Unit 1: Understanding Organizational Behavior

Unit 1

Understanding Organizational Behavior

Introduction

In a simple term, organizational behavior refers to the behavior of persons in an organization.

Everybody wants to understand others behavior. Understanding others’ behavior helps the
organization and its external forces. The analysis of these forces provides an insight for
understanding the behavior. Moreover, managers have been grappling with the idea of the
channelization of human energy towards the attainment of the organizational goals.
The understanding of human behavior play very important role in this endeavor as well. Thus,
the study of organizational behavior provides guidelines for influencing the behavior of persons
in the organization.
In this unit, you will learn the concept, genesis, needs and goals of the organizational behavior.
 Unit Learning Outcomes
At the end of the unit, you will be able to:
 Analyze different behavior manifested by individuals in an organization

Topic 1: Organizational Behavior

Time Allotment: 2 hours

Learning Objectives
At the end of the session, you will be able to:
 Understand the meaning of organizational behavior
 Explain the determinants of organizational behavior
 Identify the functions and roles of managers
 Differentiate the models of organizational behavior

Activating Prior Knowledge

What comes to your mind if you hear the words organizational behavior? What are the things,
issues or concepts that you relate with organizational behavior? List all your answers below:
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 Presentation of Content

To understand the concept of organizational behavior, let us first take the two terms involved:
organization and behavior.
Organization is a place where two or more people work together in a structured way to achieve a
specific goal or set of goals. Goals are fundamental elements of organizations. According to
Gary Johns, (1980) organizations are social interventions for accomplishing goals through group
efforts. Various environmental forces influence organizations. There are two types of
environmental forces, vis: direct and indirect. Some of the main direct forces are economic,
technological, socio-cultural, political and international.
Behavior is anything that the human being does. Behavior is a response to stimulation that can be
observed, thus, it is any response or reaction of an individual. The basic unit of behavior is
activity. According to Luthans, in understanding the variable, it is extremely important to
separate the actual behavior events from the outcomes of the events. Specific observable
behavioral events and their patterns provide useful data in order to analyze the interaction, which
precedes the behavior and the consequences that follow the behavior.
Behavior provides many helpful insights into understanding the complexities of peoples’
behavior on the job. Organizational Behavior is the study and application of knowledge about
how people act within organizations. The key elements in an organization are people, structure,
technology and external environment in which the organization operates. When people join
together in an organization to accomplish an objective, some kind of structure is required.
Organizational behavior is the systematic study of human behavior, attitudes and performance
within an organizational setting; drawing on theory methods and principles from such disciplines
as psychology, sociology and cultural anthropology to learn about individual perceptions, values,
learning capacities and actions while working in groups and careful application of knowledge
about how people- as individuals and as groups- act within the total organization; analyzing the
external environment’s effect on the organization and its human resources, missions, objectives
and strategies.
The above definition of OB highlights on its several aspects like:
a. Way of thinking—requires clearly identifying the level of analysis (individual, group,
organizational).
b. Multi-disciplinary—draws principles, theories, and models from psychology, sociology
and cultural anthropology.
c. Humanistic orientation—assumes that individual feelings, attitudes, perceptions, goals,
etc., are important to the organization.
d. Performance-oriented—focusing on whether and why individual/group/organization
performance is high, moderate, or low.
e. External environment—substantially impacts organizational behavior.
f. Scientific method—plays a critical role in OB research.
g. Applications oriented—concerned with providing useful/applicable answers to
management problems.
Fundamental concepts connected with organizational behavior
Fundamental concepts are basic principles that form a strong foundation for OB. OB has a set of
fundamental concepts revolving around the nature of people and organizations.

