ORGANIZATION THEORY

&
BEHAVIOR
 FOUNDATION OF
ORGANIZATION BEHAVIOR
DEFINITION OF AN ORGANIZATION
DEFINITION OF ORGANIZATION BEHAVIOR
ASSUMPTIONS
ITS SIGNIFICANCE FOR EFFECTIVENESS
TRENDS
FRAMEWORK FOR OB
ORGANIZATION???
 DEFINITION OF ORGANIZATION

• CONSCIOUSLY COORDINATED
SOCIAL UNIT
• COMPOSED OF 2 0R MORE PEOPLE
• CONTINUITY
• COMMON GOAL
 What is an Organization?

A structured social system consisting of groups

and individuals working together to meet some
agreed-upon objectives.
 Organizational Behavior
The field that seeks increased knowledge of all
aspects of behavior in organizational settings
through the use of the scientific method.
Characteristics of the field:
– OB applies the scientific method to practical managerial problems.
– OB focuses on three levels of analysis.
– OB is multidisciplinary in nature.
– OB seeks to improve organizational effectiveness and the quality
of life at work.
 DEFINITION
• ORGANIZATION BEHAVIOR CAN BE
DEFINED AS A FIELD OF STUDY THAT
INVESTIGATES THE IMPACT THAT
INDIVIDUALS , GROUPS AND STRUCTURE
HAVE ON BEHAVIOR WITHIN
ORGANISATION, TO ENABLE APPLYING
THIS KNOWLEDGE TOWARDS IMPROVING
ORGANIZATIONAL EFFECTIVENESS
 DEFINTION-OB
• STUDY OF BEHAVIOR OF INDIVIDUALS
WITHIN WORKGROUPS , INCLUDING AN
ANALYSIS OF THE NATURE OF GROUPS,
THE DEVELOPMENT OF STRUCTURES
BETWEEN AND WITHIN WORKGROUPS
AND THE PROCESS OF IMPLEMENTING
CHANGE
Levels of Analysis in OB
 ORGANIZATIONAL
GOALS

INDIVIDUAL TEAM ROLES

TASKS
 VISION -MISION

GOAL
FUNCTIONS-
TASKS/ACTIVITIES-
WHAT & WHY?

PROCEDURES-
STRATEGIES HOW?

SYSTEMS STRUCTURE ROLES & RESPONSIBILITIES

WHO?
CULTURE
CORE VALUES
 HOW ORGANIZATION ACHIEVES ITS
GOAL?

O R G G O AL
AN N U AL PLAN

ORGANIZATIONAL PROCESSES

M AN PO W ER M A C H IN E S M O N EY
 ELEMENTS OF OB
• The organization's base rests on management's philosophy, values, vision
and goals. This in turn drives the organizational culture which is composed :
– formal organization,
– informal organization, and
– the social environment
• The culture determines the type of leadership, communication, and group
dynamics within the organization.
• The workers perceive this as the quality of work life which directs their
degree of motivation
The final outcome are performance, individual satisfaction, and
personal growth and development. All these elements combine to
build the model or framework that the organization operates from.

– ..
 MANAGING FOR EFFECTIVENESS

INDIVIDUAL LEVEL ORG LEVEL

TEAM LEVEL OUTCOMES OUTCOMES
OUTCOMES

PRODUCTIVITY PRODUCTIVITY PRODUCTIVITY

PERFORMANCE PERFORMANCE ABSENTEEISM
ABSENTEEISM NORMS TURNOVER
TURNOVER COHESIVENESS FINANCIAL PERFORMANCE
ATTITUDES SURVIVAL
STRESS CONSTITUENT SATISFACTION
 AN ORGANIZATION WOULD
THEREFORE HAVE
• A GOAL-OBJECTIVE
• STRUCTURE-BOUNDARIES & ROLE
• STRATEGIES & SYSTEMS
• CULTURE, CUSTOMS, VALUES-
DETERMINING BEHAVIOR
 DETERMINANTS OF OB
• INDIVIDUALS.
• GROUPS.
• STRUCTURE.
 OB APPLIES KNOWLEDGE GAINED ABOUT
INDIVIDUALS, GROUPS & THE EFFECT OF
STRUCTURE ON BEHAVIOR TO MAKE THE
ORGANIZATION MORE EFFECTIVE.
 ????
• Is ORGANIZATION nothing but an aggregate of
individuals?
• If so then – is ORGANIZATION behavior all about
individual differences?- Differences in values, beliefs,
perception, personality, motivation
• What about differences in goals, strategies, systems ,
structure in an ORGANIZATION-do these bring about a
distinctive ORGANIZATION behavior
 ENVIRONMENT

