Organisation Behaviour

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Unit 1

Organization Behavior Concept
Understanding one individual's behavior is a challenging problem in and of itself. The work of
organizations gets done through the behavior of people, individually or collectively, on their own or
in collaboration with technology. Thus, central to the management task is the management of
organizational behavior. To do this, there must be the capacity to understand the patterns of
behavior at individual, group, and organization levels, to predict what behavior responses will be
elicited by different managerial actions, and finally to use understanding and prediction to achieve
Organizational behavior is the study of what people do in an organization and how that behavior
affects the performance of the organizations. It is an academic discipline concerned with describing,
understanding, predicting, and controlling human behavior in an organizational environment.

According to S.P. Robbins, "Organizational Behavior (OB) is a field of study that investigates
the impact that individuals, groups, and structure have on behavior within organizations, for
the purpose of applying such knowledge toward improving an organization's effectiveness."
Like other inputs into an enterprise, the human beings employed by that enterprise constitute a
resource -- in this case, a human resource. Other resources must be managed to ensure both the
efficiency and effectiveness of the organization. It takes economists, accountants, and financial
analysts to understand and utilize the firm's monetary resources. Similarly, technologists, engineers,
and trades people serve to help management utilize the firm's material and production facilities
efficiently. It is the role of the Human Resource Manager, and others, skilled in the analysis of
human interaction with the work environment, to assist management in the proper utilization of
human resources. The study of Organizational Behavior facilitates the process of explaining,
understanding, predicting, maintaining, and changing employee behavior in an organizational


Figure: Organizational Behavior Elements
In summary, to understand behavior in the organization, we must examine the interaction of
individuals with the various factors the individuals encounter in that organizational setting. The
behaviors encountered in the organization are, of course, very diverse. The diversity of personalities
interacting with varied organizational environments results in considerable variation in associated
behavior. The employees of the firm are resources -- human resources. Just as accountants provide
the expertise the firm requires to best manage its financial resources, so the Organizational Behavior
specialist provides the expertise needed to manage the firm's human resources.

Figure: Individual Behavior in the Organizational Setting

The Historical Evolution of Organizational Behavior
Today, Organizational Behavior is considered as an important aspect in organizational effectiveness.
However, OB as a distinct field of study was emerged at 1940s. Prior to this, before the sixteenth
century, Greek philosopher Plato wrote about the essence of leadership for job satisfaction. Aristotle
addressed the topic of persuasive communication in organization. The writings of 16th century


Italian philosopher Niccolo Machiavelli laid the foundation for contemporary work on
organizational power and politics.
In 1776, Adam Smith advocated a new form of organizational structure which is based on the
division of labour. One hundred years later, German sociologist Max Weber wrote about rational
organizations and initiated discussion of charismatic leadership. Soon after, Frederick Winslow
Taylor, also known as father of scientific management, introduced the systematic use of goal setting
and rewards to motivate employees. In the 1920s, Australian-born Harvard professor Elton Mayo
and his colleagues conducted productivity studies at Western Electric's Hawthorne plant in the
United States.
Although the above contributions traces its roots back to Max Weber and earlier scientists,
organizational behavioral studies is generally considered to have begun as an academic field with
the advent of scientific management of F.W. Taylor. In the Taylorism, rationalizing the organization
with specific sets of instructions and time-motion studies, individual compensation system can lead
lead to the increased productivity and efficiency.
After the First World War, the focus of organizational studies shifted to analysis of how human
factors and psychology affected organizations, a transformation propelled by the identification of the
Hawthorne Effect of Elton Mayo. This Human Relations Movement focused on teams, motivation,
and the actualization of the goals of individuals within organizations, the Prominent scholars for it
were, Frederick Herzberg, Abraham Maslow, David McClelland, and Victor Vroom, those have
contributed in motivational theories.
The Second World War further shifted the field, as the invention of large-scale logistics and
operations research and the management science. Interest grew in theory and methods to the
sciences of management rather that art, including systems theory, the study of organizations with a
complexity theory perspective and complexity strategy. The major contributors were Herbert
Alexander Simon and James G. March.
In the 1960s and 1970s, the field was strongly influenced by social psychology also and the emphasis
in academic study was on quantitative research. An explosion of theorizing, much of it at Stanford
University and Carnegie Mellon, produced Bounded Rationality, Informal Organization, Contingency
Theory, Resource Dependence, Institutional Theory, and Population Ecology theories, among many
Starting in the 1980s, cultural explanations of organizations and change became an important part of
study. Qualitative methods of study became more acceptable, informed by anthropology, psychology
and sociology.
Specific Contributions
Frederick Winslow Taylor (1856-1915):
Taylor was the first person who attempted to study human behavior at work using a systematic
approach. Taylor studied human characteristics, social environment, task, physical environment,
capacity, speed, durability, cost and their interaction with each other. His overall objective was to
reduce and/or remove human variability. Taylor worked to achieve his goal of making work
behaviors stable and predictable so that maximum output could be achieved. He relied strongly
upon monetary incentive systems, believing that humans are primarily motivated by money. He


