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Organization Behavior

By : Abhishek Pokhrel
Organizational Behavior
A field of study that investigates the impact that individuals, groups,
and structure have on behavior within organizations, for the purpose
of applying such knowledge toward improving an organizations
Organizational behavior is the systematic study of human behavior,
attitudes and performance within an organizational setting; drawing
on theory methods and principles from such disciplines as psychology,
sociology and cultural anthropology to learn about individual
perceptions, values, learning capacities and actions while working in
groups and careful application of knowledge about how people- as
individuals and as groups- act within the total organization;
analyzing the external environments effect on the organization and
its human resources, missions, objectives and strategies.
a. Way of thinkingrequires clearly identifying the level of analysis
(individual, group, organizational).
b. Multi-disciplinarydraws principles, theories, and models from
psychology, sociology and cultural anthropology.
c. Humanistic orientationassumes that individual feelings, attitudes,
perceptions, goals, etc., are important to the organization.
d. Performance-orientedfocusing on whether and why
individual/group/organization performance is high, moderate, or low.
e. External environmentsubstantially impacts organizational
f. Scientific methodplays a critical role in OB research.
g. Applications orientedconcerned with providing useful/applicable
answers to management problems.
The goals of organizational behaviour.
To describe systematically how people behave under variety of
To understand why people behave as they do
Predicting future employee behavior
Control at least partially and develop some human activity at work.
Basic Assumption
1. The Nature of People
2. The Nature of Organization
The Nature of People
Individual differences
A whole person
Caused behavior
Value of the person
Individual Differences
Every individual has different physical, characteristics, priorities,
perception and way of expression.
Unique talent , intelligences, personality and so on.
Manager need to consider these differences because they affect on
the job behaviors of employees.
Therefore, every person should be selected, trained and treated on
the basis of what the kind of person s/he is .
A Whole Person
A person should be accepted as a whole person. That means when an
employee come to the workplace as a complete person, he/she has
his/her background, sentiment, emotion , feeling.
It cannot be separated from the skill they are using on the job.
Caused Behavior
Human beings do not exhibit behavior randomly; rather is caused by
some motive , need , want or any drives.
Employee behavior is directed towards the goal and it can be caused
by some motives, belief system , perception , understanding,
education, experience and environment.
Managers need to motivate employee, and determine what
managerial action satisfy human needs what action threaten their
need fulfillments.
Value of the person ( Human Dignity)
Human dignity appeals for fair treatment to people.
This concept tells that people should be treated differently as
compared to other resources in the organization.
It calls for self respect and value of people.
People should be properly treated and given the value and
recoginition for their valued contribution.

Social System
Organization are social systems which is established by human
association and governed by psychological laws or rules.
Like in social system, interrelation, interaction and interdependency
between people continue till and organization exists.
Peoples behavior is influenced by their own need as well as
organizational goals.
The idea of social system provides a framework for analyzing
organizational behavior issues.
It helps to make organizational behavior problems understandable
and manageable.
Mutual Interest
Organization needs people and people also need organization.
People need organization as a means to achieve their goals and
organization need people to achieve organizational goals.
There is clear give and take relationship between people and
organization .
Significance/ Importance of OB
OB helps in understanding organization and employees in a better
OB helps in motivating employees.
OB helps in improving Industrial/ Labor relations.
OB helps in predicting and controlling human behavior.
OB helps in effective utilization of human resources.
OB helps in understanding organization and employees in a
better way.

When we can understand organization and employees, it helps to

develop friendly relationship between organization and employees
creating a proper working environment in an organization
Help to find out the factor causing the behavior and helps to apply
different strategies to control the critical behavior which harms
organization .
OB helps in motivating employees.

