ORGANISATIONAL

BEHAVIOUR
PPT #1
Introduction to OB
• Key definitions
• Organization – It may be defined as a deliberately constructed human
association for attaining common objectives.
• OB – It refers to the behavior of the people in an organization.
• It is a field of study that investigates the impact that individuals,
groups and structures have on behavior in an organization for the
purpose of applying such knowledge towards improving an
organization’s effectiveness. – Robbins
• Although prima facie, it may appear to be a theoretical subject, it has
high pragmatic relevance.
• We will majorly deal with three levels of analysis, viz.,
• Individual behavior – OB can be studied in the perspective of individual
members. This approach to OB draws heavily on the discipline of psychology
and explains why people behave the way they do. Within this perspective, we
will learn about many psychological theories of learning, motivation,
leadership etc. and many concepts of psychology such as attitude,
perceptions etc.
• Inter-individual behavior (group behavior) – People work with each other in
an organization in the form of teams, groups, committees etc. This majorly
deals with the concepts drawn from the knowledge and theories of social
psychology to understand how people behave in groups.
• Organization behavior – This entails the study of the behavior of the
organization as a whole, and it draws on the concepts and theories from the
discipline of sociology.
Contributing Disciplines to OB
• OB is an interdisciplinary subject as it has borrowed concepts, theories,
models and practices of physical as well as social sciences. Contributing
disciplines:
• 1. Psychology – OB studies human behavior which is concerned mainly
with the psychology of the people. Psychology is the greatest contributor
to the subject of OB.
• Individual behavior is governed by perception, learning, personality,
motivation etc. which are core concepts of psychology.
• Group behavior is studied and moulded with the use of theories of social
psychology (a branch of psychology). It draws from both psychology and
sociology, and studies people’s influence on one another.
• 2. Sociology – Sociology is concerned with the use of scientific
methods in accumulating knowledge about the social behavior of
groups. Sociologists study social behavior, i.e., behavior in social
contexts such as family, organization, or a mob.
• It studies the behavior of the people in society in relation to their
fellow human beings. The interpersonal dynamics of organizations are
grounded in sociological concepts.
• 3. Anthropology – Anthropology is the study of societies to learn
about human beings and their activities.
• Culture has a major influence on the structure of organizations as well
as on the behavior of the people within organizations.
• It contributes to the understanding of cultural effects on OB, effects of
value system, norms, sentiments etc. on behavior.
• Allied Disciplines:
• 4. Political Science – Political science is thought of as the study of political
systems.
• Political scientists are interested in how and why people acquire power,
how they use it, political behavior, conflict and its resolution, the behavior
of interest groups, coalition, unions etc.
• In organizations, people strive for power and leadership. Concepts from
political science can be drawn to understand the behavior of the people
who desire power.
• 5. Economics – Economics is the study of production, distribution, and
consumption of goods and services. Theories of economics assume a
person to behave rationally.
• Students of OB share the economist’s interest in such areas as productivity,
forecasting, etc.
• 6. Sciences – Science is systematized, objective knowledge. Scientific
methods are the backbone of OB as OB is based on the systematized study
of facts, behavior, their relationships and predictions.
• OB also involves establishing and studying cause and effect relationships as
in sciences. These relationships are often utilized to mould the behavior of
people at work.
• A researcher in the filed of OB investigates new facts, tests theories,
hypotheses and models.
• 7. Technology – The level of technological development affects the
behavior of employees, which subsequently affects OB. Technology
changes consumer behavior, production, distribution, and storage
activities. Technological developments may lead to effective work behavior.
• Employees need to cope with the technological advancements.
• 8. Engineering – Some topics are common to engineering as well as
OB eg. – work measurement, productivity measurement, workflow
analysis, work design, job design etc.
• OB depends on engineering for these technical jobs.
Role of OB in Management Practices
• OB studies 3 determinants of behavior in organizations.
• Individual
• Interpersonal
• Intergroup
• The knowledge of all these is applied to the organization to make the
organization work more effectively.

• The role of managers include (a) understanding and (b) influencing

the human behavior.
(a) Understanding Human Behavior
• If managers are to understand the organizations in which they work,
they must first understand the people who make up the organization.
