Unit 1

MEANING OF ORGANIZATIONAL BEHAVIOUR

Organisation behaviour is the study and application of knowledge about how and why
people behave in organizations. Organizational behaviour describes how people interact with
one another inside of an organization, such as a business.

DEFINITION:

According to Fred Luthans, “Organisational behavior is directly concerned with the

Understanding, prediction, and control of human behavior in organizations.”
According to Keith Davis quoted as “Organizational Behavior is the study and
application of knowledge about how people act within organization."

NATURE OF ORGANIZATIONAL BEHAVIOUR:

1. A Separate Field of Study and Not a Discipline Only:

By definition, a discipline is an accepted science that is based on a theoretical foundation.

But, O.B. has a multi- interdisciplinary orientation and is, thus, not based on a specific
theoretical background. Therefore, it is better reasonable to call O.B. a separate field of
study rather than a discipline only.

2. An Interdisciplinary Approach:

Organizational behaviour is essentially an interdisciplinary approach to study human

behaviour at work. It tries to integrate the relevant knowledge drawn from related
disciplines like psychology, sociology and anthropology to make them applicable for
studying and analysing organizational behaviour.

3. An Applied Science:

The very nature of O.B. is applied. What O.B. basically does is the application of various
researches to solve the organizational problems related to human behaviour. The basic line
of difference between pure science and O.B. is that while the former concentrates of
fundamental researches, the latter concentrates on applied researches. O.B. involves both
applied research and its application in organizational analysis. Hence, O.B. can be called
both science as well as art.

4. A Normative Science:

Organizational Behaviour is a normative science also. While the positive science discusses
only cause effect relationship, O.B. prescribes how the findings of applied researches can
be applied to socially accepted organizational goals. Thus, O.B. deals with what is
accepted by individuals and society engaged in an organization. Yes, it is not that O.B. is
not normative at all. In fact, O.B. is normative as well that is well underscored by the
proliferation of management theories.

5. A Humanistic and Optimistic Approach:

Organizational Behaviour applies humanistic approach towards people working in the

organization. It, deals with the thinking and feeling of human beings. O.B. is based on the
belief that people have an innate desire to be independent, creative and productive. It also
realizes that people working in the organization can and will actualise these potentials if
they are given proper conditions and environment. Environment affects performance or
workers working in an organization.

6 A Total System Approach:

The system approach is one that integrates all the variables, affecting organizational
functioning. The systems approach has been developed by the behavioural scientists to
analyse human behaviour in view of his/her socio-psychological framework. Man’s socio-
psychological framework makes man a complex one and the systems approach tries to
study his/her complexity and find solution to it.

SCOPE OF ORGANIZATIONAL BEHAVIOUR

 Improves the Satisfaction of Employees

Organisation behaviour is mainly concerned with understanding the nature of
peoples working in the organisation. It gives the complete idea of how people will
respond to the organisation. This helps employers in treating their employees properly
and providing them with better facilities.
 Managers handle every employee differently as per their nature. Employees also get work
as per their interest and better working conditions. Employees are awarded on the basis of
their performance. It leads to increase overall satisfaction level of all employees.

 Reduce the Chances of Conflicts

Conflict is dangerous for successful functioning and growth of every organisation.
Every business aims to avoid conflict with their employees. Organisation behaviour helps
in developing better relations among employees and also among employer and employee.
 Facilitates Management

Organisation behaviour is considered as an important and integral part of the

management process. It is basically concerned with managing and influencing the
individuals working in an organisation. Managers find it easy to manage all the staff
when they have a better understanding and knowledge regarding their subordinates.

 Helps in Motivation
Companies develop a better system of motivating their employees through
organisational behaviour. Through organisational behaviour, complete information
regarding employee’s need and requirement is well understood.

 Increases Organisational Efficiency

It aims at increasing the efficiency of the organisation through maximum
utilisation of resources. Organisational behaviour attempts to reduce the wastage of
resources. It helps in the identification of the right type of human skill required for the
organisation for better productivity.

 Develops Positive Attitude

It makes it easy to predict the individual’s behaviour, needs and requirements.

Organisation can accordingly focus on employee’s needs and work for their
betterment to increase their satisfaction level.. They feel that the organisation cares for
them. This way the relationship between employer and employee are improved.

