MODULE 1: INTRODUCTION TO THE
FIELD OF ORGANIZATION
BEHAVIOR
BY: PHILIP HENRY F. CONTAOI, MBA
Meaning of Human Behavior
 Human Behavior refers to the full
range of physical and emotional
behaviors that humans engage in,
biologically, socially, intellectually,
etc. and are influenced by culture,
attitudes, emotions, values, ethics,
authority, rapport, persuasion,
coercion and/or genetics.
 The capacity of mental, physical,
emotional, and social activities
experienced during the five stages
of a human being’s life – prenatal,
infancy, childhood, adolescence,
and adulthood. Includes the
behaviors as dictated by culture,
society, values, morals, ethics,
and genetics.
Meaning of Human Behavior
A study on human behavior has
revealed that 90% of the population can
be classified into four basic
personality types:
 Optimistic
 Pessimistic
 Trusting
 Envious
Organizational Behavior
 Organizational behavior is the
study of individuals and groups
within an organizational context,
and the study of internal
processes and practices as they
influence the effectiveness of
individuals, teams, and
organizations.
 Organizational Behavior is the
understanding, prediction, and
management of human behavior
in the organization (Luthans, e-b)
 Organizational Behavior is the
study of human behavior in
organizational settings, of the
interface between human behavior
and the organization, and the
organization itself.
 Organizational Behavior is the
study of what people think, feel,
and do in and around
organization.
What is an Organization?
 Organization is a group of people
who work interdependently toward
some purpose.
 Organization is a collection of
people working together to
achieve a common purpose.
 Organizations consist of people
who communicate, coordinate,
and collaborate with each other to
achieve common objectives.
(MCS)
TWO (2) Key Feature of Organization
1. It is a collective entity. It consists
of human beings (not necessarily
Employees) and these people
interact with each other in an
organized way.
 This organizational relationship
requires minimal level of the 3 C’s
to achieve a common goal.
 The organizational members have
degrees of interdependence from
each other.
  They accomplish goals by sharing
materials, information, or expertise
with co-workers.
Individual vs. Organizational Goals
1. The goals that individuals are
trying to accomplish as members
of an organization are:

2. The members have a collective

sense of purpose.

 Earning a lot of money

 An organization without a goal and  Helping promote a worthy cause
purpose will consist of a mass of  Achieving certain levels of
people wandering around personal power and prestige
aimlessly without any sense of  Enjoying a satisfying work
direction. experience, and so forth.
 So, whatever people are doing in
an organization, they have some
sense of collective purpose. 2. The goals that organization as a
whole is trying to accomplish are:

