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ORGANIZATION THEORY
&
BEHAVIOR
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FOUNDATION OF
ORGANIZATION BEHAVIORDEFINITION OF AN ORGANIZATION
DEFINITION OF ORGANIZATION BEHAVIOR
ASSUMPTIONS
ITS SIGNIFICANCE FOR EFFECTIVENESS
TRENDS
FRAMEWORKFOR OB
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ORGANIZATION???
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DEFINITION OF ORGANIZATION
CONSCIOUSLY COORDINATED
SOCIAL UNIT
COMPOSED OF 2 0R MORE PEOPLE
CONTINUITY
COMMON GOAL
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What is an Organization?
A structured social system consisting of groups
and individuals working together to meet some
agreed-upon objectives.
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Organizational BehaviorThe field that seeks increased knowledge of all
aspects of behavior in organizational settings
through the use of the scientific method.Characteristics of the field: OB applies the scientific method to practical managerial problems.
OB focuses on three levels of analysis.
OB is multidisciplinary in nature. OB seeks to improve organizational effectiveness and the quality
of life at work.
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DEF
INITION ORGANIZATION BEHAVIORCAN BE
DEFINED AS A FIELD OF STUDY THAT
INVESTIGATES THE IMPACT THATINDIVIDUALS , GROUPS AND STRUCTURE
HAVE ON BEHAVIOR WITHIN
ORGANISATION, TO ENABLE APPLYING
THIS KNOWLEDGE TOWARDS IMPROVINGORGANIZATIONAL EFFECTIVENESS
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DEF
INTION-OB STUDY OFBEHAVIOROF INDIVIDUALS
WITHIN WORKGROUPS , INCLUDING AN
ANALYSIS OF THE NATURE OF GROUPS,THE DEVELOPMENT OFSTRUCTURES
BETWEEN AND WITHIN WORKGROUPS
AND THE PROCESS OF IMPLEMENTING
CHANGE
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Levels of Analysis in OB
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ORGANIZATIONAL
GOALS
INDIVIDUAL
TASKSTEAM ROLES
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GOAL
CULTURE
SYSTEMS STRUCTURE
STRATEGIES
FUNCTIONS-
TASKS/ACTIVITIES-
WHAT &WHY?
PROCEDURES-
HOW?
ROLES & RESPONSIBILITIES
WHO?
CORE VALUES
VISION -MISION
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HOW ORGANIZATION ACHIEVES ITS
GOAL?
MANPOWER MACHINES MONEY
ORG GOAL
ANNUAL PLAN
ORGANIZATIONAL PROCESSES
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ELEMENTS OF
OB The organization's base rests on management's philosophy, values,
vision and goals. This in turn drives the organizational culture which iscomposed :
formal organization,
informal organization, and
the social environment
The culture determines the type of leadership, communication, andgroup dynamics within the organization.
The workers perceive this as the quality of work life which directstheir degree of motivation
The final outcome are performance, individual satisfaction, andpersonal growth and development. All these elementscombine to build the model or framework that theorganization operates from.
..
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MANAGING FOR EFFECTIVENESS
INDIVIDUAL LEVEL
OUTCOMES
ORG LEVEL
OUTCOMESTEAM LEVEL OUTCOMES
PRODUCTIVITYPERFORMANCE
ABSENTEEISM
TURNOVER
ATTITUDES
STRESS
PRODUCTIVITYPERFORMANCE
NORMS
COHESIVENESS
PRODUCTIVITY
ABSENTEEISM
TURNOVER
FINANCIAL PERFORMANCE
SURVIVAL
CONSTITUENT SATISFACTION
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AN ORGANIZATION WOULDTHEREFORE HAVE
A GOAL-OBJECTIVE
STRUCTURE-BOUNDARIES & ROLE STRATEGIES & SYSTEMS
CULTURE, CUSTOMS, VALUES-
DETERMINING BEHAVIOR
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? ? ? ? Is ORGANIZATION nothing but an aggregate of
individuals?
