Management Process and Organisational Behaviour Unit 7

Unit 7 Introduction to Organisational Behaviour

Structure:
7.1 Introduction
Objectives
7.2 Historical Perspective on OB
7.3 Approaches to and Importance of OB
7.4 Definition of OB and Framework for Learning OB
7.5 The Intricate Relation between MP and OB
7.6 The OB-Human Resources Management Relationship
7.7 Limitations of OB
7.8 Globalisation and OB
7.9 Summary
7.10 Glossary
7.11 Terminal Questions
7.12 Answers

7.1 Introduction
In the previous unit, you learnt the definition, importance and process of
controlling, critical control points and control as a feedback system. You also
learnt the prerequisites of effective control and the various control
techniques. Over the years, most management discussions have shifted to
the term ‘organisation’ rather than ‘industry’. The main reason for this is the
acceptance of the increasing role of human beings in organisations.
Although this might have always been so, the metamorphosis in the
terminology has perhaps come about because of the shift to service based
economy i.e., companies involved in services like healthcare, hospitality,
insurance surpassing the manufacturing services. IT industry and the need
to have knowledge workers at the hub of its functioning is perhaps one of
the most important factors that have forced management literature to shift
from the term ‘industrial’ to ‘organisational.’
Today we hear of ‘organisational psychology’, rather than ‘industrial
psychology’ and now of course Organisational Behaviour (OB) as the
standard term to explain the role of behaviour in organisations.
Organisational Behavious (OB) OB has replaced most other terms because
it focuses on behaviour that results in productivity and all organisations are
about productivity. Through this unit you will see the impact of the path
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breaking Hawthorne experiment that impacted the way organisations are

run. It attempts to explain how OB will affect each management process
e.g., how personality will affect decision making and how learning will affect
the way we staff or control. Thus the purpose of this unit is not only to
introduce OB but also to highlight the symbiotic relation between MP, OB
and human relationship management. The study of OB is deeply immersed
in psychology and behaviour but because of its focus on productivity, it
encompasses and integrates several other disciplines such as sociology,
politics and anthropology and because of this integration, OB has emerged
almost as an independent discipline.
In this unit, you will learn the historical perspective on OB, approaches to
and importance of OB. You will also learn the definition, framework for
learning OB, the relation between MP and OB. Further, you will learn the
OB-human resources management relationship, limitations of OB, and
globalisation and OB.
Objectives:
After studying this unit, you should be able to:
 explain historical perspectives on OB
 differentiate approaches to and importance of OB
 define the definition of OB and framework for learning OB
 explain the intricate relation between MP and OB
 explain the OB-human resources management relationship
 list the limitations of OB
 illustrate the impact of globalisation on OB
Learning Outcomes
After studying this unit, you will be able to:
 explain the historical perspectives on OB
 differentiate between various approaches to OB
 explain the importance of OB
 define OB and the framework for learning OB
 explain the intricate relation between MP and OB
 explain OB-human resources management relationship
 list the limitations of OB
 describe the impact of globalisation on OB

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7.2 Historical Perspectives on OB

Management has three major dimensions – technical, conceptual and
human. By technical we mean how the machines do the work whether at the
factory floor or the computer. The second is conceptual by which we mean
the purpose of the organisation, purpose of the work, the logic behind an
action, etc. The third is of course human. In earlier units, we have seen that
management is nothing but getting work done through people, which means
that it is people, and in particular managers, who make the other two
dimensions work. But managers usually ignore the conceptual and people
dimension and focus on the much easier and inanimate technical
dimension. Most managers think that their employees are lazy and are
interested only in money and that if you could make them happy in terms of
money, they would be productive. If such assumptions were true, then
human problems in the workplace would be easy to solve. We have to
accept that of the ideas of the three dimensions, human behaviour in
organisation is rather unpredictable, and therefore more difficult to manage
than the other dimensions.
In the unit introducing MP, we have already seen the tenants of scientific
management, bureaucracy and the Hawthorne experiment in brief. Out of
these it is important to understand the Hawthorne more intimately because
much of OB is anchored on this experiment.
Hawthorne experiments refer to a series of experiments conducted in the
Western Electric plant in the US. Western Electric was a monopoly supplier
to another monopoly AT&T telephone in the US. Though it all started as an
experiment because the lighting company supported the lighting of the plant,
it claimed that by increasing the lighting, the productivity of making the
relays of the telephone can be improved. Later, because of unexplainable
observations, several academics including Elton Mayo were brought in. It
consisted of four sub-experiments. Let us now learn the sub-experiments.
Part I - Illumination experiments (1924-27)
These experiments were performed to find out the effect of different levels of
illumination (lighting) on productivity of labour. The brightness of the light
was increased and decreased to find out the effect on the productivity of the
test group. Surprisingly, the productivity increased even when the level of
illumination was decreased. It was concluded that factors other than light

