Introduction

We have started out in the 21st century just a decade ago. At this stage, we are looking
forward to an era of change, at a pace faster than ever could have been anticipated.
The economies all around the world, with just a handful of exceptions, are now
working together and are intertwined like never before. Hence, the same observations
shall follow for organisations, big and small; government or private and working in
varied fields. With this background, it can be observed that the organisations too shall
have to adapt to changing environments, internally and externally.

The principle objective of this report is to enlist and analyse in brief; the challenges
that are posed to Organisational Behaviour because of the aforementioned factors and
many more. The authors have referred to existing academic & research texts and
categorised the challenges into five major categories according to their origins, as
follows:

1. Demographic factors

2. Diversification

3. Technology

4. Resistance to change

5. Globalisation
In the following pages, the authors have analysed various facets of these factors and
how they create challenges to Organisational Behaviour.

1. Demographic Challenges to Organisational Behaviour

Managing Workforce Diversity:
The most important challenge organizations currently facing is adapting to people who
are different. The term that we use for describing this challenge is workforce diversity.
Globalization focuses on differences between people from different countries but
workforce diversity addresses differences among people. Workforce diversity means
that organizations are becoming a more heterogeneous mix of people in terms of
gender, race, age, ethnicity and sexual orientation.

Gender Issues:

The number of women entering the workforce is increasing in India because of many
factors like increased economic need, grater equality of sexes, education and so on;
additional measures for managing different kinds of problems arise at the workforce.
Indian women are employed in many professional jobs like engineers, doctors,
lawyers and also in the field of services for nation and services to people which
include army, navy, banking sector, nursing etc. At the enterprise level there are some
administrative issues like maternity leave, transfer to the location of husband’s place
of positioning, child care leave, and placement in hard and soft jobs all these things
tend to cluster and create administrative issues. To attract and retain women
employees many organizations are providing alternative career paths, extended leave,
flexi time, job sharing and the option of telecommuting.

Age Factor:
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The workers age profile is also a contradictory factor leading to the diversity of work
force. Discrimination based on age can be applied in comparison between a worker
aged 40-70 with another aged 18-25.

Implication of Workforce Diversity:

Workforce diversity in the case of gender, socio-economic, ethnicity and age is here to
stay and there is no going back to the demographic setup of the organizations as they
were 20 years ago. To be successful in this type of environment one has to learn to
value and respect cultural styles and the ways of behaving that are different of one’s
own.

Managing workforce diversity effectively should be given a high priority because of

mainly two reasons.

a) It’s an opportunity to serve the needs of customers better and to penetrate new
markets
b) Diverse teams make it possible to enhance creativity, flexibility and rapid
response to changes.

Dealing With a Diverse Workforce

It is important to understand the effect on OB due to workforce diversity.
Organisational Diversity mainly deals with the individual character. It mainly depends
on different aspects such as age of people, their caste, religion, gender, and ethnicity.
It also highly depends on capabilities and disabilities of an individual. Suppose an
organisation is having different people having same age, religion, gender, caste, etc.
then the behaviour of all the people would likely to be same. Members will share same
attitude and work in similar ways and also handle various difficulties in the same
manner. But, if the people are of different religion, gender and other characteristics,
then the manner in which they do the work will also be different.

The number of minority employees entering and being promoted to higher-level

positions has increased partly because of affirmative action and equal opportunity
employment legislation. At the same time, the number of women entering the work
force has also been increasing dramatically and they are ascending to higher and
higher positions in management. Due to because of increased globalization, the
diversity of the population is increasing rapidly.

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 Three challenges for organizations and their managers due to increasing
diversity of the work force presents: a fairness and justice challenge, a decision-
making and performance challenge, and a flexibility challenge.

Fairness and Justice Challenge:

Getting a job is a scarce resource, and obtaining jobs being very a competitive process.
Managers are having a challenge to allocate jobs, give promotions, and rewards
without being biased. Achieving fairness can be difficult in the short run. Seniority
plays a role and many minorities are recent hires. This imbalance rectification done by
actively recruiting and promoting increasing numbers of women and minorities; can
lead to difficult equity issues because this attempt to fix the traditional imbalance
reduces the prospects for white-male employees. An increase in diversity can thus
strain an organization’s ability to satisfy the aspirations of its work force, creating a
problem that, in turn, directly affects the work force’s well-being and performance.
Organizations must learn to manage diversity in a way that increases the well-being of
all employees, but deciding how to achieve this goal can pose difficult ethical
problems for managers.

