ORGANIZATIONAL

BEHAVIOR
Organizational Behavior
Organizational Behavior is a field of study that investigates the impact individuals, groups and structures have on
behavior within organizations for the purpose of applying suck knowledge toward improving an organizations
effectiveness.
Individual Behaviors: First, several individual behaviors result from a persons participation in an organization.
One important behavior is productivity. Productivity, as defined in terms of an individual, is an indicator of an
employees efficiency and is measured in terms of the products or services or both! created per unit of input.
Bases of Organizational Behavior
". s!"holog!# $he science or study of individual human behavior
%. #o"iolog!# $he study of group human behavior
&. #o"ial s!"holog!# 'tudies influences of people on one another
(. Anthro$olog!# 'tudy of the human race, and culture
). oliti"al #"ien"e# Behavior of individuals in political environment.
%odels of Organizational Behavior
". $he *utocratic +odel
%. $he ,ustodial +odel
&. $he 'upportive +odel
(. $he ,ollegial +odel.
I&$ortan"e of OB
OB applies the knowledge gained about individuals, groups and the effect of structure on behavior in order to make
organizations work more effectively. 'pecifically, OB focuses on how to improve productivity, reduce absenteeism
and turnover, and increase employee citizenship and -ob satisfaction. .t is concerned with the study of what people
do in an organization and how that behavior affects the performance of the organization. .t is also important because
it focus on the following areas.
OB is a way of thinking.
OB is multidisciplinary.
$here is a distinctly humanistic orientation with OB.
$he field of OB is performance oriented.
$he e/ternal environment is seen as having significant impact on OB
'iagra& of OB
s!"holog!
Individual
#o"iolog!
#o"ial s!"holog! Grou$ Organizational Behavior
Anthro$olog!
Organizations
oliti"al #"ien"e
Organizational behavior tools to understand and alter behavior can be examined at three levels of
analysisindividual, group, and organizational.
$hese factors include personality and ability, attitudes and values, perception and attribution, learning,
motivation, stress, and work0life linkages.
Individual: .ndividual differences can be divided into personality and ability differences. 1nderstanding the nature,
determinants, and conse2uences of individual differences is essential for managing organizational behavior.
Grou$: 3roup is defined as a collection of two or more people who interact together to achieve their goals. 3roups
contribute to organizational effectiveness when group goals are aligned with organizational goals.
Organizational: Organizational structure and culture affect performance and how the changing global environment,
technology, and ethics impact work attitudes and behavior.
(Organizational )ehavior re$resents intera"tion a&ong individuals* grou$s and organizations+ E,$lain this
state&ent -ith diagra&+
*ns. Organizational Behavior OB! is the study and application of knowledge about how people, individuals, and
groups act in organizations. .t does this by taking a system approach. $hat is, it interprets people4organization
relationships in terms of the whole person, whole group, whole organization, and whole social system. .ts purpose is
to build better relationships by achieving human ob-ectives, organizational ob-ectives, and social ob-ectives. *s we
can see from the definition above, organizational behavior encompasses a wide range of topics, such as human
behavior, change, leadership, teams, etc.
.hallenges / O$$ortunities of OB for &anagers
0+ 5esponding to 3lobalization
.ncreased foreign assignments
6orking with People from different cultures
,oping with anti4capitalism backlash.
Overseeing movement of -obs to countries with low4 cost labour
+anaging people during the war on terror
1+ +anaging workforce 7iversity
8mbracing diversity
,hanging demographics
2+ .mproving 2uality and productivity
3+ .mproving customer service
4+ 'timulating innovation and changes
5+ 6orking in networked organizations
6+ ,reating a positive work environment
7+ .mproving ethical behavior
8h! a .%A9s is ne"essar! to stud! OB:
*fter studying the OB, the ,+*s are able to#
i. 1nderstand the concepts of organizational behavior and its application in managing people
ii. *pply the different approaches to organizational behavior and enhance the human relationships within
the organization.
iii. 8/plore the relationships among the various components of organizational behavior and their
effectiveness.
iv. 5ealize the importance of upgrading various types of technical and managerial skills to remain
competitive in business environment
v. 1nderstanding the ways in which one can manage workforce diversity and its importance in
globalization
vi. .mplementing the ways of improving ethical behavior within the organization at all the levels
ositive and Negative OB4
ositive OB ;Refle"ted Best<self=: *n area of OB research that concerns how organizations develop human
strength, foster vitality and resilience, and unlock potential.
Negative OB ;.riti"al feed)a">=: *n area of OB research that challenges organizations to think about how to
e/ploit their employees strength rather than dwell on their limitations.
?or&al vs+ Infor&al Organization
Formal Organization 4 the part of the organization that has legitimacy and official recognition
.nformal Organization 4 the unofficial part of the organization
8h! do Organizations E,ist:
$o increase specialization and division of labor
1se large4scale technology
+anage the e/ternal environment
8conomize on transaction costs
8/ert power and control
?a"tors Affe"ting Organizations
Organizational 8nvironment
$echnological 8nvironment
Ho- %anagers "an resolve the $ro)le&s arising in &anage&ent:
Or 8hat te"hni@ues a &anager "an a$$l! to o)tain desired organizational )ehavior:
$here are many challenges and opportunities for managers to use Organizational Behavior concepts to enhance the
overall effectiveness of individuals, groups and organization. $he following are some of the critical issues
confronting managers for which the knowledge of Organizational Behavior offers worthy solutions based on
behavioral science and other interdisciplinary fields.
$he following are some of the significant problems#
i! .mproving People 'kills
ii! .mproving 9uality and Productivity
iii! +anaging 6orkforce 7iversity
iv! 5esponding to 3lobalization
v! 8mpowering People
vi! ,oping with $emporariness
vii! 'timulating .nnovation and ,hange
viii! 8mergence of the e4organization
i/! .mproving 8thical Behavior
E,$lain ho- organizational )ehavior affe"ts &anagerial $erfor&an"e:
+anagers need to develop their interpersonal, or people, skills if they are going to be effective in their -obs. OB is a
field of study that investigates the impact that individuals, groups, and structures have on behavior within an
organization, and it applies that knowledge to make organizations work more effectively. 'pecifically, OB focuses
on how to improve productivity, reduce absenteeism, turnover, and deviant work place behavior and increase
organizational citizenship behavior and -ob satisfaction. OB uses systematic study to improve predictions of
behavior that would be made from intuition alone. But because people are different, we need to look at OB in a
contingency framework, using situational variables to moderate cause4and4effect relationships.
