THE WORLD OF

ORGANISATIONAL
BEHAVIOUR
CHAPTER 1

1
 CHAPTER 1
LEARNING OUTCOMES

• LO 1.1 : Introduction
– Definition of organizational Behavior
and organizations
• LO 1.2 : The Importance of OB to your and •LO 1. 4: Contemporary
organizations Challenges in organizational
• LO 1.3 : 4 Perspectives of Organizational behaviour
Effectiveness  the workplace trends
of diversity
– Definition of Organizational
 the inclusive
effectiveness workplace,
• LO 1.3.1 Open System  work–life
Perspective integration,
• LO 1.3.2 Organizational  remote work,
Learning Perspective  emerging
employment relationships.
• LO 1.3.3 HPWP Perspective
• LO 1.3.4 Stakeholder Perspective 2
 Why Study OB?
• OB is for everyone not only
managers but everybody since
in OB everyone is considered a
manager
• Ob and the bottom line focuses
on the importance of OB in
generating organizations
financial health. Every
organizations to succeed must
be driven by strong workplace
cultures, individual and team
rewards, creative decision
making, visionary leader and
other OB practices
 Influence behaviour – get things
done
 Helps us understand behaviour in
organization and to work effectively
in the organizational settings.
 Helps us becoming effective
managers
 Achieve organizational performance
 Interact with others in organizational
setting
 Sensitive and aware to the human
aspects of management
 Help rebuild your personal theories
that are developed through
observation and experience
 Build commitment, Resolve conflict,
Work as a group
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 LO1.1: DEFINITION

•Organizational behavior
•A study of how people feel, what people do and
think in organizations

•a study on the people behavior (individual employee

and group performance) and activities exist within the
organization

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 LO 1.2- IMPORTANCE TO US AND ORGANIZATION

• The importance of understanding OB are:

 Helps us to understand and managing people at work
and around us- Each person are different an unique
because people behaviour are influenced by self
concept, personalities, attitudes, values, emotions,
perception and motivation
 Helps us to influence, get along with and manage
people
 Aids us in applying the right styles in managing people –
leading, motivating, managing conflict, working in teams
 Helps us to manage change
 Many others 5
ORGANISATIONAL BEHAVIOUR – AN INTERDISCIPLINARY FIELD

A contingency
perspective – is the
contemporary
foundation in OB . It
is about using OB
concepts and tools
accordingly (to the
right situations). It
does not rely on the
one best way.

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 LO1.3: Four Perspectives of
Organizational Effectiveness
Open Systems Perspective

Organizational Learning Perspective

High-Performance WP Perspective

Stakeholder Perspective

NOTE: Need to consider all four perspectives

when assessing a company’s effectiveness
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 What is Organizational effectiveness?
• A broad concept which is represented by
several perspectives, including the
organization’s fit with the external
environment (open systems perspective),
internal subsystems configuration for high
performance (HPWP) with the emphasis on
organizational learning (knowledge
management) and an ability to satisfy the
needs of key stakeholders.(stakeholder
perspective)
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LO 1.3.1. Open Systems
Perspective
Environment
Feedback Feedback

Feedback Feedback

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 Open Systems Perspective
A perspective that • Organizations are complex systems
holds that that “live” within (and depend
upon) the external environment
organizations • Effective organizations Maintain a
depend on the close “fit” with changing
external •
conditions
environment for Transform inputs to outputs
efficiently and flexibly
resources, will affect • Open systems perspective lays the
that environment foundation for the other three
through their output perspectives or organizational
effectiveness
and consists of
internal subsystems
that transform inputs
to output

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1-10
 Organization-environment fit
• Good fit means the organization’s inputs,
processes and outputs are aligned with the needs
and expectations of the external environment:
• - change company’s product and services to
meet demands
• - marketing strategies to increase demands
• - work on legislations that will strengthen
company’s positions or delay legislation that will
slow down their business.
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LO 1.3.2: Organizational Learning Perspective-
Knowledge management
• This perspective focuses on the economy where
the most valued input is “knowledge.”
• An organization’s capacity to acquire, share,
use, and store valuable knowledge
• Need to consider both stock and flow of
knowledge

