ORGANISATION

BEHAVIOR
 ORGANISATION BEHAVIOUR

1. Intro to OB
2. Models
3. Structure
4. Culture
5. Group dynamics
6. Power and authority
7. Motivation
8. Compensation and Benefits
9. Stress

Chapter – 1 – Introduction to Organization Behavior (OB)

Introduction

Definition – In order to understand what Organization behavior is we need to know

the definition of Organization and Behavior separately and then put the two
together and understand the main characteristics of OB.Organisation “is defined as
a group of people who work interdependently towards same purpose. They work in
a structured pattern of interaction and coordinated task to achieve the same
goals.” Behavior is “defined as manner in which people conduct themselves or act
when in a particular situation or when presented to do a task.”

OB is the study and application of knowledge about how people as individuals and
as groups act within an organization. It strives to identify ways in which people can
act more effectively.OB is needed in today’s times and it is an applied science. It
provides useful set of tools at many levels of analysis like it helps Managers look at
behavior of individuals within the organization. Understand the complexities of
interpersonal relationships. Understand the dynamics of relationships within small
group’s i.e.inter group. Finally organizations can be viewed and managed as whole
systems that have interorganisational relationships e.g. mergers, joint ventures
etc.In summary OB can be defined as the understanding, prediction, and
management of human behavior in organization.

GOALS: - Like most sciences OB also has four goals – to describe, understand,
predict and control.

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  The first goal is to describe, systematically how people behave under a
variety of conditions.
 The second goal is to understand why people behave as they do.
 Predicting future employee behavior is another goal of organizational
behavior.
 The final goal of organizational behavior is to control ( at least partially )

Wherever organizations are, there is a need to describe, understand, predict and

better control human behavior.

FORCES: - A complex set of forces affects the nature of organizations today.

ORGANISTIONAL
BEHAVIOR

PEPOLE TECHNOLOGY
 Individuals  Machinery
 Groups  Computer hardware &
software

STRUCTURES
 Jobs
 Relationships

ENVIORNMENT
 Government
 Competition
 Societal Pressures

People: People make up the internal social system of the Organization. It consists
of individuals and groups. Groups are dynamic, they form, change and disband,
and they can be formal and informal in nature. The workforce has become richly
diverse, and diversity presents challenges. Managers need to be trend in to these
diverse patterns and trends, and be prepared to adapt to them.

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Structure: Defines the formal relationship and use of people in an organization.
People have to be related in some structural way so that there work can be
effectively coordinated.

Technology: Provides the resources with which people work and affects the task
that they perform. There has to be a delicate balance between technical and social
system.

Environment: All organizations operate within an internal and external

environment. No organization exists alone.

Fundamental Concepts of Organization Behavior:

Certain basic concepts regarding human behavior exist. Every field of social
science has a philosophical foundation of basic concepts that guide its
development. These concepts are the “enduring principles” endorsed by airline
executive Herb Kelleher.

The Nature of People The Nature of Organization

Individual differences Social systems

Perception Mutual Interest

A whole Person Ethics

Motivated behavior

Desire for involvement

Value of the person

Relevance and Effectiveness of Organizational Behavior:

The best way to handle stiff competition and a fast – changing world is through
radical transformation and adopting to change in an organized manner rather than a
chaotic manner. In today’s ever changing and advancing world Organizational
development has become more relevant than ever before. According to John W
Newstrom and Keith Davies organizational behavior seeks to integrate the four
elements of people, structure, technology and environment. The four basic
approaches – human resources, contingency, result – oriented and systems are
interwoven in Organizational Behavior study.

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Human Resources { supportive) Employee growth and development
are supported
Contingency Different behaviors are required by
different environment for
effectiveness
Result- oriented Organizational behavior programmes
are assessed in terms of there
efficiency
Systems All parts of an organization interact
in a complex relationship

Four Models of Organization Behavior

Autocrati Custodial Supportiv Collegial SOBC

c e
Basis of Power Economic Facilitator
Model Resources
Leadership Partnership
Authority Teamwork Empathy

Managerial Money Support

Orientation
Obedience Job Responsibl Belongingne
Performan e behavior ss
Employee Security & ce
Orientation Benefits

Self – Ownership
Discipline
Employee Dependen Dependenc Participati
Psychologic ce on Boss e on on
al result Organizati
on
Status & Self Higher
Recognitio Actualizati Order needs
Employee Subsistenc Security n on
needs met e
Moderate Passion and
enthusiasm Commitment
Performanc Minimum Passive Awakened
e result Cooperatio Drives
n

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Organizations follow any of the above mentioned model of OB as per there
organizations requirement to achieve more efficiency and fulfill the goals set by the
organizations. OB is the study and application of the human side of management in
coping with downsizing, diversity, the knowledge and information explosion, global
competition and total quality. “People are the key” Sam Walton founder of Wal-Mart
had said when asked what was the answer to successful organizations and
management.

