Unit I: Introduction to Organizational Behaviour.

BASIC NATURE
Organizational behavior (often abbreviated OB) is a field of study that investigates the impact
that individuals, groups, and structure have on behavior within organizations, for the purpose of
applying such knowledge toward improving an organization’s effectiveness.
Organizational behavior is a field of study, meaning that it is a distinct area of expertise with a
common body of knowledge. It studies three determinants of behavior in organizations:
individuals, groups, and structure. In addition, OB applies the knowledge gained about
individuals, groups, and the effect of structure on behavior in order to make organizations work
more effectively. To sum up our definition, OB is the study of what people do in an organization
and how their behavior affects the organization’s performance. Organizational behavior is a field
of study, meaning that it is a distinct area of expertise with a common body of knowledge. It
studies three determinants of behavior in organizations: individuals, groups, and structure. In
addition, OB applies the knowledge gained about individuals, groups, and the effect of structure
on behavior in order to make organizations work more effectively. Although debate exists about
the relative importance of each, OB includes the core topics of motivation, leader behavior and
power, interpersonal communication, group structure and processes, learning, attitude
development and perception, change processes, conflict, work design, and work stress.
An organization is a structured social system consisting of groups and individuals working
together to meet some agreed upon objectives. In other words, organizations consist of people,
who alone and together in work groups strive to attain common goals.

FUNDAMENTAL ASSUMPTIONS
fundamental ideas that are widely accepted by everyone who does scientific research on OB or
who puts these findings into practice in the workplace.
The field of OB is guided by two key assumptions:
OB Recognizes the Dynamic Nature of Organizations: Although OB scientists and practitioners
are interested in the behavior of people, they also are concerned about the nature of
organizations. OB scientists recognize that organizations are not static, but dynamic and
ever-changing entities. In other words, they recognize that organizations are open
systems—that is, self-sustaining connections between entities that use energy to transform
resources from the environment (such as raw materials) into some form of output (for example,
a finished product).
The open systems approach is characteristic of modern-day thinking in the field of OB. It
assumes that organizations are self-sustaining—that is, within the environments in which they
operate they transform inputs to outputs in a continuous fashion. This example illustrates the
symphony orchestra as an open system, but the same concepts apply to all organizations. (text
name: Jerald Greenberg, picture page No: 38)
The dynamic nature of organizations can be likened to the operations of the human body. As
people breathe, they take in oxygen and transform it into carbon dioxide. This, in turn, sustains
the life of green plants, which emit oxygen for people to breathe. The continuous nature of the
open system characterizes not only human life, but the existence of organizations as well.
OB Assumes There Is No “One Best” Approach: Today’s OB scientists agree that there really is no
one best approach when it comes to such complex phenomena. To assume otherwise is not
only overly simplistic but, as you will see, grossly inaccurate. When it comes to studying human
behavior in organizations, there are no simple answers. For this reason, OB scholars embrace a
contingency approach—an orientation that recognizes that behavior in work settings is the
complex result of many interacting forces. This orientation is a hallmark of modern OB.
explaining OB phenomena often requires saying, “it depends.” As our knowledge of
work-related behavior becomes increasingly complex, it is difficult to give “straight answers.”
Rather, it is usually necessary to say that people will do certain things “under some conditions”
or “when all other factors are equal.” Such phrases provide a clear indication that the
contingency approach is being used. In other words, a certain behavior occurs “contingent
upon” the existence of certain conditions—hence, the name. We will come across this
repeatedly throughout this book.
contingency approach: A perspective suggesting that organizational behavior is affected by a
large number of interacting factors. How someone will behave is said to be contingent on many
different variables at once.

