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ORGANIZATIONAL BEHAVIOURModule 6

by Ms Lakshmi R BFaculty--DBIT

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Organizational Behaviour

Module Six—VTU Syllabus



Contents of the presentation•What is Organization Behaviour?• Some Definitions•Why study organizational behaviour?•Elements of Organizational behaviour•Contributing factors•Evolution of OB(Historical Development)•Models of Organizational Behaviour•fundamental concepts•social systems and organizational culture



• International dimensions of organizational behaviour

• The future of OB.



What is Organizational Behavior?

• The study and application of how employees behave within organizations

• Known as people skills • 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.



1. O.B. is a field of study that investigates the impact that individuals , groups and structures have on behaviour within organizations for the purpose of applying such knowledge towards improving an organization’s effectiveness.

2. O.B. can be defined as the systematic study of the actions and reactions of individuals, groups and sub-systems.

3. O.B. is the study and understanding of individual and group behaviour, patterns of structure in order to help improve organizational performance and effectiveness.

4. O.B. is one of the most complex and perhaps least understood academic elements of modern general management, but since it concerns the behaviour of people within organizations it is also one of the most central- its concern with individual and group patterns of behaviour makes it an essential element in dealing with the complex behavioural issues thrown up in the modern business world.

5. O.B. is an inter-disciplinary behaviour science studying phenomena and dynamics(processes) of organizations and their various units.

Some definitions of OB



• Definition: The study of human behavior, attitudes, and performance in organizations.

• Value of OB: Helps people attain the competencies needed to become effective employees, team leaders/members, or managers

• Competency = an interrelated set of abilities, behaviors, attitudes, and knowledge needed by an individual to be effective in most professional and managerial positions

Organizational Behavior



Why Study Organizational Behavior?

• Chart the evolution of management thought on the nature of the organization

• Understanding of the organizational factors that influence work

• Understanding of how the work environment shapes organizational performance



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 tasks to be undertaken• the technology employed and the methods of carrying

out work• the behaviour of people• the process of management• the external environment



ORGANISATION BEHAVIOUR

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.



Insert Figure 1.1 here

Figure 1.1 What is Organizational Behavior?



Group Level

Individual Level

Organizational Levele.g., Selection Systems

e.g., Groupthink

e.g., Personality



Components of Organizational Behavior

Understanding organizational behavior

requires studying

Individuals in Organizations

Group and Team Processes

Organizational Processes



• Note that organizations are “open systems,” such that their long term effectiveness is determined by their ability to anticipate, manage, and respond to changes in their environment, with such changes resulting from external forces and/or stakeholders

• External forces include the labor force, the natural environment, the economy, and different cultures, while stakeholders include shareholders, customers, competitors, suppliers, creditors, governmental agencies and their regulations – Note the impact of these environmental influences on individual,

interpersonal, team, and organizational processes; organizations that do not effectively adapt to environmental change will fail

Organizations as Open systems



What is an Organization?

• Consciously coordinated social unit • Composed of two or more people • Functions on a continuous basis to

achieve a common goal • Characterized by formal roles that define

the behavior of its members



Organization: An organization has four essential elements (a) Group of people (b) Interacting with each other (c )In a structured manner (d) Towards a common objective Management: Implies getting things done through and with

people Manager: He is the dynamic, life-giving element in every

organization. And it is the quality and performance of its managers which is the only effective advantage an enterprise in a competitive economy can have and particularly in a business enterprise.

Basic Definitions related to OB



To provide an understanding of what goes on at the workplace. Four aspects need to be explained viz.

Definition, goals, forces and O. B. ’s major characteristics1. O.B. is the systematic study and careful application of knowledge

about how people- as individuals and as members of groups –act within organizations. It strives to identify ways in which people can act more effectively.

2. O.B. provides managers with the tools to: (a) to understand the behavior of individuals (b) to understand the complexities of inter-personal relations (c )to examine the dynamics of relationships within small groups –

both formal teams and informal groups (d) organizations can be viewed as whole systems that have inter-

organizational relationships

What is organizational Behaviour?



3 GOALS:•Most sciences share four goals-to describe, understand, predict and control some phenomena. •The field of OB seeks to replace intuitive explanations with systematic study O.B. has the following goals,1.Describe, systematically, how people behave under a variety of circumstances2.Understand why people behave as they do.3.Predicting future employee behavior.4.Control at least partially, and develop some human activity at work

• Managers can utilize the tool of O.B.to influence human behavior , skill development, team effort and productivity.

