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UNIT 1: Introduction to Organizational Behaviour Definition, need and importance of organizational behaviour Nature and scope Frame work Organizational behaviour models.
Contents
1.1 Meaning and Definition of Organizational Behaviour ............................................................................ 2 1.1. a. Assumptions of Organizational Behaviour ..................................................................................... 2 1.1. b Goals of Organizational Behaviour ................................................................................................. 2 1.2 Features/ Nature of Organizational Behaviour....................................................................................... 3 1.3 Scope of Organizational Behaviour ......................................................................................................... 4 1.3. a. Determinants of Organizational Behaviour / Key Forces Affecting OB / Elements of OB ............. 4 1.3. b. Fundamental Concept of Organizational Behaviour...................................................................... 6 1.4 Conceptual Framework for Organizational Behaviour ........................................................................... 8 1.5 Need of Studying Organizational Behaviour/Importance of Organizational Behaviour ........................ 9 1.5. a. Limitations of Organizational Behaviour ...................................................................................... 10 1.5.b. Basic Approaches of OB ................................................................................................................ 11 1.6 Models of Organizational Behaviour .................................................................................................... 12 1.6. a. Basic OB Model ............................................................................................................................ 13 1.6.b. Types of Organizational Behaviour Models .................................................................................. 14 1.6. c. Interpretation of Different Models .............................................................................................. 15 1.7 Contribution of Various Disciplines/Role of Behavioural Science in Management .............................. 16 1.7.a. Psychological Contract .................................................................................................................. 18 1.7. b. Research on Organizational Behaviour ........................................................................................ 18 1.7. c. Implications for Managers............................................................................................................ 19 1.8 Trends in Organization Behaviour......................................................................................................... 19 1.8. a. Future Prospect of OB .................................................................................................................. 19 1.9 Challenges and Opportunities for OB ................................................................................................... 20 1.9. a. Globalization of Business ............................................................................................................. 20 1.9. b. Workforce Diversity ..................................................................................................................... 21
1.9. c. Changed Employee Expectations ................................................................................................. 21 1.9. d. Increasing Quality Consciousness ................................................................................................ 22 1.9. e. Managing Change......................................................................................................................... 22 1.9. f. Ethics and Social Responsibility .................................................................................................... 22
3) Predict Employee Behaviour: Predicting future employee behaviour is another goal of organizational behaviour. Ideally, managers would have the capacity to predict which employees might be dedicated and productive or which ones might be absent, tardy, or disruptive on a certain day (so that managers could take preventive actions). 4) Control Human Activity: The final goal of organizational behaviour is to control (at least partially) and develop some human activity at work. Since managers are held responsible for performance outcomes, they are vitally interested in being able to make an impact on employee behaviour, skill development, team effort, and productivity. Managers need to be able to improve results through the actions they and their employees take, and organizational behaviour can aid them in their pursuit of this goal. Some people may fear that the tools of organizational behaviour will be used to limit their freedom and take away their rights. Although that scenario is possible, it is not likely, for the actions of most managers today are subject to intense scrutiny. Managers need to remember that organizational behaviour is a human tool for human benefit. It applies broadly to the behaviour of people in all types of organizations, such as businesses, government, schools, and service organizations. Wherever organizations are, there is a need to describe, understand, predict, and better manage human behaviour.