faced some strong criticism, including being accused of telling managers to treat workers as
machines without minds, but his work was very productive and laid many foundation principles for
modern management study.
Elton Mayo:
Elton Mayo, an Australian national, headed the Hawthorne Studies at Harvard. In his classic writing
in 1931, Human Problems of an Industrial Civilization, he advised managers to deal with emotional
needs of employees at work.
Mary Parker Follett:
Mary Parker Follett was a pioneer woman management consultant in the industrial world, which
was mainly dominated by males. As a writer, she provided analyses on workers as having complex
combinations of attitude, beliefs, and needs. She told managers to motivate employees on their job
performance, a"pull" rather than a "push" strategy.
Douglas McGregor:
Douglas McGregor proposed two theories/assumptions, which are very nearly the opposite of each
other, about human nature based on his experience as a management consultant. His first theory was
"Theory X", which is pessimistic and negative; and according to McGregor it is how managers
traditionally perceive their workers. Then, in order to help managers replace that theory/assumption,
he gave "Theory Y" which takes a more modern and positive approach. He believed that managers
could achieve more if managers start perceiving their employees as self-energized, committed,
responsible and creative beings. By means of his Theory Y, he in fact challenged the traditional
theorists to adopt a developmental approach to their employees. He also wrote a book The Human
Side of Enterprise in 1960; this book has become a foundation for the modern view of employees at

Organizational Behavior as Interdisciplinary field
OB is considered as an academic discipline. However, it is widely considered as an interdisciplinary
field of study because of covering varieties of academic discipline within it. The filed of studies can
be shown from the figure below.
Psychology refers to the science that tries to measure, explain, predict and sometimes change the
behavior of humans. OB focuses on human psychology through learning, perception, personality
emotions, training, leadership, motivation, job satisfaction etc.
It is the study of people in the organization in relation with others which includes, group, teams,
communication, power, conflict etc.


Behavioral Science
Unit of Analysis



Leadership effectiveness

Job satisfaction
Individual decision making

Performance appraisal
Attitude measurement

Employee selection
Work design
Work stress


Group dynamics
Work teams


Inter group behaviour

Formal organization theory
Study of
Organizational technology

Organizational change
Organizational culture

Behavioral change

Attitude change
Social Psychology

Group process
Group decision making


Comparative values
Comparative attitudes

Cross-cultural analysis

Organizational culture
Organizational Environment

Political science

Intraorganizational politics
Source: Stephen P. Robbins
Social psychology
It is the combine of both Psychology and Sociology which focuses on influence of people on one
another. The fields of study are: Behavioral change, attitude change, communication, group process
and group decision making.


