Module - 1

Introduction to Organizational Behavior

Meaning: Organizational Behavior (OB) is the study of human behavior in
organizational settings, the interface between human behavior and the
organization, and the organization itself.
Organizational behavior (OB) is the academic study of the ways people act within
groups. Its principles are applied primarily in attempts to make businesses operate
more effectively.

Difination: “Organizational Behaviour is directly concerned with the understanding

production control of human behaviour in organization” --- FRED LUTHANS
“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.” --- L. M. Prasad
Features of organizational behaviour:
=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, OB has a multi-interdisciplinary
orientation and is, thus, not based on a specific theoretical background.
Therefore, it is better to reason to call OB a separate field of study rather than a
discipline only.
=An Interdisciplinary Approach: Organizational behavior is essentially an interdisciplinary
approach to study human behavior at work.
OB 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.
=Applied Science: What OB basically does is the application of various research to solve the
organizational problems related to human behavior.
The basic line of difference between pure science and OB is that while the former concentrates
on fundamental research, the latter concentrates on applied research.
OB involves both applied research and its application in organizational analysis.
Hence, OB can be called both science as well as art.
=Normative Science: Organizational Behavior is a normative science also. While positive
science discusses the only cause-effect relationship, OB prescribes how the findings of applied
research can be applied to socially accepted organizational goals.
Thus, OB deals with what is accepted by individuals and society engaged in an organization. Yes,
it is not that OB is not normative at all.
In fact, OB is normative as well which is well underscored by the proliferation of management
theories.
=A Humanistic and Optimistic Approach: Organizational Behavior applies a humanistic
approach towards people working in the organization. It deals with the thinking and feeling of
human beings.
OB 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 environments.
The 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 behavioral scientists to analyze human behavior
in view of his/her socio-psychological framework.
Man’s socio-psychological framework makes the man a complex one and the systems approach
tries to study his/her complexity and find a solution to it.

Conclusion
Organizational behavior is the study of shaping the behavior of the organizational personnel.
By nature, OB is an applied science that takes a systematic approach that understands the
reason behind the behavior and influences it in a way that benefits attaining business goals.
For influencing the human behavior within the organization, OB tries to find the motivation and
drive for any particular behavior. It sets an environment that delivers maximum performance
from the workers.

The scope of organizational behaviours integrates 3 concepts, respectively –

-Individual behaviour:
It is a study of personality, study, attitude, inspiration and job satisfaction of a person. In this
study, we interact with others to study them and make their assumptions about them.
Example – In addition to the ones mentioned in Resume, a round of personal interview is
organized to interact with the candidates to check their skills.
-Inter-individual Behaviour:
It is a study of people’s leadership qualities, group mobility, group struggle, power and politics,
as well as through communication between employees and their subordinates.
Example – A meeting to decide the list of new board members
-Group Behaviour:
Group behaviours studies the structure of organization, formation of organization and
effectiveness of the organization.
Example – strike, rally etc.

Objectives of organisational behaviour:

(i) To analyse different perspective and potentialities to create and develop the ethical
values in an organisation,
(ii) To analyse the potentialities towards the ways and means to conduct and organise
the systems, methods and approaches for organisation development in an organisation,
(iii) To analyse the potentialities to develop process, methods and approaches of formal
and informal patterns of organisation and society,
(iv) To analyse how to make perspective methods and process of effective
communication to formulate ethical norms in an organisation,
(v) To analyse various aspects and factors affecting the group cohesiveness,
(vi) To analyse the ways and means to develop different ethical aspects for group
dynamism,
(vii) To analyse the mutual interest of individual and group. Mutual interest is
represented by the statement ‘Organisation needs people, and people also need
organisation’,
(viii) To analyse and evaluate the role of different key elements like people, structure,
technology interactive behaviour and environment etc.
(ix) To analyse and evaluate the behavioural approaches in organisation. In context of
that all of them are based on ‘Art’ and ‘Science’,
(x) To analyse different aspects of work environment which duly affects the behavioural
patterns and attitudes of persons.