 Providing innovative goods and

The Emphasis of Organizational services that customers want
Behavior  getting candidates elected
 raising money for medical
 OB’s focus is on employee research
behavior, decisions, perceptions,  making a profit to reward
and emotional responses. stockholders, managers, and
employees
 OB looks at how individuals and  being socially responsible and
teams in organizations relate to protecting the natural
each other and to their environment.
counterparts in other
organizations.
At individual level, objectives are
of two types: one, performance of
 OB also encompasses the study individuals which leads to attainment of
of how organizations interact with overall goals and two, personal
the external environments, objectives of individuals.
particularly in the context of Individual goals should be
employee behavior and decisions. consistent with organizational goals.
Organizational and individual goals
 OB researchers systematically should be in complete harmony with
study these topics at multiple each other.
levels of analysis, namely, the
individual, team (including
interpersonal), and organization.
Essence of Organizations
The Emphasis of Organizational
Behavior.  Organizations exist to provide
goods and services that people
want, and the amount and quality
of these goods and services are
 products of the behaviors and
performance of an organization’s
employees-of its managers, of
highly skilled employees in sales
or research and development, and
of the employees who actually
produce or provide the goods and
services.
 Today, most people make their
living by working in or for some
kind of company or organization.
People such as a company’s
owners or managers or company
employees who desire to become
future owners or managers-all
benefit from studying
organizational behavior.
Essence of Organizations
 People who seek to help or
volunteer their time to work in
nonprofit or charitable
organizations also must learn the
principles of organizational
behavior.
 Like most employees today,
volunteers attend training courses
that help them understand the
many kinds of issues and
challenges that arise when people
work together and cooperate in a
company or organization to benefit
others, such as when they seek to
aid ill. Distressed, or homeless
people, or managers – all benefit
from studying organizational
behavior.
Reasons and Methods of Studying
Human Behavior in organization.
 Understanding how people
behave in organizations is
important because they are
affected-positively and negatively-
by their experiences in it.
 An understanding of OB can help
people to enhance the positive,
while reducing the negative,
effects of working in organizations.
 Most people think they have
intuitive, commonsense
understanding of human behavior
in organization because we are all
humans and have been exposed
to organizations.
 The study of OB provides
guidelines that help people at work
to understand and appreciate
the many forces that affect
behavior in organizations.
 It allows employees at all levels in
an organization to make the right
decisions about how to behave
and work with other people in
order to achieve organizational
goals.
 OB replaces intuition and gut-
feeling with a well-researched
body of theories and systematic
guidelines for managing behavior
in organizations.
Methods in Studying Organizational
Behavior or Human Behavior
1. Experiment
2. Surveys
3. Case Method
4. Observation
5. Interview
6. Interview Questionnaire
7. Check List
8. Scales Psychological Tests
9. Statistics
History of Organizational Behavior
Research
 Began in the closing decades of
19th Century after the industrial
revolution swept across Europe
and America.
  As a result there were many
changes taking place in the
economic, technical and cultural
areas.
 Taylor was a manufacturing
manager who eventually became
a consultant and taught other
managers how to apply his
scientific management techniques.

 Focus of managers – political,

educational, and economic-shifted
to finding better ways to satisfy
customers.
MODULE 2:

The Historical, Theoretical and

Ethical Foundations of Organizational
 The manner in which goods were
Behavior
produced changed because of the
introduction of steam power and
intro of sophisticated machineries
HISTORICAL BACKGROUND OF O.B.
and equipment.
(ORGANIZATIONAL BEHAVIOR)
Ex: Weaving and clothing industries
(craft production).
What is Organizational Behavior?
Small workshops of skilled workers were
replaced by large factories with unskilled  Organizational behavior is the
or semi-skilled workers. study of both group and individual
performance and activity within an
organization. Internal and external
 Owners and managers, with only a perspectives are two theories of
technical orientation, were caught how organizational behavior can
unprepared to deal with the social be viewed by companies.
problem of people working in a big
group
 Managers began searching new  Organizational Studies,
techniques to manage human Organizational Behavior and
resources to increase efficiency of Organizational Theory is the
the employee-tax mix . systematic study and careful
application of knowledge about
how people - as individuals and as
Frederick Winslow Taylor and
groups- act within organizations.
Scientific Management

