Unit 1

ORGANIZATIONAL BEHAVIOUR
UNIT-1

COURSE CONTENT FOR UNIT-1
• Introduction – Concept and scope of
organizational behaviour,
• Historical development of organizational
behaviour,
• Emerging trends and hanging profiles of
workforce;
• Foundations of organizational behaviour,
• Challenges of organizational behaviour.

Introduction
• The study of organizations and of the
collection of people within them together
comprises the field of organizational
behavior.
• Organizational behavior (OB) is the study
of human behavior in organizational
settings, the interface between human
behavior and the organization, and the
organization itself.

The Dynamics of people and
organizations
A primary goal of management education is to
develop students into managers who can think
ahead, exercise good judgment, make ethical
decisions, and take into consideration the
implications of their proposed actions
– Jane Schmidt-Wilk

Premises
• Organizations are complex systems.
▫ Need to understand how the system operates esp. in a sociotechnical system –
humanity and technology.
• Human behavior in organizations is sometimes unpredictable
▫ Behaviors may come from deep-seated needs, lifetime experiences and personal
value systems
• Human behavior in a organization can be partially understood
▫ Applying the frameworks of behavioral science, management and other
disciplines.
• There are no perfect solutions to organizational problems
▫ Increase the understanding and skills – work relationships can substantially
upgraded
• We do not have the luxury of not working with or relate to other
people.
▫ Learn human behavior.
▫ Explore how to improve he interpersonal skills
▫ Begin to mange ones relationships with others at work.

Understanding human behavior
• Definition
• OB
▫ systematic study and careful application of knowledge
about how people – as individuals and as groups – act
within organizations.
▫ Strive to identify ways in which people can act more
efficiently
▫ A large number of research studies and conceptual
developments constantly adds up to its knowledge
base.
▫ An applied science
▫ Provides useful set of tools at many levels of analysis
from individual, interpersonal relations,
intergroup,and whole system

▫ Describe
 how people behave under a variety of conditions.
▫ Understand
 Why people behave behave as they do.
 Probe for underlying explanations
▫ Predict
 Predict future employee behavior (tardiness, productive
& unproductive etc.)
 Provide preventive actions
▫ Control
 At least partially and develop some human activity at
work.
Managers need to remember that organizational
behavior is a tool for human benefit
Goals of OB

Key forces – complex set of forces affects the nature of organizations

Key Forces
• People
 Make up the internal social system of an organization
 Melting pot of diversity – talents, background and perspectives to
their jobs
 Managers need to be tuned in to these diverse patterns and trends.
 Changes in the labor force
▫ Decline in work ethic and rise in emphasis on leisure, self expression,
fulfillment and personal growth
▫ Decreased automatic acceptance of authority and increase in the desire
for participation, autonomy and control.
▫ Skills become obsolete due to rapid technological advances – retrain or be
displaced
▫ Security needs are prime concern and loyalty diminishes because of
downsizing and outsourcing
▫ Absence of meaningful salary growth has placed renewed emphasis on
money as a motivator
 Companies address diversity by becoming compassionate and
caring, building pride without de-valuing others, empowering
some without exploiting, demonstrating openness, confidence,
authentic compassion and vulnerability.

• Structure
 Defines the formal relationship and use of people in organizations.
 Effective coordination of work
 Create complex problems of cooperation, negotiation and decision making
• Technology
 Provides he resources with which people work and affects the tasks they
perform
 Benefit of technology – does more and better work however it restricts
people in various ways
 OB’s challenge is to maintain the delicate balance between technical and
social systems.
• Environment
 Internal or external
 Organizations are part of a larger system and factors influence them like:
 Citizens expect organizations to be socially responsible
 New products and competition for customers come from around the globe
(globalization)
 The direct impact of unions diminishes
 Dramatic pace of change in society.
 The external environment influences the attitudes of people, affects
working conditions, and provides competitions for resources and power.

