Lesson 1

OVERVIEW OF COURSE

This subject/course is designed to teach the basic language of organizational behavior to diverse
audience/students, including those who are studying this as a supporting subject for their bachelor
degree program. This course is designed to provide you the foundations of organizational behavior
whether you intend to work in any field of interest.

Organizational behavior offers both challenges and opportunities for managers. It recognizes differences
and helps managers to see the value of workforce diversity and practices that may need to be changed
when managing in different countries. It can help improve quality and employee productivity by
showing managers how to empower their people as well as how to design and implement change
programs. It offers specific insights to improve a manager’s people skills. In times of rapid and ongoing
change, faced by most managers today, OB can help managers cope in a world of “temporariness” and
learn ways to stimulate innovation. Finally, OB can offer managers guidance in creating an ethically
healthy work climate.

Managers need to develop their interpersonal or people skills if they are going to be effective in their
jobs. Organizational behavior (OB) is a field of study that investigates the impact that individuals,
groups, and structure have on behavior within an organization, and then applies that knowledge to make
organizations work more effectively. Specifically, OB focuses on how to improve productivity, reduce
absenteeism and turnover, and increase employee citizenship and job satisfaction.

OB studies three determinants of behavior in organizations: individuals, groups, and structure. OB

applies the knowledge gained about individuals, groups, and the effect of structure on behavior in order
to make organizations work more effectively. OB is concerned with the study of what people do in an
organization and how that behavior affects the performance of the organization. There is increasing
agreement as to the components of OB, but there is still considerable debate as to the relative
importance of each: motivation, leader behavior and power, interpersonal communication, group
structure and processes, learning, attitude development and perception, change processes, conflict, work
design, and work stress. Organizational behavior is a developing field of study, presenting new
challenges to a manager’s understanding of work behavior and the ability to manage it effectively. This
course addresses the following points:

Organizational behavior studies the factors that impact individual and group behavior in or-
ganizations and how organizations manage their environments. Organizational behavior
provides a set of tools—theories and concepts—to understand, analyze, describe, and
manage attitudes and behavior in organizations.
The study of organizational can improve and change individual, group, and organizational
behavior to attain individual, group, and organizational goals.
Organizational behavior can be analyzed at three levels: the individual, the group, and the
organization as a whole. A full understanding must include an examination of behavioral
factors at each level.
A manager’s job is to use the tools of organizational behavior to increase effectiveness, an
organization’s ability to achieve its goal. Management is the process of planning,
organizing, leading, and controlling an organization’s human, financial, material, and other
resources to increase its effectiveness.

Managers of organizational behavior face five challenges: using information technology to enhance

1
creativity and organizational learning, using human resources to gain a competitive advantage,
developing an ethical organization, managing a diverse workforce, and managing organizational
behavior internationally.
What Is 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 toward improving an organization’s effectiveness.

An organization is a collection of people who work together to achieve a wide variety of goals, both goals of
the various individuals in the organization and goals of the organization as a whole. Organizations exist to
provide goods and services that people want. These goods and services are the products of the behaviors of
workers.

Organizational behavior is the study of the many factors that have an impact on how individuals and groups
respond to and act in organizations and how organizations manage their environments.

Although many people assume that understanding human behavior in organizations is intuitive, many
commonly held beliefs about behavior in organizations, such as the idea that a “happy worker is a productive
worker,” are either entirely false or true only in specific situations. The study of organizational behavior
provides a set of tools—concepts and theories—that help people understand, analyze, and describe what goes
on in organizations and why. How do the characteristics of individuals, groups, work situations, and the
organization itself affect how members feel about their organization?

The ability to use the tools of organizational behavior to understand behavior in organizations is one reason
for studying this subject. A second reason is to learn how to apply these concepts, theories, and techniques to
improve behavior in organizations so that individuals, groups, and organizations can achieve their goals.
Managers are challenged to find new ways to motivate and coordinate employees to ensure that their goals
are aligned with organizational goals.

Forces Reshaping the Process of Management

An understanding of organizational behavior is important to managers, who have the responsibility of

improving organizational effectiveness, the ability of an organization to achieve goals. A goal is a desired
future outcome that an organization seeks to achieve.

In the last 10 years, the challenges facing managers in effectively utilizing human resources and managing
organizational behavior have increased. These challenges stem from changing forces in the technological,
global, and social or cultural environments.

Organizations can obtain a competitive advantage, a way of outperforming other organizations providing
similar goods and services. They can pursue any or all of the following goals: increase efficiency, increase
quality; increase innovation and creativity; and increase responsiveness to customers.