• Human behavior can be studied from three points of view:
• 1. Individual behavior – The main focus of behavioral sciences is on
the study of individual behavior. It tries to analyze why and how an
individual behaves in a particular way in a given situation.
• The behavior of individuals is influenced by a number of
psychological, social and cultural factors. The job of organizational
behaviorist is to integrate these factors to help in understanding
human behavior.
• 2. Group behavior – An individual behaves differently as an individual
and as a member of the group. To make sense of behavior of people
in an organization, a manager must firstly understand group behavior
in the organization.
• 3. Intergroup behavior – The large number of groups in an
organization can have an intricate network of complex relationships.
The cooperation, coordination and conflicts within groups influence
performances. Thus, it will behoove managers to understand the
dynamics of intergroup behavior to have effective organizations.
(b) Influencing Human Behavior
• After understanding human behavior, the next job for the manager is
to influence the behavior so that it conforms to the standards
required for achieving organizational objectives. Managers can
influence the behavior in following ways:
• 1. Leadership
• 2. Motivation
• 3. Communication
• 4. Organizational Culture
• 5. Organizational Change
• 6. Attitude
• 1. Leadership – It is the process of influencing people to voluntarily
contribute their best efforts to achieve pre-determined common
objectives. An organization can achieve success only with the right
type of leadership. Leaders direct individual and group effort towards
the organizational objectives.
• “The person who influences me the most is not one who does great
deeds, but one who makes me feel I can do great deeds” – Mary
Parker Follett
• 2. Motivation – It is a driving force which stimulates an individual to
initiate an action. The job of a manager in an organization is to get
things done from others. He will be successful in his job when he can
motivate his subordinates to work for the achievement of
organizational goals.
• 3. Communication – It is the process of transmission of knowledge,
information and ideas from the sender to the receiver, with the
information being understood by the receiver. Managers need to
communicate effectively with other people in the organization to
channelize efforts towards the achievement of common goals.
• 4. Organizational Culture – It is a system of shared beliefs and
attitudes that develops within an organization and guides the
behavior of its members. Culture facilitates the generation of
commitment to larger organizational goals over individuals’ self-
interests. Managers can change the dynamics of the organization by
changing the culture of the organization.
• 5. Organizational Change – Change is the only constant. Desirable and
effective change can be introduced through group dynamics and
proper education of employees through effective communication. The
benefits of change should be highlighted and the information should
be shared with all those likely to be affected by the change.
• 6. Attitude – Attitude may be understood as a learned predisposition
to respond to an object in a consistently favorable or unfavorable
manner. These are relatively stable over time. But a desirable change
in attitude can be introduced by various managerial interventions.
Challenges and Opportunities for OB
• The pace of change is accelerating and workplaces are seeing
transformation. Such changes bring with them a gamut of challenges
for the managers. However, these challenges bring opportunities for
managers to use OB concepts. Some challenges:
• 1. Managerial challenges
• 2. Workplace issues and challenges
• 3. Organizational challenges
• 4. Global challenges
Managerial Challenges
• 1. Workforce diversity – One of the most important challenges for
organizations is adapting to people who are different. Organizations
are becoming increasingly cosmopolitan. They are becoming more
heterogenous in terms of age, gender, race, and ethnic composition.
The managers must learn to respect the diversity. They must shift
their approach from treating everyone alike to recognizing differences
and responding to those differences in a way that will ensure
employee retention and greater productivity, while at the same time
not discriminating. However, they have to recognize that diversity can
play to their benefit and provide them competitive advantage. (eg –
increase creativity and innovation, diverse perspectives to a problem).
• 2. Changing demographics of workforce –
• (i) Dual career couples – These days, both partners actively pursue
professional careers. This limits the individual’s flexibility in accepting
overseas assignments or assignments to other locations, which
hinders organizational flexibility in acquiring and developing talent.
• (ii) Growing number of youngsters – These employees bring new ways
of thinking about the world of work. They are ambitious, enthusiastic,
and innovative. Their personal goals have to be carefully aligned with
organizational goals.
• (iii) Gender factor – Since recent past, women have been actively
involved in roles that were earlier earmarked for men. Managers have
to shape their management styles considering the gender make-up of
the organization.
