UNIT III – INTRODUCTION TO ORGANIZATIONAL

BEHAVIOUR

Organizational Behaviour is concerned with the understanding,

prediction and control of human behaviour in organizations. OB is a
field of study that investigates the impact that individuals, groups and
structure have on behaviour within organizations for the purpose of
applying such knowledge towards improving an organization’s
effectiveness. In other words, OB is concerned with the study of what
people do in an organization and how that behaviour affects the
performance of the organization. Specifically, OB attempts to
understand individuals in an organization as a basis of meeting
individual needs and achieving organizational objectives. It seeks to
shed light on the whole complex human factor in the organization by
identifying causes and effects of behaviour.

Definitions of OB

“Organizational Behaviour is concerned with the understanding,

prediction and management of human behaviour in organizations.” –
Fred Luthans

“Organizational Behaviour is a subset of management activities

concerned with understanding, predicting and influencing individual
behaviour in organizational setting. It focuses on the individual, the
group and the organization separately and also at their interactional
relationships.” - Callahan et. al.

“Organizational Behaviour is a field of management that is primarily

concerned with understanding, predicting and influencing human
behaviour in organizations.” - S.P.Robbins

Features/Characteristics of Organizational Behaviour (IMP)

1. Behavioural approach to management: Organizational Behaviour

is part of general management and not the whole of it. It
represents behavioural approach to management. It is significant
to note that the importance of human behaviour in
organizations, Ob has assumed the status of a distinct field of
study.
2. Distinct field of study: OB has emerged as a distinct field of
study. It contains a body of research, theory and application
 associated with a growing concern for people in the workplace.
Its study helps in understanding the human behaviour.
3. Inter – disciplinary/ Multi – disciplinary approach: The field of Ob
is heavily influenced by several other behavioural sciences and
social sciences. The important among them are – psychology,
sociology and anthropology. OB draws a wide range of concepts
from these disciplines.
4. Levels of analysis: OB involves three levels of analysis of
behaviour – individual behaviour, group behaviour and
behaviour of the organization itself. It helps in removing
incorrect assumptions one may have with respect to human
behaviour.
5. Goal – oriented: OB is an action oriented and goal directed
discipline. The major goals of organizational are to understand,
explain and predict human behaviour in the organizational
context so as to increase organizational effectiveness.
6. Satisfaction of Individual and Organizational Needs: The OB
seeks to fulfill both employee needs and organizational
objectives. Every employee in the organization wants to fulfill his
needs through organizational activities and the organization’s
responsibility is to provide reasonable climate in the organization
so that people may get need satisfaction and the organization
may attain its objective. Thus, it works as a human tool by
bringing benefit to the employees.
7. Science and Art: OB is both a science as well as an art. The
systematic knowledge about human behaviour is a science. The
application of behavioural knowledge and skills makes OB an art.
However, OB is not an exact science like Physics or Chemistry
because it deals with human behaviour which can’t be exactly
predicted.

Contributing Disciplines to the field of OB/OR

Role of Behavioural Sciences in Organizational Behaviour (IMP)

OB is an applied behavioural science that is built on contributions from

a number of behavioural disciplines. OB is thus, of integrating nature.
It tries to combine knowledge drawn from various behavioural and
social sciences such as psychology, sociology, social psychology,
anthropology, political science, economics, industrial engineering,
medicine, yoga, etc.

1. Psychology: The term ‘psychology’ is derived from the Greek

word ‘psyche’ which means ‘soul’ or ‘spirit’. Psychology is the
science that seeks to measure, explain and sometimes change
 the behaviour of humans and other animals. Psychology has had
a great deal of influence on the field of OB. The reason is the
focus of psychology – what determines the behaviour of an
individual? The major areas researched to understand the
determinant of behaviour are attitudes, motivation and learning.

2. Sociology: While psychologists focus their attention on the

individual, sociologists study the social system in which
individuals fill their roles, ie, sociology studies people in relation
to their fellow human beings. Specifically, sociologists have
made their greatest contribution to OB through their study of
group behaviour in organizations. Some of the area within OB
that have received valuable input from sociologists are group
dynamics, design of work teams, organizational culture, formal
organization theory and structure, organizational technology,
communication, power and conflict.