If so then is ORGANIZATIONbehavior all about
individual differences?- Differences in values, beliefs,perception, personality, motivation
What about differences in goals, strategies, systems ,
structure in an ORGANIZATION-do these bring about a
distinctive ORGANIZATIONbehavior
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ORGANIZATION
HUMAN BEHAVIOR IN ORGANIZATION
SETTINGS
INDIVIDUAL ORGANIZATION
INTERFACE
ENVIRONMENT
ENVIRONMENT
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ORGANIZATIONAL PARTICIPANTS
ORGANIZATIONAL BEHAVIOR ORGANIZATIONAL ENVIRONMENT
COGNITIVE REPRESENTATION OF
REALITY HELPS GUIDE OBPARTICIPANTS CONTROL THEIR OWN BEHAVIOR
TO THE EXTENT THAT THEY RELY ON COGNITIVE
SUPPORTS & MANAGE RELEVANT
ENVIRONMENTAL CUES & CONSEQUENCES
MOST COMPLEX BEHAVIOR ACQUIRED BY DIRECTLY OBSERVING
& IMITATING OTHERS IN SURROUNDING ENVIRONMENT
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Multidisciplinary Roots
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Why is OB Important?Companies whose managers accurately appraise the work of their
subordinates enjoy lower costs and higher productivity.
People who are satisfied with the way they are treated on their jobs are more
pleasant to work with and less likely to quit.
People who are trained to work together tend to be happier and more
productive.
Employees who believe they have been treated unfairly are more likely to
steal and reject the policies of their organizations.
People who are mistreated by their supervisors have more mental andphysical illnesses than those who are treated with kindness, dignity, and
respect.
Organizations that offer good employee benefits and have friendly conditions
are more profitable than those that are less people oriented.
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MANAGEMENT FOR ORG
EFFECTIVENESS MANAGERIAL FUNCTIONS- Planning, Organizing, Leading &
Controlling
MANAGERIAL ROLES-Interpersonal , Information, Decisional
MANGERIAL SKILLS-Technical, Human & Conceptual
Org Effectiveness
O B
Generalization of
human behavior
Certain consistencies in human
behavior
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SIGNIF
ICANCE OF
OB
INDIVIDUAL BEHAVIOR &
PERFORMANCE AT WORK
GROUP WORKING-NORMS & BEHAVIOR
STRUCTURE OF ORGANIZATION
ORGANIZATION DESIGN MANAGING CHANGE
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OB EMPHASIS BEHAVIOR AS RELATED TO
JOBS & COMPETENCIES
WORK JOB DESIGN
PERFORMANCE & PRODUCTIVITY
ABSENTEEISM
EMPLOYMENT TURNOVER
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OB LINKAGES TO ORG GOAL
PERSONALITY, PERCEPTION, SKILL & ATTITUDE
DEVELOPMENT
LEARNING
MOTIVATION
LEADER BEHAVIOR & POWER
INTERPERSONAL COMMUNICATION
GROUP STRUCTURE & PROCESSES WORK DESIGN, CONFLICTS & STRESS
CHANGE PROCESSES
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F
undamental AssumptionsMOB recognizes the dynamic nature of organizations.
Open SystemsOpen Systems: Self-sustaining systems that transform inputfrom the external environment into output, which the system
then returns to the environment.
NOB assumes there is no one best approach
Contingency ApproachContingency Approach: A perspective suggesting thatorganizational behavior is affected by a large number ofinteracting factors. How someone will behave is said to be
contingent upon many different variables at once.
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The Open Systems Model
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The History of OB The Early Days: Scientific
Management and theHawthorne Studies
Classical OrganizationalTheory
Late Twentieth Century:Organizational Behavior as a
Social Science OB Today: The Infotech Age
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The Early DaysScientific ManagementScientific Management: An early approach to
management and organizational behavior
emphasizing the importance of designing jobs asefficiently as possible.
Human Relations MovementHuman Relations Movement: A perspective on
organizational behavior that rejects the primarily
economic orientation of scientific managementand recognizes, instead, the importance of social
processes and work settings.
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Classical Organizational TheoryAn early approach to the study of management thatfocused on the most efficient way of structuringorganizations.
Division of LaborDivision of Labor: The practice of dividing work intospecialized tasks that enable people to specialize in whatthey do best.
