Unit - IUnit - IConcept and Meaning of Concept and Meaning of Organizational BehaviorOrganizational Behavior

What is Organisational Behaviour?Organisation: - A place where managers practice the art of management. An Institution or sub-units of an institution working together for a common goal.Organisation Behaviour: - It is an study of human behaviour The study is about the behaviour of people in an organisation. Knowledge about human behaviour and its usefulness in improving an organizations effectiveness.Some Definitions“OB is the study & applications of knowledge about how people act within an organisation. It is a human tool for human benefit. It applies broadly to the behaviour of people in all types of organizations such as business, Govt. Schools & Service Organisations”.Keith Davis & JW Newton in Human Behaviour @ work.

“OB is directly concerned with the understanding, predicting & controlling of human behaviour in Organisations”.-Fred Luthaus.

Organization behaviour encompasses a wide range of topics such as human behaviour, change, leadership, teams etc. OB is also a field of study. It studies 3 determinants of behaviour in organizations:-• Individual.• Group.• Organisation.

To sum up OB is concerned with:-

• Study of what people do in the organization.• How behaviour effects the performance of the organization.

MODELS of OB:

• Autocratic – The basis of this model is power with a managerial orientation of authority

• Custodial – The basis of this model is economic resources with a managerial orientation of money.

• Supportive – The basis of this model is leadership with the managerial orientation of support.

• Collegial – The basis of this model is partnership with the managerial orientation of team work.

OB offers both challenges and opportunities for managers. It recognizes differences and helps managers to see the value of workforce diversity and practices that need to be changed when managing. It can help improve quality and employee productivity by showing managers how to empower their people as well as how to design and implement change programs. It offers specific insights to improve a managers people’s skills. OB can help managers cope in the world of temporariness and learn ways to stimulate innovation. Finally, OB can offer managers guidance in creating an ethically healthy work climate.

• Key Elements of OBKey Elements of OB1.1.PeoplePeople2.2.StructureStructure3.3.TechnologyTechnology4.4.EnvironmentEnvironment• Foundations of OBFoundations of OB1.1.Individual DifferencesIndividual Differences2.2.Whole PersonWhole Person3.3.Caused BehaviourCaused Behaviour4.4.Human DignityHuman Dignity5.5.Organisations as Social SystemOrganisations as Social System6.6.Mutuality of InterestMutuality of Interest7.7.Holistic ConceptHolistic Concept8.8.Need for ManagementNeed for Management

• Scope of OBScope of OB1.1.IndividualsIndividuals2.2.Groups of IndividualsGroups of Individuals3.3.Organisation as a whole Organisation as a whole

• Need for study OBNeed for study OB1.1.Helps to understand self and others better.Helps to understand self and others better.2.2.Effective management of peopleEffective management of people3.3.Tackle human problems humanlyTackle human problems humanly4.4.Predict the human behaviourPredict the human behaviour5.5.Effective utilisation of human resourcesEffective utilisation of human resources..

Contributions to the development Contributions to the development of OB as major subject in Modern of OB as major subject in Modern

LiteratureLiterature1.1. Scientific Management: Frederick W. Taylor Scientific Management: Frederick W. Taylor

(1911):(1911):• ““Maximum prosperity for employers with maximum Maximum prosperity for employers with maximum

prosperity for each employee”prosperity for each employee”• Disputes between Management & labour should be Disputes between Management & labour should be

centered on what each viewes as mutually exclusive centered on what each viewes as mutually exclusive goals.goals.

• This theory can maximize goals.This theory can maximize goals.• Management should view profit as a result of co-Management should view profit as a result of co-

operation between management & workersoperation between management & workers• There should be proper divisions of work between There should be proper divisions of work between

managers & workers.managers & workers.

Four Principles of Scientific Four Principles of Scientific ManagementManagement

1.1. Standard work practices standardize Standard work practices standardize the tools for management.the tools for management.

2.2. Scientifically select each worker.Scientifically select each worker.3.3. Management & workers must co-Management & workers must co-

operate to and work according to a operate to and work according to a standard procedure.standard procedure.

4.4. Management must make plans & Management must make plans & task assignments; workers should task assignments; workers should carry out the tasks assigned by the carry out the tasks assigned by the managers.managers.

2. 2. Theory of Administration: Henry Theory of Administration: Henry Fayol (1919):Fayol (1919):

Five functions of management: Five functions of management: 1.1. Planning.Planning.2.2. Organising.Organising.3.3. Command/Directing.Command/Directing.4.4. Co-ordination. & Co-ordination. & 5.5. Control.Control.

