UNIT - 1 (Incomplete)

Organizational behaviour
❖ It is the systematic study and careful application of knowledge about how people–as
individuals and as groups–act within organizations
❖ Strives to identify ways in which ppl can act more effectively
❖ It is a scientific discipline - backed by a large number of research studies
❖ Also an applied science i.e. info about effective practices in one organisation is extended
to others
❖ Provides tools at many levels of analysis - Levels of analysis:
➢ Individual level
■ OB helps managers look at the behaviour of individuals within an
organisation
■ Helps understand the complexities involved in interpersonal relations ,
when 2 ppl interact
➢ Group level
■ OB helps in examining the dynamics of relationships within small groups
(formal/informal)
■ Helps in understanding the intergroup relations that emerge when 2 or
more groups coordinate
➢ Organisation level
■ OB helps in viewing organizations as whole systems
❖ Goals
➢ To describe, understand, predict and control human behaviour at work
➢ Goals of organisational behaviour:
■ To systematically describe how ppl behave under a variety of conditions
● This helps managers communicate about human behaviour at
work
■ To understand why ppl behave as they do
● Managers try to find the reasons behind employees' actions
■ To predict future employee behaviour
● Eg: Managers will be able to predict which ones would be
productive and which ones would be absent, disruptive etc - helps
managers take preventive actions
■ To control (at least partially) and develop some human activity at work
● Since they are responsible for performance outcomes, they have
to make an impact on employee behaviour, skill development,
team effort and productivity
➢ OB helps to improve results through the actions taken by the managers and the
employees
➢ OB is a human tool for human benefit
➢ Applies to human behaviour in all types of organisations such as businesses,
schools, government and service operations
❖ Forces affecting the nature of organisations:
➢ People
 ■ They make up the internal social system of the organisation
■ The systems consists of:
● Individuals and groups
● Small groups and large groups
● unofficial/informal groups and official/formal groups
■ Groups are dynamic - They form, change and disband
■ Ppl are the living, thinking, feeling beings who work in the org to achieve
their objectives
■ Organisations exist to serve ppl; ppl don’t exist to serve organisations
■ Workforce today is diverse - different educational backgrounds, talents &
perspectives
■ This diversity may cause challenges for managers (Eg: every employee
has different values and goals/ different lifestyles & interests) - So,
managers need to be prepared to adapt to them
■ Changes in the labour force:
● Decline in work ethic
● More emphasis on leisure, self-expression, fulfillment, and
personal growth
● Automatic acceptance of authority has decreased
● Desire for participation, autonomy and control have increased
● Major factors affecting the workforce:
◆ Skills become obsolete due to technological advances -
manual workers need to be retrained
◆ Security needs have increased due to the threat of
downsizings/shortcomings - land loyalty diminishes
◆ More emphasis on money is placed
■ These changes place new emphasis on leadership ability
■ Factors that motivate present workforce:
● Demonstrating a sense of caring
● Really listening to employees
● Being concerned with both competence and relationships
■ Managers should respond to a diverse workforce by
● Building pride without devaluing others
● Empowering some without exploiting others
● Demonstrating openness, confidence, authentic compassion, and
vulnerability
➢ Structure
■ Defines the formal relationship and use of people in organisations
■ Different jobs are needed to accomplish all of an organisation’s activities
■ These have to be related in a structural way so that their work can be
effectively coordinated
■ These relationships create complex problems of cooperation, negotiation
and decision making
 ■ Many org structures have become flatter i.e. containing fewer levels by
cutting middle-management positions - occurred due to the pressure to
lower costs while remaining competitive
■ Some structures have grown more complex - due to mergers,
acquisitions, and new ventures
■ Some organisations hire contingent workforces - temporary, part time or
contract employees
■ Many firms have moved from a traditional to a team-based structure
➢ Technology
■ It provides the resources with which ppl work and affects the tasks they
perform
■ Significantly influences working relationships - Eg: Assembly line is
different from a research lab; A steel mill’s working conditions are
different from a hospital’s
■ PRO: Allows to do more and better work
■ Has its cons too
■ Examples of impact of technology:
● Increasing use of robots and automated control systems in
assembly lines
● Shift from a manufacturing to a service economy
● Advances in computer hardware and software capabilities
● Widespread use of internet
● The need to respond to societal demands for improved quality of