BureaucracyBureaucracy: An organizational design developed by
Max Weber that attempts to make organizations operateefficiently by having a clear hierarchy of authority inwhich people are required to perform well-defined jobs.
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TRACING HISTORY OF
ORGANIZATIONAL RESEARCH
CONCEPT PIONEERS PHILOSOPHY OB ATTRIBUTES
SCIENTIFIC
MANAGEMENT
FREDERICK TAYLOR
(1911)
Time & Motion Studies.
Finding most efficient way
Maximize Cost , Task
specialization, maximize
output
PRINCIPLES OFMANAGEMENT
HENRI FAYOL ( 1916-25) Management PrinciplesTraining in use of Principles
Order, Equity, Division ofwork, Discipline
HUMAN RELATIONS ELTON MAYO (1933) Psychological factors-Job
Satisfaction, Team work
Paying attention to worker
needs & satisfaction
DECISION MAKING HERBERT SIMON (1947) Bounded Rationality
Optimization of Goals
Hierarchy o Goals ,
Effective use of resources
SOCIO-TECHNICAL E L TRIST & K W
BAMFORTH (1951)
Social Systems view means
that organization is an open
system
Fit between social &
technological factors
BEHAVIOR DOUGLAS Mc GREGOR
(1961) RENSIS LIKERT
(19670
Individual needs &
importance of participative
management
Cohesiveness, Loyalty,
commitment & Employer
Management system
STRATEGIC
MANAGEMENT
ALFRED CHANDLER
(1962)
Establish Strategy , then
Structure is established
Strategy/Structure fit need
to adapt to environmental
changes
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TRACING HISTORY OF
ORGANIZATIONAL RESEARCH-ContdCONCEPT PIONEERS PHILOSOPHY OB ATTRIBUTES
CONTINGENCY P R LAWRENCE & J W
LORSCH ( 1967)
Structure firm to meet
environmental demands
Integration fit
QUALITY DEMING(1971)& JURAN ( 1974)
How to detect & eliminatedefects
Instill pride in qualityFocus on customer
satisfaction
ENPOWERNMENT 1984
PROACTIVE
PERFORMANCE
1987 Responsiveness to change ,
Need for Social Support
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EMERGING PERSPECTIVES IN OB
SYSTEMS APPROACH
CONTINGENCY PERSPECTIVE
INTERACTIONALISM
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SYSTEMS APPROACH VIEWS ORGANIZATION AS A SET OF
INTERRELATED ELEMENTS FUNCTIONING
AS A WHOLE
TRANSFORMATION
TECHNOLOGY
INPUTS-
material,human,
financial,
international
OUTPUTS
Product/Service
Profit/Losses
Employee behavior
FEEDBACK
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CONTINGENCY APPROACH SUGGESTS THAT IN MOST ORGANIZATIONS SITUATIONS &
OUTCOMES ARE CONTINGENT ON , OR INFLUENCED BY,
OTHER VARIABLES
ORG PROBLEMS/
SITUATIONS
CONTINGENT WAYS
OF RESPONDINGORG PROBLEMS EVALUATE IN TERMSOF THE SITUATION,
WHICH THEN SUGGEST
CAUSE & EFFECT
WAY
OF RESPONDING
UNIVERSAL
APPROACH
CONTINGENCY APPROACH
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INTERACTIONALISM
INDIVIDUALS AND SITUATIONS INTERACT
CONTINUOSLY TO DETERMINE
INDIVIDUALS BEHAVIOR
INDIVIDUALS
SITUATIONS
BEHAVIOR
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POPULAR PRESS
ARTICLES, RESEARCH WORKS &
BOOKS GIVING NEW INSIGHTS.
THEORYZ, EMOTIONAL INTELLIGENCE, REENGINEERING,
CORPORATECULTURES, INSEARCHOFEXCELLENCEETC.
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4 BASIC MODELS OR
FRAMEWORK
Autocratic - The basis of this model is
power with a managerial orientation of
authority. The employees in turn areoriented towards obedience and dependence
on the boss. The employee need that is met
is subsistence. The performance result isminimal.