Organizational efficiency is increased by reducing the amount of resources, such as people or raw materials,
needed to produce a quantity of goods or services. Organizations try to find better ways to utilize and
increase the skills and abilities of their workforce. Cross training workers to perform different tasks and
finding new ways of organizing workers to use their skills more efficiently improve efficiency. The global
competitive challenge facing organizations is to invest in the skills of the workers because better-trained
workers make better use of technology. Increased competition has also put pressure on companies to increase
the quality of the goods and services they provide. One approach to increasing quality is called Total Quality
Management (TQM), a technique borrowed from the Japanese. TQM involves a whole new philosophy of
managing behav- ior in organizations and includes elements like giving workers the responsibility for finding
ways to do their jobs more efficiently and ways to improve quality.
An organization’s ethics are rules, beliefs, and values that outline ways in which managers and workers
should behave when confronted with a situation that may help or harm other people inside or outside an
organization. Ethical behavior enhances the well-being (the happiness, health, and prosperity) of individuals,
groups, organizations, and the organizational environment. Ethics establish the goals and behaviors
appropriate to the organization. Many organizations have the goal of making a profit, to be able to pay
workers, suppliers, and shareholders. Ethics specifies what actions an organization should take to make a
profit and what limits should be put on organizations and their managers to prevent harm.

The challenge of managing a diverse workforce increases as organizations expand their operations
internationally. There are several issues that arise in the international arena. First, managers must understand
cultural differences to interact with workers and associates in foreign countries. Understanding the differences
between national cultures is important in any attempt to manage behavior in global organizations to increase
performance.

Second, the management functions of planning, organizing, leading, and controlling become more complex in
a global environment. Planning requires coordination between managers in the home country and those
abroad. Organizing, the allocation of decision-making authority and responsibility between headquarters and
the foreign country is a significant function of global managers. Leading requires managers to tailor their
leadership styles to suit differences in the attitudes and values of foreign workers. Controlling involves
establishing the evaluation, reward, and promotion policies of the organization and training and developing a
globally diverse workforce.

Why Do We Study OB?

Following are the reasons to study organizational behavior:

• To learn about yourself and how to deal with others
• You are part of an organization now, and will continue to be a part of various organizations
• Organizations are increasingly expecting individuals to be able to work in teams, at least some
of the time
• Some of you may want to be managers or entrepreneurs

The importance of studying organizational behavior (OB)

OB applies the knowledge gained about individuals, groups, and the effect of structure on behavior in
order to make organizations work more effectively. It is concerned with the study of what people do in
an organization and how that behavior affects the performance of the organization. There is increasing
agreement as to the components of OB, but there is still considerable debate as to the relative
importance of each: motivation, leader behavior and power, interpersonal communication, group
structure and processes, learning, attitude development and perception, change processes, conflict, work
design, and work stress. It is also important because it focus on the following areas.

• OB is a way of thinking.
• OB is multidisciplinary.
• There is a distinctly humanistic orientation with OB.
• The field of OB is performance oriented.
• The external environment is seen as having significant impact on OB.

Contributing Disciplines to the OB Field

Organizational behavior is an applied behavioral science that is built upon contributions from a number
of behavioral disciplines. The predominant areas are psychology, sociology, social psychology,
anthropology, and political science.
Psychology:
Psychology is the science that seeks to measure, explain, and sometimes change the behavior of humans
and other animals.
Learning Motivation Personality
Emotions Perception Training
Leadership effectiveness Job
satisfaction
Individual decision making
Performance appraisal Attitude
measurement Employee selection
Work design Work stress Individuals
Psychology

Sociology
Sociologists study the social system in which individuals fill their roles; that is, sociology studies people
in relation to their fellow human beings.

Group dynamics
Work teams
Communication
Power Organization
Conflict
system
Inter-group behavior

Sociolog Formal organization theory

y Organizational technology
Organization change Group
Organizational culture

Social Psychology
An area within psychology that blends concepts from psychology and sociology and that focuses on the
influence of people on one another.
Behavioral change
Attitude change
Social psychology Communication Group
Group processes
Group decision making

Anthropology
The study of societies to learn about human beings and their activities
Comparative
values Group
Comparative
Anthropology attitudes
Cross-cultural
Organizational
analysis Organization
culture system
Organizational
environment
Political Science
The study of the behavior of individuals and groups within a political environment

Conflict
Political Science Organization
Intra-organizational politics
Power system

Organization Behavior

Psychology
Individual

Sociology

Study of
Social Psychology Group Organizational
Behavior
Anthropology

Organization

Political Science
 Lesson 2
ORGANIZATIONAL BEHAVIOR
Overview

In last lecture we tried to understand the term of organizational behavior its need and its impact on the
organization. The focus in this discussion is to have concept of about different core concepts of the
organizational behavior and the increasingly important role of this subject in the ever-changing
domestic and global business environment Today we will be covering following topics:

Course Structure of OB
Basic OB model
What managers do
Management Functions
New management Functions
Management Roles

Course Structure of OB
We will cover following topics in our coming lectures:
Part I: The Individual
• Ability & Learning
• Values, Attitudes and Job Satisfaction
• Personality & Emotions
• Perception & Individual Decision Making
• Basic Motivation Concepts
• Motivation and its Applications
Part-II The Group
• Foundation of Group Behavior
• Group and Team Work
• Functions of Communication
• Basic Approaches to Leadership
• Contemporary Issues in Leadership
• Power and Politics
• Conflict and Negotiation
Part-III The Organization System
• Organizational Structure
• Work design and Technology
• HR Policies and Practices
• Organizational Culture
• Organizational Change
• Stress Management

Model of OB
Basic OB Model
Organization
systems level
Group
level
Individual
level
Organizational behavior tools to understand and alter behavior can be examined at three levels of
analysis—individual, group, and organizational.
These factors include personality and ability, attitudes and values, perception and attribution, learning,
motivation, stress, and work/life linkages.
Individual differences can be divided into personality and ability differences. Understanding the nature,
determinants, and consequences of individual differences is essential for managing organizational behavior.
An appreciation of the nature of individual differences is necessary to understand why people behave in
certain ways in an organization.

Group: group is defined as a collection of two or more people who interact together to achieve their goals. A
team is a group in which members work together intensively to achieve a common goal.
Work groups are the basic building blocks of an organization. Work groups use roles, rules, and norms to
control their members’ behavior, and they use several socialization tactics to turn newcomers into effective
group members. Groups contribute to organizational effectiveness when group goals are aligned with
organizational goals.

Organization. Organizational structure and culture affect performance and how the changing global
environment, technology, and ethics impact work attitudes and behavior.
Organizational structure and culture affect how people and groups behave in an organization. Together they
provide a framework that shapes attitudes, behaviors, and performance. Organizations need to create a
structure and culture that allow them to manage individuals and inter-group relations effectively.

What Managers Do?

An understanding of organizational behavior is important to managers, who have the responsibility of

improving organizational effectiveness, the ability of an organization to achieve goals. A goal is a desired
future outcome that an organization seeks to achieve.

A manager supervises one or more subordinates. Managers include CEOs, who head top-management teams
of high-ranking executives responsible for planning strategy to achieve top-level managers might be
responsible for thousands of workers. But managers are also found throughout the lower levels of
organizations and often are in charge of just a few subordinates. All managers face the challenge of helping
the organization achieve its goals. Knowledge of organizational behavior increases effectiveness by providing
managers with a set of tools. Managers can raise a worker’s self-esteem and increase worker productivity by
changing the reward system or the job design.
Top-level managers might be responsible for thousands of workers. But managers are also found throughout
the lower levels of organizations and often are in charge of just a few subordinates. All managers face the
challenge of helping the organization achieve its goals. Knowledge of organizational behavior increases
effectiveness by providing managers with a set of tools. Managers can raise a worker’s self-esteem and
increase worker productivity by changing the reward system or the job design.

Management Functions

Management is the process of planning, organizing, leading, and controlling an organization’s human,
financial, and material resources to increase its effectiveness.
In planning, managers establish their organization’s strategy, in other words, how best to allocate and use
resources to achieve organizational goals. Much uncertainty and risk surround the decisions of managers
during planning, and an understanding of organizational behavior can improve the quality of decision
making, increase success, and lower risk.

In organizing, managers establish a structure of relationships that dictate how members of an organization
work together to achieve organizational goals. Organizing involves grouping workers into departments,
groups, and teams based on the tasks they perform. Organizational behavior offers guidelines on how to
organize employees to make the best use of their capabilities and enhance communication and coordination.

When leading, managers encourage workers to do a good job and coordinate individual and groups so that
all organizational members are working toward organizational goals. The study of different leadership
methods
and how to match leadership styles to the characteristics of the organization is a major concern of
organizational behavior.

When controlling, managers monitor and evaluate individual, group, and organizational performance to see
whether organizational goals are being achieved. Knowledge of organizational behavior allows managers to
understand and accurately diagnose work situations and pinpoint the need for corrective action or strive to
maintain and improve performance. Several processes at the individual or group levels (e.g., personality
conflicts, poor job design) may cause poor performance.
Managers perform their four functions by assuming a number of roles in organizations. A role is a set of
behaviors or tasks a person is expected to perform because of the position she or he holds in a group or
organization.