Historical Perspective of
 Frederick W. Taylor (1856-1915)
Organisational Behaviour
is best known for defining the
techniques of scientific mgmt,  In 1776, Adam Smith advocated
systematic study of a new form of organisational
relationships between people structure based on the division of
and tasks for the purpose of labour.
redesigning the work process to  One hundred years later, German
increase efficiency. Sociologist Max Weber introduced
the concept about rational
 organisations and initiated the 3. Mary Parker Follett,
concept of charismatic leadership. 4. Frederick Herzberg
5. Abraham Mas low
6. David Mc Cellan
 Though the origin to the study of 7. Victor Vroom
Organisational Behaviour can
contributed to the growth of
trace its roots back to Max Weber
Organisational Behaviour as a
and earlier organisational studies,
discipline.
it is generally considered to have
begun as an academic discipline
with the advent of scientific
THE HAWTHORNE STUDIES
management in the 1890's, with
Taylorism representing the peak of
the movement.
The Hawthorne Experiments
 Thus, it was Fredrick Winslow
Taylor who introduced the  The experiments were carried out
systematic use of goal setting and between 1927 and 1933 at the
rewards to motivate employees Chicago Hawthorne plant of the
that could be considered as the Western Electric Company. Four
starting of the academic discipline studies were carried out namely:
of Organizational Behavior.
1. The illumination studies
2. The Relay Assembly Test Room
Historical Perspective of Studies
Organizational Behaviour 3. The interviewing Program
4. The Bank Wiring Room studies
 In 1920's Elton Mayo an
Australian born Harvard Professor
1. The illumination studies
and his colleagues conducted
productivity studies at Western
 These studies were expected to
Electric's Hawthorne Plant.
determine the relationship
 With this epoch making study the
between the level of illumination
focus of organisational studies
and worker's productivity.
shifted to analysis of how human
 It was expected that worker's
factors and psychology affected
productivity would increase with
organisations.
increasing levels of illumination
 The studies failed to prove any
 This shift of focus in the study of
relationship between worker's
organisations was called the
productivity and level of
Hawthorne Effect.
illumination.

 The Human Relations Movement

2. Relay assembly test room
focused on teams, motivation, and
studies.
the actualisation of goals of
individuals within organisations.
 These studies were carried out to
 Studies conducted by prominent
determine the relationship
scholars like :
between worker's productivity and
1. Chester Barnard,
improved benefits and working
2. Henri Fayol
conditions.
 Manipulated factors of production
to measure effect on output:
 Pay Incentives
 Length of Work Day & Work Week
 Use of Rest Periods
 Company Sponsored Meals
 The studies found out that there
was no cause - and - effect
relationship between working
conditions and output.
 Rather, there were other factors
that affected worker's output such
as his/her attitudes and supervisor
behavior.
3. Interview programmed
 A group of employees were
interviewed to learn more about
their opinions with respect to their
work, working conditions and
supervision. The workers
suggested that:
 Psychological factors help
determine whether a worker is
satisfied or dissatisfied in any
particular work situation
 The person's need for self-
actualization determines his/her
satisfaction in the work.
 A person's work group and his
relationship to it, also determines
his/her productivity.
 Behavior of managers and
workers in the work setting is as
important in explaining the level of
performance as the technical
aspects of the task.
4. Bank wiring room studies
 This study was expected to study
the effect of group influence on
workers productivity.
Few Special Conditions
 Segregated work area
 No Management Visits
 Supervision would remain the
same
 Observer would record data only-
no interaction with workers..
 New incentive pay rate was
established for the small group.
 Any increases in output would be
included in departmental pay
incentives
 The researchers found out that an
informal grouping and relationship
was a critical factor in the workers'
productivity.
 The informal group determined the
group's productivity, and
functioned as a protective
mechanism (served both for
internal and external purposes).
ORGANIZATIONAL BEHAVIOR’S
THEORETICAL FOUNDATION
 Cognitive Framework of
Organizational Behaviour
 Cognition means the mental action
or process of acquiring knowledge
and understanding through
thought, experience and the
sense.
 As per cognitive framework of
organizational behaviour, before
the behaviour of the person
cognition starts and giving input to
the thinking, perception and
problem solving of the person.
 This framework on the concept of  Sinner advocates that behaviour is
Expectancy, demand and intention not the outcome of stimulus alone,
of the human being. but it is an outcome which also
 According to Edward Tolman, depends on contingent
learning consists of the environmental consequence of a
expectancy that a particular event behaviour.
will lead to a particular
consequence.
 If we use this to represent  This means that a human can
cognitive framework it simply project different behaviour for the
means every individual set his same stimulus and he exhibit a
goal and he also know the response depending on
behavior will we take him to environmental consequence.
achieve goal.
 This cognitive framework is useful  Overall it can be said that
in analyzing perception, Behavioural framework is based
personality, motivation, decision on observable behaviour and
making of human in the observable environmental
organization. variables.

