CHAPTER 1 ORGANISATIONAL BEHAVIOUR

CHAPTER 1 ORGANISATIONAL BEHAVIOUR Concept and Definition of Organisational Behaviour Organisational behaviour (OB) is concerned with the understanding, prediction and control of human behaviour in organisations. It is the study and application of knowledge about how people as individuals and groups act within organisations. It strives to identify ways in which people can act more effectively. It is the field of study that investigates the impact that individual groups and organization structure have on behaviour within the organization for the purpose of applying such knowledge towards improving organisational efficiency Stephen Robbins. Organisational behaviour is a branch of social sciences that seeks to build theories that can be applied to predicting, understanding and controlling behaviour in a work organisation Aldag and Brief. Organisational Behaviour is an academic discipline concerned with understanding and describing human behaviour in an organisational environment. Keith Davis Features of Organisational Behaviour It tries to explain the complex human factors in the organisational by identifying cause and effect relationship of the behaviour. The features are as follows: 1. A field of Study: Organisational Behaviour is a field of study backed by a body of theory, research and application associated with a growing concern for people at the workplace. Its study helps in understanding the human behaviour in work organisations. 2. Levels of Analysis: Organisational Behaviour involves three levels of analysis of behaviour individual behaviour, group behaviour and behaviour of the organisation itself. 1

3. Concern for Effectiveness: The major goal of organisational behaviour is to understand, explain and predict human behaviour in the organisational context so that it may be moulded into result-yielding situations so as to improve organisational effectiveness. 4. Human Tool: Organisational Behaviour is a human tool for human benefit. It helps in understanding and predicting the behaviour of individuals. It provides generalizations that managers can use to anticipate the effects of certain actions on human behaviour. 5. Inter-Disciplinary Approach: The field of organisational behaviour is heavily influenced by several other behavioural sciences and social sciences. The prominent among these are psychology, sociology and anthropology. 6. Science and Art: OB is both a science as well as an art. The systematic knowledge about human behaviour is a science. The application of behavioural knowledge and skills clearly leans towards being an art. Nature and Scope of Organisational Behaviour Organisational behaviour is concerned with understanding and describing human behaviour in an organisational setting. It seeks to shed light on the complex human factor in organisations by identifying causes and effects of human behaviour. It is called a social science because its main concern is people and their behaviour. It is the field of study that integrates behavioural sciences like psychology, sociology and anthropology for the study of human behaviour in and around organisations. Levels of Analysis: Organisational behaviour focuses on three levels of analysis, viz., (i) Individual Behaviour, (ii) Group Behaviour (iii) Organisation Behaviour 2

1. Behaviour at the Individual Level: The behaviour of individuals is a complex phenomenon and is affected by a large number of factors such as personality, attitudes, perception, learning, motivation, social, cultural and other factors. OB integrates these factors to provide simplicity in understanding human behaviour. The study of behaviour of an individual working in the organisation is also known as micro organisational behaviour. 2. Behaviour at the Group Level: Several research studies have shown people behave differently in groups than as individuals. Several factors influence the behaviour of groups such as group goals, norms, communication, leadership, cohesiveness, etc. Understanding of group dynamics is essential to reduce conflicts and improve morale and productivity. This is also known as meso organisation behaviour. 3. Behaviour at the Organisation Level: An organization is a system composed of several interdependent individuals and groups. Individuals and groups operate within the structure of formal organisation. 3 They participate in shaping the culture of the organisation and also in organisation development. The study of behaviour from the perspective of the whole organisation is also referred to as macro-organisational behaviour.

