MBA
Organisation Behaviour
Unit I
Dr. Khushboo Sabharwal
Gupta
Organisation Behaviour
Learning Objectives of Unit -I
• Define the term organisational behaviour and concept.
• Discuss the Key Elements of organisation behaviour.
• Levels of Analysis within OB-Individual, group and organization
• Challenges and opportunities
• Relationship with other fields
Organization
What is an Organisation?
The organisation as two or more individuals who are interacting with each
other within a deliberately structured set up and working in an independent
way to achieve some common objectives.
Behaviour
Behaviour
• Behaviour may be defined as the way how people act as individual and as
groups.
• It is behaviour of the people working in an organisation to achieve
common goals or objectives.
Organization Behaviour
• Organisational behaviour can be defined as the study of what people think,
feel, and do in and around organisations.
• The study of organisation behaviour facilitates the process of explaining,
understanding, predicting, maintaining and changing employee behaviour
in an organizational setting.
Organization Behaviour
According to Stephen P Robbins
“Organisation Behaviour defined as “a field of study that investigates the impact of
individuals, groups and structures on behaviour within organisations for the purpose of
applying such knowledge towards improving an organisation’s effectiveness”
Organisational Behaviour
• Organisational behaviour (OB) is a field of study that examines the
behavior of individuals, groups, and structures within an organization and
how they impact the organization's effectiveness.
• It involves analyzing various factors such as leadership, communication,
motivation, decision-making, and organizational culture to understand
how they influence individual and group behavior within the workplace.
Organisational Behaviour
• OB aims to improve organisational performance, productivity, and employee
satisfaction by applying theories and concepts from psychology, sociology,
anthropology, and management studies to address challenges and optimise
organisational functioning.
Key elements of OB
• People—People consist of Individuals and groups. Managers must treat employees with
individual differences (personality traits, intelligence, attitude) differently.
• People make up the internal social system of the organisation.
• The workforce is one of the critical resources that needs to be
managed. In managing human resources, managers have to
deal with :
1. Individual employees who are expected to perform the
tasks allotted to them.
Key elements of OB
2. Dyadic relationships such as superior-subordinate interactions.
3. Groups who work as teams and have the responsibility for getting the job done.
4. People outside the organization system such as customers and government officials.
• Structure – Structure defines the official relationships of people in organizations.
Different jobs are required to accomplish all of an organization’s activities.
• Managers and employees, accountants and assemblers.
• These people have to be related in some structural way so that their
work can be effective. The main structure relates to power and duties.
Key elements of OB
• Technology – Technology provides the resources with which people work and also affects
the tasks that they perform.
• Organizations have technologies for transforming inputs and outputs.
• Technologies consist of physical objects, activities and processes, knowledge, all of which
are brought to bear on raw materials, labour and capital inputs during a transformation
process.
• The core technology is that set of productive components
most directly associated with the Transformation process.
For example, production or assembly line in a manufacturing
firm .
Key elements of OB
Environment – All organisations operate within a given internal and external environment.
• No organisation exist alone.
• Every organization interacts with other factors of its environment. The interactions allow the
organization to acquire raw materials, secure capital, hire employees, and obtain, lease or buy
facilities and equipment.
• An enterprise is a part of a larger system that contains other elements such as government,
family, society and other organisations.
References
S.No. Author Title of Book Publisher
1. S S Khanka Organisational Behaviour S Chand
2. S Shajahan & Linu Shajahan Organisational Behaviour New Age International
3. F C Sharma Organisational Behaviour SBPD
Management & Organisational Sahitya Bhawan Publication,
4. S C Saksena & Gaurav Sankalp
Behaviour Agra
5. Aswathappa Organisational Behaviour Himalaya Publishing
6. Balaji C.D Organisational Behavior Margham
7. Margie Parikh, Rajen Gupta,1/E, Organisational Behaviour, McGraw Hill Education,
Stephen Robbins, Timothy A. Judge ,
8. Organizational Behaviour Pearson
Prentice Hall India Pvt. Ltd.
