UNIT I

INTRODUCTION TO ORGANISATIONAL BEHAVIOUR

LESSON 1
IMPORTANCE OF ORGANISATIONAL BEHAVIOUR
Contents
1.0 Aims and Objectives
1.1 Introduction
1.2 Organization behaviour concepts
1.2.1 Organisation
1.2.2 Management
1.3 Key elements of organisational behaviour
1.3.1 People
1.3.2 Structure
1.3.3 Mechanics form of organization
1.3.4 Organic form of organization
1.3.5 Jobs and tasks
1.3.6 Technology
1.3.7 Environment
1.4 Basic approaches to organisational behaviour
1.5 Let us Sum up
1.6 Lesson-end Activities
1.7 References
1.0 AIMS AND OBJECTIVES
After studying this lesson, the students are able to :
i) Understand the concepts of organizational behavior and its application in
managing people
ii) Apply the different approaches to organizational behavior and enhance the
human relationships within the organization.
iii) Explore the relationships among the various components of organizational
behavior and their effectiveness.

1.1 INTRODUCTION
Organizations are social systems. If one wishes to work in them or to manage them, it is
necessary to understand how they operate. Organizations combine science and people
technology and humanity. Unless we have qualified people to design and implement,
techniques alone will not produce desirable results. Human behavior in organizations is
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rather unpredictable. It is unpredictable because it arises from peoples deep-seated needs

and value systems. However, it can be partially understood in terms of the framework of
behavioral science, management and other disciplines. There is no idealistic solution to
organizational problems. All that can be done is to increase our understanding and skills
so that human relations at work can be enhanced

1.2 ORGNISATION BEHAVIOUR - CONCEPTS

Organizational Behavior is field of study that investigates the impact that individuals,
groups and structure have on behavior within organization. It is the study and application
of knowledge about how people act within organizations. It is a human tool for human
benefit. It applies broadly to the behavior of people in all types of organizations, such as
business, government, schools and services organizations. It covers three determinants of
behavior in organizations: individuals, groups, and structure. OB is an applied field. It
applies the knowledge gained about individuals, and the effect of structure on behavior,
in order to make organizations work more effectively. OB covers the core topics of
motivation, leadership behavior and power, interpersonal communication, group structure
and process, learning, attitude development and perception, change process, conflict, job
design and work stress.
Before studying organizational behavior, it is desirable to know the meanings of
organization and management.

1.2.1 Organization
Organization as a purposeful system with several subsystems where individuals and
activities are organized to achieve certain predetermined goals through division of labor
and coordination of activities. Division of labor refers to how the work is divided among
the employees and coordination refers to how all the various activities performed by the
individuals are integrated or brought together to accomplish the goals of the organization.
The term organizing is used to denote one aspect of the managerial activities when he or
she is preparing and scheduling the different tasks that need to be completed for the job to
be done.

1.2.2 Management
It refers to the functional process of accomplishing the goals of the organization through
the help of others. A manager is an individual who is given the responsibility for
achieving the goals assigned to him or her as part of the overall goals of the organization
and who is expected to get the job done. The terms o f top management, lower
management are frequently used to indicate the hierarchical levels of those who are
engaged in the process of getting the goals of the organization accomplished.

1.3 Key Elements of Organisational Behavior

The key elements in organizational behavior are people, structure, technology and the
external elements in which the organization operates. When people join together in an
organization to accomplish an objective, some kind of infrastructure is required. People
also use technology to help get the job done, so there is an interaction of people, structure
and technology. In addition, these elements are influenced by the external environment,
and they influence it. Each o f the four elements o f organizational behavior will be
considered briefly.