4 FORCES:• There are a wide array of issues and trends that affect the nature of organizations today. •They can be classified under four areasPEOPLE, STRUCTURE, TECHNOLOGY and the ENVIRONMENT



OrganizationalOrganizationalBehaviourBehaviourResearchResearch

UnderstandUnderstandorganizationalorganizational

eventsevents

PredictPredictorganizationalorganizational

eventsevents

InfluenceInfluenceorganizationalorganizational

eventsevents

Goals of Organizational Behaviour



ORGANIZATIONAL BEHAVIOUR Key forces affecting Organizational Behavior

People•Individuals

•Groups

Environment•Government•Competition

•Societal pressure

Organizational Behavior

Technology•Machinery

•Computer hardware ,software

Structure•Jobs

•Relationships



•The organization's base rests on management's philosophy, values, vision and goals. •This in turn drives the organizational culture which is composed of the formal organization, informal organization, and the social environment.• The culture determines the type of leadership, communication, and group dynamics within the organization. •The workers perceive this as the quality of work life which directs their degree of motivation. •The final outcome are performance, individual satisfaction, and personal growth and development. •All these elements combine to build the model or framework that the organization operates from.

The Elements of Organizational Behavior



• Coordination • Common Goals • Division of labor• Integration

The elements of an Organization



• Psychology: The science or study of individual human behaviour

• Sociology: The study of group human behaviour

• Social Psychology: Studies influences of people on one another

• Anthropology: Study of the human race, and culture

• Political Science :Behavior of individuals in political environment.

Bases of Organizational Behaviour



Psychology seeks to measure, explain,

and change behavior

Sociology studies people in relation to their

fellow human beings

Social psychologyfocuses on the

influence of peopleon one another

Anthropology is the study of societies

to learn about human beings and their activities

Political science is the study of the

behavior of individuals and groups within

a political environment

Contributing Disciplines



Toward an Toward an OB DisciplineOB Discipline



Evolution of Management Thought History of management.ppt

Organizational Behaviour

Human Relations

Hawthorne Studies

Scientific Management

1900’s

1940’s

1970’s

Classical Organization Theory



Scientific Management

• Founded by F.W.Taylor. (1856-1917)• Often criticized but to remember that

he was studying this around time of major industrial changes

• ‘Father of Scientific Management’

• Increasing levels of output by monetary incentives as a motivator as well as formal organisation structures.

• ‘One Best Way’ to carry out a job. • Ford Motors Manufacturing Plant and

Pig Iron Experiment.

Hand Washing Procedure●

Counter Merchandising Procedures

●Special/Additional Merchandising

Procedures●

Food Preparation●

Packaging Procedures



The Classical Organization Theory

• Personalities– Frederick W. Taylor– Frank and Lillian Gilbreth– Henry Gantt

• Advocated the application of scientific methods to analyze work and to determine how to complete production tasks efficiently



• Four principles– develop a scientific approach for each element of

one’s work– scientifically select, train, teach and develop each

worker– cooperate with workers to ensure that jobs match

plans and principles– ensure appropriate division of labor



Used scientific methods to determine the “one best way’Emphasized study of tasks, selection and training of workers,

and cooperation between workers and management

Improved factory productivity and efficiencyIntroduced scientific analysis to the workplacePiecerate system equated worker rewards and performance

• Simplistic motivational assumptions• Workers viewed as parts of a machine• Potential for exploitation of labor• Excluded senior management tasks

Key concepts

Limitations

Contributions



Hawthorne Studies Hawthorne Effect - workers perform and react differently when researchers observe them

Argued that managers should stress primarily employee welfare, motivation, and communication



““The Hawthorne Studies”The Hawthorne Studies”• Illumination Study (November 1924)

– Designed to test the effect of lighting intensity on worker productivity

– Heuristic value: influence of human relations on work behavior• Relay Assembly Test Room Study (1927-1932)

– Assembly of telephone relays (35 parts - 4 machine screws) – Production and satisfaction increased regardless of IV manipulation– Workers’ increased production and satisfaction related to

supervisory practices– Human interrelationships are important contributing factors to

worker productivity– Bottom Line: Supervisory practices increase employee morale

AND productivity



• Interviewing Program (1928-1930)– Investigate connection between supervisory practices and

employee morale– Employees expressed their ideas and feelings (e.g., likes and

dislikes)– Process more important than actual results

• Bank Wiring Room Observation Study (November 1931 - May 1932)– Social groups can influence production and individual work

behavior– RQ: How is social control manifested on the shop floor?– Informal organization constrains employee behavior within

formal organizational structure



Hawthorne Studies - ImplicationsHawthorne Studies - Implications

• Illumination StudyIllumination Study (November 1924) (November 1924)– The mere practice of observing people’s behavior tends to alter their behavior The mere practice of observing people’s behavior tends to alter their behavior