The Nature of People

The six basic concepts relevant to the nature of people are:
Law of individual differences - Each person is substantially different from all others in terms of
their personalities, needs, demographic factors and past experiences and/or because they are
placed in different physical settings, time periods or social surroundings. This diversity needs to
be recognized and viewed as a valuable asset to organizations.
Perception- Perception is the unique way in which each person sees, organizes and interprets
things based on their background of individual differences. Each person reacts not to an
objective world, but to a world judged in terms of his/her own beliefs, values and expectations.
Sometimes it may lead to selective perception in which people tend to pay attention to only those
things that are consistent with or reinforce their own expectations. Selective perceptions may
lead to misinterpretation of single events at work or create a barrier in the search for new
experience. Managers need to recognize the perceptual differences among the employees and
manage them accordingly.
A whole person - People function as total human beings. People are physical, mental, social and
spiritual beings and the organization actually employs the whole person rather than certain
characteristics. There are spillover effects between the work life and life outside work and
management’s focus should be in developing not only a better employee but also a better person
in terms of growth and fulfillment. If the whole person can be developed, then benefits will
extend beyond the firm into the larger society in which each employee lives.
Motivated behavior - Individual’s behavior are guided by their needs and the consequences that
results from their acts. In case of needs, people are motivated not by what others think they ought
to have but by what they themselves want. Motivation of employees is essential to the operation
of organizations and the biggest challenge faced by managers.
Desire for Involvement - Many employees actively seek opportunities at work to become
involved in relevant decisions, thereby contributing their talents and ideas to the organization’s
success. Consequently, organizations need to provide opportunities to the employees for
meaningful involvement.
Value of the Person - People want to be treated with care, dignity and respect and increasingly
they are demanding such treatment from their employers. They want to be valued for their skills
and abilities and to be provided with opportunities to develop themselves.

The Nature of Organizations

The three key concepts related to the nature of organizations are:
Social systems - Sociology tells that organizations are social systems. Just have people have
psychological needs they also have social roles and status. Their behavior is influenced by their
group as well as their by their individual drives. Two types of social systems exist side by side in
the organization - the formal (official) social system and the informal social system- each
influencing and getting influenced by the other.
Mutual Interest - There is a mutuality of interest between the organization and its employees.
Organization needs employees to reach its objectives and people need organizations to help them
reach individual objectives. Mutual interest provides a superordinate goal – one that can be
attained only through the integrated efforts of individuals and their employees.
Ethics - Ethics is the use of moral principles and values to affect the behavior of individuals and
organizations with regard to choices between what is right and wrong. In order to ensure a higher
standard of ethical performance by managers and employees companies have established codes
of ethics, publicized statements of ethical values and set up internal procedures to handle
misconduct. Since organizational behavior involves people, ethical philosophy is involved in one
way or another in each action they take. When organization’s goals and actions are ethical,
individual, organizational and social objectives are more likely to be met.

Basic approaches of Organizational Behavior

The four basic approaches of OB are:
Human Resources (supportive) approach - Employee growth and development toward higher
levels of competency, creativity and fulfillment are encouraged and supported because people
are the central resource in any organization and society.
Contingency approach - Different managerial behaviors are required by different environments
for effectiveness.
Results-oriented approach - Outcomes of organizational behavior programs are assessed in terms
of their efficiency.
Systems approach - All parts of an organization interact in a complex relationship. Systems
approach takes an across- the board view of people in organizations and analyses issues in terms
of total situations and as many factors as possible that may affect people’s behavior.

The goals of organizational behavior

The four goals of organizational behavior are:
 To describe systematically how people behave under variety of conditions
 To understand why people behave as they do
 To predict future employee behavior
 To control at least partially and develop some human activity at work.
Importance of organizational behavior for the managers
Organizational behavior provides a useful set of tools at five levels of analysis.
 It helps managers to look at the behavior of individuals within an organization.
 It aids their understanding of the complexities involved in interpersonal relations, when
two people (two coworkers or a superior-subordinate pair) interact.
 Organizational Behavior is valuable for examining the dynamics of relationships within
small groups, both formal teams and informal groups.
 When two or more groups need to coordinate their efforts, managers become interested in
the intergroup relations that emerge.
 Organizations can also be viewed and managed as whole systems that have inter
organizational relationships

Determinants of Organizational Behavior

There are three primary determinants of behavior on which small companies focus when
studying organizational behavior: employee dynamics, available resources and work
environments.

