Introduction to

Organizational
Behavior

1-1 ©2005 Prentice Hall

 What is an Organization?

 An organization is a collection of people

who work together to achieve individual and
organizational goals
– Individual goals
– Organizational goals

 Corporatist Organization versus Organizing

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 What is Organizational Behavior?

 Organizational behavior (OB): the study of

factors that have an impact on how people
and groups act, think, feel, and respond to
work and organizations, and how
organizations respond to their environments

What is Behavior??

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 Figure 1.1
What is Organizational Behavior?

Insert Figure 1.1 here

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 Figure 1.2 Levels of Analysis

Organizational Level

Group Level

Individual
Level

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 Figure 1.3 Components of
Organizational Behavior

Understanding
organizational behavior
requires studying

Part One Individuals in Organizations

Part Two Group and Team Processes

Part Three Organizational Processes

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 Focus of OB

 What facilitates accurate perception and attribution?

• What influences individual, group and organizational learning and the
development of individual attitudes toward .work?
• How do individual differences in personality, personal development,
and career development affect individual's behaviors and attitudes?
• What motivates people to work, and how. does the organizational
reward system influence worker's behavior and attitudes?
• How do managers build effective teams?
• What contributes to effective decision-making?
• What are the constituents of effective communication?
• What are the characteristics of effective communication?
• How can power be secured and used productively?
• What factors contribute to effective negotiations?
• How can conflict (between groups or between a manager and
subordinates) be resolved or managed?
• How can jobs and organizations be effectively designed?
• How can managers help workers deal effectively with change?

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 What is Management?

 Management is the process of planning,

organizing, leading, and controlling an
organization’s human, financial, material,
and other resources to increase its
effectiveness

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 Figure 1.4 Four Functions of
Management

Planning Organizing
Decide on organizational goals Establish the rules and
and allocate and use reporting relationships that
resources to allow people to
achieve those goals achieve organizational goals

Controlling
Leading
Evaluate how well the
Encourage and coordinate
organization is achieving goals
individuals and groups
and take action to
so that they work
maintain, improve, and correct
toward organizational goals
performance

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 Table 1.1: Mintzberg’s
Managerial Roles

 Figurehead  Leader
 Liaison  Monitor
 Disseminator  Spokesperson
 Entrepreneur  Disturbance
 Resource allocator handler
 Negotiator

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 Managerial Skills

Conceptual Skills Technical Skills

Human Skills

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 Figure 1.5 An Open Systems View of
Organizational Behavior

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 Organization Behavior -
Influences
 Information Technology
 Globalization
 Diversity
 Ethics

and…...

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 ….the People Factor

 Sam Walton (Walmart) – “People are the

key”

 Bill Gates (Microsoft) – “The inventory, the

value of my company, walks out the door
every evening”

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 Some Things Never Change

 Challenges facing management – oldest

case
– Blend of technology and human components
– More unstructured jobs
– Contingent workforce more prevalent
– Increased customer centricity
– Team productivity
– Complex network of influence and relationships

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 Paradigm Shift

 Greek – paradeigma “model, pattern, or

example”
 Way of thinking
 Scheme of understanding reality
 “Paradigm establishes (written or unwritten)
rules defining the boundaries, and tells one
how to behave within the boundaries to be
successful”

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 Knowing – Doing gap

One-Eighth situation

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 Behavioral Science – Research
Methodology
 Hallmarks of any science
– Purpose is of understanding/ explanation,
prediction, control
– Definitions are precise and operational
– Measures are reliable and valid
– Methods are systematic
– Results are cumulative

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 Why Organizational Behavior?

 Organizational Psychology
 Anthropology, sociology, psychology,
political science, law, history
 Organizational Behavior
– Cognitive approach (Expectancy)
– Behavioristic (S-R)
– Social Cognitive theoretical approach (reciprocal
interaction between cognitive, behavioral,
environmental determinants)

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 Challenges for
Organizational Behavior
 1: Changing Social/ Cultural Environment
 2: Evolving Global Environment
 3: Advancing Information Technology
 4: Shifting Work/ Employment Relationships

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 Changing Social and Cultural
Environment
 National culture
 Organizational ethics and well-being
 Diverse work force

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 Diversity Challenges

 Fairness and Justice

 Decision-Making and Performance
 Flexibility

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 Figure 1.6 Diversity

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 Evolving Global Environment

 Understanding Global
Differences
 Improve Organization’s
Behaviors and
Procedures in
Response to Those
Differences

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 Advancing Information
Technology
 Information
 Knowledge
 Information Technology
 Organizational Learning
 Intranets
 Creativity
 Innovation

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 Shifting Work/ Employment
Relationships
 Downsizing
 Empowerment and Self-Managed Teams
 Contingent Workers
 Outsourcing

