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Unit-1
Organizational Behaviour
Introduction
Evolution of OB
 The great Greek philosopher PLATO had written about the “Importance of Leadership”.
 The greatest philosopher Aristotle addressed the topic of “Persuasive Communication”.
 In 500 B.C Chinese philosopher, Confucius started “Emphasizing ethics and leadership”.
 In 1776, Adam smith, an economist in his book “Wealth of Nations” propounded a new form of
organizational structure based on “Division of labour and Work specialization”.
 Robert Owen is an important name in the history of OB because he was one of the first industrialists
who argued for: -
 Regulated hours of work for all workers
 Child labour laws
 Public Education
 Company supplied meals at work
 Business involvement in community projects.
 German Sociologist, Max Weber developed “a theory of authority structures and described
organizational activity based on authority structures”.
 Soon after Max Weber, F W Taylor introduced a “systematic use of goal setting and rewards to motivate
employees” and also defined clear guidelines for improving production efficiency in one of the papers
called “The Principles of Scientific Management”.
 Henry Fayol, the Real father of modern Management defined the universal functions that all managers
perform and the principles (14 principles of Management) that constitute good management practices.
 In the late 1950’s people like Abraham Maslow, Douglas McGregor, David McCellenad, Fred
Fiedler, Herzberg, Freud Sigmund, and other behavioural scientists propounded many theories on
employee behavior
Introduction
Organizational Behavior: - OB is composed of two words: Organization and Behavior
Organizations are found in all walks of life. Government offices, banks, schools, colleges, hospitals, factories,
shops, institutes, political parties, and so on. This is necessary to carry on activities of each one of them.
Organizing is a basic function of management. It refers to the process involving the identification and grouping
of activities to be performed, defining and establishing the authority-responsibility relationship. This enables
people to work most effectively together in achieving organizational objectives.
In general, organizing consists of determining and arranging for men, and materials. Machines and money are
required by an enterprise for the attainment of its goals. In its operational sense, the term organizing means
defining the responsibilities of the employed people and the manner in which their activities are to be related.
The final result of organizing is the creation of a structure of duties and responsibilities of persons in
organizational different positions, grouping them according to the similarity, Behaviour, and interrelated nature
of activities. In brief, the organizing process results in the outcome called “organization”, consisting of a group
of people working together for the achievement of one or more common objectives.

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ORGANIZATION
We will consider a few definitions of some authors.
Money and Reiley: “Organization is the form of every human association for the attainment of a common
purpose”.
Puffier and Sherwood: “Organization is the pattern of ways in which large numbers of people have intimate
face-to-face contact with all others are engaged in a variety of tasks, relate themselves to each other in conscious,
systematic establishment and accomplishment of mutually agreed purposes”.
According to, Louis Allen, “Organization is the process of identifying and grouping work to be performed,
defining and delegating responsibility and authority and establishing relationships for the purpose of enabling
people to work most effectively together in accomplishing objectives.”
The basic feature of any organization is the hierarchy of persons in it. It, therefore, distinguishes among different
persons and decides who will be superior and the subordinate. All the organizations allow an unwritten rule that
the subordinate cannot defy the orders of the superiors.
Need for Organization
We need an organization to execute the management function. A study of an organization has to be made
necessary for the following reasons:
a. It provides an ideal setting for the study of human behavior. The study of organization leads to man’s
important discoveries that are vital for the continued well-being of the institutes particularly and the society in
general.
b. Knowledge of organization helps managers to effectively, know various things, such as how to run the
organization and protect the environment needs, how to motivate run the organizational subordinates, how to
manage conflicts, how to introduce behavioural changes, and so on.
c. Organizations pervade all the important phases of man’s life. A man is born in organizations (hospitals, clinics
etc.); he is educated in organizations (schools, colleges etc.), and works in an organization (factories, office etc.).
Process of Organizing
We have seen that the outcome of an organizing process is the ‘Organization’. Organizing is the process by
which managers bring order out of chaos and create proper conditions for effective teamwork. Organizing
involves the following interrelated steps:
a. Objectives: Every organization must have objectives. Therefore, every management essentially has to identify
the objectives before starting any activity.
b. Activities: Identifying and grouping several activities is an important process. If individuals of the groups are
to pool their efforts effectively, there must be proper division of the major activities. Each and every job must be
properly classified and grouped.
c. Duty: Every individual needs to be allotted his duty. After classifying and grouping the activities into various
jobs, they should be allotted to the individuals so that they perform them effectively. Every individual should be
given a specific job to do according to his ability. He may also be given adequate responsibility to do the job
allotted to him.
d. Relationship: Many individuals work in an organization. It is the responsibility of management to lay down
the structure of relationships in the organization and authority.