Decision Making and Performance Challenge:

It is also a challenge to utilize the attitudes and perspectives of people with different
religion, gender, age, etc. so as to improve decision making and improve the
performance of the organization. Many organizations have taken advantage of this
potential of the various employees to improve Organisational behaviour.

Flexibility Challenge:
In this challenge of diversity we need to be sensitive and careful about the various
kinds of employees working in the organization and to try to development of flexible
employment approaches that increase employee behaviour. Some of its examples are
given below and they contain the following approach:

 The needs of different groups has to be understood and new benefits packages
has to be customized according to their needs, it can be of single employees
having no child and family, gays in long term relationship commitment and also
to the employees having aged parents.

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  Performance can also be increased by providing the employees the time
according to their interest and it should be flexible such that they can input their
maximum effort into that work and accordingly set their schedule.

 Job sharing facility should be provided so that two individual who are having
mutual understanding can perform the job even if one of them is having some
issue with him.

 Handicapped employees (and customers) should be taken care of specifically

and design of job should be accordingly.

 Management programs should be conducted time to time and feedback has to be

received about their personal style of dealing with minority.

 Relationship between employees should be established mentoring.

 Establishment of informal networks is also providing employees a social

support.

2. Diversification :-
With the advent of 21st century, the nature of organisations and the way they function
is becoming more & more complicated. Be it manufacturing sector, retail, services or
any other, the expectations of the consumer are higher. The organisations of today
have to collaborate with a variety of stakeholders, consultants, execution contractors &
sub-contractors, financers and so on. This has a profound effect on the structure &
functioning of organisations.

Let us take an example of a Real estate development project being undertaken by a

developer firm for housing development. The firm, at first, has to involve a planning
firm to create the master plan for the project. Then the consultants for urban designing,
architecture, landscaping and structures come into the picture. There are also separate
consultants the services and specialities, e.g., MEP, fire-fighting, interiors, façade,
security, green and sustainable design strategies, BIM and so on. As the planning and
design phase reaches certain accepted level, the project is tendered and awarded to a
contractor. The principle contractor may be either be held responsible for the whole
project or the project may be divided into sectors and awarded separately. The
principle contractor may in turn divide the work amongst a number of sub-contractors
for execution. Hence, the management of the realty developer will have to co-ordinate
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different people, who might even be located in different countries and time zones,
have varied skill sets and technical expertise levels & work cultures! And we haven’t
yet started considering the collaborations for finance, marketing and facility
management.

As we can judge from the example above, with a variety of speciality projects,
products and services being introduced, the overall complexity escalates. This is the
diversification, that requires restructuring for the organisations, which has to be
adaptive to the pace of the diversification itself. Thus, this poses a challenge to the
organisation to change internally as well as externally, with ever dynamic conditions
to respond to.

3. Technology:
Technology is the practical application of science, knowledge and engineering for
producing goods and providing services. The technology of a firm includes the
physical aspects such as tools, machineries and equipments and knowledge and the
skill set of the employee to operate them. For any organization to survive and remain
competitive, the technology of the company should be improved in both of the above
forms. It can be achieved only through human intervention.

It is observed that whenever a new technology is being introduced it affects operation

of the organization in all the aspects. These aspects include need for adjustment in
methods of marketing, supply of materials and spare parts, in cost control, in wage
scheme, in the assignment of responsibilities to workers and managers and in the
financial and organizational structure of the Enterprise. This process is very
cumbersome because, any organization has to monitor the technological advancement,
train and motivate employees to innovate in all aspects of the organization.

The main challenge of any organization is to manage the rapid and radical
technological change. This increase in increase in technological challenge necessitates
the need for the employment and development of skilled labors and motivates them to
cope up with the change. The level of technological development of the employees

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and organization influences its ability to produce quality goods and services and to be
profitable, to create wealth and to improve the people’s performance and well being.
The management of the technological innovation can be achieved through Socio-
technique approach which involves the management of proper interface between the
Human resource and the technological system. The technological system involves the
workflow, job rules and relationships, task configuration, policies and procedures. The
human resource system involves organizational environment, motivation,
commitment, satisfaction with policy and work group facilitated by the organization.
When this interface (socio – technical) is properly managed such that no
problem arises, then it can be called fit. Normally, attainment of such fit situation is
impossible. This problem mainly happens when major transforming process takes
place within the technical system e.g. nature of raw materials, machineries, etc. These
complexities can be solved by a proper industrial relation system which analyze and
structure the organization carefully. Thereby it enables to assess new skill for
supervisors and specification of development plan.