'is"uss the role of leadershi$ on OB:
:eadership is an interpersonal process in which influence is e/ercised in a social system for the achievement of
organizational goals by others. 5esearchers agree on two characteristics of leadership. First, leadership involves
exerting influence over other members of a group or organization. 'econd, leadership involves helping a group or
organization achieve its goals. Leaders of a group or organization are the individuals who e/ert such influence. *
:eader helps others achieve organizational goals and influences perceptions and behaviors, including attitudes,
learning, motivation, stress, performance, decision4making 2uality, turnover, and absenteeism. Leader effe"tiveness
is the e/tent to which a leader helps a group or organization achieves its goals.
1nderstanding leadership helps organizations#
4 select the right people for leadership positions
4 train people in leadership positions to improve
8hat fa"tors lead to health! organizational )ehavior:
*n understanding of organizational behavior is important to managers, who have the responsibility of improving
organizational effectiveness, the ability of an organization to achieve goals. * goal is a desired future outcome that
an organization seeks to achieve.
.n recent years, the challenges facing managers in effectively utilizing human resources ; managing organizational
behavior have increased. $hese challenges stem from changing forces in the technological, global, and social or
cultural environments.
Organizations can obtain a competitive advantage, a way of outperforming other organizations providing similar
goods and services. $hey can pursue any or all of the following goals# increase efficiency, increase 2uality< increase
innovation and creativity< and increase responsiveness to customers.
*n organizations ethics are rules, beliefs, and values that outline ways in which managers and workers should
behave when confronted with a situation that may help or harm other people inside or outside an organization.
8thical behavior enhances the well4being the happiness, health, and prosperity! of individuals, groups,
organizations, and the organizational environment. 8thics establish the goals and behaviors appropriate to the
organization. +any organizations have the goal of making a profit, to be able to pay workers, suppliers, and
shareholders. 8thics specifies what actions an organization should take to make a profit and what limits should be
put on organizations and their managers to prevent harm.
Attitudes
*n attitude is a mental stage of readiness, learned and organized through e/perience, e/erting a specific influence on
a persons response to people, ob-ects, and situations with which it is related. *ttitudes are evaluative statements that
are either favorable or unfavorable concerning ob-ects, people, or events. *ttitudes are not the same as values, but
the two are interrelated.
$hree components of an attitude#
= ,ognition
= *ffect
= Behavior
$he belief that >discrimination is wrong? is a value statement and an e/ample of the cognitive component of an
attitude
4 @alue statements set the stage for the more critical part of an attitudeAits affective component. Affect is the
emotional or feeling segment of an attitude. 8/ample# >. dont like Bon because he discriminates again
minorities.?
4 $he behavioral component of an attitude refers to an intention to behave in a certain way toward someone
or something. 8/ample# >. chose to avoid Bon because he discriminates.?
4 @iewing attitudes as made up of three components helps with understanding of the potential relationship
between attitudes and behavior, however, when we refer to attitude essentially we mean the affect part of
the three components.
4 .n contrast to values, your attitudes are less stable. *dvertisements are directed at changing your attitudes
and are often successful.
8h! is it i&$ortant to >no- an individual9s values:
*lthough they do not have a direct impact on behavior, values strongly influence a persons attitudes. Cnowledge of
an individuals value system can provide insight into his0her attitudes. +anagers should be interested in their
employees attitudes because attitudes give warnings of potential problems and because they influence behavior.
'atisfied and committed employees, for instance, have lower rates of turnover and absenteeism. 3iven that
managers want to keep resignations and absences downA especially among their more productive employeesAthey
will want to do those things that will generate positive -ob attitudes.
.ognitive dissonan"e
+anagers should also be aware that employees will try to reduce cognitive dissonance. +ore importantly,
dissonance can be managed. .f employees are re2uired to engage in activities that appear inconsistent to them or are
at odds with their attitudes, the pressures to reduce the resulting dissonance are lessened when the employee
perceives that the dissonance is e/ternally imposed and is beyond his0her control or if the rewards are significant
enough to offset the dissonance.
Ao) 'esign# Bobs can be designed to range from highly simple to highly comple/ tasks in terms of the use of the
workers skill.
Ao) #i&$lifi"ation: $he -obs are broken down into very small parts as in the assembly line operations where a
fragmented task is repeatedly done over and over again by the same individual.
Ao) Rotation: $his involves moving employees among different tasks over a period of time. +anagement does not
have to bother with combining tasks, but at the same time, the workers do not get bored with doing one simple task
over several years. $he employee is periodically rotated from one -ob to another within the work setting
Ao) Enlarge&ent: $his involves simply adding more tasks to the -ob so that the workers have a variety of simple
tasks to perform rather than doing -ust one task repetitively. $wo or more tasks are combined and the individual
does the combined tasks altogether.
Ao) Enri"h&ent: $his offers a greater challenge to the workers because it re2uires the use of variety of skills
possessed by them. $his involves building in motivating factors into the -ob, giving the workers more responsibility
and control over work, and offering learning opportunities for the individual on the -ob.
Ao)<relevant >no-ledge: 8ffective leaders have a high degree of knowledge about the company, the industry and
technical matters. .n4depth knowledge allows leaders to make well4informed decision and to understand the
implications of those decisions.
Importance of Values
@alues lay the foundation for the understanding of attitudes and motivation because they influence our
perceptions.
.ndividuals enter organizations with notions of what is right and wrong with which they interpret behaviors
or outcomesAat times this can cloud ob-ectivity and rationality.
@alues generally influence attitudes and behavior.
Ao) #atisfa"tion
Bob 'atisfaction is an emotional response to a -ob situation. Bob 'atisfaction determined by how well outcomes meet
or e/ceed e/pectations. Bob 'atisfaction represents several related attitudes.