Significance of Organisational Behaviour

OB is concerned with understanding, applying and controlling of behavioural and structural
knowledge of an organisation for organisation's effectiveness. Management function
includes Planning, organising, leading and controlling where people are involved in
different roles (interpersonal roles, informational roles, and decisional roles) and different
capacities. Therefore, for an organisation to succeed it is very important for it to understand
its organisation's culture, people by way of understanding their perception, attitudes,
motivation, personality, key personality characteristics relevant to workplace, learning, job
satisfaction, etc through theories of motivation, learning, and reinforcement. And mould
their dissatifaction to satisfaction, motivate them to achieve desired results, provide them
appropriate work culture, growth opportunities, punish their inappropriate behaviour, and
infusing learning environment and leadership.

Organization Culture - is perceived differently by enterprises. There are businesses that realize
its significance and spend proportionately to either improve or sustain a positive culture while there are
others who have ignored it all together. Although it is difficult to statistically show the impact of an
organization culture, it is believed that employees from corporations with a strong organization culture
experience a sense of belonging, engagement and commitment towards their organization which is
indeed critical for success. The key role of a work culture are enlisted below:
  Organization culture goes a long way in creating the brand image of the organization. The
work culture gives an identity to the organization. In other words, an organization is known by
its culture.
 The culture shapes the way employees interact at their workplace. A healthy culture
encourages the employees to stay motivated and loyal towards the management. Additionally,
the work culture promotes healthy relationship amongst the employees. It also goes a long way
in promoting healthy competition at the workplace. It is the culture of the workplace which
actually motivates the employees to perform.
 The organization culture helps build an emotional attachment to the enterprise. The culture
cultivates a sense of belonging and commitment towards the corporation and develops a sense
of unity at the workplace.
 Every organization must have set guidelines for the employees to work accordingly. The culture
of an organization represents certain predefined policies which guide the employees and give
them a sense of direction at the workplace. Every individual is clear about his roles and
responsibilities in the organization and know how to accomplish the tasks ahead of the
deadlines. Additionally, such policies help mold positive habits into individuals which make them
successful professionals. It is the culture of the organization which extracts the best out of each
team member.
Fundamentals of Organizational Behaviour:
1. Individual Difference: Each and every person in the world is individual different. The idea of individual
difference is supported by science. A person is different in millions of ways. Each person’s DNA profile is
different. Originally, the idea of individual difference comes from psychology. From the day of birth, each
person is unique. So management can motivate employee by different ways. Management should consider
carefully the law of individual difference.
2. Perception: People look at the world and see things differently. Two people may view the same object in two
different ways. Employees see their work worlds differently for a variety of reasons. They may differ in their
personalities needs, demographic factors (Age, Gander, Income, Marital status), past experience and so on.
Management learns to guide their employees who have perceptual difference.
3. A Whole Person: Some organization may wish that they could employ only a person’s skill or brain. They
forget that they actually employ a whole person rather than certain characteristics. Skill doesn’t exist apart
from background or knowledge. Home life is not totally separate from their work life. Similarly emotional
conditions aren’t separate from physical conditions. People work, as total human beings..
4. Motivated behaviour: Motivation is essential to the operation of organization. An organization with
sophisticated technology and equipment can’t work if the human resources aren’t motivated and guided
properly. So the authority should inspire or more motive the human resources by proving different kinds of
facilities.
5. Desire for Involvement: Today many employees are actively seeking opportunities at work to become
involved in relevant decisions. They want to make a contribution by their talents and ideas for the organization.
So organization needs to provide opportunities for their meaningful improvement.
6. Value of the person: People deserve to be treated differently from other factors of productions (Land,
Capital, and Technology). They want to be treated with caring, respect and dignity. They refuse to accept the
old idea that they are simply economic tools. They want to be valued for their skills and abilities. Organization
should provide opportunities to the workers to develop themselves.
7. Organizations are social systems: and governed by social andpsychological laws. They have social
roles and status. Their behavior influenced by their group-s individual drives. Organization
environmentin a social system is dynamic. All parts of the system are interdependent.
8. Human dignity: When every one, the employee, the manager as the CEO of an organization are
engaged in the same pursuit. The pursuit of enabling their organization to achieve the objections for
 it has come in existence. Thus they are on the equal footing. The concept tells that very person
should be respected simply because he happens to be an employee just as the manager is.