4. Resistance to Change.

As quoted by Charles Darwin “It is not the strongest of the species that survive, nor
the most intelligent, but the ones most responsive to change.”

Why Is Change So Hard?

It is a natural instinct for a human that when change occurs it can cause a loss of
stability which results in the development of a predictable and measurable set of
symptoms within itself. These natural instincts can also come into affect even in
professional organizations as well. The path in which the symptoms occur is shown
below.

Organizational Instability Occurrence of Organizational

Change Loss of
symptoms Effectiveness

The symptoms that are caused by the organizational changes are as follows:

Symptoms in the Individual Organizational Behaviour Equivalents

Frustration Loss of Productivity

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 Anxiety Morale

Rejection Of The Environment Conflict

Retardation Of Development Motivation

Withdrawal Turnover

Refusal To Participate Absenteeism

Hence when there is a significant number of these symptoms occur simultaneously, an

organizational loss of effectiveness will occur. It should be that understanding the
change in process can also be used to resist the change as well as to encourage it.
Organization should know that change is not always the solution of every problem
company Hence, to prevent such issues from happening, the higher authorities may
need to prioritize various change proposals and defuse poor ideas, rather than always
responding to changes from the internal and external environment. In other words we
can also say that the change is a positive response. What needs to be preserved may be
just as important to understand as what needs to be changed.

Any organization in today's fast-moving environment that is looking for the pace of
change to slow is likely to be sorely disappointed. In fact, business and organizations
should accept change as change is important for any organization. Without change,
businesses would likely lose their competitive edge and fail to meet the needs of what
most hope to be a growing base of loyal customers.
Technology
Without change, the people in higher authorities would still be stuck in their age old
ideas which would lead to a stunt in growth. These changes are quite necessary
because adaptation of new technology and technological know-how can lead to an
increase in technology.
Technology also has an affected how we communicate. No longer do business people
have to laboriously contact people, in person, to find out about other people who
might be useful resources - they can search for experts online through search engines
as well as through social media sites. Today's burgeoning communication technology
represents changes that allow organizations to learn more, more quickly, than ever
before.
Customer Needs
The organization should change according to the need of the customers. The market is
ever changing and with that the outlook of the customers also needed. If an

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organization does not change according to the needs then it will suffer grievous losses.
The best example can be seen for Organizations like Nokia and Samsung where the
latter growth was higher than the former due to the evolution of Samsung’s smart
phone.
Economy
The impact of economy on an organization can be both negative and positive, but both
of them are quite stressful on the organization. A strong economy and increasing
demand for products and services will mean that companies must consider expansion
that might involve the addition of staff and new facilities. These changes offer
opportunities for staff, but also represent new challenges. A weak economy can create
even more problems as companies find themselves needing to make difficult decisions
that can impact employees' salaries and benefits and even threaten their jobs. The
ability to manage both ends of the spectrum is critical for organizations that want to
maintain a strong brand and strong relationships with customers as well as employees.

Growth Opportunities for Employees

The change in an organization is not only good for its growth but also for the
employees as well. When there are changes the employees can develop a creative
outlook which would lead to their growth as well. Preparing employees to deal with
these changes involves in an analysis of their growth by some tools and training is
required to help them learn new skills. Training can be provided through traditional
classroom settings or, increasingly, through online learning opportunities. Importantly,
organizations need to do a good job of evaluating employees' capabilities and then
taking steps to fill the gaps between current skills and the skills required to respond to
growth.

5. Globalisation:
Telecommuting :-

Introduction:

Telecommuting, remote work, or telework is a work arrangement in which employees

do not commute to a central place of work.

Definition:

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Telecommuting refers more specifically to work undertaken at a location that reduces
commuting time. These locations can be inside the home or at some other remote
workplace, which is facilitated through a broadband connection, computer or phone
lines.

