Organisational Behaviour

IBS Gurgaon
8th June 2021
 What is Organizational Behavior
• What is Organizational Behavior? Organizations are social systems.
Organization is a combination of humanity and technology. OB is the
study and application of knowledge about how people act within the
organization. It is a human tool for human benefit .

• OB is a field of study, which studies three determinants of behaviour in

organization.
(Individuals, Groups and structures)
Understand Organizational Life
To know yourself
To understand others
Maintain cordial relations
Motivation
Motivation
 Why we study OB
• Good Interpersonal skill leads to effectiveness and job satisfaction at
work.

• Pleasant work place - A great place to work viz Google, Intel, Microsoft.

• Leadership and communication skills are critical as a person progresses

in his or her career.

• It seems Indians are just average when it comes to communication skill

 Why we study OB
• Observing other’s behaviour- observing systematically, more than
common sense, intuition.

• Business school added course work on people skill in addition to

business skill to achieve manager’s effectiveness.

• Understanding the importance of Soft skill is essential.

• Good interpersonal skill is critical - relationship with supervisor, co

workers etc, it lowers employee turnover.
 Organisational Behaviour - Topics

• Motivation
• leader behaviour
• interpersonal communication
• Group structure and processes
• Attitude development and perception
• Change processes
• conflict and negotiation
• Organisational Structure and design
 Organisational Behaviour - Complex
• Can this study have a scientific approach ??

• Human beings are complex - two persons can react differently to a

same situation. Not every one is motivated by money.

• People behave differently in a religious place than a party.

• However there are certain fundamental principles, set pattern

contingency variables leads to certain behaviour.
 Organisational Behaviour
OB is an applied behavioural science built on contributions from a number of
behavioural disciplines:

• Psychology ( learning, perception,personality,emotions,leadership

effectiveness, training, job satisfaction, motivational forces, attitude, selection
tools, job stress, work design etc)

• Social Psychology ( group behaviour, power, conflict, communication patterns)

• Sociology – studies people in relation to its social environment and culture-

organisational culture, power, conflict, communication, different countries,
different culture)
Identify the Major Behavioral Science
Disciplines That Contribute to OB

1-15
 Challenges and
Opportunities of OB Concepts
Responding to economic pressure

• In tough economic times, effective management is an asset.

• In good times, understanding how to reward, satisfy, and retain

employees is at a premium.

• In bad times, issues like stress, decision making, and coping come to the
forefront. 1-16
 Challenges and
Opportunities of OB Concepts
Responding to globalization

• Increased foreign assignments.

• Working with people from different cultures.

• Overseeing movement of jobs to countries with low-cost labor.

• Adapting to differing cultural and regulatory norms.

Managing workforce diversity

• Workforce diversity – organizations are becoming more heterogeneous in terms of

gender, age, race, ethnicity, sexual orientation, and inclusion of other diverse groups 1-17
 Challenges and
Opportunities of OB Concepts
Improving customer service

• Service employees have substantial interaction with customers.

• Employee attitudes and behavior are associated with customer satisfaction.
• Need a customer-responsive culture.

Improving people skills

• People skills are essential to managerial effectiveness.
• OB provides the concepts and theories that allow managers to predict employee behavior
in given situations.
 Challenges and
Opportunities of OB Concepts
Working in networked organizations
• Networked organizations are becoming more pronounced.

• A manager’s job is fundamentally different in networked organizations.

• Challenges of motivating and leading “online” require different techniques.

Creating a positive work environment

• Creating a positive work environment can be a competitive advantage.

• Positive organizational scholarship is concerned with how organizations develop human strength, foster vitality and resilience, and
unlock potential.

• This field of study focuses on employees’ strengths versus their limitations, as employees share situations in which they performed
at their personal best.
 OB Model
Inputs Processes Outcome

Individual Personality Emotions and Moods Attitude

Individual Values Motivation Stress
Diversity Perception Task performance
Decision Making Citizenship behaviour
Withdrawal Behaviour
Group structure Communication
Group Roles Leader ship Group Cohesion
Team responsibilities Power and Politics
Conflict and negotiation Group Performance

Organisational structure Human Resource Management

Organisational culture Change Practices Profitability or performance
Survival
 Management – nature & purpose
It is a process of designing and maintaining an environment in which individuals,
working together in groups, efficiently accomplish selected aims.