Inter-Disciplinary Approach Organisational behaviour is of integrating nature. It tries to synthesize knowledge drawn from various behavioural and social sciences such as psychology, sociology, social psychology, anthropology, political science, economics, industrial engineering etc. Organisational Behaviour is an applied behavioural science. 1. Psychology : It is the study of human behaviour covering individual traits and membership of small social groups. (personality, perception, emotion, attitude, and learning.) 2. Sociology : The study of social behaviour (group dynamics, leadership, communication, formal and informal groups, organisational changes and developments and organisational structure) 3. Social Psychology: It is interpersonal behaviour, group decision making, effect and change on behaviour, responsive and integration of group activities with individual needs. 4. Anthropology: (Science of Mankind) study of relating of human activities in various culture and organisational frameworks (cross culture analysis, individual culture, organisational environment, comparative values and comparative attitudes.) 5. Political Science: Politics dominate human behaviour at large extend (power and politics, network, conflict resolution) 6. Semantics: The communication network in the organization. 4

Determinants of Organisational Behaviour 1. People : (Individuals and Groups) all organizations are made up of individuals. People are dynamic in nature; they interact with each other and also influence each other. They form change and disbanned organizations. The basic problem of management is to understand this behaviour so that individuals are motivated in a better way to contribute their maximum to the organisational goals. 2. Structure: It defines the roles and relationship of people. It leads to division of labor as well authority responsibility relationship. The entire structure within the organization leads to interaction between individuals. The structural design must be based on other 3 determinants, that is, requirements of organization member or individuals, the external environment and the technology used. 3. Technology: It impacts the physical and economic conditions within which people work in an organization. This includes tools, methods and resources. It influences the working condition and also put restrictions on the freedom of individuals. 4. Environment: Organizations are influenced by external environment which includes social, cultural, political, economic, legal and geographical and demographic forces. These influence attitude, motive and perceptions of people in organizations. Models of Organisational Behaviour: Since the dawn of industrial revolution, four models of organisational behaviour have been followed by managers of different organisations at different times. These are: autocratic, custodial, supportive and collegial. 5

a. Autocratic Model: 1. This model depends on the power of the boss 2. Managerial orientation is authority and right to command over the people to whom it applies 3. Employees have to be directed, persuaded and pushed into performance 4. Employees simply follow order 5. The employees psychological effect is dependent on host 6. Employee only gives what is required or the minimum performance and is compensated by minimum wages. The employees are insecure and frustrated. b. Custodial Model: 1. This model depends on economic resources. 2. Managerial orientation is toward money to pay wages. 3. In this model money is the motivating factor since physical needs are already met. 4. It is the security factors that motivate employees. 5. Employees are satisfied and happy but not fully motivated there is only passive cooperation from the. c. Supportive Model: 1. This model depends on leadership 2. Management s Orientation is to provide support to the employee s performance that is, providing a climate to help employees grow and accomplished the interest of the organization under their compatibilities. 3. Employees Orientation is job performance. They feel a sense of security and act a status and recognisation in the society as well as in nation. d. Collegial Model: 1. Depends on common interest. It is an extension of supportive model. 2. This model is based on partnership. 3. Managerial orientation is towards team work and employees orientation is towards maintaining standard and quality of work. 4. Moderate enthusiasm in performance and largely satisfies the self actualization. 6

Model Summary: Model Autocratic Custodial Supportive Collegial Basis of model Power Economic resources Leadership Partnership Managerial Orientation Authority Money Support Teamwork Employee Orientation Obedience Security and benefits Job performance Employee Psychological result Dependence on boss Dependence on organisation Employee needs met Subsistence Security 7 Participation Status and recognition Performance result Minimum Passive co-operation Awakened drives Management s assumptions about people: follows: Responsible behaviour Self-discipline Self-actualisation Moderate enthusiasm These models are based upon management s assumptions about people. These are as McGregor s Theory X and Theory Y : Douglas McGregor was a known psychologist. He propounded two contrasting theories of human behaviour which he called theory X and theory Y. These theories contain two pairs of assumptions about human beings which McGregor thought were implied by the actions of autocratic and permissive managers. It may be noted that these sets of assumptions are merely intuitive deductions; they are not based on any research studies. a) Theory X : In this McGregor said that with respect to people, management is a process of directing their efforts, motivating them, controlling their actions, modifying their behaviour to fit the needs of the organisation. Without this active intervention by management, people would be passive even resistant to organisational needs. They must, therefore, be persuaded, rewarded, punished, controlled their activities must be directed. b) Theory Y : After challenging the validity of Theory X, McGregor developed an alternative theory of human behaviour which is known as Theory Y. This theory assumes that people are not unreliable and lazy by nature. If they are properly motivated, they could really be creative. The main task of management is to unleash the potential in the employees. An employee who is properly motivated can achieve his goals by directing his own efforts and, thus, he can help in accomplishing the organisational goals.