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e. Integration: All groups of activities must be properly integrated. This can be achieved in the following ways:
through the relationship of authority: horizontal, vertical, or lateral.
The unity of objectives can be achieved along with teamwork and team spirit by the integration process of
different activities.
Behavior - Behaviour is the way how people react to a certain situation.
Organizational Behaviour
Organisational Behaviour is the study and application of knowledge about how people act within organisations.
It is a human tool for human benefits. It applies to the behaviour of people at work in all types of organizations:
public, private, cooperative sector, commercial or service organisations. Whatever organisations are, there is a
need to understand organisational behaviour.
Organisational Behaviour is the study of human behaviour in organisations to make more active human
performance to achieve organisational objectives as well as human objectives. Organisational Behaviour aims at
finding out those ways in which people will contribute in best possible manner.
The study of Organisational Behaviour involves understanding, prediction and control of human behaviour and
the factors which influence the performance of people in an organisation. It is concerned with the behaviour of
individuals and groups not the behaviour of all members collectively.
DEFINITIONS OF ORGANISATIONAL BEHAVIOUR
“Organizational behavior is directly concerned with the understanding, prediction, and control of human
behavior in organizations.” Fred Luthans.
“Organizational behavior studies the impact that individuals, groups and structure have on behavior within
organization for the purpose applying such knowledge towards improving Organizational effectiveness.”
Stephen P. Robbins.
Keith Davis said that, “Organizational Behavior is the study and application of knowledge about how people act
within organization.”
Raman J. Aldag states, “Organizational Behavior is a branch of the Social Sciences that seeks to build theories
that can be applied to predicting, understanding and controlling behavior in work organizations.”
“Organizational Behavior is a subset of management activities concerned with understanding, predicting and
influencing individual behavior in Organizational setting.” Callahan, Fleenor and Kudson.
Organizational behavior is basically a study of human behavior in both, group as well as an individual in an
organization. As we know that certain types of behavior of a person is linked to certain types of roles and
responsibilities. So, generalizations were made based on their behavior that help us predict what people do and
should do so.

Organisational behaviour (OB) is the analysis and learning of behaviour of humans in a group of people
(organisation), different means by which interaction is achieved between the entity and human behaviour.

Organisational behaviour research is classified in three major ways:

1) individuals (micro-level),

2) workgroups (Meso level),

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3) organisation’s behaviour (macro-level)

A person acts and reacts differently in an organisation than when a person is doing the activities separately. The
vision of researching organisational behaviour is to impart new life to the organisational theory and develop
more fine concepts of organisational life.

Nature and Features:

The following is the nature of organisational behavior:

1. Multidisciplinary study: Organisational behaviour is a Multidisciplinary Subject. Organisational of

behaviour uses and applies principles, practices thoughts and theories of various disciplines such as: Law,
History, Psychology, Political science, Economics etc. So Organisational behaviour is a Multidisciplinary
Subject.
2. Fundamental part of Management: OB is a scientific study of how people behave in an organization
and helps in improving the focus of management towards the employees and in setting provisions for
them.
3. Science as well as Art: Organisational behaviour is a science because it applies principles and concepts
objectively. Organisational behaviour is also an art because its application changes as and when required.
Organisational behaviour searches concepts and solutions according to the situation and need.
4. Normative Science: OB is considered to be a normative science because it helps in applying the results
of different studies in working of the organization in such a way that it is compatible with the society.
Hence, individual and social acceptance is also a key factor in the working and decision-making of an
organization.
5. System Approach: Organisational behaviour uses system approach. System approach provides a useful
framework for understanding how the elements of any organisation react among themselves and with
their external environment. Organisational behaviour uses system approach because it takes into account
all the variables affecting organisational functioning.
6. Humanistic and Optimistic Approach: OB teaches managers to apply humanistic approach towards the
employees. Its emphasis on the fact that is a very important to meet the need of employees and motivate
them. It also inculcates a positive work approach by stressing on the inborn qualities like being
independent, innovative, predictive and capable of giving positive input to the organization.
7. Contingency Approach: Today’s business world is full of uncertainties, i.e., in most organisational
situations, outcomes are affected by many factors.
8. Focussed towards Organizational Objectives: OB helps to combine both organizational and individual
objectives in such a way that both can be achieved at the same time.

In the earlier days of management studies, managers tried to search for the universally applicable answers to
organizational problems. That’s why the earlier management concepts were not successful. Organisational
environment is volatile and fast changing so management without contingent approach cannot be successful. It
must have Contingency (as and when required) approach.

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Elements in Organisational Behaviour:

An organization consists not only of people but also a changing network of interrelated activities. To study the
behaviour of people, we must understand the inter-relationship between human behaviour and other variables,
and the interactions among the formal structure of organisation, tasks, technology and methods of work, process
of management, the behaviour of individuals and groups, and the external environment.

The following are the main elements in Organisational behaviour.

1. Philosophy and Goals: The Philosophy and goals of management and workers create the climate of an
organisation. The philosophy of organisational behaviour is derived from both fact and value premises. Fact
premises represents, the behaviour of man or things in common. It is a universally accepted fact just as law of
gravitation, law of demand and supply etc. Value premises represents the desirability of certain goals. Value
premises control the human activities. The goal of an organisation is to produce more for the benefit of society,
i.e., workers, investors, and common public, and to satisfy their needs to a maximum extent.

2. Formal and Informal Organisations: Philosophy and goals can be achieved through formal and informal
organisations. Formal organisation interprets the philosophy and goals of the organisation and implement in a
rigid manner. Informal organisations on the other hand, are opposite to formal organisation and are not
implement rigidly.

3. Social Environment: Social environment means the association with othe organisation in the society which
influence each other.

4. Control System: Control is a must to get the best results. It intermingles formal organisation, informal
organization and social environment and such intermingling becomes possible only through communication and
group process.

5. Attitudes and Situation: System of controls influences the two principal factor of particular motivation i.e.,
attitudes of workers and situation factor. An ideal mix of three will yield desirable results. All these three–
control, attitudes, and situations – affect each other and a slight change in one factor may influence the
motivational pattern.

