Unit 1
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This document provides an overview of organizational behaviour and related concepts. It defines organizational behaviour as the study of how individuals and groups act within organizations. It discusses the nature of organizations and people, and how formal and informal structures, technology, and the social system influence behaviour. The document also outlines the scope of organizational behaviour and various models of OB, including autocratic, custodial, supportive, and collegial models. Key concepts around formal and informal organization, individual, group and inter-individual behaviour are introduced.
Unit 1
- 1. ORGANISATIONAL BEHAVIOUR UNIT 1 NATURE OF ORGANISATIONAL BEHAVIOUR
- 2. DEFINITION OF ORGANISATION 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.” In the words of Allen, organization is an instrument for achieving organizational goals. The work of each and every person is defined and authority and responsibility is fixed for accomplishing the same. Koontz and O’Donnell, ‘The establishment of authority relationships with provision for co-ordination between them, both vertically and horizontally in the enterprise structure.” VIJAY VISHWAKARMA SYBMM SEM IV 2
- 3. FORMAL ORGANISATION Formal organisation is “a system of well-defined jobs, each bearing a definite measure of authority, responsibility and accountability, the whole consciously designed to enable the people of the enterprise to work most effectively together in accomplishing their objectives.” It is a deliberately designed structure with formal authority, responsibility, rules, regulations and channels of communication. Some degree of formalization is necessary for organisations to function effectively; to avoid taking time-consuming decisions, to handle conflicting situations and exercise control over the activities of subordinates. VIJAY VISHWAKARMA SYBMM SEM IV 3
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- 5. ADVANTAGES OF FORMAL ORGANISATION It clearly defines objectives of the organisation and authority- responsibility relationships amongst people to attain those objectives. It results in optimum utilisation of scarce organisational resources. Division of work and relationships amongst people develops effective system of communication in the organisation. The organisational hierarchy avoids overlapping of activities between two individuals or two departments. Two individuals are not assigned the same task. Career advancement and promotional avenues are clearly defined in the formal structure of organisation. The rate of absenteeism and labour turnover (the rate at which people join and leave the organisation) remains low. (because of clear objectives, policies, strategies etc.). Formal organisation integrates formal goals of the organisation with goals of individuals working in the organisation. There is, thus, synthesis of individual, group and organisational goals. VIJAY VISHWAKARMA SYBMM SEM IV 5
- 6. DISADVANTAGES OF FORMAL ORGANISATION As too much emphasis is placed upon formal rules and regulations, workers do not use their creative and innovative skills to perform organisational tasks. There is loss of initiative and innovative abilities due to strict adherence to rules. Man is a social being. He needs to interact with people and share his feelings at-work and off- work with others. In a formally designed organisation structure, social needs remain unsatisfied as people are related to each other through a formal chain of command to discuss only official matters with each other. Social interactions are altogether ignored. Decision making is slow in a formal organisation. It is important to realise that any organisational need has to flow through the respective chain of commands before being addressed. Formal organisation is very rigid in nature. This means that there prevails perfect discipline coupled with no deviations from the procedures. Hence, this can lead to low recognition of talent. Lastly, the formal organisation does not take into account the social nature of humans as it talks about only structure and work. Interestingly, we cannot eliminate this integral part of our nature. Hence, it does not entirely display the functioning of the organisation. VIJAY VISHWAKARMA SYBMM SEM IV 6
- 7. INFORMAL ORGANISATION As formal organisation grows in size, parallel existence of informal relationships along with formal relationships becomes unavoidable. Informal organisations have always existed with formal organisations. They arise because of inevitable social and personal needs of individuals which cannot be satisfied by the principles of formal organisation. They represent non-planned, unofficial, social interactions amongst people working in formal structures. They arise out of common interests of people. These organisations are not governed by formal set of principles but they are an important and integral part of formal organisations. E. Wight Bakke calls the creation of informal organisations along with formal organisations a fusion process. VIJAY VISHWAKARMA SYBMM SEM IV 7
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- 9. “When an individual and an organisation come together in such a way that the individual is a participant in, and a member of, the organisation and the two are mutually dependent on each other, both are reconstructed in the process. The organisation to some degree remakes the individual and the individual to some degree remakes the organisations.” Keith Davis defines informal organisation as “a network of personal and social relations not established or required by formal organisation but arising spontaneously as people associate with one another.” VIJAY VISHWAKARMA SYBMM SEM IV 9
