Chapter one: Overview of organizational behavior
What is organization behavior?
Organizational behavior is
the study of what people think, feel, and do in and around organizations. It
involves understanding why individuals and groups act differently in workplace
settings and applying that knowledge to improve organizational effectiveness.
Ø The field explores the impact of individual, group,
and organizational processes on behavior and seeks to predict and control human
behavior within an organization.
Ø Organizational behavior draws upon the principles of
behavioral sciences and employs the scientific method to address practical
managerial challenges. While relatively new compared to other scientific
fields, it has gained prominence since the late 1950s.
Ø Organizational behavior specialists not only apply
their knowledge but also conduct studies to address specific organizational
issues, using the scientific method as a central approach.
The field of
organizational behavior examines various factors that influence behavior and
performance in organizations. These factors include
ü OB studies individual characteristics such as
attitudes, perceptions, learning, and goals.
ü OB investigates group dynamics, interpersonal
communication, leadership behavior, power dynamics, and learning processes
within organizations.
ü It also explores topics such as motivation, job
design, conflict management, change processes, and work stress.
There are several reasons why studying
behavior in organizational settings is important.
1.
Firstly, it
emphasizes a humanistic orientation and recognizes the significance of people's
attitudes, perceptions, learning capacities, feelings, and goals within an
organization. It considers behavior at the individual, group, and
organizational levels.
2.
Secondly, it
applies scientific research methods, leading to the emergence of principles and
guidelines for conducting good research in organizational behavior.
3.
Thirdly, it
is performance-oriented, addressing questions related to goal setting,
performance enhancement, job satisfaction, decision-making, and other factors
influencing individual and group performance.
4.
Finally, organizational
behavior is a multidisciplinary field that incorporates principles, models,
theories, and methods from various disciplines. It continues to grow in stature
and impact.
The Three Basic Units of Analysis In
Organizational Behavior (Model of Organizational Behavior)
Model of
Organizational Behavior:
Ø A model is a simplified representation of a
real-world phenomenon.
Ø The model of organizational behavior is based on
three basic levels of analysis: Individuals, Groups, and Organizational.
Ø These levels are interconnected and build on each
other to enhance understanding of behavior in organizations. For example,
individual behavior can shape group dynamics, and group behavior can impact
organizational functioning.
1.
Individual Level: At
this level, the focus is on the characteristics and behaviors of individuals
within the organization.
Ø This includes personal and biographical factors such as age, gender, marital status, personality traits, attitudes, values, and abilities. Individual perceptions, motives, and actions are also considered.
2.
Group Level: People's
behavior in groups is different from their behavior as individuals. This level
examines how individuals interact, communicate, and coordinate their activities
within workgroups.
Ø It looks at the dynamics of teamwork, leadership styles, power dynamics, interpersonal relationships, and organizational politics within groups.
3.
Organizational Level: The
highest level of analysis looks at the organization as a whole. It considers
the formal structure, processes, and operations of the organization, as well as
its impact on individuals and groups.
Ø This includes examining the design of the
organization, work processes, job roles, human resource policies and practices,
and the internal culture.
Ø It also considers the organization's interaction
with its external environment.
Replacing
Intuition with Systematic Study in Organizational Behavior:
The field of Organizational Behavior
(OB) aims to replace intuitive explanations with
systematic study. This involves the use of scientific evidence gathered under
controlled conditions, measured rigorously, and interpreted in a systematic
manner to establish cause-and-effect relationships.
Key Areas
of Systematic Study in Organizational Behavior:
1.
Employee
Performance Determinants:
ü Three types of behavior are crucial determinants of
employee performance: Productivity, Absenteeism, and Turnover.
ü Productivity is essential for organizational
success.
ü Absenteeism affects productivity, as employees need
to be present to contribute effectively.
ü High turnover increases costs and places less
experienced individuals in key positions.
2.
Job
Satisfaction:
ü Organizational behavior is concerned with employees'
job satisfaction, which is an attitude.
ü Reasons for managers to be concerned about job
satisfaction include its potential link to productivity, its negative relation
to absenteeism and turnover, and the humanistic responsibility of providing
satisfying jobs.
3. Evolution of Organizational Behavior:
ü The systematic study of management has evolved over
the past century.
ü Initially focus on physical working conditions,
principles of administration, and industrial engineering principles.
ü Later shifted to include the essential human factor,
leading to research on individual attitudes, group dynamics, and manager-worker
relationships.