3. Social Psychology: Social Psychology is an important branch of

psychology which blends concepts from both psychology and
sociology. It focuses on the influence the group members have
on one another. The major contribution of Social Psychology to
OB lies in the study of overcoming resistance to change and
introduction of change in organizations. It also studies changes
in attitude and behaviour of groups, patterns of communication,
group – decision making, etc.

4. Anthropology: Anthropology is a broad discipline that studies

the origin and development of human cultures, how these
cultures have functioned in the past, and how they continue to
function in the present. This information is very useful in
understanding the behaviour of individuals and groups in
organization. Value systems, norms, sentiments, interactions,
group cohesiveness, etc. are the concern of anthropology.
 Diag “OB as an inter disciplinary approach”

Besides, the above disciplines, certain other disciplines have also

contributed to the growth of OB. These include political science,
economics, industrial engineering, medical science, etc.

5. Political Science: has also contributed to the understanding of

OB. The topics of interest to political scientists include how and why
people acquire power and such topics as political behaviour, group
decision – making, conflict among various interest groups in the
organization, etc.

6. Economics: The research by economists on the topics of labour

market dynamics, productivity, HR forecasting, cost – benefit
 analysis, rationality in decision – making, etc has been extensively
used in OB.

7. Industrial Engineering: Industrial Engineering’s concern with

work – measurement, productivity improvement, work design,
labour relations, etc is also of concern to the field of OB.

Forces/Variables affecting Organizational Behaviour OR

Determinants of OB

It is important to understand the inter – relationships between human

behaviour and other variables which together make up the total
organization. The study of OB involves consideration of interaction
among the formal structure, the tasks to be undertaken, the
technology employed and the methods of carrying out work, the
behaviour of people, the process of management and the external
environment. These variables provide parameters within which number
of interrelated dimensions can be identified –
1. Individuals
2. Groups
3. Organization Structure
4. Technology
5. Environment

These collectively influence the behaviour in organizations.

1. Individuals: Many individuals work in the organization to satisfy

their needs. Each employee has his own physical, psychological
and social needs for which he uses his own traits and
experiences. His work behaviour is influenced not only by his
biological inheritance, but also by his interactive environment,
viz., family relationships, racial background, social setup,
religious beliefs, and technological innovations and so on.
Individual behaviour can be unfolded by studying and
understanding individuals in the above context. The study of
various psycho – social and economic factors shaping human
behaviour at work would help the management to mould the
behaviour of employees for achieving the organizational
objectives.

2. Groups: People in organization consist of both individuals and

groups. The groups in an organization may be formal or
informal, small or large; however, group relationships are
 dynamic in nature. Group performance is more effective than
individual performance as synergy is created in group behaviour.
So the management must understand the nature and working of
various groups in the organization and take steps to make
constructive use of group dynamics to achieve the organizational
objectives. That is why, study of group norms, communication,
leadership and morale is an integral part of OB.

3. Organization Structure: Individuals and groups operate within

the structure of formal organization. The structure establishes
the relationships of people in an organization. Different people in
the organization are given different roles and they have certain
relationships with others. All are attached to each other to
accomplish the organizational goals in a coordinated manner.
Thus, structure relates to distribution of authority and
responsibility throughout the organization.

4. Technology: Technology has a significant influence on work,

the work environment and working relationships. Technology
results in better work which in turn provides satisfaction to
workers. Inter – personal roles, informational roles and
managerial functions can be improved with the use of
technology. The use of scientific methods and latest technology
affect the behaviour of individuals and groups at work.

5. Environment: Modern organizations don’t operate in isolation.

In fact, they interact with their external environment consisting
of economic, technological, social and political forces. The
external environment affects the organization through
technological and scientific development, economic activity social
and cultural influences and governmental actions. The changes
in environmental conditions may compel the management to
bring changes in the internal organizational relationships. In
other words, management must create an organic structure to
adapt to the changes in the external environment.
 People
Individuals
groups

Environment Structure Organizational

Economic Job behaviour
Political Relationship
Social

Technology
Machinery
Computer
hardware

DIAGRAM: Factors Affecting Organizational Behaviour

Importance/ Significance/ Need of Understanding OB(IMP)

1. Organizational Behaviour helps an individual understand himself

and others better. This will improve interpersonal elations
considerably. Of particular significance are topics like attitude,
perception, leadership, communication, transactional analysis,
conflict, etc, an understanding of all the above will change the
functioning of an individual.

