Unit 1

Fundamentals of Organizational
Behavior

Sanjay Ghimire

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 Unit Contents

 Unit 1:Fundamentals of Organizational Behavior

– Concept and Evolution of OB,
– OB and Public Administration,

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 Organization

Groups of people who work interdependently

toward some purpose
– structured patterns of interaction
– coordinated tasks
– work toward some purpose

 Thus, Organization is A consciously coordinated

social unit, composed of two or more people, that
functions on a relatively continuous basis to achieve a
3 common goal or set of goals.
 Organizational Behavior
 Organizational Behavior studies the influence that
individuals, groups and structure have on behavior
within organizations.

 Its chief goal is to apply that knowledge toward

improving an organization’s effectiveness.

 According to Stephen P Robins, “ Organizational

Behavior as a systematic study of the actions and
attitudes that people exhibit within the organizations.”
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 Why study organisational
behaviour?
Understand
organizational
events

Organisational
Influence behavior
Predict
organizational research organizational
events events
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 Why study organisational
behaviour?

 OB helps with:
– Insights to improve people skills
– Valuing of workforce diversity
– Empowering people and creating a positive work
environment
– Dealing with labor shortages
– Coping in a world of temporariness
– Creating an ethically healthy work environment

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 Focal Points of OB

Jobs and Work

Absenteeism
Employment turnover
Productivity
Human performance
Management

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 Contributing Disciplines

Micro:
The Individual Psychology

Social Psychology

Macro:
Sociology
Groups &
Organizations
Anthropology
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 Three Levels of OB Analysis

Unit 5

Unit 4

Units 2 and 3

Plan of the course

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BASIS PUBLIC SECTOR PRIVATE SECTOR
The section of a nation's The section of a nation's
economy, which is under the economy, which owned and
Meaning control of government, whether controlled by private individuals
it is central, state or local, is or companies is known as
known as the Public Sector. Private Sector.
To serve the citizens of the
Basic objective Earning Profit
country.
Public Revenue like tax, duty, Issuing shares and debentures
Raises money from
penalty etc. or by taking loan
Finance, Information
Police, Army, Mining, Health,
Technology, Mining, Transport,
Manufacturing, Electricity,
Education, Telecommunication,
Areas Education, Transport,
Manufacturing, Banking,
Telecommunication, Agriculture,
Construction, Pharmaceuticals
Banking, Insurance, etc.
etc.
Job security, Retirement Good salary package,
Benefits of working benefits, Allowances, Competitive environment,
Perquisites etc. Incentives etc.
Basis of Promotion Seniority Merit
Job Stability Yes No
 OB and Public Administration

 Importance in OB in public sector:

– Globalization
– Managing work Force Diversity
– Improving Quality and Productivity
– Improving customer service
– Improving people skills
– Innovation and Change
– Work life balance
– Promoting ethical Behavior
11 – Creating a positive Work Environment
 Evolution of OB

 A briefdescription of how the theory and

practice of organizational behavior have
evolved.
 Human beings and organized activities have
been around for thousands of years,
 But we needn’t go back beyond the
eighteenth or nineteenth century to find OB’s
roots.

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 Evolution of OB
 Early Practices  The Behavioral Era
– Adam Smith – The Birth of the “Personnel
– Charles Babbage Office”
– – The Birth of Industrial
Robert Owen
 Psychology
The Classical Era –
–
Human Relations
Scientific Management –
–
Behavioral Science Theorists
Administrative Theory
 OB Today
– Structural Theory
– Management Science
– “Social Man” Theory
– Systems Theory
– Contingency Perspective

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 The Classical Era

 About 1900 to the mid-1930s.

 First general theories of management began
to evolve.

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 Scientific Management
 Scientific Management theory arose in part of from the
need to increase productivity.
 In the united states especially, skilled labor was short
supply at the beginning of the twentieth century.
 To increase the productivity was to increase efficiency
of workers.
 There for, F. W.Tylor, Henry L.Gantt, and Frank and
Lillian Gilbreth devised the body of principle know as
scientific management theory .

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 Frederick Taylor

 Four basic tenets:

– Develop one best way to do each job
– Select the best individual for the position
– Ensure the work is carried out in prescribed
fashion (training and increased wages as the
carrot).
– Divide work among employees so that activities
such as planning, organizing, and controlling are
the prime responsibilities of managers

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 Administrative Theory

 Scientificmanagement was concerned

with increasing the productivity of the
shop and the individual worker.
 Classical organization theory grew out
of the need to find guideline’s for
managing such complex organization
as factories.

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 Henri Fayol
 Five Functions of Management:
– Division of Work
– Authority and Responsibility
– Unity of Command
– Renumeration
– Espirit de Corps
 Much of knowledge of organizational structure came
from this theory
 Attempts to prescribe the “correct” way to manage an
organization and achieve its goals
 High specialization of labor (each dept tended to its own
18 business, and decision making was centralized)
 Structural Theory

 IdealOrganization (Max Weber), the

Bureaucracy:
– Rules and procedures control organizational
function
– High degree of differentiation exists between
function
– Hierarchy used for reporting
– Rules and norms regulate behavior
– Ownership and administration are separate
– Administrative acts are recorded in writing
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 The Behavioral Era
 The “people side” of organizations
 begin to be discussed after the 1930s
 two earlier events played an important part in the
application and development of organizational behavior
 The Birth of the “Personnel Office”
– Welfare secretaries were supposed to assist workers
 The Birth of Industrial Psychology
– scientific study of human behavior to identify general patterns
and to explain individual differences.