9. Nelson, Quick & Khandelwal, Organizational Behaviour CENGAGE
Nature of Organisational Behaviour
1. A Separate Field of Study and not a Discipline: Organizational Behaviour is
a separate field of study. There is no foundation of basic concepts that may
guide its development as a science. Therefore, it will be appropriate to call it a
field of study rather than discipline.
2. Goal Oriented: Organizational Behaviour is an applied science it is oriented
towards organizational goals. Sometimes there may be conflict of
organizational goals with individual goals. In that case, both the objectives are
achieved simultaneously.
Nature of Organisational Behaviour
3. Interdisciplinary approach: OB 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 analysing organisational behaviour.
4. An Applied science: The aim of Organizational Behaviour is to solve problems of
organizations related with human behavioural aspect. Therefore, applied
researches are concentrated, in place of fundamental researches.
Nature of Organisational Behaviour
• Many of the researches may be carried in laboratory, but the behaviour of an
individual cannot be analyzed. OB is application of various researches to solve
the organisational problems related to human behaviour.
5. Focuses Attention on People: Organizational Behavior focuses the attention on
people. It is based on the concept that need and motivation of the people is
required. If the people are given proper environment and working condition, they
are creative, independent and capable of achieving organizational objectives.
Nature of OB
6. Normative Science and Value Centred: Organizational Behaviour is a
normative science. It not only defines the cause-and-effect relationship but
also suggests how the results of various researches can be applied to get
organizational results.
7. Humanistic & Optimistic – OB applies a humanistic approach towards people
working in the organisation. It treats people as thinking, feeling human beings.
Optimistic –the innate potential of man to be independent, creative, productive
and capable of contributing positively to the objectives of the organisation.
Nature of OB
8. Science: It is a science because it follows the scientific methods of the observation, the collection
of the data, the hypothesis, the theory and the model building ever open to the scientific scrutiny
in terms of the relationship among variables under the study and the validity of such a relationship.
9. Art: It is an art, since it involves quite a subjective approach too in terms of the skillful
organization of the field studies, the collection of the data and the interpretation of the results
by human beings who generally are more subjective than objective in their approach.
10. A Total system- the system approach is one that integrates all the variable affecting
organisational functioning (to analyze the human behaviour in view of his/her socio-
psychological framework).
Need for Organisational Behaviour
I Enhancing Productivity – Understanding employee behaviour can improve performance.
• Example: Google fosters a flexible work environment emphasizing employee well-
being, creativity, and productivity. Here are some key aspects of Google's flexible
work culture:
1. Hybrid Work Model – Google has adopted a hybrid work approach, allowing employees to
split their time between the office and remote work, depending on their role.
2. Work-from-Anywhere Weeks – Employees can work from a different location for a few
weeks per year, promoting flexibility.
3. Flexible Hours – Google emphasises results over rigid schedules, allowing employees to
adjust their work hours as needed.
Need for Organisational Behaviour
4. Collaborative Spaces – Google's offices are designed to encourage
teamwork with open spaces, lounges, and creative zones.
Need for Organisational Behaviour
5. Wellness and Perks – Employees enjoy on-site fitness centers, nap pods,
free meals, and mental health resources to support work-life balance.
6. Support for Parents – Google provides generous parental leave policies
and childcare support.
7. 20% Time – Employees are encouraged to spend part of their work time
on side projects that interest them, fostering innovation.
Need for Organisational Behaviour
II. Effective Leadership & Management: Helps managers develop
leadership skills to guide teams effectively.
III. Improving Communication – Ensures smooth interaction between
employees, reducing conflicts.
IV. Employee Satisfaction & Retention – Understanding employee needs
leads to job satisfaction and reduces turnover.
V. Adaptability to Change – Helps organizations manage change
effectively.
Scope of Organisation Behaviour
1. Individuals: Organizations are the associations of individuals. (Perception, personality,
attitudes, values, learning and motivation).
i. Personality: Personality is the combination of inner and outer quality of a human being
interacting with each other. Here Organizational behaviour helps the organization to
perceive employee personality towards the organization.
ii. Learning: Learning is defined as a relatively permanent change in
behaviour that occurs as a result of experiences. Organizational
behaviour helps the employee in modification of their behaviour through practice or
training.