Significance of Special psychological :

=What Industrial-organizational Psychology Is
Industrial-organizational psychology is the study of individual, group and organizational dynamics in a
place of work. Those dynamics can be different in different workplaces. By using the scientific method in
order to study human behavior in a place of work, a psychologist is able to determine how well teams
communicate, whether or not workers are invested in the company and how happy people are in their jobs
and how that correlates to their productivity, efficiency and absenteeism rate.
=What an Industrial-organizational Psychologist Does
Every workplace has problems. Some of those could be unique to the people who work there, and others
could be common based on the type of work that is done. Every problem will be somewhat different
based on the people and place involved. An industrial-organizational psychologist assesses the individuals
and groups in a place of work as well as the policies, procedures, and environment of the workplace. The
psychologist identifies problems and uses research in order to choose and implement solutions. The
solutions are designed to improve the well-being and success of the workers and the workplace.
=How an Industrial-organizational Psychologist Solves Workplace Problems
An industrial-organizational psychologist looks at particular questions in order to solve workplace
problems. For example, they might ask how decisions are made. The industrial-organizational
psychologist might also ask how effective the communications are between colleagues or between
workers and the management team. An industrial-organizational psychologist also designs, conducts and
analyzes research studies related to interactions in the workplace. They use the data collected in order to
analyze findings and find out which problem-solving methods work and which ones do not. The work of
an industrial-organizational psychologist could improve worker morale, boost efficiency, decrease
absenteeism or lower the turnover rate. All of these activities can result in a business that is better for
workers and more profitable.

Main challenges and opportunities of organizational behavior are:

=Improving Peoples’ Skills: Technological changes, structural changes, environmental changes are
accelerated at a faster rate in the business field.
Unless employees and executives are equipped to possess the required skills to adapt to those changes,
the targeted goals cannot be achieved in time.
These two different categories of skills – managerial skills and technical skills.
Some of the managerial skills include listening skills, motivating skills, planning and organizing skills,
leading skills, problem-solving skill, decision-making skills.
These skills can be enhanced by organizing a series of training and development programs, career
development programs, induction, and socialization.
= Improving Quality and Productivity: Quality is the extent to which the customers or users believe
the product or service surpasses their needs and expectations.
For example, a customer who purchases an automobile has a certain expectation, one of which is that
the automobile engine will start when it is turned on.
If the engine fails to start, the customer’s expectations will not have been met and the customer will
perceive the quality of the car as poor. The key dimensions of quality as follows.
 Performance: Primary rating characteristics of a product such as signal coverage, audio quality, display
quality, etc.
 Features: Secondary characteristics, added features, such as calculators, and alarm clock features in
handphone
 Conformance: Meeting specifications or industry standards, workmanship of the degree to which a
product’s design or operating characteristics match pre-established standards
 Reliability: The probability of a product’s falling within t a specified period of time
 Durability: It is a measure of a product’s life having both economic and technical dimension
 Services: Resolution of problem and complaints, ease of repair
 Response: Human to human interfaces, such as the courtesy of the dealer « Aesthetics: Sensory
characteristics such exterior finish
 Reputations: Past performance and other intangibles, such as being ranked first.
More and more managers are confronting to meet the challenges to fulfill the specific requirements of
customers. In order to improve quality and productivity, they are implementing programs like total
quality management and reengineering programs that require extensive employee involvement.
= Total Quality Management (TQM): It is a philosophy of management that is driven by the constant
attainment of customer satisfaction through the continuous improvement of all organizational process.
The components of TQM are;
(a) An intense focus on the customer,
(b) Concern for continual improvement,
(c) Improvement in the quality of everything the organization does,
(d) Accurate measurement and,
(e) Empowerment of employees.
= Managing Workforce Diversity: This refers to employing different categories of employees who
are heterogeneous in terms of gender, race, ethnicity, relation, community, physically disadvantaged,
elderly people, etc.
The primary reason to employ heterogeneous category of employees is to tap the talents and
potentialities, harnessing the innovativeness, obtaining synergetic effect among the divorce workforce.
In general, employees wanted to retain their individual and cultural identity, values and lifestyles even
though they are working in the same organization with common rules and regulations.
The major challenge for organizations is to become more accommodating to diverse groups of people by
addressing their different lifestyles, family needs, and work styles.
= Responding to Globalization: Today’s business is mostly market-driven; wherever the demands
exist irrespective of distance, locations, climatic conditions, the business
operations are expanded to gain their market share and to remain in the top rank, etc. Business
operations are no longer restricted to a particular locality or region.
Company’s products or services are spreading across the nations using mass communication, the
internet, faster transportation, etc.
More than 95% of Nokia (Now Microsoft) handphones are being sold outside of their home country
Finland.
Japanese cars are being sold in different parts of the globe. Sri Lankan tea is exported to many cities
around the globe.
Garment products of Bangladesh are exporting in USA and EU countries. Executives of Multinational
Corporation are very mobile and move from one subsidiary to another more frequently.
=Empowering People: The main issue is delegating more power and responsibility to the lower level
cadre of employees and assigning more freedom to make choices about their schedules, operations,
procedures and the method of solving their work-related problems.
Encouraging the employees to participate in the work-related decision will sizable enhance their
commitment to work.
Empowerment is defined as putting employees in charge of what they do by eliciting some sort of
ownership in them.
 Managers are doing considerably further by allowing employees full control of their work.
Movement implies constant change an increasing number of organizations are using self-managed
teams, where workers operate largely without a boss.
Due to the implementation of empowerment concepts across all the levels, the relationship between
managers and the employees is reshaped.
Managers will act as coaches, advisors, sponsors, facilitators and help their subordinates to do their task
with minimal guidance.
=Coping with Temporariness: In recent times, the product life cycles are slimming, the methods of
operations are improving, and fashions are changing very fast. In those days, the managers needed to
introduce major change programs once or twice a decade.
Today, change is an ongoing activity for most managers.
The concept of continuous improvement implies constant change.
In yesteryears, there used to be a long period of stability and occasionally interrupted by a short period
of change, but at present, the change process is an ongoing activity due to competitiveness in
developing new products and services with better features.
Everyone in the organization faces today is one of permanent temporariness. The actual jobs that
workers perform are in a permanent state of flux.
So, workers need to continually update their knowledge and skills to perform new job requirements.
=Stimulating Innovation and Change: Today’s successful organizations must foster innovation and
be proficient in the art of change; otherwise, they will become candidates for extinction in due course of
time and vanished from their field of business.
Victory will go to those organizations that maintain flexibility, continually improve their quality, and beat
the competition to the market place with a constant stream of innovative products and services.
For example, Compaq succeeded by creating more powerful personal computers for the same or less
money than EBNM or Apple, and by putting their products to market quicker than the bigger
competitors.
=Emergence of E-Organisation & E-Commerce: It refers to the business operations involving the
electronic mode of transactions. It encompasses presenting products on websites and filling the order.
The vast majority of articles and media attention given to using the Internet in business are directed at
online shopping.
In this process, the marketing and selling of goods and services are being carried out over the Internet.
In e-commerce, the following activities are being taken place quite often – the tremendous numbers of
people who are shopping on the Internet, business houses are setting up websites where they can sell
goods, conducting the following transactions such as getting paid and fulfilling orders.
It is a dramatic change in the way a company relates to its customers. At present e-commerce is
exploding. Globally, e-commerce spending was increasing at a tremendous rate.
=Improving Ethical Behavior: The complexity in business operations is forcing the workforce to face
ethical dilemmas, where they are required to define right and wrong conduct in order to complete their
assigned activities.
For example,
 Should the employees of a chemical company blow the whistle if they uncover the discharging its
untreated effluents into the river are polluting its water resources?
 Do managers give an inflated performance evaluation to an employee they like, knowing that such an
evaluation could save that employee’s job?
The ground rules governing the constituents of good ethical behavior has not been clearly defined,
Differentiating right things from wrong behavior has become more blurred.
Following unethical practices have become a common practice such as successful executives who use
insider information for personal financial gain, employees in competitor business participating in
massive cover-ups of defective products, etc.
=Improving Customer Service: OB can contribute to improving organizational performance by
showing drat how employees’ attitude and behavior are associated with customer satisfaction.
In that case, service should be the first production-oriented by using technological opportunities like a
computer, the internet, etc.
To improve the customer service need to provide sales service and also the after-sales service.
=Helping Employees Balance Work-Life Conflicts: The typical employee in the 1960s or 1970s
showed up at the workplace Monday through Friday and did his or her job 8 or 9-hour chunk of time.
The workplace and hours were clearly specified. That’s no longer true for a large segment of today’s
workforce.
Employees are increasingly complaining that the line between work and non-work time has become
blurred, creating personal conflict and stress.
A number of forces have contributed to blurring the lines between employees’ work life and personal
life.
First, the creation of global organizations means their world never sleeps. At any time and on any day,
for instance, thousands of General Electric employees are working somewhere.
Second, communication technology allows employees to do their work at home, in their cars, or on the
beach in Cox’s Bazar.
This lets many people in technical and professional jobs do their work anytime and from any place.
Third, organizations are asking employees to put in longer hours.
Finally, fewer families have only a single breadwinner. Today’s married employee is typically part of a
dual-career couple. This makes it increasingly difficult for married employees to find the time to fulfill
commitments to home, spouse, children, parents, and friends.
Today’s married employee is typically part of a dual-career couple.
This makes it increasingly difficult for married employees to find the time to fulfill commitments to
home, spouse, children, parents, and friends.
Employees are increasingly recognizing that work is squeezing out personal lives and they’re not happy
about it.
For example, recent studies suggest that employees want jobs that give them flexibility in their work
schedules so they can better manage work/life conflicts.
In addition, the next generation of employees is likely to show similar concerns.
A majority of college and university students say that attaining a balance between personal life and
work is a primary career goal. They want a life as well as a job.