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were also important. Hence to find out more, the experiment was continued
by taking other factors into consideration.
Part II - Relay assembly test room study (1927-1929)
Two small groups, each of six female telephone relay assemblers, were
selected, one as a control group and another as an experimental group.
They were kept in separate rooms performing the same job. For the
experimental group, from time to time, changes were made in working
hours, rest periods, lunch breaks, etc. They also had the freedom to choose
their own rest periods and also to give suggestions to improve productivity.
While it was expected that the output will increase in the experimental
group, output increased in the control group as well. It was then concluded
that not only social cohesion and participatory decision making, but also
challenge increased productivity, which is perhaps the reason why
productivity increased in the control group.
Part III - Mass interviewing programme (1928-1930)
In this experiment, around 21,000 employees were interviewed in a span of
three years. Then it was found that people like to work in a group, have fun
and talk about matters that are important to them and when these were
permitted, productivity would increase.
Part IV - Bank wiring observation room experiment (1932)
Here, a group of 14 male workers of different work caliber performing bank
wiring were given group incentives based on productivity. The productivity
and the working of the members were observed for six months. It was
expected that the efficient workers will make the less efficient work faster
and harder. Interestingly it was found that the group established its own
norms for output and social pressure was used to achieve the standard
output rather than enhanced output.
The following conclusions were made from the sub-experiments:
 Good physical conditions are insufficient for increasing productivity.
Social and psychological factors have a major role in the workers'
productivity and job satisfaction.
 The influence of informal relations among workers had a greater impact
than formal relations in the organisation.
 If permitted to participate in decision making affecting their interests,
employees will perform better.
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 When employees believe that the management is interested in their

welfare, they work more efficiently.
 Treating employees with respect and dignity leads to performance
improvement.
 Besides the financial incentives, social and psychological needs must
also be satisfied to increase productivity.
 Good communication between the superiors and subordinates can
improve the relations and the productivity of the subordinates.
 Special attention and freedom to express their views will improve the
performance of the workers.
So, what is new in all these you might ask? Well, you are right. But if you
were living in the 1920s and 30s, then you would have wondered at these
findings. Hawthorne has been criticised on several fronts, that his
experiments lacked validity because it was conducted under controlled
conditions and would not work in real situations, that it gave too much
importance to human aspects and that human aspects alone cannot
improve production, that it gave excessive emphasis on group decision
making and of course that it gave excessive importance to the freedom of
the workers and not to the constructive role of the supervisors/managers.
Despite these criticisms Hawthorne changed the way factories worked
forever. Modern OB is hinged on Hawthorne.

Self Assessement Questions

1. The most unpredictable dimension to manage is ____________.
2. Hawthorne experiments refer to a series of _________ sub-
experiments conducted in US.
3. Hawthorne experiments proved that good physical conditions is more
than insufficient to increase productivity. (True/false)
4. Hawthorne experiments proved that treating employees with respect
and dignity leads to __________ .

7.3 Approaches to and Importance of OB

Modern approach to organisational behaviour
There are four main approaches to organisational behaviour. They are:
 Human resources approach

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 Contingency approach
 Productivity approach
 Systems approach
Let us now study each approach in detail.
Human resources approach
The human resources approach is concerned with the growth and
development of people towards higher levels of competency, creativity and
fulfillment. People are the central resource in any organisation. Hence it tries
to create a work climate for improved abilities. This approach is also known
as 'supportive approach' because the manager's primary role changes from
control of employees to providing an active support for their growth and
performance. Service based economy, where the service provider, the
employee and the customer have to work together (e.g., serving food in a
restaurant, buying an insurance, etc.) has very high relevance. Here the
roles of leadership and the leading process are vital.
Contingency approach
It implies that different situations require different behavioural practices for
effectiveness. Hence each situation must be analysed carefully to determine
the significant variables that exist in order to establish the more effective
practices. This approach ensures or at least encourages analysis of each
situation prior to action. Thus it helps to use all the current knowledge about
people in the organisation in the most appropriate manner.
Productivity approach
In this approach, the output per unit input is considered. Besides, economic
inputs and outputs, we need to have human and social inputs and outputs in
workplace, is the premise of this approach.
Systems approach
We have already seen the systems approach. It means that the organisation
'people' employ 'technology' in performing the 'task' that they are
responsible for, while the 'structure' of the organisation serves as a basis for
coordinating all their different activities. The systems view emphasises the
interdependence of each of these elements within the organisation, if the
organisation as a whole is to function effectively. This approach also looks