ü Finally, Organizational behavior emerged as a
broader, encompassing approach.
Systematic
Study in Organizational Behavior:
1. Interdisciplinary Body of Knowledge: Organizational
behavior is an interdisciplinary field with ties to behavioral sciences such as
psychology, sociology, and anthropology.
2. Use of Scientific Methods: Employs
scientific methods to develop and empirically test generalizations about
behavior in organizations.
3. Focus on Application: Focuses
on practical applications that can improve organizational functioning and the
work experiences of members.
4.
Contingency
Thinking:
·
Recognizing that
there is no one-size-fits-all approach to managing people and organizations, it
adopts a contingency approach, tailoring management practices to fit the unique
nature of each situation.
Managerial Functions and their Relevance
to Organizational Behavior:
Managers hold a vital responsibility
in establishing and sustaining an effective internal environment within an
organization. By studying managerial functions, OB can provide insights into
how managers can effectively lead and influence employees. For example:
Ø Planning: OB
can help managers understand how to set goals that align with employees'
motivations and capabilities, leading to higher job satisfaction and
performance.
Ø Organizing: OB
can provide insights into how to create structures and relationships that
promote collaboration, teamwork, and employee engagement.
Ø Directing: OB
can offer strategies for effective communication, motivation, and leadership
styles that enhance employee performance and satisfaction.
Ø Controlling: as
a component of organizational behavior, involves utilizing OB principles to
effectively monitor and evaluate employee performance, provide constructive
feedback, and implement corrective measures in a manner that preserves employee
morale and motivation.
Roles performed by organizational
behavior in management of business
OB provides insights
and solutions to various challenges faced by organizations. Here are some ways
in which OB contributes to effective management:
Ø Globalization: With
organizations expanding across national borders, managers must navigate diverse
languages, laws, work ethics, and management styles. OB helps managers develop
a global perspective, become flexible, proactive, and effectively execute
operations on a global scale.
Ø Managing
Workforce Diversity: Organizations consist of diverse individuals and
groups based on age, gender, race, etc. Managing workforce diversity is a
global concern. OB equips managers with the skills to promote awareness, handle
diversity, and foster a culture of inclusion.
Ø Improving
Quality and Productivity: Intense competition and excess supply require
managers to focus on improving productivity and the quality of goods and
services. OB empowers managers to engage and motivate employees, who are key
drivers of productivity improvements.
Ø Enhancing
Customer Service: In service-oriented industries, employees'
interactions with customers significantly impact customer satisfaction. OB
helps managers improve customer service by shaping employee attitudes and
behaviors to meet customer needs effectively.
Ø Developing People Skills: OB enhances management skills by providing insights into effective job design and team creation, leading to improved performance and employee development.
Ø Stimulating
Innovation and Change: OB fosters a culture of innovation and change by
promoting employee creativity and providing techniques to overcome resistance
to change.
Ø Work-Life
Balance: Designing flexible jobs and promoting work-life
balance is crucial for retaining talented employees. OB helps managers create a
supportive work environment that addresses employees' work-life balance needs.
Ø Promoting
Ethical Behavior: OB assists managers in creating an ethically healthy
work environment, enabling employees to make ethical decisions, enhancing job
satisfaction, productivity, and organizational citizenship behavior.
Ø Creating
a Positive Work Environment: In the
face of competitive pressures experienced by organizations, OB helps managers
develop resilience, foster human strength, and create a positive work
environment that promotes employee well-being and vitality."
The
characteristics of Organizational Behavior (OB):
1.
Human-Centric
Focus:
Ø OB seeks to enhance people's quality of life at
work.
Ø OB originated from the early 20th-century shift from
agriculture to manufacturing, addressing brutal work environments.
2.
McGregor's
Theory X and Theory Y:
Ø Theory X reflects a traditional view, assuming
people are lazy, dislike work, and need strict direction.
Ø Theory Y, a modern view, recognizes employees for
their efforts, assuming individuals have a psychological need to work and seek
responsibility.
3.
Dynamic
Nature of Organizations:
Ø Organizations are structured social systems with
groups and individuals working toward agreed-upon objectives.
Ø OB recognizes organizations as dynamic,
ever-changing entities, operating as open systems that transform resources from
the environment into outputs.
4.
Contingency
Approach:
Ø OB rejects the idea of a universal,
one-size-fits-all approach to managing organizations.