4 $he work itself
4 Pay
4 Promotion opportunities
4 'upervision
4 ,oworkers
Out"o&es of Ao) #atisfa"tion:
4 'atisfaction and Productivity
4 'atisfaction and $urnover
4 'atisfaction and *bsenteeism
4 'atisfaction and ,itizenship Behavior
8hat 'eter&ines Ao) #atisfa"tion:
4 +entally ,hallenging 6ork
4 82uitable 5ewards
4 'upportive 6orking ,onditions
4 'upportive ,olleagues
4 Personality 4 Bob Fit
4 Deredity03enes
Ao) #atisfa"tion and .usto&er #atisfa"tion
8vidence indicates that satisfied employees increase customer satisfaction and loyalty.
,ustomer retention and defection are highly dependent on how front4line employees deal with customers.
'atisfied employees are more likely to be friendly, upbeat, and responsive. ,ustomers appreciate that.
7issatisfied customers can also increase an employees dissatisfaction. $he more employees work with
rude and thoughtless customers, the more likely they are to be dissatisfied.
Theory X, which takes a pessimistic view of human nature and employee behavior, is in many ways consistent with
the tenets of scientific management. * much more optimistic and positive view of employees is found in $heory E.
Theory Y, which is generally representative of the human relations perspective, was the approach +c3regor himself
advocated. *ssumptions of $heory F and $heory E are summarized below#
Theory X ssumptions Theory ! ssumptions
". People do not like work and try to avoid it.
%. People do not like work, so managers have to
control, direct, coerce, and threaten employees
to get them to work toward organizational
goals.
&. People prefer to be directed, to avoid
responsibility, to want security< they have little
ambition.
". People do not naturally dislike work< work is a
natural part of their lives.
%. People are internally motivated to reach
ob-ectives to which they are committed.
&. People are committed to goals to the degree that
they receive personal rewards when they reach
their ob-ectives.
(. People will seek and accept responsibility under
favorable conditions.
). People have the capacity to be innovative in
solving organizational problems.
G. People are bright, but under most organizational
conditions their potential are underutilized.
HERZBERG9# T8O<?A.TOR THEORB
*ccording to Derzbergs two-factor theory, -ob satisfaction and dissatisfaction are not opposite ends of the same
continuum but independent dimensions. 'ome e/amples of hygiene factors, which lead to dissatisfaction, and
motivators, which lead to satisfaction, are presented here.
"ygiene #actors $otivators
H Pay, status, security H +eaningful and challenging work
H 6orking conditions H 5ecognition for and feeling of achievements
H Fringe benefits H .ncreased responsibility
H Policies and practices H Opportunity for growth and advancement
$his approach to -ob satisfaction implies that an effective way to satisfy workers is to find out what they want and,
to the e/tent possible, give it to them. Believe it or not, this is sometimes easier said than done. .n fact, organizations
sometimes go through great pains to find out how to satisfy their employees. 6ith this in mind, a growing number
of companies, particularly big ones, have been systematically surveying their employees.
'iversit! $rogra&s: 7iversity programs are more likely to be successful if they include repeated efforts with
follow4up activities to see if the training accomplished its ob-ectives.
8/amples of ob-ectives of diversity training programs include#
". +aking e/plicit and breaking down organizational members stereotypes that result in inaccurate
perceptions and attributions.
%. +aking members aware of different kinds of backgrounds, e/periences, and values.
&. 'howing members how to deal effectively with diversity4related conflicts and tensions.
(. 3enerally improving members understanding of each other.
7iversity training can include but is not limited to#
". 5ole4playing in which participants act out appropriate and inappropriate ways to deal with diverse
employees.
%. 'elf4awareness activities in which participants own pre-udices and stereotypes are revealed.
&. *wareness activities in which participants learn about others who differ them in lifestyle, culture, se/ual
orientation, gender, and so on.
.hallenges for the organization )! in"reasing diversit!
,hanging workforce demographics
,ompetitive pressures
5apid growth in international business
+ore women in workforce and professions
7iversity has advantages, but firms need to ad-ust through#
4 ,ultural awareness
4 Family4friendly
4 8mpowerment
#e,ual Harass&ent
'e/ual harassment can take many forms, including comments about an individualIs body, physical touching, se/ual
stories, se/ual comments, se/ually e/plicit posters, calendars, cartoons, or other items or actions of a se/ual nature.
For harassment to be considered unlawful, it must be *:: of the following#
4 5elated to a protected category
4 1nwelcome
4 Offensive to a reasonable person in the recipients position
4 'evere or pervasive
Cey steps that organizations can take to combat the se/ual harassment problem include#
". 7evelop a se/ual harassment policy supported by top management. $his policy should#
a. 7escribe and prohibit both 2uid pro 2uo and hostile work environment se/ual harassment.
b. Provide e/amples of types of behaviors that are prohibited.
c. Outline a procedure employees can follow to report se/ual harassment.
d. 7escribe the disciplinary actions that will be taken for instances of se/ual harassment.
e. 7escribe the organizations commitment to educating and training organizational members about
se/ual harassment.
%. ,learly communicate the organizations se/ual harassment policy throughout the organization.
&. .nvestigate charges of se/ual harassment with a fair complaint procedure.
(. $ake corrective action as soon as possible once it has been determined that se/ual harassment has taken
place.
). Provide se/ual harassment training and education to all members of the organization.
Ao) Enri"h&ent: In"reasing Re@uired #>ills and Res$onsi)ilities
Bob enrichment is the designing of -obs to provide opportunities for employee growth by giving employees more
responsibility and control over their work. .t is often referred to as vertical ob loading because employees are given
some of the responsibilities that used to belong to their supervisors. Derzbergs motivator J hygiene theory J was a
driving force in the movement to enrich -obs. Bob enrichment is aimed at increasing intrinsic motivation.
*lthough -ob enrichment programs have also been successful in many organizations, several factors limit their
popularity. First, there is the difficulty of implementation. 5edesigning e/isting facilities so that -ob can be enriched
is often prohibitively e/pensive. Besides, the technology needed to perform certain -obs makes it impractical for
them to be redesigned.
