CHAPTER ONE

AN OVER VIEW OF ORGANIZATIONAL BEHAVIOR

1.1 Definition and meaning

What is meant by organization? What is meant by behavior? What exactly is meant by the term
“organizational behavior”? And what is the importance of organizational behavior? The answers to
these fundamental questions will help establish our foundation for discussion and analysis and help
you better appreciate why understanding the field can be of value to you in the future.

An organization is a consciously coordinated social unit, made up of a group of people, who work
together on common goals on a relatively continuous basis. Manufacturing and service firms are
organizations, and so are schools, hospitals, churches, military units, retail stores, police
departments, volunteer organizations, and government agencies. Behavior refers to what people
do in the organization, how they perform, and what their attitudes are. By moving one step
ahead, it is, therefore, easy to define the term organizational behavior.

Organizational behavior (frequently abbreviated as OB) involves the study of the roles played by
individuals in the organisation and the relationships of individuals to each other. It is the systematic study
of a person’s behavior when employed in a business, a government department, or other organisation. It is
also the study of individual behavior and group dynamics in organizational settings. The study of
organizational behavior is primarily concerned with the psychological, interpersonal, and behavioral
dynamics in organisations.

It is the field of study that investigates the impact of individuals, groups and structure on behavior within
organizations for the purpose of applying such knowledge toward improving an organization's
effectiveness. (Stephen p. Robbins, 1996; page 10)

That's a lot of words, so let's break it down:

Organizational behavior is a field of study. This means it is a distinct area of expertise with a common
body of knowledge. What does it study? It studies three determinants of behavior in organizations:
individuals, groups, and structure. Additionally, OB applies the knowledge gained about individuals,
groups and the effect of structure on behavior in order to wake organizations work more effectively.'

To sum up our definition, OB is concerned with the study of what people do in an organization and how-
that behavior affects the performance of the organization. And because OB is specifically concerned with
employment-related situations, you should not be surprised to find that it emphasizes: behavior as related
to jobs, work, absenteeism, employment turnover, productivity, human performance, and management. "

There is increasing agreement on the components or topics that constitute the subject area of OB. While
there is still considerable debate about the relative importance of each, there appears to be general
agreement that OB includes the core topics of motivation, leader behavior and power, interpersonal-
communication, group structure and process, learning, attitude development and perception, change
processes, conflict, job design, and work stress.
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 1.2 Characteristics of organizational behavior

The biggest feature of Organizational Behavior is that Organizational Behavior takes a

systematic approach to understand and influence human behavior. Organizational behavior is
the study and participation of knowledge about human behavior in organizations as it relates to
other system elements, such as structure, technology, and the external social system. By
nature, the field of Organizational Behavior studies is very distinctive with its own features and
characteristics. Accordingly, the followings were the 6 characteristics or features Organizational
Behavior;

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

definition, a discipline is an accepted science that is based on a theoretical foundation.
But, OB has a multi-interdisciplinary orientation and is, thus, not based on a specific
theoretical background. Therefore, it is better to reason to call OB a separate field of study
rather than a discipline only.
2. An Interdisciplinary Approach: Organizational behavior is essentially an
interdisciplinary approach to study human behavior at work. It tries to integrate the
relevant knowledge drawn from related disciplines like psychology, sociology, and
anthropology to make them applicable for studying and analyzing organizational
behavior.
3. Applied Science: The very nature of OB is applied. What OB basically does is
the application of various researches to solve the organizational problems related to
human behavior. The basic line of difference between pure science and OB is that while
the former concentrates of fundamental research, the latter concentrates on applied
research. OB involves both applied research and its application in organizational
analysis. Hence, OB can be called both science as well as art.
4. A Normative Science: Organizational Behavior is a normative science also.
While the positive science discusses the only cause-effect relationship, OB prescribes
how the findings of applied research can be applied to socially accept organizational
goals. Thus, OB deals with what is accepted by individuals and society engaged in an
organization. In fact, OB is normative as well that is well underscored by the
proliferation of management theories.
5. A Humanistic and Optimistic Approach: Organizational Behavior
applies a humanistic approach towards people working in the organization. It deals with
the thinking and feeling of human beings. OB is based on the belief that people have an
innate desire to be independent, creative and productive. It also realizes that people
working in the organization can and will actualize these potentials if they are given
proper conditions and environment. Environment affects performance or workers
working in an organization.
6. A Total System Approach: The system approach is one that integrates all
the variables, affecting organizational functioning. The systems approach has been
developed by the behavioral scientists to analyze human behavior in view of his/her
socio-psychological framework. Man’s socio-psychological framework makes the man a
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 complex one and the systems approach tries to study his/her complexity and find a
solution to it.

1.3 Historical Foundations of Organizational Behavior

As organizations increased in size and complexity, the need for human concern also increased. Different
management theorists studied employees’ needs and motives or behavior in an organization and the
impact of employee behavior on productivity.

