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Organisational Behaviour Unit I ± lesson I
³OB is concerned with the emerging realities in the work-place revolution. Knowledge is replacing infrastructure. Self-leadership is superceding command-control management. Networks are replacing hierarchies. Virtual teams are replacing committees. Companies are looking for employees with emotional intelligence, not for just technical smarts. Globalisation has become the mantra of corporate survival. Coworkers are not down the hall; they are at the end of an internet connection located somewhere else on the planet.´
³The organisation is above all social. It is people.´
Peter Drucker ³People are the key´ ± Sam Walton, the founder of Wal-Mart and the richest person in the world when he died .
´Effective organisational behaviour is the bedrock on which effective organisational action rests. managers and leaders. Long term competitive advantage comes from the rich portfolio of individual and team based competencies of an organisation·s employees.µ Hellriegal and Slocum 4 .
Ch I-Understanding OB Introduction and back ground Definition Management skills Generalisations about behaviour Theoretical framework Models of OB 5 .
best practices in one orgn can be communicated to others 6 .µ ´The understanding. prediction and management of human behaviour in organisations.µ Is an applied science.Definition Organizational behaviour. is ´« a study and application of knowledge about human behaviour ² as individuals and in groups ² in orgns ² strives to identify ways in which people can act more effectively.
What is Organizational Behavior?
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Organizational Behaviour studies encompass the study of organizations from multiple viewpoints, methods, and levels of analysis. Provides a set of useful tools; -at the individual level- interpersonal relations, - at the group level ² group dynamics ² formal teams and informal groups ² inter-group relations, - at the orgn level ² inter-organisational gps ² M&As.
Traditional distinction, present especially in American academia, is between the study of "micro" organizational behavior³which refers to individual and group dynamics in an organizational setting and "macro" organizational theory which studies whole organizations, how they adapt, and the strategies and structures that guide them.
In Europe these distinctions do exist as well. and the networks of individuals and units in organizations³and "field" level analysis which study how whole populations of organizations interact.primarily interested in power. culture. some scholars have added an interest in "meso" -. but are more rarely reflected in departmental divisions. To this distinction. 10 .
Why Study Organizational Behavior Understand organizational events Organizational Behavior Research Influence organizational events Predict organizational events 11 .
Goals Describe how people behave under a variety of conditions Understand why people behave as they do Predict future employee behaviour Control and develop human activity at work to improve productivity. team effort. skill improvement. etc 12 .
13 . All the above forces interact on each other resulting in OB.jobs and relationships Technology-machinery. computers Environment-govt. social pressures.Forces People. competition.individuals and groups Structure.
emphasis on TQM. diversity. 14 . strategic partnerships. Corporate Governance and ethics serve as important contextual or environmental dimensions for OB.The major problem is and will continue to be managing people ± the HRs of the organisation ± the major challenge and critical competitive advantage. Globalisation. environmental issues.
and organisation cultural values cannot be copied. A study of over 300 cos for more than 20 yrs found that management of human resources through extensive training and techniques such as empowerment resulted in performance benefits. it levels the playing field. but operational initiatives such as TQM or advanced manufacturing technology did not. The people. personalities. motivation. It is possible to clone human bodies. Technology can be purchased or copied. 15 .their ideas. The HRs of an organisation and how they are managed represent the competitive advantage of today·s and tomorrow·s organisations. cannot be copied.
> Individuals are most productive when the boss is friendly. reliable and unassuming. > Interviews are effective selection devices.Generalisations about human behaviour > happy workers are productive workers. > Members of effective groups do not quarrel among themselves. > People are more concerned about their own salaries than others·. 16 . > behaviour of good leaders is consistent irrespective of the situations they face. > Everybody likes a challenging job > People will have to be bullied/intimidated to make them to do their jobs. > Money motivates all.
Levels of Analysis Organizational Level Group Level Individual Level 17 .
Characteristics of OB Inter-disciplinary Research based ± theories and practice Increased acceptance of findings by managers 18 .
Components of Organizational Behavior Understanding organizational behavior requires studying Part One Individuals in Organizations Part Two Group and Team Processes Part Three Organizational Processes 19 .