Ø Emphasizes flexibility, acknowledging that behavior is
influenced by a complex interplay of factors, and there is no singular best
approach.
5.
Addressing
Changing Work Realities:
Ø Responds to the challenges posed by changing
demographics, globalization, and technological advancements.
Ø OB considers the increasing presence of educated
women in the workforce, globalization trends, and the impact of automation and
technology.
6.
Way
of Thinking and Humanistic Orientation:
Ø OB involves a holistic perspective on individuals,
groups, and organizations.
Ø OB emphasizes humanistic elements, giving importance
to people's attitudes, perceptions, learning capacities, feelings, and goals.
7.
Multidisciplinary
Approach:
Ø OB draws principles, models, theories, and methods
from various disciplines, including psychology, sociology, anthropology,
economics, and political science.
Ø OB integrates diverse insights to achieve a better
understanding of human behavior in organizations.
8.
Performance-Oriented:
Ø Focuses on factors influencing performance and seeks
ways to enhance it.
Ø Addresses issues related to motivation, leadership,
job satisfaction, and organizational effectiveness.
9.
Scientific
Method Application:
Ø OB Relies on the scientific method to study
variables and relationships systematically.
Ø OB gathers scientific evidence under controlled
conditions to attribute cause and effect, aiming for accurate conclusions.
10.
Applications-Oriented:
Ø OB concerned with providing practical answers to
organizational management questions.
Ø Aims to offer solutions and insights that can
improve the functioning of organizations and enhance the work experiences of
their members.
The
Development of Organizational Behavior (OB):
As organizations
expanded in size and became more intricate, there was a growing acknowledgment
of the significance of addressing human concerns as well.
Ø Various management theorists explored employees'
needs, motives, and behavior within organizations, considering the impact on
productivity. Casual or common-sense approaches to understanding human behavior
were deemed insufficient.
Ø The systematic approach to organizational behavior
posits that behavior is purposeful, directed toward perceived self-interest,
and predictable based on individual perceptions and motives.
Theories of Management
Development: The historical
background of organizational behavior is explored through various management
theories, categorized into Classical Approach, Neo-Classical Approach,
Behavioral Approach, and Modern Approach.
1. Classical Approach: Theories
in this category include bureaucratic, administrative, and scientific
approaches. Emphasizing structural or functional factors, the classical approach focuses on
organizational structure, treating employees as economic entities like machines
and money. It led to a dehumanized structure, lacking flexibility, adaptability,
and intrinsic rewards.
Ø Scientific Management Theory (Frederick W. Taylor): Taylor's
theory aimed to increase productivity through efficiency
and fair payment.
ü It relied on systematic knowledge for work
allocation and job assignment, with principles such as developing standard
methods, scientific personnel selection, training, eliminating interruptions,
offering incentives, specialization, functional foremanship, work order, and
coordination.
2.
Neo-Classical
Approach:
The Neo-Classical Approach
in organizational behavior builds upon the classical theories but places
greater emphasis on human relations and behavioral sciences.
Ø It recognizes that management operates within a
social system where human factors play a significant role in performance. And
employees can play pivotal roles in decision-making.
Human
Relations:
Elton Mayo and the
Hawthorne Experiment: The Human Relations theory originated from the Hawthorne studies
carried out by Elton Mayo and his team at the Western Electric Company between
1924 and 1932. The research unfolded in four distinct phases.
a)
The
Illumination Experiments: it revealed that light intensity had no significant
impact on worker productivity. Attempts were made to predict behavior by
studying physical variables like illumination, rest periods, workweek length,
and productivity.
b)
Relay
Assembly Test: Demonstrated the Hawthorne Effect, where special
attention and treatment increased productivity. Non-physical variables such as
improved human relations, supervisory methods, social interaction, incentive
systems, and workers' authority were studied.
c)
Interviewing
Programs: Tested on human relations rather than favorable
physical conditions. showing that employees were unwilling to answer direct
questions but provided insights indirectly.
d)
The
Bank Wiring Observation Room Experiments: it provided freedom to
informal groups, revealing that employees were not just economic beings but
also social and psychological beings. Productivity was influenced by
sentiments, beliefs, and group behavior.
3.
Behavioral
Management Theory:
The Behavioral Management theory
considers employees as individuals with concrete human needs, part of work
groups, and members of society. Proponents like F. Herzberg, V. Vroom, Maslow,
and Likert emphasized democratic values and human motivation. The theory
recognizes employees as assets to be developed, not mere robots following
orders.
