Introduction to Organizational Behavior

Organizational behavior
is the multidisciplinary field that aims to understand
individuals, groups, and organizational processes in
workplace.

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 Levels of Analysis in OB

OB is examined at three distinct levels:

• the individual
• the group or team
• the organization as a whole

The organizational behavior is also affected by the external

environment.
 OB: Historical Journey

Scientific Management

Frederick W. Taylor proposed four principles of scientific

management:

i) Develop a science for each element of a worker’s work

ii) Codify the standard method of doing a task into standard operating
procedures
iii) Scientifically select, train, teach, and develop workmen
iv) Establish a fair and acceptable level of performance for a task and
a pay system to reward the performance above acceptable level.
Piece-rate, shop-management..
Time and motion studies…
 OB: Historical Journey
The Hawthorne Studies

The Hawthorne studies were initiated by Elton Mayo and his associates in 1927
at Western Electric Company, Chicago. It had following four phases:

1. Illumination Experiments
2. Relay Assembly Test Room Experiments (Output depends on speed and continuity)
3. Mass Interviewing Program
4. Bank Wiring Observation Room Experiment.

On the basis of the studies Mayo posited that how effectively people work
depends not only on the physical characteristics of the work environment, but
also on social conditions encountered by the workers at the workplace.

The way people behave on their jobs also depends on their attitudes and the
processes by which they communicate with each other.
 Relay Assembly Test Room Experiments

Output was dependent upon speed and continuity.

• The incentive system

• Rest hours and frequency of rest hours.
• Rest hours with tea/coffee/snacks
• Changes in working hours and workday
 Mass Interviewing Program
• Complaint is not necessary an objective recital of facts.

• Social meaning associated with objects, person or events.

• Social meaning and employee’s personal situation.

• Personal situation is composed of personal preference and social

reference

• Position or status is a reference point

• Social organization of the company and employee’s perception about

his social status and expected social rewards

• Social demands are influenced by social experience in the group

(internal and external)
 Bank Wiring Observation Room Experiment.

• To find out impact of small groups on individuals.

• Hourly wage for each worker.

• Bonus based on group efforts

Expectations: highly efficient worker would put pressure on less

efficient workers to increase output.
Some conclusions drawn from Hawthorne studies

• Role of group influence

• Motivations

• Supervision approach

• Working condition

• Employee morale

• Communication
OB: Historical Journey (cont’d)

Classical Management Theory: Focuses on the efficient structuring

of organizations.
Henry Fayol’s 14 principles of management:
Division of work Centralization and Decentralization

The Principle of Authority Scalar Chain

Principle of Discipline Order

Unity of Command Equity

Unity of Direction Stability of tenure

Subordination of Individual Interests Initiative

Remuneration Esprit de Corps

 Philosophy of Management: Theory X and Theory Y

Theory Y assumes that people are highly sensitive to their work environments,
and the ways they are treated will influence their performance.
 Fundamental Assumptions in OB
A System View of an Organization

• Considering the internal perspective, each organization is made

up of various sub-systems such as
production,
marketing,
finance,
human resource
that contribute to the overall purpose of the organization.

The various sub-systems of an organization need to be aligned

with each other to increase the efficiency of the organization.
 Fundamental Assumptions in OB
A System View of an Organization

• Considering the external perspective, each organization has a

role that it plays in the higher-level system in which it exists.

How an organization fits to the needs of larger systems

determines the survival and growth of the organization.

System theory views organization as an open system that must

change itself in order to survive and maintain in a dynamic
environment.
 Characteristics of Open System
• Energic inputs into the system (organization)

• Transformation of inputs within the system (organization)

• Energic outputs

• Feedback/recycling

• Law of entropy

• Dynamic homeostasis

• Equifinality
 Subsystems in an Organization

Katz and Kahn identified five sub-systems that are important to the
success of any organization:

• Production subsystem
• Maintenance subsystem
• Adaptive subsystem
• Supportive subsystem
• Managerial subsystem

It is not necessary that sub-systems are represented by departments

in an organization. The patterns of activity in an organization is also
a sub-system.
 Fundamental Assumptions in OB ( cont’d)

Contingency Approach
There is no “One Best” approach that fits to all situations.

Contingency approach to management suggests that

organizational behavior is affected by a large number of
interacting factors.

How someone will behave in a given situation will be

contingent on many different variables present in the
situation.

ITC
 Contingency Perspective and Organization Theory

• Following factors impact the effectiveness of the

organizational forms:

• Environmental change and uncertainty

• The size of an organization

What Managers Do?

Managerial Activities:

• Make decisions
• Allocate resources
• Direct activities of others to attain goals.
 Management Functions
French industrialist Henri Fayol observed that all managers perform
five management functions:
• planning
• organizing
• commanding
• coordinating
• controlling

Now, these managerial functions are merged into four categories:

• Planning : Goals , Strategy and plans
• Organizing: Tasks, Who, How, Whom to report, decision-centre
• Leading: Motivating, directing, communicating, resolving-conflict
• Controlling: Monitoring and correcting.
 Management Roles

Henry Mintzberg suggested that the roles performed by managers

can be broadly divided into three categories:

1. Interpersonal Roles : Figurehead, Leadership and liaison

2. Informational Roles: Monitor, disseminator, spokesperson

3. Decisional Roles: Entrepreneur, Disturbance Handler,

Resource allocator, Negotiator.
Skills Needed at Different Levels of Management
 Effective Versus Successful Managerial Activities

Luthans and his associates conducted a study on managers, and

suggested that the managers are engaged in following four
activities:

1. Traditional management
Decision making, planning, and controlling.
2. Communication
Exchanging routine information and processing paperwork.
3. Human resource management
Motivating, disciplining, managing conflict, staffing, and training.
4. Networking
Socializing, politicking, and interacting with others.
 Allocation of Activities by Time

• Source: Based on F. Luthans, R. M. Hodgetts, and S. A. Rosenkrantz, Real Managers (Cambridge, MA: Ballinger,
1988).
The Psychological Contract
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 The Psychological Contract

• The series of mutual expectations and satisfaction of needs

arising from the people-organizational relationship.

• Process of giving and receiving by the individual and the

Organization.

• Covers a range of expectations of rights and privileges,

duties and obligations that are not part of formal
agreements but still have an important influence on people’s
behavior.
 OB Model

Source. Robbins, S.P., Judge, T.A. and Vohra, N. (2019), Organizational Behavior (18th Edi.), Pearson, India