A Short History of Organizational Behavior The Greek philosopher Plato wrote about the essence of leadership. The writings of the Chinese philosopher Confucius in 500 BC are beginning to influence contemporary thinking about ethics and leadership. Aristotle addressed the topic of persuasive communication. The writings of 16th century Italian philosopher Niccolò Machiavelli laid the foundation for contemporary work on organizational power and politics. 20 .
One hundred years later. German sociologist Max Weber wrote about rational organizations and initiated discussion of charismatic leadership. 21 .In 1776. Adam Smith advocated a new form of organizational structure based on the division of labour.
22 . resulting in a dramatic shift towards the µhuman relations¶ school of thought. They discovered the importance of formal and informal group dynamics in the work place. Frederick Winslow Taylor introduced the systematic use of goal setting and rewards to motivate employees. Soon after. In the 1920s. Australian-born Harvard professor Elton Mayo and his colleagues conducted productivity studies at Western Electric's Hawthorne plant in the United States.
Proponents of scientific management held that rationalizing the organization with precise sets of instructions and time-motion studies would lead to increased productivity. Though it traces its roots back to Max Weber and earlier. organizational studies is generally considered to have begun as an academic discipline with the advent of scientific management in the 1890s. 23 . with Taylorism representing the peak of this movement. Studies of different compensation systems were carried out.
After the First World War. Frederick Herzberg. motivation. Henri Fayol. This Human Relations Movement focused on teams. and the actualization of the goals of individuals within organizations. David McClelland. a transformation propelled by the identification of the Hawthorne Effect. Abraham Maslow. and Victor Vroom. 24 . the focus of organizational studies shifted to analysis of how human factors and psychology affected organizations. Prominent early scholars included Chester Barnard.
25 . Interest grew in theory and methods native to the sciences. the study of organizations with a complexity theory perspective and complexity strategy. including systems theory. as the invention of large-scale logistics and operations research led to a renewed interest in rationalist approaches to the study of organizations. Influential work was done by Herbert Alexander Simon and James G. March and the so-called "Carnegie School" of organizational behavior. The Second World War further shifted the field.
Contingency Theory. cultural explanations of organizations and change became an important part of study. the field was strongly influenced by social psychology and the emphasis in academic study was on quantitative research. Institutional Theory. produced Bounded Rationality. among many others. informed by anthropology. A leading scholar was Karl Weick 26 . Starting in the 1980s. much of it at Stanford University and Carnegie Mellon. Informal Organization. An explosion of theorizing. and Organizational Ecology theories. Qualitative methods of study became more acceptable. psychology and sociology. In the 1960s and 1970s. Resource Dependence.
27 . task. speed. durability. Frederick Winslow Taylor Frederick Winslow Taylor (1856²1915) was the first person who attempted to study human behavior at work using a systematic approach. social environment. His overall objective was to reduce and/or remove human variability. Taylor studied human characteristics. capacity. physical environment. cost and their interaction with each other.
but his work was very productive and laid many foundation principles for modern management studies. believing that humans are primarily motivated by money. Taylor worked to achieve his goal of making work behaviors stable and predictable so that maximum output could be achieved. including being accused of telling managers to treat workers as machines without minds. He relied strongly upon monetary incentive systems. He faced some strong criticism. 28 .
Four Principles of Scientific Management 1. 2. gather informal job knowledge that employees possess. and experiment with ways of improving the way tasks are performed. 29 . Codify the new methods of performing tasks into written rules and standard operating procedures. Study the way employees perform their tasks.
Establish an acceptable level of performance for a task. and then develop a pay system that provides a reward for performance above the acceptable level. 4. 30 .Four Principles of Scientific Management 3. and train them to perform the task according to the established rules and procedures. Carefully select employees so that they possess skills and abilities that match the needs of the task.
31 .The Hawthorne Studies Hawthorne Works of the Western Electric Company near Chicago. lighting).. Found that productivity increased regardless of whether illumination was raised or lowered. 1924-1932 ± these studies mark the starting point of the field of Organisational Behaviour Initiated as an attempt to investigate how characteristics of the work setting affect employee fatigue and performance (i.e.