The early management pioneers such as Henry Fayol, Henry Ford, Alfred P. Salon and even the scientific
management advocators at the end of the 19 th century such as Frederic W. Taylor, recognized the
behavioral side of management. However, they did not emphasize the human dimension; they let it play
only a minor role in comparison with the roles of hierarchical structure, specialization, and the
management functions of planning, organizing, staffing, leading and controlling.

About the time of World War I, Fayol headed up what was at that time the largest coal mining firm in
Europe. Writing the generally considered first book in management, he emphasized that the purpose of
organization was to get the work done in specialized, machine like functions. He did not emphasize that
the organization is made up of people; it is not a machine. Yet, perhaps, the most widely recognized
management expert in modern times, peter Drucker, has stated, “The organization is, above all it is
social. It is people.” There are varied and complex reasons for the emergence of the importance of the
organization as social system, but it is the famous Hawthorne studies that provide historical roots for the
notion of a social organization made up of people and makes the generally recognized starting point for
the field of organizational behavior.

The historical background of organizational behavior can be learned by having a through look at the
following theories of management forwarded by various individuals. As forwarded by Mishara, these
theories can be grouped into four main categories as Classical Approach, Neo Classical Approach,
Behavioral approach and Modern Approach.

a) Classical Approach

Theories developed at the early stages were included under classical approach. The theories included in
this category are bureaucratic, administrative, and scientific approaches. They emphasize on the structural
or functional factors. The classical approach stresses on four S’s that is, structure, specialization, scalar
principle, and the span of control. This theory lays emphasis on the organizational structure.
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Moreover, it treats employees as economic beings like machines and money. Their maximum exploitation
is suggested by applying the bureaucratic and coercive approach. Hire and fire is the basic approach of
this theory. It led to a dehumanized organizational structure without considering the factors of flexibility
and adaptability. The rules and regulations become the governing factors. Specialization based on the
division of labor, scalar chain hierarchical organization, discipline, are the advantages of the classical
approach. This approach ignores the significance of human beings in organizational growth. There is an
absence of flexibility, adaptability, intrinsic rewards and personal attachment. Ignoring initiative,
innovation and changes is not beneficial for the health of an organization. Among the categories of
classical theories the most recognized one is the scientific management theory. Hence, now let us have a
brief look at scientific management theory as forwarded by Frederic W. Taylor.

 Scientific Management Theory: The scientific management theory

was propounded by F.W.Taylor and was carried out by Frank and Lillian Gilbreth, Henry L
Gantt and Emerson. Taylor was considered as the father of the principles of scientific
management. His primary concern was to increase productivity through greater efficiency
in production and increase in payment for workers. As to this approach, the personal talent
of the manager guided the workers who were motivated by bonus and monetary benefits.

To this end, he tried to find out the basic principles of management by using time and work study,
detailed analysis, investigation and planning of work allocation. It is known as scientific
management because systematized knowledge is used for work allocation and assignment of
specific jobs. The salary, wages, etc are to be decided as per the work performance of individuals.
Taylor described how the scientific method could be used to define the “one best way” for a job to
be done. The scientific management approach was concerned with the principles
mentioned below:

 developing a standard method of doing a job

 scientific selection of personnel
 assigning workers to jobs depending on their abilities
 training workers on the work method
 eliminating interruptions
 offering economic incentives
 specialization
 functional foremanship
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  work order and
 coordination

b) Neo-Classical Approach

The classical theories concentrated on discipline and the economic well being of people. They ignored
their morale and desires. Neo classical theories while accepting the merits of classical theories have given
more importance to human relations and behavioral sciences. These theories modified, added, and
extended the classical theories by realizing the fact that management exists in social system wherein
human factors have noteworthy roles in performance. Employees can play crucial roles in decision
making process provided that they are allowed to take part. Human relations and behavioral science have
become two important approaches of neo classical theories.

 Human Relations: This theory was developed by Elton Mayo and his colleagues from
1924 to 1932 at the Hawthorne plant of western Electric Company. Without any question, the
most important contribution to the human relations movement within organizational behavior
came out of the Hawthorne studies undertaken at the western electric company. The 4 phases
were:

1. The Illumination Experiments: this phase of the study revealed that light had no
significance impact on productivity of workers. The intensity of light did not
influence the productivity of telephone relays.

2. Relay Assembly Test: this one provided several facilities to telephone relay
assembly wherein it was observed that special attention and treatment
caused employees to increase their productivity. It was termed as the
Hawthorne Effect, where people feel the pride of belonging to a group.
Herein, the relationship between non physical variables such as improved
human relations, supervisory methods, social interaction, incentive systems,
workers’ authority, and productivity was studied.

3. Interviewing Programs: this one tested on human relations rather than on

favorable physical conditions. It revealed that employees are unwilling to
answer direct questions. They gave important clues towards management
style when asked indirectly.
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 4. The Bank Wiring Observation Room Experiments: here sufficient freedom was given
to the informal groups. It revealed that employees were not only economic
beings but social and psychological beings as well. Their productivity was
influenced by sentiments, beliefs and the group behavior of employees.

c) Behavioral Management Theory

The proponents of behavioral school recognized employees as individuals with concrete human needs as part
of the work groups and as members of a large society. This theory believes in interpersonal relations. It
states that employees are assets that can be developed not nameless robots expected to follow orders blindly.