• It includes: planning, organizing, staffing, leading and controlling

• Management applies to any kind of organisation
• The principles apply to all levels of Managers
• The aims of all managers are same to be efficient and achieve goal

All manages organisations which can be defined as group of people working together to create
surplus. In business organisation the surplus is profit, in non-profit providing services, satisfying
the needs, achieving goals
 Management - Science or Art ???
• Practicing is an art

• Organized and informed knowledge are science

• Continuous improvement in managerial knowledge and management

practice.

• This minimizes luck, intuition, trust ..

 Management Thoughts
• The Classical Approach to Management
The classical approach to management encompasses scientific management and administrative
management. The focus of scientific management was on the application of scientific methods to
increase individual workers' productivity. Administrative management was concerned primarily with
how organizations should be managed and structured. One of the key contributions of the classical
school has been to study management from the framework of planning, organizing, leading, and
controlling.
The Behavioural Approach
The behavioural approach to management emphasizes improving management through the
psychological makeup of people. The theme of the behavioural (or human resources) approach is to
focus on understanding people. Three direct cornerstones of the human resources approach are the
Hawthorne studies, Theory X and Theory Y, and Maslow's need hierarchy.
• Quantitative Approaches to Management
The quantitative approach to management is a group of methods to managerial decision making that is
based on the scientific method. Frequently used quantitative tools and techniques of the quantitative
approach include statistics, linear programming, network analysis, decision trees, and computer
simulations. Frederick Taylor's work provided the foundation for the quantitative approach to
management.
 
 Management Functions
• Planning --- setting goals , overall strategy, increases moving from mid to senior
level.

• Organising --- designing organisation’s structure ,grouping, giving tasks,

defining responsibilities, defining authority

• Staffing: Allocating right person for right job

• Leading--- direction, coordination, communicate, motivate,

• Controlling - Review, Monitor, correction

Not only the internal environment, has to manage, external like behavioural etc
 Management Roles

• Interpersonal Roles – ceremonial and symbolic role, leadership role.

• Informational Role - spokesperson, disseminator role, scanning

external information.

• Decisional Role – entrepreneur, resource allocators, negotiator,

disturbance handlers.
 Management skills
• Technical skills – Specialized knowledge

• Human skills - motivate others, understand other’s needs, listening,

managing conflicts

• Conceptual skills – analytical skill, ability to understand problems

 Managerial activities
• Traditional management – decision behavioural

• Communication – Exchanging information, participative

• Human Resource Management – Motivating, disciplining, managing

conflict, staffing, training

• Networking - socializing , exploring new relationship

 Fredrick Taylor and Scientific Management

F W Taylor -- Father of modern scientific management ---- 1875--- Midvale

steel company – Philadelphia wrote a book on “ Principles of scientific
Management” in 1911.
• Replacing Rule of thumbs with organised knowledge ( science).
• Obtaining harmony in group action, rather than discord.
• Achieving cooperation of human beings than individualism.
• Working for maximum output than restricted output.
• Developing all workers to the fullest extent for their and company’s
prosperity.
 Taylor – Scientific Management
• Productivity improvement through scientific study – time and motion study.

• Linking pay increase with improved productivity

• Scientific selection of people

• Harmonious cooperation between labour and management

• Humane aspect of the job- understanding worker’s personality, needs.

 Henri Fayol - Modern operational Management Theory

Henri Fayol - Father of modern management theory – French Industrialist (Fayol's work became more
generally known with the 1949 publication of "General and industrial administration", the English translation] of
the 1916 article "Administration industrially et Générale". In this work Fayol presented his theory of
management, known as Fayol's.

