Organizational Behavior
What is an Organization?
• An organization is a
collection of
people who work
together to
achieve individual
and organizational
goals.
What is an Organization
A consciously coordinated social
unit, composed of two
or more people, that
functions on a relatively continuous basis
to achieve a common goal or set of
goals.
What is Organizational Behavior?
Organizational behavior (OB)
is the study of factors that
affect how individuals and
groups act in organizations
and how organizations
manage their environments.
Levels of Analysis
Organizational
Level
Group
Level
Individu
al
Leve
l
Components of Organizational Behavior
What is Management?
Management is the process of
planning, organizing, leading, and
controlling an organization’s human,
financial, material, and other
resources to increase its effectiveness.
The Functions Of Management
Management
– process of working with people and resources to
accomplish organizational goals
• effective - achieve organizational goals
• efficient - achieve goals with minimum waste of
resources
1-10
Planning
Organizing
Managers’ Job
Leading
Controlling
Management
Functions
Henry Fayol a
French Industr
managers pe ialist wrote th
rform four m at all
anagement fu
nctions
Managers’ Job
Management Functions
Henry Fayol a French Industrialist
wrote that all managers perform four
• Organizing
management functions
– Determines what tasks are
Planning to be done;
Organizing
Leading – Who is to do them;
Controlling
– How the tasks are to be
Planning
grouped;
Organizing – Who reports to whom; and
Leading – Where decisions are to be
controlling
made.
Managers’ Job
Management Functions
Henry Fayol a French Industrialist
wrote that all managers perform four • Leading
management functions
– Motivating employees;
Planning
Organizing
– Direct their activities;
Leading – Select the most effective
Controlling
communication channels; or
Planning – Resolve conflicts among
members.
Organizing
Leadi
ng
controlli
ng
Managers’ Job
Management Functions
Henry Fayol a French Industrialist
wrote that all managers perform four • Controlling
management functions
– Monitoring performance;
Planning
Organizing
– Comparing performance
Leading with the set standard;
Controlling
– Making corrections, if
necessary.
Planning
Organizing
Leading
Controlling
Management Levels
Top-level
managers
Middle
managers
Frontline managers
1-16
Management Levels
• MaNaGEMENT LEvEL
– TOp-LEvEL MaNaGErs
• senior executives responsible for overall
management of an organization
•focus on long-term issues
•emphasize the survival, growth, and effectiveness of
the firm
•concerned with the interaction between the
organization and its external environment
1-17
Management Levels
• Management level (cont.)
– Middle-level managers (tactical managers)
•located between top-level and frontline managers in
the organizational hierarchy
•responsible for translating strategic goals and plans into
more specific objectives and activities
•traditional role was that of an administrative controller
who bridged the gap between higher and lower levels
•growing role is that of a developmental coach to the
people who report to them
1-18
Management Levels
• MaNaGEMENT LEvEL (cONT.)
– Frontline managers (operational managers)
• lower-level managers who supervise the operational
activities of the organization
• directly involved with non management employees
• increasingly being called on to be innovative and
entrepreneurial
– Working leaders with broad responsibilities
• in leading small companies, managers have strategic,
tactical, and operational responsibilities
• have a knowledge of all business functions, are accountable
for results, and focus on internal and external customers
1-19
Managerial Roles
• Manager: Any person who supervises one or more
subordinates.
• Role: A set of behaviors or tasks a person is expected
to perform because of the position he or she holds in
a group or organization.
Managerial roles identified by Mintzberg.
Figurehead Leader
Liaison Monitor
Disseminator Spokesperso
n Disturbance
Resource allocator
Entrepreneu Negotiator
handler
r
Management Roles
• In 1960s, Mintzberg after studying 5
executives to determine what those managers
did on their jobs.
• Mintzberg concluded that mangers perform 10
different, highly interrelated roles – or set of
behaviors – attributable to their jobs.
Mintzberg’s Managerial Roles
Role Description
Interpersonal
Figurehead Symbolic head, required to perform a number of
routine duties of a legal or social nature
Leader Responsible for the motivation & direction of
employees
Liaison Maintains a network of outside contacts who
provide favors & information
Mintzberg’s Managerial Roles
Role Description
Informational
Monitor Receives a wide variety of information; serves as
nerve centre of internal & external information of the
organization
Disseminator Transmits information received from outsiders or
from other employees to members of the
organization
Spokesperson Transmits information to outsiders on
organization's plans, policies, actions, & results; serves as
an expert on organization’s industry
Mintzberg’s Managerial Roles
Role Description
Decisional
Entrepreneur Searches organization & its environment for
opportunities & initiatives projects to bring about change
Disturbance handler Responsible for corrective action when
organization faces important, unexpected
disturbances
Resource allocator Makes or approves significant organizational
decisions
Negotiator Responsible for representing the organization at
major negotiation
Managerial Skills
• Conceptual Skills:
The ability to analyze
and
diagnose a situation
and
distinguish between
cause and effect.