Workplace Issues and Challenges
• 1. Employee rights and privacy – Managers need to be sensitive to
employee privacy, because encroachment on employees’ lives creates
resentment amongst the employees. Controversies involve issues
associated with individual rights while at work. Issues have surfaced
regarding dress code, right to marry within organizations, conflicts of
interest etc.
• 2. Unionism – Managers need to take extra precautions to ensure that
workers are treated fairly otherwise unions may start exerting undue
pressure on the management in an attempt to make it accede to their
demands.
• 3. Improving people skills – Managers need to master people
management skills. They need to ensure that they maintain cordial and
harmonious relationships with employees and that such relationships also
form amongst employees.
• 4. Helping employees balance work-life conflicts – Employees are
increasingly complaining that the line between work and nonwork time
has become blurred, creating personal conflicts and stress. The creation
of global organizations means the world never sleeps. Employees
increasingly recognize that work infringes on their personal lives, and
they’re not happy about it. Employees want jobs that give them flexibility
in their work schedules so they can better manage work–life conflicts. In
fact, balancing work and life demands now surpasses job security as an
employee priority. Organizations that don’t help their people achieve
work–life balance will find it increasingly difficult to attract and retain the
most capable and motivated employees.
Organizational Challenges
• 1. Working in Networked Organizations – Networked organizations
allow people to communicate and work together even though they
may be thousands of miles apart. The manager’s job is different in a
networked organization. Motivating and leading people and making
collaborative decisions online requires different techniques than
when individuals are physically present in a single location. As more
employees do their jobs by linking to others through networks,
managers must develop new skills. OB can provide valuable insights
to help with honing those skills.
• 2. Coping with temporariness – Managers todays face a challenge of
permanent temporariness. Globalization, expanded capacity, and
advances in technology have required organizations to be fast and
flexible if they are to survive. The result is that most managers and
employees today work in a climate best characterized as “temporary.”
Workers must continually update their knowledge and skills to perform
new job requirements. The organizations are also in a state of flux. They
continually reorganize their various divisions, sell off poorly performing
businesses, downsize operations, subcontract noncritical services and
operations to other organizations, and replace permanent employees
with temporary workers. Today’s managers and employees must learn
to cope with temporariness, flexibility, spontaneity, and unpredictability.
• 3. Creating a Positive Work Environment – Organizations should focus on
developing human strengths, fostering vitality and resilience, and unlocking
potential. OB faces a challenge of exploiting employees’ strengths rather
than dwelling on their limitations.
• 4. Ethical Behavior – Many employees these days feel pressured to cut
corners, break rules, and engage in other questionable practices. It is the
duty of managers to create an ethically healthy climate for their
employees. They can write and distribute codes of ethics to guide
employees through ethical dilemmas. They can offer seminars, workshops,
and other training programs to try to improve ethical behaviors. They can
providing in-house advisors who can be contacted for assistance in dealing
with ethical issues, and they can creating protection mechanisms for
employees who reveal internal unethical practices.
Global Challenges
• 1. Managing global environment – Organizations these days transcend
national boundaries. Managers have to cope with unfamiliar laws,
languages, practices, attitudes, management styles, ethics etc. HR
function must acquire a global perspective.
• 2. Increased Foreign Assignments – If you’re a manager, you are
increasingly likely to find yourself in a foreign assignment—
transferred to your employer’s operating division or subsidiary in
another country. Once there, you’ll have to manage a workforce very
different in needs, aspirations, and attitudes from those you are used
to back home.
• 3. Managing cultural diversity – Even in your own country, you’ll find
yourself working with bosses, peers, and other employees born and
raised in different cultures. What motivates you may not motivate
them. Or your communication style may be straightforward and open,
which others may find uncomfortable and threatening. Management
has to learn to cope with people from different cultures. To work
effectively with people from different cultures, you need to
understand how their culture, geography, and religion have shaped
them and how to adapt your management style to their differences.
• 4. Responding to economic pressures – Difficult economic times are a
test of management. Anybody can run a business when a business is
blooming. But management must be able to manage the workforce
well during tough economic times. For example, almost all the
countries were affected by the 2008 financial crisis in the USA. In
good times, understanding how to reward, satisfy, and retain
employees is at a premium. In bad times, issues like stress, decision
making, and coping come to the fore.
Taylor’s Scientific Management
• Frederick Winslow Taylor (Father of scientific management) investigated the
effective use of human resources in industrial organization, particularly at the
shop level.
