UNIT INTRODUCTION TO

1 ORGANISATIONAL BEHAVIOUR

Introduction to Organizational Behavior: Definition of Organizational Behavior-

Nature and Scope of Organizational Behavior-Opportunities of Organizational Behavior-
Linkage of Organizational Behavior with other disciplines-Organizational Behavior Models

Introduction:

Human behavior in an organization is generally concerned with the thoughts, feelings, emotions
and actions of the people working in it. To understand any one individual and his behavior is a
challenge, but to understand group behavior in an organization is a very complex managerial
task. That is why it is rightly said that the success of any organization primarily depends upon
the efficiency and effectiveness of the management, and the effectiveness of the management
depends primarily on its human skills and how well it understands the needs and desires of the
people working in the organization.

Human behavior in organizations is a relatively new concept and it emerged as a distinct field of
study in the 1950’s and early 1960’s. This study has changed the traditional belief of the
managers that all the managerial and organizational problems are technical in nature. The
managers now understand that to make their organizations more effective, they have to
understand and predict the human behavior in the organizations.

Meaning of Organizational Behavior:

OB is an area of study that investigates the impact that individuals, groups and structure have on
behavior within organizations.

An organization is an organized body of people with a particular purpose and the people
themselves are regarded as the most important organizational asset. ‘Organizational behavior
(OB) studies how interaction occurs between people in a work setting, ' This will then enable
the managers to improve job satisfaction and stimulate innovation and creativity, thus creating a
dynamic working climate.

Definitions of OB:
According to Fred Luhans, “Organizational behavior directly concerned with the understanding,
prediction, and control of human behavior in organization.”

According to Stephen P. Robbins, “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 towards improving an organization’s effectiveness.”

According Keith Davis and J.W. Newstrom, “OB is the study and application of knowledge
about how people act within organizations. It is a human tool for human benefit. It applies
broadly to the behavior of people in all types of organizations such as business, government,
schools, and service organizations.”

According to L. M. Prasad, “Organizational behavior can be defined as the study and

application of knowledge about human behavior related to other elements of an organization
such as structure, technology and social systems.”

Nature of Organizational Behavior - OB

The following points explain the nature of organizational behavior in detail:

Fundamental Part of Management

Multi-Disciplinary Approach

Normative Science

Science and Art

Optimistic and Humanistic Approach

Focused on Organizational Objectives

Total System Approach

Action and Goal-oriented discipline

Social Science

Integrating approach

An Inexact Science

A Dynamic discipline

OB exists at multiple levels

1) Fundamental Part of Management: OB is a scientific study of how people behave in an
organization and helps in improving the focus of management on employees and setting
provisions for them.

2) Multi-Disciplinary Approach: Organizational behavior has a psychological foundation and

several behavioral and social sciences such as psychology, sociology, and anthropology affect its
functioning. Various concepts taken from these behavioral and social sciences include learning,
perception, motivation, attitude etc.,

3) Normative Science: Organizational behavior is considered a normative science because it

helps in applying the results of different studies in the working of the organization in such a way
that it is compatible with society. Hence, individual and social acceptance is also a key factor in
the working and decision-making of an organization.

4) Science and Art: Organizational behavior is considered a science as well as an art. Science
because it involves the use of scientific methods and art because it deals with the behavior of
individuals. OB is both a science as well as an art. The knowledge about human behavior proves
it a science while application of this knowledge and skill clearly leads towards beings an art.

5) Optimistic and Humanistic Approach: OB teaches managers to apply a humanistic

approach toward the employees. It focuses on the fact that it is very important to meet the need
of employees and motivate them. It also inculcates a positive work approach by stressing the
inborn qualities like being independent, innovative, predictive, and capable of giving positive
input to the organization.

6) Focused on Organizational Objectives: OB helps to combine both organizational and

individual objectives in such a way that both can be achieved at the same time.

7) Total System Approach: Certain factors such as psychological structure, interpersonal

orientation, group influence, and social and personal factors are responsible for the complexity of
an individual's behavior. Thus, organizational behavior uses a systematic approach to
understanding and finding solutions for complex individual behavior.

