CHAPTER ONE:

AN OVERVIEW OF ORGANIZATIONAL

BEHAVIOR
Definitions of Concepts
• The term, ‘Organizational Behavior’ is composed of two words ‘organization’ and
‘Behavior’.
What is Organization?
• we can define the term organization as two or more individuals who are interacting
with each other within a deliberately structured setup and working in an
interdependent way to achieve some common objective/s. organizations are not
buildings or other physical structures.
• Rather organizations are people who work together to achieve a set of goals.
• Organizations play a major role in our lives.
• We cannot think of a single moment in our lives when we are not depending on
organizations in some form or the other.
• Right from the public transport that you use to come to your institute, the institute
itself, and the class you are attending at this moment, are all examples of
organizations.
 What is Behavior?
• An organization comprises people with different attitudes, cultures,
beliefs, norms, and values.
• Organizational behavior (often abbreviated as OB) is a field of study that
investigates the impact that individuals, groups, and structures have on
behavior within organizations for the purpose of applying such
knowledge toward improving an organization’s effectiveness. That’s a lot
of words, so let’s break it down.
• Organizational behavior is a field of study. This means that it is a distinct
area of expertise with a common body of knowledge. By saying that OB is
a field of study, we mean that scholars have been accumulating distinct
knowledge about behavior within organizations.
• What does OB study?
Cont.
• OB studies three determinants of behavior in organizations:
• individuals,
• groups, and
• structure.
• In addition, OB applies the knowledge gained about individuals, groups,
and the effect of structure on behavior in order to make organizations
work more effectively.
• To sum up the above definition, OB is concerned with the study of
what people do in an organization and how that behavior affects the
performance of the organization.
 WHY WE STUDY OB?
• The main reason for studying organizational behavior is that most of us work
in organizations, so we need to understand, predict, and influence the
behavior of others in organizational settings.
• Marketing students learn marketing concepts and computer science students
learn about circuitry and software code.
• But everyone needs organizational behavior knowledge to address the
people issues that we face when trying to apply marketing, computer
science, and other ideas.
• The study of OB can provide important insights into helping you better
understand a work world of continual change, how to overcome resistance
to change, and how best to create an organizational culture that thrives on
change.
Complementing Intuition with Systematic Study
• People develop an intuitive understandings of the behaviors of other people
through experience.
• This experiential, common-sense method of learning human behavior can
often lead to erroneous predictions.
• Managers can improve their predictive ability by systematically coupling
their individual experiences with those of others.
• The best way to do this is through the study of organizational behavior. The
important thing to remember is that human behavior is not random.
• Rather, OB has shown that there are “fundamental consistencies [that]
underlie the behavior of all individuals, and these fundamental
consistencies can be identified and then modified to reflect individual
differences.”
Cont.
• Systematic study of behavior means: examining relationships,
attempting to attribute causes and effects, and basing our conclusions
on scientific evidence- that is, on data gathered under controlled
conditions and measured and interpreted in a reasonably rigorous
manner.
• Intuition: your “gut feelings” about “what makes others tick.”
• the ability to understand something instinctively, without the need for
conscious reasoning:
• Our goal is to teach you how to use the systematic study of OB to
enhance your intuitive understanding of behavior and improve your
accuracy in explaining and predicting behavior in the workplace.
Interdisciplinary Influences: Disciplines
contributing to the field of OB
Organizational behavior is an applied behavioral science that is built
upon contributions from a number of behavioral disciplines. The
predominant areas are psychology, sociology, social psychology,
anthropology, and political science.
As we shall learn, psychology’s contributions have been mainly at the
individual or micro level of analysis, while the other four disciplines
have contributed to our understanding of macro concepts such as
group processes and organization.
Psychology
• Psychology is the science that seeks to measure, explain, and sometimes
change the behavior of humans and other animals. Psychologists concern
themselves with studying and attempting to understand individual behavior.
• Those who have contributed and continue to add to the knowledge of OB
are learning theorists, personality theorists, counseling psychologists, and,
most importantly, industrial and organization psychologists. Early industrial
and organization psychologists concerned themselves with problems of
fatigue, boredom, and other factors relevant to working conditions that
could impede efficient work performance.
• More recently, their contributions include training, leadership effectiveness,
needs and motivational forces, job satisfaction, decision-making processes,
performance appraisals, attitude measurement, employee selection
techniques, work design, and job stress.
 Sociology
• Whereas psychologists focus their attention on the individual, sociologists
study the social system in which individuals’ fulfill their roles; that is,
sociology studies people in relation to their fellow human beings.
• Specifically, sociologists have made their greatest contribution to OB
through their study of group behavior in organizations, particularly formal
and complex organizations.
• Some of the areas within OB that have received valuable input from
sociologists are group dynamics, design of work teams, organizational
culture, formal organization culture, formal organization theory and
structure, organizational technology, communications, power, and
conflict.
Social psychology
• Social psychology is an area within psychology, blending concepts from
both psychology and sociology.
• It focuses on the influence of people on one another.
• One of the major areas receiving considerable investigation from social
psychologists has been change. How to implement it and how to
reduce barriers to its acceptance.
• Additionally, we find social psychologists making significant
contributions in the areas of measuring, understanding, and changing
attitudes; communication patterns; the ways in which group activities
can satisfy individual needs; and group decision-making processes.
Anthropology
• Anthropology is the study of societies to learn about human beings and
their activities.
• Anthropologists’ work on cultures and environments, for instance, has
helped us understand differences in fundamental values, attitudes, and
behavior among people in different countries and within different
organizations.
• Much of our current understanding of organizational culture,
organizational environments, and differences among national cultures is
the result of the work of anthropologists or those using their
methodologies.
Political Science
• Although frequently overlooked, the contributions of political
scientists are significant to the understanding of behavior in
organizations.
• Political science studies the behavior of individuals and grounds
within a political environment.
• Specific topics of concern here include the structuring of conflict,
allocation of power, and how people manipulate power for individual
self- interest.
 Organizations as Systems
• In the earlier section, we have defined what an organization is all about. Do
remember.