Motivation – Basic concepts and theories

There are 3 components of motivation:

 Direction – what a person is trying to do

 Effort – how hard a person is trying
 Persistence – how long a person keeps on trying

Furthermore, literature distinguishes 2 types of factors that influence motivation:

 Intrinsic – self generated factors (responsibility, freedom to act, scope to

use and develop skills and abilities, interesting and challenging work,
opportunities for advancement) – they have a deeper and longer-term
effect.
 Extrinsic - what is done for people to motivate them (rewards, promotion,
punishment) – they have an immediate and powerful effect, but won’t
necessarily last long

Most influential is the Needs (content) Theory – The underlying concept is the
belief that an unsatisfied need creates tension and a state of disequilibrium. To
restore balance, a goal is identified that will satisfy the need and a behaviour
pathway to this goal is selected. All behaviour is motivated by unsatisfied needs.
People will be better motivated if their work experience satisfies their needs and
wants.

Maslow’s hierarchy of needs

 Physiological needs

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  Esteem needs
 Love needs
 Safety needs
 Need for self - actualization

If a lower need is satisfied, the next higher one becomes dominant. Higher-order
needs provide greatest motivation. Different people may have different priorities

Alderfer’s ERG Theory – About subjective states of satisfaction and desire. Three
primary categories of human needs

 Existence needs – need for material and energy exchange

 Relatedness needs – transactions with human environment, process of
sharing or mutuality
 Growth needs – people make creative or productive efforts for themselves

McClelland’s needs – Based mainly on studies of managers. Three most important

needs:

 Need for Achievement – need for competitive success measured against a

personal standard of excellence
 Need for Affiliation – need for warm, friendly relationships with others
 Need for Power – need to control and influence others

Herzberg’s two-factor model

 Motivators – factors that really motivate people,

 Hygiene factors – dissatisfies; their absence would demotivate people, but
their presence not necessarily improves motivation; essentially describe the
environment, little effect on positive job attitudes.

Hygiene Factors Motivators

Company Policy and administration Achievement
Supervision , technical Recognition
Salary Work itself
Interpersonal relations , supervisor Responsibility
Working conditions Advancement

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Process cognitive theory – Emphasis on psychological processes that effect
motivation and on basic needs. Concerned with peoples perceptions and the way
they interpret and understand it. People will be highly motivated if they can control
the means to attain their goals

Expectancy theory by Vroom –

 Value, instrumentality (belief that if we do one thing it will lead to another),

expectancy (probability that action or effort will lead to an outcome)
 Strength of expectations may be based on past experiences
 Motivation is only likely when a clearly perceived relationship exists
between performance and an outcome that is seen as a means of satisfying
needs

Goal theory by Latham and Locke

 Motivation and performance are higher when individuals are set specific
goals
 Goals have to be difficult but accepted
 Feedback on performance
 Participation in goal setting is important – goals need to be agreed
 As long as they are accepted – demanding goals lead to better performance
than easy goals

Chapter 3 – Dynamics of Organisational Behaviour

Group Behaviour and Group Dynamics

Group behavior in sociology refers to the situations where people interact in large or small
groups. The field of group dynamics deals with small groups that may reach consensus and act in
a coordinated way. Groups of a large number of people in a given area may act simultaneously to
achieve a goal that differs from what individuals would do acting alone (herd behaviour). A large
group (a crowd or mob) is likely to show examples of group behaviour when people gathered in a
given place and time act in a similar way—for example, joining a protest or march, participating
in a fight or acting patriotically.

Special forms of large group behavior are:

 Crowd "hysteria"
 Spectators - when a group of people gathered together on purpose to
participate in an event like theatre play, cinema movie, football match, a
concert, etc.
 Public - exception to the rule that the group must occupy the same physical
place. People watching same channel on television may react in the same

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 way, as they are occupying the same type of place - in front of television -
although they may physically be doing this all over the world.

