CHAPTER 1

ORGANIZATIONAL BEHAVIOUR

Organizational Behavior
"Organizational behavior is a field of study that investigates the impact that
individuals, groups and structure have on behavior within organization for the
purpose of applying such knowledge toward improving an organization's
effectiveness."

- Stephen P. Robbins

"Organizational behavior can be defined as the understanding; prediction and

management of the human behavior affect the performance of the organizations. -
Luthans

In brief organizational behavior is concerned with the study of what people do in

an organization and how their behavior affects the performance of the
organizations. Organizational behavior is a scientific discipline in which a large
number of research is conducted which improve its knowledge base.
Why organizational behavior is significant.

Organizational behavior offers several ideas to management as to how human

factor should be properly emphasized to achieve organizational objectives.
Organizational behavior provides opportunity to management to analyze human
behavior and prescribe means for shaping it to a particular direction.

Organizational behavior helps to analyze 'why' and 'how' an individual behaves in

a particular way. Human behavior is a complex phenomenon and is affected by a
large number of factors including the psychological, social and c ultural
implications. Organizational behavior integrates these factors to provide
simplicity in understanding the human behavior.

Interpersonal Level: Human behavior can be understood at the level of

interpersonal interaction. Organizational behavior provides means for
understanding the interpersonal relationships in an organization.

Group Level: Though people interpret anything at their individual level, they
are often modified by group pressures, which then become a force in shaping
human behavior. Thus individuals should be studied in groups also.
 Inter-group Level: The organization is made up of many groups that develop
complex relationships to build their proc ess and substance.
Understanding the effect of group relationships is important for managers in
today's organization.
Elements of organizational behavior

The fundamental elements of organizational behavior are discussed below:

1. People/ Employee: 
The employee is one of the very important parts of an organization. There is
no any alternative in an organization without employee/people. You know,
there may be many parties in an organization. Some party may be formal
and some may be informal.
These parties are not stable rather than mobile. Actually, today's Human
Organization is tomorrow's future.
Organization and employee are connected to each other and it will remain
forever.

2. Structure:
This is the second steps of organizational behavior. Actually, Structure means
the formal relationship with on the job employee of an organization.
There is created different types of position for doing work nicely in the
organization. These position or designation are Manager, Accountant,
Administration and general staff. These officer and staff have to connect
structurally so that they can work efficiently and can play an important role in
organizational development.

3. Technology:
Technology is a very important primary aspect of organizational structure in
the modern age. Technology supplies essential resource and equipment to the
employee for doing their work efficiently.
Thus technology effect on their activity.
Employees are not able to finish their work with the bare hand.
They build the buildings, prepare the design of the devices, determine the
working process, assemble the resources with the help of technology.
Technology effects notably on the correlation of workers at the workplace.

4. Social System:
Everything around us is society and everyone in the social lives together. The
social system determines the organizational work environment and from which
the organization can operate.
As people cannot live alone just like organization cannot run alone its job.
The organization has to do its activity with the help of the employee.

5. Environment: 
There is no any organization where they can survive alone. Every
organization has to work on the internal and external environment.
Management has to come near to all the staff to maintain a good working
 environment.
You know, a good working environment is helpful for good production.
Conclusion:
Finally, it can be said that Organizational Behavior and Organizational Structure are
deeply affected by the above fundamental elements.
Actually, the main objectives of Organizational Behavior are to develop the good
working environment for the people, nation, society and the country.

NATURE AND SCOPE (FEATURES) OF

ORGANIZATIONAL BEHAVIOUR
Organizational behaviour has emerged as a separate field of study. The nature it has acquired is
identified as follows :

1. A Separate Field of Study and not a Discipline Only

By definition, a discipline is an accepted science that is based on a theoretical foundation. But, O.B.
has a multi-interdisciplinary orientation and is, thus, not based on a specific theoretical background.
Therefore, it is better reasonable to call O.B. a separate field of study rather than a discipline only.

2. An Interdisciplinary Approach

Organizational behaviour is essentially an interdisciplinary approach to study human behaviour at

work. It tries to integrate the relevant knowledge drawn from related disciplines like psychology,
sociology and anthropology to make them applicable for studying and analysing organizational
behaviour.