As every individuals differs from each other, therefore OB helps

managers to apply appropriate motivation tool and techniques in
accordance with the nature of individual employees.
This help achieving organization goal properly .
OB helps in improving Industrial/ Labor
OB helps in understanding the root cause of the problem , predicts its
future course of action and control its negative consequences of
It help to maintain friendly relations with their employees which
creates peace and harmony in the organization .
OB helps in predicting and controlling human
Why people behave like the way they do ?
If X situation occur how will they react , how to control them
It help to create efficiency and effectiveness in an organization .
OB helps in effective utilization of HR
It enables managers to inspire and motivate employee toward higher
productivity and better results as manager.
It help to analyze and understand nature and behavior of his/her
Level of OB analysis
Individual Analysis
Organizational behaviour involves the study of learning, task,
perception, creativity, motivation, personality, turnover, performance,
cooperative behaviour, deviant behaviour, ethics, and cognition.
At this level of analysis, organizational behaviour draws heavily upon
psychology, engineering, and medicine
Group level analysis
Organizational behaviour involves the study of group dynamics, intra-
and intergroup conflict and cohesion, leadership, power, norms,
interpersonal communication, networks, and roles.
At this level of analysis, organizational behaviour draws upon the
sociological and socio-psychological sciences.
Organization level analysis
Organizational behaviour involves the study of topics such as
organizational culture, organizational structure, cultural diversity,
inter-organizational cooperation and conflict, change, technology, and
external environmental forces.
At this level of analysis, organizational behavior draws upon
anthropology and political science.
Challenges and opportunities for OB
Responding to globalization
Managing workforce diversity
Improving quality and productivity
Stimulating innovation and change
Coping with temporariness
Working in networked organization
Helping Employees balance work life conflicts
Improving ethical behavior
Responding to globalization

Organization are no longer constrained by national borders.

Eg. Mcdonalds sells hamburger in moscow. ExxonMobil, a so called
American company , receive almost 75% of its revenue outside
america. Honda builds cars in ohio, Ford in brazil; Volkswagen in
Mexico and both Mercedes and BMW in RSA.
These example illustrate that the world has become global village
Increased Foreign Assignment
Working with people from different culture.
Coping with Anti capitalism Backlash
Overseeing Movements of jobs to countries with low cost labor.
Managing People during the war on terror .
Coping with Anti capitalism Backlash

Capitalism focus on efficiency, growth and profits may be accepted in

the united states, Australia and Hong Kong but these capitalistic value
arent as popular in places like France , the Middle east and
Scandinavian countries.
Finlands egalitarian values have created a soak the rich mentality
among politicians. For eg. Finland richest men , who is making close
to $9 million a year , was ticketed for doing 80 kilometer per hour
through a 40 kilometer zone in central Helsinki, the Finnish court hit
him with a fine of $217,000
Managing Work Force Diversity
Workforce Diversity :Organization are becoming more heterogeneous
mix of people in terms of gender , age , race , ethnicity and sexual
Race: Hispanic , Asian , black
Embracing Diversity
Embracing Diversity : Previously manager used melting point
approach. ie. People will assimilate automatically.
But employee dont set aside their cultural values, lifestyle preference
and difference when they come to work.
So addressing their different lifestyles, family needs and work styles .
Improving Quality and Productivity
Excess capacity translate into increased competition . And increased
competition is forcing manager to reduce costs and at the same time,
improve their organizations productivity and the quality of the
products and services they offer.
Stimulating Innovation and change
Successful organization must foster innovation and master the art of
change or theyll become candidates for extinction.
Victory will go to the organizations that maintain their flexibility,
continually improve their quality, and beat their competition to the
marketplace with a constant stream of innovative products and
Dominos single-handedly brought on the demise of small pizza
parlors whose managers thought they could continue doing what
they had been doing for years
A is putting a lot of independent bookstores out of
business as it proves you can successfully sell books (and most
anything else) from a Web site
After years of lackluster performance, Boeing realized it needed to
change its business model. The result was its 787 Dreamliner and a
return to being the worlds largest airplane manufacturer.
The challenge for managers is to stimulate their employees creativity
and tolerance for change. The field of OB provides a wealth of ideas
and techniques to aid in realizing these goals.
Coping with temporariness

