Module: 1 Introduction

Defining Organizational behaviour, Why individual differences are important, Different

Organizational structures. Individual differences influencing work behaviour. Brief history of
OB - the scientific management, the behavioural school of management thought and practice
- early contributions, human relations model, and the cognitive school. Frame work of
organizational behaviour.

Organizational behaviour, commonly referred to as OB, is an interdisciplinary field dedicated

to the better understanding and managing of people at work.

Organizational behaviour is the study of human behaviour, attitudes, and performance in

organizations. It is the study of what people think, feel, and do, in and around organizations.
OB researchers systematically study individuals, teams, and structural characteristics that
influence behaviours within organizations.

Through their research, OB scholars try to understand and predict how these behaviours help
companies succeed.

Structure of Organisations

It is the framework around which the organisation is built and also the channels through
which information flows – to direct, co-ordinate and control work activities, and to enable
communication.

The formal structure comprises the allocation and organisation of individual and group
responsibilities in pursuit of organisational goals. It is created by management to define and
formalise the inter-relationships and interaction of people at work.

The informal structure comprises the patterns of social interaction within the organisation
which are separate from those derived from the formal structure.

The formal structure consists of three main elements:

• the grouping of tasks and definition of responsibilities which make up the jobs of
individuals;
• the grouping of those tasks and responsibilities into units, sections, and departments
with common purposes and objectives; and
 • the mechanisms required to facilitate direction, co-ordination and control of
individuals, units and departments.

History of Organisational Behaviour

The Pre-Scientific Era

The practice of management can be traced to earliest recorded history. Illiterate workers (or
slaves), miserable working conditions, primitive agrarian economies, and crude tools made
the tasks of managers in ancient civilizations extremely difficult. Moreover, even though
managers during the pre-scientific era did not have formal education and training in proven
management methods, they accomplished good results.

As time passed, exploration of natural resources and technological advances led to the
Industrial Revolution. This changed the nature of society and the location of work.

People left their farms and went to work in urban factories.

Money economies replaced barter economies, thus expediting the payment of wages.

Another outcome of the Industrial Revolution was an interest in rationalizing the

managerial process. Haphazard and unsystematic management practices proved to be
inadequate for large-scale factory operations.

This is when classical era of management came into existence

The Classical Era (1880–1930)

During this time, the first general theories of management began to evolve. One of the major
thrusts in this period is Scientific management.

Scientific management is the kind of management which conducts a business or affairs by

standards established by facts or truths gained through systematic observation, experiment, or
reasoning.

Frederic Taylor, credited with being the father of scientific management, published The
Principles of Scientific Management in 1911. Through time and task study (the analysis of
exact motions by a person to complete a task, as well as the time required to do so),
standardization of tools and procedures, development of piece-rate incentive schemes, and
systematic selection and training, Taylor dramatically improved outputs. Taylor’s goal was to
make work behaviour as stable and predictable as possible so that increased usage of
sophisticated machines and factories would achieve maximum efficiency. He relied heavily on
monetary incentives because he saw workers as basically lazy beings, motivated primarily by
money.

The Behavioural Era (1930–1960)

A unique combination of factors fostered the emergence of the behavioural era during the
1930s.

First, following legalization of union–management collective bargaining in the United

States in 1935, management began looking for new ways of handling employees.

Second, behavioural scientists conducting on-the-job research started calling for more
attention to the “human” factor. Managers heeded the call for better human relations
and improved working conditions.

One such study, conducted at Western Electric’s Hawthorne plant, was a prime stimulus for
human relations management

Hawthorne study

A group of researchers at the Hawthorne plant in the United States were experimenting in the
scientific management tradition on the impact of lighting on productivity levels of the
employees. The experiments were conducted with two groups of female workers.

The initial illumination studies attempted to examine the relationship between light intensity
on the shop floor of manual work sites and employee productivity. A test group and a control
group were used. The test group in an early phase showed no increase or decrease in output in
proportion to the increase or decrease of illumination. The control group with unchanged
illumination increased output by the same amount overall as the test group.