• Divided Industrial activities into 6 groups: (Fayol's managerial)

• Recognized the need for teaching management

• Formulated 14 principles of management

 Henri Fayol- 14 principles
• Division of work - job according to specialization
• Authority and responsibility - to be related, the later arising from the former. Authority is a combination of official position and
personal factors.
• Principle of discipline – Rules and regulations
• Unity of command: Employees should receive order from one superior only
• Unity of direction - Each group of organizational activities that have the same objective should be directed by one manager using
one plan for achievement of one common goal.
• Subordination of individual interest to organisation’s interest: The interest of the organisation supersedes every other individual
or group interest
• Remuneration: Salaries to be justified, superior should get more salary than the subordinate
• Centralisation: decision making to be centralized, it should come from the top management
• Scalar chain: Communication in the organisation should be vertical from top down .
• Order: formal organisational control system ,right job for the right employee
• Equity: Fairness – organisational interest being the most important
• Stability of personnel tenure: Recruit right, train them and retain for long.
• Initiative: creative, new ideas, management implementing new ideas.
• Esprit de corps: Enthusiasm, devotion, high morale, unity among staff
 Max Weber – Bureaucratic Theory

Main principles (characteristics):

• Specialized roles
• Recruitment based on merit (e.g., tested through open competition)
• Uniform principles of placement, promotion, and transfer in an administrative system
• Careerism with systematic salary structure
• Hierarchy, responsibility and accountability
• Subjection of official conduct to strict rules of discipline and control
• Supremacy of abstract rules
• Impersonal authority (e.g., office bearer does not bring the office with him)
• Political neutrality
 Workforce Diversity
• Age
• Gender
• Race & Ethnicity
• Sexual Orientation
• Disabilities
• Tenure
• Religion
• Cultural Identity
Intellectual and Physical Abilities and OB (3 of 5)
Exhibit 2-2 Dimensions of Intellectual Ability

Dimension Description Job Example

Number aptitude Ability to do speedy and accurate arithmetic Accountant: Computing the sales tax on a set
of items
Verbal comprehension Ability to understand what is read or heard and Plant manager: Following corporate policies on
the relationship of words to each other hiring

Perceptual speed Ability to identify visual similarities and Fire investigator: Identifying clues to support a
differences quickly and accurately charge of arson
Inductive reasoning Ability to identify a logical sequence in a problem Market researcher: Forecasting demand for a
and then solve the problem product in the next time period

Deductive reasoning Ability to use logic and assess the implications of Supervisor: Choosing between two different
an argument suggestions offered by employees

Spatial visualization Ability to imagine how an object would look if its Interior decorator: Redecorating an office
position in space were changed
Memory Ability to retain and recall past experiences Salesperson: Remembering the names of
customers
 Intellectual and Physical Abilities and OB (5 of 5)
Nine Basic Physical Abilities
Strength Factors Blank
1. Dynamic strength Ability to exert muscular force repeatedly or continuously over time
2. Trunk strength Ability to exert muscular strength using the trunk (particularly abdominal)
muscles

3. Static strength Ability to exert force against external objects

4. Explosive strength Ability to expend a maximum of energy in one or a series of explosive acts
Flexibility Factors Blank
5. Extent flexibility Ability to move the trunk and back muscles as far as possible
6. Dynamic flexibility Ability to make rapid, repeated flexing movements
Other Factors Blank
7. Body coordination Ability to coordinate the simultaneous actions of different parts of the body
8. Balance Ability to maintain equilibrium despite forces pulling off balance
9. Stamina Ability to continue maximum effort requiring prolonged effort over time
 Workplace Discrimination and
Organizational Effectiveness (2 of 3)

Type of Discrimination Definition Examples from Organizations

Discriminatory policies or practices Actions taken by representatives of the Older workers may be targeted for layoffs because
organization that deny equal opportunity to they are highly paid and have lucrative benefits.
perform or unequal rewards for performance.

Sexual harassment Unwanted sexual advances and other verbal or Salespeople at one company went on company-paid
physical conduct of a sexual nature that create a visits to strip clubs, brought strippers into the office to
hostile or offensive work environment. celebrate promotions, and fostered pervasive sexual
rumors.

Intimidation Overt threats or bullying directed at members of African-American employees at some companies have
specific groups of employees. found nooses hanging over their work stations.