Scope of Organisation Behaviour
(iii) Values and Attitudes: Attitude is an action or tendency to behave positively or negatively
towards a certain idea, person or situation. Here Organizational behaviour helps to perceive how
employees develop and change their attitudes towards the organization.
(iv) Perception: Perception is the process of receiving information and making sense of the world
around us. Organizational behaviour helps in deciding which information to notice, how to
categorise the information and how to interpret it within the framework of existing knowledge.
(v) Motivation : Motivation is internal energy that energizes the person or employee to complete
his/her activity. Here Organizational behaviour helps in motivating the ability to change the
behaviour of a person or an employee.
Scope of Organisation Behaviour
2. Group Behaviour
An organization is a collection of people who work together to achieve organizational objectives.
The group includes leadership, power, group conflicts and group dynamics.
(i) Communication: Communication plays a significant role in the workplace especially formal
communication. The organization assigns work into groups and through proper communication
among the members of the work group goals can be achieved.
(ii) Leadership: A leader is a person who influences the activities of his or her subordinates. A
leader is a person who takes initiative, and risks to achieve the overall organizational goals.
(iii) Work Groups and Group Dynamics: Individual behaviour is influenced by the presence of
others. Studies have found that individuals work harder and faster when others are present.
Scope of Organisation Behaviour
When more than two individuals are present they become a group. It means improving the
relationship between the group members.
(iv) Power: Power is an exercise of authority with or without the consent of others. Power is
one of the means to influence others for getting, they become a group. This means
improving the relationship results.
(v) Morale: Morale is expressed as the attitudes of employees towards the organization. High
morale leads to high productivity and organizational stability.
(vi) Dynamics of Conflict: Any disagreement or misunderstanding between two persons or two
groups known as Group Conflict.
Scope of Organisation Behaviour
3. Organisation/Structure: Organizational Structure refers to how the work of individuals and
teams within an organization is coordinated. Organizational Structure includes Organizational
Change, Organizational Culture, Organizational Climate, Organizational Development,
Organizational Effectiveness.
i. Organizational Climate: Organizational Climate guides and instructs or deals with
people, and has a major influence on the productivity and motivation of individuals
and groups.
ii. Organizational Culture: Organizational culture is a set of assumptions that the members
share in common. Such assumptions may be in the form of internal characteristics like
beliefs, values, traditions, rules, customs, and attitudes that employees follow in the
organization is known as the Organizational Culture.
Scope of Organisation Behaviour
(iii) Organizational Change: It helps in changing the attitude of the employees to
accept new technologies, ideas or concepts. It refers to the alteration of structural
relationships or the role of people in the organization.
(iv) Organizational Effectiveness: An organization remains effective as long as it uses
its resources in an efficient manner and continues to contribute to the larger system.
(v) Organizational Development: It helps in developing people and organization to
achieve long term objectives. Organizational Development is most significant and
innovative process of achieving operational efficiency and effectiveness in organization.
Relationship of Organizational Behaviour With
other Disciplines
• Organizational behaviour is an applied behavioural science that is built
upon contributions from a number of behavioural disciplines.
• The main areas are social psychology, anthropology, psychology,
sociology and political science.
• Psychology’s contributions have been mainly at the individual or micro
level of analysis, while the rest of the disciplines have contributed to our
understanding of macro concepts such as group processes and
organization.
Relationship of Organizational Behaviour with
Other Disciplines
• Definition: Psychology is the scientific study of the mind and
behaviour.
• Contribution to OB: Psychology helps us understand what motivates
employees, how they perceive their work environment, and how
they make decisions.
Relationship of Organizational Behaviour with
other Disciplines
Relationship of Organizational Behaviour with
Other Disciplines
Sociology
• Definition: Sociology is the study of social behaviour, society, patterns
of social relationships, social interaction, and culture.
