Principles of Management and Organisational Behaviour Dr.B.

Prathyusha,
Assistant Professor,
Dept. of H&S,
VNRVJIET

UNIT – III:
Introduction to Organizational Behaviour
Organizational Behaviour: Definition; Historical Background; Nature, Scope
and Importance; Linkages with other social Sciences; Approaches and Models.

Introduction to Organizational Behaviour

Organizational Behavior (OB) can be defined as the understanding, prediction
and management of human behavior both individually or in a group that
occur within an organization. Organization behaviour is concerned with the
studies of behaviour of people within an organization/setting. It involves
the understanding predictor is control of that behaviour. Organization
behavior can thus be defined as the study and understanding of
individual and group behaviour and patterns of structure in order to help
in group organization performance effectively. Organization behaviour applies
the knowledge gained about individuals’ groups and the effects of
structure on behaviour in order to make organization more effective. Its
concerned with what people do in an organization and how that behaviour
affects performance of the organization it emphasizes behaviour and related
to jobs work absenteeism employment turnover productivity human
performance and management
Internal and external perspectives are the two theories of how organizational
behavior can be viewed from an organization’s point of view. In this tutorial,
we will be learning in detail about both the theories.
Definition
In words of K Aswathappa, “OB is the study of human behaviour in
organisational setting, of the interface between human behaviour and
organisation and of the organisation itself.”
In words of Stephen P. Robbins, “OB is a field of study that investigates the
impact that individuals, groups and structures have on behaviour within
organisations for the purpose of applying such knowledge towards improving
an organisation’s effectiveness.”

1
Principles of Management and Organisational Behaviour Dr.B.Prathyusha,
Assistant Professor,
Dept. of H&S,
VNRVJIET
According to L. M. Prasad, “Organisational behaviour can be defined as the
study and application of knowledge about human behaviour related to other
elements of an organisation such as structure, technology and social
systems.”
According to Davis and Newstram, “Organisational behaviour is the study and
application of knowledge about how people act within organisations.”
Organizational behavior (often abbreviated as OB) is a field of study that
investigates show individuals, groups, and structure affect and is affected by
behavior within Organizations. Behavior refers to what people do in the
organization, how they perform, and what their attitudes are. Because the
organizations studied are often business organizations, OB is frequently
applied to address workplace issues such as absenteeism, turnover,
productivity, motivation, working in groups, and job satisfaction. Managers
often apply the knowledge gained from OB research to help them manage their
organizations more effectively.
History of Organizational Behavior:
The study of organizational behavior has its roots in the late 1920s, when the
Western Electric Company launched a now-famous series of studies of the
behavior of workers at its Hawthorne Works plant in Cicero, Illinois.
Researchers there set out to determine whether workers could be made to be
more productive if their environment was upgraded with better lighting and
other design improvements. To their surprise, the researchers found that the
environment was less important than social factors. It was more important,
for example, that people got along with their co-workers and felt their bosses
appreciated them.
Those initial findings inspired a series of wide-ranging studies between 1924
and 1933. They included the effects on productivity of work breaks, isolation,
and lighting, among many other factors.
The Hawthorne Effect—which describes the way test subjects' behavior may
change when they know they are being observed—is the best-known study of
organizational behavior. Researchers are taught to consider whether or not