Mockery and insults Jokes or negative stereotypes; sometimes the Arab-Americans have been asked at work whether
result of jokes taken too far. they were carrying bombs or were members of
terrorist organizations.
 Diversity management
• This is the process and programs by which Diversity management managers
make everyone more aware of and sensitive to the needs and differences of
others.

• Diversity is more successful when it is everyone’s business, not just for

certain groups of employees
 Diversity Management
Attracting, selecting, developing, and retaining diverse employees
• Target recruiting messages to specific demographic groups.
• Some companies have been actively working toward recruiting less-hired
groups.
Effective diversity programs
• Teach managers about the legal framework for equal employment opportunity
and encourage fair treatment of all people.
• Teach managers how a diverse workforce will be more effective at serving a
diverse customer base.
• Foster personal development practices that bring out the skills and abilities of
everyone
 Implications for Manager
• Understand your organization's anti-discrimination policies thoroughly
and share them with your employees.
• Assess and challenge your own stereotype beliefs to increase your
objectivity.
• Look beyond readily observable biographical characteristics and consider
the individual’s capabilities before making management decisions.
• Fully evaluate what accommodations a person with disabilities will need
and then fine-tune a job to that person’s abilities.
• Seek to understand and respect the unique biographical characteristics of
your employees; a fair but individualistic approach yields the best
performance.
 Hawthorne studies 1924- Human
Relations Theory – Elton Mayo
An experiment at the western electric company between 1924 to 1932 at Hawthorne works in
Chicago.

• The great illumination experiment - It examined physical environment with productivity.

Observed no correlation between level of illumination and productivity, with the experimental
group or control group.

• The human attitudes and sentiments 2nd set of experiment – A special group of women
assembling telephone relays were isolated from the main work group. Increased attention and
special focus in assembly test room led to better productivity.

• The third study the bank wiring observation room – to study impact of wage plan, observed that
the group was way below their capabilities, controlled by group norms. He saw adherence to
group norms became important than achieving individual target. Established Dos and Do nots.
Individual Behaviour

Performance = Individual attributes x work effort x Organisational

support
 Individual Behaviour
• Impact of Personal factors – age, adaptability, productivity, absenteeism, career
break, stereo type thinking, creativity, emotional intelligence, Mental Ability,
Physical ability etc.

• Environmental Factors – economic ( employment opportunity, wages, job

security) social ( cultural environment, work ethics, achievement needs)

• Political Factors – stability of government may lead to employment opportunities,

controlled societies viz China relative freedom low, career choices could be low.

• Organisational structure and design – Physical facilities, organisational structure,

leadership style, Reward system.
 Stages of Individual behaviour
• Joining the organisation – New capabilities, controlled, trying to prove etc.
• Remaining with the organisation - capabilities, controlled expectation, learning
attitude, commitment, lack of motivation, performance.
• Exhibit organisational citizenship – cooperation with fellow employees,
tolerating ambiguities, accepting occasional impositions ,sportsmanship,
following rules and regulations, courtesy, professional behaviour etc.
• Deviant behaviour – Destructive ( not following organisational norms or social
norms, constructive ( deviant form organisational norms but following social –
whistle blower)
• Work place violence – Physical assault, restricting others to work, not giving
respect to others.
 Learning work place
Learning is understood as the modification of behaviour through practice, training or experience.
Important components of learning:

Learning involves:
• changes in behaviour, may not be reflected in performance.
• Relatively a permanent change in behaviour.
• Learning is reflected in behaviour, only changes in thought process, no change in behaviour is
not learning.
• The learning or the practice or experience must be reinforced else the behaviour may
disappear.
• Contrary to popular belief learning is not confined to schooling, it occurs through out the life.
 Principles of Learning
• Motivation: have purpose, to reach a goal.

• Reinforcement: employed to strengthen a desirable behaviour (positive

and negative)

• Punishment: employed to minimize the undesirable behaviour

 How Learning occurs

4 Theories which explains how learning occurs:

Classical Conditioning theory: A stimulus (physical event, initially does not elicit in a particular response
gradually acquires the capacity to elicit that response as a result of repeated pairing with the stimulus. –
Ivan Pavlov Russian psychologist’s experiment.

