Introduction to Organizational Behavior (OB)

Dr Musarrat Shaheen
• “When organization become large, it becomes imperative for
someone to ensure the company remain nimble, agile and as
fast paced as it was when we were in one city or 10 cities.
Here the role of an HR person is critical in hiring right kind of
leaders who shares the same purpose and vision and have an
entrepreneurial mindset.”
-The chief Human Resource Officer of OYO room, Dinesh R.
 Management- Concept
• Management: Management is the process of achieving organizational
objectives by engaging in the five major functions of planning, organizing,
staffing, leading and controlling. The aspects of management are:
 Managers carry out the major functions of management
 Management is essential to any kind of organization
 Management is essential at all hierarchical levels
 The goal of all managers is to create and generate surplus
 The aim of all managers is to improve productivity (Output/Input),
efficiency and effectiveness

• Management process:
 Organization Resources: Labor, Capital, Materials, Machinery and
Information
 Functions of Management
 Attainment of organizational goals

• Manager: An individual who achieves goals through other people

 Levels of Management
• Top Level: They are responsible for taking major decisions for
the organization as a whole, overall activities of the business
and accountable for its impact on the society at large
Ex- CEO, President, VP, SVP and ED

• Middle Level Managers: They deal with the actual operation

of various departments in an organization and are directly
responsible for the performance of lower level managers
Ex- Manager, Director, Chief Manager and Department head

• First Level Managers: They are directly responsible for the

performance of employees in operations
Ex- Supervisors, Clerk, Shop floor workers and technicians
 Managerial Roles
• Interpersonal Roles: Figurehead, Leadership and
Liaison

• Informational Roles: Monitor, Disseminator and

spokesperson

• Decision Roles: Entrepreneur, Disturbance handler,

Resource allocators and Negotiator
Mintzberg’s Managerial Roles
 Managerial Skills

• Technical Skills: Applying specialized knowledge or

expertise

• Human Skills: Work with a good understanding of

people( individually and in groups) and motivating
them

• Conceptual Skills: Analyze, diagnose and interpret

complex business situations
 Definition of OB

• Organization: It is a consciously coordinated social unit,

composed of two or more people, that functions on a relatively
continuous basis to achieve a common goal or a set of goals

• Behavior: It is the way in which one acts or conducts oneself,

especially towards others

• OB: It is defined as the field of study that investigates the

impact that individuals, groups and structure have on behavior
within organization for the purpose of applying such
knowledge towards improving an organization’s effectiveness

• Human Resource: It is the sum of the inherent abilities,

acquired knowledge and skills as exemplified in the talents
and aptitudes of employees
 Significance of OB
• Development of skills: Talent and skill of employees can be
honed by training, motivation and provision of opportunities for
education and personal development

• Organizational Performance: The influence of various factors on

the performance of productive organizations is indicated in the
following equations:
 Knowledge * Skill = Ability

 Attitude * Situation = Motivation

 Ability * Motivation = Potential Performance

 Human Performance * Resources = Organizational Performance

 Assumptions of OB
• Organizations are social systems
• People are motivated by many needs
• People may not always behave in a logical or rational manner
• People depend on each other for work
• Attitudes and performance of workers are determined by
informal work group
• Job roles are more complex than job descriptions
• Communication channels should consider both economic
aspects of an organization and feelings of people working in it
• Teamwork is essential for employees to make sound technical
decisions
• Job satisfaction gives rise to higher productivity
• For managing people effectively, managers also need good
social skills
 Interdisciplinary Approach

• Psychology: It explains, measures and remodels human behavior

• Social Psychology: It focuses on the influence of people on one

another

• Sociology: It is the scientific study of nature and development of

society and social behavior

• Anthropology: It is the study of mankind, especially of its origin,

development, customs and beliefs

• Economics: It is a science of production, distribution and

consumption of goods and services

• Political Science: It is the study of individual and group behavior

within particular political environment
Towards OB Discipline
Basic OB Model
 S-O-B Model
• S-O-B model is a behavioral perspective that attempts to explain
human behavior in which all the variables interact with and
influence one another

• Situation: It refers to the stimulus and various physical, socio-

cultural and technological aspects of the environment

• Organism: It includes aspects like heredity, nervous system,

sense organs, muscles, Cognitive and Psychological processes
and personality of an individual

• Behavior: It stands for behavior embracing both overt and covert

responses and patterns
SOB Model for Understanding Individual
Behavior in Organizations
 Challenges and Opportunity in OB
1. Economic pressure
2. Continuing Globalization
a. Increased foreign assignments
b. Working with people from different cultures
c. Overseeing Movement of jobs to countries with low-cost labor
d. Adapting to differing Cultural and Regulatory Norms
3. Workforce demographics
4. Workforce diversity
5. Customer service
 Biographical Characteristics
Biographical Characteristics affect the performance of
employees at work , can be easily obtained from the personnel
file of an employee and impact productivity, satisfaction,
absenteeism and turnover rates of the employees. They are:
• Age