New Management Functions

New Managerial Functions

To provide leadership and direction

Total Quality Continuous

Management Improvement

Organizational efficiency is increased by reducing the amount of resources, such as people or raw materials,
needed to produce a quantity of goods or services. Organizations try to find better ways to utilize and
increase the skills and abilities of their workforce. Cross training workers to perform different tasks and
finding new ways of organizing workers to use their skills more efficiently improve efficiency. The global
competitive challenge facing organizations is to invest in the skills of the workers because better-trained
workers make better use of technology. Global pressures have forced organizations to find new ways to
increase efficiency. Increased competition has also put pressure on companies to increase the quality of the
goods and services they provide. One approach to increasing quality is called Total Quality Management
(TQM), a technique borrowed from the Japanese. TQM involves a whole new philosophy of managing
behavior in organizations and includes elements like giving workers the responsibility for finding ways to do
their jobs more efficiently and ways to improve quality.
Companies have historically shown the most
innovation, defined “as the process of bringing any
The 4-P Cycle of Continuous
new problem-solving ideas into use.” Ideas for Improvement
reorganizing, cutting costs, putting in new budgeting People
systems, improving communications, or assembling (Skilled, motivated
products in teams are also innovations. Understanding people who can
handle
how to manage innovation and creativity is change. Less stress.)
challenging to managers face because creative people Productivity Products
are difficult to manage. To encourage innovation, the (Less wasteful, more (Satisfied customers
efficient use of all because of better )
manager must allow workers freedom (e.g., the use resources.) quality goods/services.
of independent teams) and foster a culture that Processes
rewards risk taking. Although all organizations (Faster, more flexible, leaner,
compete for customers, service organizations in and ethical organizational
processes. Organizational
particular need to be responsive to customer needs. learning.)
Because the economy is becoming more and more
service based, this is an increasingly important
issue.
Management Roles
Managers can use their understanding of organizational behavior to improve their management skills. A skill
is an ability to act in a way that allows a person to perform highly in her or his role. Managers need three
types of skills: conceptual skills to analyze and diagnose a situation to distinguish between cause and effect;
human skills to understand, work with, lead, and control the behavior of individuals and groups; and
technical skills, job-specific knowledge and techniques required to perform an organizational role.

Effective managers need all three types of skills—conceptual, human, and technical. For example,
entrepreneurs often are technically skilled but lack conceptual and human skills. Scientists who become
managers have technical expertise, but low levels of human skills.
The ten roles can be grouped as being primarily concerned with interpersonal relationships, the transfer
of information, and decision making.
1. Interpersonal roles
 Figurehead—duties that are ceremonial and symbolic in nature
 Leadership—hire, train, motivate, and discipline employees
 Liaison—contact outsiders who provide the manager with information. These may be individuals or
groups inside or outside the organization.

2. Informational Roles
 Monitor—collect information from organizations and institutions outside their own
 Disseminator—a conduit to transmit information to organizational members
 Spokesperson—represent the organization to outsiders

3. Decisional Roles
 Entrepreneur—managers initiate and oversee new projects that will improve their organization’s
performance
 Disturbance handlers—take corrective action in response to unforeseen problems
 Resource allocators—responsible for allocating human, physical, and monetary resources
 Negotiator role—discuss issues and bargain with other units to gain advantages for their own
unit
Management Skills
Robert Katz has identified three essential management skills: technical, human, and conceptual.
1. Technical Skills
 The ability to apply specialized knowledge or expertise. All jobs require some specialized
expertise, and many people develop their technical skills on the job.
2. Human Skills
 The ability to work with, understand, and motivate other people, both individually and in
groups, describes human skills.
Many people are technically proficient but interpersonally incompetent
3. Conceptual Skills
1. The mental ability to analyze and diagnose complex situations
2. Decision making, for example, requires managers to spot problems, identify alternatives
that can correct them, evaluate those alternatives, and select the best one.
Skills Exhibited by an Effective Manager
1. Clarifies goals and objectives for everyone involved
2. Encourages participation, upward communication, and suggestions
3. Plans and organizes for an orderly work flow
4. Has technical and administrative expertise to answer organization-related questions
5. Facilitates work through team building, training, coaching and support
 6. Provides feedback honestly and constructively
7. Keeps things moving by relying on schedules, deadlines, and helpful reminders
8. Controls details without being over-bearing
9. Applies reasonable pressure for goal accomplishment
10. Empowers and delegates key duties to others while maintaining goal clarity and
commitment
11. Recognizes good performance with rewards and positive reinforcement

Evolution of the 21st-Century Manager

Past ManagersToday’s Managers

• Primary Role Order giver, privileged Facilitator, team
elite, manipulator, member, teacher,
controller advocate, sponsor

• Learning & Periodic learning, narrow Continuous life-long

Knowledge Specialist learning, generalist
with multiple
specialties

• Compensation Time, effort, rank Skills, results

Criteria

Cultural Orientation Monocultural, Multicultural,

monolingual multilingual