Organisation Behaviour

Prof T S Rath
Fundamentals of OB
 What is an Organization?
 An organization is a collection of people working together in a division of labour to achieve a
common purpose. The core purpose of an organization is the creation of goods and services.
 Manufacturing and service firms are organizations and so are schools, hospitals, churches,
 military unit, retail stores, police department, volunteer organizations, start-ups, local,
 state and government agencies.
 What is Behaviour?
 How we respond to people, things, situations?
 Organizational Behaviour is "the study of human behaviour in organizational settings, the
 interface between human behaviour and the organization, and the organization itself.
 Some Definitions

 “Organizational behavior is directly concerned with the understanding, prediction, and

control of human behavior in organizations.” Fred Luthans.
 “Organizational behavior studies the impact that individuals, groups and structure have on
behavior within organization for the purpose applying such knowledge towards improving
Organizational effectiveness.” Stephen P. Robbins.
 Keith Davis said that, “Organizational Behavior is the study and application of knowledge
about how people act within organization.”
 Raman J. Aldag states, “Organizational Behavior is a branch of the Social Sciences that seeks
to build theories that can be applied to predicting, understanding and controlling behavior in
work organizations.”
 “Organizational Behavior is a subset of management activities concerned with understanding,
predicting and influencing individual behavior in Organizational setting.” Callahan, Fleenor
and Kudson.
Scope and importance of OB,

 Organizational behavior is basically a study of human behavior in both, group

as well as an individual in an organization.
 Organizational Behaviour is "the study of human behaviour in organizational
settings, the interface between human behaviour and the organization, and
the organization itself.
 WHY STUDY ORGANIZATIONAL BEHAVIOUR?
 As we know that certain types of behavior of a person is linked to certain
types of roles and responsibilities. So, generalizations were made based on
their behaviors that help us predict what people do and should do so.
 Scope and importance of OB
 The study of human behaviour, attitudes, and performance in organizations is very important for
effective management; it creates values and helps people attain the competencies needed to
become effective employees, team leaders/members, or managers.
 Interrelated dimensions influencing behaviour:
 The Individual - working environment should satisfy individual needs as well as
 attainment of organisational goals.
 The Group - formal and informal. Understanding of groups complements knowledge
 of individual behaviour.
 The Organisation - impact of organisation structure and design, and patterns of
 management, on behaviour.
 The Environment - technological and scientific development, economic activity,
 governmental actions.
Relationship between OB and the
individual,
 People: The people constitute the internal social system of the organization.
They consist of individuals and groups. Groups may be large or small, formal
or informal, official or unofficial. They are dynamic. They form, change and
disband.
 People are living, thinking and feeling being who created the organization and
try to achieve the objectives and goals. Thus, organizations exist to serve the
people and people do not exist to serve the organization.
Relationship between OB and the
individual
 Chester Barnard recognized that individuals behave differently when acting in their organizational role
than when acting separately from the organization.
 OB can be divided into three levels. It focuses on
 the individuals,
 the groups and
 the organization and
 also on their interactional relationships.
 It is the study and application of knowledge about how people act with organizations.
 It is a human tool for human benefit.
 It applies broadly to the behaviour of people in all types of organizations.
 Wherever organizations are, there is a need to understand organizational behaviour.
 “The organization is above all social. It is people.”- Peter Drucker
Evolution of OB,

 Three individuals are important who promoted ideas which had major
influence in shaping the direction and boundaries of Organizational Behaviour
(OB). They are: Adam Smith, Charles Babbage and Robert Owen.
 Adam Simth, in his discussion made in “The Wealth of Nations” in 1776,
brilliantly argued on the economic advantage that organization and society
would reap from the division of labor — called work application in an industry.
He illustrated it with the helpof an application in an industry. He concluded
that division of labour raises the productivity by increasing each worker’s skill
and dexterity by saving time that is commonly lost in changing tasks.
Evolution of OB

 Charles Babbage, a British mathematics professor, in his book, “On the Economy of machinery and
manufacturer” published in 1832 added to Smith’s list of the advantage that accrued from division of labor,
the following:
 i. It reduces the time needed for learning a job.
 ii. It reduces the waste of material during the learning stage.
 Organizational Behaviour / 6
 iii. It allows for the attainment of high skill levels.
 iv. It allows a more careful matching of people’s skills and physical abilities with specific
 tasks.
 Babbage also proposed that the economics from specialization should be as relevant to doing mental work
as physical labour . This is reflected in industry in the form of specialization in accounting, taxation,
marketing and organizational behaviour.
 Robert Owen, a Welsh entrepreneur, was one of the first industrialists to recognize how the growing factory
system was demeaning workers. He argued that money spent on improving labour was one of the best
investments that business executives can make. He argued for regulating hours of work for all, child labour
too, public education, company furnished meals at work and business involvement in community projects
Evolution of OB

 Organizational behaviour is applied behavioural science.