• Contribution to OB: Sociology focuses on how individuals interact
within groups and the larger organizational culture.
• It helps organizations understand social structures and dynamics, such as
how teams form, how leadership works within social contexts, and
how organizational culture impacts behavior.
Relationship of Organizational Behaviour with
other Disciplines
Relationship of Organizational Behaviour with
Other Disciplines
Social Psychology
• Definition: Social Psychology blends elements of psychology and
sociology to study how individuals are influenced by social
interactions.
• Contribution to OB: Social psychology examines how people’s thoughts,
feelings, and behaviours are affected by the presence of others.
• It provides insights into teamwork, communication, and leadership
within organizations.
Relationship of Organizational Behaviour with
other Disciplines
Relationship of Organizational Behaviour with
other Disciplines
Relationship of Organizational Behaviour with
other Disciplines
• Economics – To survive and sustain organisation must be aware of the economic
viability of their effort.
• Political Science –to understand arrangement in organisation. It studies individuals
and groups within specific conditions concerning the power dynamics.
• History – describing the case studies from history which helped in clarifying the
roles played by decision-makers in particular circumstances and situations.
Why Study Organizational Behaviour ?
• A manager must understand, predict, and control the activities of a
person at a given moment because :
1. Every manager is essentially a human resource manager.
2. Individual differences exist in terms of age, gender, income, cast,
culture, ability, attitude, experience, personality, educational
background, occupation, etc.
The Basic Process of OB
Understanding Prediction Control
Which Variables are What Pattern of What Solutions are
Important? Behaviour are Possible?
present?
How strong are Which Variables can
they? What is the be Influenced?
cause- effect
How do They relationship? How can They be
Interrelate? Influenced?
Problem
Prevention
Why Study Organizational Behaviour ?
3. Human nature is unpredictable because of the following factors :
(i) Social and cultural factors (beliefs, customs, traditions,
knowledge)
(ii) Economic factors (income, occupation)
(iii) Political and legal factors ( political system, ideologies, law, rules
and regulations)
(iv) Psychological factors (personality, perception, attitude, ability,
learning, values, motives, needs, etc.)
Need for Studying Organisation Behaviour
1. Helps to understand ourselves and others in a better way.
2. Helps managers know individual employees better and motivate employees to work for
better results.
3. Understand the cause of the problem, predict future action, and control its
consequences.
4. Predict human behavior and maintain good human relations.
5. Effective utilization of people working in organization, motivate and inspire for higher
productivity.
6. Communication
7. Introduction to change
MODELS OF ORGANIZATIONAL BEHAVIOUR
• Models are frameworks or possible explanations for why people behave as
they behave at work. There are as many models as there are
organizations.
• Models of Organisational behavior are broadly classified into four types:
❖ Autocratic
❖ Custodial
❖ Supportive and
❖ Collegial
MODELS OF ORGANIZATIONAL BEHAVIOUR
The Autocratic Model
• The concept of the autocratic model depends on Power.
• Employees should be given orders and they are bound to follow those
orders.
• Penalized
• Management believes that it knows what is right and what is wrong.
• No power to argue, follow the orders only.
Assumptions
i. Employee is obedient to a boss.
MODELS OF ORGANIZATIONAL BEHAVIOUR
ii. Boss pays minimum wages.
iii. Employees are willing to give minimum performance.
iv. Some employees give higher performance because they are
personally liked by the boss, but most of them give only minimum
performance.
• The autocratic model is a useful way to accomplish work. This view
proved very helpful in running industries, building railroad systems
etc.
MODELS OF ORGANIZATIONAL BEHAVIOUR
Drawbacks
• Employees managed autocratically
• Employees filled with insecurity and frustrations
• Employee lost their temper
MODELS OF ORGANIZATIONAL BEHAVIOUR
The Custodial Model
• To enhance employee satisfaction and security.
• In the late 1800s, companies realized that employees might work better if their
basic needs were satisfied, if they were more secure, and had a better quality
of work life.