goods/services at acceptable prices
■ These advances have increased pressure on OB to maintain the balance
between technical and social systems
➢ Environment
■ All organisations operate within an internal and external environment
■ Organisations are part of a larger system that contains other elements
such as the government, family, and other organisations
■ Changes in the environment create demands on the organisations
■ Factors affecting OB:
● Citizens expect org to be socially responsible
● New products and competitions for customers come from around
the globe
● The direct impact of unions diminishes
● The dramatic pace of change in society quickens
● Rapid globalisation of the marketplace
■ Individual organisations (Eg: factory, school) are influenced by the
external environment
■ It influences people’s attitudes, working conditions and provides
competition for resources and power
❖ Positive characteristics of the OB field
➢ Interdisciplinary nature
 ■ It integrates behavioural sciences (the systematic body of knowledge
pertaining to why and how ppl behave as they do) with other social
sciences
■ Applies ideas from these disciplines to improve relationships between ppl
and organizations
➢ Emerging base of research knowledge, models and conceptual frameworks
■ OB’s success is due to theory development, research and managerial
practice
■ Theories:
● Offer explanations of how and why ppl think, feel, and act as they
do
● Identify important variables and link them to form tentative
propositions that can tested through research
● Good theories are also practical - address significant behavioural
issues, contribute to understanding and provide guidelines for
managerial thought and action
■ Research:
● The process of gathering and interpreting relevant evidence that
will either support a behavioural theory or help change it
● Hypotheses - testable statements connecting the variables in
theory and - guide the process of data collection
● Various research methods are used to collect the data
● Results affect future managerial practices
■ Practice:
● It is the conscious application of conceptual models and research
results in order to improve individual and organisational
performance at work
● Managers apply theoretical models to structure their thinking &
use research results to guide their own situations
● Managers also play a vital role in the devpt of theory and conduct
of research
● Feedback from practitioners can suggest whether theories are
simple/complex, realistic/artificial, useful or useless
● Organisations serve as research sites and are subjects for various
research studies
● Better models should be developed, theory based research needs
to be conducted and managers need to be receptive to both
sources and apply them to their work
➢ Increasing acceptance of theory and research by managers
■ Managers are receptive to new models, they support research and
experiment with new ideas
■ Certain kinds of organizational practices when coupled with theory devpt
and research produce improved performance
Fundamental concepts
❖ The concepts of OB are based on 2 key elements:
➢ Nature of people
■ Individual differences
● All ppl are different (tho they have some common stuff) - this is
backed by science
● This diversity needs to be recognised and viewed as a valuable
asset to organizations
● Each person is unique (the impact of nature) and individual
experiences makes ppl even more different (the influence of
nurture)
● Individual differences mean that managers can motivate
employees by treating them differently
● This requires managers to approach to be individual and not
statistical
● The law of individual differences - The belief that each person is
different from all others
■ Perception
● It refers to the unique way in which each person sees, organises
and interprets things
● Their view of the objective environment is filtered by perception
● Employees see their work lives differently due to various reasons
such as different personalities, needs, demographic factors and
past experiences
● Whatever the reason, they tend to act based on their perceptions
● This way of reacting reflects the process of selective perception -
paying attention to those features of the work environment that are
consistent with/reinforce one’s own expectations
◆ These cause misinterpretations of events at work
◆ Can lead to future rigidity in search for new experiences
 ● Managers must learn to expect perceptual differences, accept ppl
as emotional beings and manage them in individual ways
■ A whole person
● Ppl function as total human beings
● Home life isn’t separable from work life; emotional conditions
aren’t separable from physical conditions - which means that
organizations employ ppl as a whole rather than certain
characteristics
● When applying principles of OB, the management tries to not only
develop a better employee but also a better person in terms of
growth and fulfillment
● Management needs to care about the job’s effect on the whole
person
● If the whole person can be improved then the benefits will extend