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at the organisation and its broader environment i.e., social, economic,

cultural and political within which they operate. All these shape the OB.
Contemporary OB - A separate field of study interdisciplinary in nature
OB is now treated as a distinct field of study. It is almost a science.
However, it is interdisciplinary in approach. It draws heavily from other
disciplines like psychology, sociology and anthropology. It also draws from
economics, political science, law and history and integrates the relevant
aspects.
Organisational behaviour integrates the relevant contents of these
disciplines to make them applicable for organisational analysis. For
example, it addresses issues of workplace motivation or conflict which are
oriented towards organisational objectives. In fact, organisational behaviour
tries to integrate both individual and organisational objectives so that both
are achieved simultaneously.
E.g., Mr. Ram is an introverted person and is mostly secluded in his room
when at home; but if he has to work as a customer relations manager, he
has to be talking and meeting people and interestingly, Mr. Ram does that
pretty well. You see how the person is affected by the organisation. This is
why it is important to study OB.
Why is OB Important? OB is important for managers because it tries to
answer the following questions and many more which would increase the
organisational productivity and managerial effectiveness:
1. How the individual differences in personality, personal development
and career development affect an individual's and the group’s
behaviour and productivity?
2. How do people perceive things and what facilitates this? This is
important because depending on the perception, the behaviour
changes. Thus following of orders and instructions may differ widely
depending upon how this has been perceived by two different
individuals or groups.
3. Some organisations are called learning organisations and they thrive,
while others perish. What influences individuals, groups and
organisational learning and the development of individual attitudes
toward work?

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4. What motivates people to work and how does the reward system affect
it in an individual and group capacity?
5. How can we create teams that are efficient and goal oriented?
6. How are effective decisions made in teams and organisations that
affect people and their productivity?
7. When and how does communication become effective?
8. How do people use power and how can it be channelled towards
productivity?
9. Why are some individuals more effective in negotiations?
10. How can conflict (between groups or between a manager and
subordinates) be resolved or managed?
11. How can jobs and organisations be effectively designed?
12. How can managers help workers deal effectively with change?

Self Assessment Questions

5. OB can be learnt from different approaches such as human resources
approach, __________, productivity approach and systems approach.
6. The human resources approach is concerned with the growth and
development of people towards higher levels of ________, _______
and fulfillment.
7. When a manager gives orders to two different people who are identical
in department, status, salary and other organisational factors, the
response could be very different and this depends on how each of
them __________ the order.

7.4 Definition of OB and Framework for Learning OB

OB can be defined as a systematic study that investigates the impact of
individuals, groups and organisational factors on productivity to include
effectiveness and efficiency, absentee, turnover, organisational citizenship
behaviour and job satisfaction.
 By systematic study we mean looking at relationships and attempting to
attribute causes and effects, and drawing conclusions based on
scientific evidence.

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 By productivity we mean a performance measure that includes both

effectiveness (achievement of goals) and efficiency (ratio on output
versus input required to achieve it).
 By absenteeism we mean failure to report to work especially without
informing.
 By turnover we mean voluntary and involuntary permanent withdrawal
from an organisation (simply put exiting or quitting).
 By organisational citizenship we mean discretionary behaviour that is
not part of an employee’s formal job requirements, but that nevertheless
promotes the effective functioning of the organisation.
 By job satisfaction we mean a general attitude towards one’s job; the
difference between the amount of reward the workers receive and the
amount they believe they should receive.
The definition also gives us the three frameworks of studying OB i.e.,
individual level, group level and organisational level. Figure 7.1 depicts a
bird’s eye view of framework and definition combined.