Robert Owen, a successful textile mill manager in Scotland, is considered as the father of modern
personnel management. He emphasized that management should show concern for employees. Herzberg
and Vroom suggested more rational models after Maslow who developed the need hierarchy.

Abraham Maslow- a humanistic psychologist- proposed a theoretical hierarchy of five needs;

physiological, safety, social, esteem and self actualization needs. From a motivation standpoint, he argued
that each step in the hierarchy must be satisfied before the next can be activated and that once a need is
substantially satisfied, it no longer motivates behavior. Mc Gregor, Likert and others emphasized
democratic values and human motivation. Unlike the beliefs of classical theory, behavioral science
believes that human beings like work and but it should not be super imposed rather be self realized. Some
of the major contributions of the aforementioned theory are described below.

Individual behavior: it has been considered important in the field of management. Their behavior is
influenced by their respective feelings, perception, learning and personality.

Group behavior: the cultural and social backgrounds of employees have a significant role to play in
management. People work together to accomplish the corporate objective.

Task: effective performance of a task is important while giving due importance to coordinated
efforts and achievement.

Participative management: employees have the right to take part in management decisions. Giving
such opportunities to workers in the management process will help increase productivity and
efficiency.

Motivation: monetary and non monetary incentives should be used for motivating people.
Employee development and worker satisfaction contribute greatly to production.
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 Communication: two way communications is essential to establish a common flow of
understanding in any organization. Formal and informal communication is exercised for managing
people, although informal communication has more impact on management success. Group
communication, team spirit, man to man relations and group harmony have been realized by neo
classical theorists.

d) Modern Approach

According to Mishara, the modern organizational theory has become complex for it synthesizes the
classical and neo classical theories, while incorporating technological development. The modern theory is
classified into quantitative, systems and contingency.

 Quantitative Theory: this theory includes operations research and quantification

of the problem. It analyses the problem from quantifiable angles and provides solutions to
complex problems only with the help of statistical and mathematical models such as linear and
non linear programming, decision tree, game theory, simulation, probability and etc.
 Systems Theory: a system is a set of interconnected and interrelated elements of
management activity. It is an arrangement of components of activities performed for achieving
certain objectives. Here the importance of considering an organization as composed of different
work units/ sections striving to achieve a common goal and thereby the need of paying due
attention to every unit is emphasized. According to this approach, if one section of the
organization fails to accomplish its tasks then the overall wellbeing of the organization would be
in jeopardy.
 Contingency Management Theory: this theory is based on the
premises that managers prefer actions or approaches depending on the variables of the situation
they face. It recognizes that there is “no one best way” to manage people in organizations and no
single set of simple principles that can be applied universally. A contingency approach to the
study of organizational behavior is intuitively logical because organizations obviously differ in
size, objectives and environmental uncertainty. Similarly, employees differ in their values,
attitudes, needs and experiences. Therefore, it would be surprising to find that there are
universally applicable principles that work in all situations, but it is one thing to say “ it all
depends.”

1.3 The Importance of Organizational

Behavior
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Having these definitions of organizational behavior, what is its importance? The purpose of
organizational behavior is to understand people in organizations, provide practitioners and
managers with the tools to manage people more effectively & help organizations achieve their
goals. Most people are educated in organizations, acquire most of their material possessions from
organizations, and die as members of organizations. Many of our activities are regulated by the
various organizations that make up our governments. And most adults spend the better part of their
lives working in organizations. Because organizations influence our lives so powerfully, we have
every reason to be concerned about how and why those organizations function.

There is increasing agreement as to the components or topics that constitute the subject area of
organizational behavior. Although there is still considerable debate as to the relative importance
of each, there appears to be general agreement that organizational behavior includes the core
topics of:-
 Managing individual differences to achieve performance
 Motivating employees
 Managing teams
 Using power and leading people and organizations
 Decision making
 Communicating inside and outside the organization
 Managing conflict and negotiating
 Implementing change
 Work design
 Work stress

1.4 Contributing disciplines to OB

According to Stephen p. Robbins, 1996; Organizational behavior is an applied behavioral science that is
built on contributions from a number of behavioral disciplines. The predominant areas are psychology,
sociology, social psychology, anthropology and political science. As we shall learn, psychology's
contributions have been mainly at the individual or micro level of analysis; the other four disciplines have
contributed to our understanding of macro concepts such as group processes and organization.
 Psychology: It is the science of human behavior. It seeks to measure, explain and
sometimes change the behavior of humans and other animals. Psychologists concern themselves
with studying and attempting to understand individual behavior. Those who have contributed and
continue to add to the knowledge of OB are learning theorists, personality theorists, counseling
psychologists and most important, industrial and organizational psychologists. Early
industrial/organizational psychologists concerned themselves with problems of fatigue, boredom
and other factors relevant to working conditions that could impede efficient work performance.
More recently, their contributions have been expanded to include learning, perception,
personality, training, leadership effectiveness, needs & motivational forces, job satisfaction,
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 decision-making processes, performance appraisals, attitude measurement, employee selection
techniques, job design and work stress.

