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We can define the term organization as “two or more individuals who are interacting with each other
within a deliberately structured set up and working in an interdependent way to achieve some common
objectives”. Organisation comprises of people with different attitudes, cultures, beliefs, norms and

Definitions of OB
1) 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.
2) Stephen P Robins defines “Organizational behaviour as a systematic study of the actions and
attitudes that people exhibit within organizations.”

Nature of OB
Organizational behaviour is an applied behavioural science that is built on contributions from a
number of behavioural disciplines such as psychology, sociology, social psychology, anthropology
and economics.
• Psychology. Psychology is the study of human behavior which tries to identify the characteristics of
individuals and provides an understanding why an individual behaves in a particular way. This thus
provides us with useful insight into areas such as human motivation, perceptual processes or
personality characteristics.
• Sociology. Sociology is the study of social behavior, relationships among social groups and
societies, and the maintenance of social order. The main focus of attention is on the social system.
This helps us to appreciate the functioning of individuals within the organization which is essentially a
socio-technical entity.
• Social psychology. Social psychology is the study of human behaviour in the context of social
situations. This essentially addresses the problem of understanding the typical behavioural patterns to
be expected from an individual when he takes part in a group.
• Anthropology. Anthropology is the science of mankind and the study of human behaviour as a
whole. The main focus of attention is on the cultural system, beliefs, customs, ideas and values within
a group or society and the comparison of behaviour among different cultures. In the context of today's
organizational scenario. It is very important to appreciate the differences that

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exist among people coming from different cultural backgrounds as people are often found to work
with others from the other side of the globe.
• Economics. Any organization to survive and sustain must be aware of the economic viability of their
effort. This applies even to the non-profit and voluntary organizations as well.
• Political Science Although frequently overlooked, the contributions of political scientists are
significant to the understand arrangement in organizations. It studies individuals and groups within
specific conditions concerning the power dynamics. Important topics under here include structuring Of
Conflict, allocation of power and how people manipulate power for individual self-interest etc.

Scope of OB
It is currently a growing field. It is concerned with employment related situations. It emphasizes
behaviour as related to jobs, work, absenteeism, productivity, human performance & management. It
includes the studies of the production of all kinds of the organizational behaviour at all levels from the
local to the international. It has enormous theoretical scope. The theories are used in so far as possible
to explain as to why the why organizational behaviour happens.

Objectives of OB

(a) To Describe:
(b) To Understand:
(c) To Predict
(d) To Control:

Elements of OB/ Determinants of OB

 People: People make up the internal and social system of the organisation. They consist of
individuals and groups. The groups may be big or small; formal or informal; official or unofficial.
Groups are dynamic and they work in the organisation to achieve their objectives.
 Structure: Structure defines the formal relationships of the people in organisations. Different
people in the organisation are performing different type of jobs and they need to be (elated in some
structural way so that their work can be effectively co-ordinated.
 Technology: Technology such as machines and work processes provide the resources with which
people work and affects the tasks that they perform. The technology used has a significant

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influence on working relationships. It allows people to do more and work better but it also restricts'
people in various ways.
 Environment: All organisations operate within an external environment. It is the part of a larger
system that contains many other elements such as government, family and other organisations. All
of these mutually influence each other in a complex system that creates a context for a group of

Importance of OB
Organisational behaviour helps to analyse 'why' and 'how' an individual behaves in a particular
way. Human behaviour is a complex phenomenon and is affected by a large number of factors
including the psychological, social and cultural implications. Organisational behaviour integrates these
factors to provide* simplicity in understanding the human behaviour.
 Interpersonal Level: Human behaviour can be understood at the level of interpersonal interaction.
Organisational behaviour provides • means for understanding the interpersonal relationships in an
organisation. Analysis of reciprocal relationships, role analysis and transactional analysis are some
of the common methods, which provide such understanding.
 Group Level: Though people interpret anything at their individual level, they are often modified
by group pressures, which then become a force in shaping human behaviour, Thus, individuals
should be studied in groups also.. Research in group dynamics has contributed vitally to
organisational behaviour and shows how a group behaves in its norms, cohesion, goals,
procedures, communication pattern and leadership. These research results are advancing
managerial knowledge of understanding group behaviour, which is very important for
organisational morale and productivity.
 Inter-group Level: The organisation is made up of many groups that develop complex
relationships to build their process and substance. Understanding the effect of group relationships
is important for managers in today's organisation. Inter-group relationship may be in the form of
co-operation or competition.