Operant Conditioning Theory: Our behaviour produces certain consequences and how we behave in
the future will depend on what those consequences are. If our actions have pleasant effect, we will
repeat it , if unpleasant less likely to repeat. It emphasised voluntary behaviour, they make the
environment respond in ways that we want. – R-S Connection - scientist Skinner

Cognitive theory: Application of mind, cognitive theory of learning /in this theory.

Social Learning Theory: observational learning, emphasises the ability to learn by observing others. The
important models may include parents, teachers, peers, bosses, movies----. Learning by observing model
is vicarious learning. Attention to the model, good retention capability , more practice will lead to better
observational learning.
Ivan Pavlov’s Classical conditioning Theory
Ivan Pavlov’s Theory – Classical
conditioning
Classical Conditioning –Pavlov’s Theory
Learning – Changes in behaviour
• Behaviorism - Is a theory of learning based upon the idea that all
behaviors are acquired through conditioning. Conditioning occurs
through interaction with the environment. - also known as Behavioral
Psychology.

• Three Major Types of Learning by association( Classical Conditioning)

Learning by consequences( Operant Conditioning )Learning through
modeling( Observational Learning).
• Video on classical conditioning theory
Operant Conditioning- B F Skinner-American
Psychologist

• Operant conditioning can be described as the process that attempts

to modify behaviour through the use of reinforcement and
punishment. In operant conditioning, an individual forms an
association between a particular behaviour and its consequence.
B F Skinner’s Experiment- Operant
Conditioning
Operant Conditioning
• https://www.youtube.com/watch?v=H6LEcM0E0io
• https://www.youtube.com/watch?v=rk_TeIhydsM
 Attitudes
An attitude is a hypothetical construct that represents an
individual's degree of like or dislike for an item.

Attitudes are generally positive or negative views of a

person, place, thing, or event this is often referred to as the
attitude object

How we feel about something??? “ I like my job “ -------

 Components -Attitude

Components of attitude:

1.Cognition – the thought ,belief or the description of fact.

2.Affect – the emotional feeing or reaction of the thought.

3.Behaviour - final behavioural outcome of the feeling.

The Three
Components of an Attitude

3-67
 Relationship Between Attitudes
and Behavior
• Early research: the attitudes that people hold determine what they do.

• Festinger proposed that cases of attitude following behavior illustrate the

effects of cognitive dissonance.

Cognitive dissonance is any incompatibility an individual might perceive

between two or more attitudes or between behavior and attitudes.

• Research has generally concluded that people seek consistency among

their attitudes and between their attitudes and their behavior. 3-69
 Relationship Between Attitudes and
Behavior

• Consistency between attitude and behaviour is desirable.

• No individual can completely avoid dissonance

• Reducing dissonance is possible when one realises that there is some

reward to it.
 Cognitive Dissonance Theory

If there is an inconsistency between two attitudes or between attitudes and

behavior:

•  People seek to make them consistent

•  Achieve a stable state with minimum of dissonance

• Desire to reduce dissonance depends on importance of elements creating the

dissonance
 Work related Attitudes
• Job satisfaction – Positive feeling about job.

• Job involvement - the degree to which people identify psychologically with their
jobs. Care about the work they do.

• Organizational commitment – emotional attachment to the job.

• Perceived organisational support - The degree to which employees believe the

organization values their contributions and care and well beings.

• Employee Engagement – enthusiasm, involvement, satisfaction with work.

 Job Satisfaction
• Job Satisfaction

• A positive feeling about a job resulting from an evaluation of its characteristics.

• Two approaches for measuring job satisfaction are popular

• The single global rating. Highly satisfied or dissatisfied

• The summation of job facets. Nature of work, supervision, pay, promotion,

relationship with co workers 3-73
 Job Satisfaction
and Show How It Can Be
Measured
 How satisfied are people in their jobs?
 Over the last 30 years, employees in the U.S. and most
developed countries have generally been satisfied with
their jobs.
 With the recent economic downturn, more workers are less
satisfied.

