Learning objectivesable By the end of the unit, participants will be
to: Explain the nature of organizational behavior Identify the major internal and external influences of today’s organization Discuss the theories of organizational behavior and apply them to the work situation


Recite the scientific foundations of human

and organizational behavior List the major challenges and opportunities for managers to use OB concepts Discuss why workforce diversity has become an important issue in management


Organizational behavior (OB) is an

interdisciplinary field drawing from numerous disciplines including psychology, sociology, economics, organization theory, statistics, political science and many others behavioral disciplines


The nature of an organization
Organizations are social systems which

comprises of science and people(technology and humanity) . Techniques alone do not produce results in absence of design and implementations.  Human behavior in an organization is unpredictable due to their deep-seated needs and value systems

Nature of ob……….
As a result there is rarely any idealistic

solution to the problems in an organization. One way to achieve some close to idealistic solution is to enhance the understanding and skill levels of human relations, at work place.


Meaning of organizations….
Basically, an organization is a group of people

intentionally organized to accomplish an overall, common goal or set of goals. Business organizations can range in size from two people to tens of thousands. Organizations have major subsystems, such as departments, programs, divisions, teams, etc.


Each of these subsystems has a way of doing

things to, along with other subsystems; achieve the overall goals of the organization. Often, these systems and processes are defined by plans, policies and procedures


Systems have inputs, processes, outputs and

outcomes. Inputs to the system include resources such as raw materials, money, technologies and people. These inputs go through a process where they're aligned, moved along and carefully coordinated, ultimately to achieve the goals set for the system.


Outputs are tangible results produced by

processes in the system, such as products or services for consumers. Another kind of result is outcomes, or benefits for consumers, e.g., jobs for workers, enhanced quality of life for customers, etc. Systems can be the entire organization, or its departments, groups, processes, etc.


Feedback comes from, e.g., employees who

carry out processes in the organization, customers/clients using the products and services, etc. Feedback also comes from the larger environment of the organization, e.g., influences from government, society, economics, and technologies.


Each organization has numerous subsystems, as

well. Each subsystem has its own boundaries of sorts, and includes various inputs, processes, outputs and outcomes geared to accomplish an overall goal for the subsystem. Common examples of subsystems are departments, programs, projects, teams, processes to produce products or services, etc. Organizations are made up of people -- who are also systems of systems of systems -- and so on it goes. Subsystems are organized in an hierarchy needed to accomplish the overall goal of the overall system.


The organizational system is defined by,

e.g., its legal documents (articles of incorporation, by laws, roles of officers, etc.), mission, goals and strategies, policies and procedures, operating manuals, etc.


The organization is depicted by its organizational

charts, job descriptions, marketing materials, etc. The organizational system is also maintained or controlled by policies and procedures, budgets, information management systems, quality management systems, performance review systems, etc


What is Organizational Behavior? Organizational Behavior (OB) is the study and
application of knowledge about how people, individuals, and groups act in organizations.  It does this by taking a system approach. That is, it interprets people-organization relationships in terms of the whole person, whole group, whole organization, and whole social system.


Its purpose is to build better relationships by

achieving human objectives, organizational objectives, and social objectives. It is an academic field of study concerned with human behavior in organizations; also called organizational psychology.


It covers topics such as Motivation,

Group Dynamics, leadership, organization structure, decision making, careers, conflict resolution, and Organizational Development. When this subject is taught in business schools, it is called organizational behavior; when it is taught in psychology departments, it is called organizational psychology.


Organizational behavior is an academic

discipline concerned with describing, understanding, predicting, and controlling human behavior in an organizational environment.


Organizational behavior has evolved from

early classical management theories into a complex school of thought—and it continues to change in response to the dynamic environment and proliferating corporate cultures in which today's businesses operate.


Organizational behavior scientists study four

primary areas of behavioral science: individual behavior, group behavior, organizational structure, and organizational processes. They investigate many facets of these areas like personality and perception, attitudes and job satisfaction, group dynamics, politics and the role of leadership in the organization, job design, the impact of stress on work, decisionmaking processes, the communications chain, and company cultures and climates.


They use a variety of techniques and

approaches to evaluate each of these elements and its impact on individuals, groups, and organizational efficiency and effectiveness


Organization Behavior the concept
This is a broad field of study which can be

also thought of as a platform and environment independent tool which can be used to study and apply knowledge about how people act within organizations. The three determinants of behavior in an organization are individual, group and structure. 