2
Principles of Management and Organisational Behaviour Dr.B.Prathyusha,
Assistant Professor,
Dept. of H&S,
VNRVJIET
(and to what degree) the Hawthorne Effect may skew their findings on human
behavior.
Organizational behavior was not fully recognized by the American
Psychological Association as a field of academic study until the 1970s.
However, the Hawthorne research is credited for validating organizational
behavior as a legitimate field of study, and it's the foundation of the human
resources (HR) profession as we now know it.
Special Considerations:
The leaders of the Hawthorne study had a couple of radical notions. They
thought they could use the techniques of scientific observation to increase an
employee's amount and quality of work, and they did not look at workers as
interchangeable resources. Workers, they thought, were unique in terms of
their psychology and potential fit within a company.
Over the following years, the concept of organizational behavior widened.
Beginning with World War II, researchers began focusing on logistics and
management science. Studies by the Carnegie School in the 1950s and 1960s
solidified these rationalist approaches to decision-making.
Today, those and other studies have evolved into modern theories of business
structure and decision-making. The new frontiers of organizational behavior
are the cultural components of organizations, such as how race, class, and
gender roles affect group building and productivity. These studies take into
account how identity and background inform decision-making.
Academic programs focusing on organizational behavior are found in business
schools, as well as at schools of social work and psychology. These programs
draw from the fields of anthropology, ethnography, and leadership studies,
and use quantitative, qualitative, and computer models as methods to explore
and test ideas.
Depending on the program, one can study specific topics within
organizational behavior or broader fields within it. Specific topics covered
include cognition, decision-making, learning, motivation, negotiation,
impressions, group process, stereotyping, and power and influence. The
broader study areas include social systems, the dynamics of change, markets,

3
Principles of Management and Organisational Behaviour Dr.B.Prathyusha,
Assistant Professor,
Dept. of H&S,
VNRVJIET
relationships between organizations and their environments, how social
movements influence markets, and the power of social networks.
Nature of OB:
Organizational behaviour has emerged as a separate field of study. The nature
it has acquired is identified as follows:
A Separate Field of Study and not a Discipline Only
By definition, a discipline is an accepted science that is based on a theoretical
foundation. But, O.B. has a multi-interdisciplinary orientation and is, thus,
not based on a specific theoretical background. Therefore, it is better
reasonable to call O.B. a separate field of study rather than a discipline only.
An Interdisciplinary Approach
Organizational behaviour is essentially an interdisciplinary approach to study
human behaviour at work. It tries to integrate the relevant knowledge drawn
from related disciplines like psychology, sociology and anthropology to make
them applicable for studying and analyzing organizational behavior.
An Applied Science
The very nature of O.B. is applied. What O.B. basically does is the application
of various researches to solve the organizational problems related to human
behaviour. The basic line of difference between pure science and O.B. is that
while the former concentrates of fundamental researches, the latter
concentrates on applied researches. OB involves both applied research and
its application in organizational analysis. Hence, OB can be called both
science as well as art.
A Normative Science
Organizational Behaviour is a normative science also. While the positive
science discusses only cause effect relationship, O.B. prescribes how the
findings of applied researches can be applied to socially accept organizational
goals. Thus, O.B. deals with what is accepted by individuals and society
engaged in an organization. Yes, it is not that O.B. is not normative at all. In
fact, O.B. is normative as well that is well underscored by the proliferation of
management theories.

4
Principles of Management and Organisational Behaviour Dr.B.Prathyusha,
Assistant Professor,
Dept. of H&S,
VNRVJIET
A Humanistic and Optimistic Approach
Organizational Behaviour applies humanistic approach towards people
working in the organization. It, deals with the thinking and feeling of human
beings. O.B. is based on the belief that people have an innate desire to be
independent, creative and productive. It also realizes that people working in
the organization can and will actualize these potentials if they are given proper
conditions and environment. Environment affects performance or workers
working in an organization.
A Total System Approach
The system approach is one that integrates all the variables, affecting
organizational functioning. The systems approach has been developed by the
behavioural scientists to analyze human behaviour in view of his/her socio-
psychological framework. Man's socio-psychological framework makes man a
complex one and the systems approach tries to study his/her complexity and
find solution to it.