organizations responsibility to provide congenial climate in the organization so that people may get need satisfaction and the organization may attain its objectives. Thus, both organization and individuals can be benefited by each other. ix) Humanistic and Optimistic: OB focuses the attention on people from humanistic point of view. It is based on the belief that needs and motivation of people are of high concern. There is an acceptance of the value of the individual as thinking, feeling organism, and without these considerations the organizations may not be fully operational as a social entity. Further, there is optimism about the innate potential of man to be independent, creative, productive, and capable of contributing positively to the objectives of the organization. The man will actualize these potentials if given proper conditions and environments. x) Oriented towards Organizational Objectives: OB, being an applied science and emphasizing human aspect of the organization, is oriented towards organizational objectives. Though an organization may have several objectives and sometimes conflicting with individual objectives, it should not be understood that OB only emphasizes the achievement of individual objectives at the cost of organizational objectives. In fact, OB tries to integrate two types of objectives so that both are achieved simultaneously. For this purpose, it suggests various behavioural approaches. xi) Total Systems Approach: OB is a total systems approach wherein the living system of an organization is viewed as an enlargement of a man. The systems approach is an integrative approach which takes into account all the variables affecting organizational functioning. In fact, the systems thinking in organizational analysis has been developed by behavioural scientists. Behavioural science, while analyzing organizational behaviour, does not take human being in isolation but as the product of socio-psychological factors. Thus, his behaviour can be analyzed keeping in view his psychological framework, interpersonal orientation, group influence, and social and cultural factors. Thus mans nature is quite complex and OB by applying systems approach tries to find solution of this complexity.
produce goods and services to achieve their goals. We can call people, structure and technology as the internal organizational elements. These elements interact with the external environment and are influenced by it. The study of organizational behaviour, thus, involves four key elements; people, structure, technology and the environment in which the organization operates. 1) People: People make up the internal social system of the organization. That system consists of individuals and groups, and large groups as well as small ones. There are unofficial, informal groups and more official, formal ones. Groups are dynamic. We must remember that organizations exist to serve people, rather than people existing to serve organizations. The human organization of today is not the same as it was yesterday, or the day before. In particular, the workforce has become richly diverse, which means that employees bring a wide array of educational backgrounds, talents, and perspectives to their jobs. Managers need to be tuned into these diverse patterns and trends, and to be prepared to adapt to them.
Organizational behaviour
Technology Machinery Computer hardware and software Key Forces Affecting Organizational Behaviour 1) People: People make up the internal social system of the organization. That system consists of individuals and groups, and large groups as well as small ones. There are unofficial, informal groups and more official, formal ones. Groups are dynamic. We must remember that organizations exist to serve people, rather than people existing to serve organizations. The human organization of today is not the same as it was yesterday, or the day before. In particular, the workforce has become richly diverse, which means that employees bring a wide array of educational backgrounds, talents, and perspectives to their jobs. Managers need to be tuned into these diverse patterns and trends, and to be prepared to adapt to them. 2) Structure: Structure defines the roles and relationships of people in an organization. Different people in the organization are given different roles and they have certain relationships with others. Organization structure leads to division of work so that people can perform their duties to accomplish the organizational goals. Under the structure, different duties are to be performed by different people. Some may be managers others may be supervisors, clerks, peons or workers. All are related to each other to accomplish the goals in a co-ordinated manner. The structure relates to authority-responsibility relationships. 3) Technology: Technology provides the resources with which people work and affects the tasks that they perform. They cannot accomplish much with their bare hands, so they build buildings, design
machines, create work processes, and assemble resources. The technology used has a significant influence on working relationships. The great benefit of technology is that it allows people to do more and better work, but it also restricts people in various ways. It has costs as well as benefits. 4) Environment: All organizations operate within an internal and an external environment. A single organization does not exist alone. It is part of a large system that contains many other elements, such as government, the family, and other organizations. Numerous changes in the environment create demands on organizations. Individual organizations, such as a factory or a school, cannot escape being influenced by this external environment. It influences the attitudes of people, affects working conditions, and provides competition for resources and power. It must be considered in the study of human behaviour in organizations.