HUMAN BEHAVIOR IN ORGANIZATION

SETTINGS

INDIVIDUAL ORGANIZATION
INTERFACE

ORGANIZATION

ENVIRONMENT
 ORGANIZATIONAL PARTICIPANTS

COGNITIVE REPRESENTATION OF PARTICIPANTS CONTROL THEIR OWN BEHAVIOR

REALITY HELPS GUIDE OB TO THE EXTENT THAT THEY RELY ON
COGNITIVE SUPPORTS & MANAGE RELEVANT
ENVIRONMENTAL CUES & CONSEQUENCES

ORGANIZATIONAL BEHAVIOR ORGANIZATIONAL ENVIRONMENT

MOST COMPLEX BEHAVIOR ACQUIRED BY DIRECTLY

OBSERVING & IMITATING OTHERS IN SURROUNDING
ENVIRONMENT
Multidisciplinary Roots
 Why is OB Important?
Companies whose managers accurately appraise the work of their
subordinates enjoy lower costs and higher productivity.
People who are satisfied with the way they are treated on their jobs are more
pleasant to work with and less likely to quit.
People who are trained to work together tend to be happier and more
productive.
Employees who believe they have been treated unfairly are more likely to
steal and reject the policies of their organizations.
People who are mistreated by their supervisors have more mental and
physical illnesses than those who are treated with kindness, dignity, and
respect.
Organizations that offer good employee benefits and have friendly conditions
are more profitable than those that are less people oriented.
 MANAGEMENT FOR ORG
EFFECTIVENESS
• MANAGERIAL FUNCTIONS- Planning, Organizing, Leading &
Controlling
• MANAGERIAL ROLES-Interpersonal , Information, Decisional
• MANGERIAL SKILLS-Technical, Human & Conceptual
Org Effectiveness

OB

Generalization of Certain consistencies in human

human behavior behavior
 SIGNIFICANCE OF OB
• INDIVIDUAL BEHAVIOR &
PERFORMANCE AT WORK
• GROUP WORKING-NORMS & BEHAVIOR
• STRUCTURE OF ORGANIZATION
• ORGANIZATION DESIGN
• MANAGING CHANGE
 OB EMPHASIS
• BEHAVIOR AS RELATED TO
 JOBS & COMPETENCIES
 WORK –JOB DESIGN
 PERFORMANCE & PRODUCTIVITY
 ABSENTEEISM
 EMPLOYMENT TURNOVER
 OB LINKAGES TO ORG GOAL

• PERSONALITY, PERCEPTION, SKILL & ATTITUDE

DEVELOPMENT
• LEARNING
• MOTIVATION
• LEADER BEHAVIOR & POWER
• INTERPERSONAL COMMUNICATION
• GROUP STRUCTURE & PROCESSES
• WORK DESIGN, CONFLICTS & STRESS
• CHANGE PROCESSES
 Fundamental Assumptions
 OB recognizes the dynamic nature of organizations.
– Open Systems:
Systems Self-sustaining systems that transform input
from the external environment into output, which the system
then returns to the environment.
 OB assumes there is no “one best” approach
– Contingency Approach:
Approach A perspective suggesting that
organizational behavior is affected by a large number of
interacting factors. How someone will behave is said to be
contingent upon many different variables at once.
The Open Systems Model
 The History of OB
• The Early Days: Scientific
Management and the
Hawthorne Studies
• Classical Organizational
Theory
• Late Twentieth Century:
Organizational Behavior as a
Social Science
• OB Today: The Infotech Age
 The Early Days
Scientific Management:
Management An early approach to
management and organizational behavior
emphasizing the importance of designing jobs as
efficiently as possible.
Human Relations Movement:
Movement A perspective on
organizational behavior that rejects the primarily
economic orientation of scientific management
and recognizes, instead, the importance of social
processes and work settings.
 Classical Organizational Theory
An early approach to the study of management that
focused on the most efficient way of structuring
organizations.
Division of Labor:
Labor The practice of dividing work into
specialized tasks that enable people to specialize in what
they do best.
Bureaucracy:
Bureaucracy An organizational design developed by
Max Weber that attempts to make organizations operate
efficiently by having a clear hierarchy of authority in
which people are required to perform well-defined jobs.
 TRACING HISTORY OF
ORGANIZATIONAL RESEARCH