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 Appendix 1A: A Short History of
Organizational Behavior

 F.W. Taylor and Scientific Management

 Mary Parker Follett
 Hawthorne Studies
 Theory X and Y

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 F.W. Taylor and
Scientific Management
 Scientific management: the systematic
study of relationships between people and
tasks for the purpose of redesigning the
work process to increase efficiency
 The amount of and effort each employee
expends to produce a unit of output can be
reduced by increasing specialization and the
division of labor

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 Four Principles of
Scientific Management
 1. Study the way employees perform their
tasks, gather informal job knowledge that
employees possess, and experiment with
ways of improving the way tasks are
performed
 2. Codify the new methods of performing
tasks into written rules and standard
operating procedures

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 Four Principles of
Scientific Management_2
 3. Carefully select employees so that they
possess skills and abilities that match the
needs of the task, and train them to perform
the task according to the established rules
and procedures
 4. Establish an acceptable level of
performance for a task, and then develop a
pay system that provides a reward for
performance above the acceptable level

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 Mary Parker Follett

 Management must consider the human side

 Employees should be involved in job
analysis
 Person with the knowledge should be in
control of the work process regardless of
position
 Cross-functioning teams used to accomplish
projects

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 The Hawthorne Studies

 Henry A. Landsberger
 Hawthorne Works of the Western Electric
Company; 1924-1932
 Initiated as an attempt to investigate how
characteristics of the work setting affect employee
fatigue and performance (i.e., lighting)
 Found that productivity increased regardless of
whether illumination was raised or lowered

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 The Hawthorne Studies_2

 Factors influencing behavior:

– Small Group
– Type of supervision
– Earnings
– Novelty of the situation
– Interest in the experiment
– Attention from researchers
 The “Hawthorne Effect”

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 Douglas McGregor:
Theory X and Theory Y
Theory X
 Average employee is lazy,
dislikes work, and will try to
do as little as possible
 Manager’s task is to
supervise closely and
control employees through
reward and punishment
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Theory Y
 Employees will do what is
good for the organization
when committed
 Manager’s task is create a
work setting that
encourages commitment to
organizational goals and
provides opportunities for
employees to be exercise
initiative
©2005 Prentice Hall
 Contemporary Issues

 Employment Relations
 Managing the Performance Paradox
 Goal Setting and self management
 Organization Learning
 Organization change & individual transition
 Implications of change on work and non-
work relations

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 Contemporary Issues –
Employee Relations
 Social construction of organizations
 Challenges faced globally – emerging pressures
 Emergence of smaller units of firms
 Part-time workers, independent contractors, guest employees
 Formerly routine tasks now core competencies
 People as independent work units
 Self management
 Shift in personnel management practices – new Emp Relations
 Shift in approach towards Rewards
 Changing commitments

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 Contemporary Issues –
Performance Paradox
 Measures of performance loosely interrelated
 Success of sub-units not necessarily result in gains for the
organization
 Mature firms perform well on several indicators
 Top management commitment
 High performance work teams
 Feedback and responsiveness

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 Contemporary Issues –
Goal Setting v/s Self Management

 Moderately difficult goals more motivating

 Self regulation/ Self management
 Volition in goal setting
 Rewards can replace leaders
 Stretch goals force you to think differently – double loop
learning

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 Contemporary Issues –
Organizational Learning

 Meaning
 Importance
 Knowledge Management
 “Forgetting”
 Movement of Learning/ Cross firm learning

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 Contemporary Issues –
Organizational Change

 Meaning
 OD
 Schemas pertinent to change –causality, valence, inferences
 Interactional justice
 Procedural justice

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 CASE STUDY
Bob is the owner and operator of a medium-sized grocery store that has
been in his family for more than 30 years. Currently his business is
flourishing, primarily because it has an established customer base in a
busy part of town. Also, Bob is a good manager. He considers himself
to be highly knowledgeable about his business, having continuously
adapted to the changing times. For example, he recently expanded his
business by putting in a full-service deli. His philosophy is that by
continuously providing customers with new products and services, he
will always have a satisfied customer base to rely on.
At a management seminar he attended last year, the hot topic was
globalization and the impact of technology on business. He has also
been bombarded by the many television ads and mailers regarding the
opportunities available on the Internet. For the most part, Bob doesn’t
think that globalization is an issue with his business, as he doesn’t even
intend to expand outside the city. Furthermore, he feels that the Internet
has no applications in his branch of the retail industry and would simply
be a waste of time.

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 CASE STUDY

1. Is Bob correct in his assessment of how

globalization will impact his business?
2. Can you think of any Internet applications could
profit from?
3. How could Bob’s business be negatively impacted
by both technology and globalization if he does not
keep on top of these developments?

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