• Human Skills:
The ability to understand,
work with, lead, and
control the behavior of
other people and groups.
• Technical Skills:
Job-specific knowledge and
techniques.
Skills exhibited by Effective Manager
• Clarifies goals & objectives for everyone involved;
• Encourages participation, upward communication, &
suggestions;
• Plans & organizes for an orderly work flow;
• Has technical & administrative expertise to answer
organization-related questions;
• Facilitates work through team building, training,
coaching, & support;
Skills exhibited by Effective Manager (Cont.)
• Provides feedback honestly & constructively;
• Keeps things moving by relying on schedules, deadlines, & helpful
reminders;
• Controls details without being arrogant;
• Applies reasonable pressure for goal accomplishment;
• Empowers & delegates key duties to others while maintaining goal
transparency & commitment;
• Recognizes good performance with rewards & positive
corroboration.
Organizational Behavior
A field of study that investigates the impact that individuals,
groups, and structure have on behavior within
organizations, for the purpose of applying such knowledge
toward improving an organization’s effectiveness.
“Gregory Moorhead :2007”
Organizational Behavior
• The field of OB deals with human behavior in
organizations
• OB is the multidisciplinary field that seeks
knowledge of behavior in organizational settings
by systematically studying individual, groups,
and organizational processes.
“Jerald Greenberg:2008”
Organizational Behavior
• This knowledge is used both by scientists interested
in understanding human behaviour & by
practitioners interested in enhancing organisational
effectiveness & individuals well being.
“Robert A .Baron:2008”
Organizational Behavior
Organisation Behaviour is concerned with the study of
what people do in an organisation and how that
behaviour affects the performance of the
organisation.
“Robbins: 1998,9”
Organizational Behavior
OB highlights four central characteristics of the
field.
• It is firmly grounded in the scientific method.
• It studies individuals, groups & organisations.
• It is interdisciplinary in nature.
• It is used as the basis for enhancing
organisational effectiveness & individual well-being.
Organizational Behavior
The study of Organisational Behaviour involves:
• consideration of the interaction among the formal structure
(organisational context in which the process of management takes
place)
• the technology employed and the methods of carrying out work
• the behaviour of people
• the process of management
• the external environment
Organizational Behavior
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 a 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.
Four Contributing Disciplines
• Psychology
The science that seeks to measure, explain, and
sometimes change the behavior of humans
and other animals.
– Unit of Analysis:
Individual
– Contributions to OB:
• Learning, motivation, personality, emotions, perception
• Training, leadership effectiveness, job satisfaction
• Individual decision making, performance appraisal,
attitude measurement
• Employee selection, work design, and work stress
Four Contributing Disciplines
• Social Psychology
An area within psychology that blends concepts
from psychology and sociology and that
focuses on the influence of people on one
another.
– Unit of Analysis:
Group
– Contributions to OB:
• Behavioral change
• Attitude change
• Communication
• Group processes
• Group decision making
Four Contributing Disciplines
• Sociology
The study of people in relation to their fellow human beings.
– Unit of Analysis:
Organizational System
– Group
Contributions to OB:
– Group dynamics – Formal organization theory
– Work teams – Organizational technology
– Communication – Organizational change
– Power – Organizational culture
– Conflict
– Intergroup behavior
1-37
Four Contributing Disciplines
Anthropology
The study of societies to learn about human beings and
their activities.
Unit of Analysis:
Organizational System
-- Group
Contributions to OB: •Comparative values
– Organizational culture •Comparative attitudes
– Organizational environment
•Cross-cultural analysis
SIGNIFICANCE OF OB
• Road map to our lives in organizations
• Helps us understand and predict organizational life
• Influences events in organizations
• Helps understand self and others better
• Helps a manager get things done better
• Helps maintain cordial relations
• Highly useful in the field of marketing
• Helps in career planning and development
LiMiTa T iONs
•
Of O B
Knowledge about OB does not help an individual manage
personal life better
• Qualities of OB are mysterious
• Has become a fad with managers
• Is selfish and exploitative
• Managers expect quick-fix solutions-not possible
• Principles and practices may not work in the events of
declining fortunes
• Cannot eliminate totally conflict and frustration
Challenges & Opportunities for OB
• Responding to Globalization
• Managing Workforce Diversity
• Improving Quality and Productivity
• Improving Customer Service
• Improving People Skills
• Stimulating Innovation and Change
• Coping with “Temporariness”
• Working in Networked Organizations
• Helping Employees Balance Work-Life Conflicts
• Creating a Positive Work Environment
• Improving Ethical Behavior
1-41
OB Challenges
Globalization
• Refers to the economic, social and cultural
connectivity within people in other parts of the
world.