- 10. ADVANTAGES OF INFORMAL ORGANISATION Promotes social and cultural values Relief to top managers Supplement to managers’ capacities Social satisfaction and security Communication Better relationships Promotes creativity: Self-control Restraint on discretion Social satisfaction VIJAY VISHWAKARMA SYBMM SEM IV 10
- 11. DISADVANTAGES OF INFORMAL ORGANISATION Conformity Attitude of leaders Role conflict Rumour Resistance to change: Conflicting goals VIJAY VISHWAKARMA SYBMM SEM IV 11
- 12. Organizational BEHAVIOUR Organizational behavior is a field of study that investigates the impact that individuals, groups, and structures have on behavior within the organization. This impact works towards improving the organization's effectiveness “Organisational behaviour is a subset of management activities concerned with understanding, predicting and influencing individual behaviour in organisational setting.”—Callahan, Fleenor and Kudson “Organisational behaviour is the study and application of knowledge about how people act within an organisation. It is a human tool for human benefit. It applies broadly to the behaviour of people in all types of organisation.”— Newstrom and Davis. VIJAY VISHWAKARMA SYBMM SEM IV 12
- 13. The concept of OB is based on two key elements namely − Nature of people Nature of the organization In other words, organisational behaviour may be organisation of individual’s behaviour in relation to physical means and resources so as to achieve the desired objective of the organisation VIJAY VISHWAKARMA SYBMM SEM IV 13
- 14. Nature of People Individual Difference Perception A whole person Motivated behavior Positive motivation Negative motivation Value of person VIJAY VISHWAKARMA SYBMM SEM IV 14
- 15. Nature of Organization Social system Formal Informal Mutual interest Ethics VIJAY VISHWAKARMA SYBMM SEM IV 15
- 16. Evolution of Organizational Behaviour Concepts of OB in Vedas — Four Varna (Allocation of work), Four Purusarth (allocation of activities), Home and work distance (Township) Kautilaya’s Arthsastra Relationship with friend, superior, subordinate, ministers, servant etc. Wage rate and differences Values in organizations 1800 BC Babylonian Code Minimum Wage Rate Incentive Wage Rate VIJAY VISHWAKARMA SYBMM SEM IV 16
- 17. 1800 – Robert Owen Father or Personnel Management Emphasize the human factor in organization Refused to give employment to children Teach workers the importance of working conditions and cleanliness 1835 – Andrew Ure The philosophy of Manufacturers Provide snacks, medical treatment and sickness benefits 1840 – J N Tata Emphasize the dignity of labor at organization Improve the working conditions 1886 – introduce pensions plans 1895 – accident compensations schemes VIJAY VISHWAKARMA SYBMM SEM IV 17
- 18. 1880 – Scientific Management Frederiek Taylor decides to time each and every worker at the Midvale Steel Company. His view of the future becomes highly accurate: 1922: Max Weber gives the concept of Bureaucracy 1930-1950 –Human Relation Management Elton Mayo Non economic and Social factors were considered 1932 – The Hawthorne Studies Elton Mayo becomes the first to question the behavioural assumptions of scientific management. The studies concluded that human factors were often more important than physical conditions in motivating employees to greater productivity VIJAY VISHWAKARMA SYBMM SEM IV 18
- 19. 1954 – Hierarchy of Needs Maslow’s theory of hierarchy need is published in his book Motivation and Personality. This provides a framework for gaining employees’ commitment. 1954 – Leadership/Management Drucker writes The Practice of Management and introduces the 5 basic roles of managers. He writes, “The first question in discussing organization structure must be: What is our business and what should it be? Organization structure must be designed so as to make possible the attainment of objectives of the business for five, ten, fifteen years hence.” VIJAY VISHWAKARMA SYBMM SEM IV 19
- 20. 1959 – Hygiene and Motivational Factors Frederick Herzberg developed a list of factors which are closely based on Maslow’s Hierarchy of Needs, except it more closely related to work. Hygiene factors must be present in the job before motivators can be used to stimulate the workers. 1960s – Organization Development In the 1950s and 1960s a new, integrated approach originated known as Organization Development (OD): the systematic application of behavioral science knowledge at various levels (group, intergroup, and total organization) to bring about planned change 1960 – Theory X and Theory Y Douglas McGregor’s Theory X and Theory Y principles influence the design and implementation of personnel policies and practices. VIJAY VISHWAKARMA SYBMM SEM IV 20
- 21. 1964 – Management Grid Robert Blake and Jane Mouton develop a management model that conceptualizes management styles and relations. Their Grid uses two axes. “Concern for people” is plotted using the vertical axis and “Concern for task” is along the horizontal axis. The notion that just two dimensions can describe a managerial behavior has the attraction of simplicity. 1990 – Learning Organization Peter Senge popularized the “Learning Organization” in The Fifth Discipline: The Art and Practice of the Learning Organization. He describes the organization as an organism with the capacity to enhance its capabilities and shape its own future. A learning organization is any organization (e.g. school, business, government agency) that understands itself as a complex, organic system that has a vision and purpose. It uses feedback systems and alignment mechanisms to achieve its goals. VIJAY VISHWAKARMA SYBMM SEM IV 21
- 22. 1995 – Ethics On December 11, 1995 a fire burned most of Malden Mills to the ground and put 3,000 people out of work. Most of the 3,000 thought they were out of work permanently. CEO Aaron Feuerstein says, “This is not the end” — he spent millions keeping all 3,000 employees on the payroll with full benefits for 3 months until he could get another factory up and running. Why? He answers, “The fundamental difference is that I consider our workers an asset, not an expense.” VIJAY VISHWAKARMA SYBMM SEM IV 22