Thus, an effective organizational behaviour system results in productive motivation which should get an above
average performance out of average. Problem makers should be converted into problem solvers. It benefits both.
If Organisational Behaviour is applied successfully, the result will be a triple reward system - in which human,
organisational and social objectives are met.

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Why study OB?

1. Individual Behaviour

(i) Personality

(ii) Perception

(iii) Values and Attitudes

(iv) Learning

(v) Motivation

2. Group Behaviour

(i) Work groups and group dynamics

(ii) Dynamics of conflict

(iii) Communication

(iv) Leadership

(v) Morale

3. Organization: Structure, Process and Application

(i) Organizational Climate

(ii) Organizational Culture

(iii) Organizational Change

(iv) Organizational Effectiveness

(v) Organizational Development

Importance of OB

1) OB provides a road map to our lives in organizations People bring to their work place their hopes and
dreams as well as their fears and frustrations. Much of the time, people in organizations may appear to be acting
quite rationally, doing their fair share of work, and doing about their tasks in a civil manner. Suddenly, a few
people appear distracted, their work slips, and they even get withdrawn. Worse still, one may find someone
taking advantage of others to further his or her personal interest. Such a range of human behaviors makes life in
organizations perplexing. But those who know what to look for and have some advance ideas about how to cope
with pressures are more likely to respond in ways that are functional, less stressful, and even career-advancing.

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Therefore, OB need to map out organizational events so that employee can function in a more secure and
comfortable environment.

2) A Manager in a Business Establishment is concerned with Getting Things Done Through Delegation He
or she is successful when he or she can motivate subordinates to work for better results. OB will help the
manager understand the basis of motivation and what he or she should do to motivate subordinates.

3) The field of OB is useful for improving Cordial Industrial/Labour Relations If an employee is slow in
his/her work, or if his/her productivity is steadily declining, it is not always because of a poor work environment.
Often the indifferent attitude of the boss makes the worker lazy. Similarly, reluctance of the management to talk
to union leaders about issues might provoke them to give a strike call. In other words, relations between
management and employees are often strained for reasons which are personnel issues, not technical. Human
problems need to be tackled humanely. OB is very useful to understand the cause of the problem, predict its
course of action, and control its consequences. The field of OB serves as the basis for human resource
management.

4) OB helps in motivating employees OB helps manager to motivate the employees bringing a good
organizational performance automatically that leads to job satisfaction. It helps managers to apply appropriate
motivational tools and techniques in accordance with the nature of individual employees.

5) OB helps effective utilization of human resources OB helps managers to manage the people’s behaviour
and the organization effectively. It enables managers to inspire and motivates employees towards high
productivity and better results.

Contributing Disciplines of OB

1) Psychology The terms psychology comes from the Greek word ‘Psyche’ meaning soul or spirit. Psychology is
the science that seeks to measure, explain and sometimes change the behaviour of human beings. Psychology
studies processes of human behaviour, such as learning, motivation, perception, individual and group decision-
making, pattern of influences change in organization, group process, satisfaction, communication, selection and
training also such above concepts are used in Organization Behaviour.

2) Anthropology The term anthropology combines the Greek term ‘anthropo’ meaning man and the noun ending
‘logy’ meaning science. Thus, anthropology can be defined as the science of man. It is also known as ‘science of
humanity’. It studies the relationship between individuals and their environment. The major contributions of
Anthropology in the field of OB are Comparative values, Comparative attitudes, Cross-culture analysis,
Organization environment etc.

3) Political Science Political science is the branch of social science which deals with political system and
political behaviours. In other words, political science helps us to understand the dynamics of power and politics
within organizations Which includes conflict resolution, group coalition, and allocation of power etc. The main
contributions of political science in the field of OB have been concerned mainly with Conflict, Intra-
organizational policies and Power.

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4) Economics Economists study the production, distribution and consumption of goods and services. The
economic conditions of a country have long lasting impact on organizational behaviour. If psychological and
economic expectations of employee are met, they are satisfied and become high performers. Economic systems
include financial, commercial and industrial activities which have greater influences on the behaviour of the
people.

5) Engineering Engineering also influences organisational behaviour. Some topics are common to engineering
as well as organisational behaviour e.g. work measurement, productivity measurement, work flow analysis, work
design, job design and labour relations etc.

6) Medical Science Stress is becoming a very common problem in the organisations. Research shows that
controlling the causes and consequences of stress in and out of organisational settings, is important for the well-
being of the individual as well as the organisations. Medicine helps in the control of stress as well as stress
related problems.

7) Sociology Sociology also has a major impact on the study of organisational behaviour. Sociology makes use
of scientific methods in accumulating knowledge about the social behaviour of the groups. Sociology contributes
to organizational behaviour through the study of interpersonal dynamics like leadership, group dynamics,
communication etc. \

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Levels of OB

1. Individual Level Organization behavior views the organization as an individual's behavior. It studies the
individual behavior of people how they react to organizational plans, policies, etc. Psychological theories
like learning, motivation, and leadership are also considered to the study of the behavior of an individual.
It has also studied the factor like learning, perception, belief, and attitude of each individual. OB studies
the impact of psychological factors upon behavior and job performance at an individual level.
2. Group Level It has studied, how the group interacts with each other? How do they work? What types of
the task the groups are performing? How does leadership influence to the group etc? OB studies the
impact of social and psychological group behavior factors on the behavior and performance of groups at
the group level. The organization consists of a group, teams that work together in full co-operation and
co-ordination of each other. OB at the group level focuses on group interaction among members. It is
highly concerned with social psychology theories working in a group as it studies.
3. Organizational Level It has study the behavior of an organization as a whole. To study the organization,
it applies the knowledge of behavioral science. Organization behavior has tried to analyze how
organizational structure designs technology influences organizational effectiveness. It tries to focus on the
relationship between the organization and the environmental factors that directly or indirectly affect the
organization.