Subsequent phases brought the level of light down to moonlight intensity; the workers could
barely see what they were doing, but productivity increased. The results were baffling to the
researchers. Obviously, some variables in the experiment were not being held constant or
under control.

The illumination studies were followed by a study in the relay room, where operators
assembled relay switches. This phase of the study tried to test specific variables, such as
length of workday, rest breaks, and method of payment. The results were basically the same
as those of the illumination studies: each test period yielded higher productivity than the
previous one. Even when the workers were subjected to the original conditions of the
experiment, productivity increased. The conclusion was that the independent variables (rest
pauses and so forth) were not by themselves causing the change in the dependent variable
(output). As in the illumination experiments, something was still not being controlled that
was causing the change in the dependent variable (output).

The researchers subsequently attributed Increased production to a change In “mental attitude

resulting from the special attention paid to both groups generally and, in particular, to more
friendly methods of supervision, so that in a new ‘relaxed’ relationship of confidence and
friendliness practically no supervision is required”.

The behavioural era opened the door to more progressive thinking about human nature.
Rather than continuing to view employees as passive economic beings, managers began to
see them as active social beings and took steps to create a more humane work environment.

Modern Era (1960s onwards)

In 1960, Douglas McGregor formulated two sharply contrasting sets of assumptions about
human nature (see Table 1.5). His Theory X assumptions were pessimistic and negative and
were, according to McGregor’s interpretation, typical of how managers traditionally
perceived employees. To help managers break with this negative tradition, he formulated his
Theory Y, a modern and positive set of assumptions about people. McGregor believed that
managers could accomplish more through others by viewing them as self-energized,
committed, responsible, and creative beings.

The contingency approach encourages managers to view organizational behaviour within a

situational context. According to this modern perspective, evolving situations, not hard and
fast rules, determine when and where various management techniques are appropriate.
Organizational behaviour scholars should embrace the contingency approach because it helps
them realistically interrelate individuals, groups, and organizations.

Individual Differences in Organizations

The behaviour of an employee always involves a complex interaction of the person and the
situation. Events in the surrounding environment (including the presence and behaviour of
others) strongly influence the way people behave at any particular time. Yet, people always
bring personality into the situation.

Personality refers to the relatively stable pattern of behaviours and consistent internal states
that explain a person’s behavioural tendencies. Personality has both internal and external
elements. The external traits are observable behaviours that we rely on to identify one’s
personality. The internal state represents the thoughts, values, and genetic characteristics that
we infer from the observable behaviour.

An individual’s personality is relatively stable. Personality explains behavioural tendencies,

because a person’s behaviour is influenced by the situation as well as by personality traits.
Personality traits are less evident in situations where social norms, reward systems, and other
conditions constrain our behaviour.

To understand the personality of an individual one must understand both what that individual
has in common with others and what makes that particular individual unique. Thus, each
employee in an organization is unique and may or may not respond as others do in a
particular situation. This complexity makes managing and working with people extremely
challenging.

Behaviour in many situations is the result of both an individual’s personality and the nature of
the situation. Our behaviour is determined by a complex interaction between our personality
traits and the external environment; both are important and can affect what we do or say.
Almost all social scientists accept this view— known as interactionists’ perspectives—and it
is the dominant position also in organizational behaviour. An interesting implication of the
approach is that a given work setting may “fit” with the personalities of specific persons to
varying degrees. In other words, some persons may find that their traits and abilities closely
match those required by a given job, while others find that their traits and abilities do not
match those requirements.
The degree to which there is a match between employees’ characteristics and their jobs is
known as person–job fit. The basic findings of this work are that people are more productive
and satisfied when there is a close match between their personal traits and the demands of the
job than when this match is less optimal. It, therefore, becomes important to give due
consideration to the variable of individual differences in personality while recruiting
employees in the work organization, thereby leading to enhancement of both productivity and
job satisfaction. The closer the fit between individual’s personal traits and the requirements of
their jobs, the more positive are the results.