People

The first primary behavioral determinant in organizations is people. Small company employees
are inherently different. Their ages and genders vary. They also come from diverse ethnic
backgrounds. Moreover, people bring different skill sets to their companies. Employees are
also different with respect to their goals and ambitions. Some strive to get promoted more
quickly. Others enjoy more tactical functions and are satisfied becoming more efficient at their
present jobs. Managers must understand what motivates employees so they can adopt the right
management styles with them. For example, some workers prefer closer supervision, while
others are more self-directed and thrive on independence. Employees also exhibit different
behaviors in group settings. Some individuals are more reserved, and group settings almost
hamper their capabilities. Others are naturally leaders and tend to take over group tasks and
projects. Managers who correctly identify which employees work best on their own or in
groups stand to gain the most productivity from them.

Technology

Technology also greatly influences working relationships between employees. Companies that
have more updated equipment or computer software usually can expect greater production
from workers. There also tends to be more cohesiveness among employees. Managers spend
less time harping over details when they know employees have the proper tools. For example,
a marketing manager may assign an analyst the task of creating a 10-page presentation for the
department meeting. The manager knows the presentation software provides tutorials and
spends less time explaining how to set up the presentation. Contrarily, employees who do not
have the proper technology and equipment may become agitated. They may start viewing their
job as drudgery and start taking their frustrations out on other workers.
Organizational Structure

Small companies also must ensure they have the proper organizational structure for employees
to work effectively. A tall, bureaucratic structure, for example, would not work efficiently for a
small company with 50 employees. There would be too many management levels. Workers
would spend more time waiting for approval on projects or budgets, as more managers would
be involved in the decision-making process. Creativity and communication also may be
hampered in a taller organizational structure. This may lower the morale of employees who are
creative and have high ambitions. Small companies servicing diverse customer groups may be
better off using a customer-based structure, according to ReferenceforBusiness.com. Workers
become more specialized by customer, which may increase both customer and employee
satisfaction. Confusion and frustration may be averted because employees don't have to know
the different procedures for serving all customers.

Functions/Roles of Managers
Mintzberg (1973) identified ten separate roles in managerial work, each role defined as an
organized collection of behaviors belonging to an identifiable function or position. He separated
these roles into three subcategories: interpersonal contact, information processing and decision
making.

Interpersonal contact
FIGUREHEAD: the manager performs ceremonial and symbolic duties as head of the
organization;
LEADER: fosters a proper work atmosphere and motivates and develops subordinates;
LIASION: develops and maintains a network of external contacts to gather information;

Information processing

MONITOR: gathers internal and external information relevant to the organization;

DISSEMINATOR: transmits factual and value based information to subordinates;
SPOKESPERSON: communicates to the outside world on performance and policies.

Decision-making
ENTREPRENEUR: designs and initiates change in the organization;
DISTURBANCE HANDLER: deals with unexpected events and operational breakdowns;
RESOURCE ALLOCATOR: controls and authorizes the use of organizational resources;
NEGOTIATOR: participates in negotiation activities with other organizations and individuals.

Mintzberg next analyzed individual manager's use and mix of the ten roles according to the six
work related characteristics. He identified four clusters of independent variables: external,
function related, individual and situational. He concluded that eight role combinations were
'natural' configurations of the job:
contact manager -- figurehead and liaison
political manager -- spokesperson and negotiator
 entrepreneur -- entrepreneur and negotiator
insider -- resource allocator
real-time manager -- disturbance handler
team manager -- leader
expert manager -- monitor and spokesperson
new manager -- liaison and monitor

For performing these roles, skills required by the managers are:

 Technical Skills-The ability to apply specialized knowledge or expertise
 Human Skills-The ability to work with, understand, and motivate other people, both
individually and in groups
 Conceptual Skills-The mental ability to analyze and diagnose complex situations

The managers will be effective in these roles when he possesses the required skills, understands
the organization and its employees properly. However some key facts about life at work:
 Organizations are complex systems
 Human behavior in organizations is sometimes unpredictable
 Human behavior in an organization can be partially understood
 There is no perfect solution to organizational problems.
 In an organization, employees do not have the luxury of not working with or relating to
other people .