Application of OB in Management

1) Responding to Globalization Organization in recent days has changed the style of working and tries to
spread worldwide. Trapping new market place, new technology or reducing cost through specialization or cheap
labour are few of the different reasons that motivates organizations to become global.

2) Managing Workforce Diversity The increasing heterogeneity of organizations with the inclusion of different
groups. Whereas globalization focuses on differences among people from different countries. "Workforce
diversity has important implications for management practice. Managers will need to shift their philosophy from
treating everyone alike to recognizing differences and responding to those differences in ways that will ensure
employee retention and greater productivity while, at the same time, not discriminating".

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3) Improving Quality and Productivity

a) Total Quality Management (TQM) It is a philosophy of management that is driven by the constant
attainment of customer satisfaction through the continuous improvement of all organizational processes.

1. Intense focus on the customer

2. Concern for continuous improvement

3. Improvement in the quality of everything the organization does

4. Accurate measurement

5. Empowerment of employees.

b) Reengineering: Reconsiders how work would be done and the organization structured if they were being
created from scratch. "It asks managers to reconsider how work would be done and their organization structured
if they were starting over".

4) Improving people skills, It will help management to better plan and respond to changes in the workplace.
employee relationship is also showing change in the modern era. Employer Employers are no more autocrats and
participative style of leadership welcomed. Flexible working hours and increased is authority motivates
employees to perform to their best. Management now welcomes upward communication and participation of
lower level employees in the decision making process.

5) Stimulating Innovation and Change "Today's successful organizations must foster innovation and master
the art of change or they'll become candidates for extinction. An organization's employees can be the impetus for
innovation and change or they can be a major stumbling block. The challenge for managers is to stimulate
employee creativity and tolerance for change.

6) Work-life Balance Achieving a work-life balance between work and other important aspects of life is a big
challenge today in every organization. It can be tough to make time for family and work. Hence, Employers can
help employees to achieve work-life balance by instituting policies, procedures, actions, and expectations that
enable them to pursue more balanced lives, such as flexible work schedules, companysponsored family events
and activities etc.

7) Improving People Skills Possessing people skills is essential to have success in todays’ organizations.
Employees needs to improve their skills through a little effort and showing basic common courtesy in their
business dealings like being polite, avoiding conflict, listening, appreciating etc. On the other hand, employers’
should also concentrate more on training employees with this above context.

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Shortcomings of OB

1) Failure of Individual on the Domestic Front The subject helps an individual understand human behaviour
better only in the work place, he or she may be a failure on the domestic front. People who have a thorough
grounding of behavioural disciplines have sometimes proved to be total wrecks in their personal lives.

2) Failure to contribute to improve Interpersonal Relations The subject of OB has not contributed to
improved interpersonal relations in organizational settings. Jealousies, back-stabbing, leg-pulling, intrigues,
harassment, and inequalities in rewards go side by side with nice lecturers, training programmes, discussions,
smiles, assurances, niceties and the like.

3) OB is selfish and exploitative It serves only the interest of the management. With high emphasis on
motivation, efficiency, and productivity, the subject breeds a competitive spirit among the employees. They are
not allowed to function and live in harmony with one another.

4) Expectation of quick fix solutions A serious problem that has plagued the subject is the tendency of
managers to expect quick-fix solutions from behavioural programmes. Critics of OB wonder whether the ideas
that have been developed and tested during periods of organizational growth and economic plenty will endure
with equal success under different conditions. Future environment shall be marked by shrinking demand, scarce
resources, and more intense competition. When organizations stagnate, decline, or encounter a threat of closure,
there will be conflict and stress as a result it leads to one of the critical issue to find answers to related questions.

5) OB will not totally abolish conflict and frustration, it can only reduce them It means, OB not an absolute
answer to problems. It is only a part of the whole fabric of an organization. However, OB will not solve
unemployment. It will not make up for our own deficiencies. It cannot substitute for poor planning, inept
organizing, or inadequate controls. It is only one of the many systems operating within a larger social system.

Scope of OB

1. Skill Development: Entering and surviving in the new-age, organization requires certain set of skills i.e.,
work-related skills and generic skills such as problem-solving and communication skills. OB deals
directly with the generic skills.
2. Personal Growth through Insight into Human Behaviour: As per Robert P. Vecchio, people study OB
to attain self-accomplishment that one gets while learning about the behaviour and the attitude of others.
This ultimately results in improved self-knowledge and self-insight.
3. Improvement of Organizational and Individual Effectiveness: The study of OB provides information
that can be used to solve organizational issues. It also improves organizational effectiveness i.e., the
potential of an organization to be efficient and to meet the requirements of the parties involved. OB
improves organizational effectiveness by revealing factors such as employee motivation, communication
hurdles and personality factors that enhance or obstruct effective performance.
4. Sharpening and Refining of Common Sense: Gaining knowledge and information about OB is crucial
for managers as it teaches them how to deal with their subordinates which cannot be taught through any

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book. Common sense without the knowledge of OB is not enough to manage workforce. Knowledge of
OB sharpens and widens the sphere of common sense. It decreases the time one might need to attain
important behavioural knowledge and skills.

