ORGANIZATION THEORY AND BEHAVIOUR

Introduction to basic concepts

 Organization

 Organization comprises of two or more people engaged in a

systematic and harmonized effort, persistently over a period of
time in pursuit of goals.
 According to Gary Johns, ‘Organizations’ are social inventions for
accomplishing goals through group efforts.
 The word organisation is known to refer to a scale of operation that
requires the involvement of two or more persons to achieve.
 Organisation is a consciously coordinated social unit,
composed of two or more people that functions on a relatively
continuous basis to achieve a common goal or set of goals.

 Behavior

Behavior is defined as what people do which can be observed or measured.

 Organizational Theory
 Organizational theory examines the structure, functioning, and
performance of organizations, as well as the behavior of individuals and
groups within them. It consists of interrelated concepts, definitions, and
propositions that offer a systematic view of how individuals, groups, and
sub-groups interact in structured, goal-oriented activities.
 According to S.P. Robbins, organizational theory is a discipline that studies
the structure and design of organizations. It explains how organizations
are structured and provides recommendations on how they can be
designed to enhance effectiveness. This theory helps individuals
understand, diagnose, and respond to organizational needs and
challenges.

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Objectives of Organizational Theory:

a) To provide a general framework for understanding and explaining behavioural

patterns in organizations.
b) To establish a scientific foundation for managerial actions aimed at predicting,
controlling, and influencing behaviour to enhance organizational effectiveness.

 Organizational theory serves as a foundation for various management

activities in business. However, it is not a uniform science based on
universally accepted principles, as different perspectives and approaches
exist within the field.

 Organizational Behavior
 Organizational behavior 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 organiz at ion’ s
effectiveness.
 Organizational Behaviour (OB) is the study of how individuals, groups, and
structures influence behaviour within organizations, aiming to improve
effectiveness.
 It draws from multiple disciplines, including psychology, sociology, and
political science, to analyse workplace interactions, motivation, leadership,
and team dynamics. By understanding and applying OB principles,
organizations can enhance communication, performance, and overall
efficiency.

Features of an Organisation
 An organization can be understood as a structured group of people
coming together to achieve common objectives.

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 1. It is a social unit
An organization functions as a social entity composed of individuals who
interact and work together in a structured manner. It exists as a group
rather than a solitary entity, where people share social relationships and
collaborate toward achieving organizational goals. The social dimension of
an organization influences communication, teamwork, and overall culture,
which plays a significant role in determining its success. The social
interactions within the organization can foster motivation, creativity, and a
sense of belonging among members.
2. It is consciously established and coordinated
Organizations are not created by accident or randomly. There is a
deliberate effort to form them, often by individuals who recognize a need
or opportunity. The establishment of an organization involves intentional
planning, structuring, and coordination of resources, roles, and
responsibilities to ensure that it operates effectively and efficiently. This
conscious establishment is supported by leadership and management
efforts that provide direction, oversight, and control, ensuring that the
organization stays on track in achieving its objectives.
3. It is composed of two or more persons
A fundamental characteristic of any organization is that it involves multiple
individuals. Organizations are built on collaboration and require a
minimum of two people working together toward common goals. The
number of people involved can vary, but the key point is that organizations
are based on human cooperation. The relationships, roles, and
interdependencies between these individuals are essential for the
organization’s functioning. This composition also includes the various
hierarchies, teams, and functions that define how people work together to
accomplish tasks.
4. It functions on a relatively continuous basis
An organization is not a temporary or one-off entity; it functions
continuously over time. This feature highlights the ongoing nature of
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 organizational activities, whether it involves day-to-day operations or long-
term projects. Organizations have systems, structures, and processes that
allow them to operate consistently, even as individuals come and go or as
the external environment changes. This continuity is important for
maintaining momentum toward achieving organizational goals and
adapting to evolving challenges or opportunities.
5. It is aimed at achieving a common goal or set of goals
At the heart of every organization is the pursuit of a common objective or
set of objectives. This is what differentiates an organization from a random
group of individuals. The goals can vary greatly depending on the type of
organization—some may focus on producing goods or services, others on
distributing or consuming them, and some may have social, educational,
or charitable aims. Regardless of the specific nature of the goal, the
organization's members work in concert to ensure the achievement of
these objectives. A clear sense of purpose provides focus, motivation, and
direction for the individuals involved in the organization.