 Sociology: it is a science of society. Psychologists focus their attention on individuals

whereas sociologists study the social system in which individuals fill their roles; that is, sociology
studies people in relation to their fellow human beings. Specifically, sociologists have made their
greatest contribution to ob through their study of group behavior in organizations, particularly
formal and complex organizations. Some of the areas within OB that have received valuable input
from sociologists are group dynamics, design of work teams, organizational culture, organization
theory and structure, organizational technology, bureaucracy, communications, power, conflict
and intergroup behavior.
 Social psychology: it is an area within psychology, but blends concepts from both
psychology and sociology. It focuses on the influence of people on one another. One of the major
areas receiving considerable investigation from social psychologists has been changes (how to
implement it and how to reduce barriers to its acceptance.) Additionally, we find social
psychologists making significant contributions in the areas of measuring, understanding and
changing attitudes; communication patterns; the ways in which group activities can satisfy
individual needs; and group decision-making processes.

 Anthropology: It is the science of the learned behavior of human beings.

Anthropologists study societies to learn about human beings and their activities. Their work on
cultures and environments, for instance, has helped us understand differences in fundamental
values, attitudes, and behavior between people in different countries and within different
organizations. Much of our current understanding of organizational culture, organizational
environments and differences between national cultures is the result of the work of
anthropologists or those using their methodologies.

 Political Science: It is the study of the behavior of individuals and groups within a
political environment. Although frequently overlooked, the contributions of political scientists are
significant to the understanding of behavior in organizations. Political scientists study the
behavior of individuals and groups within a political environment. Specific topics of concern here
include structuring of conflict, allocation of power and how people manipulate power for
individual self-interest. Several decades ago, little of what political scientists were studying was
of interest to students of organizational behavior. But times have changed. We have become
increasingly aware that organizations are political entities: if we are to be able to accurately
explain and predict the behavior of people in organizations, we need to bring a political
perspective to our analysis.
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 1.5 Organizational behavior and Management in 21st
C
The modern work place continues to feel the impact of many changes and challenges. Organizations and
their managers are increasingly required to deliver quality products and services in abundance and at
reasonable cost. Among all people, it is increasingly being recognized that human resources are the basic
building blocks of organizational performance.

Organizational behavior is a discipline that can help managers to make good decisions while working
with people in complex and dynamic environments. The managers should have full awareness of the
complex and shifting demands that the dynamic environment will make upon them. Let us ‘look at the
Realities of the New Work Place’.

 Changing Workforce (Workforce is changing): Managers in organizations must be

prepared to deal with workforce diversity- ethnic, racial backgrounds, gender and age,
lifestyle, etc.
Managers must also be prepared to deal with the workers whose skills whether gained through
formal education or on-the-job training may not be consistent with the demands of new
technologies and tasks. Managers must be prepared to deal with workers values that reflect a
dynamic society in which family values, environmental concerns and the very concept ‘career’ are
changing. Thus, the successful manager will value diversity and will always find ways to meet the
needs of complex workforce.

 Consumer Expectations are changing: In today’s market place, only those

organizations that are able to deliver what consumers want in terms of quality services and
cost will prosper. This is the age of total quality management, where the organisation and
all of its members operate with commitments to continuous improvement and to meeting
customer needs completely. The successful manager will value quality and consumers, and
will personally do things that add value to the organization’s ability to meet customers’
needs.
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  Changing Organizations (Organizations are changing): Organizations are changing
and will continue to do so in order to survive and prosper in a complex environment. Under
different pressures today, we see organizations downsizing, forming alliances, creating new
organizational structures, going global and employing more technologies. Thus, the
manager must be comfortable working in and with organizations that are operating in new
and different ways.

 Managers must Change: For the manger to succeed, he must be willing to step forward
and make the necessary personal and organizational changes to secure it. Then, progressive
manager must make behavioral and attitudinal adjustments necessary to succeed in every
dynamic times and situation.
Managers and Organizational behavior
A manager who knows the success in a highly dynamic environment will actively support opportunity
seekers and problem solvers. These are managers who continually analyze changing situations to identify
opportunity which can be exploited or problems to be solved. They are managers who excel at helping
other people to do these same things well. The field of organizational behavior helps managers in
knowing what to ‘look for’ in work situations, understand what they find, and take the required action.

Good managers are able to recognize the significance of performance accomplishment of people at work,
people’s attitudes and behaviors and any events that occur in the work unit in the organisation as a whole
and even in external environment and take constructive active action to improve things as a result of this
insight. The study of organizational behavior can provide managers with the following practical
advantages:

 Organizational behavior provides managers with a way of

systematically thinking about the behavior of people at work.
 Organizational behavior also provides managers with techniques for
dealing with the problems and opportunities that commonly occur in
work setting.