Positive Characteristics of OB
• Interdisciplinary in nature – integrates behavioral
sciences, social sciences and other disciplines
• Emerging knowledge, theories, models and
conceptual frameworks.
• Increasing acceptance of theory and research by
practicing managers.
 Willingness of managers to explore new ideas
 More receptive to new models
 Support related research
 Hungrily experiment with new ideas

Contributing Disciplines to the OB
Field
• Psychology
• Sociology
• Social Psychology
• Anthropology
• Political Science

Field

Field (cont’d)

Fundamental Concepts of OB
 Nature of people
 Individual differences
 Nature vs.nurture
 Perception
 The unique way in which each person sees, organizes and interprets things.
 Selective perception cause misinterpretation
 A whole person
 We employ the whole person not just their brains or skills
 Ergonomics is the science of fitting workplace conditions and job demands to the
capabilities of the working population
 Motivated behavior
 A path towards increased need fulfillment is a better approach
 Desire for involvement
 Hunger for a change to chare what they know and to learn from the experience.
 Organizations need to provide opportunities for meaningful involvement –
employee empowerment
 Value of the person
 Worth before the word
 meal before the message
 they want to be treated differently from other factors of production

 Nature of organization
 Social systems
 or social structure in general refer to entities or groups in definite
relation to each other, to relatively enduring patterns of behavior and
relationship within social systems, or to social institutions and norms
becoming embedded into social systems in such a way that they shape
the behavior of actors within those social systems. Social systems can be
said to be the patterns of behavior of a group of people possessing
similar characteristics due to their existence in same society.
 Formal and informal social systems
 The idea of a social system provides a framework for analyzing
organizational behavior issues. It helps make OB problems
understandable and manageable
 Mutual interest
 Symbiotic relationship between organizations and people
 Provides a superordinate goal – one that can attained only through the
integral effort of individuals and their employers.
 Ethics
 Treatment of employees in an ethical fashion
 Establish code of ethics, publicized statements of wthical values,
provide ethics trainings, reward employees for notable ethical
behaviors, set up internal procedure to handle misconduct.

Models of Organizational Behavior

Social Systems and Organizational
Culture
• A social system is a complex set of human
relationships interacting in many ways. Within an
organization, the social system includes all the
people in it and their relationships to each other and
to the outside world. The behavior of one member
can have an impact, either directly or indirectly, on
the behavior of others. Also, the social system does
not have boundaries...it exchanges goods, ideas,
culture, etc. with the environment around it.

• Culture is the conventional behavior of an
organization that encompasses beliefs, customs,
knowledge, and practices. It influences human
behavior, even though it seldom enters into their
conscious thought. People depend on culture as
it gives them stability, security, understanding,
and the ability to respond to a given situation.
This is why people fear change. They fear the
system will become unstable, their security will
be lost, they will not understand the new
process, and they will not know how to respond
to the new situations.

HOW AN ORGANIZATION's CULTURE CAN BE
KNOWN ?
Organization culture can be a set of key values , assumptions,
understandings and norms that is shared by members of an
organization.
Organization values are fundamental beliefs that an organization
considers to be important , that are relatively stable over time,
and they have an impact on employees behaviors and attitudes.
Organization Norms are shared standards that define what
behaviors are acceptable and desirable within organization.
Shared assumptions are about how things are done
in an organization.
Understandings are coping with internal / external problems
uniformly.

• LEVELS OF ORGANIZATION CULTURE
LEVEL 1---VISIBLE, that can be seen at the
surface level
-dress codes
-office layout [ open office]
-symbols
-slogans
-ceremonies[ monthly / annual awards/long
service/birthdays etc.]

• LEVEL 2- INVISIBLE , that can be cannot be seen but
only felt.
-stories about people performance
-symbols [ flag, trademark, logos, etc]
-corporate mission statements
-recruitment/selection [ methods used]
-fairness in treatment
-social equality
-risk taking in business deals
-formality in approach
-discipline
-autonomy for departments
-responsiveness to communication
-empowerment of staff.

Approaches to OB
• Human Resources (Supportive) – Employee growth
and development are encouraged and supported.
• Contingency – Different managerial behaviors are
required by different environments for effectiveness.
• Results-oriented – outcomes of organizational
behavior programs are assessed in terms of their
efficiency.
• Systems – all parts of an organization interact in a
complex relationship.