beyond the firm into the larger society in which employees live
■ Motivated behaviour
● People are motivated by what they want
● To an observer, a person’s needs may be unrealistic but they are
still controlling
● Management can motivate ppl in 2 ways:
◆ They can show how certain actions would increase their
need fulfillment - (this is a better approach)
◆ They can threaten decreased need fulfillment if they follow
an undesirable course of action
■ Desire for involvement
● Employees are actively seeking opportunities to become involved
in relevant decisions, thereby contributing to the organisation’s
success
● They want to share what they know and to learn from the
experience
● Organisations need to provide opportunities for meaningful
involvement - this can be achieved through employee
empowerment (benefits both parties)
■ Value of the person
● Ppl want to be treated with care, respect and dignity; and they
demand such treatment from employers
● They refuse to be treated like tools
● They want to be valued for their skills and abilities and to be
provided with opportunities to develop themselves
➢ Nature of the organisations
■ Social systems
● Organizations are social systems
● Its activities are governed by psychological and social laws
● Ppl have social roles and status
 ● Ppl’s behaviour is influenced by their group as well as individual
drives
● 2 types of social systems exist in organizations:
◆ Formal (official) social system
◆ Informal social system
● The existence of a social system implies that the organizational
environment is dynamic
● All parts of the system are interdependent and each is subject to
influence by any other part
● A social system provides a framework for analyzing organizational
behaviour issues
● It helps make organizational behaviour problems understandable
and manageable
■ Mutual interest
● Organisations need ppl and ppl need organisations
● They are formed on the basis of mutuality of interest - Managers
need employees to help them reach organizational objectives; ppl
need organisations to help them reach individual objectives
● Mutual interest provides a superordinate goal - one that can be
attained only through the integrated efforts +of individuals and
their employees
■ Ethics
● It is the use of moral principles and values to affect the behaviour
of individuals and organisations with regard to choices between
what is right and wrong
● To attract and retain employees, they must be treated ethically
● Companies have
◆ Established code of ethics
◆ Publicized statement of ethical values
◆ Provided ethics training
◆ Rewarded employees for notable ethical behaviour
◆ Publicised positive role models
◆ Set up internal procedures to handle misconduct
● When the organisation’s goals and actions are ethical, individual,
organisational and social objectives are more likely to be met
● Benefits:
◆ Ppl find more satisfaction in work
◆ They learn, grow and contribute
◆ Organisation is more successful since it operates
effectively
◆ Better quality, improved service, reduced costs
◆ Benefits society by producing better products/services,
more capable citizens and an environment of cooperation
and progress
Models of organizational behaviour
❖ Different models give varying results
❖ These models constitute the belief system that affects management’s thought and
actions in each organisation
❖ Douglas McGregor - one of the first ppl to give importance to managerial models - In
1957, he stated that:
➢ Most management actions flow directly from whatever theory of human
behaviour the managers hold
➢ Management philosophy controls practice
➢ Management’s human resource policies, decision making styles, operating
practices, and organizational designs flow from key assumptions about human
behavior
➢ The assumptions may be implicit rather than explicit, but they can be inferred
from observing the actions of the manager
❖ Theory X:
➢ A traditional set of assumptions about people
➢ Assumes that most people dislike work and will try to avoid it if they can
➢ Workers are seen as being inclined to restrict work output, having little ambition,
and avoiding responsibility if at all possible
➢ They are believed to be relatively self-centered, indifferent to organizational
needs, and resistant to change
➢ Common rewards cannot overcome this natural dislike for work, so management
is almost forced to coerce, control, and threaten employees to obtain satisfactory
performance
➢ Though managers may deny that they hold this view of people, many of their
historical actions suggest that Theory X has been a typical management view of
employees
❖ Theory Y:
➢ Implies a more humanistic and supportive approach to managing people
➢ Assumes that people are not inherently lazy
➢ Even if they are lazy, it would be due to their experiences with less-enlightened
organizations, and if management provides the proper environment, they’ll work
➢ Assumes that employees are capable of exercising self-direction and self-control
in achieving their objectives
➢ Management's role: to provide an environment in which the potential of people
can be released at work
❖