32 . Subsequent phases brought the level of light down to moonlight intensity: the workers could barely see what they were doing.Started in 1924² to examine the relationship between light intensity and employee productivity ² a test group and a control group were used ² the test group initially did not show any increase or decrease in output in proportion to the increase/decrease in illumination. something besides the level of illumination was causing the change in productivity ² the complex human variable. The control group with unchanged illumination increased output by the same amount overall by the test group. The results baffled the researchers. Obviously. but productivity increased.
Even when the workers were subjected to the original conditions of experiment. 33 . ² basically the same results ² each test period yielded higher productivity than the earlier one. rest breaks. Subsequent phase ² relay room. productivity increased²that was causing the change in the output. and method of payment. such as length of workday.The serendipitous results of these experiments provided the impetus for the further study of human behaviour in the work place. where operators assembled relay switches ² test specific variables.
. 34 . Conclusion ² the independent variables (rest pauses. etc. No experimental changes during the study ² an observer and an interviewer gathered objective data ² department·s regular supervisors were used to maintain order and control.) were not by themselves causing the change in the dependent variable (output). Something was still not being controlled. The bank wiring room study: the bank wirers were placed in a separate test room.
Findings were opposite to relay room experiments ² output was restricted ² informal group norm was lower than management·s ² social pressures used to gain compliance with group norms. Social ostracism. Forcing ratebusters play the game was an effective sanction. In this. and name-calling were the major sanctions used by the group to enforce this restriction. actual physical pressure in the form of a game called ¶binging· was applied. the more money he would earn ² Also. with the privilege of returning one ¶bing· or hit. ridicule. Group pressures more effective than management incentives 35 . The incentive system dictated that the more a worker produced. a worker will be hit as hard as possible. In some cases. the best producers will be laid off last ² In spite of this output was restricted.
Interest in the experiment vi attention received in the test room The last 3 associated with ´Hawthorne Effectµ ² special attention paid to them 36 . because of: i.Implications Workers· preference to work in the relay room. Small group ii. Type of supervision iii Earnings iv Novelty of the situation v.
summary Factors influencing behavior: ± Attention from researchers ± Manager¶s leadership approach ± Work group norms The ³Hawthorne Effect´ 37 .
Mary Parker Follett Management must consider the human side Employees should be involved in job analysis Person with the knowledge should be in control of the work process regardless of position Cross-functioning teams used to accomplish projects 38 .
Douglas McGregor: Theory X and Theory Y Theory X Average employee is lazy. dislikes work. and will try to do as little as possible Manager¶s task is to supervise closely and control employees through reward and punishment Theory Y Employees will do what is good for the organization when committed Manager¶s task is create a work setting that encourages commitment to organizational goals and provides opportunities for employees to be exercise initiative 39 .
optimism. 40 .e. Even going beyond human capital are more recently recognised as ¶social capital· ( who you know ² networks.. skills). Investing in this capital results in desired performance outcomes such as increased productivity and customer satisfaction. connections. resiliency and more importantly who you can become. then Human Resources. At first employees were considered a cost. i. experience. friends). and now are becoming widely recognised as ¶human capital· (what you know ² education. one·s possible authentic self). hope. and ¶positive psychological capital· ( who you are ² confidence.
walks out the door every evening. As the ultimate µtechie¶ Bill Gates observed. ³the inventory.´ 41 . Growing research evidence that employees¶ psychological capital is positively related to their performance and desired attitudes. the value of my company.
³Because management is always about people. the essence of management has been extremely stable over recorded history. the essence of management has been and will be equally stable over time. Since human nature seems to have been extremely stable over recorded history. its essence is dealing with human nature.´ Geert Hofstede ± International Management scholar 42 .
understanding global competition .ethical problems 43 .Challenges to Management Today¶s challenges to management: .dangerous geopolitics At the organisation¶s level: .a turbulent economy .diversity .
