Chapter 1

Organizational Behavior

Introduction
Good companies have the ability to attract good employees, offer enabling
environment, reward them and retain them through integration of the need of the
organisation with that of the employees. Wages and fringe benefits are not the only
motivating factors – there are others such and superiors with good interpersonal skills,
pleasant workplace which help to satisfy employees.

MANAGERIAL FUNCTIONS

A manager is a person who gets things done by other people.

Managerial Functions are four in nature – Planning, Organising, Leading & Controlling.

Planning functions are –

 Defining the organisation’s goals

 Establishing overall strategy for achieving goals
 Integration and coordination of activities.

Organising is designing of the organisation structure. Includes

 Determination of what tasks to be done

 Who is to do them
 How the tasks are to be grouped.
 Who report to whom
 Where decisions are made.

Leading is

 Direction and coordination with people

 Motivation of people
 Select most effective communication channel
 Resolve conflicts among members

Controlling is

 To monitor the organisations performance to ensure that things go according to

plan
 Take effective measures to see that any deviation is corrected and brought back
on track.
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MANAGEMENT ROLES

Interpersonal Roles

Managers have to perform some –

 ceremonial and symbolic roles. (Certificate giving ceremony to monthly
performers at Vanik Credit Card).
 leadership roles as well – hiring, firing, disciplining, training, motivation etc.
 liaison roles – contacting others for information. Eg. Sales manager collecting
information from personnel manager.

Information roles

 Collect information from organisations and informations outside their own –

information from other organisation regarding competitors activities, tastes
preferences of customers etc. Also known as monitoring roles.
 Act as conduit for transmission of information – disseminator roles.

Decisional roles

 Entrepreneur roles – initiate and oversee new projects.

 Disturbance handlers – corrective action to unforeseen problems.
 Resource allocators – allocation of human, monetary and physical resources.

MANAGEMENT SKILLS

Managers must possess 3 essential skills –

Technical – ability to apply specialised knowledge or expertise – Civil engineers, dental

surgeons.

Human - Ability to work with, understand and motivate other people. Managers need to
understand people, identify their needs and manage conflicts.

Conceptual - Mental ability to analyse and diagnose complex problems. Managers have
to identify problems, find alternatives, evaluate alternatives and finally take decisions.

ORGANISATIONAL BEHAVIOUR

OB - Known as people skills (STUDY OF HUMAN BEHAVIOUR IN

ORGANISATIONS – Values, Attitudes, Job satisfaction, Motivation, Formal/Informal
organisation, Group/Teams, Appropriate leadership skills etc).

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A specialised field of study that concerns what people do in an organisation and how
that behaviour affects the performance of the organisation.

Organizational Behavior is so important matter for an organization to operate their

business. We know every organization has their ultimate target to maximize profit by
satisfying customers need, want and demand successfully. If any organization wants to do
business for long time, they must have to organize their business organization to compete
in a high competitive global market. That’s why the management of any organization is
very sincere to operate their employees in a dynamic way.

What is an Organization?

 Basically, an organization is a group of people intentionally organized to

accomplish an overall, common goal or set of goals.
 A deliberate arrangement of people to accomplish some specific purpose

Common Characteristics of Organizations

* Have a distinct purpose (goal)

* Composed of people
* Have a deliberate structure

What is an Organizational Behavior?

• Organizational behavior is the study of human behavior in the workplace, the
interaction between people and the organization with the intent to understand and
predict human behavior.

Keith Davis defined “Organizational Behavior is the study and application of knowledge
about how people as individual or as groups act within organizations.”

Again it can be said that OB is like a tool, by which the management teams are
understood or justified the nature of employees and take an appropriate decision to lead
the organization purport.

• It is the study of human behavior, attitudes and performance within an organizational

setting.

 Organization Behavior is concerned with the study of what people do in an

organization and how that behavior affects the performance of the organization.

Goals of Organizational Behavior

There are some goals of organizational behavior which are as follows:

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Describe: The first goal is to describe, systematically how people behave under a variety
of conditions. Achieving this goal allows managers to communicate about human
behavior at work using a common language.

Understand: A second goal is to understand any people behave as they do. The
managers would be frustrated if they could talk about behavior of their employees, but
not understand the reasons behind those actions.

Predict: The managers would have capacity to predict which employees might be
dedicated and productive or which ones might have absent, cause problem. And thus the
managers could take preventive actions.

Control: The final goal of OB is to control and develop some human activity at work.
Since managers are held responsible for performance outcome, they are vitally interested
in being able to make an impact on employee behavior, skill development, team effort,
and productivity. Managers need to be able to improve results through the actions they
and their employees take, and organizational behavior can aid them in their pursuit of this
goal.