Group behaviour differs from mass actions which refers to people behaving
similarly on a more global scale (for example, shoppers in different shops), while
group behaviour refers usually to people in one place. If the group behaviour is
coordinated, then it is called group action.

Group dynamics is the study of groups, and also a general term for group
processes. Relevant to the fields of psychology, sociology, and communication
studies, a group is two or more individuals who are connected to each other by
social relationships. Because they interact and influence each other, groups develop
a number of dynamic processes that separate them from a random collection of
individuals. These processes include:

 norms,
 roles,
 relations,
 development,
 need to belong,
 social influence,
 And effects on behavior.

The field of group dynamics is primarily concerned with small group behavior.
Groups may be classified as –

 aggregate,
 primary ,
 secondary
 And category groups.

Although the term “team” is frequently used for any group, especially to get them to
work together and motivate them, there is difference between teams and traditional
work groups. Specific difference between work groups and teams:

Work Groups Team

Strong , Clearly focused Shared leadership roles
leader
Individual Accountability Individual and Mutual Accountability
Purpose is same as Specific purpose
organization

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 Individual work - products Collective work products
Efficient meetings Encourages open-ended, active problem solving
meetings
Measures effectiveness Measures performance directly
indirectly
Discusses , decides and Discusses , decides and does work together
delegates

Bruce Tuckman (1965) proposed the four-stage model called Tuckman's Stages for
a group. Tuckman's model states that the ideal group decision-making process
should occur in four stages:

 Forming (pretending to get on or get along with others);

 Storming (letting down the politeness barrier and trying to get down to the
issues even if tempers flare up );
 Norming (getting used to each other and developing trust and productivity);
 Performing (working in a group to a common goal on a highly efficient and
cooperative basis).

Tuckman later added a fifth stage for the dissolution of a group called adjourning.
(Adjourning may also be referred to as mourning, i.e. mourning the adjournment of
the group). It should be noted that this model refers to the overall pattern of the
group, but of course individuals within a group work in different ways. If distrust
persists, a group may never even get to the norming stage.

Formal and Informal Groups

Groups come in many forms, shapes, and sizes. Most managers belong to
several different groups at the same time, some at work, some at community,
some formally organized, and some informal and social in nature. The most
basic way of identifying types of groups is to distinguish between:
 Formal groups – The organization’s managers to accomplish goals
and serve the needs of the organization deliberately create formal
groups. The major purpose of formal groups is to perform specific
tasks and achieve specific objectives defined by the organization. The
most common type of formal work group consists of individuals
cooperating under the direction of a leader. Examples of formal
groups are departments, divisions, taskforce, project groups, quality
circles, committees, and boards of directors.
 Informal groups – Informal groups in organizations are not formed or
planned by the organization’s managers. Rather, they are self-created

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 and evolve out of the formal organization for a variety of reasons,
such as proximity, common interests, or needs of individuals. It would
be difficult for organization to prohibit informal working
relationships from developing. Informal groups develop naturally
among an organization’s personnel without any direction from
management. One key factor in the emergence of informal groups is
a common interest shared by its members.

Concepts of Group Dynamics –

Group’s decision –

Is decision making in groups consisting of multiple members/entities. The

challenge of group decision is deciding what action a group should take. There are
various systems designed to solve this problem. Formal systems –

 Consensus decision-making tries to avoid "winners" and "losers". Consensus

requires that a majority approve a given course of action, but that the
minority agrees to go along with the course of action. In other words, if the
minority opposes the course of action, consensus requires that the course of
action be modified to remove objectionable features.
 Voting based methods – Range voting lets each member score one or more
of the available options. The option with the highest average is chosen. This
method has experimentally been shown to produce the lowest Bayesian
regret among common voting methods, even when voters are strategic.
Majority requires support from more than 50% of the members of the group.
Thus, the bar for action is lower than with unanimity and a group of “losers”
is implicit to this rule.
 Plurality, where the largest block in a group decides, even if it falls short of a
majority.
 Dictatorship, where one individual determines the course of action.

