ORGANISATIONAL

BEHAVIOUR

MODULE 1
PCB1203
INTRODUCTION TO ORGANISATIONAL BEHAVIOUR

 Definition,
 Fundamental concepts,
 Basic Approaches,
 Models,
 Organizational Structure,
 Limitations of Organizational Behavior,
 Continuing Challenges
Organisational Behaviour - Definition

Organizational behaviour is the study of 'human behaviour' within

organizations.

Organizational behaviour studies the 'what' and 'why' individuals do in the

organization and how their behaviour affects the work of the organization.
Organisational psychology is the scientific study and application of
psychological principles to organisations and the workplace.
Organizational Psychology &
Organizational Behaviour
 Organizational Psychology is a field of study that includes understanding
what people think, feel and do in organizations. In other words, it’s brain
stuff.
 Organizational Behavior is what people do in organizations (in particular
what you can see and measure what they do). In other words, it’s action
stuff.
 Organizational Psychology includes Organizational Behavior as a subset, in
which the psychology explains the behavior.
 Organizational Behavior includes responses to motivational actions. For
example how people behave when they are given salaries, given
commands and so on. A strictly behaviorist viewpoint is interested only in
such measurable things, not the fuzzy brain stuff.
Three types of human behaviour can be
seen in an organization:

 1. Intrapersonal Behavior - Intrapersonal behaviour is the behaviour of the employees which is

manifested as a result of their personality, tendencies, perception, motivation, expectation, and
internal feelings.

 2. Interpersonal Behavior - The behaviour resulting from the interactions between two persons
or more than two persons (groups) is called interpersonal behaviour. This behaviour manifests
itself in the form of group dynamics, intergroup conflict, leadership, communication, etc.

 3. Organizational Behavior - It includes the formal structures of the organization and the
behaviour of informal groups.
In organizational behaviour, all three types of behaviour and its effects and the effects of the internal
and external environment of the organization are observed, studied, and controlled.
McGregor Theory

In 1960, Douglas McGregor formulated Theory X and Theory Y

suggesting two aspects of human behaviour at work, or in other
words, two different views of individuals (employees): one of which
is negative, called as Theory X and the other is positive, so called as
Theory Y.
McGregor's Theory X and Theory
Y
Douglas McGregor developed a philosophical theory of humankind with his Theory X and Theory
Y in 1960. His concept is based upon Maslow's Hierarchy of Needs theory.
He proposed two distinct views of human beings: one basically negative, labelled Theory X, and the
other basically positive, labelled Theory Y.
After viewing how managers dealt with employees, McGregor concluded that a manager's
perspective of the nature of human beings is based on a certain grouping of assumptions and that he
tends to mould his behaviour toward employees according to these assumptions.
McGregor's X and Y theory remains central to organisational development, and to improving
organisational culture. This theory is a simple and salutary reminder of the natural rules for
managing people, which under the pressure of day-to-day business are all too easily forgotten.
Assumptions of Theory X

Under theory X, the four assumptions held by managers are given

below:
 1) Employees inherently dislike work and, whenever possible,
they will try to avoid it.
 2) Since employees dislike work, they must
be controlled, coerced, or threatened with punishment to achieve
goals.
 3) Employees will avoid responsibilities & seek formal direction
whenever possible.
 4) Most employees put security above all other factors
associated with work and will show little ambition.
Assumptions of Theory Y

In contrast to these negative views about the nature of human beings,

McGregor listed the following positive assumptions that he called Theory Y:
 1) Employees can view work as being as natural as play or rest.
 2) People will exercise self-control and self-direction if they are committed
to the objectives.
 3) An average employee can learn to accept even seek responsibility.
 4) Commitment to objectives is a function of rewards associated with their
achievement.
 5) The ability to make innovative decisions is widely dispersed throughout
the population and is not necessarily the sole province of those in
management positions.
Models of Organisational
Behaviour
The Autocratic Model

 This model depends on and an employee who does not power

follow orders will be penalized.
 What is paramount for the employee is obedience to a boss, not
respect for a manager.
 The boss pays minimum wages because minimum performance
is given by employees as a result.
 ' Some employees give higher performance because of internal
achievement drivers (personally like their boss, the boss is a
natural-born leader, or other factors).
The Custodial Model

 The Custodial Model economic resources and focused toward '

This approach depends on money to pay wages and benefits. ‘
 Since employees' physical needs are already reasonably met,
the employer looks to security needs as a motivating force.
 ' If an organization does not have the wealth to provide pensions
and pay other benefits, it cannot follow a custodial approach
The Supportive Model

 The Supportive Model instead of power or ' The supportive model

depends on leadership money.
 Through leadership, management provides a climate to help
employees grow and accomplish, in the interests of the
organization, the things which they are capable.
 ' Employees will take responsibility, develop a drive to contribute,
and improve themselves if management gives them a chance. '
Management orientation is therefore, to support the employee's
job performance rather than to simply support employee benefit
payments.
The Collegial Model

 The Collegial Model ' The collegial model depends on the

management building a feeling of (people working together
partnership with employees cooperatively).
 ' Managers are seen as joint contributors rather than bosses, and
the coach that builds a better team. As a result, the employee's
response to this situation is responsibility.
 ' The psychological result of the collegial approach for the
employee is self-discipline. ' Employees usually feel a degree of
fulfilment, worthwhile contribution and self-actualization.
The System Model