Limitations of OB
• People who lack system understanding and become
superficially infatuated with OB may develop Behavioral
bias – narrow viewpoint that emphasized satisfying
employee experiences while overlooking the broader
system of the organization in relation to all its publics.
• The law of diminishing return –
▫ he tendency for a continuing application of effort or skill
toward a particular project or goal to decline in
effectiveness after a certain level of result has been
achieved.
▫ Overemphasis on as valid organizational behavior practice
may produce negative results
▫ At some point increase of a desirable practice produce
declining returns, eventually negative returns

• Unethical manipulation of people
▫ Knowledge and techniques can be used to manipulate
people unethically
▫ People who lack ethical values could use people in
unethical ways.
▫ The philosophy of OB is supportive and oriented
toward human resources. Seeks to improve human
environment and help people grow toward their
potential.
▫ Ethical leadership principles such as: social
responsibility, open communication, cost-benefit
analysis.

Continuing Challenges
• Seeking Quick Fixes
▫ Are we tempted when pressured to seed rapid
solutions?
• Varying Environments
▫ Can the ideas that have been developed and tested
endure with equal success under new conditions?
• Definition Confusion
▫ Considered as relatively new discipline, can OB in
clearly define its field of student and application?

The organization is above all social. It is
people.”
Peter Drucker

CLASSICAL SCHOOL
Assumption: People are
rational
SCIENTIFIC
MANAGEMENT
SCHOOL
1. Babbage
2. Taylor
3. The
Gilbreths
4. Gantt
ORGANIZATIONA
L SCHOOL
1. Fayol
2. Weber
3. Mooney
and Reilly
4. Barnard
5. Simon
BEHAVIOURAL SCHOOL
Assumption: People are social and
self-actualizing
1. Owen
2. Munsterberg
3. Mayo
4. Follett
5. Maslow
6. McGregor
7. Argyris
8. Dale Carnegie
QUANTITATIVE SCHOOL
Assumption: People can use applied
mathematics
Management Science Operations
Management Management
Information Systems
INTEGRATION
SCHOOL
Assumption: There us
no one best way to
manage
1. Contingency Theory
2. System Theory
3. Process Theory
CONTEMPORARY SCHOOL
Assumptions: People are complex
Global
Theory Z
Mckinsey 7-S
Excellence
Quality
Productivity

Evolution of OB
Robert Owen-(1800)
• Young Factory Owner-First to emphasize the human needs of
employees and refused to employ children
• Taught workers to improve working conditions
• Father of personnel management
Andrew Ure-(1935)
• The Philosophy of Manufacturers -1835
• Value of human factor in manufacturing
• Provided welfare facilities to workers
• J.N. TATA in 1886 Instituted a pension fund & 1895 began to
pay accident compensation.

William Gilbreth-(1914)
• “The Psychology of Management
F.W.Taylor-(1916)
• Father of Scientific Management
• Time & Motion Study
• Piece Rate Method
Evolution of OB

• Henry Fayol (1916)
▫ Administrative Management , Principle of Governing
Behavior, Management Quality
• Elton Mayo-(1920’s & 1930’s)
▫ Human behavior at Harvard University
▫ Hawthorne's Experiments/Plant
• Abraham H. Maslow (1954):
▫ Need Hierarchy Motivation model
• Douglas McGregor (1960):
▫ Theory X and Theory Y Managerial Style
• Henry Mintzberg (1960) :
▫ Managerial Roles : Interpersonal, Informational and
Decision making
Evolution of OB

• Peter Drucker (1909 -2005)
▫ Father of modern management
▫ Importance of change
▫ How to bring best out of people
▫ Innovation
▫ Entrepreneurship
Evolution of OB

Challenges for OB
• Globalization to Respond
• Managing Diversity
• Improving Quality and Productivity
• Improving Customer Service
• Improving People Skills
• Stimulating Innovation and Chang e
• Coping with Temporariness
• Working in network organization
• Helping employees balance work-life conflicts
• Creating Positive work environment
• Improving Ethical Behaviour