2. A manager will be successful in his job when he can motivate his

subordinates to work for better results. Organizational behaviour
will help the manager understand the basis of motivation and
what he should do to motivate his subordinates.

3. OB helps in improving communication in the organization. It is

communication through which people come in contact with
others. To achieve organizational effectiveness, the
communication must be effective. The communication process
and how it works in interpersonal dynamics is evaluated by
behavioural sciences. The analysis of factors that affect
communication, will suggest measures to make communication
effective.
 4. OB seeks to satisfy employees’ needs and attain organizational
objectives. Every employee wants to fulfill his needs through
organizational activities and the organization’s responsibility is to
provide conductive climate in the organization so that people can
gain need satisfaction and the organization attains the objective.

5. OB suggests approaches to create organizational climate in

totality rather than merely improving the working conditions or
changing work processes. Satisfactory working conditions,
adequate compensation and better equipment for the job are
viewed as only small part of the requirements for sound
motivational climate. Creation of an atmosphere of mutual trust,
opportunity for the realization of personal goals, congenial
relations at the work place and a sense of great accomplishment
are of great importance.

6. Organizations have to undergo changes as a result of

technological, social, political and other environmental. Changes
are often resisted by the organizational members. This problem
can be successfully handled by the use of behavioural science
Knowledge. Changes can be introduced through group dynamics
and by proper education of employees through effective
communication.

Challenges and Opportunities for OB/Applicability of OB(IMP)

The dramatic changes now taking place in organization indicate the

importance of understanding OB for managers. for example, more and
more women are in the workplace; corporate downsizing, outsourcing,
intense global competition etc. has made the task of handling
employees a difficult one.

Due to continuous changing socio – economic, technological and

political conditions, the managers as behavioural scientists would come
across the following challenges:

1. Challenge of Globalization: Organizations are no longer constrained

by national boundaries. Example, all major automobile manufacturers
now build cars outside their borders; for example, Honda builds cars in
Ohio, Ford in Brazil, and both Mercedes and BMW in South Africa.
These examples illustrate that the world is becoming a ‘global village’.
In turn, managers have to become capable of working with people
from different cultures.
To work effectively with people, the managers need
to understand their culture, how it has shaped them and how to adapt
your management style to their differences. Thus, globalization has
posed both challenges and opportunities for the managers.

2. Managing Workforce Diversity: One of the most important challenge

currently being faced by organization is adapting to people who are
different. While globalization focuses on differences between people
from different countries; workforce diversity addresses differences
among people within given countries.
Workforce diversity means that organizations are
becoming more heterogeneous in terms of gender, race, caste, ethnic
groups, etc. This workforce diversity has significant implications for the
management. The managers have to shift from their ‘melting pot’
(assuming that people who were different would somehow assimilate
with the majority group) to recognizing differences among the workers
and follow such policies so as to improve productivity, reduce labour
turnover and avoid any sort of discrimination.
Diversity, if properly managed, can increase creativity and
innovation in organizations as well as improve decision – making by
providing different view points on problems. When diversity is not
managed properly, there is potential for higher turnover, more difficult
communication and more interpersonal conflicts.

3. Improving Quality & Productivity: In the era of global competition,

improvement of productivity and quality is essential to satisfy
customers. Productivity and quality could be improved through not
only better technology but also trained human resources. To achieve
these objectives – organizations are implementing programmes such
as Quality management, TQM, BPR, etc. which require extensive
employee involvement.
Organizations in the era of global competition, have
become conscious about quality, productivity, price and above all,
consumer satisfaction. For example, ‘Motorola’, the American tele –
communications equipment manufacturing are trying to attain
99.99997% defect – free manufacturing.

4. Satisfaction of Aspirations of Workforce: There has been a rise in

the employment of younger generations in today’s industries whose
aspirations are different from their counterparts of 1960s. The current
work – force is more career – oriented and have strong clarity about
the lifestyle they want to lead. The workers are becoming more aware
of their higher level needs and this awareness would intensify further
in the future workers. The managers need to evolve appropriate
techniques to satisfy this higher level need of workers in order to
motivate them. Toady, attractive salary, perks, job security, etc. may
not succeed in motivating the ambitious employees; rather they would
be motivated by better career opportunities, growth prospects and
autonomy.