Fig: Nature of OB

5
Principles of Management and Organisational Behaviour Dr.B.Prathyusha,
Assistant Professor,
Dept. of H&S,
VNRVJIET
Scope of OB:
The scope of the organizational behavior is as under:
 Impact of personality on performance
 Employee motivation
 Leadership
 How to create effective teams and groups
 Study of different organizational structures
 Individual behavior, attitude and learning
 Perception
 Design and development of effective organization
 Job design
 Impact of culture on organizational behavior
 Management of change
 Management of conflict and stress
 Organizational development
 Organizational culture
 Transactional analysis
 Group behavior, power and politics
 Job design
 Study of emotions
The field of the organizational behavior does not depend upon deductions
based on gut feelings but attempts to gather information regarding an issue
in a scientific manner under controlled conditions. It uses information and
interprets the findings so that the behavior of an individual and group can be
canalized as desired.
Large number of psychologists, social scientists and academicians has carried
out research on various issues related to organization behavior. Employee
performance and job satisfaction are determinants of accomplishment of
individual and organizational goals.
Organizations have been set up to fulfill needs of the people. In today’s
competitive world, the organizations have to be growth-oriented. This is
possible when productivity is ensured with respect to quantity of product to

6
Principles of Management and Organisational Behaviour Dr.B.Prathyusha,
Assistant Professor,
Dept. of H&S,
VNRVJIET
be produced with zero error quality. Employee absenteeism and turnover has
a negative impact on productivity.
Employee who absents frequently cannot contribute towards productivity and
growth of the organization. In the same manner, employee turnover causes
increased cost of production. Job satisfaction is a major factor to analyze
performance of an individual towards his work. Satisfied workers are
productive workers who contribute towards building an appropriate work
culture in an organization.
Organizations are composed of number of individuals working independently
or collectively in teams, and number of such teams makes a department and
number of such departments makes an organization. It is a formal structure
and all departments have to function in a coordinated manner to achieve the
organizational objective.
It is therefore important for all employees to possess a positive attitude
towards work. They need to function in congenial atmosphere and accomplish
assigned goals. It is also important for managers to develop an appropriate
work culture. Use of authority, delegation of certain powers to subordinates,
division of labor, efficient communication.
Benchmarking, re-engineering, job re-design and empowerment are some of
the important factors so that an organization can function as well-oiled
machine. This is not only applicable to manufacturing organizations but also
to service and social organizations.

Importance of Organisational Behaviour

The need and importance of organisational behaviour are as under:
1. Skill Improvement:
 Study of Organisational Behaviour helps to improve skills.
 This includes the ability of employees and use of knowledge to become
more efficient.
 It also improves managers, as well as other employees, work skill.
2. Understanding Consumer Buying Behaviour:

7
Principles of Management and Organisational Behaviour Dr.B.Prathyusha,
Assistant Professor,
Dept. of H&S,
VNRVJIET
It also an important part to improve the marketing process by understanding
consumer (buying) behaviour.
3. Employee Motivation:
OB helps to understand the basis of Motivation and different ways to motivate
employees properly.
4. Nature of Employees:
 Understanding of personnel and employee nature is important to
manage them properly.
 With the help of OB, we can understand whether employees or people
are Introvert, Extrovert, Motivated, Dominating etc.
5. Anticipating Organisational events:
 The scientific study of behaviour helps to understand and predict
organisational events.
 For example Annual Business Planning, Demand Management, Product
line management, Production Planning, Resources Scheduling,
Logistics etc.
6. Efficiency & Effectiveness:
Study of organisational behaviour helps to increase efficiency and
effectiveness of the organisation
7. Better Environment of Organisation:
OB helps to create a healthy, ethical and smooth environment in an
organisation.
8. Optimum or Better Utilization of Resources:
 Study of OB helps to understand employees and their work style and
skill better way.
 By understanding this, management can train and motivate employees
for optimum utilization of resources.
9. Importance of OB in the Goodwill of organization:
Organisational Behaviour helps to improve Goodwill of organization.

This is all about the significance and importance of organisational behaviour

and its impact on overall business activities. Ultimately OB helps to increase

8
Principles of Management and Organisational Behaviour Dr.B.Prathyusha,
Assistant Professor,
Dept. of H&S,
VNRVJIET
efficiency and productivity. This may lead to an increase in the profit of the
organisation.