1.3.1 People
People make up the internal social system of the organization. They consist of individuals
and groups, and large groups as well as small ones. People are the living, thinking,
feelings beings who created the organizations. It exists to achieve their objectives.
Organizations exist to serve people. People do not exist to serve organizations. The work
force is one of the critical resources t hat need to be managed. In managing human
resources, managers have to deal with:

i) Individual employee who are expected to perform the tasks allotted to them
ii) Dyadic relationships such as superior-subordinate interactions
iii) Groups who work as teams and have the responsibility for getting the job
done,
iv) People out side the organization system such as customers and government
officials

1.3.2 Structure
Structure defines the official relationships of people in organizations. Different jobs are
required to accomplish all of an organizations activities. There are managers and
employees, accountants and assemblers. These people have to be related in some
structural way so that their work can be effective. The main structure relates to power and
to duties. For example, one person has authority to make decisions that affect the work of
other people.
Some of the key concepts of organization structure are listed as below:
a) Hierarchy of Authority: This refers to the distribution of authority among
organizational positions and authority grants the position holder certain rights
including right to give direction to others and the right to punish and reward.
b) Division of Labor: This refers to the distribution of responsibilities and the way
in which activities are divided up and assigned to different members of the
organization is considered to be an element of the social structure.
c) Span of Control: This refers to the total number of subordinates over whom a
manager has authority
d) Specialization: This refers to the number of specialities performed within the
organization.
e) Standardization: It refers to the existence of procedures for regularly recurring
events or activities
f) Formalization: This refers to the extent to which rules, procedures, and
communications are written down
g) Centralization: This refers to the concentration of authority to make decision.
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h) Complexity: This refers to both vertical differentiation and horizontal

differentiation. Vertical differentiation: outlines number of hierarchical levels;
horizontal differentiation highlights the number of units within the organization
(e.g departments, divisions)
Organizations can be structured as relatively rigid, formalized systems or as relatively
loose, flexible systems. Thus the structure of the organizations can range on a continuum
of high rigidity to high flexibility. There are two broad categories of organization: i)
Mechanistic form of organization ii) Organic form of Organization

1.3.3 Mechanistic form of Organisation

It is characterized by high levels of complexity, formalization and centralization. A
highly mechanistic system is characterized by centralized decision making at the top, a
rigid hierarchy of authority, well but narrowly defined job responsibilities especially at
lower levels, and extensive rules and regulations which are explicitly make known to
employees through written documents. In mechanistic organization, labor is divided and
subdivided into many highly specialized tasks (high complexity), workers are granted
limited discretion in performing theirs t a sks and rules and procedures are carefully

defined (high formalization); and there is limited participation in decision making which
tends to be conducted at the highest levels of management high centralization.

1.3.4 Organic form of Organisation

A highly organic system is characterized by decentralized decision-making which allows
people directly involved with the job to make their own decisions, very few levels in the
hierarchy with flexible authority and reporting patters, loosely defined job responsibilities
for members, and very few written rules and regulations. It is relatively simple, informal
and decentralized. Compared with mechanistic organizations, employees in organic
organizations, such as design firms or research labs, tend to be more generalist in their
orientation.

1.3.5 Jobs and Tasks

Job refers to the sum total of an individuals assignment at the workplace. Tasks refer to
the various activities that need to be performed to get the job done. The nature of tasks,
its executives by various individuals, nature of interdependence and inter-relatedness,
group activities etc have implication for organizational effectiveness. Thus the jobs and
tasks have to be designed and managed properly.
Core Job Characteristics: There are five job characteristics which are central to
providing potential motivation to workers. They are: Skill variety, Task identity, Task
significance, Autonomy, and Feedback from the job itself.
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i) Task Variety: This denotes the extent to which any particularly job utilizes a
range of skills, abilities and talents of the employees. If number of different skills
is used by the employee on the job, the job is going to provide challenge and
growth experience to the workers.
ii) Task Identity: This indicates the extent to which the job involves a whole
and identifiable piece of work. If the job involves the whole components (eg
painting a portrait), then the individual can identify with the ultimate
creation turned out by him and derive pride and satisfaction from having done
a good job.
iii) Task significance: This refers to the meaningfulness or significance of the
impact that a job has on the lives of others both inside and outsider of the
organization. If what one does has an impact on the well being of others, the
job becomes psychologically rewarding to he person who performs it.
iv) Autonomy: This refers to the extent to which the job provides an
employee the freedom, independent and discretion to schedule work and make
decision and formulate the procedures to get the job done without interference
from others. The greater the degree of autonomy, the more the person doing
the job feels in control.
v) Feedback from the Job itself: This indicates the extent to which the
person who is working on the job can assess whether they are doing things
right or wrong even as they are performing the job. That is, the job itself is
stimulating one and enjoyable.
Job Design: Jobs can be designed to range from highly simple to highly complex tasks in
terms of the use of the workers skill. Some of the job design options are as follows:
i) Job Simplification: The jobs are broken down into very small parts as in
the assembly line operations where a fragmented task is repeatedly done