Framework of Organisational Behaviour

The framework for understanding the behaviour of employees in organizations consists of

five basic components:

1. The environment

2. Individual processes

3. Interpersonal and group processes

4. Organizational processes

5. Change processes

Environmental Forces

As a result of this, within the organization, strategy-making must break with the past and
grapple with the unknown, demanding radical changes in both content and processes to
formulate the winning strategy for tomorrow. Due to the changes in the environment,
introspective improvements in internal operations are necessary, but no longer sufficient for
winning. The older objectives of strategizing so as to seize emerging opportunities must give
way to one that focuses on creating these opportunities out of chaos. Managers who consider
work more important than managing, leaders who consider action more important than
planning and front-liners who consider knowledge more important than capital plays more
pivotal role. The critical factors of production and competitive advantage will be knowledge
and intelligence. If the future is unknowable, the organization that can thrive in it must be one
which is capable of changing itself.
Individual Processes

People make assumptions about those whom they work with, supervise, or spend time with in
leisure activities. To some extent, these assumptions influence the person’s behaviour towards
others. Effective employees understand what affects their own behaviour before attempting to
influence the behaviour of others.

Individual behaviour is the foundation of organizational performance. Understanding

individual behaviour, therefore, is crucial for effective management. Each person is a
physiological system composed of a number of subsystems—digestive, nervous, circulatory,
and reproductive; as well as a psychological system composed of a number of subsystems—
attitudes, perception, learning capabilities, personality, needs, feelings, and values.

Interpersonal and Team Processes

Many organizational goals can be achieved only with the cooperation of others. The
productivity generated by effective team action makes the development of team skills one of
the most essential aspects of managerial training.

Being an effective team member requires an understanding of the dynamics within and
between groups. Team members must be skilful in eliminating barriers to achieving their
goals, solving problems, maintaining productive interaction among team members, and
overcoming obstacles to team effectiveness.

Organizations also need leaders who can integrate employee and organizational goals. The
ability of organizations to achieve their goals depends on the degree to which leadership
abilities and styles enable managers to control, influence, and act effectively.

How employees communicate with peers, superiors, and others can help make them effective
team members or lead to low morale and lack of commitment.

Organizational Processes

Individuals enter organizations to work, earn money, and pursue career goals. They do so
through the organization’s culture, which is the set of shared assumptions and understanding
about how things really work—that is, which policies, practices, and norms are important in
the organization. Newcomers have to understand the organization’s culture in order to be
accepted and become productive. Some organizations use formal programmes, some others
simply rely on co-workers, and still others use a combination of these methods to teach the
newcomer what to do and what not to do on the job.

Employees and managers use power to accomplish goals and, in many cases, to strengthen
their own positions. A person’s success or failure in using or reacting to power is largely
determined by understanding power, knowing how and when to use it, and being able to
predict its probable effects on others.

Job design and organizational design help us to understand the way the jobs have been
designed and the features and shape of the organization. Decision making is one of the
important activities to be performed by managers and requires expertise.

Change Processes

The management of change involves adapting an organization to the demands of the

environment and modifying the actual behaviour of employees. If employees do not change
their behaviour, the organization cannot change. Many things must be considered when
undertaking organizational change, including the types of pressure being exerted on the
organization to change, the kinds of resistance to change that are likely to be encountered
and who should implement change.

Six basic strategies for achieving change are:

(1) People approaches—using behavioural science techniques to involve employees in

diagnosing organizational problems and planning actions to correct them;

(2) Cultural approaches—changing the shared beliefs, values, expectations, and norms that
comprise the organization’s culture;

(3) Technological approaches—changing the methods by which work is accomplished;

(4) Design approaches—rearranging organizational authority, responsibility and decision

making;

(5) Task approaches—redesigning individual jobs;

(6) Strategy approaches—changing the organization’s intended courses of action to attain its
goals or select new goals.