1. Organizational Behavior
Where Managers Work
Organization:
A coordinated social unit of two or more peoplethat functions on a relatively continuous basis to
achieve a common goal or set of goals.
Behavior: It is a function of the person and the environment where he/she is placed
B = f (P, E)
Organizations – Introduction
 Work Organizations: among different types of organizations that are all around us
 Organizations have goals, membership criteria and membership is contractual
Social
Work
Organization Individual Organizations
(E.g. Family)
What is OB?
 A management discipline which deals with understanding behaviors in an organization,
predicting people’s behaviors and control their behaviors so as to achieve organizationally
conducive behaviors.
 It offers tools and techniques to manage behaviors in an organization
 Why is OB Relevant?
 Process approach popular in stable, predictable environment
 Earlier competitive advantages of capital and technology eroding
 Environmental change, uncertainty require quick adaptation, knowledge and
creativity – rely on people
 Features of OB:
 A field of scientific study of behavior, resulting knowledge applied to attain
organizational effectiveness

2.  Focus on behavior within the organization
 Humanistic and Optimistic
 Importance of Groups
 Ongoing Process
OB Definitions
- Stephen Robins: is a field of study that investigates the impactthat individuals, Groups,
structure have on behavior within organizations to improve Organization’s Effectiveness
- OB is the study and application of knowledge about how people, individuals and groups act in
organizations.
Objectives/purpose/goals of OB:
 Explain, predict and control human behavior
 Explain- When we seek answers to why of an individual’s behavior
 Predict – When we focus attention on future, link future outcomes to action
 Control- The most controversial objective is using OB knowledge to control ones behavior
 Describe behavior– Describe systematically how people behave under a variety of conditions
Elements of OB
 Company philosophy, values, vision, goals
 Company culture, leadership, communication , group dynamics
 People, their level of satisfaction, motivation , growth and development
 Organization structure, technology
Features of OB
 OB is the study and use of information relating to the behavior of the people at work. It
concentrates on the following:
 Individual
 Group
 Structure
 Technology

3.  Environment

7. Importance of OB
 Provides a roadmap to our lives in organization
 Help to predict organizational life
 Helps us to influence the environment in which we live
 To improve interpersonal relations
 To maintain cordial Industrial relations
 Helps the manager to get things done from his/her subordinates
 It is also important in the field of marketing in knowing the customers

8. Social System
 It is complex set of human relationships interacting in many ways.
 Within an organization, the social system includes all the people in it and their relationships to
each other and to the outside world
 Behavior of one member can have an impact either, directly or indirectly, on the behavior of
others.
 It does not have boundaries. It exchanges goods, ideas, culture with the environment around
it
Culture
 Culture is the conventional behaviour of a society that encompasses beliefs, customs,
knowledge and practices.
 People depend on culture as it gives them stability, security, understanding and the ability to
respond to a given situation

9. National Culture
“Collectiveprogramming of the mind which distinguishes members of one [social group] from
another”. This ‘software’ emerges as a group learns how to solve survival related problems, over a
period of time, in an external environment and its problems of internal integration
 Cultures of nations evolve as all societies face the same basic questions, issues or problems,
but they differ in their answers
 Factors like climate, natural resources, historical events shape how people view themselves,
others, and their relationship with the world around them, their orientation to time and space
and other views using which people deal with their lives
Behavior Differences across Culture
 The cultures are studied across nations rather than by homogeneous regional, ethnic or
linguistic groups because research is more practical that way
 But a general view is that all cultures can be understood if we could compare them in terms
of:
 How people view themselves and the world round them
 How people view Time
 How people view Space
 How people view relationship with other people, and how do they communicate …
among other parameters
Culture in India
 Most senior managers in Indian organizations still have direct experience of the agricultural,
caste-based society
 For the younger generation also, the experience of growing up in Indian tradition and cultural
pattern does have a deep-rooted influence on a wide range of issues including the behavior
within the organization
 Under the British rule, India was modernized, but its social values remained
 It is important for us to realize that even common values are manifested differently in
behavior across cultures. Important challenges arise out of cultural differences for managers
who deal with multi-cultural business environment
Footprints of National Culture in Organizations in India
 Strong hierarchy, personalized relationships