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• Stock: intellectual capital/human capital- KSA- knowledge,
skills and abilities employees carry around in them. They are
non-substitutable because they cannot be replaced by
technology.
 Structural capital – or organizational capital includes
knowledge captured and retained in an organization such
as work procedures and physical layout of production line
 Relationship capital is the value derived from an
organization’s relationships with customers, suppliers and
others that provide added mutual value for the
organization. ( good brand image, goodwill)
 See next slide for the next important capital- human capital

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 STOCK - Intellectual Capital
Knowledge that people possess and
Human
generate – experience, knowledge,
Capital skills, abilities, competencies

Knowledge captured in systems and

Structural Capital structures

Relationship Value derived from satisfied

Capital customers, reliable suppliers, etc.

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1-14
 Knowledge acquisition
Extracting information and ideas from the environment .
FLOW Derived through observations, insights, grafting (buying
organizations), scanning, feedback, research
• Flow: Knowledge sharing
Organization Distributing knowledge to others within the organizations.
s nurture Derived through formal and informal communication channels,
their various forms of learning like observations, experience training.
intellectual This can be enhanced through effective organizational structures,
capital company practices, cultural values .
through four  knowledge use
organization The use of knowledge by members will add value to
learning organizations. Thus members must always be aware of latest or
processes of: current information, be able to locate or extract information,
apply them. To enhance this company’s must practice creativity
in decision making, freedom of making decision as well as open
communication and recognizes mistakes as a learning process.
Knowledge storage
Process of holding knowledge and retrieval for later use. Often
called organizational memory.
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 Organizational Memory
• Company’s can retain intellectual capital/store
knowledge by:
• Organization – Keeping knowledgeable employees/stay
al memory is employed with the company
– Transferring knowledge to others – new
the process employees are apprenticed by mature and
of storage experience employees
and – Transferring human capital to structural
preservation capital- employees are encouraged to
document their success and failures through
of special company intranets portals
intellectual – Successful companies also unlearn routines
capital and patterns of behaviour that are no longer
appropriate.
• Examples are replacing policies,
procedures and routines
• Erasing attitudes, beliefs and assumptions16
 LO1.3.3:High Performance Work Practices
(HPWPs)
• Potential HPWPs:
A perspective that holds that effective
organizations incorporate several
workplace practices that leverage
(influence) the potential of human
capital. HPWPs are internal systems and
structures that are associated with
successful companies.
HPWPs:
1. Employees’ KSA’ s are sources of
competitive advantage to organizations
2. Value of employees increased through
specific practices.
3. Maximum benefit gained when
organization practices are bundled in its
systems and structures
A. Employee involvement
B. Job autonomy
- Both of the above encourage employees in
decision making and giving them more
autonomy (freedom) in their work
activities – motivates and enhance
commitment.
C. Competency development
- recruiting, selecting, training
employees with the right KSAO’s
D. Rewards for performance and
competency development
- Linking employees’ performance to
the appropriate rewards systems
valued by the employees.
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1-18
 Benefits of HPWP:
• Build human capital by developing employees
skills and knowledge
• Superior human capital bring benefit to
organizations especially in meeting and
adapting to challenges in the environment
• Strengthen employees motivation and
attitudes towards employers – greater efforts
and commitments.

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 LO 1.3.4: Stakeholder Perspective
• To be effective organizations have to
• A perspective in which incorporate values, ethics and corporate
individuals, groups and other social responsibilities.
entities that affect or are affected – Values - Stable, evaluative beliefs, guide
by the organization’s objectives preferences for outcomes or courses of
and actions. (Stakeholders are action in various situations
employees, stockholders, suppliers, – Ethics -Moral principles/values, determine
labor unions, governments, whether actions are right/wrong and
communities, consumers, outcomes are good or bad
environmental interests groups etc.) – corporate social responsibility (CSR) –
organization’s activities that aims to
• This perspective upholds the belief benefit society and environment beyond
the firm’s immediate financial interests or
that organizations can become better if
legal obligations. Involves organization’s
they consider the needs and contract with society. Many companies
expectations of all entities that are adopt “Triple bottom line” philosophy.
affected by their actions and decisions – “Triple bottom line” philosophy means to
survive and gain profit in the market place
at the same time improve conditions for
society’s well-being.
– Go- Green environment, reuse and recycle
campaign , go paperless etc.