*nother impediment is the lack of universal employee acceptance. *lthough many relish it, some people do not
desire the additional responsibility associated with performing enriched -obs.
+anagers can enrich -obs in a variety of ways#
*llow employees to plan their own work schedules.
*llow employees to decide how the work should be performed.
*llow employees to check their own work.
*llow employees to learn new skills.
HERZBERG9#T8O<?A.TOR THEORB
*ccording to Derzbergs two-factor theory, -ob satisfaction and dissatisfaction are not opposite ends of the same
continuum but independent dimensions. 'ome e/amples of hygiene factors, which lead to ("dissatisfaction, and
motivators, which lead to satisfaction, are presented here.
!ygiene "actors #otivators
Pay, status, security
+eaningful and challenging work
6orking conditions
5ecognition for and feeling of achievements
Fringe benefits
.ncreased responsibility
Policies and practices
Opportunity for growth and advancement
$his approach to -ob satisfaction implies that an effective way to satisfy workers is to find out what they want and,
to the e/tent possible, give it to them. Believe it or not, this is sometimes easier said than done. .n fact, organizations
sometimes go through great pains to find out how to satisfy their employees. 6ith this in mind, a growing number
of companies, particularly big ones, have been systematically surveying their employees.
ersonalit!4 $he sum total of ways in which an individual reacts to and interacts with others. $he relatively stable
set of psychological attributes that distinguish one person from another.
?a"tors that deter&ine $ersonalit!4 Personality appears be a result of both hereditary and environmental factors.
Deredity factors determined at conception, ones biological, physiological, and inherent psychological makeup. $he
heredity approach argues that the ultimate e/planation of an individuals personality is the molecular structure of the
genes, located in the chromosomes. 8nvironment comprises of culture, family, social and situational factors.
%easure&ent of $ersonalit!4 Personality is a relatively stable pattern of behaviors and consistent internal states
that e/plain a personIs behavioral tendencies.
$he sum total of ways in which an individual reacts and interacts with others.
+ean how people affect others and how they understand and view themselves, as well as their pattern of
inner and outer measurable traits and %erson&situation interaction
Big five $ersonalit! traits4 * set of fundamental traits that is especially relevant to organizations. $he traits
include#
". ,onscientiousness# $he degree to which a person is dependable, organize, thorough, perseverant, honest. .t
is most consistent personality predictor of performance and also predicts lack of problem behavior.
%. 8motional stability# $he degree to which a person is not an/ious, depressed, moody, emotionally unstable,
temperamental
&. *greeableness# $he e/tent to which a person is polite, good natured, fle/ible, cooperative, trusting
(. 8/troversion# $he degree to which a person is sociable, talkative, assertive, active, ambitious
). Openness to e/perience# $he degree to which an individual has broad interests and is willing to be a risk
taker.
The Big ?ive %odel / OB
o Digh relation with -ob performance
o ,onscientiousness leads to high level of -ob knowledge.
o 8/troverts are good sales persons.
o Digh on agreeableness makes a person good team player.
o People are good and 2uick learners if they are high on openness.
#elf Estee&
!igh on $elf %steem
8/pectations for success
Possess ability for success
6illing to take risks
7o not seek approval from others on their capabilities
Digh on Bob 'atisfaction
#elf %onitoring
!igh on $%
8/pectations for success
Possess ability for success
6illing to take risks
7o not seek approval from others on their capabilities
Digh on Bob 'atisfaction
Ris> Ta>ing
Person ability 0 willingness to take risk
7ecision making 2uick
'pecific to -obs stocks! accounts!
.hara"teristi"s of T!$e<A and T!$e<B $ersonalit!4 $he characteristics of $ype * and $ype B personality is give
as follows#
T!$e A ersonalit!:
*lways moving, walking ; eating fast
Feel impatient
'trive to do two or more things at once
,annot cope with leisure time
Obsessed with number< how many, how much they have achieved
T!$e B ersonalit!:
Kever suffer from a sense of time urgency
Feel no need to display0discuss their achievements unless re2uired
Play for fun 0rela/ation
,an rela/ without guilt
Li&itations of A / B T!$e $ersonalit!4 $he limitations of $ype * and $ype B personality is give as follows#
T!$e A ersonalit!:
'uffer high level of stress
9uantity over 2uality
$ime pressure0deadlines
5arely creative
Poor decision makers
Behavior is easier to predict
T!$e B ersonalit!:
7ifficult to predict behavior
3ood decision makers
9uality of work
Ko compromise on health
6iser than hasty
,reative 0 innovative solutions to same problem
Are T!$e A9s o$erate under &oderate to high levels of stress:
$hey sub-ect themselves to continuous time pressure, are fast workers, 2uantity over 2uality, work long
hours, and are also rarely creative.
$heir behavior is easier to predict than that of $ype Bs.
Are T!$e As or T!$e Bs &ore su""essful:
$ype Bs are the ones who appear to make it to the top.
3reat salespersons are usually $ype *s< senior e/ecutives are usually $ype Bs.
ersonalit! Traits or -hat )ehavioral $redi"tions !ou &ight &a>e if !ou >no- that an e&$lo!ee had ;i= an
e,ternal lo"us of "ontrol: ;ii= lo- self estee&: ;iii= a CT!$e AD $ersonalit!:
5ealize that some workers are more likely to be positive and enthusiastic and some more likely to complain
because of personality differences.
Provide more direction for workers with less initiative to solve problems and who tend to blame others or
the situation for problems.
Provide more encouragement and support to workers with low self4esteem who belittle themselves and
2uestion their abilities.
5ealize that $ype * personalities can be difficult to get along with and have difficulty in teams.
,ommunicate to subordinates who are overly concerned being liked that sometimes honest feedback and be
constructive criticism are necessary.
E&otional Intelligen"e:
.t is also called as 89 which refers to individuals ability to be aware of feelings and emotions and the e/tent to
which they can manage them more effectively in dealing with others and challenging events. .t consists of five main
abilities#
Cnowing ones emotions# 'elf4awareness and recognizing ones feelings as it occurs
+anaging emotions# Dandling feelings and emotions appropriately to the relevant situations
+otivating oneself# 7irecting the feelings and emotions in such a way to fulfilling the desired goals
5ecognizing emotions in others# 8mpathizing and understanding the feelings and emotions for others
Dandling 5elationships# Being able to interrelate, communicate and work with others.