Technology:
Telework is facilitated by tools such as groupware, virtual private
networks, conference calling, videoconferencing, and Voice over IP (VOIP). It can be
efficient and useful for companies since it allows workers to communicate over long
distances, saving significant amounts of travel time and cost.
Benefits:
Telecommuting offers benefits to communities, employers, and employees.
For communities, telecommuting may offer fuller employment , reducing traffic
congestion and traffic accidents, relieving pressure on transportation infrastructure,
reducing greenhouse gases, reducing energy use, improving disaster preparedness, and
reducing vulnerability to terrorism.
Telecommuting individuals, or more specifically those in "work from home"
arrangements, may find that it improves work-life balance,
In general, telecommuting benefits society in economic, environmental, and personal
ways. The wide application of ICTs provides increasing benefits for employees,
especially ones with physical disabilities. It also leads to a more energy-saving society
without adversely impacting economic growth

Challenges:
Telecommuting, however convenient it sounds but the truth is that it is yet to be
introduced in the Indian industry. One of the biggest challenges of telecommuting is
that mostly there is no job security for such telecommuters or “work from home”
personnel. They are hired when there need is felt and they can be thrown off the grid
as soon as the job is done or as per organizational needs, this mentally breaks the work
force and in turn may affect the performance. Another big challenge that
telecommuting faces is the involvement of its resources in the economic and business
industry. Trust is a concept that lags behind when studied in junior - senior
relationships in the industry trends today due to various personal and social reasons.
Due to these trust issues working from a site which cannot be observed by superiors
isn’t yet popular. Another major drawback is the involvement of a lot of technology
in between the remote place of work and the permanent place to work, which in India
is yet to be developed at a par! .

Influence of MNCs :-
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Multinational corporations (MNCs) are key players in international business; they are
defined as "a business that has direct investments (in the form of marketing of
manufacturing subsidiaries) abroad in multiple countries" (Wild, Wild, et al., 21).
Transnational corporations are among the world's biggest economic institutions.
MNCs are beneficial to less developed countries. They improve the foundations of a
"backwards" economic environment through the diffusion of capital, technology,
skills, and exports. MNCs have a direct effect on the development of a more citizen
welfare conscious government. Accordingly, the number of jobs increases, consumer
spending increases, the tax base grows and health care is more widely accessible. They
also have an apparent lasting effect on the values and institutions of the host country.
The values of the country change to reflect a country committed to staying in pace
with a rapidly changing global environment; extending to political norms and
nationalistic tendencies.
Challenges:
An MNC as its name suggests does not deal with only a local economy, it is affected
by changes in global economy as well. Hence a major challenge for the MNCs is –
how to deal with the changing economy. When an economy undergoes a downfall it
means that the buying power of the populous reduces and hence it negatively affects
the industry thereby forcing MNCs to either cut out man power or find some other
means to pay them their salaries. Being a bigger organization members have to deal
with as many people at a time and take as much load as it comes to sustain, since there
is a load of competition for a single place in an organization. The expectations as per
returns from employees have grown to a very large extent thereby increasing the work
load over individuals, a major challenge is how to keep this pressure at lower levels
and still acquire the best results out of them.

Exposure to global economy :-

1. Impacts of Globalization on National Economies:

Globalization has had significant impacts on all economies of the world, with
manifold effects. It affects their production of goods and services. It also affects the
employment of labor and other inputs into the production process. In addition, it
affects investment, both in physical capital and in human capital. It affects technology
and results in the diffusion of technology from initiating nations to other nations. It
also has major effects on efficiency, productivity and competitiveness. Several
impacts of globalization on national economies deserve particular mention. One is the
growth of foreign direct investment (FDI) at a prodigious rate, one that is much greater
than the growth in world trade.

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Challenges:

An organization is like a boat in the river of economy, it cannot go further in it if its

too shallow. Similarly the challenges in an organization increase with the decrease in
the economic reforms and returns. Making profit and serving an objective is the
ultimate goal of any organization.

References:
Understanding and Managing Organisational Behaviour , Jeniffer M. George &
Gareth R. Jones, Prentice Hall, 2008.

Organisational Behaviour : Improving Performance and Commitment at the

Workplace, Jason Colquitt,Michael Wesson,Jeffrey LePine, Tata McGraw Hill.

Organisational Behaviour and Organisational Change:Innovation, Agility & Change

Management; Prof. Roger Nagel, Lehigh University, 2006.

Creating The 21 St Century Organization:The Metamorphosis Of Oticon (Case Study)

Niels Bj 0rn-Andersen, Jon A. Turner,1994

Leadership in 21st century : Where is it leading us? Julia Connell, Bernadette Cross,
Ken Parry; International Journal of Organisational Behaviour, Vol.5, No.2.

Milken Institute- Globalization Of The World Economy: Potential Benefits And Costs
And A Net Assessment, by Michael D. Intriligator , January 2003

The significance and paradox of globalization in the 21st century by Abel Adekola,
University of Wisconsin, Stout 144 Jarvis Hall, Menomonie, Wisconsin 54751, USA.
E-mail: adekolaa@uwstout.edu

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www.studymode.com

www.wikipedia.org

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