Goals of Organizational Behavior

Most sciences share four goals—to describe, understand, predict, and control some phenomenon. Organizational
behavior also embraces these goals.

1) Describe People Behavior: The first objective is to describe, systematically, how people behave under a
variety of conditions. Achieving this goal allows managers to communicate about human behavior at work using
a common language.

2) Understand People Behavior: A second goal is to understand why people behave as they do. Managers
would be highly frustrated if they could only talk about behaviors of their employees, but not understand the
reasons behind those actions. Therefore, inquisitive managers learn to probe for underlying explanations.

3) Predict Employee Behavior: Predicting future employee behavior is another goal of organizational behavior.
Ideally, managers would have the capacity to predict which employees might be dedicated and productive or
which ones might be absent, tardy, or disruptive on a certain day (so that managers could take preventive
actions).

4) Control Human Activity: The final goal of organizational behavior is to control (at least partially) and
develop some human activity at work. Since managers are held responsible for performance outcomes, they are
vitally interested in being able to make an impact on employee behavior, skill development, team effort, and
productivity. Managers need to be able to improve results through the actions they and their employees take, and
organizational behavior can aid them in their pursuit of this goal.

Some people may fear that the tools of organizational behavior will be used to limit their freedom and take away
their rights. Although that scenario is possible, it is not likely, for the actions of most managers today are subject
to intense scrutiny. Managers need to remember that organizational behavior is a human tool for human benefit.
It applies broadly to the behavior of people in all types of organizations, such as businesses, government,
schools, and service organizations. Wherever organizations are, there is a need to describe, understand, predict,
and better manage human behavior.

Key Elements/Determinants of OB

How people behave in an organization under a given situation is the concern of organizational behavior. People
join an organization to achieve certain objectives. The efforts of the people are co-ordinated by the structure of
authority-responsibility relationships. People use some technology to produce goods and services to achieve their
goals. We can call people, structure and technology as the internal organizational elements. These elements
interact with the external environment and are influenced by it. The study of organizational behavior, thus,
involves four key elements; people, structure, technology and the environment in which the organization
operates.

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1) People: People make up the internal social system of the organization. That system consists of
individuals and groups, and large groups as well as small ones. There are unofficial, informal groups and
more official, formal ones. Groups are dynamic. We must remember that organizations exist to serve
people, rather than people existing to serve organizations. The human organization of today is not the
same as it was yesterday, or the day before. In particular, the workforce has become richly diverse, which
means that employees bring a wide array of educational backgrounds, talents, and perspectives to their
jobs. Managers need to be tuned into these diverse patterns and trends, and to be prepared to adapt to
them.
2) Structure: Structure defines the roles and relationships of people in an organization. Different people in
the organization are given different roles and they have certain relationships with others. Organization
structure leads to division of work so that people can perform their duties to accomplish the
organizational goals. Under the structure, different duties are to be performed by different people. Some
may be managers others may be supervisors, clerks, peons or workers. All are related to each other to
accomplish the goals in a co-ordinated manner. The structure relates to authority-responsibility
relationships.
3) Technology: Technology provides the resources with which people work and affects the tasks that they
perform. They cannot accomplish much with their bare hands, so they build buildings, design machines,
create work processes, and assemble resources. The technology used has a significant influence on
working relationships. The great benefit of technology is that it allows people to do more and better work,
but it also restricts people in various ways. It has costs as well as benefits.
4) Environment: All organizations operate within an internal and an external environment. A single
organization does not exist alone. It is part of a large system that contains many other elements, such as
government, the family, and other organizations. Numerous changes in the environment create demands
on organizations. Individual organizations, such as a factory or a school, cannot escape being influenced
by this external environment. It influences the attitudes of people, affects working conditions, and
provides competition for resources and power. It must be considered in the study of human behavior in
organizations.
Concepts of OB
The concept of OB is based on two key elements namely:
 Nature of people
 Nature of the organization
Nature of People