 Helps in Performance Appraisal

Performance appraisal is an important element for improving the performance of
the employees. Employees when awarded for their good performance feel motivated
 to work better. It enables it to predict how peoples are working as an individual and as
a group. Their performance can be measured easily and accordingly, they can be
appraised.

FEATURES OF ORGANIZATIONAL BEHAVIOUR

1. Behavioural Approach to Management:

Organisational behaviour is that part of whole management which represents the

behavioural approach to management. Organisational behaviour has emerged as a distinct
field of study because of the importance of human behaviour in organisations.

2. Cause and Effect Relationship:

Human behaviour is generally taken in terms of cause and effect relationship and not
in philosophical terms. It helps in predicting the behaviour of individuals. It provides
generalizations that managers can use to anticipate the effect of certain activities on human
behaviour.

3. Organisational Behaviour is a Branch of Social Sciences:

Organisational behaviour is heavily influenced by several other social sciences viz.
psychology, sociology and anthropology. It draws a rich array of research from these
disciplines.

4. Three Levels of Analysis:

Organisational behaviour encompasses the study of three levels of analysis namely
individual behaviour, inter-individual behaviour and the behaviour of organizations
themselves. The field of organisational behaviour embraces all these levels as being
complementary to each other.

5. A Science as well as an Art:

Organisational behaviour is a science as well as an art. The systematic knowledge
about human behaviour is a science and the application of behavioural knowledge and skills
is an art.

6. A Body of Theory, Research and Application:

 Organisational behaviour consists of a body of theory, research and application which
helps in understanding the human behaviour in organisation. All these techniques help the
managers to solve human problems in organizations.

7. Beneficial to both Organisation and Individuals:

It creates an atmosphere whereby both organisation and individuals are benefitted by
each other. A reasonable climate is created so that employees may get much needed
satisfaction and the organisation may attain its objectives.

8. Rational Thinking:
Organisational behaviour provides a rational thinking about people and their
behaviour. The major objective of organisational behaviour is to explain and predict human
behaviour in organizations, so that result yielding situations can be created.

SIGNIFICANCE OF ORGANIZATIONAL BEHAVIOUR:

1. Skill Improvement
The Study of Organizational Behaviour helps to improve skills. This includes the
ability of employees and use of knowledge to become more efficient. Organizational
Behaviour study also improves managers as well as other employees work-skill.

2. Understanding Consumer Buying Behaviour

It also an important part to improve the marketing process by understanding

consumer buying behaviour.
3. Employee Motivation
Organisational Behaviour (OB) helps to understand the basis of Motivation and different
ways to motivate employees properly.

4. Nature of Employees
Understanding of personnel and employee nature is important to manage them
properly. With the help of Organizational behaviour, we can understand whether employees
or people are Introvert, Extrovert, Motivating etc.

5. Anticipating Organisational events

The scientific study of behaviour helps to understand and predict organisational events.
For example Annual Business Planning, Demand Management, Product line management,
Production Planning, Resources Scheduling, Logistics etc.

6. Efficiency & Effectiveness

It helps to increase efficiency and effectiveness of the organisation

7. Better Environment of Organisation

OB helps to create a healthy, ethical and smooth environment in an organization.

8. Optimum or Better Utilization of Resources

Study of OB helps to understand employees and their work style and skill better
way. By understanding this, management can train and motivate employees for optimum
utilization of resources.

9. Goodwill of organization
Organizational Behaviour helps to improve Goodwill of organization.

LEVELS OF ORGANIZATIONAL BEHAVIOUR:

1. Individual Level

This is the first level of OB analysis. At the individual level, organizational

behavior studies the behavior of an individual person such as his/her attitudes, motivation,
perception, personality, values, ethics, satisfaction, and other personal traits. The individuals
working in the organization are the very existence of the organization. Each individual’s
behavior is different from others, as it is natural, and some are affected by social, cultural,
and other social variables.

2. Group Level

The organization also consists of different groups and teams. The group-level analysis of
OB studies the behavior of people at the group level, how groups work, why they interact in
group work, collaboration, group decisions, etc.
A group is a people who come together to reach some common goals. They can be small or
large and formal or informal. In a group people work together, one’s actions affect others,
they are dependent on each other, and the goal is achieved through collective effort.

3. Organizational Level

At this last level organizational behavior analyses how the organization works. It
mainly studies how people interact with organizational structure, how the organization with
them, and how the external environment forces interact with the organization.Its major
variables such as work environment, organizational structure, culture, change, politics, and
environment within and outside of the organization.