Linkages with other Social Sciences

Organisational Behaviour is an applied behavioural science based on
contributions from numerous behavioural disciplines.
These contributing disciplines to organisational behaviour - OB are described
as follows: Disciplines of OB:
 Psychology
 Medicine
 Sociology
 Social psychology
 Anthropology
 Political Science
 Industrial Engineering
 Economics

Disciplines contributing to organisational behaviour are given below:

1) Psychology
Psychology is a behavioral science that studies the behavior of human beings
in specific conditions and predicts how the individual will react in such
conditions. Psychology with its various studies and theories has brought
about an immense difference in human behavior.

9
Principles of Management and Organisational Behaviour Dr.B.Prathyusha,
Assistant Professor,
Dept. of H&S,
VNRVJIET
Theories related to leadership, motivation, individual decision making,
attitude, ego state, learning, personality, performance appraisal, job
satisfaction, training and development, work design, job stress, and conflict
resolution have been taken from psychology itself. If used efficiently these
theories can bring about changes in the attitude of employees and inculcate
a positive approach towards the organization.
Several psychological tests are also undertaken on the prospective employees
during the hiring process which helps the managers to understand the
employee's thought process and attitude in a better manner. Apart from this,
certain other aspects of human personality can also be measured with the
help of this science.
The major contribution of psychology in the field of Organizational Behavior
OB have been concerned are given below:
 Learning
 Personality
 Perception
 Individual decision-making
 Job satisfaction
 Motivation
 Attitude measurement
 Performance appraisal
 Work design
 Work strain
 Emotions
 Employee selected
2) Medicine
Medicine is an application of science that is concerned with the diagnosis and
treatment of diseases so that the health of an individual can be improved. It
includes healing of both physical as well as psychological diseases of the
person. It observes an individual's behaviour and lifestyle patterns while
devising a strategy for the treatment of chronic diseases. This has led to the
development of wellness programs from the perspective of commercial

10
Principles of Management and Organisational Behaviour Dr.B.Prathyusha,
Assistant Professor,
Dept. of H&S,
VNRVJIET
medicine and these programs have led to a more intense focus on employee
health in the organization.
3) Sociology
Sociology is a social science that examines the influence of culture on groups
and helps managers to understand group dynamics, communication,
customs, position, authority, group processes, conflict resolution, formal
organization theory, and group decision-making.
It is the study of social institutions, society, and social relationships. The main
contributions of sociology to the field of organisational behaviour are as
follows:
 Conflict
 Intergroup behaviour
 Formal organizational theory
 Organizational change
 Organizational culture
 Organizational technology
 Group dynamics
 Power
 Communication
4) Social Psychology
Organisations are a group of people with designated jobs and play an
important role in developing human behavior. Social psychology is a
combination of psychology and sociology. It has helped in managing changes,
decision-making, communicating, and developing skills to sustain social
norms.
The major contributions of social psychology to organisational behaviour OB
are as follows:
 Group process
 Attitude change
 Group decision making
 Communication
 Behaviour change

11
Principles of Management and Organisational Behaviour Dr.B.Prathyusha,
Assistant Professor,
Dept. of H&S,
VNRVJIET
5) Anthropology
This field of applied science studies human behavior in several cultures and
environments to understand the differences between them. The study gained
importance with the rise of globalization and merger and acquisitions of many
companies on a global level. At the beginning of 21" century people from
different countries and different backgrounds started working together under
one roof. It is the manager's responsibility to handle and control people from
different ethnicities and guide their efforts in the direction suitable for the
growth of the organization.
Organizational behaviour teaches about the attitudes and transactions
occurring in various cultures. Environmental studies under anthropology
help in understanding human behavior across cultures and mergers and
acquisitions become easier.
It is the study of society to learn about human beings and their activities. The
major contributions of Anthropology in the field of organisational behaviour
are as follows:
 Comparative values
 Organization culture
 Comparative attitudes
 Organization environment
 Cross-culture analysis
6) Political Science
A stable government helps businesses to grow internationally. A stable
government at the national level promotes international business, financial
investments, expansion, and employment. Rules and regulations formed by
the government deeply influence the functioning and decision making of
organizations.
It is the study of the behaviour of people and groups within a political
environment.
The main contribution of political science in the field of organisational
behaviour has been concerned with:
 Conflict