Globalization, expanded capacity, and advances in technology have

required organizations to be fast and flexible if they are to survive.
The result is that most managers and employees today work in a
climate best characterized as temporary.
Workers must continually update their knowledge and skills to
perform new job requirements. Production employees at companies
such as Caterpillar, Ford, and Alcoa now need to operate
computerized production equipment. That was not part of their job
descriptions 20 years ago.
employees were assigned to a specific work group, gaining a
considerable amount of security working with the same people day in
and day out. That predictability has been replaced by temporary work
groups, with members from different departments, and the increased
use of employee rotation to fill constantly changing work
Finally, organizations themselves are in a state of flux. They
continually reorganize their various divisions, sell off poorly
performing businesses, downsize operations, subcontract noncritical
services and operations to other organizations, and replace
permanent employees with temporary workers.
Working in networked organization

Networked organizations allow people to communicate and work

together even though they may be thousands of miles apart.
The managers job is different in a networked organization.
Motivating and leading people and making collaborative decisions
online requires different techniques than when individuals are
physically present in a single location. As more employees do their
jobs by linking to others through networks, managers must develop
new skills. OB can provide valuable insights to help with honing those
Helping Employees balance work life conflicts

The typical employee in the 1960s or 1970s showed up at a specified

workplace Monday through Friday and worked for clearly defined 8-
or 9-hour chunks of time. Thats no longer true for a large segment of
todays workforce.
How do worklife conflicts come about?
First, the creation of global organizations means the world never
sleeps. At any time on any day, thousands of General Electric
employees are working somewhere. The need to consult with
colleagues or customers eight or ten time zones away means many
employees of global firms are on call 24 hours a day
Second, communication technology allows many technical and
professional employees to do their work at home, in their cars, or on
the beach in Tahitibut it also means many feel like they never really
get away from the office
Finally, the rise of the dual-career couple makes it difficult for married
employees to find time to fulfill commitments to home, spouse,
children, parents, and friends. Millions of single-parent households
and employees with dependent parents have even more significant
challenges in balancing work and family responsibilities.
1. Figurehead
2. Leader
3. Liaison
1. Monitor
2. Disseminator
3. Spokeperson
1. Entrepreneur
2. Disturbance Handler
3. Resource allocator
4. Negotiator
Description : Symbolic head; Obliged to perform a number of routine
duties of a legal or social nature
Identifiable Activities: Ceremony , status, Greet visitors, sign legal
documents, attend ribbon cutting ceremonies,
host receptions, etc.
Description : Responsible for the motivation and activation of
subordinates, responsible for staffing, training and associated duties
Identifiable Activities: Virtually all managerial activities involving
Description : Maintains self developed network of outside contacts
and informers who provide favors and information .
Establish and maintain contacts within and outside the organization.

Identifiable Activities: Acknowledgement of mail, external board work

, other activities involving outsiders
Description : Seeks and receives wide variety of special information (
much of it current ) to develop a thorough understanding of the
organization and environment.
Identifiable Activities: Handling all mail and contacts which are
primarily information, such as periodical news and observational
Description :Transmits information received from outsiders or from
subordinate to members of the organization. Some information
factual, some involving interpretation and integration.
Communicate/disseminate information to others within the
Identifiable Activities: Forwarding mail into the organization for
informational purpose, verbal contact , session and spontaneous
Description: Transmits information to outsiders on the organizations
plans, policies, action and results ;serve as expert on the organization
Identifiable Activities: Board meeting, handling mail and contact
involving transmission of information to outsiders, pass on memo
Description : Search the organization and its environment for
opportunities and initiates improvement projects to bring about
change; supervises design of certain project as well
Identifiable Activities: Strategy and review sessions involving initiation
or design of improvement projects
Disturbance Handler
Description: Responsible for corrective action when the organization
faces important ,unexpected disturbances.
Identifiable Activities: Strategy and review involving disturbances and
Settle conflicts between subordinates; Choose strategic alternatives;
Overcome crisis situations
Resource Allocator
Description: Responsible for allocation of organization resources of all
kinds- in effect the making or approving of all significant
organizational decisions.
Identifiable Activities: Scheduling request for authorization , any
activity involving budgeting and the programing of subordinates work
Description: Responsible for representing the organization at major
negotiation .
Identifiable Activities: Negotiation
Determinant of Behavior
Attitudes are evaluative statementseither favorable or
unfavorableabout objects, people, or events.
They reflect how we feel about something. When I say I like my job,
I am expressing my attitude about work. Attitudes are complex. If you
ask people about their attitude toward religion, Lady Gaga, or the
organization they work for, you may get a simple response, but the
reasons underlying it are probably complicated
The statement My pay is low is the cognitive component of an
attitude a description of or belief in the way things are. It sets the
stage for the more critical part of an attitudeits affective
component. Affect is the emotional or feeling segment of an attitude
and is reflected in the statement I am angry over how little Im paid.
Finally, affect can lead to behavioral outcomes. The behavioral
component of an attitude describes an intention to behave in a
certain way toward someone or somethingto continue the
example, Im going to look for another job that pays better.
The employees attitude toward his supervisor is illustrated as follows:
the employee thought he deserved the promotion (cognition), he
strongly dislikes his supervisor (affect), and he is looking for another
job (behavior).