• It is all about the ongoing process of increasing
interdependence with each other around the
planet, whether through trading goods &
services, sharing knowledge or interacting with
people from different cultures & locations in the
world.
Challenges and Opportunities for OB
• Responding to Globalization
– Increased foreign assignments
– Working with people from different cultures
– Overseeing movement of jobs to countries with
low-cost labor
– Managing people during the war on terror
1-44
Why Globalization?
• Access to additional resources (including skilled
workforce)
• Low cost
• Economies of scale
• Favorable regulations & tax systems
• Direct access to new and growing markets
• Ability to customize products to local tastes &
styles
Workforce Diversity
Workforce diversity means that organisations are
becoming a more heterogeneous mix of people in
terms of gender , age , race , physical ability etc .
A diversity workforce e.g. may include ,
❑ Women
❑ Color of people
❑ The physically disabled
❑ Senior citizens etc.
Workforce Diversity in India
Indian organisations have accommodate a very
diverse social group of employees based on
socio-economic, cultural and linguistic
composition.
❑ Scheduled castes & Scheduled tribes
❑ Other Backward castes
❑ Bonafide members of the state
❑ Ex-defense & paramilitary personnel
❑ Disabled persons
❑ Gender issues
Diversity
❑ Diversity enhances creativity and innovation (Adler,
1997;Jackson et al., 1992), and
❑ produces competitive advantages(Coleman, 2002;
Jackson et al., 1992).
❑ Diverse teams make it possible to enhance
flexibility
(Fleury, 1999) and
❑ Rapid response and adaptation to change (Adler,
1997; Jackson et al., 1992.
Challenges and Opportunities for OB
• Managing Workforce Diversity
– The people in organizations are becoming more
heterogeneous demographically (disability,
gender, age, national origin, non-Christian, race,
and domestic partners)
– Embracing diversity
– Changing demographics etc.
Impact of Diversity
• Organizational culture
• Calls for diverse approaches to managing people
including training the staff in desired skills
– For example, “people with adequate programming
skills are not available in US & UK markets” (HR Head,
Infosys, Economic Times, 2009)
Prominent world level companies
• McDonald
– Founded in 1967 in Canada
– Operating income 50% earned from outside US
operations (2005)
– Every three hrs. a new McDonald opens
somewhere on earth
– 2/3rd of its workforce non-US
Prominent world level companies
• Coca-Cola
– Operates in more than 200 countries
– 80% of its workforce are non- US citizens
– Has 500 trained personnel to go anywhere in the
world to offer advice and expertise concerning
operational and customer service problems
– 70% of its operating income comes from operations
out side of US
Prominent world level companies
Nokia
• the cell phone giant from Finland employs
over 1000 foreign workers in Finland & over 60%
of its 53000 employees are non-fins
Philips
• an electronic giant employs 83% of its
workforce outside of its headquarters in the
Netherlands
IBM
• employ almost 80000 people in India (Eco.
Times, April, 2010)
Prominent world level companies
TCS
• an Indian IT giant is planning to increase
its non-Indian workforce to 20000 from
present 10000 over the next 5 years
Infosys & Wipro
• could see non-Indians account for 10-15% of their
total employee base in next 3-5 years, from
around 5% presently
(Economic Times, 27th April,
2009)
Evolution of Organizational Behaviour
Three significant Eras:
▪ The Classical Era (1880-1930)
Administrative theory
Scientific Management
▪ The Behavioural Era (1930-
1960)
The Hawthorne Legacy
▪ The Modern Era (1960
onwards)
Contingency Approach
A Brief History of OB
▪ Classical approach to management
(scientific management and administrative
management)
▪ Hawthorne studies (workers respond to attention)
▪ Human relations movement (treat workers well
to boost productivity)
contd.
A Brief History of OB
Contd.
▪ The contingency approach (examine individual
and situational differences before taking action)
▪ Positive organizational behavior (focus on
measurable strengths of workers to improve
performance)
The classical approach
• The of scientific management
application was the of
focus scientific
increase
methods
individual worker’s productivity. to
• According to the principles of scientific
management, there is a division of work between
managers and workers.
The classical approach
TAYLOR’S PRINCIPLES
• the development of a true science for each person’s
work
• the scientific selection, training and development of
the workers
• co-operation with the workers to ensure work is
carried out in the prescribed way
• the division of work and responsibility between
management and the workers.
The classical approach
• Administrative management was concerned
primarily with how organizations should be
managed and structured.
• The core of management knowledge lies within
the classical school, including the framework of
planning, organizing, and controlling.
The classical approach
Henry Fayol classified all the business
activities into six functions:
• Technical activities
• Commercial activities
• Financial activities
• Security activities
• Accounting activities
• Managerial activities
The Hawthorne Studies
• During the 1920s, attention began to focus on social factors at
work, groups, leadership, the informal organisation and behaviour
of people.
