facilitate teams to create meaningful workspaces

• Encourage lifelong learning

• Value people as a primary resource, listen to others, inspire them and

acknowledge achievement

• Have a multicultural and multilingual orientation

• Connect people in multidirectional networks

 21st Century management behaviours continued

• Share knowledge-based power broadly

• Utilise conflict as a force to create understanding and innovation

• Connect people towards creating excellence

• Promote ethical behaviour and serve as role models

• Proactively initiate and facilitate change in individuals, teams and

organisations

• Apply best practices in every situation

MAIN MANAGEMENT FOCUS AREAS

Figure 1.6: Main focus areas for high-performing managers (Textbook, page 21)
 Main management focus areas continued

Three main focus areas require dedication to:

• Self-awareness or inner focus – monitoring one’s own thinking and
feelings
• Empathy or other focus – ability to influence others, fostering and
persuading collaboration and teamwork
• Systems awareness of outer focus – ability to explore the broader
environment and seek an understanding of how the various subsystems
of the organisation interrelate and how the organisation is influenced by
the macro, social, economic, political, environmental and technological
systems.
 CHALLENGES FOR ORGANISATIONAL
BEHAVIOUR (OB)
• Industry 4.0
• Managing in the global environment
• Adapting and thriving on discontinuity and change
• Achieving excellence through the management of people
• Creating a knowledge-based organisation
• Managing a diverse workforce to obtain competitive advantage
• Adapting to constantly changing technology
• Creating an ethical organisation
 Challenges for organisational behaviour (OB) continued

Industry 4.0
• Evolving from an era of breakthroughs in technology, including
automation, artificial intelligence (AI), mass data, robots, operational
technology and Internet of things.
• Considered to significantly reshape the nature of almost all industries,
organisations and jobs.
• Organisations combine knowledge, resources, technology, systems,
products and services in an interorganisational value chain to achieve
innovation and flexibility.
• Technology is used to connect organisations across boundaries and
collaborate as an integrated system to create value and growth and to
improve efficiency and drive competitiveness.
 Challenges for organisational behaviour (OB) continued

Industry 4.0 continued

• Automation is attained through four elements:
1. It is controlled by machines
2. Real-time production and information
3. Decentralisation control of production
4. Individualisation which means meeting the unique needs of customers

• The implications of Industry 4.0 for organisations:

– New economies will require transformational leaders that can visualise
and realise interorganisational and global collaboration while creating
partnerships across industries, organisational and national
boundaries.
– Leaders require strong product, service and process design capability
and network with other leaders who have similar capabilities.
– Must provide direction, create open channels of communication, trust,
energy and motivation among virtual networks of partner teams.
 Challenges for organisational behaviour (OB) continued

Industry 4.0 continued

• Organisations will recruit highly-skilled employees who are able to add

value and work with SMART systems.

• Employees need to be critical thinkers, innovative and able to perform

tasks that are demanding as they will be taking responsibility for
integrated and complex systems.
 Challenges for organisational behaviour (OB) continued

Managing in the global environment

• Organisations need exceptional capability to deal with the operational and
human complexity created by globalisation.

• People of different countries and cultures perceive work and life differently
(because of differing motives/expectations).

• Managers who do not understand differences may become frustrated in

their quest to lead diverse teams.
 Challenges for organisational behaviour (OB) continued

Managing in the global environment continued

• Not all expatriates find it easy to work in other countries. Besides personal
and family-related issues, the inability to adapt to a new location or work
environment, unmet job expectations and relationship issues with new
managers can all be considered reasons for failed assignments or early
repatriation.

• Global environment encounter - Lenovo

• The emergence of virtual teams

– Virtual teams pose unique challenges to leadership.
– Cohesion and trust need to be created through shared goals.
– Planning and design are key factors in the success of a virtual team.
 Challenges for organisational behaviour (OB) continued

Adapting to, and thriving on discontinuity and change

• Changing external environments
• Globalisation, changing customer needs and technological development
also create an environment of continuous fluctuation, discontinuity and
change.
• This challenges the ability of organisations, leaders, managers and
employees to anticipate and proactively deal with change.
• Work environment often “temporary”
• Organisations in constant state of flux
 Challenges for organisational behaviour (OB) continued

Adapting to, and thriving on discontinuity and change continued

• Managers and employees need certain characteristics to cope in a

changing environment
• They need to be flexible, innovative, creative, adaptive and resilient.
• Managers must become change agents who proactively anticipate the
need for change and initiate and implement it.
• Employees must participate fully in the process.
• Managers must understand resistance to change and create an
organisational culture that is conducive to change.
• Change tend to have implications for the wellness of employees and the
organisations must build the psychological capital of managers and
employees to remain effective during times of change.
 Challenges for organisational behaviour (OB) continued

Pressure to continuously improve quality and

productivity
See example - Unilever (Textbook page 26)

