CHAPTER 1:FUNDAMENTALS OF ORGANIZATIONAL BEHAVIOR Presented byApoorva Rashmi

Introduction to Organizational Behavior

OB is the Study of human behavior in organizational settings

It is the interface between the organization and human behavior

It studies about how the employees interact, react to the situations in the organization either as a group or individual

It can be studied at three levels: Individuals in the organizations (Micro level) Work groups ( Meso level) How organizations behave ( Macro level)

Definitions of Organizational Behavior

“Organizational Behavior is the study and application of knowledge about how people as individuals and groups act in an organization”

-KEITH DAVIS “Organizational Behavior is to understand,

predicting and controlling the human behavior in the organization”-Fred Luthans

“Organizational Behavior is subset of management activities concerned with understanding, predicting and influencing the individual behavior in the organization”

-Callahan

Characteristics of OB Integral Part of Management Inter-disciplinary Approach: Disciplines like

psychology, anthropology & sociology will be used in OB Normative Science: Means application of the research

findings in the organization where the people are concerned Science and Art: Because it includes both the theory and

practical theory of the application in the organization Humanistic and Optimistic Approach Directed towards Organizational Objectives Total System Approach: System approach includes

psychological framework, interpersonal orientation, group influence and social & cultural framework

Evolution or Historical Development of OB

Industrial RelationsScientific

ManagementHuman Relations

Movement1.Great Depression2.Labor Movement3.Howthrone Studies

Organizational Behavior

1. Industrial Revolution During industrial revolution 1776, the work environment

was about materialism, discipline, monotony, boredom, displacement, impersonality, work interdependence and related behavioral phenomena

All these features paved the way for the potential improvement in the organization

Robert Owen, Welsh factory owner (year:1800) was first to identify the importance of OB and hence called the father of “personnel management”

Refused to engage young children to work Facilities for cleanliness, right temperature and better working

conditions were given In 1835, Andrew Ure published “The Philosophy of

Manufactures” where the human factor is added as one of the factors of production

Provided workers with hot tea, medical treatment and sickness payment

1886, J.N Tata installed pension fund and in 1895 he began paying accidental compensation for the workers

He installed fire extinguishers and humidifiers in his factories

2. Scientific Management F.W Taylor(Scientist & Researcher) 1900’s is the “Father of

Scientific Management” theory During research he found out that the ignorance on the side of both

the workers and management is causing inefficiency and wastage Scientific management is a method where the efficiency of the work

can be increased by investigations, analysis & measurement Principles given by Taylor are:

1. Replacing rule of thumbs with science: Means that the organized and précised knowledge should be applied

2. Harmony in-group action: Mutual understanding and give & take should be there to get the maximum output from the group

3. Cooperation between the management and workers: Includes mutual confidence, cooperation & goodwill

4. Maximum output in the place of restricted output: Continuous increase in the production and productivity by both the worker and management

5. Development of workers through scientific selection and training: Select and train the workers based on their skill-set

3. Human Relations Movement Heavy emphasis was given on the

employees morale and cooperation Treating people as human beings, listening

to their needs, problem solving, decision making and involving them in the management are highlights of this movement

Three most important contributing factors are:

Great Depression Labor Movement Hawthorne Studies

Explanation of the Three Contributing Factors of Human Relations Movement

Great Depression: Caused in 1929 due to stock market crash in US Consequences of depression were: Increased unemployment, decrease in the

purchasing power, collapse of markets, decreased standard of living Positive outcome of this event is that the management realized that along with

the manufacturing, the importance should be given to marketing, finance & personnel management

It led to the development of the personnel department and giving importance to human needs

Labor Movement: It started to overcome the labor exploitation & to protect their rights Labor unions were formed & the management started focusing on

human aspects & solving their problems Primary focus of the managers was on emphasis of human relations

& secondary focus on wages, hours of work, working conditions etc Threatening of the managers by the trade unions was common

during this movement

Explanation of the Three Contributing Factors of Human Relations Movement

Hawthorne Studies: Hawthorne experiments laid strong foundation for OB These experiments took place in Western Electric Company,