12
Principles of Management and Organisational Behaviour Dr.B.Prathyusha,
Assistant Professor,
Dept. of H&S,
VNRVJIET
 Power
 Intra-organizational policies
7) Industrial Engineering
Engineering deals with the study of energy and matter and helps in
understanding job design. In the early years of studying organizational
behavior, Fredrick Taylor took basic engineering ideas and applied them to
human behavior at work. Since Fredrick was from an engineering
background, hence he gave special emphasis to human productivity and
efficiency in work behavior. He provided OB with the concept of performance
standards i.e., a piece-rate system which was a huge contributor to the growth
of organizations.
8) Economics
Organisational climate is affected by the economic environment as well.
Economic factors such as labour market dynamics, cost-benefit analysis,
marginal utility analysis, human resource planning, forecasting, and
decision-making also influence organizational behavior.

Determinants of Organisational Behaviour - OB

Key elements of organisational behaviour are shown in the figure below:

Figure: Determinants of Organizational Behaviour - OB

Determinants of organisational behaviour are as follows:

Organizational behavior determinants are:
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Principles of Management and Organisational Behaviour Dr.B.Prathyusha,
Assistant Professor,
Dept. of H&S,
VNRVJIET
People
Structure
Technology
Environment
1) People
The internal social system of an organization is made up of the people who
work in it. This comprises individuals, large/small groups, and
informal/formal groups. It is the organization that exists to serve its people
and not vice versa. Today's organizations have changed and have become
more diverse than before. Present-day employees come up with a broad range
of talents, educational backgrounds, and perspectives. Hence, managers are
required to transform themselves with the workforce to attain maximum
efficiency.
2) Structure
Relationships and roles of people in the organization are defined by structure.
People working in an organization perform different roles and have different
relationships with each other. Division of work is done based on the
capabilities and designation of the employees so that organizational goals are
met efficiently. These may be managers, supervisors, clerks, etc. working in
one direction to achieve the organizational goals in an organized manner.
Authority-responsibility relationships are the essence of structure.
3) Technology
Technology plays a vital role in modern organizations. It empowers people for
their work and also influences their activities. Since work cannot be done with
empty hands i.e., without equipment, hence organizations use technology to
build buildings, design machines, develop work processes and collect
resources. Technology in turn helps people to perform better. But technology
has some side effects like it is costly and limits people in certain ways i.e., it
makes them dependent on machines. So, technology has both pros and cons.
4) Environment
Operations of all organizations take place under internal and external
environments. An organization is a small part of a large system that contains

14
Principles of Management and Organisational Behaviour Dr.B.Prathyusha,
Assistant Professor,
Dept. of H&S,
VNRVJIET
elements such as government, family, and other organizations. Changes in
the external environment affect individual organizations such as schools or
factories. It also affects working conditions and people's behavior and provides
struggle for resources and power. Thus, organizations should adopt it while
studying human behavior.