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 Stakeholder Perspective
• Lockheed Martin is rated by
engineering students as an “ideal”
employer
– Pays attention to its many
stakeholders
– Relies on values and ethics to guide
decisions
– Strong emphasis on corporate
social responsibility (e.g. photo
shows clean-up after hurricane
Katrina)

Lockheed Martin

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Integrative Model of OB

• Access the text alternative for slide images .

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 Integrative Model of OB
 Individual inputs and processes influence individual
outcomes which have a direct effect on the
organization’s effectiveness.
 Team inputs influence team processes which then
affect team performance and other outcomes.
 Team processes and outcomes affect individual
processes and outcomes.
 Organizational inputs and processes have macro-level
influence on both teams and individuals

• Access the text alternative for slide images .

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 CHALLENGES
1.EMERGING WORKPLACE 2.DIVERSITY
• INCLUSIVE WORKPLACE:
 Values people of all identities.
• Benefits of diversity:
– Better decisions, employee
 Diversity viewed as a valued
attitudes, team performance.
resource.
– More team creativity, better
 Evidence at individual and
decisions in complex situations.
collective level.
– Better representation of
• Surface-level diversity:
community needs.
 Observable demographic or
– Moral/legal imperative.
physiological differences.
– Inclusive workplace develops a
• Deep-level diversity
culture of respect.
 Psychological differences.
• Generational diversity:
• Challenges of diversity:
– Team take longer to perform
 Deep-level diversity exists, but
effectively together. 
subtle.
– Higher dysfunctional conflict,
 Differences due more to life
lower info sharing and morale.
stage than cohort. 24
Diversity –
Represents the
multitude of
individual
differences &
similarities that
exist among
people.

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AFFIRMATIVE ACTION VS MANAGING DIVERSITY

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PROMINENT TRENDS IN DIVERSITY AROUND THE WORLD

4 demographic trends:
•Women continue to enter the workforce in
increasing numbers
•People of colour represent a growing share of
the labor force
•There’s a critical mismatch between workers’
educational attainment & occupational
requirements
•The workforce is aging.

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ACCOUNTABILITY PRACTICE DEVELOPMENT PRACTICE RECRUITMENT PRACTICE

• Top management • Diversity training • Targeted

personal program recruitment
• Network and support
intervention group
• Partnerships with
• Inclusion of diversity • Development program educational
in performance for potential managers institutions
evaluation goals and • Job rotation
ratings • Formal mentoring
program
• Inclusion of diversity • Informal mentoring
in promotions program
decision and criteria • Entry development
• Diversity in program for new
succession planning recruits
• Internal training on
• Policies against personal safety and
racism and sexism language
• Recognition and
awards
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 Emerging Workplace:
Work-Life Integration
• Effectively engaged in work and non-
• Recommended:
work roles with low role conflict.
• Practicing work-life
– Satisfying demands, experiencing
integration.
positive emotions of roles. 
– Literally integrate
– Life roles are inherently integrated.
two or more roles.
• Depleting personal resources in one
– Flexible work
role starves other roles, which is a
scheduling.
problem.
• influenced by information technology
– Align work and non-
and globalization. work roles with
personal
• Example: consuming most energy and
characteristics.
time performing/thinking about job
leaves insufficient time and energy for – Boundary
other life roles. management.
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 • Remote work benefits:
Remote Work
• Performing the job away
from the organization’s
physical work site.
• Usually working from home
or other non-client site.
• Remote employees are • Remote work
connected through
information technology.
• Some companies are
completely remote
(distributed).
 Better work-life
integration.
 Valued benefit, less
turnover.
 Higher productivity.
 Better for environment.
 Lower corporate costs.
disadvantages:
 More social isolation.
 Less informal
communication.
 Lower team cohesion.
 Weaker organizational
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culture.
For remote work
to work • Job characteristics:
 Tasks don’t require office
Employee resources.
characteristics:  Low task interdependence.
• High self-  Task performance is
motivation. measurable.
• High self- • Organizational characteristics:
organization.  Reward performance, not
• High need for presence.
autonomy.  Maintaining team cohesion and
• Good information psychological connectedness
technology skills. limit remote work days, have
• Fulfill social needs special in-person
outside work. meetings/events, video
communication.. 31
Emerging Workplace:
Employment Relationships
Three main employment
relationships:
1. Direct employment:
Employee working directly
with employer.
Full time permanent/on
contract (seconded)/part
time/seasonal
employment
2. Indirect employment:
Outsourced or agency work.
Temporary/leased
3. Contract employment:
Worker is one firm serving a
client. (independent
contractors)
• Consequences of emerging
employment relationships:
– Direct employment:
• Higher work quality, innovation, and
agility.
– Direct employment:
• Lower satisfaction or commitment
when working with indirect workers.
– Indirect employment:
• lower job satisfaction than others.
– Teams with direct and indirect
workers
• Weaker social networks, less
information sharing.
– Ambiguous manager roles, less
discretion over indirect workers.
Additional challenges

