Fundamentals of

Organizational
Behaviour

PUSPA RAJ ADHIKARI

 Organizational Behaviour

It is a deliberate collection of people brought

together to accomplish some specific purpose.

An organized group of people with a particular

purpose, such as a business or government
department.

A systematic arrangement of people brought

together to accomplish some specific purpose.
 Organization
▪ Is a purposeful combination of two or
more people
▪ Two or more people work together in
an organized group.
▪ Consciously coordinated social unit.
▪ To achieve a pre-determined goal
Behaviour
 Behaviour
▪ Anything a person or an animal does that can be observed in some
ways.
▪ We can see/feel behavior.
▪ The behavior of human beings is caused.
▪ Behavior is goal-oriented and unpredictable.
Organizational Behaviour
▪ For this, Managers need to seek answers mainly to these
two questions.

▪ Why do people behave as they behave? Why do people do

what they do at work in an organization?

▪ What Influences people’s behavior at work?

 To know this, we must know what is
organizational behavior.

▪ OB is the study and application of the human

Organizational side of management.
▪ It is concerned with the study of human
Behaviour behavior at work.
▪ Like- people’s thoughts, feelings, emotions,
needs and actions.
Organizational Behaviour
Organizational behaviour does not depend
upon assumption based on gut feelings but
attempts to gather information regarding an
issue in a scientific manner under controlled
conditions.
It uses information and interprets the
findings so that the behaviour of an
individual and group can be directed as
desired.
 Means of predicting behavior.

▪ Gut feelings
Intuition ▪ Individual observation
▪ Common sense

▪ Looks at relationships
Systematic ▪ Attempting to attribute cause & effect
▪ Scientific evidence: data gathered/
Study measured and interpreted
Organizational Behaviour
▪ Systematic study: Looking at
relationships, attempting to attribute causes
and effects, and drawing conclusions based
on scientific evidence.
▪ Evidence-based management (EBM):
The basing of managerial decisions on the
best available scientific evidence.
 Organizational Behaviour
OB has been defined by different behavioral Scientists.
According to Luthans,
Organization Behavior is directly concerned with the understanding, prediction
and control of human behavior in organization.
Robbins Defines Organization Behavior ,
Organization Behavior is a field of study that investigate the impact that
individuals, group and structures have on behavior within organizations, for
the purpose of applying such knowledge toward improving an organization’s
effectiveness.
 Organizational Behaviour
Looking into various definitions, we can say that,
▪ Organization’s work get done through people.
▪ Individually or collectively.
▪ Used technology or collaboration with it.
▪ It’s a management task involved with,
▪ Understand- behavior pattern of individual,
group, organization.
▪ Predict- what behavior response during various
management actions.
▪ Control- How it can be control.
 Organizational Behaviour
To sum up,
▪ It’s study and application of knowledge.
▪ How people act within organization?
▪ It’s human tool for human benefits.
▪ It applies broadly to the behavior of
people.
▪ To all types of organization.
 Significance of Organizational Behaviour
Perhaps the most useful way to understand the importance of human
behavior is to know-
WHAT A MANAGER DOES?
His or her –function, roles, and skills.
“WHAT A MANAGER DOES”
Significance of Organizational Behaviour
 Significance of Organizational
Behaviour
1. Understand the organization and employee in a better way:
▪ Friendly and cordial relation between employees and
organization(Manager) create a proper work environment in
organization.
2.Motivate employee:
▪ OB helps managers to motivate employee.
▪ Motivation bring good organizational performance.
▪ OB help managers to apply appropriate motivational tools and
techniques in accordance with the nature of individual employee.
 Significance of Organizational
Behaviour
3. Improve industrial/labor relations:
▪ OB helps managers to understand the root cause of the problem.
Predict its future course of action and control its negative
consequences.
▪ It decreases dispute & and disciplinary problems, conflict, and
frustration.
4. Prediction & control of human behavior:
▪ One of the most important reasons to study OB is to learn how to
predict and control or manage human behavior in the
organization.
▪ If done properly it helps to bring organizational effectiveness.
 Significance of Organizational
Behaviour
5. Effective utilization of human resources:
▪ OB helps managers how to manage people effectively.
▪ It enables managers to inspire and motivate employees
towards higher productivity and better results.
Factors Affecting Organizational Behaviour
Key Element of OB
People

External Environment
Structure Technology
 Factors Affecting Organizational Behaviour
▪ Consists of individual, group( small-large), formal,
informal
▪ Group are dynamic- form, change and disband.
▪ Organization exist to serve people, people do not exist
to serve organization.
▪ Official relationship of people, different job, structure
relates power & duty. Ones decision affect the work of
other people.
▪ Allow people to do more and better work.
Factors Affecting Organizational Behaviour
Organization are influenced by external environment which includes
socio cultural, economic, political, legal, technological, external
influential factor.