• ‘Behavioural’ and ‘informal’ are alternative headings sometimes
given to this approach.
• Turning point came with the famous Hawthorne experiments at the
Western Electric Company in America (1924-32)
• One of the researchers (leader) was ELTON MAYO (1880-1949)
The Hawthorne Studies
Four Main Phases to the Hawthorne Experiments
• The Illumination Experiments - level of production
was influenced by factors other than changes in
physical conditions of work.
• The Relay Assembly Test Room - attention and
interest by management reason for higher
productivity.
The Hawthorne Studies
• The Interviewing Programme -20,000 interviews. Gave
impetus to present-day personnel management and use of
counselling interviews. Highlighted the need for
management to listen to workers.
• The Bank Wiring Observation Room - Piecework Incentive
Scheme. Group pressures stronger than financial
incentives offered by management
The Hawthorne Studies
• A major conclusion from these studies was the
workers reacted positively because management
cared about them (the Hawthorne effect).
• The Hawthorne effect is the tendency of people
to behave differently when they receive attention
because they respond to the demands of the
situation.
contd.
The Hawthorne Studies
contd
.
• The Hawthorne studies also led to many
other conclusions, such as the fact that
effective communication with workers is
critical to managerial success
The Human Relations Movement
• The human relations movement was based
on the belief that an important link exists
among managerial practices, morale, and
productivity.
• Key points of the movement are that satisfied
workers are more productive and that, given
the proper working environment, virtually all
workers would be highly productive.
Contingency Approach
⚫ Writers in the 1950s and 1960s who adopted a more psychological
orientation.
⚫ Major focus was the personal adjustment of the individual within the
work organisation and the effects of group relationships and leadership
styles.
⚫ Main contributors: MASLOW, HERZBERG AND McGREGOR.
Contingency Approach
MASLOW’S HIERARCHY OF HUMAN NEEDS
General Examples NEEDS Organisational Examples
Achievement SELF-ACTUALISATION Challenging Job
Status ESTEEM Job Title
Friendship social Friends in the Work
Group
Stability SECURITY Pension Plan
Sustenance PHYSIOLOGICAL Base Salary
Contingency Approach
HERZBERG isolated two different sets of factors affecting
motivation and satisfaction at work.
1. Hygiene or Maintenance Factors - concerned basically with job
environment. Extrinsic to the work itself.
2. Motivators or Growth Factors - concerned with job content. Intrinsic to
the work itself.
Goal of managers is to achieve a state of no dissatisfaction by
addressing Hygiene Factors. Task of improving motivation is
then by addressing the Motivators.
Contingency Approach
McGREGOR argued that the style of Management adopted is a
function of the manager’s attitudes towards human nature and
behaviour at work.
He put forward two suppositions called Theory X and Theory Y which are
based on popular assumptions about work and people.
Contingency
Approach
THEORY X ASSUMPTIONS
⚫ People do not like work and try to avoid it.
⚫ People do not like work, so managers have to control, direct, compel,
and threaten employees to get them to work toward organisational
goals.
⚫ People prefer to be directed, to avoid responsibility, to want security,
and have little ambition.
Contingency
Approach
THEORY Y ASSUMPTIONS
▪ People do not naturally dislike work; work is a natural part of their lives.
▪ People are internally motivated to reach goals to which they are committed.
▪ People are committed to goals to the degree that they receive personal
rewards when they reach their objectives.
▪ People will seek and accept responsibility under favourable conditions.
▪ People have the capacity to be innovative in solving organisational
problems.
▪ People are bright, but generally their potentials are under-utilised.
Contingency Approach
• A cornerstone of the human relations movement is Theory X
and Theory Y of Douglas McGregor.
• Theory X is the somewhat stern and pessimistic traditional
assumptions about worker capabilities.
• Theory Y is an alternative, and optimistic, set of assumptions
The Contingency Approach
• The contingency approach to management emphasizes
there is no one best way to manage people or work.
• The contingency approach is derived from the study of
leadership styles.
• The strength of the contingency approach is that it
encourages managers and professionals to examine
individual and situational differences before deciding on
a course of action.
Milestones in the History of Organization Behaviour
Industrial Revolution Robert Owen, Andrew Ure and J.N. Tata provided
certain welfare facilities. The ideas degenerated into
paternalistic approach.
Taylor believed in rationalizing production. He
Scientific Management– believed Early 20th Century that human behaviour
was based on ‘rabble hypothesis.’
Human Relations Movement Great Depression, labour movement and during
1920s to 1940s Hawthorne led to the movement. The
movement subsequently became a fad Organisational
behaviour – 1950’s
The contingency approach is that it encourages
Contingency Approach managers and professionals to examine individual
and situational differences before deciding on a
course of action-1960 onwards.
tHanK YOu