over and over again by the same individual.

ii) Job Rotation: This involves moving employees among different tasks
over a period of time. Management does not have to bother with
combining tasks, but at the same time, the workers do not get bored with
doing one simple task over several years. The employee is periodically
rotated from one job to another within the work setting
iii) Job Enlargement: This involves simply adding more tasks to the job so
that the workers have a variety of simple tasks to perform rather than
doing just one task repetitively. Two or more tasks are combined and the
individual does the combined tasks altogether.
iv) Job Enrichment: This offers a greater challenge to the workers because it
requires the use of variety of skills possessed by them. This involves
building in motivating factors into the job, giving the workers more
responsibility and control over work, and offering learning opportunities
for the individual on the job.
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1.3.6 Technology
Organizations have technologies for transforming inputs and outputs. These technologies
consist of physical objects, activities and process, knowledge, all of which are brought to
bear on raw materials labor and capital inputs during a transformation process. The core
technology is that set of productive components most directly associated with the
transformation process, for example, production or assembly line in manufacturing firm.
Technology provides the physical and economic resources with which people work. They
cannot accomplish much with their bare hands, so they build buildings, design machines,
create work processes and assemble resources. The technology that results has a
significant influence on working relationships. An assembly line is not the same as a
research laboratory, and a steel mill does not h ave the same working conditions as a
hospital. The great benefit of technology is that it allows people to do more and better
work, but it also restricts people in various ways. It has costs as well as benefits.
Classification of Technology:
Thomson classified technology into three categories: Long-linked technology, Mediating
Technology and Intensive Technology.
i) Long linked Technology: In this, tasks are broken into a number of
sequential and interdependent steps, where the outputs of one unit become the
input of the next. (eg. Assembly line) this facilitates to have high volume of
output and efficiency. This technology calls for mechanistic structures with
high levels of specialization, standardization and formalization.
ii) Mediating Technology: This links different parties who need to be brought
together in a direct or indirect way (eg. Banks use mediating technology to
lend money to borrowers by taking money from depositors)
iii) Intensive Technology: It is used when a group of specialists are brought
together to solve complex problems using a variety of technologies (eg.
Hospital parties are treated with the help of experts drawn from different
fields of specialization). Coordination of the different activities is achieved in
the system primarily through mutual adjustment among those engaged in
solving the problem in the different units. Organic structures would fit in this

system using intensive technology.

1.3.7 Environment
All organizations operate within an external environment. A single organization does not
exist alone. It is part of a larger system that contains thousand of other elements. All these
mutually influence each other in a complex system that becomes the life style of the
people. Individual organization, such as a factory or school cannot escape from being
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influenced by this external environment. It influences the attitudes of people, affects