CONTRIBUTING DISCIPLINE TO ORGANIZATIONAL BEHAVIOUR:

 Psychology
 Sociology
 Social Psychology
 Anthropology
 Political Science
 Economics
1.Psychology

Psychology is the behavioral science that studies human behavior (+animals) and mental
processes. It is the science of humans. It is the best tool to understand why people think, what
they think, and how they think. Psychology has contributed many important concepts to OB,
such as:

 Motivation
 Learning
 Perception
 Personality
 Emotion
2.Sociology:
Sociology is the study of group behaviour. It can be described as an academic
discipline that uses the scientific method to accumulate knowledge about the social behaviour
of an individual. In other words, it studies the behaviour of people in relation to their fellow
human beings.
Some of the areas within the OB that have received valuable input from sociologists
include group dynamics, organizational culture, formal organization theory and structure,
organizational technology, bureaucracy, communication power, conflict, and inter-group
behaviour

3.Social Psychology:

Social psychology is the combination of both psychology and sociology. It studies the
social behavior and thought of people plus how people think, feel, process, and act. It
explains the interaction, interdependence, and influence of people among one another.

Social psychologists study various areas combining both sociology and psychology but
the most important for organizational behavior are the concept of behavioral change, attitude
change, communication, group process, and group decision making.

4.Anthropology

Anthropology is the science of humans. It studies the evolution or development stages of

human beings consisting of human nature, different societies, and how different cultures are
developed.It also studies how humans interacted with their environment, how they are now,
and how in the future and how humans are civilized.

5. Economics:

Any organization to survive and sustain itself must be aware of the economic

viability of their effort. This applies even to non-profit and voluntary organizations as well.

6. Political Science:

The contributions of Political Scientists are significant to the understanding of

arrangement in organizations. It studies individuals and groups within specific conditions

concerning power dynamics. Important topics under here include the structuring of conflict,

allocation of power, and how people manipulate power for individual self-interest, etc.

EMERGING TRENDS AND CHALLENGES IN ORGANIZATIONAL BEHAVIOUR

1. Globalization

Globalization has enabled the availability of all types and all countries’
products in a single place. It has both challenges and opportunities for organizational
behavior. Challenges such as it have negatively impacted the market of local business,
difficult for managers to cope with international norms, values, and cultures, ever-
growing competition, advancement of technology, etc. It also provides opportunities
such as a domestic product getting international customers, a place in the international
market, extended market, revenue, new investment opportunities, and better career
perspectives.

2. Workforce Diversity

Workforce diversity means differences in people working in the organization such

as in terms of age, race, culture, gender, values, education, geography, income, and so
forth. It is obvious that an organization consists of diverse groups of people having
different backgrounds. The differences in people should be taken into consideration by
the managers. The managers should understand the backgrounds of their employees, plan
accordingly, and develop teamwork and harmony in the organization.

3. Emerging employment Relation

Changing trends in organisations in recent years have made it utmost important to

consider some of the emerging employee relations issues which can affect employers in the
coming decade. Understanding these issues will help management to better plan and respond
to changes in the workplace.
4. Values & Ethics

Organizational ethics and values are the principles and standards which determine
acceptable conduct in the organization. They relate to actions, which are characterized
by honesty, integrity, morality, and good management practices. Organizational ethics
and values are very important since they build trust and confidence in various
relationships.

5. Improving Quality & Productivity

Quality is having a degree of excellence as compared to others and productivity

means producing maximum out of minimum input and cost.Due to globalization, the
demand of customers is ever-changing, they do not demand only products/services
rather they demand quality products/services.

6. Total Quality Management (TQM)

Total Quality Management (TQM) is a philosophy of management that is driven by

the constant attainment of customer satisfaction through the continuous improvement of all
organizational processes.
The components of TQM are;

(a) An intense focus on the customer,

(b) Concern for continual improvement,

(c) Improvement in the quality of everything the organization does,

(d) Accurate measurement and,

(e) Empowerment of employees.

7. Empowering people

Encouraging employees to participate in work related decisions will sizable enhance

their committed work.

8.. Stimulating Innovation and Change

Organizations must foster innovation and be proficient in the art of change;

otherwise, they will become candidates for extinction in due course of time and
vanished from their field of business.

9. Corporate Social Responsibility

Corporate social responsibility is a business model by which companies make a

concerted effort to operate in ways that enhance rather than degrade society and the
environment