It is the study about societies to identify about human beings and their activities such as cultures and
Political Science
Political science primarily focuses on studying the behavior of individuals and groups within the
political environment within the organization which includes conflict, Intraorganizational politics
and power.
Challenges and Opportunities for Organizational Behavior
Organizational behaviour is becoming more important in the global economy as people with diverse
backgrounds and cultural values have to work together effectively and efficiently. The followings are
the points of challenges and how can OB help coping those challenges.
1. Responding to Globalization:
The world is being the global village and organizations are not constrained by national
border in the recent days. To satisfy the customers of the world in highly competitive
globalized market, organizations need to provide the products and service of their choice,
preference and taste. Organizations need working in foreign countries in a multicultural
diversity environment. The management practices need to be modified from countries to
countries to cope with the diversity. In the globalization, the companies tend to establish the
business firms where they can have lower costs of labor to reduce the cost of production for
global competition
2. Managing Workforce diversity
The most important and most emerging challenge for today's managers is workforce
diversity because the focus of globalization is on people from different countries. It is the
concept that the industries have heterogeneity in people regarding the gender, age, race,
religion, language, ethnicity, physical abilities, nationalities, culture and inclusion of
diversified individuals.
3. Improving Quality and Productivity
The business is becoming highly the customer focused in the recent days. The product quality
should continuously be improved to compete in the market and to satisfy the customers.
However, the productivity should not be decreased. The organizational improvement is
needed, the accurate measurement and employee empowerment should be focused to
improve the both, quality and productivity. Total quality management (TQM) (a
management philosophy for the quality improvement) and process engineering (the process
of reconsidering the methods and organization structure) is to be adopted.
4. Responding to Outsourcing


Outsourcing involves the transfer of the management and/or day-to-day execution of an
entire business function to an external service provider. The client organization and the
supplier enter into a contractual agreement that defines the transferred services. Under the
agreement the supplier acquires the means of production in the form of a transfer of people,
assets and other resources from the client. The client agrees to procure the services from the
supplier for the term of the contract. Business segments typically outsourced include
information technology, human resources, facilities, real estate management, and accounting.
It is the both challenge and opportunity for the organization and responding to it in the
benefit of the firm is certainly the difficult job. Eventhough it has many opportunites to the
firm, it may create problem damaging the local market, low social responsibility, low quality
in product or service, high staff turnover, fraud, security related issues etc.
5. Improving Customer Service:
Customers are treated as the 'god' for the organizations in the recent days. The service to be
rendered by the employees should be pleased by the clients in service industries like teaching,
technical support, fast-food counters, airlines etc. OB can contribute to improving in
organization's performance to the managers through identifying about the employee
attitudes and behavior associated with customer satisfaction creating the customer-
responsive culture. OB can help the managers in creating customer-friendly culture, prompt
responding to customer needs and providing the guidance about pleasing them.
6. Improving People Skills:
OB helps managers improving the necessary skills required to manage effectively including
the motivational skills, communication and team work. It not only imparts the knowledge
and skills needed to enhance the learning ability but about the perception of individual.
7. Empowering People
Managers are giving up controls to the lower levels , they are becoming highly flexible,
organization encourages the employee participation in decision making and forming self-
managed teams in modern organizations. Workers are accepting responsibility and managers
are granting them the authority. Empowering changes leadership style, power relationships,
needs skills and abilities about understanding and predicting employees' behavior and for
this, OB is inevitable.
8. Stimulating Innovation and Change
The challenge for the today's managers is stimulating the product and service innovation for
the survival and growth in competitive environment the change to adjust to it. The
employees may resist the change and innovation having the stumbling block to it. OB
provides the adequate ideas and techniques to remove the block and go further ahead.
9. Coping with "Temporariness"
Globalization, advance in product and services, technology changes make the organization
compelled to change the nature of job, flexibility in structure, jobs are regularly redesigned.
Even the organizations are also changing. The part-time workers, temporary workers or
short-term contractors are increasing especially in developed countries to cope with increased


work pressure, use expert knowledge and reduce labour cost. The developing countries like
Nepal also facing challenges about the part time and temporary workers. However, the
human resource managers are getting challenges to manage such contingent workers. Part
time workers are frequently moving from one job to another. It is very difficult to fully retain
them and keep then in the organization for long time.
Managers need to cope those "temporariness" in job and workers. They need to learn about
flexibility, to predict, creating the organizational culture, overcome the barriers to change,
which can be learnt through OB.

