ORGANISATIONAL BEHAVIOUR

Module I

Content
1. Nature and Scope of Organisational Behaviour

2. Approaches to Organisation and Management

3. Application of Organisational Behaviour in Business.

Meaning and definition

Organizational Behavior (OB) refers to the study of how people interact

within groups in a workplace setting. It involves understanding, predicting,
and influencing individual and group behavior to improve organizational
effectiveness and employee well-being.

Definition:

Organizational Behavior can be defined as:

● "The systematic study and careful application of knowledge about

how people, individuals, and groups act within organizations."
● "The field of study that investigates the impact of individuals, groups,
and structures on behavior within organizations, aiming to improve
an organization’s effectiveness."

Nature and Scope of Organisational Behaviour

Introduction Organisational behaviour (OB) refers to the study of how

individuals and groups act within an organisation. It encompasses a range
of topics, including employee motivation, leadership, teamwork,
communication, and decision-making. The field integrates knowledge
from disciplines such as psychology, sociology, and anthropology to better
understand workplace dynamics and improve organisational effectiveness.
Understanding OB is critical for managers seeking to foster a positive work
environment, enhance productivity, and manage workforce diversity.

Nature of Organisational Behaviour The nature of organisational behaviour

is characterised by several key aspects:

1. Multidisciplinary Approach: Organisational behaviour draws on

theories and principles from various social sciences, such as
psychology (individual behaviour), sociology (group behaviour),
anthropology (cultural influences), and political science (power
dynamics). This interdisciplinary approach helps explain complex
human behaviours in the workplace.
2. Focus on Human Behaviour: OB primarily focuses on understanding
the behaviour of individuals and groups within the organisational
setting. It studies various factors, such as attitudes, emotions, values,
perceptions, and learning, which influence how employees interact
with one another and with their work environment.
3. Dynamic Nature: Organisational behaviour is not static. It evolves as
individuals and organisations change in response to both internal
and external factors, such as technological advancements, economic
conditions, and social trends. This dynamic nature means that OB
must constantly adapt to new challenges in the workplace.
4. Goal-Oriented: Organisational behaviour aims to improve
organisational performance by enhancing individual and group
effectiveness. It focuses on aligning employee behaviour with
organisational objectives, creating a motivated workforce, and
fostering a positive work culture.
5. Systems Approach: OB views an organisation as a complex system
made up of interrelated parts. Any change in one part of the
organisation, such as a shift in management style or a technological
upgrade, can affect other parts. The systems approach helps in
understanding how different organisational components interact and
influence each other.
6. Contingency Approach: There is no one-size-fits-all solution in OB.
The contingency approach suggests that organisational behaviour
varies based on situational factors. Different leadership styles,
motivational strategies, or decision-making processes may work
better in different contexts depending on the organisation's culture,
environment, and workforce composition.
Scope of Organisational Behaviour The scope of OB covers several critical
areas:

1. Individual Behaviour: This dimension focuses on understanding how

personal characteristics, such as attitudes, personality traits,
perceptions, and learning styles, affect behaviour in the workplace.
Theories like Maslow’s Hierarchy of Needs and Herzberg’s Two-Factor
Theory explain the motivational factors driving individual behaviour.
2. Group Behaviour: Since individuals often work in teams or groups, OB
also explores group dynamics, leadership, communication, conflict
resolution, and team performance. Understanding group behaviour
helps in fostering effective collaboration and managing group
conflicts.
3. Organisational Structure: The way an organisation is structured—its
hierarchy, division of labour, and distribution of authority—affects how
employees behave. OB studies different organisational designs (e.g.,
matrix, flat, functional) and their impact on employee satisfaction and
performance.
4. Organisational Culture: Culture represents the shared values, beliefs,
and norms that shape behaviour within an organisation. A strong
organisational culture can enhance employee commitment, align
individual goals with organisational objectives, and create a positive
work environment. Conversely, a toxic culture can lead to high
turnover, low morale, and poor performance.
5. Leadership and Management: Leadership is a core aspect of
organisational behaviour. OB examines different leadership
styles—such as transformational, transactional, and laissez-faire—and
their effectiveness in motivating and guiding employees. It also
addresses issues related to decision-making, power, and authority
within organisations.
6. Change Management: Organisations must constantly adapt to
changing market conditions, technologies, and social expectations.
OB explores how individuals and groups respond to change, and how
managers can lead successful change initiatives by overcoming
resistance and fostering innovation.
7. Communication: Effective communication is vital for organisational
success. OB studies various forms of communication—verbal,
 non-verbal, formal, informal—and their role in ensuring clarity,
reducing misunderstandings, and building relationships within the
organisation.
8. Workforce Diversity: As workplaces become more diverse in terms of
gender, ethnicity, age, and cultural background, OB explores how
diversity impacts team dynamics, innovation, and organisational
performance. It also investigates strategies for managing diversity
and creating inclusive work environments.