8) Action and Goal-oriented discipline: OB is an action-oriented and goal-directed discipline.

The major goal of OB & Nature of OB is to explain and predict human behavior in an
organizational context, so that it may be moulded to result-yielding situations. It provides
rational thinking, not an emotional feeling about people and their behavior.

9) Social Science: OB is a social science because its main subject matter is people and their
behavior. It is an elective field of study that integrates behavioral science like psychology,
sociology, anthropology, etc.

10) Integrating approach: OB is of integrating character. It seeks to balance human and

technical values at work. It tries to develop a new socio-technical system where human dignity
may be preserved with growth and development.

11) An Inexact Science: OB is an inexact science. It cannot provide specific answers to specific
organizational problems. The exact prediction of the behavior of people in organizations is also
not possible. "It is possible to predict relationships between variables on a broad scale but it is
difficult to apply predictive models on an individual basis."

12) A Dynamic discipline: OB is a very dynamic discipline. Its main focus is on human
behavior but does not ignore the technical component of the organizations at all. It fully
appreciates and recognizes the constraints of the working environment.

13) Organizational behavior - OB exists at multiple levels: Organizational behavior, OB has a

three-tier system. It deals with individual behavior, group behavior, and organizational behavior
as a whole. All these three levels interact with each other and OB tries to assimilate them for
good results.

Scope of OB:
OB is the study of human behavior at work in organizations. Accordingly the scope of OB
includes the study of individuals, groups and organization/structure. The aspects of these three
are –

Individuals: Organizations are the associations of individuals. Individuals differ in many

respects. The study of individuals, therefore, includes aspects as personality, perception,
attitudes, values, job satisfaction, learning and motivation.

Groups of individuals: Groups include aspects such as group dynamics, group conflicts,
communication, leadership, power and politics and the like.

Organization structure: The study of organization/structure includes aspect such as formation

of organizational structure, culture and change and development.

Individuals
•Personality
•Leadership
•Motivation
•Perception

Groups
•Team Work
•Group Dynamics

Organisational Structure
•Organisation Design
•Job Design

• Organizational behavior is the study of human behavior within organizations. The subject
encompasses the study of individual behavior, interpersonal behavior, and of the
organizations themselves.
– Intrapersonal behavior covers such aspects as personality, attitude, perception,
learning, opinion, motivation, job satisfaction, and stress management.
– Interpersonal behavior includes group dynamics, team dynamics, intergroup
conflict, leadership, communication, transaction analysis, and the like.
– About organizations, the study covers such aspects as their formation, structures,
effectiveness and formal and informal organizations.
• These three levels of analysis are not necessarily mutually exclusive. The field of
organizational behavior embraces them as being complementary. In the past, these three
levels of analysis were pursued with little co-ordination by behavioral scientists. Now,
however, a major contribution of those interested in OB is the attempt to integrate these
three levels of analysis, although this will require much effort. The individual focus is no
 more important or valuable to the manager within an organization than is the group or
formal organizational focus. There is no need to choose one level of analysis and exclude
the others. Managers in business, health care, education, government, and religious
organizations all have problems in common that require an interdisciplinary approach.
This can be provided by OB because it emphasizes on all these levels of analysis — the
individual, the group, and the formal organization.

Opportunities of OB:

We have understood that OB is an emerging discipline used to understand the behaviour of

employees in organisations. It is growing as an independent faculty of knowledge. During the
last two decades, number of changes has occurred all over the world. In the name of
liberalisation, privatisation and globalisation many countries have linked their trade and
commerce with other countries. Organisational activity in general and business and corporate
activity in particular has grown enormously. This has brought new challenges in managing
organizations. Competition has become global. Corporate downsizing, changing attitudes of
people, adopting of new cultures brought in by multinational corporate activity, business process
reengineering, total quality management, information technology and changing structure of the
occupational distribution of the working population are some of the emerging opportunities that
have changed the corporate activity in a significant manner. All these have brought new
opportunities in understanding the behaviour of people in organisations. Some of the emerging
opportunities are:
 Enhancing Working with
Improving the
Quality and people in
skills of people
Productivity Different Cultures