Discrepancies between attitudes and behavior tend to occur when

social pressures to behave in certain ways hold exceptional power, as
in most organizations. This may explain why an employee who holds
strong anti-union attitudes attends pro-union organizing meetings, or
why tobacco executives, who are not smokers themselves and who
tend to believe the research linking smoking and cancer, dont
actively discourage others from smoking.
the attitudebehavior relationship is likely to be much stronger if an
attitude refers to something with which we have direct personal
experience. Asking college students with no significant work
experience how they would respond to working for an authoritarian
supervisor is far less likely to predict actual behavior than asking that
same question of employees who have actually worked for such an
We each have thousands of attitudes, but OB focuses our attention
on a very limited number of work-related attitudes. These tap
positive or negative evaluations that employees hold about aspects of
their work environment. Most of the research in OB has looked at
three attitudes: job satisfaction, job involvement, and organizational
Job Satisfaction
When people speak of employee attitudes, they usually mean job
satisfaction, which describes a positive feeling about a job, resulting
from an evaluation of its characteristics. A person with a high level of
job satisfaction holds positive feelings about his or her job, while a
person with a low level holds negative feelings. Because OB
researchers give job satisfaction high importance
job involvement
which measures the degree to which people identify psychologically
with their job and consider their perceived performance level
important to self-worth. Employees with a high level of job
involvement strongly identify with and really care about the kind of
work they do. Another closely related concept is psychological
empowerment, employees beliefs in the degree to which they
influence their work environment, their competence, the
meaningfulness of their job, and their perceived autonomy.
Organizational Commitment In organizational commitment, an
employee identifies with a particular organization and its goals and
wishes to remain a member. Most research has focused on emotional
attachment to an organization and belief in its values as the gold
standard for employee commitment.
A positive relationship appears to exist between organizational
commitment and job productivity, but it is a modest one. 17 A review
of 27 studies suggested the relationship between commitment and
performance is strongest for new employees and considerably weaker
for more experienced employees.
Research indicates that employees who feel their employers fail to
keep promises to them feel less committed, and these reductions in
commitment, in turn, lead to lower levels of creative performance.
the research evidence demonstrates negative relationships between
organizational commitment and both absenteeism and turnover.
Importance of Attitude
a) Attitudes determine job satisfaction and performance level of the
individual employee. Positive attitudes contribute to productivity.
b) Attitudes help reduce absenteeism, turnover, grievances and accidents.
c) Attitudes provide a ' frame of reference' to perceive specific aspects of
work life, such as pay, hours of work, supervision, promotion etc.
d) Attitudes are the basis for expressing values. They help to defend self-
image. Favorable attitudes give rise to positive feelings.
e) Attitudes help people to adjust to their work environment.
f) Events are perceived differently by people with divergent attitudes.
Values represent basic convictions of an individual as to what is right,
good or desirable.
They imply enduring conviction and carry moral flavor. They contain
an element of judgment. They tend to be stable. Most values are
acquired from culture, teachers, friends, reference groups and media.
Values influence individual behavior in organizations.
Values are basic convictions that a specific mode of conduct or end-
state of existence is personally or socially preferable. They are stable
and long lasting. They serve as criterion for judging human actions.
Individuals have hierarchy of values that from their value system.
Such value system identifies the relative importance of a set of values.
Culture is the principle source of values
Importance of Values

Values are the foundation for understanding of attitudes.

