Organizational Behavior 1

Organizational

Behavior

Fundamentals of

Organizational Behavior

• Success of an Orgn depends on the ability to

understand, manage and combine humanity (people) and technology ( science)

• Technology is rapidly changing, can be mastered

• Understanding & predicting human behavior is more difficult as every individual is unique & different from each other

• Study of OB to understand human behavior, improve interpersonal skills, manage people in more efficient manner

Fundamentals of

Organizational Behavior

DEFINITIONS

John Newstrom & Keith Davis – “study & application of knowledge about how people, as individuals & as groups, act within organizations”

Greenberg & Baron – “ field that seeks knowledge of

behavior in Orgnal settings by systematically studying individuals, group and orgnal processes”

Stephen Robbins – “ a field of study that investigates the impact of individuals, groups & structure have on

behavior within orgns for the purpose of applying such knowledge towards improving an Orgn’s effectiveness”

Fundamentals of

Organizational Behavior

• OB is an applied science

• Seeks to discover new ways of increasing

effectiveness of people’s behavior in orgns

• Continuous research & development of new

concepts

• OB can be applied to all types of orgns –

Fundamentals of

Organizational Behavior

OB studies behavior of people at different levels –

2. Individual – individual attitude, personality, motives 3. Interpersonal – interaction bet employees

4. Group – impact of formal & informal groups

5. Intergroup – coordinating efforts of different groups for

smooth attainment of objectives

6. Organizational – structure, culture, impact on

individuals & groups

7. Inter-organizational – impact of mergers, acquisitions,

Fundamentals of

Organizational Behavior

OB has 4 main objectives –

2. Describe behavior – gather info to describe human

behavior accurately & completely, how people behave under different conditions, helps mgrs to describe & communicate

3. Understand behavior – understand & explain causes of

behavior, find reasons behind actions, helps mgrs to understand better & deal effectively with employees

4. Predict behavior – helps mgrs to identify productive/

unprod employees, sincere, dedicated/ disruptive

5. Control behavior – motivate, reduce stress & improve

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Fundamentals of

Organizational Behavior

FORCES AFFECTING OB People

 Most vital aspect of an org

 Operate as individual / groups

 Groups – large/ small/ official/ unofficial and are dynamic

as they are formed, changed, disbanded

 Employees come from diverse backgrounds, differ in

education, talent, culture, lifestyle, values

 Orgn must focus on building rel-ships, show care

concern, attend to problems, build competence & sense of pride, create an environment of openness &

Fundamentals of

Organizational Behavior

Structure

 Number of people working at diff levels & performing diff

jobs

 Structure is the formal rel-ship & use of people in orgn  Modern struc is flatter (fewer levels) & more complex

Technology

 Set of processes to transform resources into goods/

services

 Significant impact on working rel-ships

Fundamentals of

Organizational Behavior

Environment

 Internal & external

 Family, government, economic factors, competitors

 Consumers have become more demanding expect more

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Fundamentals of

Organizational Behavior

NATURE OF PEOPLE

 Individual Differences – every human is unique &

different from the other, on account of heredity (nature) and environment (nurture), mgrs cannot deal with all employees in the same way and each must be handled differently

 Perception – way in which each person sees,

organizes and interprets things, perceptions differ in 2 individuals because of differences in their personality, needs and values.

Fundamentals of

Organizational Behavior

Selective perception is tendency to interpret what one

sees on basis of their interests, backgrounds, experiences and attitudes.

E.g. A mgr quickly notices mistake committed by a person he dislikes but fails to spot a mistake by his favourite subordinate

Individual behavior is based on perception of situation and perception determines how people respond to situations

Fundamentals of

Organizational Behavior

 A Whole Person – impossible to separate home &

family life of a person from work life, or to separate physical characteristics of an individual from his emotional characteristics.

Employees play many more roles outside the work

place, what happens outside affects his performance at work.

 Motivated Behavior – human actions are intentional &

purposeful, behavior has causes which may be related to his needs or consequences

Fundamentals of

Organizational Behavior

2 basic ways in which mgrs can motivate

2. By showing employees how certain desirable behavior

will be rewarded

3. By threatening employees that undesirable actions will

be punished

 Desire for Involvement – employees have a strong

desire to contribute to their orgn, they seek

opportunities to utilise their knowledge, talents & skills for success of orgn, they have a strong desire to share ideas & be involved in decision making.

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Fundamentals of

Organizational Behavior

Meaningful involvement of employees is possible through

Empowerment – passing of responsibility and

authority from mgrs to employees.