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 Human Relations School

 Hawthorne Experiments - Elton

Mayo
– Regardless what the researchers
did, productivity went up
– High morale was noticed
– Informal organization important

 Firstwork that put the human

factor at the center of their work
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 Contributions
1. A business organization is basically a social system. It is not just
a techno-economic system.
2. The employee can be motivated by psychological and social
wants because his behaviour is also influenced by feelings,
emotions and attitudes.
3. Management must learn to develop co-operative attitudes and
not rely merely on command.
4. Participation becomes an important instrument in human
relations movement.
5. Productivity is linked with employee satisfaction in any business
organization.
6. Group psychology plays an important role in any business
organization.
7. Man is a living machine and he is far more important than the
22 inanimate machine.
 Watch the Video
 AT&T Archives: The Year They Discovered People
 https://www.youtube.com/watch?v=D3pDWt7GntI

[Video description]
The Hawthorne studies took place in a Western Electric plant back
from 1924 to 1932. In the studies, employees were monitored for
whether they worked better/faster under different lighting conditions. It
turned out the results were irrelevant... but the main takeaway from
the experiments were that the employees knew they were being
monitored — and productivity increased regardless of the lighting.
This 1973 film examines this experiment through the eyes of the men
and women who worked in the plants at the time.
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 Behavioral Science

 Relied on the scientific method for the study

of organizational behavior.
 Sociometry for studying group interactions -
JACOB MORENO.
 The design of organizational training
programs and reward systems - B.F.
SKINNER.
 Match people with jobs and in redesigning
jobs - DAVID MCCLELLAND
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 OB Today

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 Management Science

 Applying
quantitative techniques to
management and organizational problems

 Startedwith logistical problems associated

with WWII

 New technologies continue to demonstrate

the need to consider social and
organizational aspects
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 Systems Theory
 An organization is an adaptive system which has to adjust
to changes in its environment.
 An organization is a structured process in which individuals
interact for attaining objectives.
 A system is a set of interconnected and inter-related
elements or component parts to achieve certain goals. A
system has three significant parts:
1. Every system is goal-oriented and it must have a purpose or
objective to be attained.
2. In designing the system we must establish the necessary
arrangement of components.
3. Inputs of information, material and energy are allocated for
processing as per plan so that the outputs can achieve the
27 objective of the system.
 Systems Theory

 Every
system has its own subsystems.
Subsystems include:
– Task/Technological subsystem
 Basic work of organization
– Administrative/Structural Subsystem
 Formal organization
– Subsystem of Individuals
 Theirknowledge, skills, attitudes, values, expectations,
perceptions
– Emergent Subsystem
28  Implicit arrangements, group norming
 Contingency Perspective

 There nothing like "One best way" for designing

organizations, motivating staff and so on.
 Appropriate management approach depends '
on situational factors faced by an
organization.
 Managers have to find a "best fit' between the
demands of:
(a) The tasks
(b) The people
(c) The environment
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 Contingency Perspective
 Universal Principle:
– No universal principles of management can be applied in all
situations
 Open Systems Planning:
– Each organization has its own unique set of technical, human,
and market inputs
 Formal Design of Organizations
– Routine industries need hierarchy, Complex industries need
matrices
 Leadership Style
– Has to be situational
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 Shifting Paradigms of
Organizational Behavior

 Commitment to ethical behavior:

– Highly publicized scandals involving unethical and
illegal business practices prompt concerns for ethical
behavior in the workplace; there is growing intolerance
for breaches of public faith by organizations.
 Importance of human capital :
– A dynamic and complex environment poses
continuous human resource challenges; sustained
success is earned through knowledge, experience,
and commitments to people as valuable human assets
31 of organizations.
 Shifting Paradigms of OB …
 Demise of command-and-control :
– Traditional hierarchical structures are proving incapable of
handling new environmental pressures and demands; they are
being replaced by flexible structures and participatory work
settings that fully value human capital.
 Emphasis on teamwork:
– Organizations today are designed to be less vertical and more
horizontal in nature; driven by complex environments and
customer demands, work is increasingly team based with a
focus on peer contributions.

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 Shifting Paradigms of OB …

 Pervasive influence of information technology:

– As computers and communication technologies
penetrate all aspects of the workplace, implications
for workflows, work arrangements, and organizational
systems and processes are far reaching.
 Respect for new workforce expectations:
– The new generation of workers is less tolerant of
hierarchy, more informal, and less concerned about
status; organizations are paying more attention to
helping members balance work responsibilities and
33 personal affairs.
 Shifting Paradigms of OB …
 Changing concept of careers:
– The new realities of a global economy find employers using
more “offshoring” and “outsourcing” of jobs as well as cutting
back their workforces and employee benefits; more people are
now working as independent contractors who shift among
employers rather than holding a traditional full-time jobs.
 Concern for sustainability:
– Rising quickly to the forefront of concerns in today’s world,
issues of sustainability are more and more on the minds of
managers and organization members; decision making and goal
setting in organizations increasingly gives attention to the
environment, climate justice and preservation of resources for
34 future generations.
 The END

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