(Hawthorne Effect)(Hawthorne Effect)• Relay Assembly Test Room StudyRelay Assembly Test Room Study (1927-1932) (1927-1932)

– Relationships between workers and their supervisors are powerfulRelationships between workers and their supervisors are powerful– Human interrelationships increase the amount and quality of worker participation Human interrelationships increase the amount and quality of worker participation

in decision makingin decision making• Interviewing ProgramInterviewing Program (1928-1930) (1928-1930)

– Demonstrated powerful influence of upward communicationDemonstrated powerful influence of upward communication– Workers were asked for opinions, told they mattered, and positive attitudes Workers were asked for opinions, told they mattered, and positive attitudes

toward company increasedtoward company increased• Bank Wiring Room Observation StudyBank Wiring Room Observation Study (November 1931 - May 1932) (November 1931 - May 1932)

– Led future theorists to account for the existence of informal communicationLed future theorists to account for the existence of informal communication

• Taken together, these studies helped to document the powerful nature Taken together, these studies helped to document the powerful nature of social relations in the workplace and moved managers more toward of social relations in the workplace and moved managers more toward the interpersonal aspects of organizing.the interpersonal aspects of organizing.



Hawthorne Studies - CriticismsHawthorne Studies - Criticisms

• Not conducted with the appropriate scientific rigor necessaryNot conducted with the appropriate scientific rigor necessary• Too few subjects (N=5)Too few subjects (N=5)• No control groupsNo control groups• Subjects replaced with more “cooperative” participantsSubjects replaced with more “cooperative” participants

• WORTHLESSWORTHLESS• GROSS ERRORSGROSS ERRORS• INCOMPETENCEINCOMPETENCE



Origins of Human Relations TheoryOrigins of Human Relations Theory

• “The Hawthorne Studies– Hawthorne Works of Western Electric Company– 1924 - Chicago– Research focus: Relation of quality and

quantity of illumination to efficiency in industry– Four Important Studies



Human Relations

• Aimed to understand how psychological and social processes interact with the work situation to influence performance

• Personalities– Abraham Maslow



Principles of Human Relations TheoryPrinciples of Human Relations Theory• Human relations theory is characterized by a shift in emphasis from

TASK to WORKER• Go beyond physical contributions to include creative, cognitive, and

emotional aspects of workers• Based on a more dyadic (two-way) conceptualization of

communication.• SOCIAL RELATIONSHIPS are at the heart of organizational

behavior--effectiveness is contingent on the social well-being of workers

• Workers communicate opinions, complaints, suggestions, and feelings to increase satisfaction and production

• Origins (Hawthorne Studies & work of Chester Barnard)• Human Relations School of Management - Elton Mayo (Harvard



Human Relations (cont.)

Productivity and employee behavior are influenced by the informal work group

Cohesion, status, and group norms determine outputSocial needs have precedence over economic needs

Psychological and social processes influence performanceMaslow’s hierarchy of need

Ignored workers’ rational side and the formal organization’s contributions to productivity

Research overturned the simplistic belief that happy workers are more productive

Key concepts

Limitations

Contributions



Theory X and Theory Y: Douglas McGregorTheory X and Theory Y: Douglas McGregor• Douglas McGregor (1906-1964))

– Articulated basic principles of human relations theory– The Human Side of Enterprise (1960, 1985)– To understand human behavior, one must discover the theoretical

assumptions upon which behavior is based– Especially interested in the behavior of managers toward workers– “Every managerial act rests on assumptions, generalizations, and

hypotheses--that is to say, on theory . . . Theory and practice are inseparable.”

– Two Objectives:• Predict and control behavior• Tap Unrealized potential

– Theory X - Classical Theory– Theory Y - Human Relations Theory– FOCUS: Manager’s assumptions about HUMAN NATURE



– Assumptions• Physical and mental effort in work is similar to play / rest.• External control and the threat of punishment are not the only

strategies• Commitment to objectives is a function of the rewards associated

with their achievement• The average human being learns, under proper conditions, not

only to accept but to seek responsibility• The capacity to exercise a high degree of imagination, ingenuity,

and creativity in the solution of organizational problems is widely distributed in the population

• Intellectual potentialities of the average human being are underutilized

– A more positive perspective of human nature– The KEY to control and quality production is commitment to

organizational objectives



Organizational Behavior• Studies management activities that promote

employee effectiveness – investigates the complex nature of individual,

group, and organizational processes– Theory X

• managers assume that workers are lazy, irresponsible, and require constant supervision