Comparison of Theory X and Theory Y Theory X 1. Based on the assumption that people are basically lazy and so shirk work 2. People do not take initiative. They like to be directed. 3. People avoid responsibility whenever possible 4. For getting things done, people must be supervised strictly. 5. Autocratic style of Leadership is likely to be more effective 6. Applicable to illiterate, unskilled and lower-level workers 7. Believes in mental sickness and so negative motivation of employees Theory Y 1. Based on the assumption that people like work as children like play 2. People like to take initiative. They seek self-direction 3. People assume responsibility gladly if conditions are favorable. 4. People do not require close and strict supervision for properly performing their jobs. 5. Democratic or participative style of leadership is likely to be more effective 6. Applicable to educated and skilled employees who occupy higher positions in the organisation 7. Believes in mental health and so positive and intrinsic motivation of employees Appraisal of McGregor s Contribution These theories are important tools in understanding the behaviour of human beings and in designing the incentive schemes to motivate the employees. Neither of the two theories is fully applicable in all the situations and to all types of human beings. However, Theory X is more applicable to unskilled and uneducated low level workers, whereas Theory Y is more applicable to skilled and educated employees who are mature enough and understand the responsibility. Chris Argyris Immaturity Maturity Theory The frame work of maturity-immaturity characteristics suggested by Chris Argyris describes the multi-dimensional development process along which an individual in an organisation grows. He identified seven basic changes that take place in the people over the years. These changes reveal that people have a tendency: 8

i. to develop from a state of being passive as an infant to a state of increased activity as an adult. ii. to develop from a state of dependence on others as an infant to a state of relative independence as an adult. iii. to develop from being capable of behaving in only a few ways as an infant to being capable of behaving in many different ways as an adult. iv. to develop from having erratic, casual and shallow interests as an infant to a deepening of interests as an adult. v. to develop from having a short-term perspective as an infant to a much longer time perspective as a mature adult. vi. to develop from being in a subordinate position in the family and society as an infant to an equal or superior position to others as an adult. vii. to develop from the state of lack of self-awareness of self as an infant to a state of awareness and control over self as an adult. Immaturity-Maturity Continua Immaturity Characteristics (Pattern A) 1. Passive 1. Active 2. Dependence 2. Independence Maturity Characteristics (Pattern B) 3. Capable of behaving only in a few ways 3. Capable of behaving in a variety of ways 4. Shallow interest 4. Deepening interest 5. Short-time perspective 5. Long-time perspective 6. Subordinate position 6. Superordinate or equal position 7. Lack of awareness of self 7. Awareness of and control over self The continua of seven changes show the general tendency of people in organisation to develop from immaturity (Pattern A) to maturity (Pattern B). The matured state is characterized by an endless series of challenges in which the reward comes from doing something for its own sake. 9