Decision making in social setting

 Groupthink – Decision making in groups is sometimes examined separately

as process and outcome. Process refers to the group interactions. Some
relevant ideas include coalitions among participants as well as influence and
persuasion.
 Brainstorming - An idea-generation process that specifically encourages any
and all alternatives while withholding any criticism of those alternatives

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 

Team effectiveness refers to the system of getting people in a company or

institution to work together effectively. The idea behind team effectiveness is that a
group of people working together can achieve much more than if the individuals of
the team were working on their own. Team effectiveness is determined by a
number of factors, such as:

 The right mix of skills. Team effectiveness depends in part on bringing

together people who have different skills that somehow complement each
other.
 The right motivation. Team effectiveness is directly linked to the interest that
the group has on the project. If the job is too easy or too difficult, or if the
rewards for achieving the end result do not seem worth the effort, the team
may end up working half-heartedly in the project.
 The ability to solve conflicts without compromising the quality of the
project. Team work has one major downfall. Sometimes groups end up
making decisions they know are not in the best interest of the project, just so
they can keep the process moving. Conflict is innate to any work done in
groups, and should be taken as part of the challenge rather than as something
to be avoided by compromising.
 One way to enhance team effectiveness is to agree beforehand on a code of
conduct. As conflicts arise, it is important to know how to deal with them.

We can always look at the behaviors and skills of team leaders and team
members in analyzing team performance and success, but it is also instructive to
look at the overall team as well. The list of attributes that follows describes team
units that are highly productive and successful.

 Commitment - Team members see themselves belonging to the team.

They are committed to group goals above and beyond their personal
goals and agendas.
 Trust - Team members have faith in each other to honor commitments,
maintain confidences, support each other and generally behave
predictably and consistently.
 Purpose - The team understands how it fits into the overall business of
the organization. Team members know their roles, feel a sense of
ownership, and can see how they personally, and as a team, make a
difference.
 Communication – Effective teams communicate effectively and
frequently with each other and also communicate clearly and
consistently with people outside the team about team activities.

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  Involvement - Everyone has a role on the team. Despite differences in
roles, perspectives and experience, team members feel a sense of
partnership with each other. Contributions are respected and expected.
True consensus is reached when appropriate.
 Process Orientation – High performing teams have a large number of
process tools they can use when needed. Process tools would include:
problem solving tools, planning techniques, regular meetings,
agendas, and successful ways of dealing with problems, behavioral
agreements, and ways to improve those processes within the team.
 Continuous Improvement - The team understands the importance of
continuous improvement, has the tools, knowledge and time at their
disposal to make Continuous Improvement really happen. All
improvement efforts are done in support of the organization’s goals
and objectives.

Pragmatic Applications – The use of Self-Directed work Teams can increase

competitiveness.

But just like anything else, using Self-Directed Teams is no panacea, nor should it
be embraced as a religion. It is an operational strategy that, if implemented
properly, can provide a new dimension to competing: quickly introducing new
customerized high quality products and delivering them with unprecedented lead
times, swift decisions, and manufacturing products with high velocity.

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Power and Politics

Definition of Power – The Famous pioneering sociologist Max Weber defined

power as “the probability that one actor within a social relationship will be in a
position to carry out his own will despite resistance”. Power and politics are among
the most important concepts in the study of organization behavior. Both power and
politics are dynamic concepts and are a function of the interaction between
different elements in organizations. Power has been defined as "the ability to
influence and control anything that is of value to others." It is the ability to
influence the behavior of other people in the organization and to get them to do
what they otherwise would not have done.

Although the terms power, authority and influence are often used synonymously,
there is a difference between them.

 Power is the ability to effect a change in an individual or a group in some

way. Power may or may not be legitimate. That is, power need not
correspond with a person's organizational position.
 Authority, on the other hand, is legitimate. It is the power which is
sanctioned by the organization and is often the 'source' of power.
 Influence is a much broader concept than both power and authority.

Sources of Power – French and Raven, social psychologists, identified five sources
of power.

 Coercive – Coercive power is based on fear and is the ability to influence

another person through threats or fear of punishment
 Reward – Reward power is a positive power which refers to the ability to
get things done through others on the basis of one's power to grant
rewards
 Legitimate – Legitimate power depends on organizational position and
authority. It refers to the power conferred by a person's organizational
position.
 Expert – Expert power is derived from a person's expertise or specialized
knowledge of a certain subject that is perceived as important to the
organization.
 Referent – Referent power is based on people's identification with a
certain individual and their attempt to emulate his behavior. The person
who acts as a model for reference has power over the person who
emulates his behavior.

