ORGANIZATIONAL BEHAVIOR

Compiled by: Kefyalew Geneti

Addis Ababa
 Chapter One: An Overview of OB

• OB is related to the study of individuals, group of people working together and

their expected behavior in organizational setting.
• An organization is more than a formal arrangement of functions, more than an
organizational chart, more than a vision statement , more than a set of accounts
etc…
• An organization is a collection of people who work together to achieve individual
and organizational goals; it is a social system
• No two individuals are likely to behave in the same manner in a particular work
situation.
• Researchers, management practitioners, psychologists, social scientists etc… must
understand the very credentials of an individual, his background, social
framework, educational update, impact of social groups and other situational
factors on behavior.
• It is the human factor that contributes to the productivity.
• Hence the study of human behavior in organizational setting is important.
 Definitions
• “OB is a field of study that investigates the impact that
individuals, groups and organizational structure have on
behavior within the organization, for the purpose of
applying such knowledge towards improving an
organizational effectiveness”.
• OB is “the study and application of knowledge about human
behavior related to other elements of an organization such
as structure, technology and social systems (LM Prasad).
• “Organizational behavior as a systematic study of the
actions and attitudes that people exhibit within
organizations.” (S.P. Robins)
• “OB is a field of study devoted to understanding, explaining,
and ultimately improving the attitudes and behaviors of
individuals and groups in organizations.”  
 The three basic levels of analysis in OB
Individual Level Analysis:
• At the individual level, managers and employees need to learn
how to work with people who may be different from themselves
in a variety of dimensions, including personality, perception,
values, and attitudes.
• where employees have a variety of experiences and come from
several cultures.
• Individuals also have different levels of job satisfaction and
motivation, and these affect how managers manage employees.
• For instance, some employees may be drug and alcohol
dependencies that affected their motivation and productivity.
• More organizations expect employees to be empowered and to
take on more responsibility than ever before.
 Contd….
Group Level Analysis: People’s behavior when they are in a group
differs from their behavior when they are alone. The behavior of
people in groups is more than the sum total of all the individuals
acting in their own way. Thus, to better understand OB the study of
group behavior is crucial
Workforce Diversity: Organizations are becoming more diverse,
employing a greater variety of people in terms of gender, race,
ethnicity, sexual orientation, age, disabilities, seniority, socio-
economic status, educational background, cultural, political, nation
or nationality(African, European, Asian, Canadians, Japanese,..),
etc..
Therefore today, the ability to adapt to different people is one of the
most important and broad-based challenges facing organizations.
Much of the success in any job involves developing good
interpersonal, or “people,” skills. “Human Skill” that organizations
need to have.
 Contd…..
Organizational Level Analysis: OB analysis at organizational
level is getting more complex. As groups are not the sum
total of individuals, organizations are also not the sum
total of individuals and groups. More other organizational
level factors may put constraints on individual and group
behavior.
A. Productivity: An organization or group is productive if it
achieves its goals and does so by transferring inputs (labor
and raw materials) to outputs (finished goods or services)
at the lowest cost.
• Productivity implies a concern for both effectiveness
(achieving goals) and efficiency (watching costs).
 Contd….
B. Developing Effective Employees: One of the major challenges
facing organizations in the twenty-first century is how to
engage employees effectively so that they are committed to
the organization. We use the term organizational citizenship
behavior (OCB) to describe discretionary behavior that is not
part of an employee’s formal job requirements, but that
nevertheless promotes the effective functioning of the
organization. Recent research has also looked at expanding the
work on OCB to team behavior.
C. Global Competition
The world has come to do business under one umbrella.
• In recent years, businesses have faced tough competition with
world wide competitors. Therefore, to survive, they have to
reduce costs, increase productivity, and improve quality.
Mintzberg’s Managerial Roles and OB
Cont’d….
 Characteristics of OB
• A way of thinking
• Interdisciplinary field
• Having a distinctive humanistic outlook
• Performance oriented
• Setting external environment as critical
• Uses scientific methods to study human
behavior in organizational setting
• Having application orientation
 OB development (Past and Present
Status)g1 ex.