Single organization does not exist alone.

It influence the activities of people and affect working condition.

 Foundation of Organizational Behaviour
Every field of social science( or even physical science) has a philosophical foundation of basic concepts
that guide its development. For example,
In Account,
For every debit, there will be a credit.
In Physic,
“Element’s nature are uniform”.
The law of gravity is supposed to
Operate uniformly in Kathmandu and
Toronto.
An atom of Hydrogen is
supposed to be identical in
Anywhere in the earth.
 Foundation/
Assumption of
Organizational
Behaviour
 Foundation/ Assumption of Organizational
Behaviour

Employee goals Super ordinate Mutual Employee

goal of mutual accomplishment
Organizational interest of goals Organization
goals

Figure: Mutuality of interest

 Level of Organizational Behaviour

A system is defined as the set of interrelated and interdependent component arranged in a

manner that produces a unified whole. The system is composed of a number of sub-systems and
all the subsystem are related to each other. Organizational behavior (OB) in a system
perspective consists of the following interacting and interrelated components.

Input: It provides stimulus to behavior

Processing: It can be at individual, group and organization level
Output: Outputs are the behavioral consequences
Feedback
 Level of OB Analysis/ Scope of OB
OB analysis the behavior of people in three levels.
1. Individual Level. Organization
2. Group level analysis. System level
3. Organization System level.
Group Level
Organizational Level

Group Level Individual Level

Individual
Level
Level of Organizational Behaviour
Contributing Discipline to Organizational Behaviour
Psychology
Individual
Sociology

Study of
Social Psychology Group Organizational
Behavior

Anthropology
Organization
Political Science
Contributing Discipline to
Organizational Behaviour
Contributing Discipline to Organizational Behaviour

Industrial Engineering: Concerned with productivity issues in organization like

workflow measurement, work-flow analysis and design etc.
Communication: Major developments in the communication system due to email
and internet.
Information System: The development of new information technology has greatly
affected team dynamics, decision-making practice and knowledge management.
Women's Studies: Topics like organizational power, perceptual biases, and sexual
harassment are drawn from women’s study.
Medicine: Studies on stress and its consequences in organization are taken from
medicine.
 Challenges and Opportunities for OB
(Critical Behavioral Issues Confronting the Manager)
Understanding organizational behavior has never been
more important for managers.
▪ Changes are happening in organization. The world has
changed a lot in the past few decades.
▪ Human being are complex.
▪ Two people act differently in same situation.
▪ The same person act differently in different situation.
 Challenges and Opportunities for OB
(Critical Behavioral Issues Confronting the Manager)

▪ Employee is getting older.

▪ The workforce is becoming increasingly diverse.
▪ Global competition requires employees to become more flexible and
cope with rapid change.
▪ Such changes are causing critical behavioral issues that are to be
managed by managers.
 Challenges and Some important Changing
Opportunities for OB changes in work employee
(Critical Behavioral Issues places expectation.
Confronting the Manager)
Declining loyalty Old age employee
towards working and minorities
organizations. among other.

The typical employee is getting older;

more women and people of color are in
the workplace.
 Challenges and Opportunities for OB
(Critical Behavioral Issues Confronting the Manager)
 Challanges and Opportunities for OB
(Critical Behavioral Issues Confronting the Manager)

▪ Corporate downsizing and the heavy

use of temporary workers.
▪ Managing people during uncertain
times.
▪ These challenges bring opportunities for
managers to use OB concepts.
 Challanges and Opportunities for OB
(Critical Behavioral Issues Confronting the Manager)

1. Globalization(Responding to Globalization)
To business executives,
A strategy of crossing national boundaries through globalized production and marketing
network.
To an economist,
An economic interdependence between countries covering increased trade, technology, labor
and capital flows.
To a political scientist
Integration of a global community in terms of idea, norms and values.
 Challanges and Opportunities for OB
(Critical Behavioral Issues Confronting the Manager)

