Fundamentals

of
Organizational
Behavior

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Organization

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Behavior

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CHAP 1. INTRODUCTION TO
ORGANIZATIONAL BEHAVIOR

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THE FIELD OF ORGANIZATIONAL BEHAVIOR
Organizational Behavior is the study and
application of human side of management.
It is concerned with people’s thoughts,
feelings, emotions and actions in a work
settings.
Its chief goal is to apply that knowledge
toward improving an organization’s 1-5

effectiveness and efficiency.

 DEFINING ORGANIZATIONAL BEHAVIOR (OB)

Organizational behavior is the study of people’s behavior in

the workplace.

“Organizational behavior is the understanding, prediction,

and management of human behavior in organizations.”
(Fred Luthans)

“Organizational behavior 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.” (S.P.Robbins) 1–6
COMPLEMENTING INTUITION WITH SYSTEMATIC STUDY

Intuition: the “gut feeling” explanation of behavior.

Systematic study improves ability to accurately predict
behavior.
Assumes behavior is not random.
Fundamental consistencies that underlie behavior.
These can be identified and modified to reflect individual
differences.
SYSTEMATIC STUDY

Examines relationships.
Attempts to attribute causes and effects.
Bases conclusions on scientific evidence:
 On data gathered under controlled conditions.
 Data is measured and interpreted in a reasonably
rigorous manner.
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EVIDENCE-BASED MANAGEMENT

 Complements systematic
study.
 Bases decisions on the best
available scientific evidence.
 Forces managers to become
more scientific in their
thinking.

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 BASIC ASSUMPTIONS OF OB

1. Nature of 2. Nature of
People organization

Individual Caused Behavior Value of

Whole person Social system Mutual interest
Differences (Motivation) person/human

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 NATURE OF PEOPLE

Individual Differences Whole person Caused Behavior (Motivation) Value of person/human

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NATURE OF ORGANIZATION

1. Social System
• Social systems have a specific goal
• The system has to have strong
communal interaction to be
effective
• Everyone in the system is
dependent on each other
• Shared approach of communication
with a vocabulary specific to their
system

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2. Mutual Interest
“Organizations need people
and people also need
organizations”

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 Importance of Organizational
behaviour
1. Understand organization and
Employees in better way

2. Motivate Employees

Importances 3. Improve industrial/ labor relations

4. Predict and Control human behavior

5. Effective utilization of human

resources
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 OB MODEL(LEVELS OF OB
ANALYSIS
• A model is an abstraction of reality: a
simplified representation of some real-
world phenomenon.
• Our OB model has three levels of
analysis
– Each level is constructed on the prior
level as building blocks

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OB SYSTEM

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INPUTS:

Inputs are the variables like personality, group structure, and organizational
culture that lead to processes. These variables set the stage for what will occur
in an organization later. They are uncontrollable and the inputs are very influential in company as they
determines productivity, absenteeism, turnover, job satisfaction, etc.
 Individual level variables: biological characteristics, ability, values, attitudes, personality

Group level variables: Task characteristics, Group communication, Group size, etc.

Organization level variables: Organization structure, culture
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PROCESSES:

 Processes are actions that individuals, groups, and organizations engage in as a result
of inputs and that lead to certain outcomes.

 Individual level Processes: Motivation, perception, learning, decision making, etc.

 Group level Processes: Group dynamics, Communication, Leadership, Power & politics, Conflict
process, etc.
 Organization level Processes: Design of formal organization, HR policies and practices etc.

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OUTCOMES

 Outcomes are the key variables that you want to explain or predict, and that are affected by some other variables. What are the
primary outcomes in OB?
 Individual-level outcomes include:
 Attitudes and stress :Employee attitudes are the evaluations employees make, ranging from positive to negative, about objects,
people, or events. For example, the statement “I really think my job is great” is a positive job attitude, and “My job is boring and
tedious” is a negative job attitude. Stress is an unpleasant psychological process that occurs in response to environmental pressures
 Task Performance The combination of effectiveness and efficiency at doing your core job tasks is a reflection of your level of task
performance.
 Organizational Citizenship Behavior (Ocb) The discretionary behavior that is not part of an employee’s formal job requirements,
and that contributes to the psychological and social environment of the workplace, is called organizational citizenship behavior
(OCB), or simply citizenship behavior. Successful organizations have employees who will do more than their usual job duties—
who will provide performance beyond expectations.
 Withdrawal behavior(Absenteeisim and turnover) is the set of actions that employees take to separate themselves from the
organization. There are many forms of withdrawal, ranging from showing up late or failing to attend meetings to absenteeism and
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turnover
CONTD

 Group level, cohesion and functioning are the dependent variables.