working conditions, and provides competition for resources and power.
Every organization interacts with other members of its environment. The interactions
allow the organization t o acquire raw material, hire employees, secure capital, obtain
knowledge, and build, lease or buy facilities and equipment. Since the organization
process a product or service for consumption by the environment, it will also interact
with its customers. Other environmental actions, who regulate or over see these
exchanges, interact with the organization as well (distributors, advertising agencies, trade
associations, government of the countries in which business is conducted)
Two Distinct Sets of Environment:
i) Specific Environment: This includes the suppliers, customers, competitors,
governments agencies, employees, unions, political parties etc.
ii) General Environment: It includes the economic, political, cultural,
technological and social factors in which the organization embedded.
Organizations are embedded in an environment within which they operate. Some of the
external factors may be completely beyond the control of the organization to change,
such as the cultural, social or economic, or governmental aspects. However, many of the
other factors such as sizing up the market, being in tune with the technological changes
takes place, being a step ahead of competition, or stocking up and buffering supplies
when certain materials are likely to be in short supply, are all within the control of the
organization. Effectively managing these situations, however, requires constant and close
vigilance, adaptability to changes, and being able to manage problematical situations
through good decisions making. Those organizations which are proactive (that is,
watchful and take action before crisis situations occur) and can manage their external
environment are more effective than those that are reactive (that is, caught off guard and
wake up after facing the crises situation) and are unable to cope effectively.
Fit between Environment and Structure: Firms facing a fast changing or turbulent
external environment were very effective when they had more organic structures which
provided flexibility for quick changes to be make within the internal environment of the
system. Similarly, firms which operated in a relatively stable external environment were
very effective when they had more mechanistic structures. This mechanistic structure
allowed the system to operate in a predictable manner since authority, responsibility,
procedures, and rules were clearly specified.

1.4 Basic Approaches of Organisational Behavior

i) An Interdisciplinary Approach: It is integrating many disciplines. It integrates
social sciences and other disciplines that can contribute to the Organizational
Behavior. It draws from these disciplines any ideas that will improve the
relationships between people and organization. Its interdisciplinary nature is
similar to that of medicine, which applies physical, biological and social science

into a workable medical practice. Organizations must have people, and people
working toward goals must have organizations, so it is desirable to treat the two
as a working unit.
ii) Scientific Management Approach: The fundamental concern of the scientific
management school was to increase the efficiency of the worker basically through
good job design and appropriate training of the workers. Taylor is the father of the
scientific management movement and he developed many ides to increase
organizational efficiency. Taylor showed that through proper job design, worker
selection, employee training and incentives, productivity can be increased. The
scientific management school advocated that efficiency can be attainted by
finding the right methods to get the job done, through specialization on the job, by
planning and scheduling, by using standard operating mechanisms, establishing
standard times to do the job, by proper selection and training of personnel and
through wage incentives.
iii) A Human Resources (Supportive) Approach: It is developmental approach
concerned with the growth and development of people toward higher levels of
competency creativity and fulfillment, because people are the central resource in
any organizations and any society. It helps people grow in self-control and
responsibility and then it tries to create a climate in which all employees may
contribute to the limits of their improved abilities. It is assumed that expanded
capabilities and opportunities for people will lead directly to improvements in
operating effectiveness. Work satisfaction will be a direct result when employees
make fuller use of their capabilities. Essentially, the human resources approach
means that better people achieve better results.
iv) A Contingency Approach: Traditional management relies on one basic principle
there is one best way of managing things and these things can be applied across
the board in all the instances. The situational effect will be totally ignored in this
traditional management. Situations are much more complex than first perceived
and the different variables may require different behavior which means that
different environments required different behavior for effectiveness. Each
situation much be analyzed carefully to determine the significant variables that
exist in order to establish the kinds of practices that will be more effective.
Contingency theorist argues that the external environment and several aspects of
the internal environment govern the structure of the organization and the process
of management. Effective management will vary in different situations depending
on the individual and groups in the organization, the nature of jobs, technology,
the type of environment facing the organization and its structure. For example, if
the employees are highly matured and willing to take more responsibility, the
managers can follow delegating style and give full freedom to their employees. If
the employees are not so matured and avoid taking any responsibility, the
managers must follow directing style. Depends upon the situation, that is,
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employees level of maturity, managers will adopt different style of leadership to