44 .The nature of work and the work place itself. and the composition of the workforce are all dramatically changing ² yet human behaviour is still to be understood in full. the traditional employment contract. the emphasis and surrounding environmental context have changed. Although the problems with human organisations and the solutions over the ages have not changed much.
.g. ² the resulting ¶lean and mean· organisations offered some short run benefits in terms of lowered costs and improved productivity. E. In the 1980s and 90smanagers were preoccupied with restructuring their organisations to improve productivity and meet the competitive challenges in the international market place and quality expectations of customers. most organisations continued with more of the same. instead of making significant changes to meet the changing environment. 45 .
Six Sigma (almost perfect). Top management compensation was primarily tied to stock options and thus to the firm·s stock price ² led to high risk mergers. one analysis of Fortune 500 firms between 1995 and 2005 found ² the most prominent initiatives were.cost reduction programmes. . E. .globalising supply chains. and a highly regulated winner-take-all environment. .g. acquisitions. 46 .creating shared services.. . and. .restructuring (downsizing).
impact on those not laid off. 47 . the head of the nearly century-old investment house Merryl Lynch bet his firm ² and ultimately lost ² on the sub-prime financial market and outsized leverage ² a whopping $160 mln severance package on exit.e. This type of behaviour and many other social. massive unemployment. economic and geopolitical factors led to the stock market crash in 2008 ² most of the focus had been on financial markets..g. the remaining employees has been slighted.
in turn. outsourcing.´ The turmoil has left employees hurt and fearful. most of today¶s workers have concluded that the company no longer values them. feeling very vulnerable ± the single most prominent thought of people all over the world is ³I want a good job. An expert on corporate psychology noted: ³After years of downsizing.´ 48 . no longer feel engaged in their work or committed to the company. and a cavalier attitude that treats employees as costs rather than assets. So they.
but also to use recent history as a catalyst for paradigmatic change in the way we understand and use HRs. ´A crisis is a terrible thing to waste. ² What is a ´paradigmµ shift? Not just keeping up with incremental change. said: ´Work is crucial to every adult human because work holds within it the soul of the relationship of one citizen to one government and one country. The Head of Gallup.µ . at the end of the survey. . but a new way of thinking about and managing HRs in today·s 49 dramatically changed work place.Jim Collins The time has come not only to recognise and appreciate the importance of human resources.µ Ideal time for meeting challenges in HRM.
. defines the boundaries and tells one how to behave within those boundaries to be successful ² impact of globalisation. pattern or example.Paradigm Shift The term comes from the Gk word ¶paradeigma. paradigm now means a broad model.µ Introduced by philosophy-of-science historian Thomas Kuhn.· meaning. and people with inadequate literacy skills from disadvantaged areas.work force consisting of post war increase in population. and techies raised on computers has 50 led to a paradigm shift. Gen Xers (born in the late 60s and 70s ). ´ a model. a way of thinking or a scheme for understanding reality ² the rules . a framework. .
. E. James Brian Quinn refers to the ¶Intelligent enterprise· as the new paradigm ² ´ the organisation of enterprises and effective strategies will depend more on development and deployment of intellectual resources than on the management of physical assets.µ 51 .g.
. Google). Paradigm shifts have invalidated the advantages of certain firms.. 52 . almost all auto.g. A new set of challenges and required ways of thinking. For today·s and tomorrow·s organisations and management to be successful. there are new rules with different boundaries ² require new and different behaviour inside the boundaries for organisations and management to be successful. in recent years and created new opportunities for others. financial and retail firms. (e. e.g.
There is discontinuous change in the shift to the new paradigm. ² explains why there is considerable resistance to change and why it is difficult to move from old management paradigm to the new. 53 . let alone reason and draw logical inferences and perceptions about changes.Paradigm effect A situation in which those in the existing paradigm may not even see the changes that are occurring.
As one author put it: ³ The depth of change required demands that those charged with charting a passage through hurricane like seas do more than run up a new set of sails. at all.µ 54 . but in questioning how we know what it is (we think) we know. but how we learn. not just learning. What is involved equates to a quantum shift in. not just in drawing together more information. not just doing things differently. but questioning whether we should be doing many of the things we currently believe in.