Forces or Elements of Organizational Behavior

Organizations operate their functional activities by some elements, which affect
organizations.

People: People make up the internal social system in the organization. They consist of
individuals and groups. Groups may be large or small, formal and informal, official or
unofficial. Human organization changes every day. People are living, thinking and
feeling beings that created the organization and try to achieve the objectives and goals.

Structure: Structure defines the formal relationship and use of people in the
organization. Different people in an organization are given different roles and they have
certain relationship with others. Those people have to be related in some structural way
so that their work can be effectively coordinated.

Technology: The technology imparts the physical and economic conditions within which
people work. With their bear hands people can do nothing. So they are given assistance
of building, machines, tools, processes and resources. The nature of technology depends
very much on the nature of the organization, influences the work or working conditions.

Social System: Social system provide external environment within which organization
operates. A single organization can not exist alone. It is a part of the whole. A single
organization can not give everything and therefore there are many other organizations.
All these organizations influence each other.

Fundamental Concepts of Organizational Behavior

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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 behavior also. The concepts are-

Nature of People
Individual differences:

Every individual in the world is different from others. This idea is supported by science.
Each person is different from all others, probably in million ways, just as each persons
DNA profile is different.

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.

Perception:

Peoples perceptions are also differ when they see an object. Two people can differently
present a same object. And this is occurring for their experiences. 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.

Motivated behavior:

An employee has so many needs inside him. So, they want to fulfill those needs. That’s
why; they had to perform well in the organization. Some motivations are needed to enrich
the quality of work. A path toward increased need fulfillment is the better way of
enriches the quality of work.

Desire for involvement:

Every employee is actively seeking opportunities at work to involve in decision-making

problems. They hunger for the chance to share what they know and to learn from the
experience. So, organization should provide them a chance to express their opinions,

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ideas and suggestion for decision-making problem. A meaningful involvement can bring
mutual benefit for both parties.

Value of the person:

An employee wants to be treated separately from other factor of production (land, capital,
labor). They refuse to accept the old idea that they are simply treated as economic tools
because they are best creation of almighty Allah. For this reason, they want to be treated
with carrying respect, dignity and other things from their employers and society.

The nature of organization

There are two assumptions as to nature of organization.

Social Systems:

Organizations are social systems and governed by social and psychological laws. They
have social roles and status. Their behavior influenced by their group’s individual drives.
Organization environment in a social system is dynamic. All parts of the system are
interdependent.

Mutual interest:

In order to develop the organization behavior mutually of interest organizations and

people is necessary. Organizations need people and people in tern need organizations.
People satisfy their needs through organization and organization accomplish their goal
through people.

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

The psychological result for employees is dependence on their boss, whose power to hire,
fire, and “inspire” them is almost absolute.

The boss pays minimum wages because minimum performance is given by employees.
They are willing to give minimum performance-though sometimes reluctantly-because
they must satisfy subsistence needs for themselves and their families. Some employees
give higher performance because of internal achievement drives, because they personally
like their boss, because the boss is “a natural-born leader,” or because of some other
factor; but most of them give only minimum performance.

Contributing disciplines

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Contributing disciplines are psychology, sociology, social psychology, anthropology and
political science.

Psychology is the understanding of human behaviour. An attempt to understand human

behaviour.
It seeks to measure, explain and sometimes change the behaviour of humans.

Early organisational psychologists concerned themselves with fatigue, boredom and

factors leading to inefficient performance.

Recently contributions have been extended to learning, perceptions, personality,

emotions, training, leadership etc.

Sociology – study of the social system in which individuals fill their roles. Sociologists
study people in relation to their fellow human beings.

Sociologists have made their greatest contributions through their study of group
behaviour in organisations, particularly formal and complex organisations. Major
contributions have been made in areas of group dynamics, design of work teams,
organisation culture etc.

Social Psychology – Integration of concepts from psychology and sociology. It

focuses on influence of people on one another. Considerable investigation of social
psychologists received in the area of change – how to implement and how to reduce
resistance.

Contributions have also been made in the area of measuring, understanding and
changing attitudes, communication patterns, group decision making etc.

Anthropology - Study of societies to learn about human beings and their activities.
Work on cultures and environment has led to understanding differences in
fundamental values, attitudes and behaviour among people in different countries and
environment.

Political Science studies the behaviour of individuals and groups within a political
environment – structuring of conflicts, allocation of power, manipulation of power for
self interest.

CHALLENGES & OPPORTUNITIES FOR OB

Changes are taking place in the arena of OB in the western world –

 Average employees are getting older

 More and more women and non-whites are in the workplace.