ensure more successful results.
v) A Systems Approach: This implies that organization consists of many inter
related and inter dependent elements affecting one another in order to achieve the

overall results. Conceptually a system implies that there are a multitude of

variables in organization and that each of them affects all the others in complex
relationships. An event that appears to affect one individual or one department
actually may have significant influences elsewhere in the organization.
Systems theorists describe the organization as open to its external environment,
receiving certain inputs from the environment such as human resources, raw
materials etc, and engaging in various operations to transform those raw materials
into a finished products and finally turning out the outputs in its final form to be
sent to the environment. The organization, since it is open to the environment,
also receives feedback from the environment and takes corrective action as
necessary. This input-transformation process-output model with the feedback
mechanism can be illustrated through a simple example.
1.5 Let Us Sum Up
In this unit, we have briefly discussed about the concepts and key elements of
organizational behaviour. The key elements in organizational behavior are people,
structure, technology and the external elements, in which the organization operators,
various approaches have been developed for managerial analysis. We have also discussed
the five major approaches to organizational behaviour.
1.6 Lesson-End Activities
1. What are the key elements of organization and its dynamics?
2. Describe the two types of environment and its relations with other structural
components.
3. Explain the various types of job design options and its relevance for motivation.
4. Discuss the effect of technology on other key components organization particular, its
structure, people and nature of tasks.
5. What are the basic approaches to study organization behavior?

1.7 References

LESSON - 3
CHALLENGES AND OPPORTUNITIES
FOR ORGANISATIONAL BEHAVIOR
Contents
3.0 Aims and Objectives
3.1 Introduction
3.2 Significant Problems in Management
3.2.1 Improving People Skills
3.2.2 Improving Quality and Productivity
3.2.3 Managing Workforce Diversity
3.2.4 Responding To Globalization
3.2.5 Empowering People
3.2.6 Coping with Temporariness
3.2.7 Stimulating Innovation and Change
3.2.8 Emergence of the E-Organisation
3.2.9 Improving Ethical Behaviour
3.3 Let us Sum Up
3.4 Lesson-End Activities

3.5 References
3.0 AIMS AND OBJECTIVES
After studying this lesson on the Challenges and Opportunities for Organizational
Behavior, the students will be able to
i) Realize the importance of upgrading various types of technical and managerial
skills to remain competitive in business environment
ii) Understand the ways in which one can manage workforce diversity and its
importance in globalization
iii) Implement the ways of improving ethical behavior within the organization at
all the levels

3.1 INTRODUCTION
There are many challenges and opportunities for managers to use Organizational
Behavior concepts to enhance the overall effectiveness of individuals, groups and
organization. The following are some of the critical issues confronting managers for
which the knowledge of Organizational Behavior offers worthy solutions based on
behavioral science and other interdisciplinary fields.
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3.2 SIGNIFICANT PROBLEMS IN MANAGEMENT

The following are some of the significant problems:
i) Improving People Skills
ii) Improving Quality and Productivity
iii) Managing Workforce Diversity
iv) Responding to Globalization
v) Empowering People
vi) Coping with Temporariness
vii) Stimulating Innovation and Change
viii) Emergence of the e-organization

ix) Improving Ethical Behavior

3.2.1 Improving People Skills:

Technological changes, structural changes, environmental changes are accelerated at a
faster rate in business field. Unless employees and executives are equipped to possess
the required skills to adapt those changes, the achievement of the targeted goals cannot be
achieved in time. There two different categories of skills managerial skills and technical
skills. Some of the managerial skills include listening skills, motivating skills, planning
and organizing skills, leading skills, problem solving skill, decision making skills etc.
These skills can be enhanced by organizing a series of training and development
programmes, career development programmes, induction and socialization etc.
Implications for Managers: Designing an effective performance appraisal system with
built-in training facilities will help upgrade the skills of the employees to cope up the
demands of the external environment. The lower level cadre in management is required to
possess more of technical skills. As they move towards upward direction, their roles will
be remarkably changed and expected to have more of human relations and conceptual
skills.