It provides greater autonomy to employees through sharing of relevant information and is beneficial to both

Empowerment makes employees feel competent and valued, their talents being used

 Value of Person (Human Dignity) – orgn must treat

their employees with care, respect & dignity, not as

mere economic tools, human beings need to be valued for their skills & abilities

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Fundamentals of

Organizational Behavior

NATURE OF ORGANIZATIONS

 Social Systems : People interact as individuals &

groups, 2 types of social systems exist together in orgn - formal (official) & informal. Behavior is governed by social laws & psychological laws

 Mutual Interest : Orgn needs people & people need

orgns, for achieving objectives fulfilling individual needs

 Ethics : OB strongly advocates ethical practice, no

Fundamentals of

Organizational Behavior

When Orgns engage in ethical practice, result is Triple

Reward System – objectives of people, orgn & society

are met, everyone benefits and gains

Individuals gain by better job satisfaction, spirit of cooperation & teamwork develops

Orgns function more effectively & are successful, quality improves & costs are reduced

Society gains as it gets better products/ services, more capable citizens & faster progress

Orgns adopt ethical practices & take steps to promote high standards of ethics

Fundamentals of

Organizational Behavior

APPROACHES TO STUDY OF OB

 HUMAN RESOURCES APPROACH : considers

people as most imp resource, primary focus is on growth & developmt, making people competent,

creative & fulfilled, this approach is supportive & hence also called Supportive Approach.

This approach aims at creating a work environmt that

provides employees with opportunities to develop their abilities to maximum extent & thereby resulting in Work Satisfaction & Greater Effectiveness

Fundamentals of

Organizational Behavior

 CONTINGENCY APPROACH : This approach

recognizes that each orgn is unique & so are its

problems, hence diff methods of behavioral practices need to be adopted for diff situations.

This approach stress that mgrs must carefully analyse each situation, identify imp variables/ factors & select the

method that is best suited for that situation

Orgns are affected by a large number of interacting factors & the best way is contingent upon the situation &

Fundamentals of

Organizational Behavior

 RESULTS ORIENTED APPROACH : Productivity is

ratio of output to input, it is greater if an orgn is able to increase its output & reduce inputs, OB wants to

improve productivity & effectiveness, but OB also takes into account human, social & economic inputs. E.g. by improving employee job satisfaction, OB creates

positive human output, employee developmt programs create better employee & better citizens which are a valuable social output

A popular measure to attain triple objectives is Total

Quality Management or TQM, which aims at

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Fundamentals of

Organizational Behavior

 SYSTEMS APPROACH : All depts of an orgn are

interconnected and interdependent parts of a larger system, this approach emphasizes that

orgn is a system of many variables, each variable is affected by others,

there are many subsystems in a large system,

every subsystem requires some input & produces some output,

systems have the ability to produce positive & negative results/ consequences,

these consequences may be intended or unintended, there are long term and short term effects of these

Fundamentals of

Organizational Behavior

Managers in orgns, while taking decisions must look not only at the immediate situation but also at the impact it will have on the orgn as a whole

Managers need to carry out cost-benefit analysis to determine the impact of their action

Eg to introduce a new snack item in the canteen of the company

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Fundamentals of

Organizational Behavior

LIMITATIONS OF OB

2. Behavioral Bias : Mgrs tend to overlook other imp

issues, they may develop a tunnel vision – looking at problems from a narrow perspective & overlooking much larger, broader picture

Mgrs must not only involve themselves in developing satisfied work force but also think of customer satisfaction

Behavioral bias may cause Dependence, Over

Contentment, Indiscipline & Irresponsible employees Rather than taking responsibility & learning from failures,

employees may look for excuses to explain poor performance

Fundamentals of

Organizational Behavior

 _{Law of Diminishing Returns}

:

is decline in output with each additional unit of input, it may decline to zero & may end up in negative

It implies that more of a good or positive factor is not

necessarily beneficial & will work only to a certain point As per the law, for any situation there is an optimal level of a

desirable practice, beyond that optimal point results will gradually decline. E.g. increasing pay may initially lead to an improvement in performance but they will work only up to a certain point, beyond this point there will no further improvement in performance

Fundamentals of

Organizational Behavior

Mgrs must keep in mind this law before making imp decisions

It is difficult to predict the exact point at which the law comes into effect, point may vary with circumstances There are several variables in a given situation, it is

possible that excess of one variable reduces benefits of other variables

Orgnal effectiveness is attained by paying attention to all variables in a situation or system, merely maximizing one variable is no guarantee that it will increase orgnal effectiveness

Fundamentals of

Organizational Behavior

UNETHICAL PRACTICES & MANIPULATION

Mgrs may use knowledge of OB for benefit of people and society at large or for their own selfish means

Mgrs may use knowledge to manipulate people & exploit people, use it to satisfy their selfish ends, such unethical use will be a total violation of the philosophy of OB

Ethical leadership is based on the principles of Social responsibility & obligations, open communication, cost-benefit analysis of human & social costs, not just

Fundamentals of

Organizational Behavior

NEW CHALLENGES FOR OB

 Need for Quick fix solutions : Extremely competitive

business environment, mgrs are under pressure to

deliver good results in shortest possible time, decisions may be taken without deep thought & unrealistic

expectations

 Challenging Environments : how applicable are OB

methods & techniques in fast changing business environment, good/ bad economic conditions

 OB needs clear definition : with regard to unit of

analysis- individual / group, whether OB is source of info or only theory, whether to have micro / macro focus,