Approaches to Organization and Management: An Overview

The study of organization and management has evolved over time,

encompassing a variety of approaches and schools of thought. Each
approach provides a unique lens for understanding how organizations
function, how management decisions are made, and how to improve
efficiency, effectiveness, and employee satisfaction. This essay explores the
key approaches to organization and management, including classical,
human relations, systems, and contingency approaches.

1. Classical Approach

The classical approach, which emerged during the late 19th and early 20th
centuries, views organizations as formal structures focused on efficiency
and effectiveness through strict control, clear hierarchies, and specialized
tasks. This approach has three main schools of thought: Scientific
Management, Administrative Theory, and Bureaucratic Management.

● Scientific Management (Frederick Taylor): Taylor emphasized

optimizing work processes and labor productivity through
time-and-motion studies, standardization, and incentives for workers.
His focus was on increasing output by making tasks more efficient.
● Administrative Theory (Henri Fayol): Fayol developed the concept of
management functions such as planning, organizing, commanding,
coordinating, and controlling. He also outlined 14 principles of
management (e.g., division of work, authority and responsibility, unity
of command).
 ● Bureaucratic Management (Max Weber): Weber proposed an
organizational structure characterized by a clear hierarchy, strict rules,
and a formal chain of command, designed to create efficiency,
predictability, and consistency in large organizations.

The classical approach views workers primarily as components of a

well-oiled machine, where the emphasis is on efficiency, discipline, and
control.

2. Human Relations Approach

The Human Relations approach emerged in response to the limitations of

the classical approach, especially its disregard for the human element in
the workplace. This perspective highlights the social needs of workers,
emphasizing motivation, leadership, communication, and group dynamics.

● Hawthorne Studies (Elton Mayo): The Hawthorne Studies, conducted

at the Western Electric Company in the 1920s and 1930s, revealed that
social factors, such as attention from management and the
relationships among coworkers, had a significant effect on worker
productivity. This led to the recognition that employees are motivated
not just by financial incentives but also by emotional and
psychological factors.
● Maslow’s Hierarchy of Needs: Abraham Maslow introduced a theory
suggesting that human needs, ranging from basic physiological
requirements to self-actualization, drive behavior. Understanding
these needs helps managers develop strategies to motivate
employees.

The human relations approach advocates for management practices that

consider employees' well-being, promote job satisfaction, and foster
positive work environments.

3. Systems Approach

The Systems Approach views organizations as open systems interacting

with their external environment. Organizations are seen as complex
entities composed of interrelated parts, where changes in one area can
impact the entire system.

● Ludwig von Bertalanffy’s General Systems Theory: The systems

approach suggests that an organization is a dynamic system
comprising inputs (resources such as labor, materials), processes
(workflows and operations), outputs (products or services), and
feedback mechanisms. It emphasizes the importance of considering
both internal subsystems (departments, teams) and the
organization’s external environment (market conditions,
technological advances).
● Synergy and Interdependence: A key concept in systems thinking is
synergy, where the whole is greater than the sum of its parts. This
approach helps management see the organization holistically,
recognizing the interconnectedness of various functions and
departments.

The systems approach provides a framework for managing complexity,

adapting to change, and achieving organizational goals in a dynamic
environment.

4. Contingency Approach

The Contingency Approach argues that there is no single best way to

manage an organization. Instead, effective management depends on the
specific circumstances and external factors facing the organization. This
approach is situational, suggesting that management practices should be
tailored to fit the context.

● Key Elements of Contingency Theory: Managers must assess the

external environment (market competition, regulatory changes) and
internal factors (organizational size, technology, workforce
capabilities) to determine the best strategies. The contingency
approach emphasizes flexibility, adaptability, and the importance of
aligning organizational practices with environmental conditions.
● Structural Contingency Theory (Burns and Stalker): One key insight
of contingency theory is the idea that organizational structure should
reflect the stability or dynamism of the environment. For instance,
 mechanistic structures (rigid hierarchies, formal communication) are
more suited to stable environments, while organic structures
(decentralized decision-making, flexible roles) are better for dynamic
environments.

The contingency approach provides a practical framework for organizations

facing uncertainty, helping managers make decisions that align with
situational demands.