 The System Model ' Since employees are being asked to spend
many hours of their day at work, they want a work context that is
ethical, infused with integrity and trust, and able to provide an
opportunity to experience a growing sense of community among
co-workers. To accomplish this, managers must increasingly
demonstrate a sense of care and compassion, being sensitive to
the needs of a diverse workforce with rapidly changing needs,
and complex personal and family needs. Therefore, employees
go beyond the self-discipline of the collegial approach until they
reach a state of self-motivation, in which they take responsibility
for their own goals and actions.
Organisational Behaviour

 The conclusion is that organizational behaviour is concerned with the

study of the interaction of individual ,individuals and groups in
organizations, the interaction of the organization structure, techniques,
and characteristics of the environment.
 Organizational Behavior is concerned with the study of the behaviour of
individuals and groups in the organization and its effects on the
organization and to predict and control their future behaviour from the
information obtained from it.
 Thus, organizational behaviour is the study of the behaviour of
individuals, groups, and various components of the organization working
in the organization and the effects arising out of them and their
interactions with the environment so that this knowledge can make the
organization effective and purposeful.
Limitation of organisational behaviour

 There are many limitations of organizational behavior. Organizational behavior is

a new and developing field of study which plays an active role in solving human
problems. By using this knowledge, the manager fulfils human needs as well as
achieves organizational goals and increases organizational effectiveness.
 This subject is full of limitations, the main reason for which is the man and his
dynamic behavior. Human behavior is governed by thoughts and feelings and is
largely dependent on circumstances. Therefore, it is very difficult to understand,
predict and control it in reality. Frustration, discontent, and industrial conflicts
cannot be completely resolved by this.
 This ideology is based on limited research work and evidence. Therefore, it may
not be helpful in achieving desired results in all situations, although
organizational behavior has become a widely accepted subject and the approach
still has some limitations of ob.
Limitation of organisational
behaviour
 Behavioral bias: It further causes dependence, dis-
contentment, indiscipline, and irresponsibility.
 Law of diminishing returns: It says that beyond a certain
point, there is a decline in output even after each additional good
or positive factor.
 Unethical practices and manipulation of people: Knowledge
of motivation and communication acquired can be used to exploit
subordinates in an Organization by the manipulative managers.
Behavioral Bias

 Behavioral Bias is a condition that is a reflection of tunnel vision, in which people have narrow
viewpoints as if they were looking through a tunnel.
 They see only the tiny view at the other end of the tunnel while missing the broader landscape.
 Following the behavioral bias, people who lack system understanding may develop a behavioral
bias, which leads them to develop a narrow viewpoint that emphasizes employee satisfaction
while overlooking the broader system of the organization about all its stakeholders.
 It should be clear that the concern for employees can be so greatly overdone that the original
purpose of bringing people together, which is “productivity organizational outputs for society”
could be lost.
 An effective organizational behavior should help accomplish organizational purposes. It should
not replace them.
 The person who does not consider the needs of people as consumers of organizational output
while fighting for employee needs is not applying the ideas of organizational behavior correctly.
Behavioral Bias

 It is a mistake to assume that the objective of organizational behavior is as

simple as to create a satisfied employee-base, as that goal will not
automatically turn into new products and stellar customer service.
 It is also a fact that the person who pushes production outputs without regard
for employee needs is also not applying organizational behavior in the right
fashion.
 The most effective OB dwells, acknowledges and appreciates a social system
that consists of many types of human needs that are served in many ways.
 Behavioral bias can be so misapplied in a way that it can be harmful to
employees as well as the organization as a whole.
 Some individuals, despite having good intentions, so overwhelm others with
the care that the recipients of such care become dependent and unproductive.
 They find excuses for failure rather than take responsibility for progress. They
do not possess a high degree of self-respect and self-discipline.
The Law of Diminishing Returns

 Overemphasis on organizational behavior, the practice may produce

negative results, as indicated by the law of diminishing returns
 It places an overemphasis on an OB practice that may produce negative
results. It is a limiting factor in organizational behavior in the same way
that it is in economics.
 In economics, the law of diminishing return refers to a declining amount
of extra outputs when more of a desirable input is added to an economic
situation.
 After a certain point, the output from each unit of added input tends to
become smaller. The added output eventually may reach zero and even
continue to decline when more units of input are added.
The Law of Diminishing Returns

 The law of diminishing returns in organizational behavior works

similarly.
 According to the law of diminishing returns, at some point,
increases of a desirable practice produce declining returns, finally
resulting in zero returns, and then follows negative returns as
more increases are added.
 More of a good thing is not necessarily good. The concept means
that for any situation there is an optimum level of a desirable
practice, such as recognition or participation.
 When that point is exceeded, there is a decline in returns
realized. To put it differently, the fact that a practice is desirable
does not necessarily imply that more of the same practice is
more desirable.
Unethical Manipulation of People

 A significant concern about organizational behavior is that its knowledge

and techniques can be used to manipulate people unethically as well as to
help them develop their potential.
 People who lack respect for the basic dignity of the human being could
learn organizational behavior ideas and use them for selfish ends.
 They could use what they know about motivation or communication in the
manipulation of people without regard for human welfare. People who lack
ethical values could use people in unethical ways.