1.6 Nature of Managerial Work

As per Robbins, managers get things done through others. They make decisions, allocate resources, and
direct the activities of others to attain goals. If you do not know where you are going, any road will get
you there. Since organizations exist to achieve goals, someone has to define these goals and the means by
which they can be achieved. Management is that someone. In the early part of 1960’s Henneri Fayol
wrote that all managers perform five management functions- planning, organizing, commanding,
coordinating and controlling. Today, authors condensed these down to five- planning, organizing,
staffing, leadership and controlling. In the late 1960’s Henry Mintizberg concluded that managers
perform ten different highly interrelated roles or sets of behaviors attributable to their jobs. The ten roles
can be categorized into three broad categories as follows:

1. Interpersonal Roles: all managers are required to perform duties that are ceremonial and
symbolic in nature. The interpersonal roles consist of three sub categories as indicated below:
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 a) Figurehead/symbolic head: as figurehead a manager is required to perform a number of routine
duties of legal or social nature. Example, when the president of a university hands out diplomas
at commencement or a factory supervisor gives a group of high school students a tour of the
plant, he or she is acting in figurehead role.
Leadership: here the manager is responsible for the motivation & direction of subordinates. All
mangers have a leadership role. It includes hiring, training, motivating, and disciplining
employees.
b) Liaison: in this case the manager maintains a network with important people and groups. It is
concerned with contacting outsiders who provide the manager with information. They may be
individuals or groups inside or outside the organization. Example, acknowledgement of mail,
external board work
2. Information Roles: all managers, to some degree, receive and collect information from
organizations and institutions outside their own. Typically, this is done through reading magazines and
talking with others to learn of changes or new things that may affect his/her unit directly or indirectly.
This role has got three important sub roles as described below.

a) Monitor: a manager receives wide variety of information, serves as nerve center of internal and
external information of an organization. Example, handling all mail and contacts categorized as
concerned primarily with receiving information.
b) Disseminator: a manager transmits information received from outsiders or from other
subordinates to concerned parties. Examples include forwarding mail into organization for
informational purposes; verbal contacts involving information flow to subordinates such as
review sessions.
c) Spokes person: is concerned with transmitting and sharing relevant information with outsiders
by representing the organization. Examples include communicating to interest parties an
organization’s plans, actions, policies, and the like.

3. Decisional Roles: all managers are required to make decisions. This role has four important sub
categories as stated below.

a) Entrepreneurship: initiates and oversees new projects that will improve their organization’s
performance. Example, strategy and review sessions involving initiation or design of
improvement projects
b) Disturbance Handler- engages in resolving conflicts
c) Resource allocator: the manager is supposed to allocate various resources in an efficient manner
to various section/departments.
d) Negotiator: involves dealing with other parties representing the organization For example,
contract negotiation

Still another way of considering what managers do is to look at the skills or competencies they need to
successfully attain their goals. Three essential managerial skills are:-
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 1. Technical skill: encompasses the ability to apply specialized knowledge or expertise.
2. Human skill: is about the ability to work with, understand and motivate other people both
individually or in groups.
3. Conceptual skill: is the mental ability to analyze and diagnose complex situations. Decision
making, for example, requires managers to spot problems, identify alternatives that can correct
them, evaluate these alternatives, and select the best one.

1.7 Levels of organizational behavior Analysis

When organizational researchers study human behavior, they usually try to draw conclusions about casual
relationships of two (dependent & independent) variables-what causes what.

According to Stephen P. Robbins, a model is an abstraction of reality; a simplified representation of some

real world phenomenon. There are three levels of analysis in Organizational behavior; these are

1. The first level of analysis is called micro-organizational behavior, studies the individual. It is
the smallest possible level of analysis in organizations and includes topics such as perception,
personality, motivation, and learning.
2. The second and middle level of analysis in organizational behavior is the small group that is
made up of individual employees within an organization. The study of small groups in
organizational behavior includes issues of group size and composition, cohesion, trust,
conflict management, team building, group decision making, and leadership.
3. The third level of analysis in organizational behavior, called macro-organizational
behavior, is concerned with larger groups, such as departments, and organizational processes.
Macro organizational behavior topics include issues such as the design and structure of
organizations, organizational culture and strategy, organizational power and politics, change, and
organizational effectiveness.

Organizational System Level

Group Level

Individual Level
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 Figure 1.2 The three levels of analysis in organizational behavior

A)Dependent variables: are those which are caused by independent variables. The
primary dependent variables given by different scholars in the model of OB are; productivity,
absenteeism, turn-over and job satisfaction. We use these as the critical determinants of human
resources effectiveness in an organization.

 Absenteeism: is failure to report to work. It is obviously difficult for an organization to

operate smoothly and to attain its objectives if employees fail to report to their jobs. The work
flow is disrupted and often important decisions must be delayed. In organizations that rely heavily
in assembly line technology, absenteeism can be considerably more than disruption-it can result in
a drastic reduction in quality of output and in some cases, it can bring about a complete shutdown
of the production facility. Levels of absenteeism beyond the normal range in any organization
have a direct impact on that organization’s effectiveness and efficiency.