Stimulating
Empowering Dealing with
Innovation and
People Globalization
Change

Improving Ethical Improving

Behavior Customer Service

1. Enhancing Quality and Productivity: Maintaining the quality of its products is a

challenging task for every organization. It is the driving force through which companies
are able to attract more & more customers & hold them for the long term. Quality is
simply the degree to which products are able to satisfy the customer’s needs & wants. It is
the main factor which affects the customer satisfaction level. Better quality products more
easily satisfy customer needs & wants. Every organization should focus on quality factor
to increase its customer base. The main dimensions covered under the quality factors are
Features, Reliability, Durability, Performance, and Conformance with standards,
Responses & Reputation. Managers are focusing more & more to meet the quality
expectations of customers. In order to improve quality & productivity, they are even
engaging programs like Total Quality Management (TQM) & Reengineering. These two
techniques mainly focus on customer needs & continuously make efforts to increase the
customer satisfaction level. These techniques too involve extensive employee involvement
in order to increase productivity.
2. Working with people in Different Cultures: Every organization has employees who
differ from each other in terms of race, culture, religion, gender, and ethnicity. Employing
 person with distinct cultures help organizations in getting fresh & new talents and
potentialities. Maintaining peace & cooperation among its different employees is a
challenging task for every organization. Every employee working in an organization
wants to retain their own values & cultures although they are working in the same
company where they need to follow some rules & regulations. Same decision of
organization may be welcomed & accepted by people of one culture & opposed by people
from another culture. Therefore managers need to treat every employee differently as per
their individual differences in order to ensure cooperation & increase productivity.
3. Improving the skills of people: Skills of people need to improved & upgraded as per the
requirements from time to time. In the business area, there are always lots of changes
which occur at a faster rate in terms of technology, environment & structure. These
changes need to be addressed in order to achieve efficiency & increase productivity.
Employees & other executives of the organization should possess the required skills in
order to easily adapt to these changes. Failure to adopt these changes will make it difficult
to achieve targeted goals timely. There are basically 2 sets of employee skills that are
technical & managerial skills. Managers should, therefore, focus on designing a proper
performance appraisal program consisting of various training & development programs
for their employees. This will help them in improving their skills.
4. Empowering People: Empowerment of employees is another challenging task for every
organization. Productivity of employees generally gets reduced when kept under stringent
rules & regulations as compared when they are allotted some freedom. Delegating
appropriate responsibility & power to employees at different level is important &
challenging task for managers. Employees should be allowed & encouraged to participate
in various work-related decisions. This will improve employer-employee relations in the
organization & also the commitment of employees to work.
5. Stimulating Innovation and Change: Today every business needs to focus on innovative
ideas in order to bring changes to beat the tough competition in the market. Business
should always focus to differentiate their product from their competitor’s product. It will
help them in getting more & more customers. Business will fail & eventually forced to
shut down if unable to keep flexibility as per market demand. It should always bring
innovative products & services to market with minimum cost. For example, MI is
 presently beating the tough competition in the market by presenting a wide range of
innovative products at a minimized cost,
6. Dealing with Globalization: Today globalization of business is something that is
increasing worldwide at a great pace. Now the operations of the business are not limited to
one particular location or nation, but they are performed internationally. Businesses
nowadays are conducted beyond the national boundary of one country & have their
presence in different countries of the world. Products of companies are selling more by
various online portals over the internet rather than by their physical outlets. Faster
transportation & communication network have an efficient role in providing services to
customers via online portals.
Online presence of companies becomes the most emerging requirement of every
business. For example, Amazon conducts the majority of its business operations
worldwide via its internet portals rather its physical outlets.
7. Improving Ethical Behavior: Better ethical behavior in working culture is a must for an
organization to increase its productivity. It should always be ensured that employees
behave positively & abide by all rules & regulations of the organization. Healthy working
environment for employees with minimal ambiguity should be created. This will help in
increasing their productivity & reducing conflicts. Clear cut instruction should be given
regarding what is right behavior & what is wrong. All unethical practices like the use of
insider information for personal gains should be avoided. Managers should organize
various workshops, seminars & training programs in order to improve ethical behaviour of
employees.
8. Improving Customer Service: Business is unsuccessful if it fails to treat its customer
well & provide them with better service. If businesses have a large number of satisfied
customers it will help it in enjoying large profits in the long run. They need to develop a
better understanding with their customers to easily recognize their needs & wants.
Employees should meet with customers in the friendliest manner & try to address their
problem properly. It will help the management in creating the customer-responsive
environment in business. Organizational behavior has a key role in establishing a better
understanding of employees & ultimately with customers.
Linkage of Organizational Behavior with other disciplines