 Group cohesion is the extent to which members of a group support and validate one another at work. In
other words, a cohesive group is one that sticks together. When employees trust one another, seek common
goals, and work together to achieve these common ends, the group is cohesive; when employees are divided
among themselves in terms of what they want to achieve and have little loyalty to one another, the group is
not cohesive
 Group functioning refers to the quantity and quality of a group’s work output. In the same way that the
performance of a sports team is more than the sum of individual players’ performance, group functioning in
work organizations is more than the sum of individual task performances.

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CONTD

 Organizational level, we look at overall productivity and survival

 Productivity is the highest level of analysis in OB is the organization as a whole. An
organization is productive if it achieves its goals by transforming inputs into outputs at the
lowest cost. Thus productivity requires both effectiveness and efficiency.
 Eg: A hospital is effective when it successfully meets the needs of its clientele. It is efficient
when it can do so at a low cost.

 Survival is the final outcome we will consider is organizational survival, which is simply
evidence that the organization is able to exist and grow over the long term. The survival of an
organization depends not just on how productive the organization is, but also on how well it1–21
fits
with its environment
 THE INDEPENDENT
Independent variable
VARIABLES
The presumed cause of some change in the dependent
variable.

Independent
Variables

Individual-Level Group-Level Organization

Variables Variables System-Level
Variables

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 THE INDEPENDENT VARIABLES
The independent variable (X) can be at any of these
three levels in this model:
• Individual: Biographical characteristics, personality
and emotions, values and attitudes, ability,
perception, motivation, individual learning and
individual decision making.
• Group: Communication, group decision making,
leadership and trust, group structure, conflict, power
and politics, and work teams.
• Organization System: Organizational culture,
human resource policies and practices, and
organizational structure and design.
© 2009 Prentice-Hall Inc. All rights
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reserved.
 DEPENDENT VARIABLES IN OB
• Productivity: A performance measure that includes
effectiveness and efficiency.
– Effectiveness: Achievement of goals.
– Efficiency: The ratio of effective output to the input
required to achieve it.
• Absenteeism: The failure to report to work.
• Turnover: The voluntary and involuntary permanent
withdrawal from an organization.
• Deviant Workplace Behavior: Voluntary behavior that
violates significant organizational norms and thereby
threatens the well-being of the organization and/or any
of its members. 1–24
 DEPENDENT VARIABLES IN OB
• Organizational citizenship behavior (OCB):
Discretionary behavior that is not part of an
employee’s formal job requirements, but that
nevertheless promotes the effective functioning
of the organization.
• Job satisfaction: A general attitude toward one’s
job, the difference between the amount of reward
workers receive and the amount they believe they
should receive.
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CONTRIBUTING DISCIPLINES
TO THE OB FIELD

Micro: Psychology
The Individual

Social
Psychology
Sociology
Macro:
Groups &
Organizations Anthropology
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CONTRIBUTING DISCIPLINES TO THE OB FIELD
Psychology
The science that seeks to measure, explain, and sometimes
change the behavior of humans and other animals.

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CONTRIBUTING DISCIPLINES TO THE OB FIELD
Psychology
The science that seeks to measure, explain, and sometimes
change the behavior of humans and other animals.

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CONTRIBUTING DISCIPLINES TO THE OB FIELD (CONT’D)
Social Psychology
An area within psychology that blends concepts from psychology
and sociology and that focuses on the influence of people on one
another.