HISTORY OF OB

The Early Days: Scientific Management and the Hawthorne Studies

•The first attempts to study behavior in organizations came out of a desire by industrial
efficiency experts to improve worker productivity.
•SCIENTIFIC MANAGEMENT AND ITS DETRACTORS.
Frederick Winslow Taylor, an engineer who noticed the inefficient practices of the employees in
the steel mill in which he worked and attempted to change them. This led Taylor to study the
individual movements of labourers performing different jobs, searching for ways to do them
that resulted in the fewest wasted movements. Research of this type was referred to as
time-and-motion studies. In 1911, Taylor advanced the concept of scientific management.
•scientific management :
An early approach to management and organisational behavior emphasising the importance of
designing jobs as efficiently as possible.
•Human relation Movement:
A perspective on organizational that reject the primary economic orientation of scientific
management recognises,instead,the importance of social processes in work settings.
•Hawthorne studies :
The earliest systematic research in the field of OB, this work was performed to determine how
the design work environment affected performance.
•Hawthorne effect:
The tendency for people being studied to behave differently than they ordinarily would.
•Classical organizational theory :
An early approach to the study of management that focused on the most efficient way of
structuring
Organisations.
•Division of labor :
The practice of dividing work into specialized tasks that enable people to specialize in what they
do best.
•bureaucracy :
An organizational design developed by Max Weber that attempts to make organisations
operate efficiently by having a clear hierarchy of authority in which people are required to
perform well-defined jobs.

•By the 1940s, doctoral degrees were awarded in OB and the first textbooks were published.
•By the late 1950s and early 1960s, OB was clearly a going concern.
•In the 1970s, active programs of research were going on— investigations into such key
processes motivation and leadership, and the impact of organizational structure.

•Today, in what has been called the infotech age, computer technology has made it possible to
eliminate vast amounts of grunt work that labourers used to have to perform.
•easy access to information in online databases has made it possible for almost any worker to
gather the facts needed to make his or her decisions.

HUMAN BEHAVIOUR IN ORGANIZATIONS

Human behavior in organizations is complex and often difficult to understand.
We can define organizational behavior as the study of individual behavior and group dynamics
in organizations. The study of organizational behavior is primarily concerned with the
psychosocial, interpersonal, and behavioral dynamics in organizations. However, organizational
variables that affect human behavior at work are also relevant to the study of organizational
behavior. These organizational variables include jobs, the design of work, communication,
performance appraisal, organizational design, and organizational structure.
Understanding Human Behavior