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 Globalization

Economic, social, and cultural connectivity with

people in other parts of the world
 Effects of globalization on organizations:
Greater efficiencies and knowledge sources
Ethical issues about economies of developing countries
New organizational structures and communication
Greater workforce diversity
More competitive pressure, demands on employees

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 OB AND ETHICS

• Ethics involves the study of moral issues & choices. It is

concerned with right vs wrong, good vs bad & the many
shades of grey in supposedly black and white issues.
• This issue must be addressed because:
• - employees are confronted with ethical challenges at
all levels of organizations and throughout their career
• Unethical behaviour damages relationships, erodes
trusts and makes it difficult to conduct business
• Unethical behaviour also reduces cooperation, loyalty
and contribution which of course hurts the
performance of individuals, teams and organizations

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- HOW TO IMPROVE THE ORGANIZATION’ S ETHICAL
CLIMATE

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 DIVERSITY CHALLENGES - ADDITIONAL
THE CHALLENGES THE CHALLENGES

INACCURATE STEREOTYPING AND PREJUDICE FEARS OF REVERSE DISCRIMINATION – ONE

– HAVE TO SACRIFICE COMPETENCE AND PERSON’S GAIN IS ANOTHER PERSON LOSS
QUALITY
ENTHOCENTRICISM – ONES CULTURE AND DIVERSITY NOT SEEN AS PRIORITY IN
NORMS ARE MORE SUPERIOR THAN OTHERS MANAGEMENT

POOR CAREER PLANNING PROBLEM IN REDESIGN ORGANIZATION

REWARD SYSTEM

AN UNSUPPORTIVE WORKING ENVIRONMENT RESISTANCE TO CHANGE

FOR DIVERSE EMPLOYEES – DIVERSE
EMPLOYEES ARE OFTEN EXCLUDED IN SOCIAL
EVENTS

DIFFICULTY BALANCING CAREER AND FAMILY

ISSUES – IN WOMEN AS ORGANIZATION
EMPLOYEE IN BALANCING WORK AND SOCIAL
LIFE 37
 CONCLUSION
CONTRUCT A CONCEPTUAL MAP OF THIS CHAPTER

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 A HISTORICAL PERSPECTIVE OF OB

• A study of • There are 3 significant

organizational behavior landmarks in the
has exist long time ago.
We can better evolution of
understand where the understanding &
field of OB is today & managing people:
where it appears to be
headed by appreciating  The human relations
where it has been. movement
 The TQM movement
 The Internet revolution