8motional .ntelligence 8.! is very closely linked to our self4concept, because it is strongly related to self awareness.
er"e$tion
Perceptive people tend to live in a fle/ible, spontaneous way, wanting to understand life and adapt to it. $hey often
appear to be more rela/ed and less organized than -udging types and are less attracted to schedules and routines.
,haracteristics associated with people who prefer Perceiving#
'pontaneous
Fle/ible
,asual
Open4ended
*dapt, change course
:ike things loose and open to change
Feel energized by last minute pressures.
$he perceptive type, on the other hand, may wait until all the information and aspects of a situation are seen before
they make a decision. *rtists, consultants, musicians and counselors tend to be perception oriented.
8h! is $er"e$tion I&$ortant:
Because peoples behavior is based on their perception of what reality is, not on reality itself.
The world that is perceived is the world that is behaviorally important.
?a"tors Influen"ing er"e$tion
Perceiver
$arget
'ituation
6hen an individual looks at a target and attempts to interpret what he or she sees, that interpretation is heavily
influenced by personal characteristics of the individual perceiver.
$he more relevant personal characteristics affecting perception of the perceiver are attitudes, motives, interests, past
e/periences, and e/pectations.
#ignifi"an"e of "hange &anage&ent in an organization< ,hanges are constantly taking place in our environment.
,hanges occur outside organization that re2uires internal adaptation. $he manager has to ensure that individual and
groups in organizations, and structures, process and behaviors of sub4systems must adapt to the changing e/ternal
and internal environments. .n effect, the manager is a change agent who facilities changes to occur in the various
subsystems of the organization needed. ,hanges at the individual level can be facilitated by offering special training
to particular employees to handle a new assignment. *t group level, team building efforts can be initiated to operate
interactively in a smooth and harmonious fashion so as to increase their effectiveness. ,hanges can be brought at the
technological level through implementation of sophisticated and more effective machines or by better ways of doing
things. *t the structural level, -ob can be redesigned or new policies initiated which serve the needs of both
employees and the organization. ,hanges at the organizational climate, by being able to scan the internal and
e/ternal environment of the organization and deciphering how changes in these environments are likely to widen the
gap between desired and actual state of affairs performance, productivity, customer satisfaction, employee
satisfaction etc!, the manager can become an effective change agent for introducing planned changes.
.o&&on resistan"e to "hange4 $he resistance for organizations change can be happened in two ways#
Individual resistan"e# .ndividual sources of resistance to change lie in basic human characteristics such as
perceptions, personalities and needs. $he resistance may happen by individuals are#
Dabit
'ecurity
8conomic factors
Fear of the unknown
'elective information processing
Organizational resistan"e# Organizations, by their very nature, are conservative. $hey actively resist change. $here
are si/ ma-or sources of organizational resistance4
'tructural inertia
:imited locus of change
3roup inertia
$hreat to e/pertise
$hreat to established power relationship
$hreat to established resource allocation
8h! $eo$le resist "hange4 Following the reasons that people wants to resist change#
7irect costs0:imited resources
'aving face0@ested interests
Fear of the unknown
Breaking traditions05outines
.ncongruent systems
.ncongruent $eam 7ynamics
Effe"tive "hange &anage&entEA$$roa"hes to &anaging organization "hange4 Curt :ewin stated that there are
two types of forces operating in the change process. i! $hose forces which prepare or make the system ready for
changes to occur, are called as driving forces, ii! $hose forces which oppose or operate against changes taking place
in the system, are called as restraining forces. .f the two sets of forces are e2ual in strength, then the systems is in a
state of e2uilibrium and changes will not occur. .f the driving forces are stronger than the restraining forces, then the
system will be changing to find a new e2uilibrium as the gap to be filled gets narrowed down. * more viable option
is to reduce e/isting resistance by dealing with and minimizing the forces that resist the change. .n practice, a
combination of both strategies J reducing the restraining factors and increasing the driving forces often ensures best
results. Curt :ewin argued that successful change in organizations should follow three steps#
i! 1nfreezing the status 2uo
ii! +ovement to a new state
iii! 5efreezing the new change to make it permanent.
Over"o&ing resistan"e to organizational "hange4 'even tactics have been suggested for use by change agents in
dealing with resistance to change. $hese are#
8ducation and communication
Participation
Building support and commitment
.mplementing changes fairly
+anipulation and cooptation
'electing people who accept change
,oercion
Grou$ '!na&i"s4 3roup dynamics are the interactions and forces among group members in social situation.
T!$es of Grou$s
?or&al4 hierarchical. $hese groups are formed by the organizations to carry out specific tasks.
Infor&al4interest groups or cli2ues4horizontal, vertical or random. $hese are the groups formed by employees
themselves.
Virtual Grou$s4 facilitated through .. $. a! .nformation 'haring b! 7ecision +aking c! 'olving ,omple/
Problems
s!"hologi"al Grou$4 we? feeling, sensitivity, affinity, understanding of individual strengths and personalities,
sense of belonging and loyalty
Effe"tive Grou$4 * group is effective when it satisfies three criteria#
Production output4 $he product of the groups work must meet or e/ceed standards of 2uality and 2uantity
+ember satisfaction4 +embership in the group must provide people with short4term satisfaction and
facilitate their long4term growth and development
,apacity for continued cooperation4 Dow the group completes a task should maintain or enhance the
groups ability to work together< groups that dont cooperate can not survive.
#tages of Grou$ 'evelo$&ent4 $he five distinct stages groups go through# forming, storming, norming,
performing and ad-ourning. $hese are describes below#
?or&ing< $he first stage in group development characterized by much uncertainty.
#tor&ing< $he second stage in group development characterized by intra4group conflict
Nor&ing< $he third stage in group development characterized by close relationships and cohesiveness
erfor&ing< $he fourth stage in group development during which the group is fully functional
AdFourning< $he final stage in group development for temporary groups characterized by concern with wrapping
up activities rather than task performance.