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 CONTRIBUTING DISCIPLINES TO THE OB FIELD (CONT’D)
Sociology
Sociology is a social science that focuses on society, human social
behavior, patterns of social relationships, social interactions, and
aspects of culture associated with everyday life

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CONTRIBUTING DISCIPLINES TO THE OB FIELD (CONT’D)
Anthropology
Anthropology is the study origin of societies to learn about
human beings and their activities. Anthropologists’ work on
cultures and environments has helped us understand
differences in fundamental values, attitudes, and behavior
among people in different countries and within different
organizations.

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CONTRIBUTING DISCIPLINES TO THE OB FIELD (CONT’D)
Political Science
The study of the behavior of individuals and groups
within a political environment.

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 CHALLENGES AND OPPORTUNITIES FOR OB
• Responding to Globalization
– Flow of trade, resources and activities across national
borders and cultures
– Increased foreign assignments
– Overseeing movement of jobs to countries with low-
cost labor

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• Managing Workforce
Diversity
– Embracing diversity
– Changing demographics
– Implications for managers
• Avoid Stereotyping and
discrimination
• Recognizing and responding to
differences

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 CHALLENGES AND OPPORTUNITIES FOR OB

• Improving Quality and Productivity

– Total Quality management (QM)
– Process reengineering

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 CHALLENGES AND OPPORTUNITIES FOR OB

• Coping with “Temporariness”

-Nature of work is everchanging and so
are organizations.
-Long periods of ongoing change,
interrupted occasionally by short periods
of stability.

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• Working in Networked Organizations
• a Networked Organization refers to multiple
business entities working together as a group.
• All these businesses come together and create
the appearance of a large single entity. Software
and Information Technology based companies
are the most common form of networked
organizations 
• As team members in this network are usually
spread around in various remote locations,
usually comprising multiple countries, time
zones are a major issue.

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 CHALLENGES AND OPPORTUNITY FOR OB
(CONT’D)
• Improving People Skills
• Empowering People
• Stimulating Innovation and Change
• Helping Employees Balance Work/Life
Conflicts
• Improving Ethical Behavior
• Managing People during a crisis
EMERGING TRENDS IN OB

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Case
Over the past century, the average age of the workforce has increased as medical science has continued to
enhance longevity and vitality. Many individuals will work past the previously established ages of retirement,
and the fastest-growing segment of the workforce is individuals over the age of 55. Unfortunately, older workers
face a variety of discriminatory attitudes in the workplace. They found that stereotypes inferred that older
workers are lower performers.

Research, on the other hand, indicates they are not, and organizations are realizing the benefits of this needed
employee group. Experts say older workers “typically hit the ground running much quicker and they fit into the
organization well.” They bring to the job a higher skill level earned through years of experience, remember an
industry’s history, and know the aging customer base.

Older workers who aren’t finding fulfilling positions are seeking to opt out of traditional roles. After long careers
in the workforce, an increasing number are embracing flexible, work-from-home options such as customer
service positions. For instance, Olga Howard, 71, signed on as an independent contractor for 25–30 hours per
week with Arise Virtual Solutions, handling questions for a financial software company after her long-term
career ended.

“In this knowledge economy, the retention of older workers gives employers a competitive edge by allowing
them to continue to tap a generation of knowledge and skill,” said Mark Schmit, executive director of the
Society for Human Resource Management (SHRM) Foundation. “New thinking by HR professionals and 1–50
employers will be required to recruit and retain them. Otherwise, organizations’ greatest asset will walk out the
door.”
Do you think increasing age diversity will create new
challenges for managers? What types of challenges do you
expect as a manager?

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 WHAT MANAGERS DO
Managers (or administrators)
Individuals who achieve goals through other people.

Managerial Activities
• Make decisions
• Allocate resources
• Direct activities of others
to attain goals

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MANAGEMENT FUNCTIONS
Planning Organizing

Management
Functions

Controlling Leading

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MINTZBERG’S MANAGERIAL
ROLES

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MINTZBERG’S MANAGERIAL ROLES (CONT’D)

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 MANAGEMENT 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.
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 MANAGERIAL ACTIVITIES

1. Traditional management
• Decision making, planning, and controlling
2. Communication
• Exchanging routine information and processing
paperwork
3. Human resource management
• Motivating, disciplining, managing conflict, staffing,
and training
4. Networking
• Socializing, politicking, and interacting with others

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ALLOCATION OF ACTIVITIES BY TIME

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