Values influence perception for individuals.
Values influence motivation of an individual.
Values influence an individual's motivation to obtain specific
outcomes, such as money, promotion, prestige.
Values influence them types of activities that the individual finds
appealing. They guide individual actions.
Values influence behavior. Matching of individual differences in values
with proper work environment improves performance
Types of values

Values can be classified as terminal and instrumental:

Terminal values: they refer to desirable end-states of existence. They
are the goal thats individuals would like to achieve during their
lifetime. An example of terminal values is comfortable and exciting
life. The sense of accomplishment, self-respect, social recognition,
freedom, happiness, friendship, etc.
Instrumental values: they refer to preferable modes of behavior .they
are means of achieving the terminal values, an example of
instrumental values are: ambitious, capable, cheerful, honest,
independent, responsible.etc.
Seven level classification of values

Reactive: reacting to basic physiological needs: unaware of oneself and other

human beings.
Tribalistic: power exercised by authority figure: high dependence: influence by
Egocentrism: believes in the individual: desire for individual responsibilities.
Conformity: desires that others accept his values: low tolerance for ambiguity and
divergent values.
Manipulative: goals accomplishment by manipulating things and people.
Sociocentric: seeks social relationships through job: desire to get along with
Existential: seeks self-fulfillment through job: a high tolerance for ambiguity and
divergent values.
Terminal values:
They refer to desirable end-states of existence. They are the goal
thats individuals would like to achieve during their lifetime. An
example of terminal values is comfortable and exciting life. The sense
of accomplishment, self-respect, social recognition, freedom,
happiness, friendship, etc.
Instrumental values:
They refer to preferable modes of behavior .they are means of
achieving the terminal values, an example of instrumental values are:
ambitious, capable, cheerful, honest, independent, responsible.etc.
Beliefs are descriptive thoughts that an individual holds about
something. They can be based on knowledge, opinion and faith. They
are acquired from parents, teacher, peer and reference group
members. They influence individual behavior.
Beliefs are the psychological cornerstone of people. They serve as the
foundation upon which people order and structure their lives. They
provide continuity to personality and provide meaning to perception.
Development of beliefs is based on.

a) Cultural Environment: Most of the facts for beliefs are provided by

the cultural environment. Divergence in the cultural environment
causes differences in beliefs of individuals.
b) Functional Factors: Needs, demands and emotions of the individual
account for individual differences in beliefs. Such factors are unique
an individual.
Importance of belief
a) Beliefs provide continuity to the personality of an individual.
b) All attitudes incorporate beliefs.
c) Beliefs assign meaning of day- to -day perceptions and activities of
an individual.
d) Beliefs exert vital impact on the motivation of an individual.
Emotions are reactions to a person (seeing a friend at work may make
you feel glad) or an event (dealing with a rude client may make you
feel frustrated)
If someone is rude to you, youll feel angry. That intense feeling
probably comes and goes fairly quickly, maybe even in a matter of
seconds .
Emotions are more likely to be caused by a specific event, and
emotions are more fleeting than moods
Emotions like anger and disgust tend to be more clearly revealed by
facial expressions
Emotions may be more action-orientedthey may lead us to some
immediate actionwhile moods may be more cognitive, meaning
they may cause us to think or brood for a while.

Perception involves the way we view the world around us. It adds,
meaning to information gathered via the five senses of touch, smell,
hearing, vision and taste. Perception is the primary vehicle through
which we come to understand our surroundings and ourselves.
Perception can be defined as a process by which individuals organize
and interpret their sensory impressions in order to give meaning to
their environment.
Factor Influencing Perception
Attitudes: The perceiver's attitudes affect perception. For example,
suppose Mr. X is interviewing candidates for a very important position
in his organization a position that requires negotiating contracts with
suppliers, most of whom are male. Mr X may feel that women are not
capable of holding their own in tough negotiations. This attitude will
doubtless affect his perceptions of the female candidates he

Moods can have a strong influence on the way we perceive someone.