The vast majority of theories and models of human behavior fall into two basic categories: that
of an internal perspective and that of an external perspective. The internal perspective looks at
workers’ minds to understand their behavior. It is psychodynamically oriented, and its
proponents understand human behavior in terms of the thoughts, feelings, past experiences,
and needs of the individual. The internal perspective explains people’s actions and behavior in
terms of their histories and personal value systems. The idea of this perspective is that internal
processes of thinking, feeling, perceiving, and judging lead people to act in specific ways;
therefore, people are best understood from the inside, and their behavior is best interpreted
alongside their thoughts and feelings. The internal perspective has given rise to a wide range of
motivational and leadership theories.
The external perspective, on the other hand, focuses on factors outside the person to
understand behavior, that is, external events, consequences, and environmental forces. This
perspective excludes consideration of a person’s history, feelings, thoughts, and personal value
system in interpreting actions and behavior. Thus, it has given rise to an alternative set of
motivational and leadership theories.
The internal and external perspectives offer alternative explanations for human behavior. For
example, the internal perspective might say Mary is an outstanding employee because she
has a high need for achievement, whereas the external perspective might say it is because
She is extremely well paid for her work. Kurt Lewin combined both perspectives with his
claim that behavior is a function of both the person and the environment.
Interdisciplinary Influences
Organizational behavior is a blended discipline that has grown out of contributions from
numerous earlier fields of study. The sciences of psychology, sociology, engineering,
anthropology, management, and medicine have all contributed to our understanding of human
behavior in organizations.
Psychology, the science of human behavior, was developed during the closing decades of the
nineteenth century. Psychology traces its origins to philosophy and the science of physiology.
One of the most prominent early psychologists, William James, held a degree in medicine (MD).
Since its beginnings, psychology has branched into a number of specialized fields, including
clinical, experimental, military, organizational, and social psychology. Organizational psychology
frequently overlaps with organizational behavior; for
For instance, both investigate work motivation.
Johnson & Johnson, Valero Energy, and Chaparral Steel all used longstanding psychological
research to develop their sophisticated personnel selection methods.
Sociology, the science of society, has contributed greatly to our knowledge of group and
intergroup dynamics. Because sociology takes society rather than the individual as its point of
departure, sociologists focus on the variety of roles within a society or culture,the norms and
standards of behavior in groups, and the consequences of compliant and deviant behavior.
Individuals have a role set that is determined by their social position, and roles affect how
people interact within organizations. The Professional Role Behaviors Survey, for example,
studied how the roles of various medical practitioners changed during hospital restructuring
and these changes influenced organizational behavior and culture.
Engineering is the applied science of energy and matter. It enhances our understanding of the
design of work. Frederick Taylor took basic engineering ideas and applied them to human
behavior at work, influencing the early study of organizational behavior.With his engineering
background, Taylor placed special emphasis on human productivity and efficiency in work
behavior. Job preparation and performance shifted from a long apprenticeship and a creative,
problem-solving approach to work to training in and automated performance of simplified
tasks. A study published in 1990 showed that
Taylor’s notions of performance standards and differential piece-rate systems were still shaping
organizational goal-setting programs at Black & Decker, IBM, and Weyerhaeuser at that time.
Anthropology, the science of human learned behavior is especially important to our
understanding of organizational culture. In fact, anthropological research has been used to
examine the effects of efficient organizational cultures on organizational performance and
the ways pathological personalities may lead to dysfunctional organizational cultures. In one
case study, Schwartz used a psychodynamic, anthropological mode of inquiry to explore
corporate decay at General Motors and NASA.
Management, originally called administrative science, is the study of overseeing activities
and supervising people in organizations. It includes the design, imple-mentation, and
management of various administrative and organizational systems. March and Simon take
the human organization as their point of departure to investigate administrative practices
that enhance the effectiveness of the system. Management is the first discipline to take the
modern corporation as the unit of analysis, a viewpoint that distinguishes its contribution to
the study of organizational behavior.
Medicine, the applied science of treating diseases to enhance an individual’s health and
well-being, focuses on both physical and psychological health as well as industrial mental
health.As modern care defeats acute diseases, medical attention is shifting to more chronic
diseases such as hypertension and to issues involved in occupational health and well-being.
These trends have contributed to the growth of corporate wellness programs such as Johnson &
Johnson’s “Live for Life Program.” Moreover, ergonomics has gained increasing attention as a
way to prevent medical problems resulting from poor design of workstations, resulting in the
loss of billions of dollars from higher healthcare costs and lower worker productivity.Such costs
can be cut nearly in half by implementing the results of medical research into better workplace
design.
THE ORGANIZATIONAL CONTEXT
A complete understanding of organizational behavior requires an understanding of both
human behavior and of the organizational context--that is, the specific setting -within
which behavior is acted out.

Organizations as Open Systems

Organizations are open systems of interacting components, including people, tasks,
technology, and structure. These internal components also interact with components in
the organization's task environment.

Katz and Kahn in one study, and Leavitt in another, established open system
frameworks for understanding organizations.28 The four major internal components are
task, people, technology, and structure. These four components, along with the
organization's inputs, outputs, and key elements in the task environment. The task of
the organization is its mission, purpose, or goal for existing. The people are the human
resources of the organization. The technology is the wide range of tools, knowledge,
and/or techniques used to transform inputs into outputs. The structure involves the
systems of communication, authority and roles, and workflow.

In addition to these major internal components, the organization as a system also has
an external task environment composed of different constituents such as suppliers,
customers, and federal regulators. Thompson describes the task environment as that
element of the environment related to the organization's degree of goal attainment, or
its basic task.
The organization system works by taking inputs, converting them into throughputs, and
delivering outputs to its task environment. Inputs are the human, informational,
material, and financial resources used by the organization. Throughputs are the
materials and resources as they are transformed by the organization's technology
component. Once the transformation is complete, they become outputs for customers,
consumers, and clients.
The actions of suppliers, customers, regulators, and other elements of the task
environment affect the organization and the behavior of people at work. The role of
modern corporations has expanded to include corporate social responsibility.