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4 BASIC MODELS OR
FRAMEWORK
Custodial - The basis of this model is
economic resources with a managerial
orientation of money. The employees inturn are oriented towards security and
benefits and dependence on the
organization. The employee need that is metis security. The performance result is
passive cooperation.
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4 BASIC MODELS OR
FRAMEWORK Supportive - The basis of this model is
leadership with a managerial orientation of
support. The employees in turn are orientedtowards job performance and participation.
The employee need that is met is status and
recognition. The performance result isawakened drives.
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4 BASIC MODELS OR
FRAMEWORK Collegial - The basis of this model is
partnership with a managerial orientation of
teamwork. The employees in turn areoriented towards responsible behavior and
self-discipline. The employee need that is
met is self-actualization. The performanceresult is moderate enthusiasm.
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Although there are four separate models, almostno organization operates exclusively in one. There
will usually be a predominate one, with one ormore areas over-lapping in the other models.
The first model, autocratic, has its roots in theindustrial revolution. The managers of this type oforganization operate out of McGregor's Theory X.
The next three models begin to build onMcGregor's Theory Y. They have each evolvedover a period of time and there is no one "best"model.
The collegial model should not be thought as thelast or best model, but the beginning of a newmodel or paradigm
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OB- CHALLENGES &TRENDS Paradigm shift------?
GLOBALISATION- Creating a global village
INFORMATION AGE-IT
TOTAL QUALITY MANAGEMENT
DIVERSITY & CULTURAL ISSUES
REENGINEERING
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OB- CHALLENGES &TRENDS ENPOWERING EMPLOYEES- shift from
Management control
COPING WITH CHANGE &TEMPORARINESS-Stability ofFlexibility
STIMULATING INNOVATIVENESS &CHANGE
CORPORATE VALUES & ETHICS
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OB- CHALLENGES &TRENDS STIMULATING INNOVATIVENESS &
CHANGE.
CORPORATE VALUES & ETHICS. WORKFORCE DEMOGRAPHICS-Age, Gender,
Ethnic Composition.
WORK PLACE ISSUES- Employee Privacy,
Employee rights, Unionization.
Improving Employee Skills.
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Prominent Trends The rise of global
businesses with
culturally diverseworkforces.
Rapid advances in
technology.
The rising
expectations of people
in general.
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Globalization The process of interconnecting the worlds
people with respect to the cultural,
economic, political, technological, andenvironmental aspects of their lives.
Multinational EnterprisesMultinational Enterprises: Organizations
that have significant operations spread
throughout various nations but areheadquartered in a single country.
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Working Abroad ExpatriatesExpatriates: People who are citizens of one country but
who are living and working in another country.
C
ultureC
ulture: The set of values, customs, and beliefs thatpeople have in common with other members of a social
unit (e.g., a nation).
Culture shockCulture shock: The tendency for people to become
confused and disoriented as they attempt to adjust to a new
culture.
RepatriationRepatriation: The process of readjusting to ones own
culture after spending time away from it.
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Working Abroad
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Management Perspectives
Convergence HypothesisConvergence Hypothesis: A biased approach tothe study of management, which assumes thatprinciples of good management are universal, andthat ones that work well in the United States willapply equally well in other nations.
Divergence HypothesisDivergence Hypothesis: The approach to thestudy of management that recognizes that knowinghow to manage most effectively requires clearunderstanding of the culture in which peoplework.
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Shifting Demographics
More women are in
the workforce than
ever before.
Racial and ethnic
diversity is reality.
People are living andworking longer than
ever before.
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Responding to Changes in Technology
Creating Leaner OrganizationsCreating Leaner Organizations
Downsizing/RightsizingDownsizing/Rightsizing: The process of adjusting the number of
employees needed to work in newly designed organizations.
OutsourcingOutsourcing: The process of eliminating those parts of organizations thatfocus on noncore sectors of the business and hiring outside firms to
perform these functions instead.
Creating Virtual OrganizationsCreating Virtual Organizations
Highly flexible, temporary organizations formed by a group of companies
that join forces to exploit a specific opportunity.
Increasing the Use of TelecommutingIncreasing the Use of Telecommuting
The practice of using communications technology so as to enable work to
be performed from remote locations.