• Gender

• Marital status

• Tenure
 Biographical Foundations of Behavior

• Heredity: It is the process by which characteristics are given

from a parent to the child through the genes

• Biological development of the individual: Physiological aspects

and level of maturity

• The nervous system: It is responsible for transmitting data in the

form of stimuli from the sense organs to the brain and responses
back from the brain to the target sites such as muscles, organs
and glands

• Cognitive processes :Thinking and Problem solving

 Diversity
• Diversity is the presence of members of different ages,
genders, ethnic groups and/or educational backgrounds in an
organization

• Composition of the workforce has been changing over the past

few years

• Managing diversity has become a challenge to organizations

• The situation today has undergone a radical change with

people from diverse backgrounds occupying managerial
positions
Reasons for Diversity
 Diversity Management

• Creation of Family-friendly workplaces

• Providing Diversity training to employees
• Developing Mentoring programs for employees
• Learning
• Empathy
• Testing- Selecting and Evaluating
• Mentoring
• Alternative work schedules
 Theory X assumptions

• The average person dislikes work and tries to avoid it if he/she

can

• Employees have to be either coerced by punishment or guided

by means of financial rewards to make them work effectively

• The average employee prefers to be given directions about

his/her work and shies away from taking greater responsibilities

• Employees are not too ambitious, seldom take risks and give
high importance to their security needs
 Theory Y assumptions
• People can put in physical and mental efforts in work as
naturally as they do while playing
• Tight controls and punishments cannot make people deliver
the goods
• An average person would not only accept responsibility but
also seek it if proper conditions exist in the organization
• If people find the job satisfying, they would be more happy
• People can solve their work related problems by using
creativity and imagination
• Generally intellectual capabilities of an average person are not
properly utilized in modern industrial condition
 Theory Z(Japanese Management Style)
• Theory Z emphasizes on building close and trusting
relationships among workers, managers and others
• The central idea is to create an industrial team within a stable
work environment which fulfills employees’ needs for
affiliation, independence and control as well as organization’s
need for high quality work
• Theory Z principles are:
 Increasing employee loyalty to the company
 Providing a job for life
 Strong focus on well-being of the employee both ON and OFF
the job
 Scientific Management Steps

Scientific Management is that kind of management which conducts a

business or affairs by standards established by facts or truths gained through
systematic observation, experiment or reasoning of work methods to improve
the efficiency of workers. The steps are:

• Develop a science for each element of the job to replace old rule of thumb
methods

• Scientifically select employees and then train them to do the job

• Supervise employees to make sure that they follow the prescribed methods
for performing their jobs

• Continue to plan the work but use workers to actually get the work done
 Administrative Theory Principles-Henri Fayol
1. Division of work
2. Authority and responsibility
3. Discipline
4. Unity of command
5. Unity of direction
6. Subordination of individual interest to general interest
7. Remuneration
8. Centralization
9. Scalar Chain
10. Order
11. Equity
12. Stability of tenure of personnel
13. Initiative
14. Sense of union
Bureaucratic Management Characteristics-Weber

• Qualification based hiring

• Merit based promotion
• Chain of Command
• Division of labor
• Impartial application of rule and regulation
• Recorded in writing
• Mangers separate from owners
 Group Influences-Mary Parker Follet
• Organizations function on the principle of “power with” rather
than “power over”

• Power is the ability to influence and bring about a change and

should not be based on hierarchy

• Power should be based on cooperation and should involve both

superiors and subordinates (power sharing)

• Integration may involve finding a solution acceptable to all group

members

• Managers should be responsible for keeping a group together and

ensuring that organizational objectives are achieved through group
interaction
Systems Theory components-Chester Bernard
An organizational system has four major components namely:
• Input: Money, Materials, Men, Machines and informational
sources are required to produce goods and services

• Transformation processes: Managerial and technical abilities

are used to convert inputs into outputs

• Output: Products, services, profits and other results produced

by the organization

• Feedback: Information about the outcomes and the position of

the organization relative to the environment it operates in
 Contingency Theory-JW Lorsch
• There is no one best way to manage all situations

• The response “ It depends” holds good for several

management situations

• The task of managers is to identify which technique

will, in particular situation, under particular
circumstances and at a particular time, best contribute
to the attainment of management goals
 Hawthorne Studies
• Hawthorne effect is a type of reactivity in which individuals
modify or improve an aspect of their behavior in response to
their awareness of being observed. The experiments were
conducted in four phases
a. Illumination experiments
b. Relay assembly test room experiments
c. Interview Phase
d. Bank wiring observation room experiments
• The findings are:
 The group is the key factor in job performance
 Perceived meaning and importance of the work determine
output
 Workplace culture sets its own standards