'eviant -or>$la"e )ehavior4 @oluntary behavior that violates significant organizational norms and in so doing
threatens the well4being of the organization or its members. *lso called antisocial behavior or workplace incivility.
8/ample4
Production# :eaving early, .ntentionally working slow, 6asting resources
Property# 'abotage, :ying about hours worked, 'tealing from the organization
Political# 'howing favoritism, 3ossiping and spreading rumors, Blaming coworkers
Personal# 'e/ual harassment, @erbal abuse, 'tealing from coworkers.
Grou$ de"ision &a>ing te"hni@ues4 3roups offer an e/cellent vehicle for performing many of the steps in the
decision4making process. ,urrently used groups decision making techni2ues are#
Intera"ting grou$s4 $ypical groups in which members interact with each other face4to4face
Brainstor&ing4 *n idea generation process that specifically encourages any and all alternatives while withholding
any criticism of those alternatives
No&inal grou$4 * group decision making method in which individual members meet face4to4face to pool their
-udgments in a systematic but independent fashion.
Ele"troni" &eeting grou$s4 * meeting in which members interact on computers allowing for anonymity of
comments and aggregation of votes.
8h! do $eo$le Foin grou$s:
$here is no single reason why people -oin groups. Because most people belong to a number of groups, its obvious
that different groups provide different benefits to their members. $hese are#
'ecurity4 By -oining a group, individuals can reduce the insecurity of >standing alone?
'tatus4 .nclusion in a group that is viewed as important by others provides recognition and status for its
members
'elf4esteem4 3roups can provide people with feelings of self4worth.
*ffiliation4 3roups can fulfill social needs.
Power4 6hat cannot be a achieved individually often becomes possible through group action. $here is
power in numbers.
3oal achievement4 $here are times when it takes more than one person to accomplish a particular task4
there is need to pool talents, knowledge, or power in order to complete a -ob. .n such instances,
management will rely on the use of a formal group.
Grou$ 'e"ision %a>ing Advantages
+ore knowledge through pooling of group resources
.ncreased acceptance ; commitment due to voice in decisions
3reater understanding due to
.nvolvement in decision stages
Grou$ 'e"ision %a>ing 'isadvantages
Pressure in groups to conform
7omination by one forceful member or dominant cli2ue
*mount of time re2uired, because group is slower than individual to make a decision
Grou$ 'e"ision %a>ing ?a"tors
3roups offer an e/cellent vehicle for performing many of the steps in the decision making process. $hey are a
source of both breadth and depth of input for information gathering. Following factors is considering in decision
making process#
3roups generate more complete information and knowledge
3roup decision takes more time
+embers of group comes from different backgrounds
8hat relationshi$s "an !ou dra- a&ong grou$ "ohesiveness* $erfor&an"e nor&s and $rodu"tivit!:
,ohesiveness can play an important function in influencing a groups level of productivity. 6hether it does depends
on the groups performance related norms.
8hen grou$s &a>e )etter de"ision than individuals
3roups are superior only when they meet certain criteria. $hese criteria include#
4 $he group must have diversity among members
4 $he group members must be able to communicate their ideas freely and openly
4 $he task being undertaken must be comple/.
A"hieving Grou$ .ohesiveness
$o achieve group cohesiveness following suggestion are made#
'mall group have better ,ohesiveness.
8ncourage unilateral acceptance of group goals.
$ime spent by members for group activities should be increased.
.ncrease status of group and group members.
,reate an environment of perceived difficulty in attaining group membership.
,ompetition with other groups.
.ntroduce reward systems.
Physical .solation of group increases cohesiveness.
Ho- grou$9s de&ogra$h! $redi"ts turnover
$he degree to which members of a work unit share a common demographic attribute, such as age, se/, race,
educational level, or length of service in group or an organization!, and the impact of this attribute on turn4over.
$urn4over will be greater among those with dissimilar e/periences because communication is more difficult.
Organizational .onstraint ?a"tors that differentiate good de"ision &a>ers fro& $oor ones ;rational &odel=
Organizations can constrain decision makers, creating deviations from the rational model. $hese constraints can
differentiate good decisions from poor ones. $hese constraints are as follows#
4 Performance evaluation
4 5eward systems
4 Formal regulations
4 'ystem imposed time constraints
4 Distorical precedents
Rational 'e"ision %a>ing %odel
5ational decision making, we often think the best decision maker is rational and makes consistent, value4
ma/imizing choices within specified constraints. $he steps involved in rational decision making model#
". 7efine the problem
%. .dentify the decision criteria
&. *llocate weights to the criteria
(. 7evelop the alternatives
). 8valuate the alternatives
G. 'elect the best alternatives
8or>for"e diversit!
$he workforce has become increasingly diverse, with higher percentages of women and minorities entering and
advancing in organizations. .ncreasing diversity, or differences resulting from age, gender, race ethnicity, religion,
se/ual orientation, and socioeconomic background, represents a ma-or challenge for managers. +embers of a group
who are very diverse are likely to have different e/periences, assumptions, and values, and could respond to work
situations in very different ways. +anagers face three challenges as a result of increased workforce diversity#
fairness and -ustice, decision making and performance, and fle/ibility.
I&$li"ations for %anagersEEffe"t on -or>for"e diversit!: +anagers have to shift their philosophy from treating
everyone alike to recognizing individual differences and responding to those differences in ways that will ensure
employee retention and greater productivity while, at the same time not discriminating. .f work force diversity is
managed more effectively, the management is likely to ac2uire more benefits such as creativity and innovation as
well as improving decision making skills by providing different perspectives on problems. .f diversity is not
managed properly and showed biases to favor only a few categories of employees, there is potential for higher
turnover, more difficulty in communicating and more interpersonal conflicts.
8or> Grou$# * group interacts primarily to share information and to make decision to help each group member
perform within his or her area of responsibility.
8or> Tea&# * group whose individual efforts result in performance that is greater than the sum of the individual
inputs.
.hara"teristi"sE?a"tors of Effe"tive 8or> Tea&s<
,ommitment and inspiring goals
5ole ,larity
'elf4 disclosure including confrontation!