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Responding to Changes in Expectations
Increasing Flexibility
in Response to
Employees Needs
The Quality
Revolution
Corporate Social
Responsibility
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Increasing Flexibility
Flextime ProgramsFlextime Programs: Policies that give employees some discretion overwhen they can arrive and leave work, thereby making it easier to adapttheir work schedules to the demands of their personal lives.
The Contingent WorkforceThe Contingent Workforce: People hired by organizations temporarilyto work as needed for finite periods of time.
Compressed WorkweeksCompressed Workweeks: The practice of working fewer days eachweek but longer hours each day.
Job SharingJob Sharing: A form of regular part-time work in which pairs ofemployees assume the duties of a single job, splitting its
responsibilities, salary, and benefits in proportion to the time worked.Voluntary Reduced WorkTime ProgramsVoluntary Reduced WorkTime Programs: Programs that allowemployees to reduce the amount of time they work by a certainamount, with a proportional reduction in pay.
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The Quality Revolution
Total Quality ManagementTotal Quality Management: An organizational strategy ofcommitment to improving customer satisfaction bydeveloping techniques to carefully manage output quality.
BenchmarkingBenchmarking: The process of comparing ones ownproducts or services with the best from others.
Malcolm Baldridge Quality AwardMalcolm Baldridge Quality Award: An award givenannually to American companies that practice effectivequality management and make significant improvements in
the quality of their goods and services.
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Corporate Social Responsibility
Business decision making
linked to ethical values,
compliance with legal
requirements, and respect forindividuals, the community at
large, and the environment. It
involves operating a business
in a manner that meets or
exceeds the ethical, legal, andpublic expectations that
society has of business
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Ethics in Organizations
Good ethics is good businessGood ethics is good business
Improved financial performance
Reduced operating costs
Enhanced corporate reputation Increased ability to attract and retain employees
Code ofEthicsCode ofEthics: A document describing what an organization standsfor and the general rules of conduct it expects of its employees.
Ethics OfficersEthics Officers: Individuals (usually at the vice presidential level)
who oversee the ethics of a companys operations.Ethics AuditEthics Audit: The process of actively investigating and documentingincidents of dubious ethical value within a company.
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Ethical Guidelines
1. Does the behavior violatethe obvious shall nots?
2. Will anyone get hurt?
3. What if you did it 100times?
4. How would you feel if
someone did it to you?
5. Whats your gut feeling?
6. Would the behavior passthe front page test?
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OB MODELSCOGNITIVE, BEHAVIORISTIC & SOCIAL LEARNING THEORETICAL
FRAMEWORKS USED TO DEVELOP OB MODEL
AUTOCRATIC CUSTODIAL SUPPORTIVE SUPERLATIVE
(COLLEGIAL)
BASIS OF
MODEL
Power Economic
Resources
Leadership Partnership
Managerialorientation
Authority Money Support Teamwork
Employee
Orientation
Obedience Security
Benefits
Job
Performance
Responsible
Behavior
Employee
psychological
result
Dependence
on Boss
Dependence
on
Organization
Participation Self
Discipline
Employeeneed met
Performance
result
Subsistence
Minimum
Security
Passive
cooperation
Status &Recognition
Awakened
drivers
SelfActualization
Moderate
enthusiasm
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Basic framework for understanding organizational behavior
INDIVIDUALPROCESSES
Individual
differences
Attitudes/Attitude
formation
Learning
/Reinforcement
Motivation
ENHANCING INDIVIDUAL& INTERPERSONAL PROCESSES
Goal setting/Rewards
Job Designation/Participation
Performance Appraisal
Stress
Decision Making/ Creativity
INTERPERSONAL PROCESSESGroup Dynamics
Inter group dynamics
Leadership/Influence
Power/Politics/Conflict
Interpersonal Communication
INTEGRATING INDIVIDUALS,
GROUPS & ORGANIZATIONS
Change/development
International Issues
Career Dynamics
ORGANIZATIONAL PROCESSES &
CHARACTERISTICS
Organization Structure
Environment/technology
Organization Design
Organization Culture
MANAGERIAL CONTEXT
Managing People &
Organizations
ORGANIZATIONAL EFFECTIVENESS
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