Therefore, to be effective in an organization, it is imperative that an employee learns about

human behavior, explore how to improve his/her interpersonal skills and begin to manage his/her
relationships with others at work. These are the areas where knowledge of Organizational
Behavior can make a significant contribution to the employee’s effectiveness. Organizational
behavior is a scientific discipline in which large number of research studies and conceptual
developments are constantly adding to its knowledge base. It is also an applied science, in that
information about effective practices in one organization is being extended to many others.

Models of Organizational Behavior

The five models of organizational behavior are the:

 autocratic model,
 custodial model,
 supportive model,
 collegial model and
 system model

Autocratic model

Autocratic model is the model that depends upon strength, power and formal authority. In an
autocratic organization, the people (management/owners) who manage the tasks in an
organization have formal authority for controlling the employees who work under them. These
lower-level employees have little control over the work function. Their ideas and innovations are
not generally welcomed, as the key decisions are made at the top management level.

The guiding principle behind this model is that management/owners have enormous business
expertise, and the average employee has relatively low levels of skill and needs to be fully
directed and guided. This type of autocratic management system was common in factories in the
industrial revolution era.

One of the more significant problems associated with the autocratic model is that the
management team is required to micromanage the staff – where they have to watch all the details
and make every single decision. Clearly, in a more modern-day organization, where highly paid
specialists are employed an autocratic system becomes impractical and highly inefficient.

The autocratic model is also a detractor to job satisfaction and employee morale. This is because
employees do not feel valued and part of the overall team. This leads to a low-level of work
performance. While the autocratic model might be appropriate for some very automated factory
situations, it has become outdated for most modern-day organizations.

Custodial model

The custodial model is based around the concept of providing economic security for employees –
through wages and other benefits – that will create employee loyalty and motivation.

In some countries, many professional companies provide health benefits, corporate cars,
financial packaging of salary, and so on – these are incentives designed to attract and retain
quality staff.

The underlying theory for the organization is that they will have a greater skilled workforce,
more motivated employees, and have a competitive advantage through employee knowledge and
expertise.

One of the downsides with the custodial model is that it also attracts and retains low performance
staff as well. Or perhaps even deliver a lower level of motivation from some staff who feel that
they are “trapped” in an organization because the benefits are too good to leave.

Supportive model

Unlike the two earlier approaches, the supportive model is focused around aspiring leadership. It
is not based upon control and authority (the autocratic model) or upon incentives (the custodial
model), but instead tries to motivate staff through the manager-employee relationship and how
employees are treated on a day-to-day basis.

Quite opposite to the autocratic model, this approach states that employees are self-motivated
and have value and insight to contribute to the organization, beyond just their day-to-day role.
The intent of this model is to motivate employees through a positive workplace where their ideas
are encouraged and often adapted. Therefore, the employees have some form of “buy-in” to the
organization and its direction.

Collegial model

The collegial model is based around teamwork – everybody working as colleagues (hence the
name of the model).

The overall environment and corporate culture need to be aligned to this model, where
everybody is actively participating – is not about status and job titles – everybody is encouraged
to work together to build a better organization.

The role of the manager is to foster this teamwork and create positive and energetic workplaces.
In much regard, the manager can be considered to be the “coach” of the team. And as coach, the
goal is to make the team perform well overall, rather than focus on their own performance, or the
performance of key individuals.

The collegial model is quite effective in organizations that need to find new approaches –
marketing teams, research and development, technology/software – indeed anywhere the
competitive landscape is constantly changing and ideas and innovation are key competitive
success factors.