 Behaviouristic Framework of
Organizational Behaviour
 Social Cognitive Framework in
Organizational behaviour
 Pioneer behaviourist Ivan Pavlov
and John B. Watson insist that it
 The Social Cognitive Theory is a
is advisable and fruitful to the
framework which give a base to
study the behaviour of the human
understand the human behaviour.
being which is visible than
studying the mind is elusive in
 The Social cognitive framework
nature.
in organizational behaviour states
that the person and external
 The concept of behaviouristic
situations are interdependence
framework of organizational
with each other along with the
behaviour can be clearly
behaviour itself to determine the
explained with the help of stimulus
behaviour.
and respond.

 It means that along with cognitive

 Stimulus is the force of action or and external situation the
motivation and response is the experiences faced through
reaction or the behaviour. relevant past events determines
what a person becomes and this
 Further behaviourist B.F. will create an impact in
Skinner developed this concept subsequent behaviour.
by considering the environmental  The person and the environmental
consequences which leads to a situation do not function as
certain behaviour. independent units but, in
conjunction with behaviour itself,
 reciprocally interact to determine
behaviour.
 It means that cognitive variables
and environmental variables are
relevant, but the experiences
generated by previous behaviour
also partly determine what a
person becomes and can do,
which, in turn, affects
subsequently behaviour.
. productivity, and the bottom line of
BANDURA & STAJKOVIC/LUTHANS
 Bandura developed social
learning theory into the more
comprehensive social cognitive
theory (SkCT).
 Stajkovic and Luthans have
translated this SCT into theoretical
framework for organizational
behaviour.
Bandura identified 5 basic human
capabilities as a part of SCT
1. Symbolizing: People process visual
experiences into cognitive models. They
help in future action.
2. Forethought: Employees plan their
action.
3. Observational: Employees learn by
observing the performance of the
referent groups (peers, supervisors, and
high performers) and the consequence
of their action.
4. Self Regulatory: Employees self
regulate their actions by setting internal
standards (aspired level of
performance).
5. Self-reflective: Employees reflect
back on their actions (how did I do?)
and perceptually determine how they
believe then can successfully
accomplish the task in the future given
the context (probability of success
between 0 to 100% is estimated).
IMPLICATIONS AND IMPACTS OF
ETHICS IN ORGANIZATION
 An organization's ethical
philosophy can affect the
organization in many ways
including its reputation,
the organization.
 Ethics within an organization can
offer many benefits. A positive
ethical corporate culture improves
the morale among the workers in
an organization, which could
increase productivity, employee
retention and loyalty.
 Higher productivity improves the
efficiency of the organizations and
increased employee retention
reduces the cost of replacing
employees.
 Other essential benefits of an
ethical culture include better
internal communication and wider
community development through
corporate social responsibility.
 Organizations that lack ethical
practices as a mandatory basis of
their business structure and
corporate culture, have commonly
been found to fail due to the
absence of business ethics.
 Corporate downfalls would
include, but are not limited to, the
recent Enron and WorldCom
scandals, two primary examples of
unethical business practices
concerning questionable
accounting transactions.
 Organizations focusing on
encouraging ethical practices are
commonly viewed with respect by
 their employees, the community,
and corresponding industries.
 Ethical business practices of
organizations have resulted in a
solid financial bottom-line. This
has been seen through greater
sales and increased revenue by
companies retaining talented
personnel and attracting new
skilled employees.
 More importantly, an ethical
organization will have the ability to
retain employees that are
experienced and knowledgeable
(generally referred to as human
capital).
 This human capital results in less
employee turnover, less training
time for new employees, and
greater output regarding services
(or production of goods).
MODULE 3:
THE CHANGING ENVIRONMENT OF
ORGANIZATIONS
Effects of Globalization in the
Behavior of People in the
Organizational Setting
 Globalization is the process in
which people, ideas and goods
spread throughout the world,
spurring more interaction and
integration between the world’s
cultures, governments and
economies
 Globalization is the spread of
products, technology, information,
and jobs across national borders
and cultures. In economic terms, it
describes an interdependence of
nations around the globe fostered
through free trade.
 Globalization leads to increased
competition. This competition can
be related to product and service
cost and price, target market,
technological adaptation, quick
response, quick production by
companies etc. When a company
produces with less cost and sells
cheaper, it is able to increase its
market share.
Globalization and Changes in Wages
 When companies expand
overseas to countries with a lower
standard of living, they gain
access to products and services at
a much lower cost. Because of
this, an increasing number of
companies outsource. Although
good for businesses, this can
result in lower wages for workers.
Effects of Diversity in the Behavior of
People in the Organizational Setting
 It means understanding that each
individual is unique, and
recognizing our individual
differences. These can be along
the dimensions of race, ethnicity,
gender, sexual orientation, socio-
economic status, age, physical
abilities, religious beliefs, political
beliefs, or other ideologies.
 Diversity in the workplace makes
teams perform more creatively
and innovatively than teams with
similar backgrounds.
 When people react and think
differently, approach challenges
and solve problems differently, it
can mean that customers receive
 a better level of service and teams performance and improves job
achieve their goals. satisfaction.