Organizational Behavior covers the core

topics of motivation, leadership behavior and power, interpersonal communication, group structure and process, learning, attitude development and perception, change process, conflict, job design and work stress. 


The scope ofinternal social system OB 1. People: They make up the
of the organization consisting of individuals and groups (large and small).Work force is a complicated resource to be managed. This process deals with.  Individuals who are expected to perform the task allotted to them. Superior-subordinate interactions. Teams who have the responsibility of getting the job done. The outside interface as the customers and the government officials.

2. Structure: This defines the official relationship of individuals in an organization. Various people with various roles as managers, accountants, assemblers etc. are related in some structural way so that the output can be effective. The key concepts related to this are: Hierarchy of Authority: Distribution of authority among positions along with the rights assigned to them.  Division of labor: This is the way the duties are distributed among various members and is a major element of the social structure

Span of Control: Total number of

subordinates over whom a manager has authority Specialization: Existence of specialties performed in the organization. Standardization: existence of procedures for recurring events.


 Formalization: extent of rules, procedures

and communication laid out. Centralization: concentration of authority to make the decision.  Complexity: It includes both vertical differentiation (outline number of hierarchical levels) and horizontal differentiation (number of units inside the organization as departments).


3. Mechanistic form: A mechanistic system is characterized by centralized decision making at the top level management, a rigid hierarchy of authority, narrowly defined job responsibilities and extensive rules and regulations explicitly disclosed to the employees through written documents.


Organic form: An organic system can be

defined in terms of decentralization of decision making which allows people directly involved in the job to make their own decisions, few levels in hierarchy with flexible authority and reporting levels, loosely defined job responsibilities and very few written rules and regulations.


5. Job and tasks: Job is the sum total of an individual's assignment at the workplace and the task refers to the various activities that need to be performed to get the job done. To provide motivation to the workers five job characteristics have been grossly defined. They are Skill variety, Task identity, Task significance, Autonomy and Feedback from the job.


The jobs can be designed to range from highly simple to highly complex tasks in terms of the use of the workers skill. Some of the design options are job simplification, job rotation, job enlargement and job enrichment.


6. Technology: This provides the physical

and economic resources with which people work. The organization has the technology for transforming inputs and outputs. These consist of physical objects, activities and process, knowledge, all of which are brought to bear on raw materials labor and capital inputs during a transformation process.

The technology can be classified in three

categories namely Long linked technology in which tasks are broken into a number of sequential and interdependent steps and the output of one unit becomes the input to the next, Mediating technology which links different parties who need to be brought together in a direct or an indirect way and Intensive technology which is used when a group of specialists are brought together to solve complex problems using a variety of technologies.


7. Environment: All organizations operate

within an external environment. All organizations mutually influence each other in a complex system that influence the attitudes of people, affects working conditions and provides competition for resources and power.  Two distinct sets of environment exist. Specific environment which includes the suppliers, customers, competitors, government's agencies, employees, unions, political parties etc. General environment includes the economic, political, cultural, technological and social factors in which the organization embedded.

Firms facing a fast changing or turbulent

external environment were very effective when they had more organic structures which provided flexibility for quick changes to be make within the internal environment of the system. Similarly, firms which operated in a relatively stable external environment were very effective when they had more mechanistic structures since it allows the system to operate in a predictable manner since authority, responsibility, procedures, and rules are clearly


The behavioral disciplines contributing to ob Experimental psychology-Learning; motivation,
perception, effects of physical environment on psychomotor performance, stress Social Psychology-Group dynamics, attitudes and attitude change, impression formation, personality, leadership  Industrial Psychology-Measurement of performance, abilities, job performance, abilities, job characteristics, employee compensation, applied motivational programs


Clinical Psychology-Human adjustment, emotional

stress, abnormal behavior, human development throughout the life cycle Sociology-Socialization process, social satisfaction, status systems, effects of major social institutions such as family, community, religion, organizational structure Political science-Interest groups, conflicts, power, bargaining, coalitions, strategic planning, control


Anthropology-Comparative organizational

structures, their functions in varying cultures, cultural influences on organizations, adaptation of organizations to environment Economics-Comparative organizational structures, their functions in varying cultures, cultural influences on organizations, adaptation of organizations to environment


Why study OB? The bottom line is that:
Tools from Organizational Behavior can be

used to help companies create positive and effective organizational cultures. Students who are committed to serving as positive change agents within companies can use the OB toolkit to help them achieve their goals.