Globalization is a free movement of goods, services, people, capital and

information's across national boundaries.
It is a process of integration of the world as one market.
Example,
McDonald’s sells hamburgers in more than 118 countries
KFC in Bharatpur.
Nepal sell its rugs in Europe and USA.
Mercedes and BMW in the United States and South Africa.
 Challenges and Opportunities for OB
(Critical Behavioral Issues Confronting the Manager)
▪ Challenges: Managing in a global company poses many different challenges and
opportunities.
▪ Value and beliefs differ sharply among cultures.
▪ How to learn and develop managerial abilities?
▪ How to deal with cross-cultural differences?
▪ How to design motivational packages?
▪ Increased Foreign Assignments
▪ Working with People from Different Cultures
▪ Overseeing the Movement of Jobs to Countries with Low-Cost Labor
▪ Adapting to Differing Cultural and Regulatory Norms
 Challenges and Opportunities for OB
(Critical Behavioral Issues Confronting the Manager)
Opportunities:
Globalization has also opened new avenues of opportunities
▪ Expanded market and revenue.
▪ Opportunity to learn new things.
▪ Required to work in foreign countries.
▪ Managers need to modify management practices to suit differences
among people from different cultures and countries.
 Challenges and Opportunities for OB
(Critical Behavioral Issues Confronting the Manager)
2.WorkforceDiversity:
Organizations are becoming more heterogeneous in terms of employees’
gender, age, race, ethnicity, sexual orientation, people of color, and other
characteristics. Managing this diversity is a global concern.
 Challenges and
Opportunities for
OB
(Critical Behavioral
Issues Confronting
the Manager)
 Challenges and Opportunities for OB
(Critical Behavioral Issues Confronting the Manager)
3. Improving Customer Service
Service employees include technical support representatives, fast-food
workers, sales clerks, nurses, automobile repair technicians, consultants,
financial planners, and flight attendants.

OB can provide considerable guidance in helping managers create such

cultures—in which employees establish rapport with customers, put
customers at ease, show genuine interest, and are sensitive to a customer’s
individual situation.
 Challenges and Opportunities for OB
(Critical Behavioral Issues Confronting the Manager)
4. Improving people skills
▪ Organization cannot be improved without the improvement of people.
▪ Managers should show their talent to implicate motivation theory, create
and manage effective work teams, and communicate and lead effectively.
▪ People skills are important for all levels of managers.
 Challenges and Opportunities for OB
(Critical Behavioral Issues Confronting the Manager)
5. Improving quality and productivity
Almost Every industry suffers from excess supply. Such as malls,
automobile/vehicles, restaurants, the telecom industry, etc.
▪ Managers need to improve productivity and product quality. Active
participation of employees is a must for this to happen. The tools used are
as follows.
“Almost quality improvement comes via simplification of design,
manufacturing, layout, processes and procedures” -Tom Peters
 Challenges and Opportunities for OB
(Critical Behavioral Issues Confronting the Manager)
▪ Improving quality and productivity
▪ Total Quality Management
▪ Quality Circle
▪ Re-engineering: The fundamental rethinking and radical redesign of
business processes to achieve dramatic improvements in critical,
contemporary measures of performance, such as cost, quality, service,
and speed.
 Challenges and Opportunities for OB
(Critical Behavioral Issues Confronting the Manager)
6. Managing change:
▪ Change is an ongoing activity for most organizations.
▪ Managing today is characterized by long periods of ongoing change.
▪ Workers need to continually update their knowledge and skills to cope
with new job requirements.
▪ Managers need to learn to cope with change.
▪ Managers stimulate innovation and change.
 Challenges and Opportunities for OB
(Critical Behavioral Issues Confronting the Manager)
7. Creating a Positive Work Environment:
An area of OB research that studies how organizations develop human
strengths, foster vitality/energy and resilience, and unlock potential.
 Challenges and Opportunities for OB
(Critical Behavioral Issues Confronting the Manager)
8. Ethical Behavior:
Situations in which individuals are required to define right and wrong
conduct.
Ethics involves moral issues and choices.
It deals with right or wrong behavior.
Managers should provide/ offer classes of interaction, seminars,
workshops, and training programs to try to improve ethical behaviors.
 Challenges and Opportunities for OB
(Critical Behavioral Issues Confronting the Manager)
9. Managing information technology:
▪ IT affects every function within the organization. The rapid changes in
information technology are changing skills requirements.
▪ E-commerce is getting popular.
▪ Computer-based virtual offices are increasing.
▪ Manager should manage the dimension of information technology.
 Challenges and Opportunities for OB
(Critical Behavioral Issues Confronting the Manager)
10. Balance work-life need:
People need organization and Organizations need people.
• Flextime- Determine their work schedule by the employee.
• Five-day week- work 40 hours in five days.
• Job sharing- two or more people share a job.
• Time bank plan- worker save their leave and holidays and utilize it in
any other way.
• Virtual office- employees work from home through computers and
Internet.
 Individual Behavior