Communication

 Remote employees benefit from

There are some very positive benefits
communication technology. With
that can be hard from having a more
VOIP (Voice Over Internet
diverse workforce. Let’s discuss eight
Protocol), employees who
amazing benefits to individuals and
telecommute don’t need to rely on
employing companies;
their cell phones since the same
1. Increased productivity type of multi-line office phone can
2. Improved creativity be connected to an ethernet cord
3. Increased profits in a home office mirroring the
4. Improved employee engagement typical office setting, assuring
5. Reduced employee turnover remote employees they’re part of
6. Improved company reputation a team.
7. Wider range of skills
8. Improves cultural insights  Strictly using technology for all
workplace communication can be
problematic if employees begin to
Effects of Technology in the Behavior avoid in-person or face-to-face
of People in the Organizational interactions. All workplace
Setting conversations should not be
conducted electronically,
 Technology in the workplace has
especially for sensitive topics,
helped workers become more
such as performance evaluations
efficient than ever before.
and disciplinary actions.

 Technology can help your

business grow from a small,
homegrown company to a large Training
corporation. However, technology
 Technology can dramatically
has a more immediate impact on
change the landscape for training
your employees. Regardless of
within your organization, for new
where you implement new
technology itself or ongoing
technology in your organization,
professional training and personal
employees throughout your
development.
company will be directly affected
in plenty of positive ways.
Effects of Corporate Governance in
the Behavior Of People in the
Efficiency
Organizational Setting
 Technology can improve the way
 Effects of Corporate Governance
your employees do their jobs,
in the Behavior of People in the
making them more efficient and
Organizational Setting Corporate
free from the burden of tedious,
governance is the system used to
repetitive tasks. Technology
direct and control organizations.
simplifies many job functions,
One of the many important roles
which in turn strengthens
played by corporate boards and
 executive committees is to the framework of corporate
establish and enforce policies governance occurs when an
deemed necessary for the officer or other controlling member
effective operation of the of a corporation has other financial
company. • interests that directly conflict with
the objectives of the corporation.