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 THE HUMAN RELATIONS MOVEMENT – THE HAWTHORNE STUDY
• A unique combination of
factors during the 1930s
fostered the human
relations movement.
• Management began
looking for new ways of
handling employees.
• Behavioral scientists
conducting on-the-job
research started calling
for more attention to the
“human” factor.
• Managers who had lost
the battle to keep unions
out of their factories
heeded the call for
better human relations &
improved working
conditions.
• The Hawthorne study by Elton Mayo and
colleagues – the illumination study – a study
conduct to see the impact of physical factor
influence to productivity where apparently
generated a turnaround in the outcome. –
supportive supervision BUT……….
• The Hawthorne Legacy
 Interviews conducted decades later with 3
subjects of the Hawthorne studies & reanalysis
of the original data with modern statistical
techniques don’t support initial conclusions
about the positive effect of supportive
supervision.
 Specifically, money, fear of unemployment
during the Great Depression, managerial
discipline & high-quality raw materials – not
supportive supervision- turned out to be
responsible for high output in the relay assembly
test room experiments.
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THE HUMAN RELATIONS MOVEMENT – THE PIONEERS

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 -THE HUMAN RELATIONS MOVEMENT - (DOUGLAS MCGREGOR’S THEORY X & Y) – A
MODERN AND POSITIVE ASSUMPTIONS ABOUT EMPLOYEES BEING RESPONSIBLE
AND CREATIVE
Outdated (Theory X) Modern (Theory Y)
Assumptions about People at Assumptions about People at
Work Work
1. Most people dislike work; they 1. Work is a natural activity, like
avoid it when they can. play or rest.
2. Most people must be coerced 2. People are capable of self-
& threatened with punishment direction & self-control if they’re
before they will work. People committed to objectives.
require close direction when
they’re working.
3. Most people actually prefer to 3. People generally become
be directed. They tend to avoid committed to organizational
responsibility & exhibit little objectives if they’re rewarded for
ambition. They’re interested only doing so.
in security. 42
 THE HUMAN RELATIONS MOVEMENT (MCGREGOR’S
THEORY X & Y)

Outdated (Theory X) Modern (Theory Y)

Assumptions about People at Assumptions about People at
Work Work
4. The typical employee can learn
to accept & seek responsibility.
5. The typical member of the
general population has
imagination, ingenuity &
creativity.

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THE HUMAN RELATIONS MOVEMENT – THE IMPLICATIONS OR
FINDINGS

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LO2- THE TQM MOVEMENT

45
THE TQM MOVEMENT – WILLIAM EDWARD DEMING AND THE DEMING
LEGACY

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THE INTERNET REVOLUTION

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 INTERNET AND OB
GOAL SETTING AND ORGANIZATIONAL
FEEDBACK STRUCTURE

• The Internet & modern

• Abundant research evidence telecommunications technology
supports the coupling of
clear & challenging goals & have given rise to “virtual
timely & constructive teams” & “virtual organizations”.
feedback for keeping •Time zones, facilities & location
employees headed in the no longer are hard constraints
right direction.
on getting things accomplished.
• This virtual workplace, with less
• Thanks to Web-based
software programs such as
face-to-face interaction, requires
eWorkbench, managers can managers & employees who are
efficiently create, align and flexible & adaptable & not
track their employee’s goals. bound by slow & rigid
bureaucratic structures &
methods
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 INTERNET AND OB

JOB DESIGN DECISION MAKING

• Databases linked to the Internet

• The work itself is a
powerful motivator for give today’s decision makers
many employees today, unprecedented amounts of both
especially those in IT. relevant & irrelevant data.

• Boring & unchallenging • The trick is to be energized &

and/or dead-end jobs selective, not overwhelmed.
will repel rather than
attract top talent in the
Internet age. • A clear sense of purpose is
necessary when sifting for useful
information.
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 INTERNET AND OB

KNOWLEDGE SPEED, CONFLICT AND

MANAGEMENT STRESS

• Unfortunately, conflict and

• Of growing
stress are unavoidable by-
importance today are
products of strategic and
E-training, E-learning
operational speed.
and distance learning
via the Internet.

