ORGANIZATIONAL BEHAVIOR

(MGT-606)

Lecture 1
(Introduction)

Presenter:
ISMATULLAH BUTT
Associate Professor

1
Introduction to Organizational Behavior

Lecture Plan:
1. Defining O.B.
2. What managers do?
3. Effective Versus Successful Managerial Activities.
4. The challenges and Opportunities for O.B.
5. Disciplines contributing to OB field.
6. Historical Background of Modern O.B.

2
 Organization Defined-i
The term “organization” can be used in a number of ways:
 The activity that is an important function of management.
 People who are united by a common purpose.
 Organization is the form of every human association for the
attainment of a common purpose.
 The process of identifying and grouping the work to be
performed, defining and delegating responsibility and
authority and establishing relationships for the purpose of
enabling people to work most effectively together in
accomplishing objectives.

3
Organization
Organization Defined-ii
Defined-ii

•The place where managers work.

•A consciously coordinated social unit,
composed of two or more people, that
functions on a relatively continuous basis
to achieve a common goal or set of goals.

4
Organizational
Organizational Behavior-What
Behavior-What itit is?
is?

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 organization’s
effectiveness

5
Organizational
Organizational Behavior
Behavior

Organizational Behavior (OB)

• OB is the study and application of knowledge about
how people, individuals, and groups act in
organizations.
• 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.

6
What
What Managers
Managers Do
Do
Managers (or Administrators)
Individuals who achieve goals through other people

Managerial
ManagerialActivities
Activities
••Make
Makedecisions
decisions
••Allocate
Allocateresources
resources
••Direct
Directactivities
activitiesofofothers
othersto
to
attain
attaingoals
goals

7
Management
Management Functions
Functions

Planning
Planning Organizing
Organizing

Management
Management
Functions
Functions

Controlling
Controlling Leading
Leading

8
Effective
Effective Versus
Versus Successful
Successful Managerial
Managerial
Activities
Activities (Luthans)
(Luthans)

1.
1. Traditional
TraditionalManagement
Management
•• Decision
Decisionmaking,
making,planning,
planning,and
andcontrolling
controlling
2.
2. Communication
Communication
•• Exchanging
Exchangingroutine
routineinformation
informationand
andprocessing
processing
paperwork
paperwork
3.
3. Human
HumanResource
ResourceManagement
Management
•• Motivating,
Motivating,disciplining,
disciplining,managing
managingconflict,
conflict,staffing,
staffing,
and
andtraining
training
4.
4. Networking
Networking
•• Socializing,
Socializing,politicking,
politicking,and
andinteracting
interactingwith
withothers
others

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Allocation
AllocationofofActivities
Activitiesby
byTime
Time

10
Katz’s
Katz’s Essential
Essential Management
Management Skills
Skills
Technical Skills
The ability to apply specialized
knowledge or expertise
Human Skills
The ability to work with, understand,
and motivate other people, both
individually and in groups

Conceptual Skills
The mental ability to analyze and
diagnose complex situations

11
Complementing
Complementing Intuition
Intuition with
with Systematic
Systematic Study
Study

Intuition
“Gut” feelings about “why I do what I do” and “what makes
others tick”

Systematic Study
• Looking at relationships, attempting to attribute causes and
effects, and drawing conclusions based on scientific evidence
• Provides a means to predict behaviors

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Complementing Intuition with Systematic Study

Intuition
◦ Gut feelings
◦ Individual observation
◦ Common sense
Systematic Study
◦ Looks at relationships
◦ Scientific evidence
◦ Predicts behaviors
The two are complementary means of
predicting behavior.