We can conceive of situations where the organization may benefit by an employee voluntarily
choosing not to come to work. For instance, fatigue or excess stress can significantly decrease an
employee’s productivity. Jobs where an employee needs to be alert- surgeons and air line pilots are
obvious examples- it may well be better for the organization if the employee does not report to
work rather than show up and perform poorly.

 Productivity: an organization is productive if it achieves its goals and does so by

transferring inputs to outputs at the lowest possible cost. As such, productivity implies a concern
for both efficiency and effectiveness. A hospital, for example, is effective when it successfully
meets the needs of its clients. It is efficient when it can do this at a low cost. According to
Mishara, the refined and improved behavior of employees has a direct reflection on productivity.
The effectiveness, efficiency, and economy of the organization are observed at individual and
group levels. An organization achieves effectiveness when it achieves its goals. Efficiency relates
to the wise utilization of available resources so as to achieve the desired end.

 Turnover: turnover often means the loss of people the organization does not want to lose.
As coined by Robbins, a high rate of turnover in an organization means increased recruiting,
selection and training costs. It can also mean a disruption in the efficient running of an
organization when knowledgeable and experienced personnel leave and replacements must be
found and prepared to assume positions of responsibility. If the right people are leaving the
organization, turnover can be positive. It may create the opportunity to replace an underperforming
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 individual with someone with higher skills or motivation, open up increased opportunities for
promotion, and add new and fresh ideas to the organization. All organizations have some turnover.
Turnover is for the good of the organization when low performing workers are leaving & high
performers come in.

 Job satisfaction: is the difference between the amount of rewards workers receive and
the amount they believe they should receive. Unlike the previous three factors job satisfaction
represents an attitude rather than a behavior. In improved situation and group behavior will
increase the satisfaction of individuals; the expectations of the employees are met.
The difference between the amount of reward and its expectation is the level of satisfaction. The
quality of performance depends on the satisfaction of employees. Individual satisfaction is the
legitimate result of organizational behavior.
B)Independent variables: is the presumed cause of some change in the dependent
variable. The major determinants of productivity, absenteeism, turnover, and job satisfaction are
independent variables at different levels of organizational behavior model. The independent variables
influencing the organization’s model of behavior are individuals, groups and the structure of the
organization.

 Individual Level Variables: people enter organizations with certain characteristics that
influence their behavior at work. The common ones include- personality characteristics, value,
attitudes and basic ability levels. Individuals having their own personalities, preferences, values,
attitudes and learning influence the work environment directly. Management cannot control these
variables; rather they have to use these factors for effective performances.

 Group Level Variables: people’s behavior when they are in groups is different from their
behavior when they are alone. The individual in groups are expected to exhibit what the group
considers to be acceptable standard of behavior and the degree to which the group members are
attracted to each other. Group variables are important factors influencing organizational behavior.
A group has more impact than the sum of individual’s contributions. Synergy (i.e. contribution of
people in groups is more than the sum total of the contributions of each individual) is obtained
through group variables. However, if group behavior is not controlled, it may damage more than
the individual employees.

 Organization system variables/structural variables : just

as groups are more than the sum of their individual members; so are organizations more than the
sum of their member groups. The structures of an organization have their own functional
relations. Straight line communication and unity of command have disciplined behavior. Multiple
commands may create conflicts. Organizational behavior reaches its highest level of
sophistication when we add formal structure to our previous knowledge of individuals and group
behavior. The design of the formal organization, technology and work processes, and jobs; the
organization’s human resource policies and practices (like selection, training programs,
performance appraisal methods); the internal culture and levels of work stress all have an impact
on the dependent variables.
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 1.8 Replacing Intuition with systematic study

Each of us is a student of behavior. Since our earliest years, we have watched the actions of others and
have attempted to interpret what we see, Whether or not you have explicitly thought about it before you
have been "reading" people almost all your life. You watch what others do and try to explain to yourself
why they have engaged in their behavior. Additionally, you've attempted to predict what they might do
under different Sets of conditions.

Generalizations about Behavior

You have already developed some generalizations that you find helpful in explaining and predicting what
people do and 'will do. But how did you arrive at these generalizations? Yap did so by observing, sensing,
asking, listening, and reading. That is, your understanding comes either directly from your own
experience with things in the environment, OJ secondhand, through the experience of others.

How accurate are the generalizations you hold? Some may represent extremely sophisticated appraisals of
behavior and may prove highly effective in explaining and predicting the behavior of others. However,
most of US also carry with us a number of beliefs that frequently fail to explain what/why people do. To
illustrate, consider the following statements about work related behavior:

1. Happy workers are productive workers.

2. All individuals are most productive when their boss is friendly, trusting and approachable.
3. Interviews are effective selection devices for separating job applicants as high or low performers.
4. Everyone wants a challenging job.
5. You have to scare people a little to get them to do their jobs.
6. Everyone is motivated by money.
7. Most people are much more concerned with the size of their own salaries than with others'.
8. the most effective work groups are devoid of conflict.