• OB is an applied behavioral science built on contributions from a number of behavioral

disciplines, mainly psychology and social psychology, sociology, and anthropology.

• Psychology’s contributions have been principally at the individual or micro level of

analysis, while the other disciplines have contributed to our understanding of macro
concepts such as group processes and organization.

• The following image is an overview of the major contributions to the study of

organizational behavior.

Psychology: Psychology is the science that attempts to measure, explain, and at times change the
behavior of humans and other animals.

Early industrial/organizational psychologists were concerned with problems of fatigue, boredom,

and other factors relevant to working conditions that could disrupt/ impede efficient work
performance.
More recently, their contributions have been expanded to include learning, perception,
personality, emotions, training, leadership effectiveness, needs and motivational forces, job
satisfaction, decision making processes, performance appraisals, attitude measurement, employee
selection techniques, work design, and job stress.

Sociology: Sociologists study the social system in which individuals fill their roles; that is,
sociology studies people in relation to their fellow human beings. Their significant contribution
to OB is through their study of group behavior in organizations, particularly formal and complex
organizations.

Social Psychology: Social psychology blends the concepts of psychology and sociology. It
focuses on the influence of people on one another. The major challenge deals with the issue of
how to implement it and how to reduce barriers to its acceptance.

Anthropology: Anthropology is the study of societies to learn about human beings and their
activities. Anthropologists work on cultures and environments; for example, they have aided in
understanding differences in fundamental values, attitudes, and behavior among people in
different countries and within different organizations.

Political Science: Contributions from political scientists for a better understanding of OB are
significant. Political scientists study the behaviors of individuals and groups within a political
environment. Specific topics of concern to political scientists include conflict resolution, group
coalition, allocation of power, and how people manipulate power in their self-interest. In the
past, the term ‘politics’ was considered to be a dirty word. Not any more now. Organizations are
becoming political entities and a better understanding of them cannot be had without
understanding the political perspective as well.

CONTRIBUTIONS OF OTHER SCIENCES:

Apart from various behavioral sciences, other disciplines have also contributed to the
development of organizational behavior. They are:

 Engineering: This discipline, too, has influenced OB. Industrial engineering, in

particular, has long been concerned with work measurement, productivity measurement,
 workflow analysis and design, and labor relations. Obviously, all these are important for
OB.
 Economics: This is used to study the motivation and satisfaction of people in an
organization. It also enables one to understand the rationality of human actions. For
instance, money is a basic motivator for any individual. The value of money is a function
of economic variables.
 History: This helps in analyzing the culture and development of values and beliefs that
affect human behavior. It enables one to understand the behavior and development of
people in a a country.
 Medicine: This is used to understand impact of work stress on the biological functioning
of human beings and its impact on performance and organizational effectiveness.
 Natural Sciences like Physics, Chemistry, Botany, Zoology, and Geology: These are
useful in the design of a suitable work environment to reduce fatigue, stress and
monotony in order to ensure psychological commitment and satisfaction in an
organization. Chemistry helps in understanding the chemical changes that occur in the
human body and the consequent behavior. Certain levels of chemical compounds cause a
disturbance in the biological system, which results in stress. Similarly certain colors are
pleasing and will have a positive impact on people, for example, the color green gives
rise to feelings of peace and pleasure, whereas red creates irritation. Thus providing
vegetation and plants in an office produces a pleasant ambience and has a positive impact
on the thinking of employees. Many organizations put green plants in their offices, which
not only help to create a pleasant working environment, but also because it has been
proved that the oxygen ejected by them, helps to keep employees fit.