Social factors for understanding organizational behaviour :

The major focus of sociologists is on studying the social systems in which individuals fill their roles. The
focus is on group dynamics.
They have made their greatest contribution to OB through their study of group behavior in
organizations, particularly formal and sophisticated organizations.
Sociological concepts, theories, models, and techniques help significantly to understand better the
group dynamics, organizational culture, formal organization theory and structure, corporate technology,
bureaucracy, communications, power, conflict, and intergroup behavior.
Psychologists are primarily interested in focusing their attention on individual behavior.
Key concepts of Sociology are;
 Most sociologists today identify the discipline by using one of the three statements:
 Sociology deals with human interaction arid this communication are the key influencing factor among
people in social settings.
 Sociology is a study of plural behavior. Two or more interacting individuals constitute a plurality pattern
of behavior
 Sociology is the systematic study of social systems:
A social system is an operational social unit that is structured to serve a purpose.
It consists of two or more persons of different status with various roles playing a part in a pattern that is
sustained by a physical and cultural base.
When analyzing organizing as a social system, the following elements exist:
 People or actors
 Acts or Behavior
 Ends or Goals
 Norms, rules, or regulation controlling conduct or behavior
 Beliefs held by people as actors
 Status and status relationships
 Authority or power to influence other actors
 Role expectations, role performances, and role relationships.
Therefore, organizations are viewed by sociologies as consists of a variety of people with different roles,
status, and degrees of authority.
The organization attempts to achieve certain generalized and specific objectives.
To attain some of the abstract ends such as the development of company loyalty, the organization’s
leaders appeal to the shared cultural base.

Four Models of Organizational Behaviour:

Models are frameworks or possible explanations why do people behave as they do at work. There are so
many models as many are organizations. Varying results across the organizations are substantially caused by
differences in the models of organizational behaviour. All the models of organizational behaviour are broadly
classified into four types: autocratic, custodial, supportive and collegial. We discuss these four models
beginning with the autocratic. O.B. is the study of human behaviour in organizations, the interface between
human behaviour and the organization and the organization itself.

The five significance of models of organisational behaviour 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 organisation, the people (management/owners) who manage the tasks in an
organisation 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 organisation, 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 organisations.

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 organisation 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 organisation 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 organisation, 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
organisation 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 organisation.
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 organisations 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 organisational 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 organisation 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
organisation.
Individuals obviously want good remuneration, job security, but also want to work in a positive work
environment where the organisation 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 organisation.