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TABLE OF CONTENTS
1. Learning Outcomes
After studying this module, we shall gather information to:
Organization Behavior is the systematic study and the careful application of how
people- as individuals and as groups - act within an organization. It is a scientific
discipline in which varied research studies and conceptual developments are constantly
contributing to the knowledge base. It is traditionally focused on the motivation and
coordination of an organization's internal stakeholders or employees.
The traditional definition of organizational behavior is thus, the study of individuals and
their behavior within the context of the organization in a workplace setting.
However, with the passage of time, it has become essential to redefine OB since the very
concept of ‘organization’ has changed and so is the ‘behavior’. Traditionally, Robbins
(2003) defined an ‘organization’ as a ‘consciously coordinated social unit, composed of
two or more people, which functions on a relatively continuous basis to achieve a
common goal or set of goals. It’s characterized by formal roles that define and shape the
behavior of its members’. However, a modern organization can be defined as an open
system that has continuous interaction with the environment through the exchange
of inputs and outputs with the bidirectional feedback.
They achieved their goals through planning, organizing/ directing and controlling the
internal stakeholders. Now, there is a visible change. Managers today have become
research oriented. They are receptive to new models. They support related research
and hungrily experiment with new ideas.
Garvin (2013) observed in his case study (“Google’s Project Oxygen: Do Managers
Matter?” (case number 9-313-110, published April 2013) that since the early days of Google,
people throughout the organization had felt that managers are not required at all- ‘It was a
company built by engineers for engineers…. most engineers, wanted to spend their time
designing and debugging, not communicating with bosses or supervising other workers’
progress.’ Hence, ‘Google experimented with a completely flat organization, eliminating
engineering managers in an effort to break down barriers to rapid idea development and to
replicate the collegial environment they’d enjoyed in graduate school. That experiment
could last only for a few months. ‘They relented when too many people went directly to
Page with questions about expense reports, interpersonal conflicts, and other nitty-gritty
issues. And as the company grew, the founders soon realized that managers contributed in
many other, important ways—for instance, by communicating strategy, helping employees
prioritize projects, facilitating collaboration, supporting career development, and ensuring
that processes and systems aligned with company goals.’
Therefore, we can say that management skills revolve round technical skills, human
skills and conceptual skills which have been redefined due to the emerging trends.
The emerging trends of Organization Behavior issues are as follows:
1 Globalization
2 Workforce diversity and the transformed employment relationship
3 Technological advancements
4 Workplace ethics
5 Outsourcing
2.1. Globalization
Over the span of less than two decades, the world has progressed to become inter-related
due to globalization. The word ‘Globalization’ can be defined as ‘a process of economic
integration at the international level ‘(Pareek, 2004). To illustrate this, as per the reports
of Times of India (2012), General Electric which was making cheaper and stripped down
versions of its ECG and Ultrasound machines in India is now taking them to the world
“People no longer live and work in an insular marketplace; they are now part of a worldwide
economy with competition coming from nearly every continent. For this reason, profit and
non-profit organizations need diversity to become more creative and open to change.
Maximizing and capitalizing on workplace diversity has become an important issue for
management today. Diversity is generally defined as acknowledging, understanding,
accepting, valuing and celebrating differences among people with respect to age, class,
ethnicity, gender, physical and mental ability, race, sexual orientation, spiritual practice, and
public assistance status.”
Hence, managers 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.
Datta, K.(2013, Business Standards) observed that ‘Tata Group Chairman, Cyrus
Mistry had established his progressive credentials by unequivocally stating that he was
looking forward to seeing more women in key leadership positions at Tata Global
Beverages (TGB). He is on strong ground here because this company, like many fast-
moving consumer goods companies worldwide, has an impressively large complement
of women - 41 per cent, according to its annual report (notably too, TGB’s joint venture
with Starbucks is headed by a woman). However, a little over a year ago, Britannia’s
Managing Director Vinita Bali, with over a decade of experience of heading an Indian
company, wryly observed that India Inc is “still very much an old boys’ network”.
The requirement of a safer and healthier work environment in the current dynamic market
situations has propelled the need to recognize the relevance of developing and retaining
high performing managers. Fundamentally, organizational success or failure or stagnation
depends on the impact that people have upon their organizations. This is the focus of
As per the report of Times of India, on 18th July 2012, Maruti's Manesar plant was hit
by violence as workers at one of its auto factories attacked supervisors and started a
fire that killed a company official and injured 100 managers, including two Japanese
expatriates. The line differentiating between right and wrong has become all the more
blurred.
It is not one but many such events that have happened all over the world due to which it
is being realized that today’s managers need to create a climate that portrays strong
ethical approach. Organization behavior focuses on the why and how to create ethical
work environment. It enables them to write and distribute the code of ethics to guide
employees through ethical dilemmas. Now they are offering trainings and seminars in
order to improve ethical behavior and create a healthy climate in which minimum degree
of ambiguity exists between what constitutes right and wrong behavior.
2.5 Outsourcing
Increasing completion has led to the development of cost-effective strategies. The focus
is to make an organization as lean as possible. The functions and services which do not
form the core of an organization are normally discontinued. Similarly, the organizations
are indiscriminately buying any expertise/service/function which is needed by the
organization and is very expensive, but can be arranged from outside at a lower cost. This
process of buying a function or a service from outside sources is called outsourcing. The
human resources are also being outsourced. Even the personnel training is being
outsourced on account of the fact that training is not the core function of the organization.