Models of OB
Organizational behavior model is a basic structure that shows the relations between employees
at different levels in the organization. Organizational behavior model reflects the behavior of
the people and management all together, it is considered as field study not just a discipline.

Organization analyzes behavior of employees into three basic levels known as OB Model, they
are: – Individual level, Group level and Organizational system level.

Organizational behavior revolves around three main theoretical approaches: – cognitive,

behaviorist and social learning frameworks.
 These frameworks became the basis on which the organizational behavior model operates. The
cognitive theory was developed by Edward and depends on the expectancy and incentive
concepts, while the behaviorist framework created by Ivan Pavlov and John B.Watson relies on
observation power. While the social theory depends on how the connection is created between
the stimulus and response.

Types of OB Models:

1. Autocratic Model;
2. Custodial Model;
3. Supportive Model;
4. Collegial Model; and
5. System Model

1. Autocratic Model: The autocratic model is the model that relies on strength, power and
formal authority. The autocratic model depends on power. Managers see authority as the only
means to get the things done and employees are expected to follow orders. So it results in the
higher dependence on the boss.
In an autocratic organization, the people (management/owners) managing the functions in an
organization have formal authority to control the employees working under them. These lower-
level employees have little control over the job assignments. His ideas and innovations are
generally not welcomed, as major decisions are made at the top management level.
The guiding principle behind this model is that management/owners have extensive business
expertise, and the average employee has a relatively low level of skill and needs to be thoroughly
directed. This type of autocratic management system was common in factories during the
Industrial Revolution era.

One of the more significant problems associated with the autocratic model is that the
management team needs to micro-manage the employees – where they have to look at all the
details and make every single decision. Clearly, in a more modern-day organization, where
highly paid specialists are hired, an autocratic system becomes impractical and highly inefficient.
The autocratic model also opposes job satisfaction and employee morale. This is because
employees do not feel valued and part of the overall team. This leads to low level of
performance. While the Autocratic model may be suitable for some much automated factory
situations, it is out of date for most modern outfits.
2. Custodial Model: – Workers being managed under the autocratic model often feel insecure
and disappointed. They may also show aggression towards their boss and their family and
neighbors. So progressive managers felt that something must happen ways to develop better
employee relations so that insecurities and frustrations could be removed. The custodial
approach induces employees now to show their dependency and loyalty towards the company
and not to the boss or managers, or supervisors. The employees in this environment are more
psychologically contended and preoccupied with their rewards, but it is not necessary they would
be strongly motivated to give the performance.
To overcome the shortcomings of autocratic model, it came into existence. This model is reward
based. More emphasis is on economic rewards and benefits to motivate employees.

The custodial model is based on the concept of providing economic security for employees –
through pay and other benefits that will create employee loyalty and motivation. In some
countries, many professional companies offer health benefits, corporate cars, financial packaging
of salaries, etc. – these are incentives designed to attract and retain quality employees.
The underlying principle for the organization is that they will have a more skilled workforce,
more motivated employees, and have a competitive advantage through employee knowledge and
expertise. The downside with the custodial model is that it also attracts and retains low-
performing employees. Or perhaps even some offer low-level motivation from employees who
feel they are “stuck” in an organization because the benefits are too good to leave.