• He tried to find out the reasons for slow pace of work and suggested methods
for improving it.
• His objective was to provide a scientific basis for designing and performing
various jobs. He wanted managers to adopt scientific and systematic
approach to managerial problems.
• He was of the view that there is a science for doing each job. He made efforts
to replace the primitive rule of thumb methods by modern scientific methods
based on investigation, analysis and measurement.
• He said that there is “one best way” of doing a thing.
Principles of scientific management
• 1. Replacement of rule of thumb – Taylor advocated the replacement of
rule of thumb with scientific methods. Every work should be planned
properly before it is carried out. Taylor suggested work study to
eliminate unnecessary operations, standardization of tools and
equipment, scientific selection of employees etc.
• 2. Cooperation, not individualism – Workers and management should
cooperate to create mutual confidence and goodwill, and to achieve
organizational goals.
• 3. Development of workers – All the plans of raising output can only be
achieved with the efforts of workers. The workers should be
scientifically selected, placed and developed to achieve best results.
• 4. Maximum output – The whole philosophy of scientific management
advocates increased production and productivity. Taylor wanted to
change the old methods of production so that the rate of production
increases.
Elements of scientific management
• 1. Work study – It is related to analyzing the work to be performed by
eliminating unnecessary operations and finding out the quicker way of
doing it. Work study also reduces efforts and increases productivity.
• 2. Standardization of tools and equipment – The tools and equipment
should be standardized so that no delays happen in case of
breakdowns as substitutes could be easily arranged. Moreover, it
required less people to operate varied tools.
• 3. Scientific selection, placement and training – Workers should be
selected scientifically by assessing their education, experience, skillset
and attitude towards job. They should be scientifically placed on jobs
that suit their skillset, and they should be continually trained.
• 4. Introduction of functional foremanship – Taylor advocated
functional foremanship. He believed that workers should be freed
from the burden of planning and designing. According to Taylor, the
two functions of planning and doing should be separated.
• Taylor suggested 8 functional specialists, the first 4 related to planning
work and the other 4 related to shop work.
• 5. Mental revolution – Taylor’s idea was to bring a change in the
attitude of workers and management towards each other. Workers
felt that the management was exploiting them, giving heavy workload
and paying meager amounts. And the management had misgivings
that workers always grumbled about their workload, follow go-slow
policies and damage equipment. Taylor wanted to promote
cooperation between the management and the workers.
Henry Fayol’s Principles of
Management
• Henry Fayol is also known as the Father of Modern Management Theory.
He introduced a general theory that can be applied to all levels of
management and every department.
• The fourteen principles of management created by Henri Fayol are:
• 1. Division of Work (Specialization) – Work should be divided into smaller
tasks and then a person should be allocated to each smaller task. It leads
to specialization.
• 2. Authority and Responsibility – Authority facilitates the management
to work efficiently, and responsibility makes them responsible for the
work done under their guidance or leadership. There should be a
balance between these two.
• 3. Discipline – Without discipline, nothing can be accomplished. It is
the core value for any project or any management. Good
performance and sensible interrelation make the management job
easy and comprehensive. Employees’ good behaviour also helps them
smoothly build and progress in their professional careers.
• 4. Unity of command – This means an employee should have only one
boss and follow his command. If an employee has to follow more than
one boss, there begins a conflict of interest and can create confusion.
• 5. Unity of Direction – Whoever is engaged in the same activity should
have a unified goal. This means all the people working in a company
should have one goal and motive which will make the work easier and
achieve the set goal easily.
• 6. Subordination of Individual Interest to General Interest – This
indicates a company should work unitedly towards the interest of a
company rather than personal interest. Be subordinate to the
purposes of an organisation. This refers to the whole chain of
command in a company.
• 7. Fair Remuneration – This means that remuneration paid to the
workers should be just and fair. This plays an important role in
motivating the workers of a company. Remuneration can be monetary
or non-monetary. Ideally, it should be according to an individual’s
efforts they have put forth.
• 8. Centralization – Centralization means concentration of power in the
hands of few whereas decentralization means dispersal of power.
There has to be an effective balance between centralization and
decentralization.