CONCEPT PIONEERS PHILOSOPHY OB ATTRIBUTES

SCIENTIFIC FREDERICK TAYLOR Time & Motion Studies. Maximize Cost , Task
MANAGEMENT (1911) Finding most efficient way specialization, maximize
output
PRINCIPLES OF HENRI FAYOL ( 1916-25) Management Principles Order, Equity, Division of
MANAGEMENT Training in use of Principles work, Discipline

HUMAN RELATIONS ELTON MAYO (1933) Psychological factors-Job Paying attention to worker
Satisfaction, Team work needs & satisfaction
DECISION MAKING HERBERT SIMON (1947) Bounded Rationality Hierarchy o Goals ,
Optimization of Goals Effective use of resources

SOCIO-TECHNICAL E L TRIST & K W Social Systems view means Fit between social &
BAMFORTH (1951) that organization is an open technological factors
system
BEHAVIOR DOUGLAS Mc GREGOR Individual needs & Cohesiveness, Loyalty,
(1961) RENSIS LIKERT importance of participative commitment & Employer
(19670 management Management system

STRATEGIC ALFRED CHANDLER Establish Strategy , then Strategy/Structure fit need

MANAGEMENT (1962) Structure is established to adapt to environmental
changes
 TRACING HISTORY OF
ORGANIZATIONAL RESEARCH-Contd
CONCEPT PIONEERS PHILOSOPHY OB ATTRIBUTES

CONTINGENCY P R LAWRENCE & J W Structure firm to meet Integration fit

LORSCH ( 1967) environmental demands

QUALITY DEMING(1971) How to detect & eliminate Instill pride in quality’

& JURAN ( 1974) defects Focus on customer
satisfaction
ENPOWERNMENT 1984

PROACTIVE 1987 Responsiveness to change ,

PERFORMANCE Need for Social Support
 EMERGING PERSPECTIVES IN OB

• SYSTEMS APPROACH
• CONTINGENCY PERSPECTIVE
• INTERACTIONALISM
 SYSTEMS APPROACH
• VIEWS ORGANIZATION AS A SET OF
INTERRELATED ELEMENTS FUNCTIONING
AS A WHOLE
FEEDBACK

INPUTS- TRANSFORMATION OUTPUTS

material, TECHNOLOGY
Product/Service
human,
financial, Profit/Losses
international
Employee behavior
 CONTINGENCY APPROACH
• SUGGESTS THAT IN MOST ORGANIZATIONS SITUATIONS &
OUTCOMES ARE CONTINGENT ON , OR INFLUENCED BY,
OTHER VARIABLES
UNIVERSAL CAUSE & EFFECT
ORG PROBLEMS/ APPROACH WAY
SITUATIONS OF RESPONDING

CONTINGENCY APPROACH
CONTINGENT WAYS
ORG PROBLEMS OF RESPONDING
EVALUATE IN TERMS
OF THE SITUATION,
WHICH THEN SUGGEST
 INTERACTIONALISM

• INDIVIDUALS AND SITUATIONS INTERACT

CONTINUOSLY TO DETERMINE
INDIVIDUALS’ BEHAVIOR

INDIVIDUALS

BEHAVIOR

SITUATIONS
 POPULAR PRESS

• ARTICLES, RESEARCH WORKS &

BOOKS GIVING NEW INSIGHTS.