 Psychology is the science that seeks to measure, explain, and sometimes
change the behaviour of humans and other animals.
 Sociology studies people in relation to their fellow human beings. Greatest
contribution was through their study of group behaviour in organizations,
particularly formal and complex organizations.
 Social Psychology is an area within psychology, blending concepts from
psychology and sociology. It focuses on the influence of people on one
another.
 .
Evolution of OB

 Industrial psychology is also known as work psychology, Organizational

psychology. Industrial psychology helps in improving the workplaces,
satisfaction and motivation levels of
 the employees, and helping the overall productivity of the organization.”
 Anthropology is the study of societies to learn about human beings and their
activities. This has helped us understand differences in fundamental values,
attitudes, and behaviour between people in different countries and within
organizations.
 Political science, the study of the behaviour of individuals and groups within a
political environment, is frequently overlooked
Evolution of OB

 Studying different economic subfields helps to illustrate the Organizational

actions in a very useful way such as understanding the dynamics of the labor
market, efficiency, human resource planning and forecasting, and cost benefit
analysis.
 Technological progress often impacts employee behaviour. Technology
influences consumer behaviour, manufacturing practices, and storage and
distribution activities
Models of OB

 1. autocratic
 2. custodial
 3. supportive
 4. collegial
Models of OB
Autocratic Model

 In the autocratic model there is managerial orientation toward power.

Managers see power as the only way to get the job done, and employees are
forced to obey orders which lead to high boss dependence.
 The Organizational mechanism is largely formalized; power is delegated by
the right of command to the individuals to whom it refers. In this model
employees are closely and strictly supervised in order to attain desired
performance.
 Employees are supposed to obey the order of the managers and there is no
place for employee's suggestion in this model which sometimes result in
minimal performance.
Custodial Model

 Under this model, the key goal relating to management is to use money or
resources to support workers. Employee works towards security attainment
and in return organization uses the organization's economic resources to
benefit the organization's employees which lead to high employee
dependence on organization.
 Employees are getting sufficient respect and organizational protection
according to this model.
 They feel satisfied but they are not given any kind of authority to determine
what benefits or incentives they will receive.
Supportive Model

 In this supportive model managers are very supportive towards employees.

 Here Managerial leadership is the key criterion of Organizational behavior,
rather than using money or influence or authority.
 The main goal is to assist employees in achieving results with the aid of
employee involvement and participation in managerial decision making
process.
Collegial Model

 Collegial implies a community of shared-intentioned individuals. Therefore,

in collegial model, a high degree of understanding is established between the
management and employees in order to accomplish common objectives.
 This model requires less guidance and control from the side of management.
 Collegial model is more useful where there is flexibility in behaviour, an
intellectual environment and considerable freedom of employment.
Evolution of OB

 Classical Era: Fredrick Taylor, Henry Gantt, Frank & Lilian Gilberth
 Scientific Management: The economic man; efficiency
 Administrative Theory: Henry Fayol and of Management Principles Unity of
command, span of control, authority, responsibility, division of labour, scalar
chain etc for administrative efficiency.
 Paid attention to efficiency both from job and administrative perspective.
They assumed that financial incentives are sufficient to improve efficiency at
work. Planning, Organising, directing and controlling are required to attain
the goals of the organization.
 Chester Bernard and Herbert Simon emphasized on rational aspects of
decision making and development of mathematical and decision science
support systems to aid management.
Evolution of OB

 Human Relations Era: Hawthorne studies highlighted that workers respond to changes in work
settings with their feelings and sentiments and also their understanding of social norms. Thus
the emphasis shifted from rational to social man.
 Systems & Contingency Approaches: Around 1950s diversification, computerization and
improved communication led to shift in emphasis from social man to complex man with a
variety of needs and desires. Each individual is treated as different with their specific needs
and aspirations.
 Systems approach tried to integrate both human and organizational aspects by defining
organization as a purposeful system with its five subsystems: production, maintenance,
boundary, adaptive and managerial subsystems.(Katz & Kahn).
 Contingency approach as the name suggests took a situational view of effective management.
Organizations need to be managed as per their specific situations and environment. Since no
two organizations or situations are alike there is no best way to manage.
Match the following

Elements Model
 Resources  Autocratic
 Power  Supportive
 Shared Intention  Custodial
 Leadership  Collegial
 Interrelated dimensions influencing behaviour:
 The Individual - working environment should satisfy individual needs as well
as attainment of organisational goals.
 The Group - formal and informal. Understanding of groups complements
knowledge of individual behaviour.
 The Organisation - impact of organisation structure and design, and patterns
of management, on behaviour.
 The Environment - technological and scientific development, economic
activity, governmental actions.
Current Trends of OB

 Changing world of work

 Diversity and inclusion
 Customer expectations
 Employee expectations
 Organization Design
 Organisation Structure
 Organization Culture
 Ethics at work