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Fig. 7.1: Diagrammatic View of Definition of OB

Self Assessment Questions

8. By systematic study we mean looking at relationships and attempting
to attribute ___________ and effects, and drawing conclusions based
on scientific evidence.
9. The two inherent components in the term productivity are ________
and ________.
10. By organisational citizenship we mean ________ behaviour that is not
part of an employee’s formal job requirements, but that nevertheless
promotes the effective functioning of the organisation.
11. In the OB learning framework we learn about personality, perception,
learning, attitude and motivation under group level variables.
(True/False)

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7.5 The Intricate Relation between MP and OB

How does OB connect to MP?
We repeat the statement, ‘Management is the process of getting work done
through people.’ That means people are extremely important. In the earlier
section we have seen what OB intends to achieve in management. Let us
now see how it is connected to the management processes.
Individual OB and its impact on MP
When OB is addressed from this perspective, it covers personality,
perception, learning, attitude and motivation. Of course, each of these affect
the other and in turn motivation. In a work context, their collective impact on
motivation is worth highlighting e.g., people with introverted personality are
motivated differently than extroverted ones and those with a positive attitude
differently from those with negative attitude. Together it affects how people
see things, how they react and how they work. It impacts the planning
process as individuals can perceive both opportunity and threat in a
situation. Their cautious personality versus an offensive one can affect the
decision and being introverted or extroverted can affect the way information
is gathered and analysed for planning and decision making. These factors
affect the way the organising is carried out i.e., if people are motivated and
have the right attitude, the organisations can be more flat, it affects the
staffing since more motivated workforce means less people to produce the
same, it affects the leading process because highly motivated people need
less leading and it affects controlling too because when we are working with
highly motivated people such as scientists, it does not require much control
and in fact controls can be counterproductive while it can be very effective
when we are dealing with those with low motivation.
Group OB and its impact on MP
Under this we study interpersonal behaviour, the dynamics of groups and
teams, leadership, conflict stress, negotiations, power and politics. We may
study decision making under OB also but for the purpose of this SLM, we
have covered it under MP and is not repeated here. The moment we
organise, we create teams and groups. They are meant to work cohesively
towards the goal. This depends, to a great extent, on the individual. It also
depends on the group dynamics. Though people interpret anything at their
individual level, they are often modified by group pressures, which are

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clearly highlighted in the Hawthorne experiments. Hence group is a force to

reckon with in planning since plans created and decided by the group are
better executed. When plans are made by managers or others without
consulting the group, the productivity is often adjusted to the group norms
as we saw in the bank wiring experiment. Norms, cohesion, goals,
procedures, communication pattern and leadership within a team directly
affect productivity. When managers are considerate, have clear goals,
motivate people and set example, then the group too has a different
dynamics to productivity. Concept of group is extremely important in MP.
Groups are capable of making their own plans and objectives in consonance
with the organisational objectives, make extremely good decisions. So far as
organising is concerned we saw how groups are the hub and the output of
organising and we also saw how formal and informal groups have an impact
in the workplace and while organising. When we have very effective groups,
we can have a very flat organisation and reduce much of the supervisory
cost and consequent motivation can lead to much higher productivity, which
in turn leads to reduction in staff and efforts on controlling. Unions are a
classic case of groups and its impact on productivity. There are unions,
which negotiate very effectively and ensure high levels of productivity and
those which will bring the shutters of an organisation down. This gives us an
idea of power and politics and conflict in an organisation and how they affect
productivity and job satisfaction. You would now be convinced how group
aspects of OB affect MP decisively.
Organisational level OB and its impact on MP
Organisational level OB studies organisational design, structure, roles and
culture. You can intuitively see that organisational structure overlaps in MP
and OB. The design is impacted by the group size, group maturity and
individual variables of OB. The roles impact the planning e.g., how many
roles can one do and ensure high effectiveness. The role of national and
organisational culture and its impact on MP processes need no emphasis.
For example, detailed planning is a hallmark of Western culture, which
believes in individualism, and people are left to themselves more than it is
done in the Eastern culture which believes more in collectivism. So, when a
role is defined in the Western culture, it will be highly specific while in India
or Japan, it may be more tacit and people may take on ad hoc roles more
easily which changes the nature of organising. This applies to the leading

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and controlling processes as well. While those from the East may be
conforming to a higher degree of control because of their collective beliefs,
those from the West may not be. But then again the industry and firm level
culture also matters. The IT companies in India probably have a greater
leaning towards individualism than collectivism than perhaps a
manufacturing firm and even in IT firms, a US based company like Google
would have it more than an Indian company.
We are now clear that MP and OB are so intimately related and impact each
other so much that it makes sense to study it together.