3. An Applied Science

The very nature of O.B. is applied. What O.B. basically does is the application of various researches
to solve the organizational problems related to human behaviour. The basic line of difference
between pure science and O.B. is that while the former concentrates of fundamental researches, the
latter concentrates on applied researches. O.B. involves both applied research and its application in
organizational analysis. Hence, O.B. can be called both science as well as art.

4. A Normative Science

Organizational Behaviour is a normative science also. While the positive science discusses only
cause effect relationship, O.B. prescribes how the findings of applied researches can be applied to
socially accepted organizational goals. Thus, O.B. deals with what is accepted by individuals and
society engaged in an organization. Yes, it is not that O.B. is not normative at all. In fact, O.B. is
normative as well that is well underscored by the proliferation of management theories.

5. A Humanistic and Optimistic Approach

Organizational Behaviour applies humanistic approach towards people working in the organization.
It, deals with the thinking and feeling of human beings. O.B. is based on the belief that people have
an innate desire to be independent, creative and productive. It also realizes that people working in the
organization can and will actualize these potentials if they are given proper conditions and
environment. Environment affects performance or workers working in an organization.

6. A Total System Approach

The system approach is one that integrates all the variables, affecting organizational functioning. The
systems approach has been developed by the behavioural scientists to analyse human behaviour in
view of his/her socio-psychological framework. Man's socio-psychological framework makes man a
complex one and the systems approach tries to study his/her complexity and find solution to it.

Scope of Organizational Behaviour

The three internal organizational elements viz., people, technology and structure and the fourth
element, i.e., external social systems may be taken as the scope of O.B.

1. People

The people constitute the internal social system of the organization. They consist of individuals and
groups. Groups may be large or small, formal or informal, official or unofficial. They are dynamic.
They form, change and disband. Human organization changes everyday. Today, it is not the same as
it was yesterday. It may change further in the coming days. People are living, thinking and feeling
being who created the organization and try to achieve the objectives and goals. Thus, organizations
exist to serve the people and not the people exist to serve the organization.

2. Structure

Structure defines the sole relationship of people in an organization. Different people in an

organization are given different roles and they have certain relationship with others. It leads to
division of labour so that people can perform their duties or work to accomplish the organizational
goal. Thus, everybody cannot be an accountant or a clerk. Work is complex and different duties are
to be performed by different people. Some may be accountant, others may be managers, clerks, peons
or workers. All are so related to each other to accomplish the goal in a co-ordinated manner. Thus,
structure relates to power and duties. One has the authority and others have a duty to obey him.

3. Technology

Technology imparts the physical and economic conditions within which people work. With their bare
hands people can do nothing so they are given assistance of buildings, machines, tools, processes and
resources. The nature of technology depends very much on the nature of the organization and
influences the work or working conditions. Thus, technology brings effectiveness and at the same
restricts people in various ways.

4. Social System
 Social system provides external environment which the organization operates. A single organization
cannot exist also. It is a part of the whole. One organization cannot give everything and therefore,
there are many other organizations. All these organizations influence each other. It influences the
attitudes of people, their working conditions and above all provides competition for resources and
power.

O.B. is the study of human behaviour at work in organizations. Accordingly, the scope of O.B.
includes the study of individuals, groups and organization/structure. Let us briefly reflect on what
aspects each of these three cover.

Individuals

Organizations are the associations of individuals. Individuals differ in many respects. The study of
individuals, therefore, includes aspects such as personality, perception, attitudes, values, job
satisfaction, learning and motivation.

Groups of Individuals

Groups include aspects such as group dynamics, group conflicts, communication, leadership, power
and politics and the like.

Five Models of Organisational Behaviour

The five models of organisational behaviour are the:

 autocratic model,
 custodial model,
 supportive model,
 collegial model and
 system model.

Autocratic model

Autocratic model is the model that depends upon strength, power and formal authority.

In an autocratic organisation, the people (management/owners) who manage the tasks in an

organisation have formal authority for controlling the employees who work under them. These
lower-level employees have little control over the work function. Their ideas and innovations are
not generally welcomed, as the key decisions are made at the top management level.

The guiding principle behind this model is that management/owners have enormous business
expertise, and the average employee has relatively low levels of skill and needs to be fully
directed and guided. This type of autocratic management system was common in factories in the
industrial revolution era.
One of the more significant problems associated with the autocratic model is that the
management team is required to micromanage the staff – where they have to watch all the details
and make every single decision. Clearly, in a more modern-day organisation, where highly paid
specialists are employed an autocratic system becomes impractical and highly inefficient.