• THEORY Z, EMOTIONAL INTELLIGENCE, REENGINEERING,

CORPORAT E CULTURES, IN SEARCH OF EXCELLENCE ETC.
 4 BASIC MODELS OR
FRAMEWORK
• Autocratic - The basis of this model is
power with a managerial orientation of
authority. The employees in turn are
oriented towards obedience and dependence
on the boss. The employee need that is met
is subsistence. The performance result is
minimal.
 4 BASIC MODELS OR
FRAMEWORK
• Custodial - The basis of this model is
economic resources with a managerial
orientation of money. The employees in
turn are oriented towards security and
benefits and dependence on the
organization. The employee need that is met
is security. The performance result is
passive cooperation.
 4 BASIC MODELS OR
FRAMEWORK
• Supportive - The basis of this model is
leadership with a managerial orientation of
support. The employees in turn are oriented
towards job performance and participation.
The employee need that is met is status and
recognition. The performance result is
awakened drives.
 4 BASIC MODELS OR
FRAMEWORK
• Collegial - The basis of this model is
partnership with a managerial orientation of
teamwork. The employees in turn are
oriented towards responsible behavior and
self-discipline. The employee need that is
met is self-actualization. The performance
result is moderate enthusiasm.
• Although there are four separate models, almost
no organization operates exclusively in one. There
will usually be a predominate one, with one or
more areas over-lapping in the other models.
• The first model, autocratic, has its roots in the
industrial revolution. The managers of this type of
organization operate out of McGregor's Theory X.
• The next three models begin to build on
McGregor's Theory Y. They have each evolved
over a period of time and there is no one "best"
model.
• The collegial model should not be thought as the
last or best model, but the beginning of a new
model or paradigm
OB- CHALLENGES &TRENDS
• Paradigm shift------?
• GLOBALISATION- Creating a global village
• INFORMATION AGE-IT
• TOTAL QUALITY MANAGEMENT
• DIVERSITY & CULTURAL ISSUES
• REENGINEERING
OB- CHALLENGES &TRENDS
• ENPOWERING EMPLOYEES- shift from
• Management control
• COPING WITH CHANGE & TEMPORARINESS-
Stability of Flexibility
• STIMULATING INNOVATIVENESS & CHANGE
• CORPORATE VALUES & ETHICS
OB- CHALLENGES &TRENDS
• STIMULATING INNOVATIVENESS &
CHANGE.
• CORPORATE VALUES & ETHICS.
• WORK FORCE DEMOGRAPHICS-Age, Gender,
Ethnic Composition.
• WORK PLACE ISSUES- Employee Privacy,
Employee rights, Unionization.
• Improving Employee Skills.
Prominent Trends
• The rise of global
businesses with
culturally diverse
workforces.
• Rapid advances in
technology.
• The rising
expectations of people
in general.
 Globalization
• The process of interconnecting the world’s
people with respect to the cultural,
economic, political, technological, and
environmental aspects of their lives.
• Multinational Enterprises:
Enterprises Organizations
that have significant operations spread
throughout various nations but are
headquartered in a single country.
 Working Abroad
• Expatriates:
Expatriates People who are citizens of one country but
who are living and working in another country.
• Culture:
Culture The set of values, customs, and beliefs that
people have in common with other members of a social
unit (e.g., a nation).
• Culture shock:
shock The tendency for people to become
confused and disoriented as they attempt to adjust to a new
culture.
• Repatriation:
Repatriation The process of readjusting to one’s own
culture after spending time away from it.
Working Abroad
 Management Perspectives
 Convergence Hypothesis:
Hypothesis A biased approach to
the study of management, which assumes that
principles of good management are universal, and
that ones that work well in the United States will
apply equally well in other nations.
 Divergence Hypothesis:
Hypothesis The approach to the
study of management that recognizes that knowing
how to manage most effectively requires clear
understanding of the culture in which people
work.
Shifting Demographics
 More women are in
the workforce than
ever before.
 Racial and ethnic
diversity is reality.
 People are living – and
working – longer than
ever before.
 Responding to Changes in Technology
 Creating Leaner Organizations
 Downsizing/Rightsizing:
Downsizing/Rightsizing The process of adjusting the number of
employees needed to work in newly designed organizations.
 Outsourcing:
Outsourcing The process of eliminating those parts of organizations that
focus on noncore sectors of the business and hiring outside firms to
perform these functions instead.
 Creating Virtual Organizations
 Highly flexible, temporary organizations formed by a group of
companies that join forces to exploit a specific opportunity.
 Increasing the Use of Telecommuting
 The practice of using communications technology so as to enable work to
be performed from remote locations.
Responding to Changes in Expectations