Individual Differences
Social Systems
OB Mutuality of interest
Holistic Concept
The discipline of Organizational Behaviour has fundamental concepts revolving round the (a) nature of people and (b) the nature of the organization. 1) The Nature of People With regard to people, there are six basic concepts: i) Individual Difference: People have much in common (they become excited by the arrival of a new child in the family or they are grieved by the loss of a loved one), but each person in the world is also individually different. Each person is different from all others, probably in millions of ways, just as each persons DNA profile is different, as far as we know. And these differences are usually substantial rather
than meaningless. All people are different, and this diversity needs to be recognized and viewed as a valuable asset to organizations. Individual differences mean that management can motivate employees best by treating them differently. Individual differences require that a managers approach to employees be individual, not statistical. This belief that each person is different from all others is typically called the law of individual differences. ii) Perception: People look at the world and see things differently. Even when presented with the same object, two people may view it in two different ways. Their views of their objective environment is filtered by perception, which is the unique way in which each person sees, organizes, and interprets things. People use an organized framework that they have built out of lifetime experiences and accumulated values. They tend to act on the basis of their perceptions. Essentially each person seems to be saying, I react not to an objective world, but to a world judged in terms of my own beliefs, values, and expectations. This way of reacting leads to the process of selective perception, in which people tend to pay attention to those features of their work environment which are consistent with or which reinforce their own expectations. Selective perceptions can not only cause misinterpretations of single events at work, but also lead to future rigidity in the search for new experiences. iii) Whole Person: When an individual is appointed, his/her skill alone is not hired, his/her social background, likes and dislikes, pride and prejudices-are also hired. A persons family life cannot be separated from his or her work life. It is for this reason that managers should endeavour to make the workplace a home away from home. They not only strive hard to develop a better employee out of a worker, but also a better person in terms of growth and fulfillment. iv) Caused Behaviour: From psychology we learn that normal behaviour has certain causes. These may relate to a persons needs and/or the consequences that result from acts. In the case of needs, people are motivated not by what we think they ought to have but by what they, themselves want. To an outside observer, a persons needs may be unrealistic, but they are still controlling. This fact leaves management with two basic ways to motivate people. It can show them how certain actions will increase their need fulfillment, or it can threaten decreased need fulfillment if they follow an undesirable course of action. Clearly, a path toward increased need fulfillment is the better approach. Motivation is essential to the operation of organizational. v) Desire for Involvement: People wish to feel good about them. This desire is reflected in their drive for self-efficacy, or the belief that one has the necessary capabilities to perform a task, fulfill role expectations, make a meaningful contribution, or meet challenging situation successfully. They hunger for the chance to share what they know and to learn from the experience. Organizations need to provide opportunities for meaningful involvement, a practice which will result in mutual benefit for both parties. vi) Human Dignity: Because of a higher order, people want to be treated with respect and dignity. The concept tells that every person should be respected simply because he happens to be an employee just as the manager is. They refuse to accept the old idea that they are simply economic tools. They want to be valued for their skills and abilities and to be provided with opportunities to develop themselves. 2) The Nature of the Organization i) Organization is a Social System: An organization is a social system which co-ordinates the activities of its members for the achievement of common goals. It is a part of the society and consists of people who are social beings. People have many psychological needs and play different types of roles. Their behaviour is influenced not only by their individual drives, but also by the groups of which they are members. That is why; organizational behaviour is dynamic in nature. A change in the social system is reflected in the organizational behaviour through the behaviour of individuals and groups. ii) Mutuality of Interests: Organizations need people, and people need organizations. Organizations have a human purpose. They are formed and maintained on the basis of some mutuality of interests among the participants. Organizations help people achieve their own personal objectives at the same time people help organizations achieve its objectives. It is a symbiotic relation. Everybody must
bear in mind that the organizational and employees interests are intertwined in such a way that if the interests of one suffer the interests of another do suffer. Both the employees and organization can prosper if they help each other to prosper. Mutual interest provides a super-ordinate goalone that can be attained only through the integrated efforts of individuals and their employers. iii) Ethics: In order to attract and retain valuable employees in an era in which good workers are constantly recruited away, ethical treatment is necessary. To succeed, organizations must treat employees in an ethical fashion. More and more firms are recognizing this need and are responding with a variety of programs to ensure a higher standard ethical performance by managers and employees alike. Companies have established codes of ethics publicized statements of ethical values, provided ethics training, rewarded employees for notable ethical behaviour, publicized positive role models, and set up internal procedures to handle misconduct. They have began to recognize that since organizational behaviour always involves people, ethical philosophy is involved in one way or another in each action they take. When the organizations goals and actions are ethical, mutuality creates a triple reward system in which individual, organizational, and social objectives are all met. People find more satisfaction in work when there is cooperation and teamwork. They are learning, growing, and contributing. The organization is also more successful, because it operates more effectively.