❖ McGregor's argument:
➢ Management had been following an outdated set of assumptions about people
because it adhered to Theory X when the facts are that the Theory Y set of
assumptions is more truly representative of most people
➢ So, it needed to change to a whole new set of assumptions about people
➢ He stimulated subsequent generations of managers to think consciously about
their belief systems and management models
➢ He was an early advocate of the practical value of reading and using research
findings to better understand human behavior.
➢ He introduced and publicized one of the early theories of motivation - the
hierarchy of needs model by A. H. Maslow.
➢ He emphasised the need to bring human values into balance with other values at
work.
❖ Models such as Theory X and Theory Y are also called “paradigms” - frameworks of
possible explanations about how things work
❖ Any model that a manager holds usually begins with certain assumptions about people
and leads to certain interpretations, implications, and even predictions of events
❖ Managers tend to act as they think, because they are guided by their dominant thoughts.
❖ Managerial paradigms act in important ways:
➢ They influence managerial perceptions of the world around them.
➢ They define one's boundaries and provide prescriptions for how to behave.
➢ They encourage resistance to change, since they have often worked in the past
➢ They may either consciously or unconsciously affect one’s behaviour
➢ When new paradigms appear, they provide alternative ways of viewing the world
and solving problems
❖ 5 models (paradigms): autocratic, custodial, supportive, collegial, and system
❖ Models may vary within the departments/branches; a manager’s preferences may differ
from the model prevailing in the organisation
❖ Factors that determine selection of a model:
➢ Philosophy
➢ Values
➢ Vision, mission & goals of managers
➢ Environmental conditions
❖