10. Working in Networked Organizations
The use of computer and internet in workplace is increasing day by day. The interlink
between the organizations and workplace using communication technologies is rapidly
expanding, resulting the networked organizations. Organization becomes complex allowing
maximum number of people without any physical distance, like a global village. Motivating,
leading and communicating those virtually connected employees is highly challenging. OB
can be the important insight for getting knowledge to help managing those logically
connected people.
11. Helping Employees Balance Work/Life Conflicts
In recent days, employees often feel that they are unable to create balance between the work
and their personal life. They blame that their job create problem in their family life because of
lacking take care about their family, spouse or children since they almost busy in office work
even in home. The fast growing organizations, these days, have no office hours, specially no
closing hours. It sometimes, creates conflict, bore and interfere in personal life and they are
not happy.
It has been seen that there should be the balance between the work and personal life. They
need flexibility in their work schedules, with equal emphasis on "life" and "job". And if this
happens, it is very difficult to attract the most capable and motivated employees. OB offers
different ideas, suggestions and guidance in maintaining balance between these two and
resolving the conflict.
12. Improving Ethical Behavior
Employees in the organization are finding difficult to differentiate what is right and what is
wrong. They always see people around them are in unethical practices like taking bribe and
padding expense accounts, favoritism and nepotism. It creates decreasing the confidence and
trust in management.
Managers try to provide in-house advice about DOs and DONTs regarding ethical behavior.
They Create protection mechanisms write and distribute codes of ethics to their employees
and sometimes they also offer seminars, workshops, and training to improving the ethical


13. Declining Employee Loyalty
Because of global completion, unemployment and inflation, employees are unable to be loyal
and honest although they do not like it. Management can not easily trust to employee, they
do not like delegating authority because of fear of misuse. Officials take bribe for bread and
butter and they increase their expense accounts. Workforce motivation is becoming highly
challenging because of temporariness and brain-drain. OB of course can provide the
techniques to increasing the employee loyalty determining the code of ethics or ethical
behavior, motivating them, communicating effectively.

Emerging Trends in Organizational Behavior
Different writers explained differently about the emerging trends to OB. The following points can be
traced out as the recent trends to OB.
Globalization of products and services
The revolution in middle level management: Maximum cut in the middle level managers,
restructuring and redefining the roles
Decentralization of business, government, political and social institutions
High level of diversity among people, groups, institutions and geographic locations
Computerization in organizations
Use of technologies in communication
Priority and reservation opportunities for minorities and women
Inclusion of different race, caste, religion, language, region etc.
10. Flat structure and wide span of control
11. Team and Group Approach with dynamic leadership
12. Virtual team and virtual organizations
13. Innovative plan for special career needs: Flexible working hours, reduced hours, quality
of work life
14. Contingent workforce
15. Ethical behavioral issues


Unit 2
Perception is our sensory experience of the world around us and involves both the recognition of
environmental stimuli and actions in response to these stimuli. Through the perceptual process, we
gain information about properties and elements of the environment that are critical to our survival.
Perception not only creates our experience of the world around us; it allows us to act within our
"Perception is a process by which individuals organize and interpret their sensory impression in
order to give meaning to their environment." S.P. Robbins
It is the process of becoming aware of something through the senses and achieving understanding of
it; the process of interpretation based on sensation; the psychological ability to process or use
information received through the sense organs
So that perception is the set of psychological processes by which people recognize, organize,
synthesize, and give meaning (in the brain) to the sensations received from environmental stimuli (in
the sense organs)
Why is it Important?
Study about perception is very important because people's behavior is based on their perception of
what reality is, not on reality itself. The world that is perceived is the world that is behaviorally
Sensation usually refers to the immediate, relatively unprocessed result of stimulation of sensory
receptors in the eyes, ears, nose, tongue, or skin. Perception, on the other hand, better describes one's
ultimate experience of the world and typically involves further processing of sensory input. In
practice, sensation and perception are virtually impossible to separate, because they are part of one
continuous process.
Perceptual Process
The perceptual process is a sequence of steps that begins with the environment and leads to our
perception of a stimulus and an action in response to the stimulus.
We speak of a 'sense of humor' because different people sense humor in different things. What one
person perceives (senses) to be funny, another person might not.

On the other hand when one has managed to perceive humor in something, laughter (in one register
or another) follows rather automatically. It is the behavioral response to the perception of humor.
The perceptual process involves brain structuring, and how it organizes incoming stimuli,
determines what we experience.