• But what does it mean by an organizational system? You know that organizations are
systems of interacting components, which are people, tasks, technology, and
structure.

• These internal components also interact with components in the organization’s

environment.

• Organizations as open systems have people, technology, structure, and purpose,

which interact with elements in the organization’s environment.
Open and Closed System
• A system is commonly defined as a group of interacting units or
elements that have a common purpose and a subsystem is a set of related
parts that work together to achieve an objective as one component of a
larger system.
• The units or elements of a system can be parts, wires, people,
computers, and so on.
• Systems are generally classified as open systems and closed systems
and they can take the form of mechanical, biological, or social systems.
• Open systems refer to systems that interact with other systems or the
outside environment, whereas closed systems refer to systems having
relatively little interaction with other systems or the outside
environment.
 Cont.
• All systems have boundaries, a fact that is immediately apparent in mechanical systems
such as the watch, but much less apparent in social systems such as organizations.

• The boundaries of open systems, because they interact with other systems or
environments, are more flexible than those of closed systems, which are rigid and largely
impenetrable.

• A closed-system perspective views organizations as relatively independent of

environmental influences.

• The closed-system approach conceives of the organization as a system of management,

technology, personnel, equipment, and materials, but tends to exclude competitors,
suppliers, distributors, and governmental regulators.
Cont.
• Open-systems theory: In contrast to closed systems, the open-system
perspective views an organization as an entity that takes inputs from the
environment, transforms them, and releases them as outputs in tandem with
reciprocal effects on the organization itself along with the environment in
which the organization operates.

• That is, the organization becomes part and parcel of the environment in
which it is situated.
Cont.
• Furthermore, the open-system approach serves as a model of business
activity; that is, business is a process of transforming inputs to outputs
while realizing that inputs are taken from the external environment and
outputs are placed into this same environment.

• Companies use inputs such as labor, funds, equipment, and materials to

produce goods or to provide services and they design their subsystems to
attain these goals.
The Formal and Informal Organization
• Informal organization refers to the patterns of behavior and influence
that arise out of the human interaction occurring within the formal
structure.

• The formal organization is the part of the system that has legitimacy
and official recognition.
Formal Vs Informal Organization

Formal organization (overt/openly) Informal organization (covert/hidden)

Goals and objectives, Policies and Beliefs and assumptions about:
procedures •People
Job descriptions •Work the organization
Financial resources Perceptions and attitudes
Values
Feelings, such as fear, range, despair and
hope
Group norms
Cont.
• While formal and informal organizations are similar along some dimensions,
there are also important differences.

• Because the informal organization can exert a strong influence on employee

behavior, it is important to understand its nature, how it works, in what ways it
affects behavior, and how it can be used in the management of the organization.

• any behavior that occurs “above and beyond” what prescribed by the formal
organization is a result of the informal organization.
Why informal organization?
• In general, the informal organization emerges because the formal structure does
not satisfy all employee and organizational needs.
• The exact form of the formal structure does not satisfy all employee and
organizational needs.
• The exact form the informal organization will take thus depends on the specific
deficiencies in the formal structure and in employee need satisfaction.
• It is important to remember that managers do not have a choice as to whether or
not the informal organization will develop; informal relationships will be formed
within any formal structure.
• It is important for the manager to understand (rather than to attempt to suppress)
the informal organization and to channel its energies toward organizational goals.
END