❖ The autocratic model

➢ The prevailing model of the industrial revolution
➢ Depends on power - they have the power to demand ppl to work and penalise
them if orders are not followed
➢ Managerial orientation: formal, official authority
➢ Management knows what’s best - employees just follow orders
➢ Assumes that employees have to be directed, persuaded and pushed to work -
so, the management’s task is to prompt
➢ This view leads to tight control of employees
➢ This model is disliked by many employees
➢ Employee orientation: obedience to a boss, not respect to a manager
➢ Psychological result for employees: dependence on their boss - since they have
the power to hire and fire them
➢ Minimum wages are paid cuz minimum performance is given by employees -
some may perform higher due to factors such as liking their boss
➢ They are willing to do minimum performance cuz they must satisfy their
subsistence needs
➢ This model is not a complete failure - useful to get work done
 ➢ Eg: used for building railroad systems, operating steel mills
➢ Main weakness: High human costs
➢ It adopts “micromanagement”:
■ The immersion of a manager into controlling the details of daily
operations
■ Micromanagers tend to:
● Control and manipulate time
● Place their self interest above that of employees
● Establish long approval processes
● Specify detailed procedures for everything
● Closely monitor results
■ Employees dislike this - results in low morale, paralysed decision making
and high turnover
➢ Can be useful under conditions such as an organisational crisis
❖ The custodial model
➢ This model came up in order to:
■ Develop better employee satisfaction and security
■ Remove insecurities, frustrations and aggressions of employees so that
they would like working
■ Have a better quality of life
➢ It focuses on satisfying the security needs of employees
➢ 1890s and 1900s - companies began welfare programs (later known as
paternalism)
➢ 1930s - the programs evolved into fringe benefits to provide employee security
➢ Custodial approach depends on economic resources
➢ Managerial orientation: towards money (to pay wages and benefits)
➢ Employee orientation: security and benefits
➢ This approach leads to employee dependence on the organisation
➢ Employees become focused on economic rewards and benefits - so they are well
trained and reasonably contented
➢ But, contentment does not necessarily produce motivation; it may produce only
passive cooperation - so they don’t perform much more effectively than
autocratic
➢ Emphasises on material rewards, security and organisational dependence
➢ Cons:
■ Employees aren’t producing up to their capacities
■ They are not motivated
❖ The supportive model
➢ Originates from “the principle of supportive relationships” (by Likert) - states that
the leadership of the organisation should be such that each member feels
supported in all their interactions & relationships with the organisation and it
should build and maintain their sense of personal worth and importance
➢ This started with a series of research studies done by Elton Mayo & F. J.
Roethlisberger - stated that:
 ■ Organisation is a social system - worker is the most important element -
they are a complex personality that is difficult to understand
■ Understanding group dynamics and application of supportive supervision
is important
➢ Model depends on leadership instead of power or money
➢ Through leadership, management helps employees grow and accomplish what
they are capable of
➢ Employees are helped to become productive
➢ The leader assumes that workers are not passive or resistant to organisational
needs but that they are made so by an inadequately supportive work
environment
➢ Management orientation: to support employee’s job performance
➢ Employee orientation: job performance
➢ Psychological result due to support received: participation and task involvement
➢ Employees are more strongly motivated since their status and recognition needs
are met - hence, they have awakened drives for work
➢ Manager role: to help employees solve their problems and accomplish their work
➢ Model works well with employees and managers
➢ It is effective in wealthy nations cuz it responds to a wide range of employees’
needs
➢ Difficult in developing nations where needs and social conditions are different
❖ The collegial model
➢ Extension of the supportive model
➢ “Collegial” - relates to a body of people working together cooperatively
➢ Embodies a team concept
➢ Less used on assembly lines; used more with unprogrammed work, an
intellectual environment, and job freedom
➢ Depends on management’s building a feeling of partnership with employees (Eg:
by setting up fun committees, not using terms like “bossess” and subordinates”)
➢ So, employees feel needed and useful
➢ They feel that managers are also contributing - so, its easier for them to respect
them
➢ Managers are seen as joint contributors rather than bosses
➢ Managerial orientation: teamwork
➢ Manager acts like a coach
➢ Employee orientation: responsibility
➢ Eg: Employees produce quality work bcuz they want to and not becuz they are
told to - they feel that it's their obligation
➢ Psychological result: self-discipline
➢ Employees normally feel some degree of fulfillment, worthwhile contribution and
self-actualisation
➢ Self actualisation leads to moderate enthusiasm in performance
➢ This model produces improved results where appropriate
❖ The system model
➢ It is the result of a search for higher meaning at work - this talks about
“spirituality”
■ Spirituality - desire for employees to know their deepest selves better, to
grow personally, to make a meaningful contribution to society and to
demonstrate integrity in every action taken - can be done through
reading, meditation, journal writing, workshops, etc
■ Incorporates the principle of self-awareness and encourages ppl to “know
themselves” while respecting others’ moral and religious beliefs
➢ Employees want a work context that is ethical, has integrity and trust and
provides opportunities to experience a sense of community among co-workers
➢ The model depends on trust, community and meaning
➢ To achieve this, managers must show a sense of caring and compassion, and
should be sensitive to the rapidly changing needs of the workforce (Managerial
orientation: caring, compassion)
➢ It follows “positive organisational behaviour” - managers focus attention on
helping employees develop feelings of hope, optimism, self-confidence, empathy,
trustworthiness, esteem, courage and resilience
➢ Managers work to develop a positive workplace culture that leads to
organisational success and committed employees
➢ Managers need to display:
■ Authenticity - the ability to open themselves up to others by being
transparent
■ Social intelligence
● Strategic social awareness for managers
● Has 5 dimensions:
◆ Empathy - appreciation for, and connectedness with,
others
◆ Presence - projecting self-worth in one’s bearing
◆ Situational radar - ability to read social situations and
respond appropriately
◆ Clarity - using language effectively to explain and persuade
◆ Authenticity - being “real” and transparent, while projecting
honesty
➢ Role of manager: facilitating employee accomplishments through a variety of
actions - such as:
 ■