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In simple words, nature of people is the basic qualities of a person, or the character that personifies an individual
they can be similar or unique. Talking at the organizational level, some major factors affecting the nature of
people have been highlighted. They are:
 Individual Difference: It is the managerial approach towards each employee individually, that is one-on-one
approach and not the statistical approach, that is, avoidance of single rule. Example: Manager should not be
biased towards any particular employee rather should treat them equally and try not to judge anyone on any other
factor apart from their work.
 Perception: It is a unique ability to observe, listen and conclude something. It is believing in our senses. In
short, the way we interpret things and have our point of view is our perception. Example: Aman thinks late night
parties spoil youth while Anamika thinks late night parties are a way of making new friends. Here we see both
Aman and Anamika have different perception about the same thing.
 A whole person: As we all know that a person’s skill or brain cannot be employed we have to employee a
whole person. Skill comes from background and knowledge. Our personal life cannot be totally separated from
our work life, just like emotional conditions are not separable from physical conditions. So, people function is
the functioning of a total human being not a specific feature of human being.
 Motivated behavior: It is the behavior implanted or caused by some motivation from some person, group or
even a situation. In an organization, we can see two different types of motivated employees: o Positive
motivation: Encouraging others to change their behavior or say complete a task by luring them with promotions
or any other profits. Example: “If you complete this, you will gain this.” o Negative motivation: Forcing or
warning others to change their behavior else there can be serious consequences. Example: “If you don’t complete
this, you will be deprived from the office.”
 Value of person: Employees want to be valued and appreciated for their skills and abilities followed by
opportunities which help them develop themselves.
Nature of Organization
Nature of organization states the motive of the firm. It is the opportunities it provides in the global market. It also
defines the employees’ standard; in short, it defines the character of the company by acting as a mirror reflection
of the company. We can understand the nature of any firm with its social system, the mutual interest it shares and
the work ethics. Let us take a quick look at all these factors:
 Social system: Every organization socializes with other firms, their customers, or simply the outer world, and
all of its employees - their own social roles and status. Their behavior is mainly influenced by their group as well
as individual drives. Social system are of two types namely: o Formal: Groups formed by people working
together in a firm or people that belong to the same club is considered as formal social system. Example: A
success party after getting a project. o Informal: A group of friends, people socializing with others freely,
enjoying, partying or chilling. Example: Birthday party.
 Mutual interest: Every organization needs people and people need organizations to survive and prosper.
Basically, it’s a mutual understanding between the organization and the employees that helps both reach their
respective objectives. Example: We deposit our money in the bank, in return the bank gives us loan, interest, etc.
 Ethics: They are the moral principles of an individual, group, and organization. In order to attract and keep
valuable employees, ethical treatment is necessary and some moral standards need to be set. In fact, companies
are now establishing code of ethics training reward for notable ethical behavior.

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Models of OB
Organizations differ in the quality of the systems they develop and maintaining and in the results they achieve.
Varying results are substantially caused by different models of organizational behavior. These models constitute
the belief system that dominates management’s thought and affects management’s actions in each organization.
Therefore, it is highly important that managers recognize the nature, significance, and effectiveness of their own
models, as well as the models of others around them. Four models of organization behavior are:
1) Autocratic Model: “Might is right” is the motto of the theory. It depends upon power. Those who are in
command must have power to demand. Employees are to follow their boss otherwise they are to be penalized.
The theory is based on the assumption that only management knows what is wrong and what is right and
employees are to follow orders without any argument. Management thinks that employees are passive and
resistant to organizational needs. It is just like theory X developed by McGregor. Under autocratic conditions the
employee orientation is obedience to a boss, not respect for a manager. The psychological result for employees is
dependence on their boss, whose power to hire, fire, and “perspire” they is almost absolute. The boss pays
minimum wages because minimum performance is given by employees. They are willing to give minimum
performance—though sometimes reluctantly—because they must satisfy subsistence needs for themselves and
their families. The autocratic model was an acceptable approach to guide managerial behavior when there were
no well-known alternatives, and it still can be useful under some conditions.
2) Custodial Model: Workers being managed under the autocratic model often feel insecurity and frustration.
They may even show aggression towards their boss and their families and neighbours. That is why progressive
managers felt that there must be some way to develop better employee relationships so that insecurity and
frustration could be dispelled. The custodial model provides employees’ dependence on organization rather their
dependence on their boss. The model emphasizes economic reward, security, organizational dependence, and
maintenance factors. The custodial approach leads to employee dependence on the organization. Rather than
being dependent on their boss for their weekly bread, employees now depend on organizations for their security
and welfare. Employees working in a custodial environment become psychologically preoccupied with their
economic rewards and benefits. As a result of their treatment, they are well maintained and contented. However,
contentment does not necessarily produce strong motivation; it may produce only passive cooperation. The result
tends to be that employees do not perform much more effectively than under the old autocratic approach.
3) Supportive Model: The basic idea behind this theory is that leadership motivates the people to work and not
the power of money as in custodial model. Through leadership, management provides a climate to help
employees grow and accomplish in the interest of the organization, the things of which they are capable.
Management’s orientation, therefore, is to support the employee’s job performance, rather than to simply support
employee benefit payments as in the custodial approach. Supportive behavior is not the kind of behavior that
requires money. Rather, it is a part of management’s lifestyle at work, reflected in the way that it deals with other
people. The manager’s role is one of helping employees solve their problems and accomplish their work. Under
the supportive model, the workers feel a sense of participation and task involvement in the organization. The
manager's role is one of helping employees solve their problems and accomplish their work. This model has been
found to be effective in affluent countries where workers are more concerned about their higher-level needs’
affiliation and esteem. This model has limited application under Indian conditions because a vast majority of
operative workers are still working for the satisfaction of their physiological and security needs.
4) Collegial Theory: A useful extension of the supportive model is the collegial model. The term collegial
relates to a body of persons having a common purpose. The collegial model, which embodies a team concept,
first achieved widespread applications in research laboratories and similar work environments. The collegial
model traditionally was used less on assembly lines, because the rigid work environment made it difficult to
develop there. The theory is based on the principle of mutual contribution by employer and employees. Each

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employee should develop a feeling that he is a part of the whole and contributing something to the whole and
recognizes the others contribution. Management is supported to be joint contribution and not the boss.
The managerial orientation is toward teamwork. Management is the coach that builds a better team. The
employee response to this situation is responsibility. The collegial approach for the employee is self-discipline.
In this kind of environment employees normally feel some degree of fulfilment, worthwhile contribution, and
self-actualization, even though the amount may be modest in some situations. This self-actualization will lead to
moderate enthusiasm in performance.