10.  Indian social system is steeply hierarchical and highly conscious of status differences
 Powerful, senior and elderly people command special respect
 Subordinates are expected to show unquestioned loyalty and trust (Sra[d]dha) and in
return, complete protection and care flows from the superior
 Family/social group centered
 Employees tend to be Collectivist, not Individualistic in organizationsin India. The basic
unit of society is thought to be family, rather than an individual. The primary
commitment of an individual is to family, not work
Footprints of National Culture in Organizations in India … contd.
 Visibly influenced by religious / spiritual beliefs
 These attitudes and practices are regularly reinforced by frequent religious festivals
and rituals, rites and specific menus associated with those festivals
 Coexistence of Contrasts
 Realizing detachment from the “Maya” (Illusion) of the material world
 Transcend it for achieving un-ending union with the supreme being,
 the ‘popular’ religious are more ritualistic
Footprints of National Culture in Organizations in India … contd.
 Desire to be embedded in a Group
 Indians feel comfortable if they are with other members of preferred in-groups, who
are usually their families, friends, colleagues and members of their own caste
 At work, informal networks are formed along these lines
 Context sensitive or Situational Behavior
 Most people in India perceive a situation and the responses to it as one episode in an
on-going flow of interactive relationships between situations and responses. That
means that behavior can be different on the basis of three situational elements
generally known as the Place, Time and the Person (Desha, Kaala and Paatra)
How Can Managers Work With Culture Differences
 Insensitivity to cultural causes of behavior difference can cause managers:

11.  Not to recognize the other person, but to judge only on the basis of narrowly defined,
only skill-based criteria
 Ignore the reality of why a person is the way he/she is
 Assume that all people are same (essentially like me)
 Judge that if they are not same as I am, they are inept (or whatever else): this can lead
to racist, sexist, ethnocentric behaviors
 To Choose not to see the cultural differences and thereby limit managerial choices
Successful Organization
 Embracing globalization
 Diverse workforce
 Quality management
 Skilled workforce
 Good customer service
Challenges of OB
• Responding to Globalization
 Foreign assignments
 Working with people from different cultures
 Overseeing movement of jobs to countries with low-cost labour
• Managing Workforce Diversity
 Embracing diversity
 Recognizing and responding to differences
• Improving Quality and Productivity
 Quality management (TQM)
 Process reengineering ( BPR)
• Responding to the Labour Shortage
 Changing work force demographics

12.  Fewer skilled labourers
 Early retirements and older workers
• Improving Customer Service
 Increased expectation of service quality
 Customer-responsive cultures
Historical Development ofOrganization Behavior
• 1922: Max Weber gives the concept o Bureaucracy
• 1925: Mary Parker Follette writes on Power, conflict and leadership
• 1938: Chester Bernard writes about Functions of Executive
• 1939: Hawthorn studies are carried out and its findings are published
• 1960: Douglas McGregor gives theories X and Y
• 1985: Peter F. Drucker gives the concept of MBO
• 1990: Peter Senge writes about Learning and Change

16. Human relations theory
 Phase-1- Illumination experiments (in 1924)
 At the Hawthorne plant of western electric company
 Two groups were formed :
Control group
Test group
 Intensity of Light was not varied for Control group but was varied for Test group.
 Output of both groups increased despite of variation in the intensity of light.
Reason
 Workers felt someone cared about them and they were important to the company.
 Improvement in the group's morale

17. The human relations movement suggests that managers using good human relations will achieve
productivity.
Human Relations Theory
 The group norms were
 Don’t turn out too much work
 Don’t turn out too little work
 Don’t tell supervisors anything that would harm a colleague
 Don’t be too officious-rather follow group norms.
Ultimate finding of all experiments
 PEOPLE ARE NOT MERELY THE ECONOMIC BEINGS RATHER THEY ARE SOCIAL BEINGS
International Dimensions of OB

18.  Managers of MNCs have to manage a variety of social, political and economic environments
and unique individual differences
 Need to be sensitive to cultural differences across different countries
 Employees travelling to foreign countries for work face parochialism( localism),
ethnocentricism and cultural shock
 Personal values, interpersonal skills, back ground and decision making skills of the manager
 Unfamiliar languages , labour laws, employee attitudes, work ethics
Limitations of OB
 Cannot abolish conflict and frustration. Can only reduce them
 Improves the organisational performance, but not an absolute solution
 OB is not a substitute for good planning, organising and controlling
 Improved OB will not make up for all organisational deficiencies
Limitations of OB ( contd..)
 Behavioural Bias
- Over importance to only satisfyingemployee experiences
- If concern for employees is overdone, organisational productivity may be lost
- Satisfied work force will not automatically translate into productivity.
- BB can harm both employees and organizations
Limitations of OB ( contd..)
 Law of diminishing returns – the more of a desirable input is added, the output from each unit
tends to become smaller, reach Zero or even become negative
- Too much of employment security provided to workers may restrict employee development,
initiative and growth
- It should be a combination of all system variables in a balanced manner and not just maximising
one human variable.
 Unethical manipulation of people – Knowledge and techniques of OB should be used to
develop competencies of the people
- People in power must maintain high ethical standards and integrity and not misuse their power

19. - Should be used for human welfare.
The future of OB
 In the face of LPG, Managing people and their behaviour needs a different approach.
 Improving people’s skills
 Improving quality and productivity
 TQM
 Reengineering
 Empowering people
 Coping with temporariness