 Satisfaction levels differ depending on the facet involved.

 Employees in Western cultures have higher levels of job

satisfaction as compared to employees in Eastern cultures. 3-74
Job Satisfaction
and Show How It Can Be
Measured

3-75
Job Satisfaction
and How It Can Be Measured

3-76
 Main Causes of Job Satisfaction
• What causes job satisfaction?
• Research shows that job satisfaction is correlated with life satisfaction.

• Pay influences job satisfaction only to a point.

• Personality also plays a role in job satisfaction.

• People who have positive core self-evaluations, who believe3-77
in their
inner worth and basic competence, are more satisfied with their
jobs than those with negative core self-evaluations.
Summarize the Main
Causes of Job Satisfaction

3-78
Identify Four Employee
Responses to Dissatisfaction

3-79
 Job satisfaction
• Dissatisfied employees - Exit – voice – loyalty- neglect ---

• Exit / Voice – active Loyalty/Neglect – passive

• Job satisfaction and Job performance – satisfied employees are more productive.
Organisations with more satisfied employees tend to be more effective.

• Job satisfaction and OCB - satisfied employees would seems more likely to talk
positively about the organisation. Positive experience with the organisation, people
with positive attitude and good moods will be more likely to be engaged in OCB.
 Employee
Responses to satisfaction
• More specific outcomes of job satisfaction include:
• Job Satisfaction and Job Performance
• Happy workers are more likely to be productive workers.

• Job Satisfaction and OCB

• People who are more satisfied with their jobs are more likely to engage in OCB.

• Job Satisfaction and Customer Satisfaction

• Satisfied employees increase customer satisfaction and loyalty.

• Job Satisfaction and Absenteeism 3-81

• There is a consistent negative relationship between satisfaction and absenteeism, but it is

moderate to weak.
 Employee
Responses to Dissatisfaction
• Job Satisfaction and Turnover
• A pattern of lowered job satisfaction is a predictor of possible
intent to leave.

• Job Satisfaction and Workplace Deviance

• If employees don’t like their work environment, they’ll respond
somehow.

• Managers Often “Don’t Get It”

• Many managers are unconcerned about employee job satisfaction.
• Others overestimate how satisfied employees are with their jobs, 3-82
so they don’t think there’s a problem when there is one.
 Implications for Managers
• Pay attention to your employees’ job satisfaction levels as determinants
of their performance, turnover, absenteeism, and withdrawal behaviors.

• Measure employee job attitudes objectively and at regular intervals in

order to determine how employees are reacting to their work.

• To raise employee satisfaction, evaluate the fit between the employee’s

work interests and the intrinsic parts of his/her job to create work that is
challenging and interesting to the individual.

• Consider the fact that high pay alone is unlikely to create a satisfying
work environment.
3-83
 Values
• Values – basic convictions about what is right, good, or desirable.
• Value system – ranks values in terms of intensity.

The Importance and Organization of Values

Values lay the foundation for understanding of attitudes and motivation.
Values generally influence attitudes and behaviors.

• Terminal values – desirable end-states of existence.

• Instrumental values – preferred modes of behavior or means of 5-84
achieving terminal values.
Generational
Differences in Values

5-85
 Compare Generational
Differences in Values
• Person-Organization Fit

• People high on extraversion fit well with aggressive and team-

oriented cultures.

• People high on agreeableness match up better with a

supportive organizational climate than one focused on
aggressiveness.

• People high on openness to experience fit better in

organizations that emphasize innovation rather than 5-86
standardization.
 Implications for Managers
• You need to evaluate your employees’ jobs, their work groups, and your
organization to determine the optimal personality fit.

• Take into account employees' situational factors when evaluating their

observable personality traits, and lower the situation strength to better
ascertain personality characteristics.

• Although the MBTI has been widely criticized, it may have a place in
organizations. You may consider the results helpful for training and
development. The results can also help employees better understand
themselves, help team members better understand each other, open 5-87 up

communication in work groups, and possibly reduce conflicts.