a demand for more wages, higher bonus, a better canteen or entertainment facilities. Reluctance of the management to talk to union leaders about workers problems might provoke them to give a strike call. In other words, relations between management and employees are quite often strained for reasons, which are psychological and not rational. Organizational behaviour helps understand the causes of poor industrial relations in the organization and suggest suitable measures for their improvement. 6) Introduction of Change in the Organization: Change is the law of nature. Organizations have also to undergo changes as a result of technological, social, political and other environment. Changes are often resisted by the organizational members. This problem can be successfully handled by the use of behavioural science knowledge. Change can be introduced through group dynamics and by proper education of employees through effective communication. The benefits of change should be highlighted and information should be shared with all those likely to be affected by the change.
Diminishing returns may not apply to every human situation, but the idea applies so widely that it is of general use. Furthermore, the exact point at which an application becomes excessive will vary with the circumstances, but an excess can be reached with nearly any practice. Why does the law of diminishing returns exist? Essentially, it is a system concept. It applies because of the complex system relationships of many variables in a situation. The facts state that when an excess of one variable develops, although that variable is desirable, it tends to restrict the operating benefits of other variables so substantially that net effectiveness declines. For example, too much security may lead to less employee initiative and growth. This relationship shows that organizational effectiveness is achieved not by maximizing one human variable but by combining all system variables together in a balanced way. 3) Unethical Manipulation of People A significant concern about organizational behaviour is that its knowledge and techniques can be used to manipulate people unethically as well as to help them develop their potential. People who lack respect for the basic dignity of the human being could learn organizational behaviour ideas and use them for selfish ends. They could use what they know about motivation or communication in the manipulation of people without regard for human welfare. People who lack ethical values could use people in unethical ways. The philosophy of organizational behaviour is supportive and oriented toward human resources. It seeks to improve the human environment and help people grow toward their potential. However, the knowledge and techniques of this subject may be used for negative as well as positive consequences. This possibility is true of knowledge in almost any field, so it is no special limitation of organizational behaviour. Nevertheless, we must be cautious so that what is known about people is not used to manipulate them. The possibility of manipulation means that people in power in organizations must maintain high ethical and moral integrity and not misuse their power. Without ethical leadership, the new knowledge that is learned about people becomes a dangerous instrument for possible misuse. Ethical leadership will recognize such principles as the following: i) Social Responsibility: Responsibility to others arises whenever people have power in an organization. ii) Open Communication: The organization will operate as a two-way, open system, with open receipt of inputs from people and open disclosure of its operations to them. iii) Cost-benefit Analysis: In addition to economic costs and benefits, human and social costs and benefits of an activity will be analyzed in determining whether to proceed with the activity. As the general population learns more about organizational behaviour, it will be more difficult to manipulate people, but the possibility is always there. That is why society desperately needs ethical leaders.