Approaches to OB

Organizational Behavior relates to the relationship between employees and

the employer in an organization.
There are 4 Approaches to Organizational Behavior studies;
 Human resources approach.
 Contingency approach.
 Productivity approach.
 Systems approach.
And one more approach to study organizational behavior is Interdisciplinary
Approach.
Human Resources Approach
This approach recognizes the fact that people are the central resource in any
organization and that they should be developed towards higher levels of
competency, creativity, and fulfillment. People thus contribute to the success

15
Principles of Management and Organisational Behaviour Dr.B.Prathyusha,
Assistant Professor,
Dept. of H&S,
VNRVJIET
of the organization. The human resources approach is also called as the
supportive approach in the sense that the manager’s role changes from
control of employee to active support of their growth and performance.
Contingency Approach
The contingency approach (sometimes called the situational approach) is
based on the premise that methods or behaviors which work effectively in One
situation fail in another.
For example; Organization Development (OD) programs, way work brilliantly
in one situation but fail miserably in another situation.
Results differ because situations differ, the manager’s task, therefore, is to
identify which method will, in a particular situation, under particular
circumstances, and at a particular time, best contribute to the attainment of
organization’s goals.
The strength of the contingency approach lies in the fact it encourages
analysis of each situation prior to action while at the same time discourages
the habitual practice of universal assumptions about methods and people.
The contingency approach is also more interdisciplinary, more system –
oriented and more research-oriented titan any other approach.
Productivity Approach
Productivity which is the ratio of output to input is a measure of an
organization’s effectiveness. It also reveals the manager’s efficiency in
optimizing resource utilization.
The higher the numerical value of this ratio, the greater the efficiency.
Productivity is generally measured in terms of economic inputs and outputs,
but human and social inputs and outputs also are important.
For example, if better organizational behavior can improve job satisfaction, a
human output or benefit occurs.
Systems Approach
The Systems Approach to OB views the organization as a united, purposeful
system composed of interrelated parts.
This approach gives managers a way of looking at the organization as a whole,
whole, person, whole group, and the whole social system.

16
Principles of Management and Organisational Behaviour Dr.B.Prathyusha,
Assistant Professor,
Dept. of H&S,
VNRVJIET
In so doing, the systems approach tells us that the activity of any segment of
an organization affects, in varying degrees the activity of every other segment.
A systems view should be the concern of every person in an organization.
Inter-Disciplinary Approach
Organizational behavior is an integration of all other social sciences and
disciplines such as psychology, sociology, organizational theories etc.
They all are interdependent and influence each other. The man is studied as
a whole and therefore, all disciplines concerning man are integrated.

Models of Organizational Behaviour

There are four different types of models in OB. We will throw some light on
each of these four models.
Autocratic Model:
The root level of this model is power with a managerial orientation of
authority. The employees in this model are oriented towards obedience and
discipline. They are dependent on their boss. The employee requirement that
is met is subsistence. The performance result is less. The major drawbacks of
this model are people are easily frustrated, insecurity, dependency on the
superiors, minimum performance because of minimum wage.
Custodial Model:
The root level of this model is economic resources with a managerial
orientation of money. The employees in this model are oriented towards
security and benefits provided to them. They are dependent on the
17
Principles of Management and Organisational Behaviour Dr.B.Prathyusha,
Assistant Professor,
Dept. of H&S,
VNRVJIET
organization. The employee requirement that is met is security. This model is
adapted by firms having high resources as the name suggest. It is dependent
on economic resources. This approach directs to depend on firm rather than
on manager or boss. They give passive cooperation as they are satisfied but
not strongly encouraged.
Supportive Model:
The root level of this model is leadership with a managerial orientation of
support. The employees in this model are oriented towards their job
performance and participation. The employee requirement that is met is
status and recognition. The performance result is awakened drives. This
model is dependent on leadership strive. It gives a climate to help employees
grow and accomplish the job in the interest of the organization. Management
job is to assist the employee’s job performance. Employees feel a sense of
participation.
Collegial Model:
The root level of this model is partnership with a managerial orientation of
teamwork. The employees in this model are oriented towards responsible
behavior and self-discipline. The employee requirement that is met is self-
actualization. The performance result is moderate zeal. This is an extension
of supportive model. The team work approach is adapted for this model. Self-
discipline is maintained. Workers feel an obligation to uphold quality
standard for the better image of the company. A sense of “accept” and
“respect” is seen.

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