5. Modern Approaches

In addition to the above traditional approaches, modern organizational

theories such as Lean Management, Total Quality Management (TQM),
and Agile Management focus on continuous improvement,
customer-centricity, and flexibility.

● Lean Management: Lean management emphasizes waste reduction,

process optimization, and maximizing value for the customer. It
builds on the principles of scientific management but adds a focus on
continuous improvement and employee involvement.
● Agile Management: Agile management is centered around flexibility,
collaboration, and quick adaptation to changes, particularly in
industries like software development. It emphasizes small teams,
iterative progress, and close customer collaboration.

Conclusion

The approaches to organization and management have evolved to reflect

changes in the business environment, technology, and society’s
expectations. From the rigid, efficiency-driven focus of the classical
approach to the more flexible and adaptive models of contingency and
modern approaches, each theory contributes valuable insights for
managers. Today, successful organizations often combine elements of
these approaches, adapting them to their unique needs and external
challenges. Understanding these perspectives enables managers to craft
strategies that promote both organizational effectiveness and employee
satisfaction.
Application of Organizational Behavior in Business: An Essay

Organizational Behavior (OB) is a critical area of study that helps

businesses improve their effectiveness by understanding and influencing
the behaviors of individuals and groups within organizations. By applying
OB principles, companies can enhance employee motivation, foster strong
leadership, build positive work cultures, and improve overall organizational
performance. This essay explores the practical applications of
organizational behavior in business, emphasizing its role in areas such as
leadership, communication, motivation, decision-making, and
organizational culture.

1. Enhancing Leadership and Management Practices

One of the most significant applications of organizational behavior in

business is its impact on leadership and management practices. OB
theories provide managers with tools and insights to lead their teams more
effectively.

● Leadership Styles: By understanding different leadership

theories—such as transformational leadership, transactional
leadership, and servant leadership—managers can adopt styles that
best suit their organization’s needs. For instance, a transformational
leader may inspire employees to innovate and pursue ambitious
goals, while a transactional leader may focus on structure, rewards,
and clear objectives.
● Emotional Intelligence: OB emphasizes the importance of emotional
intelligence (EI) in leadership. Leaders with high EI are better at
managing their own emotions, understanding the emotions of
others, and fostering positive work relationships, which enhances
team performance and conflict resolution.

Effective leadership, guided by OB principles, fosters employee

engagement, commitment, and productivity, leading to better business
outcomes.
2. Improving Communication within Organizations

Communication is a cornerstone of organizational success, and OB

provides essential insights into how information is shared and processed
within organizations.

● Effective Communication Channels: OB helps organizations develop

effective communication strategies by recognizing formal and
informal communication channels. While formal channels (like
reports, emails, and meetings) provide structure, informal channels
(such as casual conversations and peer interactions) are equally
important for fostering teamwork and building trust.
● Cross-Cultural Communication: In global business environments, OB
principles help companies understand and overcome
communication barriers that arise from cultural differences. For
example, OB guides leaders in adapting communication styles to
accommodate diverse teams, ensuring messages are interpreted as
intended and reducing misunderstandings.

By improving communication processes, businesses can ensure that

employees are well-informed, aligned with organizational goals, and able
to collaborate effectively.

3. Motivating Employees and Improving Performance

Motivation is a key driver of employee performance, and OB offers a range

of models and theories that help managers understand what motivates
their workforce.

● Maslow’s Hierarchy of Needs: Maslow’s theory suggests that

employees are motivated by a hierarchy of needs, starting with basic
physiological needs and moving toward self-actualization. Managers
can use this theory to ensure that employees' basic needs are met,
while also creating opportunities for growth and achievement.
● Herzberg’s Two-Factor Theory: Herzberg’s theory distinguishes
between hygiene factors (such as salary and job security) and
motivators (like recognition and responsibility). Businesses can apply
 this theory to ensure that hygiene factors are adequately addressed,
while focusing on motivators to enhance job satisfaction and
performance.
● Vroom’s Expectancy Theory: Vroom’s theory states that employees
are motivated when they believe their efforts will lead to desired
outcomes. Managers can use this model to design reward systems
that align with employee expectations, thereby improving motivation
and performance.

When businesses apply motivational theories from OB, they can enhance
employee engagement, reduce turnover, and boost productivity,
contributing to organizational success.

4. Facilitating Effective Decision-Making

Organizational behavior also plays a crucial role in improving

decision-making processes in businesses. OB helps managers understand
how individuals and groups make decisions and how biases, group
dynamics, and cognitive processes affect these decisions.

