Introduction to Business Management and Organizational Behaviour Managing Organizational

Behaviour

Managing Organizational Behaviour

Introduction
Organizational Behaviour (OB) is the study and application of skills, knowledge and human
behaviour characteristics related to how people act and interact individually and together with
others, in an organizational setting. The study of organizational behaviour helps managers and
organizational leaders develop their management knowledge and skills.

Effective managers develop a broad understanding of the fundamental theories of

organizational and human behaviour and can apply those theories where appropriate in a
constantly changing environment.

This course of study - the modules, the required textbook readings, and other references used
as needed - contributes significantly to the skill and knowledge base required by you to be an
effective manager.

Learning Outcomes
• Explain how knowledge of organizational behaviour can be applied in the Canadian
business and non-business organization environment

• Describe the evolution of Organizational Behaviour.

The Nature of Organizations

Organization:
A social unit of people, systematically structured and managed to meet a need or to pursue
collective goals on a continuing basis.

All organizations have a management structure that determines relationships between functions
and positions, and subdivides and delegates roles, responsibilities, and authority to carry out
defined tasks.

Organizations are open systems in that they affect and are affected by the environment beyond
their boundaries.

(Source: [Link])

Types of Businesses
1. Sole Proprietorship: One person owning the business.
2. Partnership: Two or more persons owning the business.
3. Incorporated Business: A legal entity. An artificial being is endowed with the rights,
duties and powers of a person. Owners are shareholders; Board of Directors are
appointed.
Introduction to Business Management and Organizational Behaviour Managing Organizational
Behaviour

Types of Businesses
What is the difference between a sole proprietorship, a partnership, or an incorporated
businesses?
• The ownership configuration
o The number of employees, the size of the organization, its sales, etc. can be the
same in all three types of businesses.
o We can see from the definition of an organization that the study of organizational
behaviour applies to all of the ownership configurations.

Your Workplace
The issues affecting your workplace are very dynamic and have a large impact on individual and
organizational behaviour.

Based on your own experience, or what you have read, how would you characterize your
workplace?
What are some of the issues that people and organizations are dealing with?

Please give some independent thought to those issues.

Here is a list of issues that your workplace is dealing with:

• changing job roles
• changing equipment and technology
• changing marketplace
• changing employee demographics
• changing management styles and philosophies
• changing values and ethics
• changing union relationships.

Why Should We Study Organizational Behaviour?

• To understand how an organization's effectiveness can be influenced by the actions and
interactions of its members
• Increase our ability to manage the organization’s resources more effectively by
increasing our ability to understand and predict human behaviour within the organization.

When studying OB, there are 3 levels of analysis:

1. Individuals
2. Groups/Teams
3. Organization through its structure and its processes

We will be examining each of these 3 levels in this course and demonstrating the
interrelationships of each.
Introduction to Business Management and Organizational Behaviour Managing Organizational
Behaviour

Organizational Effectiveness Indicators

The assessment of organizational effectiveness depends on:
1. Perspective of the Evaluator
• e.g., a shareholder may value the increase in stock price as an indicator of
effectiveness, whereas the Manager of Human Resources may value the
decrease in employee turnover as an indicator.
2. Time Frame Used
• e.g., year comparison or a 5-year comparison
3. The Standard of Comparison
• e.g., similar organization, plan, past performance.

There are many factors that can influence an organization's effectiveness and these factors may
or may not be controllable by the organization's members:

1. Environmental Characteristics
• Competition, economy (employment rates, inflation rates), supply of raw
materials.
2. Organizational Characteristics
• Include the structure of the organization or the effective use of technology
3. Managerial Policies and Practices
• Has management developed an appropriate strategy and design for rewarding
and motivating employees?
4. Employee Characteristics
• Do the employees possess the skills and abilities necessary for effective
performance?
• Are the personal goals of employees aligned with the goals of the organization?

The Evolution of Organizational Behaviour

1. Scientific Management
2. Human Relations Movement
3. Leadership Research

Scientific Management

This theory of management was developed by Frederick Taylor in the 1880s and 1890s. It
emerged as a result of the Industrial Revolution and mass production.

In this theory, employees were given simple tasks that were perfected by a “job engineer” who
focused on mechanical efficiency.

Management did all the planning and directing, and employees had no say in the design of the
work. Pay was based on productivity.
Introduction to Business Management and Organizational Behaviour Managing Organizational
Behaviour

Human Relations Movement

The Human Relations Movement is related to the Hawthorne Studies, which looked at factors
that influence a worker’s morale and productivity.

In the Hawthorne Studies, a study was conducted over many years on employees of Hawthorne
Works, a Western Electric factory outside of Chicago.

The Set Up: The employees in the plant were divided into two groups, the control group and the
experimental group.

The Impendent Variable: Altering working conditions (e.g., dimmer lighting while working.)

The Finding: Even if the working conditions were adversely affected, productivity still increased
in relation to the control group.

Why? Because the employees were being paid attention to.