Self Assessment Questions

12. Perception is an important factor while planning because it
__________ the way threat and ---------- are seen by people.
13. Though people want to do things their way, their attitude, perceptions
and decisions are often modified by ___________ pressures.
Hawthorne experiment gives us an insight into this.
14. Groups are capable of making their own plans and objectives in
consonance with the organisational objectives. Some of them make
excellent decisions and follow up with action on the shop floor. A good
example of such a group is the _____________.

7.6 The OB-Human Resources Management Relationship

This is perhaps one of your first courses in the MBA program and you will
also take a course in HRM in your first semester. So, do you call it a day
after you write the examination on this SLM and then go ahead. It will be
very unfortunate if you do that and we will see why you should carry the
knowledge of OB ahead with you?
There are three factors of production namely land, labour and capital. This
legacy from the industrial era is true even today but it has undergone
several fundamental changes after we embraced the services economy and
later knowledge economy and globalisation. First, land, which was
conceived as geographically bounded, has undergone conceptual changes
to include the virtual area from which business can be done much like
amazon.com. Second, buoyed by logistic efficacy and technological
innovations, we can disconnect production and consumption centres
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geographically. It is possible to lift products from one place to the other

cheaply and quickly thus offsetting the importance of being close to the
consumer. Thirdly, capital is flexible and mobile today and its availability, for
the right reasons, plenty.
What about labour? They are no less mobile. They can shift jobs, shift
places, shift career, do multitasking, work from home using computers
(telecommute) and do several other things which we could not think of
earlier. Because of the unimaginable mobility induced in labour, we have
new challenges. Add to this the individual human uniqueness unlike the
other two factors. Human beings can be creative and destructive equally
well or just plain benchers (people held on payrolls but not doing any
specific tasks). They can vary their production, qualitatively and
quantitatively, for reasons such as time of day, mood, interest, motivation,
season, desire for bargaining, coercion, amount of light, availability of music,
team spirit, etc. They need, besides great pay, motivation and meaningful
work, empowerment, etc. They need not only high pay but comparative
justice in pay (i.e., justice in relation to other’s pay) and other factors. They
have unique needs which emanate from their family, society and culture,
self image, desire to learn and grow and several such intangibles, both
predictable and unpredictable. All these challenges make architecting the
factor of production called ‘Human Resources’, the modern variant of the
age old ‘labour’, complex.
When innovation and creativity is lacking in our teams, when our team fails
to measure up, when there is discontent in the team, when members seek
change, when production is sub-optimal and targets are missed, remember,
as a team leader or a manager in whatever department we are, we will be
called upon to answer ‘why’. And the answer almost always would lie in our
competence or otherwise of handling the men charged under our
leadership. Equally, when we savour success, exceed targets, enjoy
excellent bonuses remember that we did a great job in managing the people
charged under our leadership. And when we do all that, remember that it
takes only a minute for the people to change their mind about us and undo
all that we achieved. No other factors of production do that to us.
Because OB answers most of these, a course in OB and HR would interest
the Marketing, Financial, Operations and other functional area managers.

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So, a study of managing people is not a mere study intended to sharpen

some HR department’s skills but it encompasses every one of us without
regard to department or functional area.
OB and HR are two sides of a coin. Without one, the other would be invalid.
In individual variants of OB, we learn about learning, personality, perception,
attitude, emotions and motivation and in HR we learn how to use these for
results e.g., how is the salary designed to fulfill the hygiene factor of
motivation theory or the equity theory. If we speak of personality, perception
and attitude, we check how these fit into the organisation through the
selection process. Thus, all OB concepts can be mapped on to HR systems
and processes. Knowing this map enables us to understand the OB-HR
connection. It follows that you need to revise your OB concepts continually
when taking HR decisions and since selection, motivation, etc. are the
functions of all managers and not only HR managers, OB is invaluable for
all.
Let us illustrate this further. Read the story Google v/s Facebook at
http://news.cnet.com/8301-13577_3-20012839-36.html. It is a simple story
of how one company tried to procure talent from the other. You may realise
that both organisations are similar in innovation, technology savvy
atmosphere, work culture, empowerment, etc. If we look at the salary they
are really high in both cases and the issue of hygiene (existence of sufficient
pay), propounded in the two factor theory of motivation, is not too relevant
here. But by merely offering higher salary, the concept of equity becomes
unbalanced, leading to a flow of rare talent from one to another.
So, the purpose of these units of course is to enable you to harness the
human power to the best of your advantage and through it to the advantage
of the organisation, society and the world at large.
Self Assessment Questions
15. Selection process ensures that individual factors such as right
personality, _________ and __________ exist in an individual so that
the organisation can work smoothly.
16. OB is not a standalone concept. All OB concepts can be mapped to
___________ systems and processes.