Importance of studying organizational behavior

 The pace of change in organization is accelerating and transformation is
occurring at various workplaces.
 Therefore, is time for organization, to know how to combat change for the
prosperity of organizations.
 Understanding organizational behaviour is essential for managing these
changes effectively.
 Below are some key reasons why studying organizational
behaviour is important:

i. Managing Change Effectively:

Studying organizational behaviour equips managers with the knowledge to

understand and manage change within an organization. By recognizing how

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 individuals and groups respond to change, leaders can implement strategies
to minimize resistance and foster a positive transition.

ii. Enhancing Employee Motivation and Performance:

Understanding the factors that motivate employees helps organizations

design incentive systems that increase job satisfaction and improve
performance. It enables organizations to align individual goals with
organizational objectives, fostering greater productivity.

iii. Improving Leadership and Management Skills:

Knowledge of organizational behavior aids in developing effective leadership

styles that can inspire and guide employees towards achieving organizational
goals. It helps managers to communicate more effectively, build trust, and
create a work environment that encourages collaboration and innovation.

iv. Promoting Positive Work Culture and Environment:

Studying organizational behaviour helps in creating a positive workplace

culture by identifying behaviours that contribute to a supportive and
productive environment. It encourages the development of norms, values,
and ethical standards that enhance employee engagement and reduce
conflict.

v. Fostering Effective Communication:

Understanding communication dynamics within an organization is critical for

preventing misunderstandings and ensuring that messages are delivered and
received accurately. Effective communication fosters better relationships,
improves teamwork, and supports organizational efficiency.

vi. Enhancing Organizational Efficiency and Adaptability:

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 By understanding the behaviour of employees and groups, organizations can
streamline processes, reduce inefficiencies, and adapt to changes in the
external environment more easily. It helps organizations remain competitive
and responsive to market demands and internal challenges.

vii. Conflict Resolution:

Organizational behaviour knowledge equips leaders and employees with the

skills to identify, manage, and resolve conflicts in a constructive manner. It
promotes a conflict-resolution culture, ensuring that disagreements do not
negatively impact organizational performance.

viii. Improving Decision-Making Processes:

By studying how individuals make decisions within organizations, managers

can implement more effective decision-making strategies that align with
organizational goals. It helps in reducing bias, improving the quality of
decisions, and fostering accountability in decision-making.

ix. Facilitating Employee Development and Training:

A deeper understanding of organizational behaviour allows managers to

identify areas for employee development, enabling the design of targeted
training programs that enhance skills and competencies. It ensures that
employees remain adaptable and equipped to meet the challenges of a
rapidly changing workplace.

x. Supporting Organizational Change and Innovation:

Organizational behaviour studies enable managers to foster a culture of

innovation by understanding the factors that encourage creativity and risk-
taking among employees. It helps organizations anticipate and adapt to new

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 trends, technologies, and market demands, leading to sustained growth and
prosperity.

Management Theory and Organizational Behaviour (Evolution of OTB)

 Industrial Revolution Influence: The Industrial Revolution drove

changes in management styles, company policies, and organizational
culture, leading to rapid business growth and the need for structured
workflow adjustments.
 Taylor’s Scientific Management: Taylor’s theory emphasized efficiency
and productivity but lacked a human-centred approach, which later led to
the development of the human relations movement in organizational
behaviour.
 Human Relations Management: The Hawthorne Studies highlighted the
importance of employee attention and group dynamics in productivity,
shifting focus from pure efficiency to the role of individuals and teams in
organizational success.
 McGregor’s Theory X & Y: Theory X views employees as inherently lazy,
while Theory Y sees them as motivated; Theory Y became a key foundation
of organizational behaviour by emphasizing trust, motivation, and
teamwork.