 Increasing Flexibility
in Response to
Employees’ Needs
 The Quality
Revolution
 Corporate Social
Responsibility
 Increasing Flexibility
Flextime Programs:
Programs Policies that give employees some discretion
over when they can arrive and leave work, thereby making it easier to
adapt their work schedules to the demands of their personal lives.
The Contingent Workforce:
Workforce People hired by organizations temporarily
to work as needed for finite periods of time.
Compressed Workweeks:
Workweeks The practice of working fewer days each
week but longer hours each day.
Job Sharing:
Sharing A form of regular part-time work in which pairs of
employees assume the duties of a single job, splitting its
responsibilities, salary, and benefits in proportion to the time worked.
Voluntary Reduced Work Time Programs:
Programs Programs that allow
employees to reduce the amount of time they work by a certain
amount, with a proportional reduction in pay.
 The Quality Revolution
 Total Quality Management:
Management An organizational strategy of
commitment to improving customer satisfaction by
developing techniques to carefully manage output quality.
 Benchmarking:
Benchmarking The process of comparing one’s own
products or services with the best from others.
 Malcolm Baldridge Quality Award:
Award An award given
annually to American companies that practice effective
quality management and make significant improvements in
the quality of their goods and services.
Corporate Social Responsibility
Business decision making
linked to ethical values,
compliance with legal
requirements, and respect for
individuals, the community at
large, and the environment. It
involves operating a business
in a manner that meets or
exceeds the ethical, legal, and
public expectations that society
has of business
 Ethics in Organizations
Good ethics is good business
 Improved financial performance
 Reduced operating costs
 Enhanced corporate reputation
 Increased ability to attract and retain employees
Code of Ethics:
Ethics A document describing what an organization stands
for and the general rules of conduct it expects of its employees.
Ethics Officers:
Officers Individuals (usually at the vice presidential level)
who oversee the ethics of a company’s operations.
Ethics Audit:
Audit The process of actively investigating and documenting
incidents of dubious ethical value within a company.
 Ethical Guidelines
1. Does the behavior violate
the obvious “shall nots”?
2. Will anyone get hurt?
3. What if you did it 100
times?
4. How would you feel if
someone did it to you?
5. What’s your gut feeling?
6. Would the behavior pass
the “front page test”?
 OB MODELS
COGNITIVE, BEHAVIORISTIC & SOCIAL LEARNING THEORETICAL
FRAMEWORKS USED TO DEVELOP OB MODEL

AUTOCRATIC CUSTODIAL SUPPORTIVE SUPERLATIVE

(COLLEGIAL)
BASIS OF Power Economic Leadership Partnership
MODEL Resources
Managerial Authority Money Support Teamwork
orientation
Employee Obedience Security Job Responsible
Orientation Benefits Performance Behavior
Employee Dependence Dependence Participation Self
psychological on Boss on Discipline
result Organization
Employee Subsistence Security Status & Self
need met Recognition Actualization
Performance Minimum Passive Awakened Moderate
result cooperation drivers enthusiasm
 Basic framework for understanding organizational behavior

INDIVIDUAL ENHANCING INDIVIDUAL INTERPERSONAL PROCESSES

PROCESSES
& INTERPERSONAL PROCESSES Group Dynamics
•Individual
Goal setting/Rewards Inter group dynamics
differences
Job Designation/Participation Leadership/Influence
•Attitudes/Attitude
formation Performance Appraisal Power/Politics/Conflict
•Learning Stress Interpersonal Communication
/Reinforcement
Decision Making/ Creativity
•Motivation
ORGANIZATIONAL PROCESSES &
INTEGRATING INDIVIDUALS, CHARACTERISTICS
GROUPS & ORGANIZATIONS
MANAGERIAL CONTEXT Organization Structure
•Change/development
Managing People & Environment/technology
Organizations •International Issues
Organization Design
•Career Dynamics
Organization Culture

ORGANIZATIONAL EFFECTIVENESS