The autocratic model is also a detractor to job satisfaction and employee morale. This is because
employees do not feel valued and part of the overall team. This leads to a low-level of work
performance. While the autocratic model might be appropriate for some very automated factory
situations, it has become outdated for most modern-day organisations.

Custodial model

The custodial model is based around the concept of providing economic security for employees –
through wages and other benefits – that will create employee loyalty and motivation.

In some countries, many professional companies provide health benefits, corporate cars,
financial packaging of salary, and so on – these are incentives designed to attract and retain
quality staff.

The underlying theory for the organisation is that they will have a greater skilled workforce,
more motivated employees, and have a competitive advantage through employee knowledge and
expertise.

One of the downsides with the custodial model is that it also attracts and retains low performance staff as
well. Or perhaps even deliver a lower level of motivation from some staff who feel that they are “trapped”
in an organisation because the benefits are too good to leave.

Supportive model

Unlike the two earlier approaches, the supportive model is focused around aspiring leadership.

It is not based upon control and authority (the autocratic model) or upon incentives (the custodial
model), but instead tries to motivate staff through the manager-employee relationship and how
employees are treated on a day-to-day basis.

Quite opposite to the autocratic model, this approach states that employees are self-motivated
and have value and insight to contribute to the organisation, beyond just their day-to-day role.
The intent of this model is to motivate employees through a positive workplace where their ideas
are encouraged and often adapted. Therefore, the employees have some form of “buy-in” to the
organisation and its direction.

Collegial model

The collegial model is based around teamwork – everybody working as colleagues (hence the
name of the model).

The overall environment and corporate culture need to be aligned to this model, where
everybody is actively participating – is not about status and job titles – everybody is encouraged
to work together to build a better organisation.

The role of the manager is to foster this teamwork and create positive and energetic workplaces.
In much regard, the manager can be considered to be the “coach” of the team. And as coach, the
goal is to make the team perform well overall, rather than focus on their own performance, or the
performance of key individuals.

The collegial model is quite effective in organisations that need to find new approaches –
marketing teams, research and development, technology/software – indeed anywhere the
competitive landscape is constantly changing and ideas and innovation are key competitive
success factors.

System model

The final organisational model is referred to as the system model.

This is the most contemporary model of the five models discussed in this article. In the system
model, the organisation looks at the overall structure and team environment, and considers that
individuals have different goals, talents and potential.

The intent of the system model is to try and balance the goals of the individual with the goals of
the organisation.

Individuals obviously want good remuneration, job security, but also want to work in a positive
work environment where the organisation adds value to the community and/or its customers.

The system of model should be an overall partnership of managers and employees with a
common goal, and where everybody feels that they have a stake in the organisation.
 Organizational Climate: Organizational climate refers to the total
organizational situations affecting human behavior. Organizational climate

takes a system perspective that affect human behavior. Besides improving the
satisfactory working conditions and adequate compe nsation, organizational
climate includes creation of an atmosphere of effective supervision; the
opportunity for the realization of personal goals, congenial relations with
others at the work place and a sense of accomplishment.

Historical Background For Modern Organizational Behaviour

Scientific Manage ment Approach

Scientific management approach was developed by F.W. Taylor at the beginning

of the 20th century. This theory supported the use of certain steps in scientifically
studying each element of a job, selecting and training the best workers for the job
arid making sure that the workers follow the prescribed method of doing the job.
It provided a scientific rationale for job specialization and mass production. His
assumption was that employees are motivated largely by money. To increase the
output, Taylor advised managers to pay monetary incentives to efficient workers.

Yet, his theory was criticized by many employers and workers. Workers objected
to the pressure of work as being harder and faster. Critics worried that the
methods took the humanity out of labor, reducing workers to machines
responding to management incentives. Therefore, Taylor's view is now
considered inadequate and narrow due to the points given by the critics.

Bureaucratic Approach

While scientific management was focusing on the interaction between workers

and the task, researchers of such approach were studying how to structure the
organization more effectively. Instead of trying to make each worker more
efficient, classical organization theory sought the most effective overall
organizational structure for workers and managers.
 The theory's most prominent advocate, Max Weber, proposed a 'bureaucratic
form' of structure, which he thought would work for all organizations

Henry Ford, Henry Fayol and Frederick W. Taylor, the early management
pioneers, recognized the behavioral side of management. However, they did not
emphasize the human dimensions.