NB: Recognition of Organizational Behavior: Though influenced by

various management theories, organizational behavior was officially
recognized as a distinct field in the 1970s, evolving into a comprehensive
study of individual and group dynamics in organizations.

Individual Specific Contributions to Organizational Behavior

 Frederick Winslow Taylor studied human behavior at work

systematically, aiming to eliminate variability and maximize output
through efficiency and monetary incentives. While criticized for treating
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 workers like machines, his principles laid the foundation for modern
management.
 Mary Parker Follett emphasized understanding workers' attitudes,
beliefs, and needs, advocating for motivation through encouragement (pull
strategy) rather than coercion (push strategy).
 Douglas McGregor introduced Theory X, which sees workers as lazy and
needing control, and Theory Y, which views them as motivated and
responsible, encouraging managers to adopt a more developmental and
positive approach.

Objectives of O.B Begin here next time

 Organizational Behaviour (OB) focuses on understanding how individuals

and groups behave within an organization and how this behaviour affects
overall performance.
 By studying and applying OB principles, organizations can create better
work environments, improve employee well-being, and enhance
productivity.
 Below are the key objectives of OB:

1. Job Satisfaction

OB aims to improve job satisfaction by identifying factors that influence

employees' happiness and motivation at work. This includes work-life
balance, recognition, career growth, and a positive work environment.
Satisfied employees are more engaged, committed, and productive.

2. Finding the Right People

Hiring the right employees is critical for organizational success. OB helps in

understanding the traits, skills, and personalities that align with job roles
and company culture, ensuring better hiring decisions that lead to long-
term success.
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 3. Organizational Culture

OB examines and fosters a positive organizational culture that aligns with

company goals. A strong culture enhances teamwork, ethical behaviour,
and employee commitment while reducing conflicts and
misunderstandings.

4. Leadership and Conflict Resolution

OB studies different leadership styles and their impact on employee

performance. It also provides strategies for resolving workplace conflicts
by promoting open communication, mediation, and collaboration.

5. Understanding Employees Better

Employees have different needs, motivations, and expectations. OB helps

managers understand these aspects, allowing them to tailor their
leadership approach, improve employee engagement, and address
workplace challenges effectively.

6. Understanding How to Develop Good Leaders

OB emphasizes leadership development by identifying key qualities of

effective leaders and providing training in decision-making,
communication, and emotional intelligence to nurture future leaders.

7. Developing a Good Team

A well-functioning team is essential for collaboration and innovation. OB
focuses on team dynamics, communication strategies, and trust-building
to enhance teamwork and group effectiveness.
8. Higher Productivity

The ultimate goal of OB is to enhance organizational productivity by

creating a motivated, satisfied, and well-managed workforce. By
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 understanding and improving individual and group behaviour,
organizations can optimize performance and achieve business objectives.

FEATURES / CHARACTERISTICS /NATURE OF ORGANIZATIONAL

BEHAVIOUR
 Organizational Behaviour is the study of how individuals and groups behave
within organizations.
 It takes a systems approach, considering the whole person, group, organization,
and social system.
 The goal is to improve relationships by aligning human, organizational, and social
objectives. Organizational behaviour has developed into its own distinct field of
study.
 The features or characteristics /nature it has acquired is identified
as follows:

1. A Distinct Field of Study

OB is not just a single discipline but a broad field that draws knowledge
from multiple areas.
2. Interdisciplinary Approach
It combines insights from psychology, sociology, and anthropology to
understand human behaviour in organizations.
3. Applied Science
OB focuses on solving real-world organizational problems by applying
research findings.
4. Normative Science
Instead of just explaining cause-and-effect, OB also provides guidelines for
improving workplace behaviour and achieving organizational goals.
5. Human-Centered and Positive
OB emphasizes the well-being and potential of employees, recognizing
that a supportive environment enhances performance.