Contributions
of Behavioral Management:
Ø Individual Behavior:
Recognizes the importance of individual employee behavior influenced by
feelings, perception, learning, and personality.
Ø Group Behavior: Emphasizes
the role of cultural and social backgrounds in management, with people working
together toward group and corporate objectives.
Ø Task: Stresses
the effective performance of tasks, giving importance to coordinated efforts
and achievement.
Ø Participative Management: Advocates
for employees' involvement in management decisions to enhance productivity and
efficiency.
Ø Motivation: Promotes
the use of both monetary and non-monetary incentives for motivating employees,
focusing on development and satisfaction.
Ø Communication: Highlights
the importance of two-way communication for understanding in organizations. It
recognizes the impact of informal communication on management success,
emphasizing group communication, team spirit, and group harmony.
4.
Modern
Approach:
According to Mishara,
the modern organizational theory integrates classical and neo-classical
theories while incorporating technological developments. It is categorized into
quantitative, systems, and contingency theories.
Ø Quantitative Theory: utilizes
operations research and quantification to analyze and solve problems. It
employs statistical and mathematical models, including linear and non-linear
programming, decision trees, game theory, simulation, and probability, to
address complex issues.
Ø Systems Theory: Views
an organization as interconnected units striving for common objectives. It emphasizes
the importance of each unit, highlighting that the failure of one section can
jeopardize the overall well-being of the organization.
Ø Contingency Management Theory: Recognizes
that managers choose actions based on situational variables. It rejects a
one-size-fits-all approach, acknowledging the diversity in organizations and
employees. Asserts that there is "no one best way" to manage,
emphasizing a case-by-case consideration.
Contributing disciplines of OB
Organizational behavior
draws upon various disciplines to enhance our understanding of human behavior
in organizations.
1.
Psychology: Psychology
focuses on the measurement, explanation, and modification of human and animal
behavior.
Ø Psychology contributes to the understanding of
individual behavior such as learning, motivation; personality, perception,
counseling psychology.
2.
Sociology: Sociology
examines the social systems within which individuals operate.
Ø Sociology examines individuals in the context of their
interactions with others.
Ø In organizational behavior, sociology has made
significant contributions by studying group behavior within organizations,
particularly in formal and complex organizational structures.
Ø Topics such as group dynamics, work teams,
communication, power, conflict, and intergroup behavior have been explored by
sociologists in the context of organizations.
4.
Social Psychology: Social
psychology is an interdisciplinary field that combines concepts from psychology
and sociology.
Ø It explores topics such as behavioral change,
attitude change, and group processes.
Ø In organizational behavior, social psychology
provides insights into social interactions, influence, and social dynamics
within organizational settings.
5.
Anthropology: Anthropology
focuses on the study of societies to gain understanding about human beings and
their activities.
Ø Anthropological research on cultures and
environments has helped in understanding differences in fundamental values,
attitudes, and behaviors across different countries and organizations.
Ø Anthropology contributes to organizational behavior
through the study of comparative values and attitudes, cross-cultural analysis,
and organizational culture and environment.
Management and organizational behavior in
the 21st century
In the 21st century,
managers face numerous challenges and opportunities that require the
application of organizational behavior concepts. Some of the critical issues
managers confront include:
1.
Improving Quality and Productivity: Managers
strive to enhance the productivity and quality of products and services offered
by their organizations.
Ø Total Quality Management (TQM) and Business Process
Reengineering (BPR) concepts prioritize the significance of employee engagement
in attaining these objectives.
Ø Managers recognize that employee participation and
planning are vital for successful quality and productivity improvements.
2.
Developing People Skills: Managers
rely on effective communication, motivation, and delegation to work through
others.
Ø Organizational behavior theories and concepts assist
managers in understanding and predicting employee behavior.
Ø Develop skills in active listening, providing
constructive feedback, delegating authority, and creating effective teams is
crucial for managers.
3.
Managing Workforce Diversity: Organizations
face the challenge of adapting to a diverse workforce in terms of gender, race,
ethnicity, and other differences.
Ø Managers need to shift their approach from treating
everyone the same to recognizing and responding to individual differences.
Ø Managing diversity positively can enhance
creativity, innovation, and decision-making by incorporating diverse
perspectives.
4.
Responding to Globalization: Managers
operate in a globalized world where they may be assigned to foreign countries
or work with individuals from different cultures within their own country.