OB model Dependent variables
 Productivity  Absenteeism  Turnover  Job Satisfaction

Independent variables Individual-level variables Group-level variables Organizational systems-level variables

Historical developments of aOB By most estimates, OB emerged as distinct
field around the 1940s. However, its origins can be traced much further back in time. The Greek philosopher Plato wrote about the essence of leadership. Aristotle, another respected philosopher, addressed the topic of persuasive communication. The writings of sixteenth-century Italian philosopher Niccolo Machiavelli laid the foundation for contemporary work on organizational power and politics.

In 1776, Adam Smith advocated a new form of

organizational structure based on the division of labor. One hundred years later, German sociologist Max Weber wrote about rational organizations and initiated discussion of charismatic leadership. Soon after, Frederick Winslow Taylor introduced the systematic use of goal setting and rewards to motivate employees.


In the 1920s, Elton Mayo and his colleagues

conducted productivity studies at Western Electric’s Hawthorne plant. They reported that an informal organization – employees casually interacting with others – operates alongside the formal organization. OB has been around for a long time; it just wasn’t organized into a unified discipline until after World War II.


Though it traces its roots back to Max Weber and

earlier, organizational studies is generally considered to have begun as an academic discipline with the advent of scientific management in the 1890s, with Taylorism representing the peak of this movement.

Proponents of scientific management held that

rationalizing the organization with precise sets of instructions and time-motion studies would lead to increased productivity.  Studies of different compensation systems were carried out.


After the First World War, the focus of organizational

studies shifted to analysis of how human factors and psychology affected organizations, a transformation propelled by the identification of the Hawthorne Effect . This Human Relations Movement focused on teams, motivation, and the actualization of the goals of individuals within organizations. Prominent early scholars included Chester Barnard, Henri Fayol, Frederick Herzberg, Abraham Maslow, David McClelland, and Victor Vroom.


The Second World War further shifted the field,

as the invention of large-scale logistics and operations research led to a renewed interest in rationalist approaches to the study of organizations. Interest grew in theory and methods native to the sciences, including systems theory, the study of organizations with a complexity theory perspective and complexity strategy.  Influential work was done by Herbert Alexander Simon and James G. March and the so-called "Carnegie School" of organizational behavior.

In the 1960s and 1970s, the field was strongly

influenced by social psychology and the emphasis in academic study was on quantitative research. An explosion of theorizing, much of it at Stanford University and Carnegie Mellon, produced Bounded Rationality, Informal Organization, Contingency Theory, Resource Dependence, Institutional Theory, and Organizational Ecology theories, among many others.

Starting in the 1980s, cultural explanations of

organizations and change became an important part of study. Qualitative methods of study became more acceptable, informed by anthropology, psychology and sociology. A leading scholar was Karl Weick.


Specific Contributions
Frederick Winslow Taylor (1856-1915) was the

first person who attempted to study human behavior at work using a systematic approach. Taylor studied human characteristics, social environment, task, physical environment, capacity, speed, durability, cost and their interaction with each other. His overall objective was to reduce and/or remove human variability.


Taylor worked to achieve his goal of making

work behaviors stable and predictable so that maximum output could be achieved. He relied strongly upon monetary incentive systems, believing that humans are primarily motivated by money.  He faced some strong criticism, including being accused of telling managers to treat workers as machines without minds, but his work was very productive and laid many foundation principles for modern management study.

Elton Mayo Elton Mayo, an Australian national, headed

the Hawthorne Studies at Harvard. In his classic writing in 1931, Human Problems of an Industrial Civilization, he advised managers to deal with emotional needs of employees at work.


Mary Parker Follett Mary Parker Follett was a pioneer

management consultant in the industrial world. As a writer, she provided analyses on workers as having complex combinations of attitude, beliefs, and needs. She told managers to motivate employees on their job performance, a "pull" rather than a "push" strategy.

Douglas McGregor Douglas McGregor proposed two

theories/assumptions, which are very nearly the opposite of each other, about human nature based on his experience as a management consultant. His first theory was “Theory X”, which is pessimistic and negative; and according to McGregor it is how managers traditionally perceive their workers.

Then, in order to help managers replace that

theory/assumption, he gave “Theory Y” which takes a more modern and positive approach. He believed that managers could achieve more if they start perceiving their employees as self-energized, committed, responsible and creative beings.


By means of his Theory Y, he in fact challenged the

traditional theorists to adopt a developmental approach to their employees.  He also wrote a book, The Human Side of Enterprise, in 1960; this book has become a foundation for the modern view of employees at work.