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  Corporate downsizing and heavy use of temporary workers
 Global competition is requiring workers to become more flexible.

Responding to Globalisation
World has become a global village with companies from one end locating and
relocating manufacturing facilities. (Toyota in Kentucky USA, Macdonald in USSR).
With globalisation, managerial skills have to be tuned to changing conditions since
overseas assignments are most likely. Workforce has to be managed with different
motivations, aspirations, attitudes than in home country. Styles of management have to
change – depending upon the culture prevailing in the foreign country.

Managing Workforce diversity

Adapting to people who are different in race, culture and religion, gender and ethnicity.
Canada and Australia are having to cope with large influx of Asian workers. In South
Africa more blacks are likely to hold top positions. Women are moving into managerial
positions.

Managers will have to change their philosophy from treating all people alike to
recognising differences and diversity and responding to those differences in ways by
which retention in possible.

Improving Quality & Productivity

Managers are having to improve the organisations productivity and quality and are
implementing programmes such as Total Quality Management (TQM). TQM is a
philosophy of management that is driven by -
 constant attainment of customer satisfaction
 through continuous improvement of all organisation processes
 Requiring employees to rethink what they are doing and get more involved in
workplace decisions.
Total Quality Management

 Intense focus on customer – not only who buy the organisations goods and
services but also internal customers who interact and serve others in the
organisations.

 Concern for continuous improvement – Very good is not good enough.

Quality can always be improved.

 Improvement in quality of everything the organisation does - Uses a broad

definition of quality. I relates to not only the final product but also to
deliveries, response to complaints, how interaction with others are made.

 Accurate measurement – Uses statistical techniques to measure every critical

performance. Organisations performances are measured against standards in
the industry. Problems are traced to their roots and causes eliminated.

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  Empowerment of employees – Involves people on the line in the
improvement process. Teams are widely used for finding and solving problems
.

Reengineering techniques are used by asking managers how the work would be done if
they were to start working afresh. This would involve minor innovations to total redesign
of the product. (Changing the roller skates to a liner).

Improving people skills

Relevant concepts and theories to predict the behaviour of people at work. Managers can
gain insights into specific people skills, skills in motivating people, better communication
and creation of more effective teams.

Empowering People

Decision making is being pushed down to operating level. Employees are being redefined
as associates. Workers are being given the choices for solving work related problems. An
increasing number of organisations are using self managed teams.

Coping with temporariness

In the past managing could be characterised by long periods of stability – life long loyalty
to company – Japanese concept. This is being replaced with permanent temporariness.
Workers are having to learn new skills which were not a part of their job description say
a decade ago – Caterpillar asking employees to operate computerised production
equipment. Managers have learnt to live with flexibility, unpredictability. OB helps in
this change.

OB model
Developing an OB Model
A model is an abstraction of reality, a simplified representation of some real-world
phenomenon. Exhibit 1-5 presents the skeleton on which we will construct our OB
model. It proposes three types of variables (inputs, processes, and outcomes) at three
levels of analysis (individual, group, and organizational).
The model proceeds from left to right, with inputs leading to processes and processes
leading to outcomes. Notice that the model also shows that outcomes can influence inputs
in the future.

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Inputs
Inputs are the variables like personality, group structure, and organizational culture that
lead to processes. These variables set the stage for what will occur in an organization
later. Many are determined in advance of the employment relationship. For example,
individual diversity characteristics, personality, and values are shaped by a combination
of an individual’s genetic inheritance and childhood environment. Group structure, roles,
and team responsibilities are typically assigned immediately before or after a group is
formed. Finally, organizational structure and culture are usually the result of years of
development and change as the organization adapts to its environment and builds up
customs and norms.
Processes
If inputs are like the nouns in organizational behavior, processes are like verbs. Processes
are actions that individuals, groups, and organizations engage in as a result of inputs and
that lead to certain outcomes. At the individual level, processes include emotions and
moods, motivation, perception, and decision making. At the group level, they include
communication, leadership, power and politics, and conflict and negotiation. Finally, at
the organizational level, processes include human resource management and change
practices.
Outcomes
Outcomes are the key variables that you want to explain or predict, and that are affected
by some other variables. What are the primary outcomes in OB? Scholars have
emphasized individual-level outcomes like attitudes and satisfaction, task performance,
citizenship behavior, and withdrawal behavior. At the group level, cohesion and
functioning are the dependent variables. Finally, at the organizational level we look at
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overall profitability and survival. Because these outcomes will be covered in all the
chapters, we’ll briefly discuss each here so you can understand what the “goal” of OB
will be.

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