The Formal And Informal Organization

The open systems view of organizations suggests that they are designed like
clockwork (recall the clockwork metaphor described at the beginning of this chapter),
with a neat, precise, interrelated functioning. The formal organization is the official,
legitimate, and most visible part of the organization, and it enables people to think of
organizations in logical and rational ways. The snake pit metaphor mentioned earlier
originates from the study of the informal organization, which is unofficial and less
visible.

The Hawthorne studies, conducted during the 1920s and 1930s, first suggested the
importance of the informal elements. During the so-called interview study, the third of
the four Hawthorne studies, the researchers began to fully appreciate the informal
elements of the Hawthorne Works as an organization. The formal and informal
elements of an organization can sometimes conflict; we must understand both. Such
conflicts erupted in many organizations during the early years of the twentieth century
and were embodied in the union-management strife of that era. Sometimes these
formal-informal conflicts escalated into violence.

The informal elements of the organization are often points of diagnostic and
intervention activities in organizational development, though the formal elements must
always be considered because they provide the context for the informal. It is the
informal elements involving people's feelings, thoughts, and attitudes about their work
that most affect their behavior and performance, but individual behavior plays out in
the context of both the formal and informal elements of the system, becoming, in the
process, organizational behavior. Employees' moods, emotions, and dispositions all
influence critical organizational
CHALLENGES AND OPPORTUNITIES OF OB

Responding to Economic Pressures:During difficult economic times, effective management is

often at a premium.
Anybody can run a company when business is booming, because the difference between good
and bad management reflects the difference between making a lot
of money and making a lot more money. When times are bad, though, managers are on the
front lines with employees who must be fired, who are asked to
make do with less, and who worry about their futures. The difference between
good and bad management can be the difference between profit and loss or, ultimately,
between survival and failure. Managing employees well when times are tough is just as hard as
when times
are good—if not more so. But the OB approaches sometimes differ. In good
times, understanding how to reward, satisfy, and retain employees is at a premium.
In bad times, issues like stress, decision making, and coping come to the fore.
Eg:During the 2008 financial crisis, many automotive companies faced economic pressures due
to a decline in consumer spending. Ford, for instance, responded by implementing a
restructuring plan that included workforce reductions, closing plants, and focusing on more
fuel-efficient vehicles. These measures helped the company navigate the economic challenges
and emerge stronger in the following years.

Responding to Globalization : Organizations are no longer constrained by national borders. The

world has become a global village. In the process, the manager’s job has changed.

Increased Foreign Assignments: If you’re a manager, you are increasingly

likely to find yourself in a foreign assignment—transferred to your employer’s
operating division or subsidiary in another country. Once there, you’ll have
to manage a workforce very different in needs, aspirations, and attitudes from
those you are used to back home.

Working with People from Different Cultures: Even in your own country,
you’ll find yourself working with bosses, peers, and other employees born and
raised in different cultures. What motivates you may not motivate them. Or
your communication style may be straightforward and open, which others may
find uncomfortable and threatening. To work effectively with people from different cultures,
you need to understand how their culture, geography, and religion have shaped them and how
to adapt your management style to their
differences.
Managers at global companies such as McDonald’s, Disney, and Coca-Cola
have come to realize that economic values are not universally transferable.
Management practices need to be modified to reflect the values of the different
countries in which an organization operates.

Overseeing Movement of Jobs to Countries with Low-Cost Labor: In a global economy, jobs tend
to flow where lower
costs give businesses a comparative advantage, though labor groups, politicians,
and local community leaders see the exporting of jobs as undermining the job
market at home. Managers face the difficult task of balancing the interests of
their organization with their responsibilities to the communities in which they
operate.

