CONCEPT OF ORGANIZATION AND ORGANIZATIONAL BEHAVIOUR

Organization

 Organization is a place where two or more people work together in a

structured way to achieve a specific goal or set of goals. Goals are
fundamental elements of organizations.
 e.g. ONGC, INFOSYS, Indian Railways etc.
 Organization can be compared to a human body. The human body consists
of hands, feet, eyes, ears, nose, fingers, mouth etc. These parts perform
their work independently and at the same time, one part cannot be a
substitute to another. The same principle is also applicable in the
organization. The organization consists of different departments and each
department performs its work independently and cannot be a substitute to
another.

Functions of Organization

(i) Determination of activities

 It means the decision and division of various activities to achieve
the objectives of the organization.
 Work

Parts

Subparts

e.g. Purchase Work

 Requisitions of items Placing of an order
Storage

(ii) Grouping of activities

 The identical activities of an organization are grouped under one

individual or a department.

e.g. . Sales Department

Canvassing Advertisements
Debt Collection

(iii) Allotment of duties to specified persons

 To ensure effective performance, the grouped activities are
allotted to specified persons.
 e.g. Purchasing activities Purchase Manager
Production activities Production Manager
Sales activities Sales Manager

Besides, adequate staff members are also appointed under the specified
persons. These persons are specialized in their respective fields. If
required, appropriate training may be provided to such persons.

(iv) Delegation of authority

 It will be very difficult for a person to perform the duties
effectively, if there is no authority to do it.
 While delegating authority, responsibilities are fixed.

e.g. Production manager is delegated with the authority to produce the

goods and fixed with responsibility of producing quality goods.

(v) Define relationship

 When a group of persons is working together for a common goal,
it is necessary to define the relationship among them.
  If it is done, each person will know who is his boss, from whom he
has to receive orders and to whom he is answerable.
(vi) Coordination of various activities
 The delegated authority and responsibility should be coordinated
by the chief managerial staff.
 This person has to see whether all the activities are going on to
accomplish the objectives of the organization or not.

Elements of an Organization

The elements of organization are:

(i) People
An organization consists of people with different traits, personality,
skills, qualities, interests, background, beliefs, values and intelligence. In
order to maintain a healthy environment, all the employees should be
treated equally and be judged according to their work and other aspects
that affects the firm.
(ii) Organizational structure
Structure is the layout design of an organization. It is the construction
and arrangement of relationships, strategies according to the
organizational goal.
Example − Organizational structure defines the relation of a manager
with employees and co-workers.
(iii) Technology
Technology can be defined as the implementation of scientific
knowledge for practical usage. It also provides the resources required
by the people that affect their work and task performance in the right
direction.
Example − Introduction of SAP, big data and other software in the
market determines individual and organizational performance.
(iv) Environment
All companies function within a given internal and external
environment. Internal environment can be defined as the conditions,
factors, and elements within an enterprise that influences the activities,
 choices made by the firm, and especially the behavior of the employees.
e.g. customers, suppliers, competitors etc.
While external environment can be defined as outside factors that
affect the company's ability to operate. e.g. Economical, technological,
political factors etc.

Organizational Behavior
 In simple terms, organizational behavior refers to the behavior of persons
in an organization.
 Behavior is anything that the human does. It is any response or reaction of
an individual. The basic unit of behavior is activity.
 Organizational behavior is the study of what people do in an organization
and how their behavior affects the organization’s performance.
 Running a large company or even a small one, is no easy task. The field of
OB helps understanding the complexities of people’s behavior on the job.
 Understanding others behavior helps the person to understand them and
provides guidelines for influencing the behavior of the person in the
organization.
 Knowledge about human behavior would be useful in improving an
organization’s effectiveness.
 OB is both art and science. It is considered as art because it contains
knowledge about behavior of individuals. It is considered as science
because it involves application of science.

Model of OB
The three determinants of behavior within an organization which go to make an
organization effective are:

Personality
Perception
Learning
 Individual Behavior
Attitude

Value

Motivation

Group Dynamics
Leadership
Group Behavior Power and Politics

Value
Motivation

Organizational Culture
Organization HR Policies and Practices
Work Stress
Organizational Change and
Development

Management Challenges before OB

(i) Responding to economic pressures

(ii) Responding to globalization
 Increased foreign assignments
 Working with people from different cultures
  Overseeing movement of jobs to countries with low cost labour
(iii) Managing workforce diversity
(iv) Improving quality and productivity
(v) Improving customer service
(vi) Improving people skills
(vii) Stimulating innovation and change
(viii) Coping with temporariness
(ix) Working in networked organization
(x) Helping employees balance work life conflicts
(xi) Creating a positive work environment
(xii) Improving ethical behavior

Importance of OB

It is very important to study the Organizational behavior. It gives the direction to

an organization and also helps to understand the organizational life.

(i) Skill development: Helps to develop the skills of the employees and gain
of knowledge to enhance the performance of the employees. Employees
should remain up to date with new technology and use existing one in a
better way. Training also improves the required skills of the employees
and teach them to perform the tasks independently.
(ii) Understanding customer behavior: The behavior of the customer helps
the organization to decide what products and services to be offered.
When an organization builds a strong connection with the customer, an
organization will get an idea about the customer needs. For
understanding the customer behavior, the organization must conduct
surveys and one on one interviews.
(iii) Employee motivation: A manager in a business organization usually gets
things done by others. Here, he will be successful when he can motivate
his employees. OB helps him to understand different ways to motivate
employees properly.
 (iv) Nature of employees: Understanding the employee nature is important
to manage them properly.
(v) Efficiency and effectiveness: OB helps to increase efficiency and
effectiveness of organization.
(vi) Better environment of organization: It helps to create healthy, ethical
and smooth environment in organization.
(vii) Better utilization of resources: Study of OB helps to understand
employees and their workstyle and skill better way. By understanding
this, management can train and motivate employees for optimum
utilization of resources.

Goals of Organizational Behavior

The bottom line of OB is to explain and predict behavior within an organization.

By examining behavior in three different levels of influence – at the individual,
group and organizational level – organizations can better understand
performance in the workplace and improve interactions among employees. This
can also create a competitive advantage through improved motivation,
leadership, communication and organizational culture, all of which greatly affect a
business bottom line.