➢ Employees embrace the goal of organisational effectiveness and see the

company-employee obligations from a system viewpoint
➢ They experience a sense of psychological ownership for the organisation
➢ They reach a state of self-motivation - take responsibility for their own goals and
actions
➢ A wide range of needs are met and it includes the highest-order needs (Eg:
social, status, esteem, autonomy, self-actualisation)
➢ This model boosts employees’ passion and commitment to organisational goals
➢ Eg: Starbucks - managers recognise outstanding achievements and their
passions, promote an open environment, award stock options - results in
effective customer service, new product ideas, employee loyalty and low turnover
rates

Communication
❖ The transfer of information and understanding from one person to another person
❖ A way of reaching others by transmitting ideas, facts, thoughts, feelings and values
❖ Goal: to have the receiver understand the message intended
❖ Effective communication provides a bridge of meaning between the 2 people and avoids
misunderstanding
❖ Always involves at least 2 ppl - a sender and a receiver

The importance of communication

❖ Organisations cannot exist without communication
❖ If no communication - employees don’t know what co-workers are doing, management
doesn’t receive inputs - coordination and cooperation is impossible - organisation will
collapse
❖ Every act of communication influences the organisation in some way
❖ Communication helps accomplish basic management functions - planning, organising,
leading and controlling - so that they can achieve their goals
❖ Effective communication encourages better performance and job satisfaction
 ❖ Open communication is better than restricted communication i.e. if employees know the
problems faced by the organisation and hear what the managers say, they will respond
favourably
❖ Open-book management
➢ Follows open and transparent communication
➢ Provide employees with the company’s financial and operating numbers enabling
them to independently track and understand the organisation's performance
➢ Then they are provided training and are expected to take appropriate action to
improve those numbers
❖ Open communication works best when:
➢ Employees understand the business
➢ Trust that they’ll receive benefits
➢ They are empowered to run the workplace
❖ Managers need timely, useful information to make sound decisions
❖ Inadequate/poor data can affect performance cuz managerial decisions affect many ppl
and activities

The two-way communication process

❖ The method by which a sender reaches a receiver with a message
❖ 8 steps:
➢ Develop an idea
■ A key step; unless there is a worthwhile message, all the other steps are
useless
➢ Encode
■ The idea should be converted into suitable words, charts, or other
symbols for transmission
■ Sender determines the method of transmission so that the idea can be
appropriately encoded
■ Key to successful encoding: framing an issue for presentation
● It uses rich, colourful, carefully selected language to shape the
perceptions of recipients
● Sender frames an issues by placing it in a particular context to
convey the intended meaning - perceptions are influenced through
the context provided
● Eg: framing competition for new customers as an “opportunity”
rather than a “problem”
● Helps managers create vivid images and memorable messages -
shapes that attitudes & action of followers
➢ Transmit
■ Message is transmitted by the method chosen such as memo, phone call
or personal visit
■ Sender chooses a certain channel and communicates with careful timing -
Eg: sender decides not to communicate about the pay rise today
 ■ Sender tries to keep the communication channel free of barriers - Eg:
trying to reduce distraction during interview
➢ Receive
■ The initiative transfers to the receiver, who tunes in to receive the
message
■ If the receiver does not function, the message is lost
■ The receiver controls steps 4 to 8
➢ Decode
■ Message has to be decoded so that it can be understood
■
➢ Accept
➢ Use
➢ Provide feedback

Communication barriers
❖ Personal
❖ Physical
❖ Semantic