CHAPTER 2. History of Human Relations & Organizational Behaviour

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1 In this Chapter, we shall understand: 1. Concepts of Human Relations/Organizational Behaviour 2. Interdisciplinary nature of Organizational Behaviour 3. Why Organization Behaviour? 4. Theories X and Y? 5. Future of Organization Behaviour

2 The Organization & the Individual Individual Behavior affects and is affected by several factors. Three factors principally affect Individual Behavior: 1. Actions 2. Structure 3. Context

3 In a global world, human beings occupy centre stage in any business. The interplay of roles in an organization, also called human dynamics is quite complex. Another term to explain this dynamics is OB. Ob is defined as an interdiciplinary behavioural science, studying phenomena related to dynamics of an organization And their various human units.

4 An organixation,, as a unit, consists of social, technical and economic subunits, which co-ordinate ordinate human and material resources to achieve its goals. These goals are : 1. To make profits 2. To produce goods and provide services 3. To compete in the market place 4. To ensure well being of the staff 5. To achieve stability, continuity and growth

5 Definition of Human Relations and OB There are a few definitions of human relations and OB, one of which is motivating people in organizational settings to develop team work which accomplishes individual as well as organizational goals effectively Keith Davis. Another definition by Fred Luthans states OB as the understanding, prediction and the management of human behaviour in organizations.

6 Historical developments of human relations and OB Human relations always existed, though the scientific study of such relations and consequent behavior is of recent origin. Prior to the industrial revolution, people were either self employed or worked in small groups. There were issues regarding working conditions and resources, which were managed in an appropriate manner. Since the numbers were not large, the issues were small and the solutions were easy to find. With the advent of industrial revolution and mass production, levels of earnings, supply of goods and working conditions improved. The human element gradually started playing a important role in systemizing businesses. The category of people called Managers were born.

7 Scientific Management movement F. W. Taylor was the first to recognize the importance of human element. He improved working conditions, simplified operations, eliminated waste, improved house keeping. As a result productivity improved. The concept of division of labour and work measurement emerged. He also suggested scientific methods of training and incentives to enhance performance.

8 Scientific Management movement The human relations movement gave rise to behavioural thinkers and social scientists. Taylor s theory was found to be inadequate on some aspects. Elton Mayo, Mary Parker Follet,, Abraham Maslow, Douglas McGregor, Chris Argyris and many others emphasized through their findings the impact of the human element on workplace productivity.

9 Scientific Management movement Assumptions of human relations movement : 1. Organizations are social systems 2. People are motivated by many needs 3. People always do not behave in a rational or logical manner 4. People depend on each other for work 5. Informal groups in a workplace decide performance behaviour to a large extent 6. Team work is essential for the success of an organization 7. Job satisfaction gives rise to higher performance. Thus the human face to the organization was created.

10 Contributory Disciplines to OB Human behaviour being unscientific needs a multi disciplinary approach to be understood. The disciplines that contribute to the study of OB are : 1. Psychology 2. Sociology 3. Social Psychology 4. Anthropology 5. Political Science (Refer to block diagram in course material)

11 Significance of OB : OB and HR contribute significantly to the performance and effectiveness to people and organization. The human resources are the sum total of potential and acquired skills and knowledge. Skills need to be improved through proper training. Similarly man management and interpersonal skills play an important role in handling complex work pressures. This activity is called management development an important part of OB

12 Organizational Performance : HR and OB make effective organizations. Knowledge x Skill = Ability Attitude x Situation = Motivation (Keith Davis) Ability x Motivation = Potential Performance Human Performance x Resources = Organization Performance

13 Theory X & Theory Y Douglas McGregor formulated two sets of assumptions: Theory X & Theory Y to study human behavior at work. Theory X assumes: a. The average employee dislikes work and tries to avoid it, if he can. b. He has to be pushed into working effectively, through punishment or rewards. c. He seldom takes risk, is not ambitious and gives high importance to his security. Theory Y assumes: a. People naturally put in effort to accomplish tasks. They need d not be pushed into it. b. People are self driven to solve work related issues using their own creativity. C. Employees do take risk and stretch themselves to action when they see a meaningfulness.

14 Theory X & Theory Y.. Y This model creates Theory X & Theory Y Managers. Theory X Manager is: a) Hard driving, ambitious, result oriented. b) Demanding, autocratic, does not delegate easily. Theory Y Manager is: a) Balanced emotionally, moderately/low ambitious. b) Trusting towards people and delegates.

15 Prospects in the 21 st century 1) Organizations in the 21 st century are perceived as global entities. 2) They are compared with their counterparts globally and corrective actions taken to create uniformity. 3) Since automation and computerization are taking over manpower, human resources need to develop alternate skills. 4) Organizations are getting leaner with fewer jobs than before. 5) Workforce consists of both sexes, with women getting equal opportunities as men. 6) Relocation of people and jobs are routine. Those who adapt to relocation rise to seniors positions. OB has major challenges which are more significant than before.

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