• Introduction to a welfare programme to satisfy the security needs of
employees.
MODELS OF ORGANIZATIONAL BEHAVIOUR
• The custodial approach is based on economic resources, money for wages
and benefits to motivate employees.
• To satisfy the security need of employees, a number of programmes
were started by various companies. Employees, unions and government
began to care for the security needs of workers.
• Employees security remains a high priority. In order to stabilize the
workforce, many facilities are provided like reduced overtime, other
benefits, provide retirement benefits, job transfers, day-care center .
MODELS OF ORGANIZATIONAL BEHAVIOUR
• The welfare programmes for employees started by the Indira Gandhi National
Open University(IGNOU), New Delhi.
• IGNOU in the beginning provided its employees facilities like house-lease
facility, subsidized transport facility, day-time child care in the campus etc.
• This made employees dependent in IGNOU which, in turn, became custodian
of its employees.
MODELS OF ORGANIZATIONAL BEHAVIOUR
The main features of the Custodial approach are:
i. The employee’s dependence on the organisation increases.
ii. Employees working in a custodial model become psychologically preoccupied
with their economic rewards and benefits, As a result, they are well-maintained
and happy.
Drawbacks
i. Employees are not producing near their capacities.
ii. They are not motivated to grow the greater capacities of which they are capable.
iii. Employees are happy, but most of them really do not feel fulfilled.
MODELS OF ORGANIZATIONAL BEHAVIOUR
The Supportive Model
• The supportive depends neither on power (Autocratic model) nor on money
(Custodial model) but it depends on leadership. With the help of leadership,
management provides a climate, that helps employees to grow and develop in the
interest of the organisation.
• The managers recognize that the workers are not passive by nature and
disinterested in organisational needs but they are made so by a supportive
climate at work.
MODELS OF ORGANIZATIONAL BEHAVIOUR
• The characteristics of the Supportive model are as under
i. Workers are not always lazy and passive in nature.
ii. If they are given a chance, they will take responsibility and develop to
contribute and improve themselves.
iii. They are strongly motivated because their status and recognition needs are
better satisfied.
iv. A feeling of participation and involvement will be developed in the
organisation. The workers will say “We” in place of “They”.
MODELS OF ORGANIZATIONAL BEHAVIOUR
• Supportive behaviour is not the kind of behaviour that requires money. It
is a part of managers style at work. The role of manager should be to be
helpful with employees solving their problems and do their work.
• The Supportive model of organisational behaviour is found more useful
and effective in developed countries. When the need for material
rewards and security become satisfied, employee become aware of
managerial practices.
MODELS OF ORGANIZATIONAL BEHAVIOUR
Collegial Model
• The Collegial Model is an extension of the supportive model. The word collegial means
a group of persons having a common purpose. It is a team concept. This concept is
useful in laboratories and research work.
• The basic theme of the collegial model is to develop team spirit and teamwork. The
management should build a feeling of partnership with employees.
• The result is that employees feel needed and useful. They feel that managers are
contributing also. Managers are seen as joint contributors and not as bosses.
MODELS OF ORGANIZATIONAL BEHAVIOUR
The main features of the collegial model are:
• Team Spirit - It develops a team spirit among employees and the manager’s role is
like a coach.
• Feeling of responsibility – It also creates a feeling of responsibility. Employees
produce quality work not because management tells them to do it but because the
inspector will catch them if they do not, but because they feel inside themselves an
obligation to provide others with high quality.
They also feel an obligation to uphold quality standards that will bring credit to their
jobs and company.
MODELS OF ORGANIZATIONAL BEHAVIOUR
• Self-discipline – Self-discipline is generated among employees.
• The greatest benefit of the Collegial model is that the employee becomes self-
discipline. The collegial model produces improved results.