Challenges and Opportunities for OB

There are a lot of challenges and opportunities today for managers to use OB concepts. Some of the more critical
issues confronting managers for which OB offer solutions – or at least some meaningful insights toward
solutions are discussed below.
1) Globalization of Business There is no denying the fact that the world economy is becoming increasingly
global in character. Barriers to trade between different countries have been reduced to a great extent.
India which is also a member of the World Trade Organization (WTO) has also removed most of the
barriers 10 trade which has paved the way for free competition. Many foreign multinational corporations
have brought technology and capital into India and are now competing among themselves and with the
Indian firms. Several Indian firms have opened their subsidiaries in foreign countries and have also
entered into alliance with local companies in foreign countries.
Managing in a global economy poses many challenges and opportunities. For example, at a macro level,
property ownership arrangements vary widely in different countries. So does the availability of natural
resources and components of the infrastructure, as well as the role of government in business. For our
purposes, a very important consideration is how behavioural processes vary widely across cultural and
national boundaries. Norms, values and beliefs differ sharply among cultures and these shape patterns of
work-related behavior of the workers to a great extent. They also affect the nature of supervisory relationship,
decision-making styles and processes, and organizational configurations. Group and inter-group processes,
responses to stress, and the nature of political behavior also differ from culture to culture. Thus, globalization
has posed both challenges and opportunities for the managers. The global managers must work to understand
the local culture and the behavioural forces that affect the workforce in order to manage the workers more
effectively. Even if the global manager is working in his own country, he might have to manage the workers
who belong to different cultures. In this case also, the manager will have to learn to adapt his management
style to deal effectively with such workers. Similarly, one has to master the art of interacting with bosses and
peers belonging to different cultures.
2) Workforce Diversity Another serious challenge that managers face involves workforce diversity, i.e., the
increasing heterogeneity of organizations with the inclusion of workers from different groups such as
women, physically disabled persons, retired defence personnel, backward classes, ethnic groups etc.
Whereas globalization focuses on differences between personnel from different countries, workforce

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diversity addresses differences among people within the same country. For instance, more and more
women have been joining organizations in India, and women executives have also been occupying
important positions at the middle and top levels of the organizations. This in itself is a challenge for
organizations as, traditionally, Indian society has been male-dominated.
Earlier, the management followed a melting pot approach to differences in the workforce. It was assumed
that people who were different would somehow assimilate with the majority group. But it is now
recognized that employees don't set aside their values, beliefs, lifestyle preferences, etc. when they come
to work. Therefore, it is desirable to recognize and value such differences by adapting management
practices to different life and work styles, etc. of the diverse groups.
Thus, workforce diversity has significant implications for management. The managers will be required to
shift their approach from treating each group of workers alike to recognizing differences among them and
following such policies so as to improve productivity, reduce labour turnover and avoid any sort of
discrimination. When workforce diversity is managed properly, there would be better communication,
better human relations and congenial work culture in the organization.

3) Changed Employee Expectations With the changes in workforce demographics, employee expectations
and attitudes have also changed. Traditional allurements such as job-security, attractive remuneration,
housing, and the like do not attract, retain or motivate today's workforce.
Employees today demand empowerment and expect quality of status with the management. Previous
notions on managerial authority are giving way to employee influence and involvement along with
mechanisms for upward communication.
Empowerment results in redefining jobs, both on the shop floor as a well as in boardrooms. As workmen
are given more control over their jobs, a whole class of supervisors may become redundant, not because
they will do a bad job, but because there shall be no need for them. Empowerment also means that the
worker can bring his or her children to the workplace, look around, and can even gain knowledge about
work methods. This is a privilege enjoyed till now only by owners of enterprises whose children can
access even vital documents. Expectations of equality are breaking up the traditional relationships
between employees and owners.
4) Increasing Quality Consciousness Because of increased competition, both from indigenous as well as from
foreign organizations, there is increased emphasis on quality of products and services, that too at competitive
cost. Today, the buzz words in quality are total quality management, kaizen (improvement upon improvement),
six sigma standard, and quality certification. Because of increased emphasis on quality, organizations have to
change not only their technology but way of their working. Such a change results into behavioural problems in
employees as they perceive that such a change would affect them adversely. Therefore, the managers have to
adopt suitable practices to ensure that employees accept change willingly and become part of the mission of
spreading quality consciousness throughout the organization.
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5) Managing Change Nothing is permanent except change. In the contemporary environment, organizations
must plan and implement change to survive and grow. As a result, demands and expectations placed on managers
and their organizations are greater than ever before, as is the complexity of the environment within which they
must operate. While in the past managers might have seen change as something that must be addressed
periodically, it has now become a fact of everyday life for everyone in the business world. And human resources
are keys to the successful introduction of any change. The challenge before managers is to prepare organizational
members for change. They must play the role of 'change, agents' or 'facilitators of change', to improve
organizational effectiveness.
6) Ethics and Social Responsibility Although scams, scandals, and frauds, in business are not really new, media
attention focused on them in recent years (e.g., Bofors gun deal, Bihar fodders scam, Tehlaka dot com, Bombay
stock scam, etc.) has increased public sensitivity about them. Many organizations today are taking steps to
enhance the ethical standards of their employees and to avoid legal and/or public opinion problems. There is also
increased concern for carrying out social responsibility by the management of business organizations.
Ethics denote the socially accepted beliefs about what is right and wrong or good and bad. Social responsibility is
the organization’s obligation to protect and contribute to the interests of various stakeholders such as investors
and owners, employees, customers, suppliers, government, society, etc. Various trade associations and chambers
of commerce and industry have developed codes of ethics for their member organizations to increase the
credibility of a business. From the point of view of social responsibility, increasing attention has been focused in
recent years on a business obligation to help avoid pollution, and contribute to social causes. However, clearly
defining ethical behavior and social responsibility is a great challenge. Nevertheless, it is expected of managers
to create an ethically healthy climate for their subordinates where they can perform their duties efficiently and
confront a minimal degree of ambiguity regarding what constitutes good and bad behavior.