Openness to feedback
,ompetence
,reativity with constructive confrontation
,ollaboration 0'upport0$rust
,ongruence between individual and group goals
'upportive leadership
+anagement of power
Tea& ?un"tioning4
,ohesion4 amongst team members
,onfrontation4solving problems
,ollaboration4working together
Tea& E&$o-er&ent<
,larity of 5oles
*utonomy
5esources proven.
*ccountable4goals
ur$oses of "reating -or> tea&
Few trends have influenced -obs as much as the massive movement to introduce teams into the workplace. $he shift
from working alone to working on teams re2uires employees o cooperate with others, share information, confront
differences, and sublimate personal interests for the greater good of the team. $he purposes of creating work teams
are as follows#
4 +any perspectives are needed
4 *cceptance of the decision is critical
4 $he problem is comple/ or unstructured
4 .ndividuals -udgments are unreliable
4 .ndividuals are unwilling to take necessary risks
4 Eou want to develop team members team4related skills
Reasons for the failure of -or><tea&
$he reasons that work teams could not work is as follows#
4 $he issue is unimportant
4 .ndividuals dont want to participate
4 .ndividual risk preferences are too high
4 $ime is of the essence
4 3roup norms are unacceptable
Role of &anage&ent a""ountant in &anaging grou$ and tea&s
* management accountant works in an organization as a management position. For the manager in an organization,
the behavior and performance of group as well as teams provide the primary mechanism for the attainment of
organization goals, .n order to provide for effective goal accomplishment, the manager must be familiar with#
$he process of influencing group behavior
$he climate for ma/imum interaction and minimal conflict between group members.
$he means for the satisfaction of individual needs, which may be different from individual to individual
within each group.
$he 3roup is defined as collection of two or more individuals who are interdependent and interact with one another
for the purpose of performing to attain a common goals or ob-ective. $he principal characteristics presented in this
definition J goals, interaction and performance are crucial to the study of behavior in organizations. * group is a
collection of individuals in which the e/istence of all in their given relationships! is necessary to the satisfaction of
certain individual needs to each. .n order to satisfy certain needs relating to social interactions, employees may
informally or formally! -oin together to form various social, civic, or recreational groups within organizations. *
wok team generates positive synergy through coordinated effort. $he e/tensive use of teams creates the potential for
an organization to generate greater outputs with no increase in inputs. +anagement is looking for positive synergy
that will allow the organizations to increase performance.
Organizational .onfli"t
$he process in which one party perceives that its interests are being opposed or negatively affected by another party.
T!$es of .onfli"t
4 $ask conflict# ,onflict over content and goals of the work
4 5elationship conflict# ,onflict based on interpersonal relationships
4 Process conflict# ,onflict over how work gets done
The .onfli"t ro"ess
$he conflict process has five stages. $hese are#
". Potential opposition or incompatibility
,ommunication
'tructure
Personal variables
%. ,ognition and personalization
Perceived conflict
Felt conflict
&. ,onflict handling .ntentions
,ompeting
,ollaborating
,ompromising
*voiding
*ccommodating
(. Behavior overt conflict
Partys behavior
Others reaction
). Outcomes
.ncreased group performance
7ecreased group performance
'istinguish )et-een role "onfli"t and role a&)iguit!
5ole conflicts create e/pectations that may hard to reconcile or satisfy. 5ole ambiguity is created when role
e/pectations are not clearly understood and the employee is not sure what he or she is to do.
I&$ortan"e of role a&)iguit! #tud!
5ole ambiguity means that the prescribed behaviors of the employee are not clear. $here are fewer limits, therefore,
to the scope and functions of the employees political actions. Because political activities are defined as those not
re2uired as part of ones formal role, the greater the role ambiguity, the more one can engage in political activity
with little chance of it being visible.
.onfli"t Negotiation
* -oint process of finding a mutually accepted solution to a comple/ conflict. Kegotiation useful under the following
conditions#
4 $wo or more parties
4 ,onflict of interest between the parties
4 Parties are willing to negotiate
4 Parties prefer to work together rather than to fight openly, give in, break off contact, or take the dispute to a
higher authority
.ondu"ting the Negotiation
4 1se an appropriate negotiation style
4 1se suitable language
4 1se effective responding and listening techni2ues
4 .dentify needs and wants
4 'etup the negotiation
4 ,reate the non4verbal environment
4 'tart the negotiation
4 7eal with conflict during the negotiation
4 *chieve a negotiated outcome
Organizational .ulture
* system of shared meaning held by members that distinguishes the organization from other organizations. ,ulture
is a descriptive term due to the following reasons#
Dow employee perceive its characteristics
Bob satisfaction seeks to measure affective responses to the work environment
Organizational culture is descriptive, while -ob satisfaction is evaluative
.o&$onents of organizational "ulture
5outine behaviors
Korms shared by teams
7ominant values
3uiding philosophy for policies toward employees and customers
$he rules of the game for getting along in the organization
$he climate of the organization
?ive &ost i&$ortant ele&ents in &anaging "ulture
6hat leaders pay attention to
Dow leaders react to crises
Dow leaders behave
Dow leaders allocate rewards
Dow leaders hire and fire individuals
Ho- to "hange a "ulture
.f the culture no longer supports the goals and strategy of an organization, it should be changed
+ergers and ac2uisitions generally result in a change in culture
Re@uire&ents for su""essfull! "hanging organizational "ulture
1nderstand the old culture first
'upport employees and teams who have ideas for a better culture and are willing to act on those ideas
Find the most effective sub4culture in the organization and use it as a model
Delp employees and teams do their -obs more effectively
1se the vision of a new culture as a guide for change
5ecognize that significant cultural change takes time
Effe"ts of organization "ulture on e&$lo!ee )ehavior and $erfor&an"e
*llow employees to understand the firms history and current approach
Fosters commitment to corporate philosophy and values
'erves as a control mechanism for employee behaviors
,ertain cultural types may produce greater effectiveness and productivity
.reating and #ustaining .ulture
The .reation of .ulture4 $he ultimate source of an organizations culture is its founders!. Founders have a vision
of what the organization should be and they are unconstrained by previous customs or ideologies. Founders create
culture in three ways#
8mployee selection4 Founders hire and keep only those employees who think and feel the same way the
founders do.