Contributing Disciplines to the OB Field EXHIBIT 1-3a 55 .
Contributing Disciplines to the OB Field EXHIBIT 1-3c 56 .
Contributing Disciplines to the OB Field EXHIBIT 1-3b 57 .
Contributing Disciplines to the OB Field EXHIBIT 1-3c 58 .
Contributing Disciplines to the OB Field EXHIBIT 1-3d 59 .
Contributing Disciplines to the OB Field EXHIBIT 1-3f 60 .
5 OB Models given by Keith Davis and Newstrom are: 1) Autocratic 2) Custodial 3) Supportive 4) Collegial 5) Systems 61 .
g. low payment and exploitation ² employees put in min work in the job to serve the basic needs of the family . directing and persuading ² tight control ² unfair practices. e.. organisational crisis.most prevalent during he industrial revolution ² persons in power can demand work from workers ² pushing. The performance result is minimal . 62 AUTOCRATIC MODEL . The basis of this model is power with a managerial orientation of authority. it has worked well in certain conditions.though harsh. The employee need that is met is subsistence. The employees in turn are oriented towards obedience and dependence on the boss.
The employee need that is met is security. To perk up the sagging morale of the workers under the autocratic model employers began to offer various welfare schemes in the 19th century ± paternalism ± fringe benefits ± job security. 63 . The performance result is passive cooperation. The employees in turn are oriented towards security and benefits and dependence on the organization.Custodial The basis of this model is economic resources with a managerial orientation of money.
freezes hiring. The organisation should have considerable resources to pay pension benefit from physical needs to security needs. Workers depend more on the organisation and less on the managers ² ensures loyalty ² economic rewards are assuredeven if the employee does not perform ² contented ² but performance may decline because of job security ² 1940s and 50s ² University of Michiganconducted studies which revealed that happy employees are not necessarily 64 the ost producticve employees. E.. IBM makes considerable efforts to stabilise the workforce and preserve their jobs ² reduces overtime. . allows job transfers and offers retirement incentives and lessens subcontracting to adjust IT slow downs.g.
in the light of his or her back ground. Ensures organisatinal harmony. and expectations view the experience as supportive and one which builds and maintains his or her sense of personal worth and importance. TATAs.Supportive The basis of this model is leadership with a managerial orientation of support.g. values.µ e.. The performance result is awakened drives. ´The leadership and other processes of the organisation must be such as to ensure a maximum probability that in all interactions and all relationships within the organisation each member will. The employees in turn are oriented towards job performance and participation. The employee need that is met is status and recognition. 65 .
The employee need that is met is self-actualization. Manager is not addressed as ¶boss· but is a facilitator. almost no organization operates exclusively in one. Although there are four separate models.. The performance result is moderate enthusiasm.g. Employees are self disciplined. E. ´Collegialµ means a group of people working for a common purpose. a R&D team or a project team. with one or more areas overlapping in the other models.Collegial The basis of this model is partnership with a managerial orientation of teamwork. There will usually be a predominate one. The employees in turn are oriented towards responsible behavior and self-discipline. 66 . self content and self actualised.
autocratic Custodial Supportive Collegial Autocratic Custodial Supportive Collegial Economic Model depends on Power Model depends on Leadership Partnership resources PowerEconomic resourcesLeadershipPartnershipManagerial orientationAuthorityMoneySupportTeamworkEmployee Managerial orientation Authority Money Support Teamwork orientationObedienceSecurityJobResponsiblityEmployee psychological resultDependence on bossDependence on organizationParticipationSelf-disciplineEmployees needs Employee orientation Obedience Security Job Responsibility metSubsistemceMaintenanceHigher-orderSelfactualizationPerformance resultMinimumPassive Dependence cooperationAwakened drivesModerate enthusiasm Employee Dependence psychological result on boss on organization Participation Self-discipline Employees needs met Subsistence Maintenance Higher-order Selfactualization Moderate 67 enthusiasm Performance result Minimum Passive cooperation Awakened drives .
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