Goals of Organizational Behavior

Most sciences share four goals—to describe, understand, predict, and control some phenomenon. Organizational
behavior also embraces these goals.
1) Describe People’s Behavior: The first objective is to describe, systematically, how people behave under a
variety of conditions. Achieving this goal allows managers to communicate about human behavior at work using
a common language.
2) Understand People’s Behavior: A second goal is to understand why people behave as they do. Managers
would be highly frustrated if they could only talk about behaviors of their employees, but not understand the
reasons behind those actions. Therefore, inquisitive managers learn to probe for underlying explanations.
3) Predict Employee Behavior: Predicting future employee behavior is another goal of organizational behavior.
Ideally, managers would have the capacity to predict which employees might be dedicated and productive or
which ones might be absent, tardy, or disruptive on a certain day (so that managers could take preventive
actions).
4) Control Human Activity: The final goal of organizational behavior is to control (at least partially) and
develop some human activity at work. Since managers are held responsible for performance outcomes, they are
vitally interested in being able to make an impact on employee behavior, skill development, team effort, and
productivity. Managers need to be able to improve results through the actions they and their employees take, and
organizational behavior can aid them in their pursuit of this goal.
Some people may fear that the tools of organizational behavior will be used to limit their freedom and take away
their rights. Although that scenario is possible, it is not likely, for the actions of most managers today are subject

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to intense scrutiny. Managers need to remember that organizational behavior is a human tool for human benefit.
It applies broadly to the behavior of people in all types of organizations, such as businesses, government,
schools, and service organizations. Wherever organizations are, there is a need to describe, understand, predict,
and better manage human behavior
Emerging Aspects of OB

Organizational Behaviour (OB) is not that Organizational Behaviour(OB) which was studied before. There are
emerging various trends in OB. With the passage of time managers are adopting different models or practice to
manage the behaviour of employees within the organization. Here we discuss the trends in OB presented by
Keith Davis. These trends are as follows:
1. Open System
2. Human Orientation
3. Distribution of Power
4. Intrinsic Motivation
5. Balanced Focus
6. Self-disciplined
7. Leadership and team support

1. Open System
Previously Oraganizations were taken as a closed system. Employees used to work in a tights rules and structure.
Nowadays organizations are seen as a complex open system that interacts openly with various elements to
achieve a desired goal. Organizational behaviour is viewed from the perspective of the system. Behavioural
relationships are defined as the whole individual, the whole group, and the whole organization. The systemic
aspect of organizational behaviour provides synergistic effects.

2. Human Orientation
Previously Employees were considered as like a machine. Managers used to think that they work in the
organization to fulfill their need only. Nowadays employees are considered the most important resources of the
organization. They are treated as a means of development of the organization. Managers are providing support,
team work facilities, guidance etc. to the employees.

3. Distribution of Power
Previously the Power was at the top level of the organization. We can say that traditional organizations focused
on power Centralization. Nowadays Modern organizations focus on power decentralization. A Certain level of
power is distributed to the employees by providing them to participate in decision-making, planning etc.

4. Intrinsic Motivation
Motivation is the process of creating willingness to the employees towards the work to achieve organizational
goal as well as individual goal. Previously the managers used to focus on extrinsic motivation which contains
salary, job security, policy etc. Nowadays most of the employees are motivated by intrinsic factors which contain
reward, recognition, achievement etc. Today's managers are focusing on intrinsic motivational factors.

5. Balanced Focus
People and the organisation are interdependent each other. Organizations need people and at the same time
people also need organizations. Previously Managers used to focus to achieve organizational goal and objectives.
The needs, objectives and goals of the employees were neglected. But nowadays managers are starting to make
balance between organizational and individual goal, need and objectives.

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6. Self-disciplined
Previously managers used to make strick and tight rules and regulations to control the behaviour of employees in
the organizations. Nowadays managers are creating such environment in which employees feel that they are in
their own home. They consider themselves as the most important member of the organization. They are
motivated, controlled and guided by themselves.

7. Leadership and team support

Previously employees should work individually without any support of the managers or their colleagues which
created job dissatisfaction and low performance. Nowadays managers are providing support as a leader to the
employees. Managers are creating team to get the job done or to solve the problem. Managers are creating such
environment where employees consider manager as their friend. This increases the job satisfaction and motivate
the employees.

Cultural Diversity

Cultural diversity (also known as multiculturalism) is a group of diverse individuals from different cultures or
societies. Usually, cultural diversity takes into account language, religion, race, sexual orientation, gender, age
and ethnicity.

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Ms. Swati Agarwal