• Organisations experience much pressure to continuously improve quality

and productivity.
• Pressure comes from sources such as – customer demands, competition,
limited resources, legal requirements and national and international
industry standards.
• High-performance organisations realise that it is people who mainly
determine the organisation’s capacity to perform and that it makes
business sense to involve all employees in quality improvement.
 Challenges for organisational behaviour (OB) continued

Pressure to continuously improve quality and productivity continued

Figure 1.7 PDCA cycle for continuous quality improvement (Textbook page 26)
 Challenges for organisational behaviour (OB) continued

Pressure to continuously improve quality and productivity continued

• Effectiveness
• Efficiency
• Achieved through approaches such as total quality management (TQM).
• It is customer-centred and employee-driven.
• Organisations are viewed as a process rather than a chain of command
and relies on a collaborative approach to problem-solving, training and
empowerment.
• Lean manufacturing is closely related to TQM and focuses on value chain
analysis, elimination of waste and flow.
 Challenges for organisational behaviour (OB) continued

Pressure to continuously improve quality and productivity continued

• Engagement by employees is required for them to experience meaning in

their jobs and as a result are responsible, accountable and innovative
form strong relationships with co-workers and managers and demonstrate
organisational citizenship behaviour.
• Employees need to share their knowledge, insight and experience so that
the company can have a competitive advantage.
 Challenges for organisational behaviour (OB) continued

Creating a knowledge-based organisation

• Organisations are filled with employees who are knowledgeable,
experienced and have learned how to solve problems in creative ways.
• When employees leave the organisation it results in a gap in organisational
knowledge.
• A challenge for the organisation is to nurture knowledge and to retain it in
the organisation.
• Knowledge management – gather and distribute information and use it to
create excellence.
• For example, information regarding changing customer needs that is used
to adjust service levels towards excellence.
 Challenges for organisational behaviour (OB) continued

Creating a knowledge-based organisation continued

• Enable employees to continuously make improvements by sharing their

tacit knowledge to improve systems and practices.
• Organisations need to learn about the broader external environment, the
industry in which they function, the needs of customers and their own
products and processes.
• A problem many organisations experience is the mobility of knowledge
workers.
• Such employees are often referred to as “gold-collar” employees because
of exceptional contribution to the attainment of organisational strategy.
• To prevent such employees from existing in the organisation, they must be
provided with challenging work, autonomy, advanced technology and
development opportunities.
 Challenges for organisational behaviour (OB) continued

Managing a diverse workforce as a competitive

advantage
• Diversity also arises from cultural, political, language, gender, religious and
other differences.
• Diversity can become a company’s competitive advantage (can be used to
improve decision-making).
• Best practices for diversity management and inclusivity (refer to diversity
encounter Textbook page 27).
 Challenges for organisational behaviour (OB) continued

Managing a diverse workforce as a competitive advantage continued

• A challenge is for management to find a set of organisational values that is

shared by everyone and to capitalise on the richness of ideas, world views
and perspectives that diversity brings into the workplace.
• A diverse workforce is essential to improving customer service in a diverse
marketplace.
• Supervisors or managers may not know how to manage diverse teams and
may ignore the issue of diversity without realising the potential it can hold
for group performance.
• Overcoming this obstacle, requires organisations to offer diversity training
programmes that aim to create an understanding and appreciation for each
other.
 SUSTAINABILITY, ETHICS AND SOCIAL
RESPONSIBILITY
• Managers and leaders consider it their ethical duty to take a long-term
perspective to ensure organisations continue to provide positive returns,
for a broader range of stakeholders with diverse needs and expectations.
• Organisations that do what is universally considered right have a better
chance of developing a positive reputation, attracting better employees
and establishing a stable customer base.
• King IV emphasises that organisations should report on the actions taken
to establish corporate governance and the processes followed to
formulate and implement these actions.
 Sustainability, ethics and social responsibility continued

• Ethics is often linked to sustainability.

• Sustainability is defined as attaining and maintaining balance, stability and
support in terms of social, environmental and economic issues and the
ability to meet the needs of the present generation without compromising
the ability of future generations to meet their needs.
• Corporate social responsibility (CSR) refers to the organisation taking
responsibility for the communities in which they operate and using
strategies to act ethically and be socially friendly and beneficial to society.
• In terms of environmental issues, sustainability implies utilising natural
resources in a manner that will protect and maintain the ecological
balance.
 Sustainability, ethics and social responsibility continued

Figure 1.8 Sustainability: collective responsibility and accountability process

(Textbook page 31)
 CONCLUSION
• OB presents the study of the behaviour of individuals, teams and mangers
within organisations in a constantly changing environment that poses
challenges related to technology, competitiveness, diversity, knowledge,
excellence and ethics.
• An organisation needs to adjust to a changing environment.
• Organisational structure influences the organisation’s ability to change and
adjust.
• The role of managers as facilitators and team leaders is crucial.
• Successful organisations have developed highly adaptive cultures that
embrace integrated product design teams, teamwork, quality, diversity, a
global outlook and continuous learning.