• 9. Scalar chain – It refers to the chain of authority ranging from the
ultimate authority to the lowest ranks. Fayol felt that scalar chain is
necessary to ensure unity of command and effective communication.
A “gang plank” may be created by passing the established line of
authority to facilitate quick communication.
• 10. Order – Order means right man on the right job, and right
material in the right place. “A proper place for everything and
everything in its right place”. Each employee should occupy that place
wherein he or she can render the best possible service.
• 11. Equity – All employees should be treated equally and respectfully.
It’s the responsibility of a manager that no employees faces
discrimination. There should be no nepotism or favouritism.
• 12. Stability – An employee delivers the best if they feel secure in
their job. It is the duty of the management to offer job security to
their employees.
• 13. Initiative – The management should support and encourage the
employees to take initiatives in an organisation. It will help them to
increase their motivation and morale.
• 14. Esprit de Corps – It is the responsibility of the management to
motivate their employees and be supportive of each other regularly.
Developing trust and mutual understanding will lead to a positive
outcome and work environment. “Cooperation and Teamwork”.
Hawthorne Experiments
• Hawthorne studies were designed to explore avenues to increase
worker productivity.
• The Hawthorne Effect is used to describe a change in the behavior of
an individual that results from their awareness of being observed.
The Hawthorne Studies
• Between 1924 and 1927, a team of researchers from Harvard
Business School conducted experiments at Hawthorne Works aimed
at identifying whether there was an effect of illumination on the
productivity of their workers.
• They thought that well-lit rooms would increase productivity. They
had an experimental group of workers who were exposed to varying
light intensities and a control group with workers exposed to a
constant intensity of light. They found that light intensity did not have
an effect on productivity because an increase in light intensity in the
control group caused increased productivity in both groups that
continued even when light intensity was decreased.
• The research team went on to test other experimental variables such
as light intensity, length of the workday, and the timing of breaks. In
general, an increase in productivity over all working conditions was
observed until the experiment ended, leading to the conclusion that
productivity was due to workers knowing that they were being
observed.

• One widely reported definition of the Hawthorne effect rests on the

story that no matter what variables were changed -- typically in the
illumination studies -- worker productivity increased. In other words,
the variables did not matter; the instrumental factor was that study
subjects were being observed.
Actual studies
• 1. The first phase of these experiments involved five girls engaged in
electrical assembly testing. These girls were separated from the rest
and placed in a separate room known as Relay Assembly Test Room. A
supervisor was attached to them to maintain a record of their
performance and maintain a friendly atmosphere. This experiment
continued for over 1.5 years and changes like extended rest periods,
reducing working week from 48 to 42 hours. Every change showed an
improvement in performance.
• 2. All the improvements introduced earlier were systematically
removed. Though the output fell a little, but it was still more than it
was before the experiments.
• 3. The improvements were reintroduced. The output roared and even
working for even 42 hours, it was more than the previous records.

• It was pointed out that morale of employees improved because of

their recognition for experiments and hence their performance was
better. The girls became a closely knit group and cooperated happily
with researchers. The attention they received from others, for being a
part of the research also acted as a motivator.
• Hawthorne studies revealed that an organization is not only a formal
arrangement of men and functions, but also a social system which can
be operated successfully only with the application of the principles of
psychology and other behavioral sciences.
New Experiment
• Another study in the bank wiring observation room, was introduced to
study the effect of a sophisticated wage incentive plan. The most
important finding was that employees did not individually maximize
their outputs. Rather, their output became controlled by a group norm
that determined what was a proper day’s work. Interviews determined
the group was operating well below its capability and was leveling
output to protect itself. Members were afraid that if they significantly
increased their output, the unit incentive rate would be cut, the
expected daily output would be increased, layoffs might occur, or slower
workers would be reprimanded. So the group established its idea of a
fair output—neither too much nor too little. Members helped each other
ensure their reports were nearly level.
• A group of workers determined the level of fair output and
established norms for individual work rates that conformed to the
output. To enforce the group norms, workers used sarcasm, ridicule,
and even physical force to influence individual behaviors that were
not acceptable to the group. Researchers also learned that money
was less a factor in determining worker output than were group
standards, sentiments, and security.
• The norms the group established included a number of “don’ts.”
Don’t be a rate-buster, turning out too much work. Don’t be a
chiseler, turning out too little work.
Thank you!