3. Supportive Model: – The basic idea behind this theory is that leadership drives people to
work not the power of money as in the custodial model. Through leadership Management
provides an environment to help employees develop and fulfils the interests of the organization,
rather than the only things to support employee benefit payment as per custodial approach.
It works in the public sector organization which is dependent on effective leadership. Here, it is
assumed that workers are self directed and creative. Importance in this model is given to
psychological needs, self esteem, job satisfaction and friendly relations between superior-
subordinate.
Under the supportive model, workers feel a sense of participation and work participation in the
organization. The role of the manager is to help the employee and solve their problems and get
their work done. This model has been found to be effective in prosperous countries where
workers are more concerned about their higher levels need affiliation and esteem.
Unlike the earlier two approaches, the supportive model is centred around ambitious leadership.
It is not based on control and authority (autocratic model) or incentives (custodial model), but
instead tries to motivate employees through the manager-employee relationship and how
employees are treated on a day-to-day basis.
Quite the opposite of the autocratic model, this approach suggests that employees are self-
motivated and have the value and insight to contribute to the organization, beyond just their day-
to-day role.
This model aims to motivate employees through a positive workplace where their ideas are
encouraged and often adapted. Therefore, employees have some form of “buy-in” for the
organization and its direction.
The supportive model is widely accepted chiefly in the developed nations where the needs of the
employees are different as it fulfills many of the employees emerging needs. This approach is
less successful in the developing nations where the social and economic need of the working
class is different. In short, in the supportive model, money is not which retain the satisfaction of
the employees, but it is a part of the organization’s life that has been put to the use and makes
other people feel wanted.

4. Collegial Model: –A useful extension of the supportive model is the collegial model. This
word collegial means a body of individuals with a common purpose. The collegial model, which
embodies a term concept, first achieved widespread applications in research laboratories and
similar work environments. This is a best model based on the partnership between workers and
management in which both work together as a team and respect each other. Workers are satisfied
by their job and they are committed to the organization.
The collegial model traditionally was used theory is based on the principle of mutual
contribution by employer and employees. Each employee should develop a feeling that he is a
part of the whole and contributing something to the whole and recognizes the others
contribution. Management is supported to be joint contribution and not the boss.
The collegial model is based on teamwork – everyone working as a peer. The overall
environment and corporate culture needs to be aligned with this model, where everyone is
actively participating – not just about position and job title – for everyone to work together to
make a better organization is encouraged.
The role of the manager is to foster this teamwork and create positive and energetic workplaces.
In much more respect, the manager can be considered the “coach” of the team. And as a coach,
the goal is to keep the team doing well overall, rather than focusing on their own performance, or
the performances of key individuals.
The collegial model is quite effective in organizations that need to find new approaches –
marketing teams, research and development, technology/software – virtually anywhere the
competitive landscape is constantly changing and ideas and innovation are key competitive
success factors.
The success of the collegial model depends on the management’s ability to foster the feeling of
partnership between the employees. This makes the employees feel important and needed. They
also feel that managers are not just mere supervisors but are also giving their equal contribution
to the team. To make the collegial model success many organizations have abolished the use of
bosses and subordinates during working, as these terms create the distance between the managers
and subordinates. While some of the organizations have abolished the system of allotting
reserved space for executives. Now any employee can park their vehicle in the common parking
space, which increases their convenience and makes them more comfortable.
5. System Model: – The final organizational model is known as the system model. It is the most
contemporary model of the five models. In the system model, the organization looks at the
overall structure and team environment, and assumes that individuals have different goals,
talents, and abilities. The system model aims to try to balance the goals of the individual with the
goals of the organization. Individuals obviously want good remuneration, job security, but also
want to work in a positive work environment where the organization adds value to the
community and/or its customers. The model system should be a holistic partnership of managers
and employees with a common goal, and where everyone feels they have a stake in the
organization.
In the system model, the expectations of the managers are much more than getting the work done
by the employees. The managers have to show their emotional side, be more compassionate and
caring towards their team, and they must be sensitive towards the needs of the diverse workforce.
They have to devote their attention to creating the feeling of optimism, hope, trustworthiness,
courage, self-determination, and through this, they try to develop a positive work culture where
the employees feel more at ease and work as if they are working for their family. This ultimately
results in the long time commitment and loyalty of the employees and the success of the
company.