How many of these statements do you think are true? For the most part, they are all false, and we touch
on each later in this text. But whether these statements are true or false is not really important at this time.
What is important is to be aware that many of the views you hold concerning human behavior are based
on intuition rather than fact. As a result, a systematic approach to the study of behavior can improve your
explanatory and predictive abilities.

Consistency vs. Individual Difference

Casual or commonsense approaches to obtain knowledge about human behavior are inadequate.
Underlying this systematic approach is the belief that behavior is not random. It is caused and directed
toward some end that the individual believes, rightly or wrongly, is in his or her best interest. Behavior
generally is predictable; if we know how the person perceived the situation and what is important to him
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or her. While people's behavior may not appear to be rational to an outsider, there is reason to believe it
usually is intended to be rational and it is seen as rational by them.

An observer often sees behavior as non rational because the observer does not have access to the same
information or does not perceive the environment in the same way. Certainly there are differences
between individuals, Placed in similar situations, all people do not act alike. However, certain
fundamental consistencies underlie the behavior of all individuals that can be identified and then modified
to reflect individual differences. These fundamental consistencies are very important. Why? Because they
allow predictability; when you get into your car, you make some definite and usually highly accurate
predictions about how other people will behave.

For instance, you would predict that other drivers will stop at stop signs and red lights, drive on the right
side of the road, and pass on your left and not cross the solid double line on mountain roads. Notice that
your predictions about the behavior of people behind the wheels of their cars are, almost always correct.
Obviously, the rules of driving make predictions about driving behavior easy.

What may be less obvious is that there are rules (written and unwritten) in almost every setting.
Therefore, it can be argued that it's possible to predict behavior (undoubtedly not always with 100 percent
accuracy) in supermarkets, classrooms, doctors' offices, elevators, and in most structured situations. To
illustrate further, do you turn around and face the doors when you get into an elevator? Almost everyone
does, yet did you ever read you're supposed to do this? Probably not! Just as I make predictions about
automobile drivers (where there are definite rules of the road), I can make predictions about the behavior
of people in elevators (where there are few written rules).

In a class of 60 students, if you wanted to ask a question of the instructor, I would predict you would raise
your hand. Why don't you clap, stand up, raise your leg, cough, or yell, "Hey, over here!"? The reason is
that you have learned raising your hand is appropriate behavior in school. These examples support a
major contention in this text: Behavior is generally predictable, and the systematic study of behavior is a
means to making reasonably accurate predictions. When we use the phrase "systematic study,” we mean
looking at relationships, attempting to attribute causes and effects, and basing our conclusions on
scientific evidence, that is, on data gathered under controlled conditions and measured and interpreted in a
reasonably rigorous manner.

Systematic study replaces intuition or those gut feelings about "why I do what I do" and "what makes
others tick." Of course, a systematic approach does not mean those things you have come to believe in an
unsystematic way are necessarily incorrect. Some of the conclusions we make in this course, based on
reasonably substantive research findings, will only support what you always knew was true. But you will
also be exposed to research evidence that runs counter to what you may have thought was common sense.
In fact, one of the challenges of teaching a subject like organizational behavior is to overcome the notion ,
held by many that "it's all common sense."

You will find that many of the so-called commonsense views you hold about human behavior are, on
closer examination, wrong. Moreover, what one person considers "commonsense" frequently runs counter
to another's version of "commonsense"; are leaders born or made? What is it that motivates people at
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work nowadays? You probably have answers to such questions, and individuals who have not reviewed
the research are likely to differ on their answers. The point is that one of the objectives of OB is to
encourage you to move away from your intuitive views of behavior toward a systematic analysis, in the
belief that such analysis will improve your accuracy in explaining and predicting behavior.

1.9 Ethics and Organizational Behavior

In an organizational world characterized by cutbacks, expectations of increasing worker productivity, and
tough competition in the marketplace, it's not altogether surprising that many employees feel pressured to
cut corners, break rules, and engage in other forms of questionable practices.

Members of organizations are increasingly finding themselves facing ethical dilemmas, situations where
they are required to define right and wrong conduct. For example, should they blow the whistle if they
uncover illegal activities taking place in their company? Should they follow orders they don't personally
agree with? Do they give an inflated performance evaluation to an employee they like, knowing that such
an evaluation could save that employee's job? Do they allow themselves to play politics in the
organization if it will help their career advancement?

What constitutes good ethical behavior has never been clearly defined; and in recent years the line
differentiating right from wrong has become even more blurred. Employees see people all around them
engaging in unethical practices--elected officials indicted for padding their expense accounts or taking
bribes; high-powered lawyers, who know the rules, are found to be avoiding payment of Social Security
taxes for their household help; successful executives who use insider information for personal financial
gain; employees in other companies participating in massive cover-ups of defective military weapons.
When caught, they hear these people giving excuses like "Everyone does it," or "You have to seize every
advantage nowadays," or "I never thought I'd get caught."