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 6. Systems Approach
It considers all factors affecting an organization, including social and
psychological aspects, to create effective solutions.

ELEMENTS OF ORGANIZATIONAL BEHAVIOR/FORCES AFFECTING O.B/ SCOPE

OF ORGANIZATIONAL BEHAVIOUR

The three internal organizational elements viz., people, technology and structure
and the fourth element, i.e., external social systems may be taken as the scope
of O.B.
People

Environment Environment

Structure Technology
Environment

There is a complex set of key forces that affect organizational behaviour today.
These key forces are classified into four areas;

 People.
 Structure.
 Technology.
 Environment.

There is an interaction between people, structure, and technology and these

elements are influenced by the environment. The four key forces affect
Organizational Behaviour and how it is applied.

 People
People are the internal social system of an organization, made up of individuals
and groups. These groups may be formal or informal and change over time. They

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work together to achieve organizational goals, and organizations exist to serve
people, not the other way around. The study of people focuses on aspects such
as personality, attitudes, values, job satisfaction, learning, and motivation.

 Structure
Structure defines how people in an organization are related and how their work
is coordinated. It divides labour so that different roles can be performed
efficiently, with people taking on different responsibilities like managers,
accountants, clerks, etc. This structure involves authority, where some people
lead and others follow to achieve the organization’s goals.

 Technology
Technology includes tools, machines, and processes that help people perform
their tasks and improve working relationships. While it increases productivity
and efficiency, it can also limit workers in certain ways, influencing how tasks are
completed and shaping work environments.

 Social System (Environment)

Organizations operate within a broader social system, which includes external
factors like government, other organizations, and the community. These
elements influence the organization and its members, affecting their attitudes,
working conditions, and access to resources, while creating competition and
power dynamics.

Approaches to Organization Behaviour studies

 Organizational Behaviour examines the relationship between employees

and employers, emphasizing effective coordination to achieve
organizational goals, based on research that analyses employee actions
and reactions in the workplace.

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  These approaches help organizations understand and manage employee
behaviour effectively.
 There are five approaches to organizational behaviour;

1. Human Resources Approach

o People are the key resource in any organization.
o Managers should support employees' growth and performance rather
than just controlling them.
o Encourages creativity, competence, and fulfilment.

2. Contingency Approach
o No single method works in all situations.
o Managers should analyse each situation and apply the best
approach.
o Avoids rigid, one-size-fits-all solutions.

3. Productivity Approach
o Measures efficiency by comparing output to input.
o Considers economic, human, and social impacts.
o Better job satisfaction and employee development lead to higher
productivity.

4. Systems Approach
o Views an organization as a connected system where every part
affects others.
o Encourages teamwork, motivation, and a strong organizational
culture.
o Managers play a key role in creating a positive work environment.

5. Interdisciplinary Approach
o Combines insights from psychology, sociology, and other social
sciences.

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 o Studies human behaviour as a whole.
o Recognizes the influence of multiple disciplines on workplace
behaviour.

Fundamental concepts of organizational behaviour

 Organizational Behaviour (OB) is built on several fundamental concepts

that provide insights into how individuals and groups behave within
organizations.
 These concepts guide the understanding of the dynamics between people
and organizations and help to create a work environment that fosters
productivity and well-being.
 The following are the fundamental concepts:

1. Individual differences: This concept emphasizes that every individual is

unique, with different personalities, backgrounds, abilities, and
experiences. Understanding and appreciating these differences helps in
creating a more inclusive and effective work environment. It also highlights
the need for tailored management approaches that suit different
individuals rather than a one-size-fits-all strategy.
2. Perception: Perception refers to the way individuals interpret and make
sense of their environment and the behaviours of others. In organizational
behaviour, it is important to understand that perception can influence
decision-making, communication, and relationships at work.
Misunderstandings and biases often arise due to differences in perception,
which can impact team dynamics and productivity.
3. A Whole person: This concept acknowledges that employees are more
than just workers; they are people with diverse needs, emotions, and
personal lives. Recognizing employees as whole persons, rather than
merely as cogs in a machine, is important for fostering job satisfaction,
engagement, and well-being. Organizations that take a holistic approach
tend to have more motivated and committed employees.
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 4. Motivated behaviour: Motivated behaviour refers to the drive that
pushes individuals to perform tasks and achieve goals. Motivation can
stem from both intrinsic factors (internal desires, interests) and extrinsic
factors (rewards, recognition). Organizational behaviour seeks to
understand these motivations and how they can be effectively harnessed
to improve performance, productivity, and satisfaction in the workplace.
5. The desire for involvement: This concept highlights the fact that
individuals want to feel involved in the decision-making process and the
success of the organization. Employees who are engaged and involved are
more likely to show initiative, be committed to their work, and contribute
positively to organizational goals. It is important for organizations to
provide opportunities for employees to be actively engaged in meaningful
ways.
6. The value of the person: Recognizing the inherent worth and dignity of
each employee is central to organizational behaviour. When employees
feel valued and appreciated, they are more likely to perform well and
demonstrate loyalty to the organization. Organizations that prioritize the
value of their people are likely to have higher levels of employee
satisfaction, trust, and retention.
7. Human dignity: Human dignity refers to treating people with respect,
fairness, and equity. In the context of organizational behaviour, it
emphasizes the importance of creating a work environment that respects
each employee’s rights and feelings. Upholding human dignity fosters
positive relationships, reduces conflicts, and enhances the overall work
atmosphere.
8. Organizations as social systems: Organizations are viewed as social
systems where individuals and groups interact and influence each other.
The behaviours of people within the organization are shaped by both the
formal structure and the informal social relationships. Recognizing
organizations as social systems highlights the importance of

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 understanding group dynamics, communication patterns, and cultural
factors in shaping organizational outcomes.
9. Mutuality of interest: This concept underscores the importance of
aligning the interests of both employees and employers. When both
parties work together towards common goals, there is a greater likelihood
of success for the organization. The mutuality of interest emphasizes
collaboration, shared responsibility, and creating win-win situations for all
stakeholders, which leads to a harmonious and productive work
environment.

Main challenges and opportunities of organizational behaviour

 The challenges and opportunities of organizational behaviour (OB) are

ever-evolving as organizations strive to enhance productivity and meet
their business goals.
 Understanding and applying OB concepts can significantly help managers
in addressing these challenges and leveraging opportunities to improve
the work environment and achieve organizational success.
 Below are challenges and opportunities of OB:

1. Improving people’s skills: One of the key challenges in organizational

behaviour is ensuring employees possess the necessary skills to meet
organizational demands. This includes technical, interpersonal, and
problem-solving skills. Managers can help by providing continuous training
and development opportunities, which can improve employee
performance, confidence, and the overall effectiveness of the organization.
2. Improving quality and productivity: Increasing productivity while
maintaining or improving the quality of output is a major challenge in OB.
Managers must find ways to improve the efficiency of operations without
sacrificing the quality of products or services. This involves optimizing
resource utilization, creating streamlined processes, and encouraging a
culture of continuous improvement among employees.
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 3. Total Quality Management (TQM): TQM is a management approach
aimed at embedding a culture of quality in every aspect of the
organization. It encourages employees at all levels to continuously seek
ways to improve processes and products. The challenge lies in integrating
TQM across all departments and ensuring that it becomes a consistent and
ongoing practice, rather than a one-time initiative.
4. Managing workforce diversity: In today’s globalized world, workforces
are increasingly diverse, consisting of people with different genders, races,
ages, ethnicities, and sexual orientations. This presents both challenges
and opportunities for managers. The challenge is managing and
harmonizing these differences, while the opportunity lies in leveraging
diverse perspectives to drive innovation, creativity, and inclusivity in
decision-making.
5. Responding to globalization: As organizations expand internationally,
managers face the challenge of understanding and adapting to global
business practices, cultural differences, and international regulations.
However, globalization also offers opportunities to tap into new markets,
access global talent, and increase organizational competitiveness on a
global scale.
6. Empowering people: Empowerment involves giving employees the
autonomy to make decisions and take responsibility for their work. This not
only boosts morale but also fosters innovation and accountability. The
challenge is finding the balance between giving employees autonomy
while ensuring that they have the necessary guidance and resources to
succeed.
7. Coping with temporariness: In today’s fast-paced and ever-changing
business environment, temporary and contract-based work is becoming
more common. Managers need to find ways to manage temporary teams
effectively, ensuring they remain productive and motivated despite the
short-term nature of their roles. This challenge can be turned into an
opportunity by fostering flexibility and adaptability within the organization.
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 8. Stimulating innovation and change: Organizations must continually
innovate to stay ahead of competitors and adapt to market changes.
Managers must create a culture that encourages creativity and risk-taking
while managing the resistance that often comes with change. The
challenge is creating an environment where innovation is both valued and
supported.
9. Emergence of e-organization & e-commerce: The rise of digital
technologies and online platforms presents both challenges and
opportunities for managers. The challenge lies in understanding and
integrating e-business strategies into traditional business models, while
the opportunity lies in expanding the organization’s reach, reducing
operational costs, and enhancing customer experience through digital
tools.
10. Improving ethical behaviour: In a world where corporate scandals
are not uncommon, managers are under pressure to ensure that
employees adhere to ethical standards. Creating a work environment
where ethical behaviour is encouraged and upheld is essential. Managers
must lead by example and create clear ethical guidelines to guide
decision-making and employee conduct.
11. Improving customer service: Customer satisfaction is crucial for
business success, and OB plays a significant role in ensuring that
employees provide excellent service. Managers must foster a customer-
responsive culture where employees are friendly, knowledgeable, and
proactive in addressing customer needs. Training and support systems
should be in place to enable employees to consistently meet customer
expectations.
12. Helping employees balance work-life conflicts: In a world
where work-life balance is becoming increasingly important, managers
need to find ways to support employees in managing the demands of both
work and personal life. This could involve flexible work hours, remote work

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 options, and promoting a culture that values personal well-being alongside
productivity.
13. Flattening world: The concept of a flattening world refers to the
increasing equality in access to information, resources, and opportunities.
This provides both challenges and opportunities in terms of collaboration
and competition. Managers must learn to navigate this interconnected
world by fostering global collaboration and keeping up with technological
advancements.
14. Working with people from different cultures: In a globalized
workforce, managers must learn how to effectively manage people from
different cultural backgrounds. This includes understanding diverse
communication styles, work ethics, and decision-making processes. The
challenge is adapting to these cultural differences, while the opportunity
lies in creating a more inclusive and globally competitive organization.

TRENDS IN CURRENT ORGANIZATIONS

 Organizations are experiencing rapid changes and transformations, and

adapting to these shifts is crucial for their success. Below are key trends in
many organizations today:

1. Globalization
Globalization involves connecting economically, socially, and culturally
with people worldwide. While it increases efficiency and provides access to
new knowledge and skills, it also brings challenges such as heightened
competition, market instability, longer working hours, and work-family
conflicts.
2. Information Technology
Advancements in information technology, such as the internet, are
transforming organizations. They enable global connectivity, create new
competitive advantages, and allow for remote work and virtual teams,