2) Contingency Approach: The contingency approach also is more interdisciplinary, more systemoriented, and more research-oriented than the traditional approach. Thus it helps managers use in the most appropriate manner all the current knowledge about people in organizations. Traditional management searched for principles to provide one best way of managing. There was a correct way to organize, to delegate, and to divide work. The correct way applied regardless of the type of organization or situation involved. Management principles were considered to be universal. As the field of organizational behaviour developed, many of its followers initially supported the concept of universality. Behavioural ideas were supposed to apply in any type of situation. One example was the belief that employee-oriented leadership should consistently be better than task-oriented leadership, whatever the circumstances. An occasional exception might be admitted, but in general early ideas were applied in a universal manner. The more accepted view in the twenty-first century is that few across-the board concepts apply in all instances. Situations are much more complex than first perceived, and the different variables may require different behavioural approaches. The result is the contingency approach to organizational behaviour, which means Those different situations require different behavioural practices for greatest effectiveness. 3) Results-Oriented Approach: All organizations need to achieve some relevant outcomes, or results. A dominant goal for many is to be productive, so this results orientation is a common thread woven through organizational behaviour. Productivity, at its simplest, is a ratio that compares units of output with units of input, often against a predetermined standard. If more outputs can be produced from the same amount of inputs, productivity is improved. Or if fewer inputs can be used to produce the same amount of outputs, productivity has increased. Productivity often is measured in terms of economic inputs and outputs, but human and social inputs and outputs also are important. For Example: If better organizational behaviour can improve job satisfaction, a human output or result occurs. In the same manner, when employee development programs lead to a by-product of better citizens in a community, a valuable social result occurs. 4) Systems Approach: Treating an organization as a system is critically important to its success. The fundamental elements of the systems approach include: i) There are many variables within a system. ii) The parts of a system are interdependent (one part affects many others parts and is affected by many in a complex way). iii) There are many subsystems contained within larger systems. iv) Systems generally require inputs, engage in some process, and produce outputs. v) The input-process-output mechanism is cyclical and self-sustaining (it is on-going, repetitive, and uses feedback to adjust itself). vi) Systems produce both positive and negative results. vii) Systems produce both intended and unintended consequences. viii) The consequences of systems may be short-term, long-term, or both.
Human Behaviour
Individual Behaviour 1) Perception 2) Personality 3) Values, Attitudes and Job satisfaction 4) Motivation 5) Learning
Group Behaviour 1) Group Dynamics 2) Teamwork 3) Power and Politics 4) Communication 5) Leadership 6) Decision-Making
Organization Factors 1) Organization Theory 2) Organization Design and Structure 3) Organizational Culture 4) Organizational Effectiveness
OB
3) Behaviour at the Organization Level: An organization is a system composed of several interdependent individuals and groups. Individuals and groups operate within the structure of formal organization. They participate in shaping the culture of the organization and also in organization development. At times, they may resist change, while they may fight for change in certain situations. Stress caused by the activities of individuals and groups has to be managed at the organizational, group and individual levels. The study of behaviour from the perspective of the whole organization is also referred to as macro organizational behaviour.
Under the supportive model, the workers feel a sense of participation and task involvement in the organization. The manager's role is one of helping employees solve their problems and accomplish their B - 12 Thakurs MBA First Semester HB (Organizational Behaviour) work. This model has been found to be effective in affluent countries where workers are more concerned about their higher level needs affiliation and esteem. This model has limited application under Indian conditions because a vast majority of operative workers are still working for the satisfaction of their physiological and security needs. 4) Collegial Theory: A useful extension of the supportive model is the collegial model. The term collegial relates to a body of persons having a common purpose. The collegial model, which embodies a team concept, first achieved widespread applications in research laboratories and similar work environments. The collegial model traditionally was used less on assembly lines, because the rigid work environment made it difficult to develop there. The theory is based on the principle of mutual contribution by employer and employees. Each employee should develop a feeling that he is a part of the whole and contributing something to the whole and recognizes the others contribution. Management is supported to be joint contribution and not the boss. The managerial orientation is toward teamwork. Management is the coach that builds a better team. The employee response to this situation is responsibility. The collegial approach for the employee is self discipline. In this kind of environment employees normally feel some degree of fulfillment, worthwhile contribution, and self-actualization, even though the amount may be modest in some situations. This self actualization will lead to moderate enthusiasm in performance. Autocratic 1) Basis of Model 2)Managerial Orientation 3) Employee Orientation 4) Employee Psychological Result 5) Employee Needs Met Power Authority Obedience Dependence on boss Custodial Economic resources Money Security Dependence on organization Supportive Leadership Support Job performance Participation Status and Recognition Awakened drives Collegial Partnership Teamwork Responsibility Self-discipline Participation Self-discipline Moderate enthusiasm
Subsistence Minimum
6) Performance Result
iv) Different models will remain in use though new model predominates as most appropriate for general use at any given time as task conditions differ from time to time and organization to organization.