MODELS OF ORGANIZATIONAL BEHAVIOUR
Autocratic Custodial Supportive Collegial
Basis of Model Power Economic Sources Leadership Partnership
Managerial Authority Money Support Teamwork
orientation
Employee Obedience Security and Job performance Responsible
orientation benefits behaviour
Employee Dependence on Dependence on Participation Self-discipline
psychological Boss organization
result
Employee needs Subsistence Security Status and Self-actualization
met recognition
Performance Minimum Passive cooperation Awakened drives Moderate
result enthusiasm
CHALLENGES FACING ORGANISATIONS
1. Managing workforce diversity
• Workforce diversity has essential implications for management – managers will need to
shift their philosophy from treating everyone alike to recognising differences and
responding to them in ways that will ensure employee retention and greater productivity.
2. Responding to Globalization
• The world today is continuously becoming a global village. Organisations no longer constrain
themselves to national borders.
• Implies that no organization can work effectively in isolation and has to comply with the
global factors that have an impact on it. Globalization leads to numerous challenges in front
of an organization.
CHALLENGES FACING ORGANISATIONS
• At the individual level, an employee may be required to work on foreign
assignments or collaborate with people from different cultures.
• OB provides us with fundamental concepts to enable us to focus on how cultural
differences might require managers to modify their managerial practices.
• At the group level, problems may arise in decision-making procedures and
while working in teams that include people of different cultural
backgrounds.
• At the organizational level, problems may arise in the case of mergers or
acquisitions due to vast cultural differences.
CHALLENGES FACING ORGANISATIONS
3. Improving quality and productivity
• More and more managers are confronted with the challenge of having to improve
their organisation’s productivity and the quality of their products and services.
• In improving quality and productivity, they are implementing programmes like
TQM and Business Process Reengineering (BPR).
4. Improving people skills/interpersonal skills
• OB allows the manager to completely exercise insight into behaviour, how to alter the
behaviour and generally improve interpersonal skills.
• The subject matter of OB helps both practising managers as well as potential
managers to develop skills that can be used on the job.
CHALLENGES FACING ORGANISATIONS
5. Empowering people
• Managers are empowering employees; they are putting employees on what to do.
• They have to learn how to give up control and employees have to learn how to
take responsibility for their work.
6. Stimulating innovativeness and change
• This implies that today successful organisations must foster innovation and
master the art of change, or they become extinct.
• Victory will go to organisations that maintain flexibility, continually improve
quality and beat competition in the marketplace
CHALLENGES FACING ORGANISATIONS
7. Coping with temporariness
• Today change is an ongoing activity for most managers.
• Managing in the past could be characterized by long periods of
stability, interrupted occasionally by short periods of change.
• But managing today could be described as a long period of ongoing
change, interrupted occasionally by short periods of stability.
• The world that most managers and employees face today is that of
permanent temporariness.
CHALLENGES FACING ORGANISATIONS
• There is permanent change in the jobs themselves, so workers need to
continuously update their knowledge and skills to perform new jobs
requirements
• Today managers and employees must learn to cope with temporariness.
They have to live with flexibility and unpredictability.
CHALLENGES FACING ORGANISATIONS
8. Dealing with employees’ loyalty
• Today, organisations seek to be lean and mean by closing down
operations, moving to low-cost regions, closing the less profitable
branches, and eliminating entire levels of managing and replacing
permanent employees with temporary ones.
• These kinds of changes result in a decline in employee loyalty. Employees
perceive that their employers are less committed to them and as a result,
they fail to be committed to their employer.
CHALLENGES FACING ORGANISATIONS
• The manager therefore is to devise ways to motivate workers who feel less
committed to their employers, but at the same time maintain organizational
global competitiveness.
CHALLENGES FACING ORGANISATIONS
9. Improving Ethical Behaviour
• Organisations today are characterized by cut backs, expectations of
improving workers productivity and tough competition in the
market place.
• Due to there pressures, employees feel pressured to cut corners, break
roles, and engage in other forms of questionable practices could also be
contracted to give guidance to employees.
CHALLENGES FACING ORGANISATIONS
• Today managers need to create an ethically healthy climate, living by
example, for employees where they can do their work productively
and confront minimal degree of ambiguity regarding what constitutes
right and wrong behaviour Situations in which individuals are
required to define right and wrong conduct