THE SCOPE OF THE ORGANIZATIONAL
BEHAVIOUR IS AS UNDER:
▫ Impact of personality on performance
(b) Employee motivation
▫ Leadership
▫ How to create effective teams and groups
▫ Study of different organizational structures
▫ Individual behaviour, attitude and learning
▫ Perception
▫ Design and development of effective organization
▫ Job design
▫ Impact of culture on organizational behaviour
▫ Management of change
▫ Management of conflict and stress
▫ Organizational development
▫ Organizational culture
▫ Transactional analysis
▫ Group behaviour, power and politics
▫ Job design
▫ Study of emotion

Importance of OB
• OB provides a road map to our lives in organizations.
• OB uses scientific research to understand and make
organization life, as it helps to predict what people will
do under various conditions
• It helps to influence organizational events – to
understand and predict events
• It helps individual understand herself/ himself in
better fashion.
• It helps manager to manage human resources
effectively. Eg. Motivation
• It helps organizations for maintaining cordial
industrial relations.
• It is also useful in the field marketing.

Hawthorne Effect
• Illumination Experiment.
• Relay Assembly Test Room Experiment.
• Interviewing Programme.
• Bank Wiring Test Room Experiment

Illumination Experiment:
• This experiment was conducted to establish
relationship between output and illumination. When
the intensity of light was increased, the output also
increased.
• The output showed an upward trend even when the
illumination was gradually brought down to the
normal level.
• Therefore, it was concluded that there is no
consistent relationship between output of
workers and illumination in the factory.
There must be some other factor which
affected productivity.

Relay Assembly Test Room
Experiment:
• This phase aimed at knowing not only the impact of illumination on
production but also other factors like length of the working day, rest
hours, and other physical conditions. In this experiment, a small
homogeneous work-group of six girls was constituted. These girls
were friendly to each other and were asked to work in a very
informal atmosphere under the supervision of a researcher.
• Productivity and morale increased considerably during the period of
the experiment. Productivity went on increasing and stabilized at a
high level even when all the improvements were taken away and the
pre-test conditions were reintroduced.
• The researchers concluded that socio-psychological
factors such as feeling of being important, recognition,
attention, participation, cohesive work-group, and non-
directive supervision held the key for higher productivity.

Mass Interview Programme:
• The objective of this programme was to make a systematic
study of the employees’ attitudes which would reveal the
meaning which their “working situation” has for them. The
researchers interviewed a large number of workers
with regard to their opinions on work, working
conditions and supervision. Initially, a direct approach
was used whereby interviews asked questions considered
important by managers and researchers.
• The researchers observed that the replies of the workmen
were guarded. Therefore, this approach was replaced by an
indirect technique, where the interviewer simply listened to
what the workmen had to say.
• The findings confirmed the importance of social
factors at work in the total work environment.

Bank Wiring Test Room Experiment:
• This experiment was conducted Dickson with a view to develop a
new method of observation and obtaining more exact information
about social groups within a company and also finding out the
causes which restrict output. The experiment was conducted to
study a group of workers under conditions which were as
close as possible to normal. This group comprised of 14
workers.
• After the experiment, the production records of this group were
compared with their earlier production records. It was observed that
the group evolved its own production norms for each individual
worker, which was made lower than those set by the management.
Because of this, workers would produce only that much, thereby
defeating the incentive system.
• Those workers who tried to produce more than the group norms
were isolated, harassed or punished by the group.

• The findings of the study are:-
• Each individual was restricting output.
• The group had its own “unofficial” standards of
performance.
• Individual output remained fairly constant over
a period of time.
• Informal groups play an important role in the
working of an organization

Contributions of the Hawthorne
Experiment:
• A business organization is basically a social system. It is
not just a techno-economic system.
• Management must learn to develop co-operative
attitudes and not rely merely on command.
• Participation becomes an important instrument in human
relations movement. In order to achieve participation,
effective two-way communication network is
essential.
• Productivity is linked with employee satisfaction in any
business organization. Therefore management must take
greater interest in employee satisfaction.
• Group psychology plays an important role in any business
organization. We must therefore rely more on informal
group effort.

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