'ocialization4 Founders indoctrinate and socialize their employees toward the founders way of thinking
and feeling
+odeling4 $he founder acts as a role model and encourages to employees identify with him or her and to
internalize the founders beliefs, values and assumptions.
#ustaining .ulture4 Once a culture e/ists< OB practices within the organization serve to maintain it by giving
employees a similar set of e/periences. $hese practices include the selection process, performance evaluation
criteria, training and development activities, and promotional procedures# those who support the culture are
rewarded and those who do not are penalized.
.reating an Ethi"al Organizational .ulture
* strong organizational culture that is high in risk tolerance, low4to4moderate in aggressiveness, and focuses on
means as well as outcomes is the one most likely to shape high ethical standards. Practices that encourage
development of an ethical culture are#
". Be a visible role model
%. ,ommunicate ethical e/pectations
&. Provide ethical training
(. @isibly reward ethical acts and punish unethical ones
). Provide protective mechanisms
.reating a .usto&er Res$onsive .ultures
,reating an organizational culture that builds a strong and loyal customer base is generally rewarded with revenue
growth in better financial performance.
Ge! varia)les in sha$ing "usto&er res$onsive "ultures#
". $ypes of employees
%. :ow formalization
&. 6idespread use of empowerment
(. 3ood listening skills
). 5ole clarity
G. Organizational citizenship behavior
%anagerial A"tions# $o create a more customer4responsive culture, managers should do the following#
". 'elections4 Diring the correct service contact people
%. $raining4 $raining employees to improvement of product knowledge, active listening, showing patience,
and displaying emotions
&. 'tructural design4 5educe the rules and regulations to empower employees for meeting needs ; re2uests
customers
(. 8mpowerment4 8mployees should be given discretion to make day4to4day decisions about -ob4related
activities.
). :eadership4 :eaders must model customer4centric behaviors
G. Performance evaluation4 Behavior4based performance evaluations are consistent with improved customer
service.
L. 5eward systems4 Pay and promotion should be contingent on outstanding customer service
.reating a ositive Organizational .ulture
* positive organizational culture is defined as a culture that emphasizes building on employee strength, rewards
more than it punishes, and emphasizes individual vitality and growth.
#$iritual Organizational .ulture
Organizations that promote a spiritual culture recognize that people have both a mind and a spirit, seek to find
meaning and purpose in their work, and desire to connect with other human beings and be part of a community.
'ifferentiate #$iritual Organizations fro& Non<s$iritual organizations
'piritual organization is differencing from non4spiritual organization for the following reasons#
'trong sense of purpose
$rust and respect
Dumanistic work practices
$oleration of employee e/pression
%erits of #$iritual .ultures
'pirituality in organization is positively related to creativity, employee satisfaction, team performance and
organizational commitment.
Ho- E&$lo!ees Learn .ulture
,ulture is transmitted to employees in a number of forms, the most potent being stories, rituals, material symbols
and language
.ontrast )et-een Ao) )ased and #>ill )ased $a!
#>ill<)ased $a! ;.o&$eten"!<)ased or Gno-ledge<)ased=: * pay plan that sets pay levels on the basis of how
many skills employees have or how many -obs they can do.
Ao)<)ased $a! ;ie"e<rate=: * pay plan in which workers are paid a fi/ed sum for each unit of production
completed
Varia)le<$a! $rogra&
* pay plan that bases a portion of an employees pay on some individual and0or organizational measure of
performance.
?a"tors influen"e $erfor&an"e and satisfa"tion or
Ho- organization "ulture influen"e $erfor&an"e and satisfa"tion:
Ob-ective Factors
". .nnovative and risk taking
%. *ttention to details
&. Outcome orientation
(. People orientation
). $eam orientation
G. *ggressiveness
L. 'tability
%ethods of so"ialization -ith organization
Or
Ho- e&$lo!ees learn "ulture+
'tories, rituals, material symbols, language.
#tories4 :earning org norms ; values through stories include circulation of informal ; oral narration of events
about the organization.
Rituals4 5ituals repetitive se2uence of activities that e/press ; reinforce the key values of the organization.
%aterial s!&)ols4 @arious materials symbols used by org convey specific means high status people can be
distribution the bases of various facilities provided to him e2uality.
Language4 +any organizations ; units within organization use language as a way to identify members of a culture
or sub culture by learning these language members at least to their acceptance of the culture ; in so doing help to
preserve it. .t acts as common denominator that unties members of an organizational culture.
.hanging the organizational "ulture
Predict the current culture set uni2ue goals.
5ecruit personnel with previous e/perience so that they are able to interact well.
+ake changes from top to bottom so that consistent message is delivered.
.nclude employees in this process of change when making changes in rules ; policies.
'tay the course of being persistent.
.auses of "hanges or for"es for "hanges
Forces that are stimulate changes in organization.
8or> ?or"e4$he educational level of work force seems to be cause for organizational changes. Duman resource
policy and practices must be changed as to concentrate in an effective work force. Organization spends a lot of
money in development skills of the employees.
Te"hnolog!4 .t is changing -obs and organization speed 0fast technology change.
E"ono&i" #ho">s4 Boom, recession these two factors influence financial decision, investment decisions, dividend
decision, capital structure.
.o&$etition4 .t is changing capable of new product development rapidly and getting them to market 2uickly.
.hain Effe"t of .hange< ,hange touches a se2uence of related and supporting changes. .t is known as 7omino
8ffect.
Rea"tive and roa"tive "hanges
5eactive change is undertaken when it is pressed by some factors. 8ither internal or e/ternal to the organization
most of organization believe in traditional pattern of working often go for reactive changes. Organization introduces
certain methods or systems when they are forced for that. For e/ample# population control devices they did when
they are forced by government. Proactive change is brought out of the likely behavior of the forces having impact on
the organization. Organization known as prospectors which constantly interact with their environment to identify
new opportunity and threats. 5egularly basis changes in order to avoid developing inertia of infle/ible.