3. 3. Bureaucracy: Max Webber (1922):Bureaucracy: Max Webber (1922):Max Webber was a German Political Max Webber was a German Political

Scientist, economist & sociologist. He Scientist, economist & sociologist. He suggested Bureaucratic form of suggested Bureaucratic form of organisation & management in order to organisation & management in order to form a successful & efficient form a successful & efficient administration.administration.

Bureaucracy also takes into it purview the Bureaucracy also takes into it purview the following:following:

• Clearly defined specialize functionClearly defined specialize function• Use of legal authorityUse of legal authority• Hierarchal form Hierarchal form • Written rules & proceduresWritten rules & procedures• Technically trained bureaucrats Technically trained bureaucrats

• Apt to positions based on technical Apt to positions based on technical expertise.expertise.

• Promotions should be based on Promotions should be based on technical expertise & Competence.technical expertise & Competence.

• Should clearly define career path. &Should clearly define career path. &• There should be objectivity & There should be objectivity &

impersonality of decisions.impersonality of decisions.

4.4.Observations on Organisations & Observations on Organisations & Management Mary Parker Follet Management Mary Parker Follet (1925)(1925)

• Mary worked mainly as Social worker in Mary worked mainly as Social worker in Roxbury Section of Boston.Roxbury Section of Boston.

• In 1920s – 1930’s; her main observations In 1920s – 1930’s; her main observations regarding Organisation & Management regarding Organisation & Management were:were:– Power:Power: ‘Power is capacity’ & cannot be ‘Power is capacity’ & cannot be

delegated but authority can.delegated but authority can.– Conflict:Conflict: Studied integration of desires. Studied integration of desires.– Leadership:Leadership: Good Leader “Tenacity, Good Leader “Tenacity,

steadfastness of purpose, tactfulness, steadfastness of purpose, tactfulness, steadiness in stormy periods.”steadiness in stormy periods.”

5. 5. The Twentieth Century’s Management The Twentieth Century’s Management Guru Peter F. Drucker 1995Guru Peter F. Drucker 1995

• Austrian born, modern management guru.Austrian born, modern management guru.• Propounded MBO & Self control concepts.Propounded MBO & Self control concepts.• Statistician and an analyst of things from Statistician and an analyst of things from

different Perspectives.different Perspectives.• Prediction up to 2010:Prediction up to 2010: - Rise in alliance, partnership & joint - Rise in alliance, partnership & joint

ventures on global scale. Technology will ventures on global scale. Technology will help in ‘Networking of Societies’.help in ‘Networking of Societies’.

- Need for decentralizing in an extremely - Need for decentralizing in an extremely uncertain environment.uncertain environment.

• Use of teams in Organisations.Use of teams in Organisations.• Number of knowledgable workers, blue Number of knowledgable workers, blue

collar jobs and continuous learning.collar jobs and continuous learning.• Evolution of knowledge societies in Evolution of knowledge societies in

developed countries. These societies will developed countries. These societies will remain in 3 sectors (1) Business (2) remain in 3 sectors (1) Business (2) Government (3) Non-Profit Government (3) Non-Profit Organisations/NGO’s.Organisations/NGO’s.

• World market will become more important World market will become more important than domestic market.than domestic market.

5. 5. Functions of the Executive: Chester I. Functions of the Executive: Chester I. Bernard (1938):Bernard (1938):

• Organisations are formed because individuals have a Organisations are formed because individuals have a purpose but also limitations. Limitations could be purpose but also limitations. Limitations could be knowledge, financial resource or physical resource. knowledge, financial resource or physical resource.

• Purpose + Limitation = System of Cooperative Purpose + Limitation = System of Cooperative action.action.

• Two types of motivation in organisation:Two types of motivation in organisation:• Motivation to participate. Motivation to participate. • Motivation to perform.Motivation to perform.

• Chris Argyris, has further tried to elaborate it by Chris Argyris, has further tried to elaborate it by comparing bureaucratic system (with assumption) to comparing bureaucratic system (with assumption) to more human structure (Theory) because more human structure (Theory) because bureaucratic values leads to poor or shallow bureaucratic values leads to poor or shallow relationships.relationships.

People - Organisation relationship. Whole person Whole groups Whole organisation & Whole Social SystemORGANISATION BEHAVIOUR ANCHOR OB should draw on knowledge from other disciplines

rather than own research base:1.Multidisciplinary Anchor Field of psychology & sociology has contributed the

most to current OB knowledge. Psychology – Understanding of individual &

interpersonal behaviour Sociology – Team dynamics, organisation

socializations organisation power Anthropology – Organisation culture. Political Science – Power & politics in organisation. Engineering – Productivity issues. Economics – Power, negotiations & decision making.