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7.7 Limitations of OB
OB has some important limitations. These are:
 OB is not a remedy for the removal of conflict and frustration but can
only reduce them.
 It is only one of the many systems operating within a large social
system.
 There is a great danger of OB when in the hands of people who lack
system understanding. They tend to look only at the 'behavioural basis',
which gives them a narrow view point. This tunnel vision often leads to
satisfying employee experiences while overlooking the broader system
of an organisation in relation to all its public.
 The law of diminishing returns also operates in the case of
organisational behaviour (the law states that at some point increase of a
desirable practice produces declining returns and sometimes negative
returns when that point is exceeded). For example, too much of freedom
and security could lead to less employee initiative and growth after
reaching a level and to complacency after that. This relationship shows
that organisational effectiveness is achieved not by having more and
more of a particular factor but appropriate level of it.
 The ethical standards of those in charge and those who use OB
techniques are a great concern. Its knowledge and techniques could be
used to manipulate people without regard for human welfare. People
who lack ethical values could use people in unethical ways.

Self Assessment Questions

17. If you know your OB, you can completely remove conflict and
frustration (True/False).
18. Tunnel vision of OB can lead to satisfying employee experiences at the
cost of broader system of an organisation. (True/False)
19. If we give infinite freedom and security to people, productivity is seen to
improve. (True/False)

7.8 Globalisation and OB

Globalisation refers to the complex economic network of international
competition, resource suppliers and product markets. Most organisations
have to achieve high performance within this competitive global
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environment. Since environment affects organisational structure and the

way we do business, it affects people who create performance for the
organisation. Let us see this in some more detail.
Globalisation forces affect OB
Globalisation is affected by several forces such as rapid growth in
information technology and electronic communication, movement of
valuable skills and investments, increasing cultural diversity, high level of
knowledge worker immigration, increased job migration and the multicultural
workers. As a result we are exposed to global best practices among people.
For example, the use of groups in quality circles emerges from Japan and is
quickly copied by all to retain the competitive advantage, hire and fire is
mimicked by several Indian companies from the West although it was
seldom heard in India as a concept before globalisation, but creating safety
valves and higher pay when the times are good is the underlying factor for
this policy and that this is not existent in the Indian economy where supply
of labour is greater than demand and consequent low compensation is often
missed. This in turn leads to strikes and labour unrest which affects
productivity greatly. OB has to understand these proactively.
Impact of alliances
Globalisation is contributing to the emergence of regional economic
alliances such as European Union (EU), North American Free Trade
Agreement (NAFTA), Asia-Pacific Economic Cooperation Forum (APEC).
This implies that people and resources can move freely and industries can
be set up in these alliances easily. This compels the countries to adjust the
organisational structure to remain competitive (e.g., having a flat
organisation versus more hierarchical), which in turn affects creation of
groups, methods of motivation and managing change.
Globalisation is accelerating outsourcing
Contracting work to outside agencies or organisations rather than
accomplishing it with a full-time permanent workforce, off shoring,
contracting work to persons in other countries, job migration and movement
of jobs from one location or country to another – many of these decisions
are based on economy and hence OB has to deal with the acceptance of
this change, managing the perception of its employees, their motivation and
compensation, and other measures to retain productivity in the home