5. Empowerment of Employees: Empowerment means every member

of society or an organization being able to take control of his/her own
destiny and realizing his / her potential to the full. Managers are
putting employees in charge of what they do. Thus, managers are
learning how to give up control and employees are learning how to
take responsibility for their work and make appropriate decisions.
Various techniques of empowerment range from participation in
decision – making to the use of self – managed teams.

6. Corporate Reorganization: Due to changes in the economic, political

and international environment, many corporations have resorted to
reorganization to remain competitive in the market. In many cases,
organizations have resorted to downsizing and got rid of surplus staff
by offering them golden hand – shake under the ‘Voluntary Retirement
Scheme’.
Mergers and acquisitions in to - day’s business
environment are not uncommon. Reorganization has great impact on
the employees of concerned companies. The employees experience
anxiety and uncertainty about their places in the new organization.
The top managers of corporations must consider the possible ‘human
problems’ while taking any decision about re – organization’.

7. Improving Ethical Behaviour: In an organizational world marked by

cutbacks, expectations of increasing worker productivity and tough
competition in the market place, creates pressure on employees to
take short cuts, break rules and engage in other forms of questionable
practices.
Members of organizations are increasingly finding
themselves facing ethical dilemmas, situations in which they are
required to define right or wrong conduct. For example, should they
(employees) follow orders with which they don’t personally agree? Do
they give an inflated performance evaluation to an employee whom
they like, knowing that such an evaluation could save the employees’
job? Do they allow themselves to “play politics” in the organization if it
will help their career advancement?
 Today’s managers need to create an ethically healthy climate for
his/her employees, where they can do their work productively and
have clarity regarding what constitutes right or wrong behaviour. Many
organizations today are taking steps to enhance the ethical standards
of their employees and to avoid legal and/or public opinion problems.

Level of Analysis of OB

OB focuses on three level of analysis, viz. 1. Individual 2. Group 3.

Organization

1. Behaviour at the Individual Level: Organizations are made up of

their individual members. The behaviour of an individual is a
complex phenomenon and is affected by a large number of
factors such as personality, attitudes, perception, learning,
motivation, social, cultural and other factors. OB integrates
these factors to provide simplicity in understanding human
behaviour. The study of behaviour of an individual working in the
organization is also known as micro – organizational behaviour.
2. Behaviour at the Group Level: Though people interact with the
outside world at their individual level, their behavioural pattern
is also influenced by the groups to which they belong. Several
research studies have shown people behave differently in groups
than as individuals. Several factors influence the behaviour of
groups such as group goals, norms, communication, leadership,
cohesiveness, etc. Understanding of group dynamics is essential
to reduce conflicts and improve morale and productivity. OB
provides the means to understand and achieve co – operative
group relationships through interaction, avoidance of win – lose
situations and focus on total group objectives.
3. Behaviour at the Organizational Level: An organization is a
system composed of several interdependent individuals and
groups. Individuals and groups operate within the structure of
formal organization. They participate in shaping the culture of
organization and also in organization development. At times,
they may resist changes, while they might fight for change in
certain situations. Stress caused by the activities of individuals
and groups has to be managed at the organizational, group and
individual levels.
Conceptual Models of OB

OB is the study of human behaviour in an organization which is shaped

by interactions among individuals and groups in the organization. A
large number of factors and concepts determine the types of
interactions in the organization. It is very difficult to understand all
these factors and concepts. To overcome this difficulty, four models of
human behaviour have been developed. Each model usually begins
with certain assumptions about people and leads to certain
interpretations of events. The four models are:

1. AUTOCRATIC MODEL: This model depends on power of the boss.

Those who are in command must have the power to demand. In
an autocratic environment, the managerial orientation is official
authority. This authority is delegated by right of command over
the people to whom it applies. Management believes that it
knows what is best and that the employee’s orientation is to
follow orders. It assumes that employees have to be directed,
persuaded and pushed into performance, and this is the
management’s task. Management does the thinking; the
employees obey the orders. This conventional /traditional view
of management leads to tight control of employees at work.