Models of OB
The following four models of organizational behaviour are as follows:
1. Autocratic Model

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In an autocratic model', the manager has the power to command his subordinates to do a specific job.
Management believes that it knows what is best for an organization and therefore, employees are
required to follow their orders. The psychological result of this model on employees is their increasing
dependence on their boss. Its main weakness is its high human cost.
2. Custodial Model
This model focuses better employee satisfaction and security. Under this model organizations satisfy
the security and welfare needs of employees. Hence, it is known as custodian model. This model leads
to employee dependence on an organization rather than on boss. As a result of economic rewards and
benefits, employees are happy and contented but they are not strongly motivated.
3. Supportive Model
The supportive model depends on 'leadership' instead of power or money. Through leadership,
management provides a climate to help employees grow and accomplish in the interest of an
organization. This model assumes that employees will take responsibility, develop a drive to
contribute and improve them if management will give them a chance. Therefore, management's
direction is to 'Support' the employee's job performance rather than to 'support' employee benefit
payments, as in the custodial approach. Since management supports employees in their work, the
psychological result is a feeling of participation and task involvement in an, organization.
4. Collegial Model
The term 'collegial' relates to a body of persons having a common purpose. It is a team concept.
Management is the coach that builds a better team. The management is seen as joint contributor rather
than as a boss. The employee response to this situation is responsibility. The psychological result of
the collegial approach for the employee is 'self-discipline'. In this kind of environment employees
normally feel some degree of fulfillment and worthwhile contribution towards their work. This results
in enthusiasm in employees' performance.


Autocratic Custodial Supportive Collegial

Basis of Model Power Economic Leadership Partnership
Managerial- Authority Money Support Teamwork

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Employee Dependence on Dependence Participation Self-discipline
psychological boss on
result organization
Employee Subsistence Security Status and Self-actualization
needs met recognition
Performance Minimum Passive Awakened Moderate enthusiasm
result cooperation drives

Challenges and opportunities

A quick look at few dramatic changes now taking place in organization1.Old employee getting
old2.Corporate Downsizing3.Temporary working employees4.Global competition5.War on terror In
short there are lot of challenges and opportunities today for managers to OB concepts.
1. Globalization to Respond
Organizations are no longer constrained by national borders, world become global village.
•Increased foreign assignment
Transferred to your employer’s operating division in another country, Once there, you’ll have to
manage workforce, aspiration from employees, and attitudes from those you are used to back home
•Working with different people
Working with bosses, peers and other employees who were born and raised in different culture, to
work effectively with them you’ve to understand how their culture, geographic and religion have
shaped them.
•Coping with Anti-capitalism backlash
“soak the rich” means fine should be charged with respect of income you earn. Managers at global
companies have come to realize that economic values are not universally transferable, need to
modify by managers to reflect economic values in those countries they’re working.
•Overseeing Movement of jobs to countries with low cost labor
In a global economy, jobs tend to flow to places where lower cost provide business firms with a
comparative advantages
•Managing people During the war on terror
An understanding of OB topics such as emotions, motivation, communication and leadership can
help managers to deal more effectively with their employees’ fear about terrorism
2. Managing workforce diversity

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The people in organization are becoming heterogeneous demographically, Workforce diversity
whereas globalization focuses on differences between people from different countries, mix of people
in terms of gender, age, race, and sexual orientation. Embracing diversity Changing US demographics
Changing management philosophy Recognizing and responding to difference
3. Improving Quality and productivity
World added capacity in response to increase demand. Excess capacity translates in increase
competition, is forcing managers to reduce costs and, at the same time; improve the organization
quality and productivity.
4. Improving Customer service
OB can contribute to improving an organization’ performance by showing that how employees’
attitude and behavior are associated with customer satisfaction.
5.Improving people skills
Designing motivating jobs, how creating effective teams, techniques for improving interpersonal
6.Stimulating innovation and change
Victory will go the organization to maintain their flexibility, continually improve their quality and
beat their competition in market place. An organization’s employees can be major block in change, the
challenge to the manager to stimulate their creativity and tolerance for change.
7.Coping with Temporariness
Survival for the organization, is need to move fast and flexible and innovative in their products,
jobs are redesigned, task are done by flexibility, trained old employees with new technology, better
understanding of change, overcome resistance to change, create organizational culture
8.Working in network organization
Global working through one link i.e. INTERNET, technology changes the people towork together
and communicate at thousand miles, people can work from their home and non office locations.
9.Helping employees Balance work-life conflicts
Flexible Working hours, reporting time, creating opportunities for employees, job security, design
workplace and jobs
10.Creating positive Work Environment
Human strength, vitality, right person appointed at right place, effort on what good for
11.Improving Ethical Behavior