1-13
Challenges
Challenges and
and Opportunity
Opportunity for
for OB
OB
 Improving people skills
 Empowering people
 Stimulating innovation and change
 Coping with “temporariness”
 Working in networked organizations
 Helping employees balance work/life conflicts
 Improving ethical behavior
 Managing people during the war on terrorism
 Responding to Globalization
 Managing Workforce Diversity
 Improving Quality and Productivity
 Responding to the Labor Shortage
 Improving Customer Service

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Challenges
Challenges and
and Opportunities
Opportunities for
for OB
OB (cont’d)
(cont’d)

 Improving Quality and Productivity

◦ Quality management (QM)
◦ Process reengineering
 Responding to the Labor Shortage
◦ Changing work force demographics
◦ Fewer skilled laborers
◦ Early retirements and older workers
 Improving Customer Service
◦ Increased expectation of service quality
◦ Customer-responsive cultures

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Historical Background of Modern OB-i
 Management has been practiced for thousands of years.
 The Egyptians and Greeks provide representative examples.
 Egyptians are best known for the construction of the
pyramids-a massive engineering and management feat.
 Greeks had a working knowledge of effective management
practices.
 Management philosophy and leadership have been subjects
of concern for many centuries.
 The oldest military treatise in the world is the “ Art of war”
written by SUN TZU, a Chinese writer around 500 B.C.
 NICCOLO MACHIVELLI wrote his famous book “The
prince” and mentioned broad management principles.

16
Historical Background of Modern OB-ii
The Industrial Revolution:
 The earliest management practices developed in relation
to the needs of specific civilizations and countries.
 The Industrial revolution in 18th century affected the
management practices world wide.
 Some of the major developments that Industrial
Revolution brought included the following:
i. Rising per capita income
ii. Economic growth
iii. Reduced dependence on agriculture
iv. A high degree of specialization of labor
v. A widespread integration of markets

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Historical Background of Modern OB-iii
 These developments occurred in conjunction with the
invention of new machinery and scientific application of job
specialization in the work place.
 The emergence of the factory system.
 Adam Smith popularized the concept of division of labor.

Scientific Management:
 The natural outgrowth of the Industrial Revolution.
 More attention directed toward increasing factory output.
 This system attempted to develop ways of increasing
productivity and to formulate methods of motivating
workers to take advantage of labor saving techniques.

18
Historical Background of Modern OB-iv
 Three of the most important American Scientific
managers were Frederick Taylor, Frank Gilbreth and
Henry L. Gantt.
 The steps followed in the scientific method are:

1. Identifying the problem

2. Obtaining preliminary information
3. Posing a tentative solution to the problem
4. Investigating the problem area
5. Classifying the information
6. Stating a tentative answer to the problem
7. Testing the answer

19
Historical Background of Modern OB-v
 ‘New management practice’ is essentially re-adaptability of
existing ‘old management truths.’
 Early management pioneers such as Henry Fayol, Henry
Ford, Alfred P. Solan and even the scientific managers,
recognized the behavioral side of management.
 They however did not emphasize the human dimension.
 Henry Fayol(NPWFE) emphasized in his book on
management that the purpose of the organization was to get
the work done in specialized, machinelike functions.
 Management guru, Peter Drucker stated that the
organization is, above all, social. It is people.

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Historical Background of Modern OB-vi
HAWTHRONE Studies:
 These studies provide historical roots for the notion of a social
organization made-up of people and mark the starting point of
organization behavior.
 The initial purpose of the HAWTHRONE studies( 1924-1932) was to
determine the effect of illumination on output.
 Sponsored by National Research Council, started in late 1924, at the
HAWTHRONE Works of the Western Electric Company near
Chicago.
 Before completion, they passed through following four major phases:
1. The illumination experiments
2. The relay assembly test room experiments
3. The interview program
4. Bank wiring observation room study

21
Historical Background of Modern OB-vii
Contributions by Chester I Barnard:
 Chester Barnard was president of New Jersey Bell from
1927 till his retirement.
 In 1938, he wrote his famous book “ The Functions of the
Executive.”
 He is known as the father of modern behavioral science.
 His behavioral contributions fall into two major areas:

A. Identified and described the following functions of the

executive:
i. The establishment and maintenance of a communication system
throughout the organization.
ii. The promotion and acquisition of essential effort by recruiting
people and rewarding them appropriately.
iii. The formulation of the purpose and objectives of the organization. 22
Historical Background of Modern OB-viii

B. Set forth a Theory of Authority:

 Realize the importance of educating people to cooperate.
 Giving someone an order is insufficient, for the person
might will refuse to carry it out.
 A person can and will accept a communication as
authoritative only when following four conditions
simultaneously obtain;
i. He can and does understand the communication
ii. At the time of his decision, he believes it is not
inconsistent with the purpose of the organization

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Historical Background of Modern OB-ix

iii. At the time of his decision, he believes it to be

comparable with his personal interest as whole.
iv. He is able mentally and physically to comply with.
 Today this view is known as “ The Acceptance
Theory of Authority.”