Under autocratic model, the employees’ orientation is

obedience to the boss; they need not be respectful to him. The
boss has absolute power to hire or fire or employees. The
employees depend upon the boss and are paid minimum wages
for minimum performance. The leadership in an autocratic model
is negative because of which the employees are uninformed,
insecure and afraid.

The autocratic model has been successful in situations

where the workers are actually lazy and have a tendency to shirk
work. It is also required in the situations where the work to be
done is time – bound. The threat generally used by the
managers is that the reward or wages will be withheld if the
workers don’t obey them. However, nowadays it is not applicable
in the strict sense because there are minimum wages laws in
most of the countries and workers are educated and organized.

2. CUSTODIAL MODEL: To overcome the shortcomings of the

autocratic model, the custodial model came into existence. The
insecurity and frustration felt by the workers under the
autocratic model can lead to aggression towards the boss. To
 dispel this feeling of insecurity and frustration, the need was felt
to develop a model which will improve the employer – employee
relations. He features of custodial model are:

a) This model emphasizes the economic rewards and

benefits. Since the employees’ physiological needs are
already met, the employer looks to security needs as a
motivating force.

b) The employee depends upon organization rather than their

boss. If the organization has got sufficient welfare and
development programs for the employees, they don’t leave
the organization.

c) Under this model, the employees are satisfied and happy;

though not strongly motivated. So they give only passive
co – operation, and don’t work more hard than under the
autocratic approach.

d) The workers feel secured under the management using the

custodial model.

The difficulty with the custodial model is that it depends

upon money as the best way to motivate employees. The
psychological needs of the workers are completely ignored.

3. SUPPORTIVE MODEL: the main features of this model are:

1. The supportive model depends on leadership instead of

power or money. By providing supportive leadership,
managers try to create a favorable organizational climate
in which the employees are helped to grow to their greater
capacities and achieve things for they’ve the capability in
the interest of the organization.

2. The leader assumes that the workers will take

responsibility, make their contributions and improve
themselves, if given a chance. It is assumed that the
workers are not lazy and they don’t shirk work. If properly
motivated, they can be self – directed and creative.

3. Management must support the employees’ job

performance, rather than simply giving them wages and
benefits, as in custodial approach.
 4. This model takes care of the psychological needs of the
employees in addition to their subsistence and security
needs.

The supportive model is an improvement over the earlier two

models. Supportive behaviour helps in creating friendly superior
– subordinate interactions with a high degree of confidence and
trust. This model has been found to be effective in affluent
countries where the workers are more concerned about their
psychological needs like self – esteem, job satisfaction, etc.
However, it has limited application in developing countries,
where the most important requirement is the satisfaction of their
physiological and security needs.

5. COLLEGIAL MODEL: is an extension of the supportive model. The

word ‘collegial’ means a body of persons having a common purpose.
This model is based upon the partnership between employees and
the management. Its features are:

 This model creates a favorable climate in the organization

as the workers feel that they are partners in the
organization. They view the managers not as bosses but as
joint contributors. Both the management and the workers
accept and respect each other.

 This model generates team spirit in the organization and a

system of self – discipline is developed in the organization.

 Under the collegial environment, the workers have job

satisfaction, job involvement and job commitment.
 “Comparative View of OB Models”

S.No BASIS AUTOCRATIC CUSTODIAL SUPPORTIVE COLLEGIAL

1. Basis of Power Economic Leadership Partnership
model resources
2. Managerial Authority Money Support Teamwork
Orientation
3. Employees Obedience Security & Job Responsible
Orientation benefits Performance Behaviour
4. Employee Dependence Dependence Participation Self –
Psychological on the boss on discipline
Result organization
5. Employee Subsistence Security Status and Self -
Needs Needs Needs recognition actualization
6. Performance Minimum Passive co – Awakened Moderate
Results operation drives enthusiasm

ORGANIZATION BEHAVIOUR IS SITUATIONAL (SHORT NOTE)

Psychologists and other behavioural scientists have emphasized for

years that individual behaviour is a function of the interaction between
personal characteristics of the individual and environmental
variables/factors. In order to understand a person’s behaviour, the
pressures placed upon him in a given situation must be understood.
Aggressive behaviour, for example, may surface when a normally calm
individual is forced into constant harassments by peers.