Significant Findings:
The morale of employees was greatly influenced by working conditions (i.e., supervisory styles).

If workers were treated with dignity, then this led to job satisfaction, which would lead to an
increase in productivity. Economic incentives were secondary.

Leadership Research
Leadership research has focused on whether individuals are born a leader versus whether
leadership can be learned.

The research has resulted in many theories surrounding the issue of leadership. For example,
Fred Fiedler, a leading expert on the study of leadership and organizational performance,
theorizes that different types of leaders are needed for different situations.
Introduction to Business Management and Organizational Behaviour Managing Organizational
Behaviour

Another theory called Situational Leadership, by Hersey and Blanchard, states that the
leadership style used by the leader should be adapted according to the employee.

Is leadership and influence skill based on nature or nurture?

Other significant researchers and their studies:

• Changing Concepts in Organizational Behaviour between 1980s to 2000s

1890s
• Theory/Concept: Scientific Management
• Key Contributor: Frederick Taylor

1900s
• Theory/Concept: Bureaucracy Administrative Theory
• Key Contributor: Max Weber & Henry Fayol

1910s
• Theory/Concept: Fight-Flight Stress Response
• Key Contributor: Walter Cannon

1920s
• Theory/Concept: Hawthorne Studies
• Key Contributor: Elton Mayo

1930s
• Theory/Concept: Group Dynamics
• Key Contributor: Kurt Lewin
• Theory/Concept: Classical Conditioning
• Key Contributor: Ivan Pavlov
• Theory/Concept: Early Leadership Studies
• Key Contributor: R. Lippitt & R. White

1940s
• Theory/Concept: Need Theory of Motivation
• Key Contributor: Abraham Maslow
• Theory/Concept: Behaviour Modification
• Key Contributor: B.F. Skinner
• Theory/Concept: Psychoanalysis
• Key Contributor: Sigmund Freud

1950s
• Theory/Concept: Human Side of Enterprise
• Key Contributor: Douglas McGregor
• Theory/Concept: Hygiene-Satisfaction Model
• Key Contributor: Frederick Herzberg
• Theory/Concept: Humanistic Psychology Stress Response
• Key Contributor: Carl Rogers & Hans Selye
Introduction to Business Management and Organizational Behaviour Managing Organizational
Behaviour

1960s
• Theory/Concept: Managerial Grid
• Key Contributor: R. Blake J. Mouton
• Theory/Concept: Contingency Leadership
• Key Contributor: Fred Fiedler
• Theory/Concept: Personality, Locus of Control
• Key Contributor: J. B. Rotter
• Theory/Concept: Expectancy Theory
• Key Contributor: Victor Vroom
• Theory/Concept: Cognition and Stress
• Key Contributor: Richard Lazarus
• Theory/Concept: Type A Behaviour
• Key Contributor: Meyer Friedman & Ray Rosenman
• Theory/Concept: Bounded Rationality
• Key Contributor: Herbert Simon
• Theory/Concept: Power & Leadership
• Key Contributor: John French & Bertram Raven

1970s
• Theory/Concept: Path-Goal Leadership
• Key Contributor: Robert House
• Theory/Concept: Dynamics of Bureaucracy
• Key Contributor: Michel Crozier

1980s
• Theory/Concept: Culture and Careers
• Key Contributor: Edgar Schein

1990s
• Theory/Concept: The Illusion of Strategic Planning
• Key Contributor: Henry Mintzberg
• Theory/Concept: Situational
• Key Contributor: Hersey and Blanchard
• Theory/Concept: Transformational
• Key Contributor: Warren Bennis
• Theory/Concept: Charismatic
• Key Contributor: Jay Conger

2000s
• Theory/Concept: Visionary
• Key Contributor: Kouzes & Posner
• Theory/Concept: Holistic
• Key Contributor: Peter Senge
• Theory/Concept: Spiritual
• Key Contributor: Max DePree
• Theory/Concept: Extrinsic VS Intrinsic Motivation
• Key Contributor: Teresa Amabile & Daniel Pink
Introduction to Business Management and Organizational Behaviour Managing Organizational
Behaviour

Summary
Interpreting and making judgements about why individuals, groups, and organizations behave
as they do is one of the most challenging aspects of managerial work. Because of this, we need
to study and use behavioural science theories and models to help us understand, interpret, and
predict the behaviours.

The context of twenty-first century organizational behaviour is dynamic as a result of the

changes in the economy, in the diversity of the workforce, and in the way organizations are
structured, designed, managed, and led.

These changes have resulted in an increased need for leaders and managers to improve their
ability to understand and manage people. As well, tasks have become far more complex. This
increase in complexity challenges the traditional concepts around the impact of external
motivators.

This course of study - while limited in terms of time and content - is designed to introduce you to
the present state of knowledge in this field. It outlines the essential elements of organizational
behaviour necessary for you and for everyone who wants to improve their ability to influence
and manage others.

You have now completed this module. You can move on to the next module.