A large number of people have contributed to the growth of OB as a discipline.
1. The Human Relations Movement
• Despite the economic progress brought about in part by Scientific
Management,
• critics were calling attention to the "unpleasant side of progress," which
included severe labor/management conflict, lack of concern, boredom, and
wasted human resources. These concerns lead a number of researchers to
examine the discrepancy between how an organization was supposed to
work versus how the workers actually behaved. In addition, factors like
World War I, developments in psychology (eg. Freud) and later the
depression, all brought into question some of the basic assumptions of the
Scientific Management School.
• One of the primary critics of the time, Elton Mayo(known as a founder of
human relations movement & for his research including Hawthorne
studies) , claimed that this "alienation" stemmed from the breakdown of
the social structures caused by industrialization, the factory system, and its
related outcomes like growing urbanization.
 Cont’d
• The credit of highlighting the importance of informal social
groups, good human relation, and the needs for managerial
motivation, participation, better communication, good
leadership and committee management goes to this school
of thought.
• McGregor’s theory ‘Y’ is heavily human relation oriented.
The theory made it explicit that group relationships are the
key to behavior.
• It throws light on how and why individuals and group
behavior influences workers motivation, supervision,
communication pattern and productivity.
• Human relations theories also helped to provide a better
explanation of why people in Organizations behave as they
do by stressing and exploring the role of group.
 The Hawthorne Studies, by Elton Mayo
• The research he conducted under The Hawthorne Studies of the 1930s
showed the significance of groups in affecting the behavior of
individuals at work.
• The research helped him to make certain deductions about how
managers behave.
• He carried out a number of investigations to look at ways of improving
productivity, for example changing lighting conditions in the workplace.
His findings were that:
• work satisfaction depended to a large extent on the informal social
pattern of the work group.
• wherever norms of cooperation and higher output were established it
was due to a feeling of importance.
• Physical conditions or financial incentives had little motivational value
• People will form workgroups and this can be used by management to
benefit the organizations
 Cont’d
• People’s work performance is dependent on both social issues
and job content
• Suggested a tensions between worker’s ‘logic of sentiment’
and managers’ ‘logic of cost and efficiency’ which could lead to
conflict in the organization
• Individual workers cannot be treated in isolation, but as
members of a group
• Monetary incentives and good working conditions are less
important to the individual than the need to belong to the
group.
• Informal or unofficial groups at workplace have strong
influence on behavior of those workers in a group
• Managers must be aware of these ‘social needs’ and cater for
them to ensure that employees collaborate with the official
organization rather than work against it.
Contributing fields to OB/its relation with other fields
• Psychology: Psychology is an applied science, which attempts
to explain human behavior in a particular situation and
predicts actions of individuals.
• contributed towards various theories on learning, motivation,
personality, training and development, theories on individual
decision making, leadership, job satisfaction, performance
appraisal, attitude, ego state, job design, work stress and
conflict management.
• Sociology: Science of Sociology studies the impact of culture on
group behavior. Contributed to a large extent to the field of
group-dynamics, roles that individual plays in the organization,
communication, norms, status, power, conflict management,
formal organization theory, group forming processes and group
decision-making.
 Cont’d
• Social psychology: Working organizations are formal assembly of people
who are assigned specific jobs and play a vital role in formulating human
behavior. It is a subject where concept of psychology and sociology are
blend to achieve better human behavior in organization.
• The field has contributed to manage change, group decision-making,
communication and ability of people in the organization, to maintain
social norms.
• Anthropology: It is a field of study relating to human activities in various
cultural and environmental frameworks. It understands difference in
behavior based on value system of different cultures of various countries.
The study is more relevant to organizational behavior today due to
globalization, mergers and acquisitions of various industries.
• Political Science: The study of the behavior of individuals and groups
within a political environment. It contributed to OB concepts like
conflict management, intra organizational politics and power.