We think differently when we are happy than we do when we are
depressed. In addition, we remember information that is consistent
with our mood state better than information that is inconsistent with
our mood state. When in a positive mood, we form more positive
impression of others. When in a negative mood, we tend to evaluate
others unfavourably.
Unsatisfied needs or motives stimulate individuals and may exert a
strong influence on their perceptions. For example, in an
organizational context, a boss who is insecure perceives a
subordinate's efforts to do an outstanding job as a threat to his or her
own position. Personal insecurity can be transferred into the
perception that others are out to "get my job", regardless of the
intention of the subordinates.
Another factor that can affect social perception is the perceivers' self-
concept. An individual with a positive self-concept tends to notice
positive attributes in another person. In contrast, a negative self-
concept can lead a perceiver to pick out negative traits in another
person. Greater understanding of self allows us to have more
accurate perceptions of others.
Finally, expectations can distort your perceptions in that you will see
what you expect to see.
Depend upon the past experience you will come up with the
conclusion .
Eg . It is like a trend analysis
In past such circumstances end up with certain outcomes.
Factor in a situation
The situation in which the interaction between the perceiver and the
target takes place has an influence on the perceiver's impression of
the target. For example, a professor may not notice his 20-year
student in a swimming custom at the swimming pool. Yet the
professor will notice the same student if they comes to his
organizational behaviour class in custom. In the same way, meeting a
manager in his or her office affects your impression in a certain way
that may contrast with the impression you would form had you met
the manager in a restaurant.
The strength of the situational cues also affects social perception.
Some situations provide strong cues as to appropriate behaviour. In
these situations, we assume that the individual's behaviour can be
accounted for by the situation, and that it may not reflect the
individual's disposition. This is the discounting principle in social
For example, you mayen counter an automobile sales person who has
a warm and personable manner, asks you about your work and
hobbies, and seems genuinely interested in your taste in cars. Can you
assume that this behaviour reflects the sales person's personality?
You probably cannot, because of the influence of the situation. This
person is trying to sell you a car, and in this particular situation he
probably treats all customers in this manner.
Novelty and Familiarity:

oThis principle states that either a novel or a familiar external

situation can serve as a attention getter, and
onew objects in familiar settings or familiar objects in new
settings will draw attention

e.g. job rotation helps workers increase the attention


oThe principle of motion states that a moving object receives

more attention than an object that is stationary

e.g. attention of a work will normally be more on the conveyer belt rather than the wall
Loud people are more likely to be noticed in a group than quiet ones

oGenerally objects of larger size attract more

attention or to small size

e.g. a 6 feet 5 or 3ft inches tall boss may receive more attention
than a 5 foot 7 inches tall boss


oThe repetition principle states that a repeated stimulus is more

attention drawing than a non-repetitive one

e.g. repeated ads on the TV are based on this principle

Perceptual Grouping

Principle of Similarity

Objects of similar size,

shape, color etc tend
Similarity to be grouped together

Principle of Proximity
Tendency to perceive
stimuli which are near
one another as
belonging together

The relationship of a target to its background influences perception
because of our tendency to group close things and similar things
Objects that are close to each other will tend to be perceived
together rather than separately. As a result of physical or time
proximity, we often put together objects or events that are unrelated.
For examples, employees in a particular department are seen as a
group. If two employees of a department suddenly resign, we tend to
assume their departures were related when in fact, they might be
totally unrelated.
Factors that Influence Perception
Selective Perception
Halo Effect
First-impression error
Contrast Effect
Selective Perception
Selective Perception: We receive a vast amount of information.
Therefore, it is impossible for us to assimilate everything we see - on
eye certain stimuli can betaken. That is why their boss may reprimand
some employees for doing something that when done by another
employee goes unnoticed. Since, we can't observe everything going
on about us, we engage in selective perception.Selective perception is
also out tendency to choose information that supports our view
points; Individuals often ignore information that makes them feel
uncomfortable or threatens their view points.
Selective perception allows us to "speed-read" others, but not
without the risk of drawing an inaccurate picture. Because we see
what we want to see, we can draw unwarranted conclusions from an
ambiguous, perception tends to be influenced more by an individual's
attitudes, interests, and background than by the stimulus itself.