– Theory Y • managers assume employees want to work and control

themselves

• Personalities– Douglas McGregor



Theory X and Theory Y: Douglas McGregorTheory X and Theory Y: Douglas McGregor• Theory X - Classical Theory

– Three Assumptions• The average human being has an inherent dislike of work and will

avoid it.• Most people must be coerced, controlled, directed, and threatened

with punishment• The average human being prefers to be directed, wishes to avoid

responsibility, has relatively little ambition, wants security.– Neither explains nor describes human nature

• Theory Y - Human Relations Theory



Theory Y Prototype: The Scanlon PlanTheory Y Prototype: The Scanlon Plan• Participative Management• Two Central Features

– Cost-reduction sharing for organizational members - sharing the economic gains from improvements in organizational performance

– Effective participation - a formal means of providing opportunities to every member of the organization to contribute ideas for improving organizational effectiveness.

• Must be implemented appropriately• Wastes time and undermines managerial power?• Magic formula for every organizational problem?• CONCERN for RELATIONSHIPS in the organization.• As the need to increase commitment grows, so does the need to develop

strong, communication-based relationships among organizational members, particularly between supervisor and subordinate.



Concern for PEOPLEDegree of personal commitment to one’s jobTrust-based accountability (vs. obedience-based accountability)Self-esteem for the individualInterpersonal relationships with co-workers

Concern for PRODUCTIONUse of people and technology to accomplish organizational tasksConcern for is not about quantity or quality

Assessment instrument does not represent personality traits of the manager -- instead, indicate a specific orientation to production and people



Organizational Behavior (cont.)

Promotes employee effectiveness through understanding of individual, group, and organizational processes

Stresses relationships among employees, managers, and work performed

Assumes employees want to work and can control themselves

Increased participation, greater autonomy, individual challenge and initiative, and enriched jobs may increase participation

Recognized the importance of developing human resources

Some approaches ignored situational factors, such as the environment and technology

Key concepts

Limitations

Contributions



There are four major models or frameworks that organizations operate out of:

• Autocratic - The basis of this model is power with a managerial orientation of authority. The employees in turn are oriented towards obedience and dependence on the boss. The employee need that is met is subsistence. The performance result is minimal.

Models of organizational behaviour



• Custodial - The basis of this model is economic resources with a managerial orientation of money. The employees in turn are oriented towards security and benefits and dependence on the organization. The employee need that is met is security. The performance result is passive cooperation.

• Supportive - The basis of this model is leadership with a managerial orientation of support. The employees in turn are oriented towards job performance and participation. The employee need that is met is status and recognition. The performance result is awakened drives.



• Collegial - The basis of this model is partnership with a managerial orientation of teamwork. The employees in turn are oriented towards responsible behavior and self-discipline. The employee need that is met is self-actualization. The performance result is moderate enthusiasm.

• Although there are four separate models, almost no organization operates exclusively in one.

• There will usually be a predominate one, with one or more areas over-lapping in the other models.



• The first model, autocratic, has its roots in the industrial revolution.

• The managers of this type of organization operate out of McGregor's Theory X.

• The next three models begin to build on McGregor's Theory Y.

• They have each evolved over a period of time and there is no one "best" model.

• The collegial model should not be thought as the last or best model, but the beginning of a new model or paradigm.



Douglas McGregor -Theory X and Theory YDouglas McGregor -Theory X and Theory Y

Theory YTheory X

Work is Natural

Self-Direction

SeekResponsibility

Good DecisionsWidely Dispersed

AvoidWork

Must be Controlled

AvoidResponsibility

Seek Security



Fundamental Concepts of Organizational Behaviour

• In every field of social science, or even physical science, has a philosophical foundation of basic concepts that guide its development. There are some certain philosophical concepts in organizational behaviour also. The concepts are-



• Individual differences:Every individual in the world is different from others. This idea is supported by science (DNA). The idea of individual difference comes originally from psychology. From the day of birth, each person is unique, and individual experiences after birth tend to make people even more different.Motivated behaviour:An employee has so many needs inside him. So, they want to fulfil those needs. That's why; they had to perform well in the organization. A path toward increased need fulfilment is the better way of enriches the quality of work.



• Perception: Peoples perceptions are also differ when they see an object. Two people can differently present a same object. A person always organizes and interprets what he sees according to his lifetime of experience and accumulated value. Employees also see work differently for differ in their personalities, needs, demographics factors, past experiences and social surrounding.



• A whole person:An employee's personal life is not detached from his working life. As an example, A women who attend the office at 8:30 AM is always anxious for her children's school time (if her children able to attend the school or not). As a result, its impact falls on her concentration that means her working life. For this reason, we cannot separate it. So manager should treat an employee as a whole person.