2. The Scientific Method Anchor Testing their hypothesis in a scientific manner from

collecting data, analyzing & concluding. A set of principles & procedures is adhered.

3. The Contingency Anchor Clause ‘It depends’ No single solution is best in all circumstances. “Different consequences in different situation, no single

solution applicable all the time”. Should be careful in this clause as well.

4. The multiple Level of Analysis anchor How people structure their work relationship & How

organisations interact with the environment? Discussion, power, Organisation politics and conflict.

5. The Open System Anchor Organisations are living systems. Phil Carrol, “Organisation consists of interdependent parts

that works together to continually monitor & transact with the external Environment”.

OB offers both challenges and opportunities for managers. It recognizes differences and helps managers to see the value of workforce diversity and practices that need to be changed when managing. It can help improve quality and employee productivity by showing managers how to empower their people as well as how to design and implement change programs. It offers specific insights to improve a managers people’s skills. OB can help managers cope in the world of temporariness and learn ways to stimulate innovation. Finally, OB can offer managers guidance in creating an ethically healthy work climate.

ORGANIZATION: An organization is a social arrangement which pursues collective goals and which controls its own performance and which has boundaries separating it from its environment. In social sciences, organizations are studied by researchers from several disciplines which are as follows:-

Sociology. Economics. Political Science. Psychology. Management. Organizational Communication.

Types of organizations: Sole proprietorship Partnership Corporation Non-profit organization/NGO’s. Trusts

Organizational Structures: Organization structure defines how job tasks are formally divided, grouped & coordinated. There are 6 elements for organization structure which are as follows:-

Work Specialization Departmentalization Chain of Command Span of control Centralization & Decentralization Formalization

Organizational Design: Simple Structure The Bureaucracy The Matrix Structure Pyramid or Hierarchies Structure

Simple Structure

Bureaucratic Structure

Pyramid Structure

Organization Culture:

Organizational culture, or corporate culture, comprises of the attitudes, experiences, beliefs and values of an organization. It has been defined as "the specific collection of values and norms that are shared by people and groups in an organization and that control the way they interact with each other and with stakeholders outside the organization.” From organizational values develop organizational norms, guidelines or expectations that prescribe appropriate kinds of behavior by employees in particular situations and control the behavior of organizational members towards one another" Senior management may try to determine a corporate culture. In addition, there will also be an extant internal culture within the workforce. Work-groups within the organization have their own behavioral quirks and interactions which, to an extent, affect the whole system. Strong/weak cultures: Strong culture is said to exist where staff respond to stimulus because of their alignment to organizational values. Conversely, there is weak culture where there is little alignment with organizational values and control must be exercised through extensive procedures and bureaucracy.

ElementsA number of elements that can be used to describe or influence Organizational Culture: The Paradigm Control Systems Organizational Structures Power Structures Symbols Rituals and Routines Stories and MythsCharacteristics of Organization Culture:Research suggests that there are 7 primary characteristics: Innovation and risk taking Attention to detail Outcome orientation People orientation Team orientation Aggressiveness Stability

Each of these characteristics exists from low to high. Appraising the organization on these 7 characteristics then, gives a composite picture of the organization.

Organizational ClimateClimate is often defined as the recurring patterns of

behaviour, attitudes & feelings that categorize life in the organization. Although culture and climate are related, climate often proves easier to assess & change. At an individual level of analysis the concept is called individual psychological climate. These individual perceptions are often aggregated or collected for analysis and understanding at the team or group level, or the divisional, functional or overall organizational level.

There are several approaches to the concept of climate of which 2 have received substantial patronage which are as follows:

Cognitive Scheme Approach:

Shared Perception Approach:

It is important to realize that among these 2 approaches, there is no best approach and they actually have a great deal of overlap.

While an organisation and its leaders cannot remove every stressor in the daily life of its employees, Organisational Climate studies have identified a number of behaviours of leaders which have a significant impact on stress and morale.

Organizational Climate Assessment: The objective of performing an employee climate

assessment is to identify the key areas which are hindering production, reducing effectiveness & which might generate unexpected cost in near future. The idea & approach is for the organization not to simply perform an academic exercise, but to critically examine themselves to see where the company and the employees might be finely tuned to generate higher levels of performance. Once identified, opportunities to strengthen existing approaches which are working well, as well as selecting appropriate interventions for addressing weakest areas should be aggressively pursued for maximum benefit of everyone.

The assessment is designed with the following assumptions in mind:-

Fundamental care of employee as an asset Respect for the dignity of the employee and the

sensitiveness of human beings Full understanding of the realities of business Embracing optimization and improvement Key to motivation and commitment