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 INTERNET AND OB
CHANGE AND RESISTANCE TO
CHANGE
• Internet-centered organizations are
• As Old Economy
companies race to become
E-corporations, employees
are being asked to digest
huge doses of change in
every aspect of their work •
lives.
• Inevitable conflict and
resistance to change will
need to be skillfully
managed if it is to prosper.
ETHICS
littered with ethical landmines
needing to be addressed humanely
and responsibly.
Among them are around-the-clock
work binges, exaggerated promises
about rewards, electronic
monitoring, questionable antiunion
tactics, repetitive motion injuries
from excessive keyboarding, unfair
treatment of part-timers & privacy
issues.
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 THE NEED TO BUILD HUMAN AND SOCIAL CAPITAL

See tables below for the various

forms of human and social
capital and the 21st century
managers’ characteristics

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 THE NEED TO BUILD HUMAN AND SOCIAL CAPITAL

HUMAN CAPITAL SOCIAL CAPITAL

EDUCATION SOCIAL RELATIONSHIPS

EXPERIENCE FAMILY RELATIONSHIPS

KNOWLEDGE, SKILLS AND ABILITY (KSA) RELATIONSHIPS WITH CURRENT

EMPLOYEES
VISION RELATIONSHIPS WITH INDUSTRY

CONFIDENCE AND SELF-ESTEEM PROFESSIONAL MEMBERSHIPS

INITIATIVE AND ENTREPRENEURSHIP GOODWILL

ADAPTABILITY AND FLEXIBILITY TRUST

READINESS TO LEARN STATUS

REPUTATION SUPPORT FROM OTHERS

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 The 21st century managers
Table 1-2 Evolution of the 21st Century Manager

Past Managers Future Managers

Primary role Order giver; privileged Facilitator, team member,
elite, manipulator, teacher, advocate,
controller sponsor, coach
Learning & Periodic learning, Continuous life-long
knowledge narrow specialist learning, generalist with
multiple specialties
Compensation Time, effort, rank Skills, result
criteria
Cultural orientation Monocultural, Multicultural, multilingual
monolingual
Primary source of Formal authority Knowledge (technical &
influence interpersonal)
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THE NEED TO BUILD HUMAN AND SOCIAL CAPITAL – THE
21The
ST 21st century managers
CENTURY MANAGERS
Past Managers Future Managers
View of people Potential problem Primary resource
Primary Vertical Multidirectional
communication
pattern
Decision-making Limited input for Broad-based input for
style individual decisions joint decisions
Ethical Afterthought Forethought
considerations
Nature of Competitive (win-lose) Cooperative (win-win)
interpersonal
relationships
Handling of power & Hoard & restrict access Share & broaden access
key information
Approach to change Resist Facilitate
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THE NEED TO BUILD HUMAN AND SOCIAL CAPITAL – BUILDING
HUMAN AND SOCIAL CAPITAL
HUMAN CAPITAL EXAMPLE AND PURPOSES
TRAINING Software certification to gain
knowledge and skills to improve
performance in current job
WORK BASED Job rotation, cross functional projects to
DEVELOPMENT build knowledge and relationships
OPPORTUNITIES
LEARNING OUTSIDE OF Fluency gained in a second language to
WORK increase opportunities within and
outside current employment
CAREER PLANNING Opportunities identified inside or
outside of your current place of
employment and assessing your
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strength and weaknesess.
THE NEED TO BUILD HUMAN AND SOCIAL CAPITAL – BUILDING
HUMAN AND SOCIAL CAPITAL

SOCIAL CAPITAL EXAMPLE AND PURPOSES

INTERNAL Mentoring relationships to provide

guidance and opportunities
Membership on a company softball
team to build relationships outside your
work area
EXTERNAL Conference attendance to meet people
at other companies and learn other job
opportunities
Join local, industry specific
organizations to identify new customers

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 DISCUSSION QUESTIONS;

1. Think of your most desired job. Now describe what

you could do to develop your human and social
capital to make you a more attractive candidate.
2. Assume you graduate this year and are fortunate
enough to get a job interview with your most
desired employer. Explain in terms of human and
social capital how you would promote or sell your
self in that interview.

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