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country. In the host country, OB has to manage these to align the people to
the home county which outsources.
Creating global managers
Managers need to know how to conduct business in multiple countries,
adapt to the culture, which is their biggest challenge, be able to handle
different languages, think with a world view and are able to map strategy in
the global context, have a global attitude and global mindset. This implies
that we have to learn quickly on adjusting our personality’s effect on
business processes, change our attitudes and perception about managers
and employees from other countries, learn how to work in international
groups including virtual groups and be prepared to adjust to a global
organisational structure and systems.
Globalisation and culture
Culture is quite hardwired in our mind and globalisation demands it’s
rewiring as we have to accept the shared way of doing things in a particular
society, define boundaries between different groups and affects how their
members relate to one another, develop cultural intelligence i.e., the ability
to identify, understand and act with sensitivity and effectiveness in cross-
cultural situations.
Self Assessment Questions
20. One of the ways global alliances impact OB is that they compel the
countries to adjust the ___________ to remain competitive.
21. Culture is quite hardwired in our mind and ___________ requires that it
is rewired.

7.9 Summary
Let us recapitulate the important concepts discussed in this unit:
 OB can be defined as a systematic study that investigates the impact of
individuals, groups and organisational factors on productivity to include
effectiveness and efficiency, absentee, turnover, organisational
citizenship behaviour and job satisfaction.
 Hawthorne experiments refer to a series of experiments conducted in
the Western Electric plant in the US. Much of Organisational Behaviour
was developed based on these experiments.

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 The experiments made it clear that social and psychological factors play
a major role in employee job satisfaction and productivity.
 The four major approaches to OB are human resource approach,
contingency approach, productivity approach and systems approach.
 OB and management process are interrelated. Management processes
focus on getting the work done most effectively and efficiently while OB
looks into the individual, group and organisational variables that impact
employee productivity, absenteeism, job satisfaction etc.
 OB has certain limitations such as it is not a remedy for conflict, it is only
one of many social systems, operation of law of diminishing returns.
 Globalisation also impacts the study of OB.

7.10 Glossary
Effectiveness: A term that is used to indicate that the goals achieved are
those intended to be achieved and not something different.
Organisational citizenship: Discretionary behaviour that is not part of an
employee’s formal job requirements, but that nevertheless promotes the
effective functioning of the organisation.
Systematic study: A study that defines the cause and effect relationship
between two factors. Usually they have a dependent and independent
variable relationship i.e., when the independent variable is increased or
decreased, the dependant variable also behaves in a predictable way by
increasing or decreasing.
Turnover: Voluntary and involuntary permanent withdrawal from an
organisation (simply put exiting or quitting).

7.11 Terminal Questions

1. Elucidate the deductions from the Hawthorne experiments.
2. Differentiate between human resources approach and contingency
approach.
3. Justify why OB is an important area of learning for a manager.
4. Define OB and explain the framework for learning OB.
5. Explain the intricate connection between MP and OB.

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7.12 Answers

Self Assessment Questions

1. Human
2. 4
3. False
4. Performance improvement.
5. Contingency
6. Competency, creativity
7. Perceives
8. Causes
9. Efficiency and effectiveness.
10. Discretionary
11. False
12. Impacts, opportunities
13. Group
14. Quality circles
15. Perception and attitude
16. HR
17. False
18. True
19. False
20. Organisational structure
21. Globalisation

Terminal Questions
1. Impact of social and psychological factors, informal relations on the
workers productivity are some of the learning from Hawthorne
experiments. Refer Section 7.2 for more details
2. HR approach was focused on growth and development of people to
higher levels of competency and fulfillment. Contingency approach
implied different behavioural practices in different situations. Refer
Refer Section 7.3 for more details.

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3. OB helps managers to learn individual differences affecting individual

and group productivity, motivating factors etc. Refer Section 7.3 for
more details.
4. Organisational Behaviour is the systematic study of individual, group
and organizational factors on productivity, effectiveness and efficiency.
Refer Section 7.4 for more details.
5. Management process focuses on getting the work done and OB
focuses on the individual, group and organizational factors affecting
productivity. Refer Section 7.5 for more details.

References/E-References
 Johns, G., & Saks, A. (2010). Organisational Behaviour: Understanding
and Managing Life at Work with My OB Lab. Pearson, Ed 8.
 James, P., S. (2011). Instructor Notes to Management Graduates.
 Greenberg, J. (2010). Behaviour in Organisations: Global Edition.
Pearson, Ed 10
 Arnold, J, et al, (2010). Work Psychology. Pearson, Ed 5.
 Stephen, R. (2010). Organisational Behaviour. Prentice Hall, Ed 10.

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