It will be comparatively cheaper for them to sign the MOU (memorandum of
understanding) with training organizations rather than developing high quality trainers
themselves. Hence, outsourcing requires lot of planning based on the competencies that
the management wishes to develop and retain.
3 Defining OB
Put on the Thinking Cap: What is Organization Behavior?
The recent progressive trends that find a mention above have redefined organization
behavior as the study and application of how people – as individuals and as groups – act
COMMERCE Paper No. 1: Management Concepts & Organizational
Behaviour
Module No. 9 : Organizational Behaviour – An Introduction
____________________________________________________________________________________________________
Keeping the complexities and growing demands and expectations at work in mind, many
a times certain questions race through the mind like:
All these questions are related to people and how they relate to the groups existing within
the organization. This is where organizational behavior can make a significant
contribution. OB organically tantamount to analyzing and applying the information
regarding people’s behavior within and outside a group. It strives to identify ways in
which people can act more effectively. It provides a useful set of tools at many levels for
analysis. For instance, it enables managers not only identify the behavior patterns of the
individuals, but also comprehend the complexities involved in interpersonal relations,
when two people interact. At the next level, OB helps in assessing the dynamics of bonds
innate to smaller groups which can be divided into formal and informal groups.
Interorganization
relationships (Mergers &
Joint Venturs)
Individuals
As per Newstrom, J.W. and Davis, K (1996), there are four goals of Organizational
Behavior:
1 To describe
2 To understand
3 To predict and
4 To control
Organization behavior is a study based on systematic approach rather than gut feeling or
intuition.
As discussed earlier, the organization, is a system which has a defined purpose and goals
with several components that need to be managed. We can, for the sake of convenience,
categorize the factors that need to be managed. These are people, jobs and tasks,
technology, structure and processes. In addition, all the changes that are taking place
outside the organization, i.e., the external environment, has to be monitored in order to
steer the organization effectively. The term effectiveness refers to the successful
accomplishment of the organizational goals. Efficiency refers to the minimization of the
costs while performing the job. Thus, managing organizational behavior for effective and
efficient performance means that all the five components needs to be properly handled.
These are:
1 People: Individual employees who are expected to perform the task allotted to
them; Dyadic relationships such as superior-subordinate interactions; Groups who work
as teams and have the achieve the target; People outside the organizational system such
as customers, clients, suppliers, vendors and government officials.
2 Jobs and tasks: the jobs refer to the sum total of an individual’s assignment at the
workplace. Tasks refer to the various activities that need to be performed to get the job
done (contextual).You will see in the later chapters, how jobs are designed, and the extent
to which the tasks done by the individuals and the groups are inter-related. Hence, jobs
and tasks need to be designed and managed properly.
4 Structure: refers to the various job positions and the levels of reporting
relationships that are set up in an organization. Depending on the nature of job, it can be
hierarchical with a tall pyramid or flat and lean. The entire dynamics of communication,
flow of authority, and rules and regulations in the system differ between the two
structures discussed above. The structure of the organization needs to match with the
5 Process: refers to the way by which the manager gets the things done. Here we
are referring to the abstract aspects like: how does a manager leads; motivates; manages
the perception of employees; instill the norms and values amongst them; plays a role in
developing the work culture of that place and so on. The personality, managerial
philosophy and leadership style of the manager determines how he/she handles the
critical situations. Thus, the processes used by different people to achieve the
organization goal vary from individual to individual. Some processes are more effective
than others and bring about better results. Hence, the manager is required to be
perceptive about the processes that others use and be flexible enough to achieve the
organizational goals in the right manner.
6 The external environment: The five aspects discussed above constitute the
internal aspects of the organization which constantly interact with the external
environment. The external environment relates to the dynamic global markets, supply
systems, government regulations of the respective countries, the economic-political-and
social climate, the changing demographics of the work force, the cultural environment in
which the organization is embedded. For instance,
For instance, For example, the United Kingdom has a largely market-driven,
democratic society with laws based upon precedent and legislation, whilst Iran has
a political and legal system based upon the teachings and principles Islam and a
Sharia tradition. In sum, organizations are embedded in an environment within
which they operate. Some of the external factors may be completely beyond the
control of the organization to change, such as the cultural, social or governmental
aspects. However, many of the other aspects such as sizing up the markets,
updating the technological changes etc are all under the control of the organization.
However, a manager needs not only to be vigilant but also be adaptable to deal
with difficult and critical situations through sound decision making
However, many of the other aspects such as sizing up the markets, updating the
technological changes etc are all under the control of the organization. However, a
manager needs not only to be vigilant but also be adaptable to deal with difficult and
critical situations through sound decision making.
6 Summary
With sweeping changes taking place both within and globally, the managers need
to develop their interpersonal or people skills to be effective in their jobs.
Organizational behavior is a field of study that investigates the impact that the
individuals, groups and structures have on behavior within the organization, and
then it applies that knowledge to make organizations work more effectively. Its
goals are to make the managers more effective at describing, understanding,
predicting and controlling human behavior.