• Desire for involvement: • Every employee is actively seeking opportunities

at work to involve in decision-making problems, share what they know and to learn from the experience. So, organization should provide them a chance to express their opinions, ideas and suggestion for decision-making problem.

• Value of the person: An employee wants to be treated separately from other factor of production (land, capital, labour). So, they have to be treated with carrying respect, dignity and etc.. from their employers and society.



• Mutual interest: In order to develop the organization behaviour mutually of interest organizations and people is necessary. Organizations need people and people in tern need organizations.



• Ethics: In order to attract and retain valuable employees in an era in which good workers are constantly required away, ethical treatment is necessary. Every Company is required to establish codes of ethics, publicized statements of ethical values, provided ethics training, rewarded employees for notable ethical behaviour, publicized positive role models, and set up internal procedures to handle misconduct.



International Dimensions of OBCorporate governance.

– The active oversight of management decisions,– corporate strategy, and financial reporting by

Boards of Directors.Ethics leadership.

– Making business and organizational decisions with high moral standards that meet the ethical test of being “good” and not “bad,” and of being “right "and not “wrong.”



Integrity:• Acting in ways that are always honest,

credible, and consistent in putting one’s values into practice.

• Positive organizational behaviour.Quality of work life.• The overall quality of human experience in

the workplace. Commitment to quality of work life is an important value within organizational behaviour. Theory Y provides the theoretical underpinnings for contemporary quality of work life concepts.



Positive organizational behaviour focuses on– practices that value human capacities and

encourage their full utilization.

Positive organizational behaviour is based onthe core capacities of:

– Confidence.– Hope.– Optimism.– Resilience (The ability to recover quickly from

illness, change, or misfortune).



Globalization.– The worldwide interdependence of resource

flows, product markets, and business competition.

Job migration.– The shifting of jobs from one nation to another



Personal management.– understand one’s self, exercising initiative,

accepting responsibility, working well with others, and continually learning from experience.

Self-monitoring.– Observing and reflecting on one’s own behaviour

and acting in ways that adapt to the situation.



Social Systems:• Organizations are social systems and governed by social and psychological laws.

They have social roles and status. Their behaviour influenced by their group's individual drives. Organization environment in a social system is dynamic. All parts of the system are interdependent. The shared values and beliefs among people in organization that affects the way they interacts, behaves and accomplishes certain task that distinguish one organization with other organization .



Organisational Culture• Organisational Culture is a sub culture of the

organisation, i.e., it comprises of the attitudes, experiences, beliefs and values of an organisation. 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 outside the organization.



• culture encompasses the shared values, attitudes, standards, and beliefs and other characteristics that define an organization's operating philosophy. Organizational behaviour, meanwhile, can be under-stood in some ways as the academic study of corporate culture and its various elements, as well as other important components of behaviour such as organization structure and organization processes



Four types of organization designs have emerged in response to certain deficiencies in conventional designs and to rapid advances in technology. They are

• Matrix• Network• Virtual• Learning

ORGANISATIONS OF THE FUTURE



• Only Learning Organizations will survive in present competitive market

• It ability is to learn ,create, codify and utilize knowledge faster.

• It has the capacity to adapt and change.• Learning Organizations like individuals constantly

learn.• Old shibboleth is demolished and a new order

created• Teaches managers to look at the world afresh



Leader in this field is –’The Fifth Discipline’, He says Senge

• Old methods of TQM, learning from mistakes etc are insufficient

He put forward 5 compact technologies• Systems Thinking • Personal Mastery• Mental Models• Building shared visions• Team learning



Challenges for Organizational Behavior

• 1: Changing Social/ Cultural Environment

• 2: Evolving Global Environment

• 3: Advancing Information Technology

• 4: Shifting Work/ Employment Relationships




• Changing Social/ Cultural Environment– National culture

– Organizational ethics and well-being• Social responsibility

– Diverse work force



Figure 1.6 Diversity




• Diversity Challenges– Fairness and Justice– Decision-Making and Performance– Flexibility







• 4: Shifting Work/ Employment

Relationships




• Evolving Global Environment

– Understanding Global Differences

– Global learning







• 4: Shifting Work/ Employment Relationships




• Advancing Information Technology– Information– Knowledge– Information Technology– Organizational Learning– Intranets– Creativity– Innovation







• 4: Shifting Work/ Employment

Relationships




• Shifting Work/ Employment Relationships– Downsizing– Empowerment and Self-Managed

Teams– Contingent Workers– Outsourcing



THANK U


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