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 where employees work together across time, space, and organizational
boundaries using digital tools.
3. The changing workforce
The workforce is becoming more diverse, with differences in gender, age,
race, ethnicity, and other factors. This diversity offers opportunities like
gaining a competitive edge but also presents challenges like racism,
stereotyping, and conflicts.
4. Emerging employment relationships
As a result of globalization, new technology, and workforce changes,
employees are facing more dynamic work environments. They now
perform a range of tasks, rather than specific roles, and are expected to
continually learn new skills to remain competitive. This shift impacts job
design, loyalty, and work stress.
5. Workplace values and ethics
Values guide decision-making and actions, while ethics relates to moral
principles. Companies are under pressure to align their actions with ethical
standards and corporate social responsibility, especially in a global
environment. Organizations must balance values with the expectation to
uphold high ethical standards.

Contributing Disciplines to the Organizational Behavior

 Organizational behaviour (OB) is an interdisciplinary field that draws on

various behavioural sciences to understand how individuals and groups
interact within an organization.
 These disciplines help to explain different facets of behaviour, motivation,
decision-making, and group dynamics.
 Below are the major disciplines contributing to OB:

1. Psychology

 Psychology is the scientific study of the mind and behaviour.

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  It delves into the biological, cognitive, emotional, and social factors that
influence how individuals think, act, and feel.
 In the context of OB, psychology focuses on understanding motivation,
learning, personality, emotions, attitudes, and mental health.
 For example, psychological theories like Maslow’s hierarchy of needs or
Herzberg’s two-factor theory help explain employee motivation, job
satisfaction, and performance.
 Psychologists also investigate work stress, leadership effectiveness,
decision-making, and conflict resolution, providing valuable insights for
managing people and improving organizational effectiveness.
 Techniques from psychology are used in performance appraisals,
employee selection, training, and enhancing employee well-being.

2. Sociology

 Sociology is the study of human society, social behaviour, and the

structures that influence individuals.
 It examines how individuals interact within groups, organizations, and
communities.
 In OB, sociology helps us understand how social systems (like families,
schools, or work groups) shape behaviour, and how people form
relationships and work together within organizations.
 Sociologists also study social inequality, class, race, and gender, which
are crucial in understanding workforce diversity.
 Sociological concepts such as group dynamics, organizational culture,
social norms, and socialization contribute to OB by explaining how
employees interact, collaborate, and align with organizational goals.
 Sociology also helps in identifying social factors that influence
leadership styles, employee engagement, and team performance.

3. Social Psychology

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  Social psychology blends elements of both psychology and sociology,
focusing on how individuals’ behaviour is influenced by the presence
and actions of others.
 It examines topics such as attitude formation, social influence,
conformity, group behaviour, and interpersonal relationships.
 In OB, social psychology is instrumental in understanding how groups
influence individual behaviour, decision-making, and conflict resolution.
 It contributes to understanding the formation of group dynamics, the
role of power and influence in teams, and how individuals perceive and
interact with their colleagues.
 Social psychology also provides insights into improving communication,
building trust, resolving conflicts, and fostering teamwork in the
workplace.

4. Anthropology

 Anthropology is the study of human societies, cultures, and their

development over time.
 It helps in understanding human behaviour in various cultural contexts
and examines how cultures adapt and influence individuals and groups.
 In OB, anthropology contributes to the understanding of organizational
culture, values, and behaviours across different national and ethnic
groups.
 Anthropologists study rituals, symbols, and customs that define
organizational life, helping to shape corporate cultures.
 Additionally, anthropological research on societal structures and values
can inform leadership strategies, diversity management, and cross-
cultural communication in global organizations.
 Understanding cultural differences is essential in managing
multinational teams and organizations.