Hawthorne in Chicago Elton Mayo, an industrial research professor at Harvard Business

School is called as “ Father of Human Relations Movement” Following experiments were conducted in Hawthorne experiments:

Illumination experiments (1924-27): To find out the effect of the illumination on workers productivity

Relay experiments test room experiments (1927-28): to see the effect of changes in the working hour and working conditions on the workers productivity

Experiments in interviewing the workers (1928-30): to find out the attitudes and sentiments of the workers towards work

Back wiring room experiments (1931-32): to find out the social system of an organization

Organizational BehaviorYear Development

Late 1950’s to early 1960’s

OB term came into picture as a more mature and research based field

1960’s to 1970’s

Development of the theories of motivation, leadership, design of work & job satisfaction

1980’s Attention was shifted to organizational culture, team work & political skills in the organization

1990’s Importance was given to personal integrity, character & virtue ethics as well as positive psychology

2000’s Fred Luthan’s has emphasized on Positive Organizational Behavior (POB), which focuses on confidence, hope, optimism & other positive attributes at work

Fundamentals of OBNature of People Nature of

OrganizationIndividual differences Organization is a social

systemPerception Mutuality of interestMotivation to employees EthicsWhole personCasual behaviorDesire for involvementHuman dignity

Contributing Disciplines of OB

Psychology: Focuses on the individual’s behavior and how it can be altered. It includes ego, decision making, satisfaction etc

Sociology: Studies the impact of the culture effects the group behavior and the group dynamics in the organization

Political Science: It speaks about how the political stability affects the international business, financial investments & employment

Social Psychology: Deals with how the people accept changes, communication skills, ability to maintain norms in the organization etc

Anthropology: Study related to human behavior in the organizational & social framework

Medicine: How the medicine plays a vital part in curing the individual’s physical & psychological diseases hence increase the work related productivity

Engineering: How the use of engineering increases the productivity of the human beings

Economics: Includes labor market dynamics, cost-benefit analysis, human resource planning, forecasting and decision making etc

Determinants of OBThere are four main determinants of OB People

Individual Group

Structure Jobs Relationships

Technology Machinery Computer Hardware & Software

Environment Government Competition Social Pressures

Models of OB Features1. Autocratic Model:

Management decides what is good for organization

•Only management decides what is write or wrong•Power based•Formal by nature•Obedient orientation of employees•Employees are dependent on boss

2. Custodial Model: Focuses on employee satisfaction, security & welfare & hence ensure that the employees are motivated and happy

•Resource based•Monetary affiliation•Focuses on employee security•Employee dependence on the organization•Employee focuses on rewards and benefits

3. Supportive Model: Provides the climate for the employees to grow & accomplish the organization’s objectives. Depends upon the leadership power rather than money

•Based on leadership•Leader supports employees•Increases participation•Strongly motivated employees

4. Collegial Model: Collegial means team having common purpose. Focuses on better team building

•Based on employee cooperation•Focuses on teamwork•Employees feel responsible•Employees feel satisfied

Approaches to OB Human Resources(Supportive) Approach:

Concerned with the growth & development of people Focuses on building competencies, creativity etc Traditional method of management are used

Contingency Approach: It is more interdisciplinary, more system & research oriented Work will be divided & delegated using the most appropriate methods

Result-Oriented Approach: In this approach, the organization focuses on developing the OB to

achieve the goals of the organization Productivity ( ration of output to input) will be increased

Systems Approach: Here, interrelated units work together to achieve the common goals All the subsystems in the management need to have better co-

ordination & understanding to achieve the organization goals

Importance of OB

Helps in understanding human behavior Assists in controlling and directing

human behavior Explains the uses of power and sanction Helps in understanding the concepts of

leadership Evaluates communication process Helps in understanding the organization

climate Supports in organizational adaptation

Challenges and Opportunities of OB

Globalization of Business: Workforce Diversity: Changed Employee Expectation: Increasing Quality Consciousness: Ethical Issues at Work:

Thank You