Concepts of Power –

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When people lose power, they try to regain it individually, or by forming a
coalition with other less powerful people. Organizational coalitions are different
from political coalitions in some basic ways.

Organizational politics is often called 'power in action.' Politics may be legitimate

(within sanctioned organizational limits) or illegitimate (exceeding sanctioned
organizational limits) in nature.

Other sources of power –

 Property ownership and institutionalized law. "Its my business,

I own it, I make the decisions ".
 Personality and skill in building influence and reputation.
 Family interest and traditions can affect the family-owned
business.
 Company, charity, club and trade union activities can be
controlled by interest groups who maneuver for position.
 In democracies – power to rule rests with the people and
exercised through e.g. participative representation, co-
determination or coalition.
 In an autocracy – An individual or small group - through force
and ability to reward followers - holds the power to govern,
control and own resources. They define the rights, privileges
and rules of behavior.
 In a bureaucracy – Control is achieved via “rationally " defined,
accepted procedures and regulations which guide activity (“the
rule of law ").
 In a technology driven organisation experts and problem-solvers
acquire power and influence according to the "know-how" they
contribute.

Uses of Power –

 Power is a tool that can help build a stronger organization.

 Power abusers, on the other hand, constantly feel superior to those in less
influential positions. They enjoy the feeling of being in control of the
destinies of those under them. They also are nagged by a feeling of being
inferior to those in higher and more influential positions in the
organization.
 Managers can satisfy the need for social power in others by doing the
following:

i. Seek their advice and counsel;

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 ii. Include them in briefings and meetings;
iii. Expand their authority;
iv. Let them know that their efforts have a positive impact on the
organization;
v. Delegate significant assignments to them;
vi. Assign them to task forces to bring them into the decision-making
circle.

Politics at work place – Politics will always be a part of organizations so long as

people are involved. Organizations that are overrun with politics, however, will
sooner or later take their place among the also-rans. Political decisions encourage
hypocrisy, secrecy, deal making, rumors, power brokers, self-interests, image
building, self-promotion, and cliques -- not a receipt for effective teamwork.

Thus basically, organizational Politics is defined as activities people perform to

acquire, enhance, and use power and other resources to obtain their preferred
outcomes in a situation of uncertainty or disagreement.

Avoiding Office Politics

A short list for reducing politics is:

 Measure performance.
 Pay off on performance.
 Publicize performance data.
 Reveal the reasons for decisions.
 Openly consider all good ideas.
 Shun deal making.
 Do not enter into secret deals.
 Avoid all political behavior.

Organisation Culture

Basically, organizational culture is the personality of the organization. Culture is

comprised of the assumptions, values, norms and tangible signs (artifacts) of
organization members and their behaviors. Corporate culture can be looked at as a
system. Inputs include feedback from, e.g., society, professions, laws, stories,
heroes, values on competition or service, etc. The process is based on our
assumptions, values and norms, e.g., our values on money, time, facilities, space

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and people. Outputs or effects of our culture are, e.g., organizational behaviors,
technologies, strategies, image, products, services, appearance, etc.

Organisation Culture has a number of important characteristics:

 Observed behavioral regularities.

 Norms
 Dominant Values
 Philosophy
 Rules
 Organizational Climate.

Developing Organisational Culture – Although organisational culture can develop

in a number of different ways, the process usually involves some version of the
following steps:

 A single person (founder) has an idea for a new enterprise.

 The founder brings in one or more other key people and creates a core group.
 The founding core group begins to act in concert to create an organization.
 At this point others are brought into the organization, and a common culture
is followed.

Changing Organisational Culture – Despite the barriers and resistance to change,

organizational culture can be managed and changed. There can be simple
guidelines –

 Assess the current culture

 Set realistic goals that impact the bottom line.
 Recruit outside personnel with industry experience.
 Make changes from top down.
 Include employees in the culture change process.
 Take out all the trappings that remind employees of the previous culture.
 Expect to have some problems and find people who would rather move than
change with the culture and if possible take these losses early.
 Move quickly and decisively to build momentum and to defuse resistance to
the new culture.
 Stay the course by being persistent.

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