INTRODUCTION TO

ORGANIZATIONAL BEHAVIOR
 Chapter outline

 Organizational Behavior: Meaning, scope and

Foundations
 Systematic study of behavior
 Scope of OB
 Fundamental concepts of OB
 Importance of OB
 Model of OB
Organizational Behavior: Meaning, scope and
Foundations
Organizational Behavior studies the influence that
individuals, groups and structure have on behavior within
organizations.
 Organizational behavior (often abbreviated as OB) is a
field of study that investigates how individuals, groups,
and structure affect and are affected by behaviour within
organizations.
 Behavior refers to what people do in the organization,
how they perform, and what their attitudes are.
 This study is done so that we can use the knowledge to improve
organizational outcomes and thereby its effectiveness. 1-3
Organizational Behavior: Meaning, scope and
Foundations …

 Main Points from the definition:

 Organizational behavior is a field of study, meaning that
it is a distinct area of expertise with a common body of
knowledge.
 It studies three determinants in organizations: individuals,
groups and structure.
 OB applies the knowledge gained about individuals,
groups and the effect of structure on behavior in order to
make organizations work more effectively.
 To sum up our definition, OB is concerned with the study of
what people do in an organization and how their behavior
affects the organization’s performance. 1-4
SYSTEMATIC STUDY: Complementing Intuition
with Systematic Study
 Often our intuition leads us in the decision making
process.
 Intuition relies on “gut feeling” which is individual’s
observation and commonsense.
 Though intuition is useful for decision making, it does not give
us the complete picture.
 Systematic study improves ability to accurately predict
behavior.
 Assumes behavior is not random.
 Fundamental consistencies underlie behavior.
 These can be identified and modified to reflect individual
differences. 1-5
 Systematic Study…
 Examines relationships.
 Attempts to attribute causes and effects.
 Bases conclusions on scientific evidence:
 On data gathered under controlled
conditions.
 Data is measured and interpreted in a
reasonably rigorous manner.
 By doing so we can better determine cause
and effect and then by applying scientific
evidence to our conclusions we are better
able to predict behavior.
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 Scope of OB
 Organizational Behaviour is concerned with the
understanding, prediction and control of human
behaviour in organizations.
 It focuses on the individuals, the groups and the
organization and also on their interactional
relationships.
 It is the study and application of knowledge about how
people act within organizations.
 It applies broadly to the behaviour of people in all
types of organizations. Wherever organizations are,
there is a need to understand organizational behaviour.
Scope of OB…
 The scope of OB involves three levels of behaviour
in organizations: individuals, groups and structure.
 Individual Behaviour
 Personality
 Perception

 Values and Attitudes

 Learning

 Motivation
 Scope of OB….
 Group Behaviour
 Work groups and group dynamics
 Communciation

 Leadership

 Organization: Structure, Process and Application

 Organizational Climate
 Organizational Culture

 Organizational Change

 Organizational Effectiveness

 Organizational Development
 Fundamental Concepts of OB
 Organizational behaviour starts with a set of six fundamental concepts
revolving around the nature of people and organizations. They are as
follows:
 The Nature of people:
 Individual differences
 A whole person
 Motivated behaviour
 Value of the person (human dignity)
 The Nature of organizations:
 Social systems
 Mutual Interest
 Result:
 Holistic organizational behaviour
 Fundamental Concepts of OB…
 1. INDIVIDUAL DIFFERENCES:
 People have much in common, but each person in the
world is also individually different. Each one is different
from all others. This is a fact supported by science.
 Individual differences mean that management can get
the greatest motivation among employees by making
manager’s approach to employees individual, not
statistical.
 This belief that each person is different from all others is
typically called the LAW OF INDIVIDUAL DIFFERENCES.
 Fundamental Concepts of OB…
 2. A WHOLE PERSON:
 Organizations actually employ a whole person, rather
than certain characteristics or skill.
 Human life is not totally separable from work life and
emotional conditions are not separate from physical
conditions.
 People function as total human beings.
 Fundamental Concepts of OB…
 3. MOTIVATED BEHAVIOUR :
 From psychology we learn that normal behaviour has
certain causes.
 In the case of needs, people are motivated not by
what we think they ought to have but by what they
themselves want.
 This act leaves management with two basic ways to
motivate people.
 It can show them how certain actions will increase their
need fulfillment, or it can threaten decreased need
fulfillment if they follow an undesirable course of action.
 Fundamental Concepts of OB…
 4. VALUE OF THE PERSON (HUMAN DIGNITY):
 This concept asserts that people are to be treated
differently from other factors of production because
they are of a higher order in the universe.
 It recognizes that because people are of a higher
order they want to be treated with respect and
dignity – and should be treated this way.
 The concept of human dignity rejects the old idea of
using employees as economic tools.
 Fundamental Concepts of OB…
 5. SOCIAL SYSTEMS:
 From sociology we learn that organizations are social
systems; consequently activities there-in are governed
by social laws as well as psychological laws.
 Their behaviour is influenced by their group as well as
by their individual drives.
 The existence of a social system implies that the
organizational environment is one of dynamic change
rather than a static set of relations.
 All parts of the system are interdependent and subject
to influence by any other part.
Fundamental Concepts of OB…
 6. MUTUAL INTEREST:
 Mutual interest is represented by the statement
“organizations need people, and people also need
organizations”.
 People see organizations as a means to help them
reach their goals, while organizations need people
to help reach organizational objectives.
 Mutual interest provides a super-ordinate goal that
integrates the efforts of individuals and groups.
 Fundamental Concepts of OB…
 7.HOLISTIC ORGANIZATIONAL BEHAVIOUR:
 When the six fundamental concepts of organizational
behaviour are considered together, they provide a
holistic concept of the subject.
 Holistic organizational behaviour interprets people-
organisation relationships in terms of the whole person,
whole group, whole organisation, and whole social
system.
 Issues are analyzed in terms of the total situation
affecting them rather than in terms of an isolated event
or problem.
Few Absolutes in OB
 There are few absolutes in organizational behavior.
 When making decisions you must always take into
account situational factors that can change the
relationship between two variables.
 For example, as seen in the following chart one
message from a boss in an Ethiopian/American
culture can mean a completely different thing in an
another culture. It is always important to take
context into account.
 Few Absolutes in OB…
 Impossible to
make simple
and accurate Contingency Independent Dependent
generalizations Variable (Z) Variable (X) Variable (Y)