Managing Workforce Diversity:One of the most important challenges for organizations is

adapting to people
who are different. We describe this challenge as workforce diversity. Whereas globalization
focuses on differences among people from different countries, workforce diversity addresses
differences among people within given countries.
Workforce diversity acknowledges a workforce of women and men; many racial and ethnic
groups; individuals with a variety of physical or psychological abilities; and people who differ in
age and sexual orientation. Managing this diversity
is a global concern.
Eg:managing workforce diversity is when tech companies like Google and Microsoft actively
promote inclusive hiring practices to foster diversity. They implement initiatives to attract and
retain employees from various backgrounds, genders, and ethnicities. This includes mentorship
programs, diversity training, and creating an inclusive work culture to harness a wide range of
perspectives and talents within the organization.

Improving Customer Service:

customer service is the store manager’s most
important general responsibility: “Instill in your employees the meaning and
importance of customer service as outlined in the retail philosophy, ‘Our store
is a place where the word “no” does not exist’; empower staff to ‘use their
best judgment’ in all customer service matters.”Many an organization has failed because its
employees failed to please customers. Management needs to create a customer-responsive
culture. OB can provide
considerable guidance in helping managers create such cultures—in which employees are
friendly and courteous, accessible, knowledgeable, prompt in responding to customer needs,
and willing to do what’s necessary to please the customer.
Eg:improving customer service is when a retail business introduces a user-friendly online
customer support portal, allowing customers to easily access information, track orders, and
resolve issues independently. This not only enhances the customer experience but also reduces
the workload on customer service representatives, leading to more efficient and satisfactory
interactions.

Improving People Skills :

People Skills add value to the organization. They are those sets of ideas that enable a person to
effectively communicate with others and decrease the possibility of miscommunication. It helps
in resolving issues or conflicts at the workplace.
Eg:improving people skills can be exemplified by a manager who actively engages in
interpersonal communication workshops, practices active listening, and provides constructive
feedback to foster a positive work environment. This dedication to honing people skills
contributes to better team collaboration, effective leadership, and overall workplace harmony.

Stimulating Innovation and Change :

Today’s successful organizations must foster innovation and master the art
of change, or they’ll become candidates for extinction. Victory will go to the
organizations that maintain their flexibility, continually improve their quality,
and beat their competition to the marketplace with a constant stream of innovative products
and services.An organization’s employees can be the impetus for innovation and change, or
they can be a major stumbling block. The challenge for managers is to stimulate their
employees’ creativity and tolerance for change. The field of OB provides a wealth of ideas and
techniques to aid in realizing these goals.
Eg:A restaurant stimulating innovation and change might regularly introduce new and unique
menu items based on customer feedback and emerging food trends. This approach keeps the
dining experience fresh, attracts new customers, and demonstrates a commitment to adapting
to evolving tastes in the industry.

Coping with “Temporariness”:

Globalization, expanded capacity, and advances in technology have required organizations to be
fast and flexible if they are to survive. The result is that most managers and employees today
work in a climate best characterized as “temporary.”
Workers must continually update their knowledge and skills to perform new
job requirements.Today’s managers and employees must learn to cope with temporariness,
flexibility, spontaneity, and unpredictability. The study of OB can help you better understand a
work world of continual change, overcome resistance to
change, and create an organizational culture that thrives on change

Working in Networked Organizations :

Networked organizations allow people to communicate and work together
even though they may be thousands of miles apart. Independent contractors
can telecommute via computer to workplaces around the globe and change
employers as the demand for their services changes. Software programmers,
graphic designers, systems analysts, technical writers, photo researchers, book and media
editors, and medical transcribers are just a few examples of people
who can work from home or other non office locations. The manager’s job is different in a
networked organization. Motivating and
leading people and making collaborative decisions online requires different
techniques than when individuals are physically present in a single location. As
more employees do their jobs by linking to others through networks, managers
must develop new skills. OB can provide valuable insights to help with honing
those skills.
Eg:A small business owner collaborates with other local businesses to form a networked
organization. They share resources, ideas, and support each other in marketing initiatives and
community events, creating a collaborative network that benefits all participants.