3.2.2 Improving Quality and Productivity:

Quality is the extent to which the customers or users believe the product or service
surpasses their needs and expectations. For example, a customer who purchases an
automobile has certain expectation, one of which is that the automobile engine will start
when it is turned on. If the engine fails to start, the customers expectations will not have
been met and the customer will perceive the quality of the car as poor. Deming defined
quality as a predictable degree of uniformity and dependability, at low cost and suited to
the market. Juran defined it as fitness for use. The key dimensions of quality as follows:
i) Performance: Primary operating characteristics of a product such as signal
coverage, audio quality, display quality etc.
ii) Features: Secondary characteristics, added features, such as calculators, and
alarm clock features in hand phone
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iii) Conformance: Meeting specifications or industry standards, workmanship of the

degree to which a products design or operating characteristics match preestablished
standards
iv) Reliability: The probability of a products failing within t a specified period of
time
v) Durability: It is a measure of products life having both economic and technical
dimension
vi) Services: Resolution of problem and complaints, ease of repair
vii) Response: Human to human interface, such as the courtesy of the dealer
viii) Aesthetics: Sensory characteristics such exterior finish
ix) Reputations: Past performance and other intangibles, such as being ranked first.
More and more managers are confronting to meet the challenges to fulfill the specific
requirements of customers. In order to improve quality and productivity, they are
implementing programs like total quality management and reengineering programs that
require extensive employee involvement.
Total Quality Management (TQM): It is a philosophy of management that is driven by
the constant attainment of customer satisfaction through the continuous improvement of

all organizational process. The component of TQM are (a) intense focus of the customer,
(b) concern for continual improvement (c) improvement in the quality of everything the
organization does (d) accurate measurement and (e) empowerment of employees.
Reengineering: This refers to discrete initiatives that are intended to achieve radically
redesigned and improved work process in a bounded time frame. Business Process
Reengineering employees a structural methodology that reduces work process to their
essential composite activist and provides cost performance matrices to facilitate a
business case for dramatic improvements. Both functional and cross-functional processes
are evaluated through workflow analysis and activity based costing. In many cases, the
application of new technology and industries best practices will enable quantum
improvement in an organizations cost and performance.
Implications for Managers: Todays managers understand that any efforts to improve
quality and productivity must influence their employees. These employees will not only
be a major force in carrying out changes, but increasingly will participate actively in
planning those changes. Managers will put maximum effort in meeting the customers
requirements by involving everyone from all the levels and across all functions. Regular
communications (both formally and informally) with all the staff at all levels is must.
Two way communications at all levels must be promoted. Identifying training needs and
relating them with individual capabilities and requirements is must. Top managements
participation and commitment and a culture of continuous improvement must be
established.
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3.2.3 Managing Workforce Diversity:

This refers to employing different categories of employees who are heterogeneous in
terms of gender, race, ethnicity, relation, community, physically disadvantaged,
homosexuals, elderly people etc. The primary reason to employ heterogeneous category
of employees is to tap the talents and potentialities, harnessing the innovativeness,
obtaining synergetic effect among the divorce workforce. In general, employees wanted
to retain their individual and cultural identity, values and life styles even though they are
working in the same organization with common rules and regulations. The major
challenge for organizations is to become more accommodating to diverse groups of
people by addressing their different life styles, family needs and work styles.
Implications for Managers: Managers have to shift their philosophy from treating
everyone alike to recognizing individual differences and responding to those differences
in ways that will ensure employee retention and greater productivity while, at the same
time not discriminating. If work force diversity is managed more effectively, the
management is likely to acquire more benefits such as creativity and innovation as well
as improving decision making skills by providing different perspectives on problems. If
diversity is not managed properly and showed biases to favor only a few categories of
employees, there is potential for higher turnover, more difficulty in communicating and
more interpersonal conflicts.
3.2.4 Responding to Globalization:
Todays business is mostly market driven; wherever the demands exist irrespective of
distance, locations, climatic conditions, the business operations are expanded to gain their
market share and to remain in the top rank etc. Business operations are no longer
restricted to a particular locality or region. Companys products or services are spreading