 MANAGEMENT and OB IN THE 21ST CENTURY
• Information technology is a major force driving change. We are
experiencing the rapid integration of information across all industries
everywhere, yet it is still people who invent, direct, guide, and
manage change in their own careers and in the boundary less
organization. This text relates organizational behavior topics to
managing dynamic body of knowledge that can be used to
understand and manage a wide technological change as a driver of
performance and integration. “Business at the speed of thought” is a
major factor of competitive advantage.
• Another set of success factors that lead to competitive advantage are
developing and sustaining world-class products and services with
Internet speed and meeting and exceeding customer demand.
Organizations are adapting by reengineering, reinventing,
restructuring, and rethinking their strategies, structures, and
expertise around web-based, Internet integrated business processes.
Not all organizations are changing at the same pace or on the same
scale.
 contd
• However, Internet-driven networks and software applications have
produced a type of “digital Darwinism”.
• Internationalism : People and Situations: Internationalism is a relatively
new approach to understanding behavior in organizational settings.
• First presented in terms of interactional psychology, this view assumes
that individual behavior results from a continuous and multidirectional
interaction between characteristics of the person and characteristics of
the situation.
• More specifically, internationalism attempts to explain how people select,
Organization Behavior—Text and Cases interpret, and change various
situations.
• When people enter an organization, their own behaviors and actions
shape that organization in various ways. Similarly, the organization itself
shapes the behaviors and actions of each individual who becomes a part
of it.
• This interactionist perspective can be useful in explaining organizational
behavior.
 contd
• Organizational behavior is the study of human behavior in
organizational settings, the interface between human behavior and
the organization, and the organization itself. The study of
organizational behavior is important because organizations have a
powerful influence over our lives.
• * Serious interest in the study of management first developed around
the beginning of this century.
• Two of the earliest approaches were scientific management (best
represented by the work of Taylor) and classical organization theory
(exemplified by the work of Weber) i.e. Bureaucracy.
• !*Organizational behavior began to emerge as a scientific discipline
as a result of the Hawthorne studies.
• McGregor and Maslow led the human relations movement that grew
from those studies.
• *Contemporary organizational behavior attempts to describe, rather
than prescribe, behavioral forces in organizations.
 contd
• Ties to psychology, sociology, anthropology,
political science, economics, engineering, and
medicine make organizational behavior an
interdisciplinary field.
• ! The basic concepts of the field are divided into
three categories : individual processes,
interpersonal processes, and organizational
process and characteristics.
 Organization as a system (buma 2012)
Organization:
• A consciously coordinated social unit,
composed of two or more people, that
functions on a relatively continuous basis to
achieve a common goal or set of goals. Also
defined as
• Is a collection of people who work together to
achieve individual and organizational goals
 Virtual Organization
• Virtual Organization popularly known as ‘E’ Organization will have the following characteristics:
• 1. There are no generally accepted rules. There are no established and proven e-org models or
strategic plans. What worked in March may be scrapped in May. E-orgs in their infancy and players
are being forced toe experiment.
• 2. Victory goes to the quick. Fast to no longer fast enough. It used to be that the big would eat
• the small. In an e-word, the fast eat the slow. Competition is forcing e-organizations to make
decisions quickly, develop new products and service in record time, move into market fast, and be
able to respond to competitive actions immediately. The old saw “Ready, Aim, Fire” has been
replaced by “Fire, Ready, Aim”.
• 3. Location doesn’t matter. In the past, the people you hired, the suppliers you used, and the
customers you serviced were largely defined by your geographic location. For instance, you hired
from the labour pool from Bangalore to New Delhi or tried to entire prospective employees to
move from where they lived to where your organization was located. Now, through network
linkages, employers in remote locations can have access to the best and brightest. And talented
people no longer have to move their residence to pursue job opportunities in faraway places.
• 4. Integrated information is everything. Intranets, extranets and the internet have changed the
way that information can move inside organizations. Open and integrated information systems
allow bypassing of traditional organizational hierarchies; making it easy for employees and
managers alike to track projects, democratizing internal decision making; and closely linking
organizations to their suppliers, partners, and customers.