 Human beings
are complex In
Boss Gives Understood as
and diverse Ethiopian/American
Culture
“Thumbs Up” Sign Complimenting

 OB concepts
must reflect
situational In Iranian or Boss Gives Understood
as Insulting
conditions: Australian
Cultures
“Thumbs
Up” Sign - “Up
Yours!”
contingency
variables
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Importance: Challenges and Opportunities
for OB
 Understanding OB has never been more important for
managers as organizations are changing at a much more
rapid pace than historically seen.
 In the workplace today there are many challenges and
opportunities in the area of Organizational Behavior.
 Responding to Economic Pressures
 Responding to Globalization
 Managing Workplace Diversity
 Improving Customer Service
 Improving People Skills
 Stimulating Innovation and Change
 Coping with “Temporariness”
 Working in Networked Organizations
 Helping Employees with Work-Life Conflicts
1-20
 Responding to Economic Pressures
 Effective management is especially important during
tough economic times.
 Employees look to their managers to provide security
during the instability of a recession.
 Often when there are economic pressures managers
are forced to make decisions based on resource
constraints.
 These situations may include laying off employees,
motivating employees when there are limited resources
and encouraging employees when they are stressed
about their futures. 1-21
 Responding to Globalization
 Increased foreign assignments
 Differing needs and aspirations in workforce
 Working with people from different cultures
 Domestic motivational techniques and managerial styles may
not work
 Overseeing movement of jobs to countries with low-cost
labor

1-22
 Managing Workforce Diversity

Workforce diversity:
organizations are
becoming a more
heterogeneous mix of
people in terms of gender,
age, race, ethnicity, and
sexual orientation
Diversity Implications

“Managers have to shift their

philosophy from treating
everyone alike to recognizing
differences and responding to
those differences in ways that
ensure employee retention and
greater productivity while, at the
same time, not discriminating.”

1-24
 Improving Customer
Service and People Skills
 The majority of employees in developed nations work
in service jobs
 They must know how to please their customers

 People skills are essential to success in today’s

organizations
 Stimulating Innovation
and Change
 Organizations must be innovative and able to
change in order to succeed in the marketplace
today
 This includes a commitment to
 Flexibility
 Quality Improvement
 Staying Competitive.
 Coping with Temporariness
 Jobs are constantly changing
 Skills need to be updated for workers to stay on
target
 Workers need to be able to deal with change

 Employees need to be able to cope with

flexibility, spontaneity and unpredictability
 Working in Networked
Organizations
 Managers must adapt their skills and communication
styles to succeed in an online environment
 As technology continues to become an integral part of
organizational effectiveness workers will find that their
communication styles and needs will change as well.
 Managers must stay on top of what is needed to
motivate workers in this environment.
 Helping Employees Handle Work-
Life Conflict
The line between work and non work has blurred and
managers are increasingly dealing with conflicts that
arise between work and life away from work

Managers must face the reality that people bring their

life at home with them to the office, and they must find
ways to help workers deal with the conflict that arises
 Model of OB
 In Organizational Behavior (OB) we utilize the
representation of the world as broken down into three
levels.
 The first level of analysis we will look at is the
Individual level. At this level we look at individuals’
behavior.
 Next, recognizing that individuals make up groups, we
analyze how group behavior occurs.
 Finally, organizations are made up of groups of
individuals, so we analyze the organization at a
systems level.
Model of OB: Three Levels of OB Analysis
 Keep in Mind…

 OB’s goal is to understand and predict human

behavior in organizations.
 Fundamental consistencies underlie behavior.
 It is more important than ever to learn OB concepts.

1-32
Summary
1. Defined Organizational Behavior (OB).
2. Show the value to OB of systematic study.
3. Demonstrated how few absolutes apply in OB.
4. Identified the major challenges and opportunities
managers have in applying OB concepts.
5. Identified the three levels of analysis in OB.

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