across the nations using mass communication, internet, faster transportation etc. An
Australian wine producer now sells more wine through the Internet than through outlets
across the country. More than 95% of Nokia hand phones are being sold outside of their
home country Finland. Japanese cars are being sold in different parts of globe. Sri
Lankan tea is exported to many cities across the globe. Executives of Multinational
Corporation are very mobile and move from one subsidiary to another more frequently.
Implications for Managers: Globalization affects a managerial skills in at least two
ways: i) an Expatriate manager have to manage a workforce that is likely to have very
different needs, aspirations and attitudes from the ones that they are used to manage in
their home countries. ii) Understanding the culture of local people and how it has shaped
them and accordingly learn to adapt ones management style to these differences is very
critical for the success of business operations. One of the main personality traits required
for expatriate managers is to have sensitivity to understand the individual differences
among people and exhibit tolerance to it.
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3.2.5 Empowering People

The main issue is delegating more power and responsibility to the lower level cadre of
employees and assigning more freedom to make choices about their schedules, operations,
procedures and the method of solving their work-related problems. Encouraging the
employees to participate in work related decision will sizably enhance their commitment
at work. Empowerment is defined as putting employees in charge of what they do by
eliciting some sort of ownership in them. Managers are doing considerably further by
allowing employees full control of their work. An increasing number of organizations are
using self-managed teams, where workers operate largely without boss. Due to the
implementation of empowerment concepts across all the levels, the relationship between
managers and the employees is reshaped. Managers will act as coaches, advisors,
sponsors, facilitators and help their subordinates to do their task with minimal guidance.
Implications for Manager: The executive must learn to delegate their tasks to the
subordinates and make them more responsible in their work. And in so doing, managers
have to learn how to give up control and employees have to learn how to take
responsibility for their work and make appropriate decision. If all the employees are
empowered, it drastically changes the type of leadership styles, power relationships, the
way work is designed and the way organizations are structured.

3.2.6 Coping with Temporariness

In recent times, the Product life cycles are slimming, the methods of operations are
improving, and fashions are changing very fast. In those days, the managers needed to
introduce major change programs once or twice a decade. Today, change is an ongoing
activity for most managers. The concept of continuous improvement implies constant
change. In yester years, there used to be a long period of stability and occasionally
interrupted by short period of change, but at present the change process is an ongoing
activity due to competitiveness in developing new products and services with better
features. Everyone in the organization faces today is one of permanent temporariness.
The actual jobs that workers perform are in a permanent state of flux. So, workers need to
continually update their knowledge and skills to perform new job requirements.
Implications for Manager: Managers and employees must learn to cope with
temporariness. They have to learn to live with flexibility, spontaneity, and

unpredictability. The knowledge of Organizational Behavior will help understand better

the current state of a work world of continual change, the methods of overcoming
resistance to change process, the ways of creating a better organizational culture that
facilitates change process etc.

3.2.7 Stimulating Innovation and Change

Todays successful organizations must foster innovation and be proficient in the art of
change; otherwise they will become candidates for extinction in due course of time and
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vanished from their field of business. Victory will go to those organizations that
maintain flexibility, continually improve their quality, and beat the competition to the
market place with a constant stream of innovative products and services. For example,
Compaq succeeded by creating more powerful personal computers for the same or less
money than IBNM or Apple, and by putting their products to market quicker than the
bigger competitors. Amazon.com is putting a lot of independent bookstores out of
business as it proves you can successfully sell books from an Internet website.
Implications for Managers: Some of the basic functions of business are being
displaced due to the advent of a new systems and procedures. For example books are
being sold only through internet. Internet selling an organizations employees can be the
impetus for innovation and change; otherwise they can be a major hindrance. The
challenge for managers is to stimulate employee creativity and tolerance for change.