System model

The final organizational model is referred to as the system model. This is the most contemporary
model of the five models discussed in this article. In the system model, the organization looks at
the overall structure and team environment, and considers that individuals have different goals,
talents and potential.

The intent of the system model is to try and balance the goals of the individual with the goals of
the organization. Individuals obviously want good remuneration, job security, but also want to
work in a positive work environment where the organization adds value to the community and/or
its customers.

The system of model should be an overall partnership of managers and employees with a
common goal, and where everybody feels that they have a stake in the organization.
 Application

1. How does ethics affect the behavior of a person?

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Feedback

Read and analyze the questions/statements below, then encircle the letter of your answer.

1. This is a fundamental element of an organization

a. employee b. goal c. technology d. behavior

2. In this approach of OB, outcomes of organizational behavior programs are assessed

in terms of their efficiency
a. contingency b. human resources c. systems d. results oriented

3. Which aspect of OB suggests that it derives concepts from various fields and areas of
specialization?
a. applications b. humanistic orientation c. multi-disciplinary d. way of thinking

4. This determinant of organizational behavior has something to do with the increased

productivity of workers
a. people b. technology c. organizational structure d. behavior

5. This decision-making role of a manager refers to the responsibility in appropriating

the resources of the organization
a. negotiator b. entrepreneur c. disturbance handler d. resource allocator

6. This skill of a manager relates to his/her ability to solve problems

a. human skill b. conceptual skill c. technical skill d. managerial skill
 7. This determinant of behavior defines how activities in an organization are directed
toward the achievement of organizational aims
a. people b. technology c. organizational structure d. behavior

8. What is the basic unit of behavior?

a. organization b. goal c. activity d. job

9. This model is based around the concept of providing economic security for
employees
a. custodial b. system c. autocratic d. supportive

10. This model of organizational behavior depends upon strength, power and formal
authority
a. autocratic b. custodial c. system d. supportive model

Summary of the Unit

In this unit you have learned that:

 Organizational behavior deals with the understanding, prediction and control of human
behavior in an organization. It is an interdisciplinary approach to the study of human
behavior.
 The study of behavior can be viewed in terms of various main disciplines like,
Psychology, Sociology, Social Psychology, Anthropology, Political Science, Economics,
Engineering, Medicines, Semantics, etc.
 The study of organizational behavior helps to improve functional behavior which leads to
productivity, effectiveness, efficiency and organizational citizenship.
 It also helps to reduce dysfunctional behavior at workplace like absenteeism, employee
turnover, dissatisfaction, tardiness, etc.
 The study of organizational behavior is the most important contributor towards building
managerial skills.
 The major goals of organizational behavior are: understanding behavior, predicting
behavior and controlling behavior.
 Reflection

Consider an organization which you are familiar with and identify an issue on organizational
behavior that you think have affected its performance. How could have the study of
organizational behavior affected or benefited of the organization?
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 References
French, W.L. Kast, F. E. & Rosenzweig, J. E. (1985). Understanding Human Handy, C. B.
(1993). Understanding Organizations, (Fourth Edition) London: Penguin Mullins. L. J
(2000). Management and Organizational Behaviour, (4th Edition ). London: Pitman
Publishing

Hellriegel, D., Slocum, J., & Woodman, R. Organizational behavior -8th edition, Thomson
South-Western

Ivancevich, Konopaske and Matteson. Organizational behavior and management -7th edition,
Tata McGrawHill

Luthams, F. (1992). Organizational Behaviour, (Sixth Edition). New Jersey; Mc Graw-Hill

Newstrom, J. Organizational behaviour-Human behaviour at work, 12th edition, McGrawHill

Robbins, S. (1992). Essentials of Organizational Behaviour, (3rd Edition). New Jersey; Prentice
–Hall Inc.

Robbins, S., Judge, T. & Sanghi, S.. Organizational Behaviour, 12th ed, Prentice Hall India

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