Psychology
Medicine
1) Personality 2) Perception 3) Attitude 4) Learning 5) Motivation 6) Job Satisfaction 7) Training 8)Leadership Effectiveness 9) Performance Appraisal 10) Employee Selection 11) Work Design 1) Stress 2) Tension 3) Depression 1) Group Dynamics 2) Communication 3) Leadership 4) Power and Politics 5) Conflict
Individual
Sociology
1)Organizational Structures 2)Formal and Informal Organizations 3) Organizational Culture 4) Organizational Change 1) Behavioural Change 2) Attitude Change 3) Communication 4) Group Processes 5) Group decision - Making 1) Individual Culture 2) Organizational Culture 3)Organizational Environment 1) Organizational Power 2) Politics 3) Conflicts 1) Work Measurement 2)Productivity Measurement 3) Workflow Analysis and Design 4) Labor Relations 1) Government Policies 2) Allocation of Scare Resources
Group
Study of OB
Social Psychology
Anthropology
Political Science
Organizations
Industrial Engineering
Economics
Major Disciplines and their Contribution to OB 6) Political Science: Political science has also contributed to the understanding of OB. The themes of interest to political scientists include how and why people acquire power and such topics as political behaviour, group decision-making, conflict behaviour of interest groups, formation of coalition, etc. 7) Engineering: This discipline, too, has influenced OB. Industrial engineering, in particular, has long been concerned with work measurement, productivity measurement, workflow analysis and design, and labor relations. Obviously, all these are important for OB. 8) Economics: Economics aids in the understanding of economic conditions at a given time, economic policies of the government, allocation of scarce resources to different competing alternatives, and all these factors affect the organizational climate. Organizational behaviour has learned a great deal from such economic factors as labor market dynamics, cost-benefit analysis, marginal utility analysis, human resource planning and forecasting and decision making.
behaviour is not an exact science but an interesting challenge facilitated by a good knowledge of the theories and research findings.
Based on the above trend analysis, the following future prospects of OB can be inferred: i) OB has reached the status of identifiable fields of study and applications respectively, with explicit implications for human resource management in complex organizations. This legitimate recognition as academic (OB) and applied (HR) fields is likely to be reinforced in future. ii) OB can clearly be distinguished from other areas, such as general management and personnel administration. There will be an increased interplay of macro-structural variables and the environment in these fields. iii) There will be a movement in the topical coverage of the fields (i.e., perception, personality and group dynamics, etc.) to those more specifically identified with OB per se (i.e., job design, OB Modification (OB Mod), job conflict and stress, organizational power and politics, management leadership, organizational development, etc.). iv) The trend of making OB more application oriented will continue. Conclusively, the study of OB and the application of HR in the identical areas covered by them produce more efficient human resource managers, especially needed for the 21st century. The effective management of human resources is really what HR & OB are all about.
Globalization
Workforce Diversity
OB Challenges
Managing Change
Challenges of OB
Employees today demand empowerment and expect quality of status with the management. Previous notions on managerial authority are giving way to employee influence and involvement along with mechanisms for upward communication. Empowerment results in redefining jobs, both on the shop floor as a well as in boardrooms. As workmen are given more control over their jobs, a whole class of supervisors may become redundant, not because they will do a bad job, but because there shall be no need for them. Empowerment also means that the worker can bring his or her children to the workplace, look around, and can even gain knowledge about work methods. This is a privilege enjoyed till now only by owners of enterprises whose children can access even vital documents. Expectations of equality are breaking up the traditional relationships between employees and owners.