All are equipped with certain instincts ( inborn), reflexes( automatic) and personal
abilities.
▪ Inherited characteristics:
▪ Learned Characteristics
Perception, Values, Personality, Attitude
According to KURT LEWIN,
People are influenced by a number of diversified factors, both genetic & and
environmental and the influence of these factors determines the pattern of
behavior.
 Individual Behavior
Gesture: A movement that you make with your hands, your head or your
face to show a particular mean.
Instincts: Inborn pattern of behaviour often responsive to specific stimuli.
Reflex: An action or a movement of your body that happen naturally in
response to something that you do without thinking.
Behaviour: The way that somebody behave especially towards other
people.
 Individual Behavior
He called his conception of these influences “THE FIELD THEORY” and suggested
that
B=f(P,E)
So, behavior(B) is a function (f) of the person(P) and environment(E) around him.
Each person’s behavior is product of
- Intelligence
- creativity
- personality
- adoptability
 Determinants of Individual Behavior

Goal
Belief
Need
Values
Attitudes
Emotions and behavior
 Goal
▪ Goal is the desired future state of affairs.
▪ They(individuals) pay their physical and mental effort to
achieve one or more specified goals.
▪ Without a goal individual effort would be meaningless.
▪ Goal motivate employees for better performance.
▪ It is a tool to manage motivation/guide action.
Goals are:
▪ Multiple
▪ Conflicting
▪ Future-oriented
▪ Succession
 Belief
▪ Belief represents ideas about someone or something and the
conclusions people draw about them.
▪ It conveys a sense of “what is” to the individual.
▪ Beliefs are cognition (The process by which knowledge and
understanding is developed in the mind) or thoughts about the
characteristic of objects.
▪ Beliefs can be based on knowledge, opinion, and faith.
▪ It is acquired or obtained from – parents, teachers, peer &
references.
▪ Past experiences
▪ Available information
▪ Generalization
 Belief
Feature of Belief:
Belief may be different from the fact.
Employees belief impact on their performances.
Common Beliefs in Nepalese Employee
▪ Financial benefits can be gained through strikes and agitation.
▪ The private sector provides low job security.
▪ Money is a strong motivating factor for workers in an organization.
▪ Nepalese decision-makers believe that the more power you hold, the
more you are recognized in society.
 Emotions
Emotions are intense feelings that are directed at someone or something.
Emotions were an inseparable part of everyday life.
Emotion felt and displayed.
Intense, discrete (separate), and short-lived feeling experiences that are often
caused by a specific event.
How many emotions are there? There are dozens, including anger, contempt,
enthusiasm, envy, fear, frustration, disappointment, embarrassment, disgust,
happiness, hate, hope, jealousy, joy, love, pride, surprise, and sadness.
Many researchers agree on six universal emotions—anger, fear, sadness,
happiness, disgust, and surprise.
Emotions
 Needs
▪ Anything an individual requires or wants
▪ A need is a lack or deficit of something within the system or organism.
▪ The actual process of motivation starts with the identification of needs.
▪ Needs are the starting point of individual behavior.
▪ Needs serve as a stimulus for action, and It triggers behavior.
▪ The stronger the needs that we have the more we are motivated to fulfill
these needs.
▪ Weak or satisfied needs cannot motivate employee to put in effort on the
job.
 Needs
▪ Unsatisfied needs cause tension within an individual.
▪ Individuals have different needs.
This can be two type:
Primary needs: They are basic physical needs that include food, water,
shelter, and safety.
Secondary needs: Secondary needs are social and psychological needs
including belonging and affection, self-esteem, and the need for achievement.
These needs are valuable in our career-making process.
Need, Want, Satisfaction chain.
 Needs
.
Give
Give rise Wants Tension
Need
Need Wants Which
Which cause
cause Tension
rise
to to

Which
Which give rise
give rise to Which result
Action
Action Which result in Satisfaction
Satisfaction
to in
 Values

Value is a basic understanding or conviction of an individual as,

- What is right?
- What is good or desirable?
Values generally identify an individual’s ethical/ moral structure on
which the concept of good, bad, right, and wrong is based.
 Values

Types of values.
1. Terminal Values:
Terminal values represent the desirable end-states of existence:
The goals an individual would like to achieve during his/her
lifetime.