Helping Employees Balance Work–Life Conflicts:

The typical employee in the 1960s or 1970s showed up at a specified workplace
Monday through Friday and worked for clearly defined 8- or 9-hour chunks of
time. That’s no longer true for a large segment of today’s workforce. Employees
are increasingly complaining that the line between work and nonwork time
has become blurred, creating personal conflicts and stress. 19 At the same time,
today’s workplace presents opportunities for workers to create and structure
their own roles.Employees increasingly recognize that work infringes on their personal lives, and
they’re not happy about it. Recent studies suggest employees want
jobs that give them flexibility in their work schedules so they can better manage
work–life conflicts. 20 In fact, balancing work and life demands now surpasses job
security as an employee priority. 21 The next generation of employees is likely to
show similar concerns. 22 Most college and university students say attaining a balance between
personal life and work is a primary career goal; they want “a life”
as well as a job. Organizations that don’t help their people achieve work–life
balance will find it increasingly difficult to attract and retain the most capable
and motivated employees.
Eg:An IT company supports work-life balance by offering employees the option to work from
home when needed, providing flexibility in working hours, and promoting a culture that values
personal time. This approach acknowledges and addresses the diverse needs of employees,
fostering a more balanced and supportive work environment.

Creating a Positive Work Environment:

Although competitive pressures on most organizations are stronger than ever,
some organizations are trying to realize a competitive advantage by fostering a
positive work environment.A real growth area in OB research is positive organizational
scholarship (also called positive organizational behavior), which studies how organizations
develop human strengths, foster vitality and resilience, and unlock potential.
Researchers in this area say too much of OB research and management practice has been
targeted toward identifying what’s wrong with organizations and their employees. In response,
they try to study what’s good about them. Some key independent variables in positive OB
research are engagement, hope, optimism, and resilience in the face of strain.
Positive organizational scholars have studied a concept called “reflected
best-self”—asking employees to think about when they were at their “personal
best” in order to understand how to exploit their strengths. The idea is that
we all have things at which we are unusually good, yet too often we focus
on addressing our limitations and too rarely think about how to exploit our
strengths. Although positive organizational scholarship does not deny the value of the
negative (such as critical feedback), it does challenge researchers to look at OB
through a new lens and pushes organizations to exploit employees’ strengths
rather than dwell on their limitations.
Eg:A company creates a positive work environment by establishing a recognition program where
employees are regularly acknowledged for their contributions. This could include monthly
awards, shout-outs in team meetings, or a designated space for showcasing employee
achievements. Such initiatives contribute to a positive and motivating atmosphere, boosting
morale and fostering a sense of appreciation within the workplace.

Improving Ethical Behavior :

In an organizational world characterized by cutbacks, expectations of increasing productivity,
and tough competition, it’s not surprising many employees
feel pressured to cut corners, break rules, and engage in other questionable
practices. Increasingly they face ethical dilemmas and ethical choices, in which they are
required to identify right and wrong conduct.Managers and their organizations are responding
to the problem of unethical behavior in a number of ways. They’re writing and distributing
codes of
ethics to guide employees through ethical dilemmas. They’re offering seminars,
workshops, and other training programs to try to improve ethical behaviors.
They’re providing in-house advisors who can be contacted, in many cases anonymously, for
assistance in dealing with ethical issues, and they’re creating protection mechanisms for
employees who reveal internal unethical practices.Today’s manager must create an ethically
healthy climate for his or her employees, where they can do their work productively with
minimal ambiguity about what right and wrong behaviors are. Companies that promote a strong
ethical mission, encourage employees to behave with integrity, and provide strong ethical
leadership can influence employee decisions to behave ethically. In upcoming chapters, we’ll
discuss the actions managers can take to create an ethically healthy climate and help employees
sort through ethically ambiguous situations. We’ll also present ethical-dilemma exercises at the
end of each chapter that allow you to think through ethical issues and assess how you would
handle them.
Eg:A small business emphasizes ethical behavior by implementing a clear policy against
accepting gifts from clients or vendors that exceed a nominal value. This straightforward
guideline helps maintain integrity in business relationships and reinforces a commitment to
ethical practices within the organization.