5. Economics
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  Economics is the study of how societies allocate resources to meet their
needs and wants.
 It focuses on production, consumption, and distribution of goods and
services.
 In OB, economics provides insights into decision-making, resource
allocation, negotiation, and organizational power dynamics.
 Economic theories like supply and demand, market competition, and
cost-benefit analysis are applied to organizational decision-making
processes.
 OB also uses economic concepts like incentives, compensation, and
productivity to understand employee motivation and performance.
 Understanding the economic environment in which organizations
operate, including factors like market competition, labour costs, and
economic cycles, helps managers make informed decisions that affect
organizational performance and strategic planning.

6. Political Science

 Political science studies the theory and practice of politics, government

structures, and the distribution of power.
 It provides insights into how power dynamics, authority, governance,
and political institutions influence organizational behaviour.
 Political science helps OB by explaining how power and influence
operate within organizations, especially in hierarchical structures.
 It also explores topics such as organizational politics, decision-making,
conflict resolution, and the role of leadership.
 Political scientists use theories of power, authority, and governance to
understand how organizational leaders exercise control, make
decisions, and manage conflicts within teams.

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  Understanding political behaviour helps managers navigate power
struggles, enhance communication, and create fair decision-making
processes in organizations.

7. Medical Science

 Medical science, particularly in the areas of health psychology, stress

management, and occupational health, significantly contributes to OB.
 It focuses on how physical and mental health impacts individual
performance and well-being at work.
 Medical science helps understand the physiological and psychological
effects of stress, burnout, and work-related illnesses.
 OB incorporates these findings to promote employee wellness, improve
workplace ergonomics, and create supportive environments that reduce
health risks.
 For example, research on stress management techniques, the
importance of work-life balance, and the role of health in productivity
helps organizations foster a healthier work environment.
 Medical science also contributes to studying mental health in the
workplace, providing insights on how to manage mental health
challenges like depression, anxiety, and workplace burnout.

Challenges for Organizational Behavior

 Modern organizations are heavily influenced by the external environment,

which requires constant monitoring and adaptation to changes.
 Here are some key challenges that managers face today in organizational
behaviour:

1. Managerial Challenges
o Workforce Diversity: Managing employees from diverse
backgrounds, cultures, and experiences.

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 o Changing Demographics: Adapting to changes in the age, race,
and education levels of the workforce.
o Growing Number of Youngsters: Addressing the needs and
expectations of a younger workforce.
o Gender Factor: Managing gender diversity and promoting equality
in the workplace.
2. Workplace Issues and Challenges
o Employee Privacy: Ensuring the protection of personal information
and respecting employees' privacy.
o Employee Rights: Safeguarding the rights of employees, including
fair treatment and protection from discrimination.
o Unionism: Dealing with the presence and influence of unions in the
workplace.
o Changed Employee Expectations: Meeting the evolving needs
and expectations of employees in areas like job security, work-life
balance, and benefits.
3. Organizational Challenges
o Improving Quality and Productivity: Enhancing the efficiency
and output of the organization while maintaining high standards.
o Managing Technology and Innovation: Integrating new
technologies and fostering innovation in processes and products.
o Coping with Temporariness: Managing the increasing use of
temporary or contract workers and adapting to changing workforce
structures.
o Ethical Behaviour: Ensuring that the organization operates with
integrity and adheres to ethical standards in decision-making.
4. Global Challenges
o Managing Global Environment: Navigating the complexities of
global markets, regulations, and competition.

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 o Managing Cultural Diversity: Effectively managing teams from
different cultural backgrounds to enhance cooperation and
performance.
5. Environmental Challenges
Managers must also respond to broader environmental issues, such as:
o Ecology: Addressing environmental concerns and sustainability.
o Air, Water, and Soil Pollution: Managing the organization’s
impact on the environment and reducing pollution.
o Personnel Policies: Creating policies that support both employees
and the organization's goals.
o Consumerism: Meeting the demands of an increasingly aware and
conscientious consumer base.
o Research and Development: Investing in R&D to drive innovation
and stay competitive.

o Economic Policies: Adapting to national and international

economic policies that affect the organization’s operations.

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