Current state of the field
Organizational behaviour is currently a

growing field. Organizational studies departments generally form part of business schools, although many universities also have industrial psychology and industrial economics programs.


The field is highly influential in the business world

with practitioners like Peter Drucker and Peter Senge , who turned the academic research into business practices. Organizational behaviour is becoming more important in the global economy as people with diverse backgrounds and cultural values have to work together effectively and efficiently. It is also under increasing criticism as a field for its ethnocentric and pro-capitalist assumptions


During the last 20 years organizational behavior

study and practice has developed and expanded through creating integrations with other domains: Anthropology became an interesting prism to understanding firms as communities, by introducing concepts like Organizational culture, 'organizational rituals' and 'symbolic acts' enabling new ways to understand organizations as communities.

Leadership Understanding: the crucial role of

leadership at various level of an organization in the process of change management. Ethics and their importance as pillars of any vision and one of the most important driving forces in an organization.


Methods used in organizational studies
A variety of methods are used in

organizational studies. They include quantitative methods found in other social sciences such as multiple regression, non-parametric statistics, time dependent analysis, and ANOVA.


 In addition,

computer simulation in organizational studies has a long history in organizational studies.  Qualitative methods are also used, such as ethnography, which involves direct participant observation, single and multiple case analysis, and other historical methods. In the last fifteen years or so, there has been greater focus on language, metaphors, and organizational storytelling.

Classical organizational theory
Classical organizational theory was driven by the

desire to provide answers to certain questions. Among these critical questions were: How should work be divided by departments and by individuals? How much authority should be given to the incumbent of each position? What should his duties be? What mean of coordination should be provided?


Both managers and writers on management

had in the past tried to discover principles to answer the questions and the quest is continuing now also.  Fayol’s analysis of management and principles that he stated regarding organization became the basis for many writers to develop their thinking on this issue.


The most commonly stated principles from

this approach are expressed as OSCAR: Objectives, specialization, coordination, authority, and responsibility (Dale, 1965). This thinking of this group of writers who followed and developed Fayol’s thoughts is termed as classical theory of the organization.


Criticism-The criticism of the classical theory

includes the opinion that it is too mechanistic. The theory seemed to assume that top management only needed to know what is to be done or what it wanted to be done. It will arrange for an organization in which all roles are exactly dovetailed. It will issue the necessary orders down through the chain of command, and hold each person accountable for the performance.

Each person is spurred into appropriate action

by the hope or reward and fear or penalties. Classical school expressed the belief that, if these steps are followed, the organization will function harmoniously and effectively. No doubt, they laid stress on the principle of esprit de corps, but its implication was not explored.


Behavioral Theory – Organization Behavior
The criticism of classical theory as too

mechanistic resulted in a new theory of organization that emphasized that organizations are made up of human beings and orders and policies will be subject to reinterpretation in the light of psychological “set” of those who transmit them or carry them out as well as the social environment.


 The people in the organization are motivated by many forces

beside those taken into account by the classicists and employees of an organization are often seeking goals different from those expressed in the organization manual. Theory developed in the field of organization design and management based on behavioral variables of human beings in the subject of organization behavior. Chester Barnard was probably the first of the behavioral theorists of organization (Dale, 1965).


Theory (1890-1940)
At the turn of the century, the most notable

organizations were large and industrialized. Often they included ongoing, routine tasks that manufactured a variety of products. The United States highly prized scientific and technical matters, including careful measurement and specification of activities and results.


Management tended to be the same. Frederick

Taylor developed the: scientific management theory” which espoused this careful specification and measurement of all organizational tasks. Tasks were standardized as much as possible. Workers were rewarded and punished. This approach appeared to work well for organizations with assembly lines and other mechanistic, routinized activities.


Management THEORY (1930-1950)
Max Weber embellished the scientific

management theory with his bureaucratic theory.  Weber focused on dividing organizations into hierarchies, establishing strong lines of authority and control. He suggested organizations develop comprehensive and detailed standard operating procedures for all routinized tasks.


MOVEMENT (1930-today)
Eventually, unions and government

regulations reacted to the rather dehumanizing effects of these theories. More attention was given to individuals and their unique capabilities in the organization. A major belief included that the organization would prosper if its workers prospered as well. Human Resource departments were added to organizations.


The behavioral sciences played a strong role

in helping to understand the needs of workers and how the needs of the organization and its workers could be better aligned. Various new theories were spawned, many based on the behavioral sciences (some had name like theory “X”, “Y” and “Z”).