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Manager shouldn’t place an order on which subordinate don’t agree Define clearly the right and
wrong conduct Fair policy and appropriate system Increase confidence and trust over organization
Have some logic against order you place to employees.

Impact of Global and Cultural Diversity on Organisational Behaviour

Globalisation is the process of international integration of various domains like cultural,
economic and technological unification. The globalisation introduced various challenges and
opportunities for the organisations. The globalisation can be seen as a socioeconomic
integration across various countries, as a result of which there is a cross-border movement of
capital, human resources, ideas and commodities.
The incipience of globalisation has entirely modified various organisational aspects in various
domains such as changes in the leadership strategy, changes in the planning strategy and
changes in the structure. These changes originated from numerous factors such as workplace
diversity, the creation of a level playing field, surfacing of global managers and the crosscultural
differences. One particular concern is the effect of globalisation on organisational
behaviour, which primarily originates from the cultural integration. Organisational behaviour
is the study of human behaviours in an organisation.
With the increase in globalisation, it has become evident that the organisational culture is
becoming inappropriate and the relevance of global culture is rising; as a result of which the
organisations face the challenge of establishing a corporate culture that suffices the demands of
the global culture. This is an important challenge because the organisations are forced to align
their organisational culture with the global trends and this intimidates the unification of
corporate culture, which is a major factor in the success of any organisation. This challenge for
organisations is balancing between the global cultural trends and the demands of the corporate
culture at the organisational level. Therefore, it can be argued that the globalisation threatens
the norms, disposition and the fundamental values of the organisation that shapes the reasons
for the firm’s existence.
The next challenge is to manage the diversity. It is obvious that the globalisation increases the
workplace diversity, which has various implications for the managers as well as the
organisation. Also, it is clear that the globalisation tends to form a deviation between the
organisational and global culture; which is an important challenge for the firms.
The next challenge associates to the organisational relations. It refers to how the individuals in
the organisation treat each other and interact with them. It is evident that the globalisation has
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an adverse impact on the aspects of organisational relationships such as involvement,
supportiveness, openness and trust and collaboration. This makes the establishment of a shared
corporate culture difficult. The success in the age of globalisation requires the organisations to
embrace the global culture, which increases the challenges associated with the leveraging
diversity, filling the gaps in global and corporate culture and infusing core organisational values
to the strategies that aim to adopt a global culture.
Cultural diversity means the differences in the composition of employees of an organisation
regarding gender, race, nationality, colour, religion, age, or creed. OB relates to the nature of
communication amongst people and various groups within an organisation. The positive
impact of cultural diversity aids the members of the organisation to develop relationships and
recognise each other despite their differences of background and origin.

Define and Establish Cultural Diversity

A typical organisation has a variety of people who have the personal and cultural differences.
A business that has the interest to promote cultural diversity among its workers, strives to create
mutual respect for the various cultures while enabling the workers to attain their full potential.
Acknowledging various cultures allows the organisation to positively improve the
organisational behaviour which, in turn, improves both the performance and image. The
company should impersonate the cultural diversity aspect in the mission statement of the

Transforming Organisational Behaviour

The level of diversity and the nature of interactions in that organisation influence the patterns
of the behaviour of an organisation. The organisation, therefore, should try to create a culture
that enhances the diversity of its workforce and also raises the individual performance. The
positive influences of cultural diversity help the organisation to not only increase the extent of
its reach but also to receive favourable exposure from all the sections of the population due to
its multi-cultural approach.

Influencing Cultural Diversity

Cultural diversity has respect and understanding various employees in the organisation. This
aspect is reinforced by possessing interpersonal communication, teamwork and feedback.
Such engagements will help the employees appreciate each other's culture and interact with the
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other employees. Consequently, the organisational behaviour and an accommodating culture
are established within the system.

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