- 23. SCOPE OF OB Organizational behavior sheds light on the complex human factor in organization by identifying causes and effects of human behavior. Organization behavior is called social science because its main concern is people and their behavior. It is the field of study that integrates behavioral sciences like psychology, and anthropology for the study of human behavior in land around organizations VIJAY VISHWAKARMA SYBMM SEM IV 23
- 24. Individual Behavior It is the study of individual’s personality, learning, attitudes, motivation, and job satisfaction. In this study, we interact with others in order to study about them and make our perception about them. Example − The personal interview round is conducted to interact with candidates to check their skills, apart from those mentioned in the resume. VIJAY VISHWAKARMA SYBMM SEM IV 24
- 25. Inter-individual Behavior It is the study conducted through communication between the employees among themselves as well as their subordinates, understanding people’s leadership qualities, group dynamics, group conflicts, power and politics. Example − A meeting to decide list of new board members. VIJAY VISHWAKARMA SYBMM SEM IV 25
- 26. Group Behavior Group behavior studies the formation of organization, structure of organization and effectiveness of organization. The group efforts made towards the achievement of organization’s goal is group behavior. In short, it is the way how a group behaves. Example − Strike, rally etc. VIJAY VISHWAKARMA SYBMM SEM IV 26
- 27. 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 every day. 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 VIJAY VISHWAKARMA SYBMM SEM IV 27
- 28. 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. VIJAY VISHWAKARMA SYBMM SEM IV 28
- 29. 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. VIJAY VISHWAKARMA SYBMM SEM IV 29
- 30. 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. VIJAY VISHWAKARMA SYBMM SEM IV 30
- 31. MODELS OF OB Models are frameworks or possible explanations why do people behave as they do at work. There are so many models as many are organizations. Varying results across the organizations are substantially caused by differences in the models of organizational behaviour. All the models of organizational behaviour are broadly classified into four types: autocratic, custodial, supportive and collegial. VIJAY VISHWAKARMA SYBMM SEM IV 31
- 32. Autocratic Model The root level of this model is power with a managerial orientation of authority. The employees in this model are oriented towards obedience and discipline. They are dependent on their boss. The employee requirement that is met is subsistence. The performance result is less. The major drawbacks of this model are people are easily frustrated, insecurity, dependency on the superiors, minimum performance because of minimum wage. VIJAY VISHWAKARMA SYBMM SEM IV 32
- 33. Custodial Model The root level of this model is economic resources with a managerial orientation of money. The employees in this model are oriented towards security and benefits provided to them. They are dependent on the organization. The employee requirement that is met is security. This model is adapted by firms having high resources as the name suggest. It is dependent on economic resources. This approach directs to depend on firm rather than on manager or boss. They give passive cooperation as they are satisfied but not strongly encouraged. VIJAY VISHWAKARMA SYBMM SEM IV 33
- 34. Supportive Model The root level of this model is leadership with a managerial orientation of support. The employees in this model are oriented towards their job performance and participation. The employee requirement that is met is status and recognition. The performance result is awakened drives. This model is dependent on leadership strive. It gives a climate to help employees grow and accomplish the job in the interest of the organization. Management job is to assist the employee’s job performance. Employees feel a sense of participation VIJAY VISHWAKARMA SYBMM SEM IV 34
- 35. Collegial Model The root level of this model is partnership with a managerial orientation of teamwork. The employees in this model are oriented towards responsible behavior and self-discipline. The employee requirement that is met is self-actualization. The performance result is moderate zeal. This is an extension of supportive model. The team work approach is adapted for this model. Self-discipline is maintained. Workers feel an obligation to uphold quality standard for the better image of the company. A sense of “accept” and “respect” is seen. VIJAY VISHWAKARMA SYBMM SEM IV 35
- 36. System model The final organisational model is referred to as the system model. This is the most contemporary model of the five models. 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. VIJAY VISHWAKARMA SYBMM SEM IV 36
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- 38. Interpretation of Different Models : Various conclusions may be drawn from the study of different models as follows : (i) As soon as the understanding of human behaviour develops or social conditions change, the model is bound to change. No one model is best for all times. (ii) Models or organizational behaviour are related to hierarchy of human needs. As society advances on the need hierarchy, new models are developed to serve the higher order needs that is paramount at that time. (iii) Present tendency towards more democratic models of organizational behaviour will continue to develop for long run. (iv) Different models will remain in use though new model predominates as most appropriate for general use at any given time as task conditions differ from time to time and organization to organization. VIJAY VISHWAKARMA SYBMM SEM IV 38