Ø Understanding cultural differences and adapting
management styles accordingly is essential for effective collaboration and
motivation in diverse teams.
5.
Empowering People: Modern
managers empower employees by granting them more autonomy and decision-making
authority.
Ø The role of managers shifts from being traditional
bosses to coaches, advisers, sponsors, or facilitators.
Ø Employees are encouraged to participate in
work-related decisions, and decision-making authority is delegated to the
operational level.
6.
Stimulating Innovation and Change: Organizations
must foster innovation and embrace change to remain competitive.
Ø Managers play a crucial role in stimulating
employees' creativity and promoting a culture that embraces change.
Ø Successful organizations continuously improve
quality, innovate, and bring new products and services to the market.
7.
Coping with Temporariness: Managers
face ongoing change and must adapt to flexibility, spontaneity, and
unpredictability.
Ø The business environment is characterized by long
periods of change punctuated by short periods of stability.
Ø Both managers and employees must consistently
enhance their knowledge and skills to adapt to evolving job demands and
requirements.
8.
Declining Employee Loyalty: Traditional
notions of job security and loyalty have diminished in the face of global
competition and corporate changes.
Ø Managers need to motivate employees who may feel
less committed to their employers while maintaining competitiveness in the
global marketplace.
Organization as a system
Here are some key
points about organizations as systems:
1.
Private and Organizational Goals: According
to Mishra, an organization is a social system where members strive to achieve
both their private goals and the organization's goals.
Ø Although these goals may initially seem
contradictory, effective organizational behavior can reconcile them.
2.
Structure, Process, and Relationship: An
organization is a structure, a process, and a relationship that aims to achieve
corporate objectives within a given environment.
Ø It is composed of individuals with different
authorities and responsibilities who collaborate to utilize existing resources
for the organization's objectives.
3.
Dynamic Nature: An
organization is not static but dynamic, continually changing to adapt to the
needs of society, its members, corporate objectives, and environmental changes.
Ø Organizations evolve and develop in response to the
inability of individuals to achieve their desired goals individually.
4.
Common Goals: Robin
defines an organization as a consciously coordinated social unit comprising two
or more people working together on a continuous basis to achieve a common goal
or set of goals.
Ø The authority, responsibilities, and relationships
among members are integral to organizational function.
5.
Mechanism for Collaboration: Organizations
serve as mechanisms through which individuals combine their efforts to
accomplish more than they could individually.
Ø Managing and controlling the behavior of individuals
and groups is crucial for the smooth operation and goal attainment of the
organization.
6.
Interconnectedness and Linkages: The
systems perspective emphasizes that everything within an organization is
connected to everything else.
Ø It is essential to understand the linkages,
relationships, and flows within the organization and model businesses and
processes accordingly. Each employee, unit, or activity is part of a larger entity,
and their collective efforts produce results.
7.
Managing the System: Traditional
management thinking focuses on managing separate pieces or departments within
an organization. This leads to sub-optimization.
Ø However, managing the system as a whole is necessary
to overcome this challenge. Managing all system components, including inputs,
processes, outputs, and feedback, is crucial for effective adaptation in a
rapidly changing environment.
8.
Open System: An
organization is an open system that interacts with various factors in its
environment.
Ø It acquires inputs from the environment, processes
them, and produces outputs that are returned to the environment.
Ø The organization is influenced by its environment,
and feedback, such as complaints, suggestions, and loyalty, helps in assessing
its performance.
Ethics and Organizational Behavior
Acting ethically
involves making decisions and taking actions that align with accepted moral
principles and values. Ethical behavior extends to various aspects of organizational
behavior, including interactions with employees, customers, stakeholders, and
the broader community.
People learn from their
interactions with the environment, adapting behaviors based on past experiences
to maximize positive consequences and minimize negative ones. In organizational
behavior, this process is commonly known as behavior modification. This process
involves two contingencies: antecedents and consequences
Ø Antecedents: Antecedents
are events or stimuli that precede behavior. They inform employees that certain
behaviors will lead to specific consequences. For example, a supervisor's
request for an employee to complete a task by a specific deadline serves as an
antecedent signaling the desired behavior.
Ø Consequences: Consequences
are the outcomes or results that follow behavior. Positive consequences, such
as praise or rewards, reinforce desired behavior, while negative consequences,
such as penalties or loss of trust, discourage undesirable behavior.