Managers and their organizations are responding to this problem from a number of directions. They're
writing and distributing codes of ethics to guide employees through ethical dilemmas. They're offering
seminars, workshops, and similar training programs to try to improve ethical behaviors. They're providing
in-house advisers who can be contacted, in many cases anonymously, for assistance in dealing with
ethical issues. And they're creating protection mechanisms for employees who reveal internal unethical
practices.

Today's manager needs to create an ethically healthy climate for his or her employees, where they can do
their work productively and confront a minimal degree of ambiguity regarding what constitutes right and
wrong behaviors. To help you define and establish your personal ethical standards, you'll find ethical
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dilemma exercises by confronting ethical issues you might not have thought about before, and sharing
your ideas with classmates, you can gain insights into your own ethical viewpoints, those of others , and
the implications of various choices.

Today’s manager needs to create an ethically healthy climate for

his or her employees, where they can do their work productively
and control a minimal degree of ambiguity regarding what
constitutes right and wrong behavior!

1.10 Challenges and opportunities for OB

 The Creation of a Global Village: Two or three decades ago, national borders
acted to insulate most firms from foreign competitive pressures. This time organizations are
no longer constrained by national borders. Trading blocks have significantly reduced tariffs
and barriers to trade. As multinational corporations develop operations worldwide, as
companies develop joint ventures with foreign partners, and as workers increasing chase job
opportunities across national borders, managers have to become capable of working with people
from different cultures.

 From “Everyone is the same” to Workforce Diversity: One of the

most important and broad-based challenges currently facing organizations is adapting to
people who are different. The term we use for describing this challenge is workforce
diversity. Whereas globalization focuses on differences between people from different
countries; workforce diversity addresses differences among people within given countries.
Workforce diversity means that organizations are becoming more heterogeneous in terms of
gender, race, and ethnicity. We used to take a melting pot approach to differences in
organizations, assuming people who were different would somehow automatically want to
assimilate. But we now recognize that employees don’t set aside their cultural values and
lifestyle preferences when they come to work. The challenge for organizations, therefore, is to
make themselves more accommodating to diverse groups of people by addressing their
different lifestyles, family needs, and work styles. The melting pot assumption is being
replaced by one that recognizes and values difference.
What implications does workforce diversity have for management practice?
Managers will need to shift their philosophy from treating everyone alike to recognizing differences
and responding to those differences in ways that will ensure employee retention and greater
productivity while, at the same time, not discriminating. Diversity, if positively managed, can increase
creativity and innovation in organizations as well as improve decision making by providing
different perspectives on problems. When diversity is not managed properly, there is potential for
higher turnover, more-difficult communication and more interpersonal conflict.

 Toward Improving Quality and Productivity: Managers are

continuously challenged to improve their organization’s productivity and the quality of the
products and services they offer. Toward improving quality and productivity, they are
implementing programs, such as total quality management and reengineering, programs
that require extensive employee involvement. TQM is a philosophy of management that is
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 driven by the constant attainment of customer satisfaction through the continuous
improvement of all organizational processes. TQM has implications for OB because it
requires employees to rethink what they do and become more involved in workplace
decisions. Reengineering––reconsiders how work would be done and organization structured if
they were being created from scratch.

 From Management Control to Empowerment: Nowadays, there is

a reshaping of the relationship between managers and the people they are supposedly
responsible for managing. In some cases managers are being called coaches, advisers,
sponsors, or facilitators. In some organizations, employees have become associates or
teammates. Decision making is being pushed down to the operating level, where workers are
being given the freedom to make choices about schedules, procedures, and solving work-
related problems. Self-managed teams, in which workers operate largely without bosses, are
becoming common. What is going on is that managers are empowering
employees. They are putting employees in charge of what they do. And in so doing, managers
have to learn how to give up control and employees have to learn how to take responsibility
for their work and make appropriate decisions.

 From Stability to Flexibility: It used to be that managers needed to

introduce major change programs once or twice a decade. Today, change is an ongoing
activity for most managers. The concept of continuous improvement, for instance, implies
constant change. In the past, managing could be characterized by long periods of stability,
interrupted occasionally by short periods of change.

Managing today would be more accurately described as long periods of ongoing change,
interrupted occasionally by short periods of stability. In the past, employees were assigned to a
specific work group, and that assignment was relatively permanent. There was a
considerable amount of security in working with the same people day in and day out. That
predictability has been replaced by temporary work groups, teams that include members from
different departments and whose members change all the time, and the increased use of
employee rotation to fill constantly changing work assignments. Finally, organizations
themselves are in a state of flux. They continually reorganize their various divisions, sell off
poor-performing businesses, downsize operations, subcontract non critical services and
operations to other organizations, and replace permanent employees with temporaries.

What does flexibility imply? Today’s managers and employees must learn to cope with
temporariness. They have to learn to live with flexibility, spontaneity, and unpredictability. The
study of OB can provide important insights into helping you better understand a work world of
continual change, how to overcome resistance to change, and how best to create an organizational
culture that thrives on change.
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