2. Instrumental values:
Refers to the preferable mode of behavior or means of achieving
one’s terminal values.
Types of Values
 Attitudes
.
 Attitude
▪ Attitudes are evaluative statements—either favorable or
unfavorable—about objects, people, or events.

▪ Attitudes are complex.

▪ Ask Job holders their attitudes toward their job, you

may get simple responses (e.g., “No, I hate my work,”
“Being an …….. is fantastic!” etc.)

▪ The underlying reasons are likely more complicated.

 Attitude
▪ Evaluative statements or judgments concerning
objects, people, or events.
▪ They reflect how we feel about something.
▪ A simple response is attitude.
▪ Attitudes towards cars, buses, bikes, persons,
groups of people, etc.
▪ “Attitudes are Evaluative statements or judgments
concerning objects, people or events”- S.P. Robbins.
▪ Attitudes are the collection of beliefs, feelings,
and behavioral intentions towards an object.
 Components of Attitudes
▪ Cognitive component:(beliefs, opinions, knowledge or information
held by individuals.) “My pay is low”. The opinion or belief
segment of an attitude.
▪ Affective component:(feeling, sentiments, moods, and emotions
about some person idea, event, or object.)“I am angry over how
little I’m paid”. The emotional or feeling segment of an attitude.
▪ Behavioral component: (the predisposition to act on a favorable or
unfavorable evaluation of something.)“I am going to look for
another job that pays better” An intention to behave in a certain
way toward someone or something.
Component of
Attitude
 Attitude formation
▪ Experience: Working in a company- factors like salary, and
performance appraisal.
▪ Association: Like age, race, income class, region, religion,
educational background.
▪ Family: An Individual’s initial core part of attitudes is largely
shaped by family/ parents.
▪ Peer groups:
▪ Society: Social class, religious affiliation, culture, structure of
society, etc.
 Types of Attitude

▪ Job Satisfaction:
• An individual’s general attitude toward his/her job.
• A positive feeling about one’s job resulting from an evaluation of its
characteristics.
• A high level of job satisfaction equals positive attitudes toward the
job and vice versa.
• It is a positive feeling about a job resulting from an evaluation of its
characteristics.
• While a dissatisfied person holds negative feelings.
 Outcomes of job satisfaction:
▪ Job Performance
▪ Organizational Citizenship Behavior (OCB)
▪ Psychological empowerment
▪ Customer Satisfaction
▪ Life Satisfaction
The impact of job dissatisfaction:
▪ Neglect response, Absenteeism, Turnover
▪ Counterproductive work behavior (CWB): Actions that actively damage the organization,
including stealing, behaving aggressively toward co-workers, or being late or absent.
 Types of Attitude
▪ Job Involvement:
• The degree to which a person identifies with a job, actively participates
in it and considers performance important to self-worth.
• High levels of job involvement
• Fewer absences and lower resignation rates
• Actively participative in it and
• Consider job performance important to self-worth.
• Empowering (psychological empowerment) participate in the decision-
making process.
 Types of Attitude
Organizational Commitment: The degree to which an employee identifies with a
particular organization and its goals and wishes to maintain membership in the
organization. "Do not hire a man who does your work for money, but him who does it
for the love of it“- Henry David Thoreau
▪ Affective Commitment- Emotional attachment to the organization and a belief in its
value.
▪ Continuance Commitment- The perceived economic value of remaining with an
organization compared to leaving it.
▪ Normative Commitment- An obligation to remain with an organization for moral
or ethical reason.
High level of organizational commitment of employee produce - low level of
absenteeism and low turnover.
 Implications for Manager
The major job attitudes-job satisfaction, job involvement, organizational
commitment,
▪ Remember that an employee’s job satisfaction level is the best single
predictor of behavior.
▪ Pay attention to your employees’ job satisfaction levels as determinants of
their performance, turnover, absenteeism, and withdrawal behaviors.
▪ Measure employee job attitudes at regular intervals to determine how
employees are reacting to their work.
▪ Consider the fact that high pay alone is unlikely to create a satisfying work
environment.