● Rational Decision-Making Model: The rational decision-making

model provides a structured approach to problem-solving, ensuring
that decisions are based on logical analysis of available information.
OB encourages the use of this model to improve the quality of
decisions by reducing emotional and impulsive decision-making.
● Groupthink: Group dynamics can sometimes lead to poor
decision-making, such as in the case of groupthink, where the desire
for consensus overrides critical thinking. OB teaches managers how
to recognize and prevent groupthink by encouraging diverse
viewpoints, fostering open discussions, and empowering employees
to challenge ideas constructively.

By applying OB principles to decision-making, businesses can make more

informed, objective, and innovative choices, leading to better long-term
outcomes.

5. Building a Positive Organizational Culture

A strong organizational culture is essential for business success, and OB
helps companies understand and shape their workplace culture.

● Cultural Dimensions: Organizational behavior examines the different

dimensions of culture, such as power distance, individualism vs.
collectivism, and uncertainty avoidance. By understanding these
dimensions, businesses can create cultures that align with their
strategic goals and employee needs.
● Corporate Social Responsibility (CSR): OB promotes the idea that
businesses should foster cultures of ethical behavior and social
responsibility. Companies that prioritize CSR are more likely to attract
and retain employees who share their values, leading to higher job
satisfaction and a positive corporate image.
● Adaptability and Innovation: A positive culture encourages
adaptability and innovation by promoting trust, open
communication, and a willingness to take risks. OB provides insights
into how companies can build a culture that supports creativity and
continuous improvement.

A well-cultivated organizational culture, grounded in OB principles, helps

attract top talent, reduce turnover, and increase employee loyalty, all of
which drive business success.

6. Managing Change and Innovation

In today’s rapidly changing business environment, organizational behavior

is essential for managing change and fostering innovation.

● Lewin’s Change Management Model: Lewin’s three-step model

(Unfreeze, Change, Refreeze) helps managers guide their
organizations through the process of change. OB teaches managers
how to reduce resistance to change by involving employees in the
change process, communicating effectively, and providing the
necessary support during transitions.
● Kotter’s Eight-Step Change Model: John Kotter’s model outlines
eight steps for successful change, from creating urgency to building a
coalition and consolidating gains. OB helps managers implement
 these steps effectively, ensuring that organizational changes are
accepted and sustained.
● Innovation Management: OB emphasizes the importance of
creating an environment where innovation can thrive. This includes
encouraging risk-taking, providing resources for experimentation,
and fostering a collaborative culture where new ideas are welcomed.

By applying OB principles to change management and innovation,

businesses can remain competitive and agile in the face of market
disruptions and evolving customer demands.

Conclusion

The application of organizational behavior in business is crucial for

enhancing leadership effectiveness, improving communication, motivating
employees, facilitating better decision-making, building a strong
organizational culture, and managing change and innovation. By
understanding and applying OB theories, businesses can create
environments where employees thrive, organizational goals are met, and
overall performance is improved. The insights provided by OB give
organizations the tools they need to adapt to challenges, stay competitive,
and achieve long-term success.
QUESTION AND ANSWERS

Nature and Scope of Organizational Behavior

1. What is Organizational Behavior (OB)?

○ OB is the study of how individuals and groups behave within
organizations.
2. What are the primary goals of OB?
○ To understand, predict, and manage employee behavior to
improve organizational performance.
3. What is the scope of OB?
○ OB encompasses individual behavior, group dynamics, and
organizational processes.
4. What are the key elements of OB?
○ Individuals, groups, structure, technology, and the external
environment.
5. What is the significance of OB in business?
○ OB helps in improving employee productivity, job satisfaction,
and organizational effectiveness.
6. What are the levels of analysis in OB?
○ Individual level, group level, and organizational level.
7. What is the role of psychology in OB?
○ Psychology helps in understanding individual behavior,
motivation, and perception in organizations.
8. What is the role of sociology in OB?
○ Sociology studies group behavior, communication, and
organizational structure.
9. What is the role of anthropology in OB?
○ Anthropology helps understand cultural influences on
organizational behavior.
10. How does OB help in managing diversity?
○ OB provides tools for managing a diverse workforce by
promoting inclusiveness and understanding.
11. What is the importance of OB in leadership development?
 ○ OB helps identify leadership styles and behaviors that influence
organizational success.
12. How does OB address organizational culture?
○ OB studies organizational culture and its impact on employee
behavior and organizational effectiveness.
13. What are organizational citizenship behaviors (OCBs)?
○ OCBs are discretionary behaviors that go beyond formal job
requirements and help the organization.
14. What is the importance of studying OB for managers?
○ It equips managers with the knowledge to manage employees
effectively and improve workplace dynamics.
15. What are the key challenges in OB?
○ Globalization, workforce diversity, and technological changes
are major challenges.