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Historical Background of Modern OB-x

Behavioral Science:
 The work begun by Munsterberg, GILBRETH, Mayo and
Barnard continues today.
 Thousands of Psychologists, sociologists, anthropologists and
social and industrial Psychologists are employed in both industry
and academia.
 Their area of interest is now called behavioral science.
 Their focus extends to the study of individual behavior, on one
hand, to the study of large groups and organizations on the other.
 Three of the broadly based areas of interest for behavioral
scientists are;
1. Individual behavior
2. Group behavior
3. Organizational development

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Historical Background of Modern OB-xi
Individual Behavior:
 Psychologists focus on the individual’s motivation as a
socio-psychological being.
 The questions in this connection include;
 What motivates the worker?
 How does motivation work?
 Why some people are more motivated by a particular
reward than others?
Group Behavior:
 Some people are concerned with studying people as parts
of a social system or collection of cultural
interrelationships.
 They see an organized enterprise as a social organism
which, in turn, is made up of many social sub organisms.
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Historical Background of Modern OB-xii
 They are interested in studying the subjects as attitudes,
habits, and the effects of pressure and conflict within the
cultural environment.
 They are also concerned with the effect that personnel have
on organizations and counter effect of organizations on the
personnel.
 To what degree do people make the organization and vice
versa.
Organization Development:
 In recent years, some behavioral scientists call themselves
Organizational Development experts.
 They typically work for large organizations or are brought
into companies as consultants.
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Historical Background of Modern OB-xiii
 Their objective is to help managers and employees both,
understand and cope with change.
 They also help employees understand interpersonal and
intra-organizational behavioral problems and in developing
behavioral change strategy for dealing with them.

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29
 Four Contributing Disciplines

1. Psychology: The science that seeks to

measure, explain, and sometimes change the
behavior of humans and other animals.
◦ Unit of Analysis:
 Individual
◦ Contributions to OB:
 Learning, motivation, personality, emotions, perception
 Training, leadership effectiveness, job satisfaction
 Individual decision making, performance appraisal,
attitude measurement
 Employee selection, work design, and work stress

1-30
 Four Contributing Disciplines

2. Social Psychology: An area within

psychology that blends concepts from
psychology and sociology and that focuses on
the influence of people on one another.
◦ Unit of Analysis:
 Group
◦ Contributions to OB:
 Behavioral change
 Attitude change
 Communication
 Group processes
 Group decision making
1-31
 Four Contributing Disciplines
1-32

3. Sociology: The study of people in relation to

their fellow human beings.
–
Unit of Analysis:
Group
– Organizational System
– Contributions to OB:
 Group dynamics
 Work teams  Formal organization theory
 Communication  Organizational technology
 Power  Organizational change
 Conflict  Organizational culture
 Intergroup behavior
 Four Contributing Disciplines
1-33

4. Anthropology: The study of societies to

learn about human beings and their activities.

–
Unit of Analysis:
 -- Organizational System Group

– Contributions to OB:
 Organizational culture  Comparative values
 Organizational
 Comparative attitudes
environment
 Cross-cultural analysis

© 2009 Prentice-Hall Inc. All rights reserved.

 There are Few Absolutes in OB

Contingency variables: “It Depends!”

Situational factors that make the main relationship
between two variables change—e.g., the relationship
may hold for one condition but not another

In Country 1 x May be related to

y
In Country 2 x May NOT be related to y 34
 Few Absolutes in OB
1-35

Situational factors that make the main relationship

between two variables change—e.g., the relationship
may hold for one condition but not another.

Contingency Variable (Z) Independent Variable (X) Dependent Variable (Y)

In American Culture Boss Gives “Thumbs Up” Understood as

Sign Complimenting

In Iranian or Australian Boss Gives “Thumbs Up” Understood as Insulting -

Cultures Sign “Up Yours”