3.2.8 Emergence of E-Organization

E- Commerce: It refers to the business operations involving electronic mode of
transactions. It encompasses presenting products on websites and filling order. The vast
majority of articles and media attention given to using the Internet in business are
directed at on-line shopping. In this process, the marketing and selling of goods and
services are being carried out over the Internet. In e-commerce, the following activities
are being taken place quite often - the tremendous numbers of people who are shopping
on the Internet, business houses are setting up websites where they can sell goods,
conducting the following transactions such as getting paid and fulfilling orders. It is a
dramatic change in the way a company relates to its customers. At present e-commerce is
exploding. Globally, e-commerce spending was increasing at a tremendous rate from
US$ 111 billion in 1999 to US$ 1.3 trillion by 2003.
E-business: It refers to the full breadth of activities included in a successful Internetbased
enterprise. As such, e-commerce is a subset of e-business. E-business includes
developing strategies for running Internet-based companies, creating integrated supply
chains, collaborating with partners to electronically coordinate design and production,
identifying a different kind of leader to run a virtual business, finding skilled people to
build and operate intranets and websites, and running the back room or the administrative
side. E-business includes the creation of new markets and customers, but its also
concerned with the optimum ways to combine Computers, the Web and Application
Software. A sizable number of multinational corporations are selling goods and services
via the Internet.
Growth rate of e-business: The application of Internet operations are initially covers a
small part of the business. At this point, their e-commerce operations are secondary to
their traditional business. An increasingly popular application of e-business is merely
using the Internet to better manage an ongoing business. Later, there are millions of firms

that are now selling anything over the Internet, but they are using e-business applications
to improve communications with internal and external stakeholders and to better perform
traditional business functions. Some companies are putting maximum effort in improving
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its internal efficiency and providing support to its wide-reaching dealer network and to
on-line sellers by crating a shared and integrated network. The companies wanted to
make creasing
E-Organizations: This embraces e-commerce and e-business. State and central
governments, municipal corporations are using the Internet for extending all the public
utility services more efficiently through internet.
Implications for Managers: The employees must acquire skills, knowledge, attitudes in
learning new technology, overcoming any resistance

3.2.9 Improving Ethical behavior:

The complexity in business operations is forcing the workforce to face ethical dilemmas,
where they are required to define right and wrong conduct in order to complete their
assigned activities. For example, Should the employees of chemical company blow the
whistle if they uncover the discharging its untreated effluents into the river are polluting
its water resources? Do managers give an inflated performance evaluation to an employee
they like, knowing that such an evaluation could save that employees job?
The ground rules governing the constituents of good ethical behavior has not been clearly
defined. Differentiating right things from wrong behavior has become more blurred.
Following unethical practices have become a common practice such as successful
executives who use insider information for personal financial gain, employees in
competitor business participating in massive cover-ups of defective products etc.
Implications for Managers: Managers must evolve code of ethics to guide employees
through ethical dilemmas. Organizing seminars, workshops, training programs will help
improve ethical behavior of employees. Retaining consultants, lawyers, voluntary service
organizations to assist the company in dealing with ethical issues will ensure positive
ethical behavior. Managers need to create an ethically healthy climate for his employees
where they can do their work productively and confront a minimal degree of ambiguity
regarding what constitutes right and wrong behavior.

3.3 Let us Sum Up

in this chapter we have discussed the significant problem in management and the
ways to manage them at all levels of the organization.

3.4 Lesson-End Activities

1. Describe the various challenges and opportunities for Organizational Behavior.
2. Explain the need for empowering employees to make them put more effort in their
work
3. Describe the necessity in managing work force diversity and its relevance in the
globalization of business operations.
4. What is E-commerce? Explain its importance in importance to remain competitive in
the business environment.