Approaches to Organization and Management

16. What is the Classical Approach to management?

○ The Classical Approach focuses on efficiency, productivity, and
the formal structure of organizations.
17. Who is considered the father of Scientific Management?
○ Frederick Taylor.
18. What is Scientific Management?
○ A management theory that focuses on improving labor
productivity through scientific methods.
19. What are the key principles of Scientific Management?
○ Time studies, standardization, and task specialization.
20. Who developed Administrative Theory?
○ Henri Fayol.
21. What are Fayol’s five functions of management?
○ Planning, organizing, commanding, coordinating, and
controlling.
22.What is Bureaucratic Management?
○ Max Weber’s model of an organization characterized by a clear
hierarchy and strict rules.
23.What are the features of Bureaucratic Management?
 ○ Division of labor, hierarchy, formal rules, and impersonal
relationships.
24. What is the Human Relations Approach?
○ A management approach that emphasizes the importance of
social factors in the workplace.
25.Who conducted the Hawthorne Studies?
○ Elton Mayo.
26. What did the Hawthorne Studies reveal?
○ Social interactions and employee attention play a key role in
increasing productivity.
27.What is Maslow's Hierarchy of Needs?
○ A motivational theory that categorizes human needs into five
levels, from physiological needs to self-actualization.
28. What is the Systems Approach to management?
○ It views an organization as an open system that interacts with
its environment.
29.What is synergy in the Systems Approach?
○ The concept that the whole is greater than the sum of its parts.
30. What is the Contingency Approach?
○ It suggests that there is no one best way to manage;
management practices should be tailored to the situation.
31. What is Structural Contingency Theory?
○ The theory that organizational structure should be designed
based on environmental factors.
32.What is the significance of adaptability in the Contingency
Approach?
○ It allows organizations to adjust strategies based on changing
conditions.
33.What is Total Quality Management (TQM)?
○ A modern approach focused on continuous improvement and
customer satisfaction.
34. What is Lean Management?
○ A methodology that aims to reduce waste and increase value for
customers.
35.What is the role of Agile Management?
○ Agile Management emphasizes flexibility, iterative processes,
and collaboration, particularly in dynamic industries.
Application of Organizational Behavior in Business

36. How is OB applied in leadership development?

○ OB helps identify effective leadership styles and fosters
leadership behaviors that improve team performance.
37.How does OB contribute to employee motivation?
○ OB theories like Maslow's and Herzberg’s provide insights into
what drives employee motivation.
38. What role does OB play in decision-making?
○ OB helps managers understand cognitive biases and group
dynamics that affect decision-making processes.
39.How does OB help in managing organizational change?
○ OB provides frameworks like Lewin’s Change Model to manage
resistance and facilitate smooth transitions.
40. What is Lewin’s Change Management Model?
○ A three-step model involving unfreezing, changing, and
refreezing organizational processes.
41. What is Kotter’s Eight-Step Change Model?
○ A model that provides a structured approach to managing
organizational change, from creating urgency to consolidating
gains.
42. How does OB improve communication in organizations?
○ OB helps businesses establish clear communication channels
and address cross-cultural communication challenges.
43. How does OB help in managing workforce diversity?
○ It provides strategies for creating inclusive environments where
diversity is respected and leveraged.
44. What is the role of OB in shaping organizational culture?
○ OB helps organizations build and sustain cultures that align
with their strategic goals and employee needs.
45. How does OB support conflict resolution?
○ OB provides conflict management techniques such as
negotiation, mediation, and fostering collaboration.
46. What are organizational citizenship behaviors (OCBs)?
○ Discretionary behaviors by employees that contribute to
organizational effectiveness beyond formal requirements.
47.How does OB contribute to employee well-being?
 ○ OB helps organizations design work environments that
promote job satisfaction and reduce stress.
48. What is the role of OB in fostering innovation?
○ OB encourages the development of cultures and structures that
support creativity and risk-taking.
49. How does OB help in performance management?
○ OB provides tools for setting clear expectations, offering
feedback, and aligning individual performance with
organizational goals.
50. Why is OB important for managers?
○ OB equips managers with knowledge to lead effectively,
improve employee satisfaction, and achieve organizational
success.