Hawthorne Studies

The real beginning of applied research in the area of organizational behaviour

started with Hawthorne Experiments. In 1924, a group of professors began an
enquiry into the human aspects of work and working conditions at the Hawthorne
plant of Western Electric Company, Chicago. The findings of these studies were
given a new name 'human relations' the studies brought out a number of findings
relevant to understanding human behaviour at work. The Human element in the
workplace was considerably more important. The workers are influenced by
social factors and the behaviour of the individual worker is determined by the
group.
Learning organization : Learning organizations are organizations where people
continually expand their capacity to create the results they truly desire, where
new and expansive patterns of thinking are nurtured, where collective aspiration
is set free, and where people are continually learning to see the whole together.

According to Sandra Kerka (1995) most conceptualizations of the learning

organizations seem to work on the assumption that ‗learning is valuable,
continuous, and most effective when shared and that every experience is an
opportunity to learn‘. Learning organizations:

Provide continuous learning opportunities.

Use learning to reach their goals.

Link individual performance with organizational performance.

Benefits
The main benefits are:
 o Maintaining levels of innovation and remaining
competitive
o Being better placed to respond to external pressures

o Having the knowledge to better link resources to customer

needs
o Improving quality of outputs at all levels

o Improving Corporate image by becoming more people

o oriented Increasing the pace of change within the
organization.

Knowledge Management: Knowledge management (KM) comprises a range of

strategies and practices used in an organization to identify, create, represent,
distribute, and enable adoption of insights and experiences. Knowledge management
efforts typically focus on organizational objectives such as improved performance,
competitive advantage, innovation, the sharing of lessons learned, integration and
continuous improvement of the organization.

Functions of Management

Among the various approaches to the study of management, the process approach has gained
wider acceptance. It is because this approach lays emphasis on what a manager does. A manager
no matter his level in the organization performs several functions. There is no consensus among
the management thinkers on the classification of management functions. The number of
functions as well as the terminology used to describe them is not alike. Henry Fayol identifies
five functions, viz., planning, organizing, commanding, co-coordinating and controlling.
Newman and Summer recognize only four functions, namely – planning, organizing, staffing,
and directing. Koontz and O’Donnel classify the functions into planning, organizing, staffing,
directing, and controlling. For the purpose of our study, we shall confine the discussion to the
following five functions of management – planning, organizing, staffing, directing and
controlling

Planning:

 Planning consists of the activities involved in choosing courses of action to achieve

organizational objectives.
 It is deciding in advance what to do, when to do, how to do and who will do it, in order to
achieve these objectives.
 Both long- term and short- term plans are necessary to achieve goals

Organizing:

 Organizing involves the grouping of jobs into framework for coordination and direction.

 Formal organizations may be portrayed by use of an organisation chart.
  Organizations are structured based on product, function, geography, customer and
project. 
 The matrix structure has evolved as a result of complex environments, markets and
technology.

Staffing:
 Staffing is planning, organizing, directing and controlling of procurement, development,
compensation, integration and maintenance of people for the purpose of contributing to
individual, organizational and social goals. 
 This process requires the performance of the functions like job analysis, human resources
planning, recruitment, selection, induction, placement, training, execute development, wage and
salary administration, leadership, teamwork, motivation, grievance procedure, disciplinary
procedure ect.
Directing:
 The important function of management at any level is directing the people by motivating,
commanding, leading and activating them. 
 The willing and effective cooperation of employees for the attainment of organizational goals is
possible through direction. 
 Tapping the maximum potentialities of the people is possible through and command. 
 Thus, direction is an important managerial function in securing employee’s contribution
Controlling:
 After planning, organizing, staffing and directing the various activities, the performance is to be
verified in order to know whether the activities are performed in conformity with the plans and
objectives or not. 
 Controlling also involves checking, verifying and comparing of actual performance with the
plans, identification of deviations, if any and correcting of identified deviations. 
 Thus, actions and operations are adjusted to predetermined plans and standards through control.

 The purpose of control is to ensure the effective operation of an organisation by focusing on all
resources- human, material, finance and machines.