 These may include codes of

ethical conduct towards
customers, vendors, employees
and shareholders, input into the
organization’s structure, as well as
approval of functional positions
and responsibilities.
Establishing Corporate Strategy
 An organization’s corporate board
must be intimately involved with
establishing a clear definition for
the organization’s purpose and
desired outcomes. If a company
sets the goal to become the global
leader in telecom technology for
the military market, for instance,
then corporate objectives,
strategic plans, financial
allocations and measurable
outcomes should all be measured
against their ability to move the
company toward that goal.
Effects of Corporate Governance in
the Behavior of People in the
Organizational Setting
5 Common Issues that Arise in
Corporate Governance
1. Conflicts of Interest
2. Oversight Issues
3. Accountability Issues
4. Transparency
5. Ethics Violation
OVERSIGHT ISSUES
 Effective corporate governance
requires the board of directors to
have substantial oversight of the
company’s procedures and
practices. Oversight is a broad
term that encompasses the
executive staff reporting to the
board and the board’s awareness
of the daily operations of the
company and the way in which its
objectives are being achieved.
ACCOUNTABILITY ISSUES
 Accountability is necessary for
effective corporate governance.
From the top-level executives to
lower-tier employees, each level
and division of the corporation
should report and be accountable
to another as a system of checks
and balances.
TRANSPARENCY
 To be transparent, a corporation
must accurately report their profits
and losses and make those
figures available to those who
invest in their company.
Overinflating profits or minimizing
losses can seriously damage the
company’s relationship with
stockholders in that they are
enticed to invest under false
pretenses.

CONFLICTS OF INTEREST
ETHICS VIOLATIONS
 Avoiding conflicts of interest is
vital. A conflict of interest within
  Members of the executive board
have an ethical duty to make
decisions based on the best
interests of the stockholders.
Further, a corporation has an
ethical duty to protect the social
welfare of others, including the
greater community in which they
operate.
Effects of New Employment
Relationships in the Behavior of
People in the Organizational Setting
 The term ‘employee relations’
refers to a company’s efforts to
manage relationships between
employers and employees. An
organization with a good
employee relations program
provides fair and consistent
treatment to all employees so they
will be committed to their jobs and
loyal to the company. Such
programs also aim to prevent and
resolve problems arising from
situations at work.
Effects of New Employment
Relationships in the Behavior of People
in the Organizational Setting
One of the most effective ways for a
company to ensure good employee
relations is to adopt a human resource
strategy that places a high value on
employees as stakeholders in the
business. Stakeholders are people who
are committed, financially or otherwise,
to a company and are affected by its
success or failure. When employees are
treated as more than just paid laborers,
but as actual stakeholders with the
power to affect outcomes, they feel
more valued for the job they do.
Effects of New Employment
Relationships in the Behavior of People
in the Organizational Setting
An effective employee relations program
starts with clearly written policies.
Employee relations policies describe the
company’s philosophy, rules, and
procedures for addressing employee-
related matters and resolving problems
in the workplace.
Effects of New Employment
Relationships in the Behavior of People
in the Organizational Setting
Communication
Perhaps the most important element for
successful relationships with employees
is communication. To feel engaged in
the business, employees need to be
informed of what’s going on with the
company, including management’s
plans and how those plans may affect
their jobs.
Effects of New Employment
Relationships in the Behavior of People
in the Organizational Setting
Challenges Facing the Employment
Relationship in Future Organizations
addresses the issues of change within
employee relationships resulting from
the impact of factors such as: *
international competitive pressures. *
technological change. Changing
individual expectations and behaviours.
 With elearning, each time the course is
accessed your return on investment
Effects of New Employment
improves because you are dividing the
Relationships in the Behavior of People
fixed production costs by number of
in the Organizational Setting
uses. You also have savings through
decreased travel, reduced material, and
hopefully improved (and more efficient)
Poor communication is one of the main performance.
causes of conflict between employees in
the workplace. This can result in a
difference in communication styles or a
failure to communicate. For example, a
manager reassigned an employee’s task
to the employee’s co-worker but failed to
communicate the reassignment to the
employee.

Impact of High Performance Practices in

the Organization

High-performance work practices

(HPWPs) can be defined as practices
that have been shown to improve an
organization’s capacity to effectively
attract, select, hire, develop, and retain
high-performing personnel.

Impact of E-Learning in the Organization

E-learning materials are stored online,

so employees can access
importantresources any time they
encounter a question or difficult
situation…. E-learninghelps companies
create a higher quality, more effective
training experience for employees, at a
more affordable cost.

Impact of E-Learning in the Organization

Why E-learning is important?