Theory Z : A Hybrid Model given by William Ouchi Made a comparative study of American and Japanese management practices. He came to the conclusion that many of the Japanese management practices can be adapted in American context. He suggested the adoption of Theory Z which represents an integration of American and Japanese management practices. Theory Z represents the adoption of Japanese management practices by the American companies. The hybrid type of system incorporates the strengths of Japanese management (group decision-making, social cohesion, job security, holistic concern for employees, etc), and American management (quick decision-making, individual freedom, risk-taking by individuals etc. This theory provides a complete transformation of motivational aspect of employees as compared to Theory X and Theory Y. Theory Z has been followed successfully by the Japanese firms operating in the U.S.A. Organisational Theory: Organisational theory is the study of structure, functioning, and performance of organisations and of the behaviour of groups and individuals working in organisations. According to S.P. Robbins, Organisation theory is the discipline that studies the structure and design of organisations. It explains how organisations are actually designed and offer suggestions on how they can be constructed to improve organisational effectiveness. Challenges for Organisational Behaviour: The field of organisational behaviour is dynamic and not static. Behavioural scientists are continuously engaged in updating and sharpening behavioural skills to cope up with the emerging changes in the external environment of the organisations. 1. Globalisation of Business: There is no denying the fact that, the world economy is becoming increasingly global in character. Barriers to trade between different countries have been reduced to a great extent. Globalisation has posed both challenges and opportunities for the managers. The global managers must work to understand the local culture and the behavioural forces that affect the workforce in order to manage the workers more effectively. 10

2. Workforce Diversity: Another serious challenge that managers face involves workforce diversity, i.e., the increasing heterogeneity of organisations with the inclusion of workers from different groups such as women, physically disabled persons, retired defence personnel, backward classes, ethnic groups etc. The managements followed melting pot approach to differences in workforce. It was assumed that people who were different would somehow assimilate with the majority groups. But it is now recognized that employees don t set aside their values, beliefs, lifestyle preference, etc., when they come to work. Therefore, it is desirable to recognize and value such differences by adapting management practices to different life and work styles, etc. of the diverse groups. 3. Satisfaction of Aspirations of Workforce: The workers are becoming more aware of their higher level needs and this awareness would intensify further among the future workers. The managers would be required to evolve appropriate techniques to satisfy the higher level needs of workers in order to motivate them. 4. Empowerment of Employees: Various techniques of empowerment range from participation in decision-making to the use of self-managed teams. In future, organisations will follow team structures which will pave the way for empowerment of lower levels. Empowerment would be all the more necessary to speed up the process of decision-making, make use of environmental opportunities and to serve the customers and society better. 5. Improvement of Productivity and Quality: In the era of global competition, improvement of productivity and quality is essential to satisfy customers. Productivity and quality could be improved through not only better technology but also trained human resources. Programmes like Total Quality Management (TQM) and Business Process Reengineering (developed by Michael Hammer and James Champy) which require extensive employee involvement can be implemented to meet the challenges of quality and productivity. 11

6. Management of Innovation and Change: In today s environment, organisations must foster innovation and manage change successfully. Success comes to those organisations that maintain their flexibility, continually improve their quality and outbeat their competitors with innovative products and services. Employees are key to innovation and change. The challenge for managers is to stimulate employee creativity and tolerance for change. 7. Facilitating Work-life Balance: Organisations must recognise that transitions in personal life often accompany career transitions. Therefore, they must be concerned with the consequences of major career moves within the organisation and help individuals to develop strategies for managing the accompanying changes in their personal lives. 8. Promoting Ethical Behaviour: Many organisations today are taking steps to enhance the ethical standards of their employees and to avoid legal and / or public opinion problems. There is also increased concern for carrying out social responsibility by the managements of business organisations. 12

Sample Multiple Choice Questions 1. The Theories of Organisation book is written by (a) John Miner (b) Henry Fayol (c) John Robinson (d) Urwick 2. The Organisational Behaviour book is written by (a) Keith Davis (b) Stephen P Robbins (c) David Lev (d) Fawler and Hackman 3. The Organisation Theories includes (a) Technology (c) Adaptation and change (b) Boundary and Environment (d) All of the above 4. Models of Organisational Behaviour includes (a) Supportive Model (b) Authoritative Model (c) Collegial Model (d) All of the above 5. Theory x and Theory y given by: (a) Douglas McGregor (c) Kurt Lewin (b) Elton Mayo (d) Likert Rensis 6. Who has given the Immaturity Maturity Theory? (a) Douglas McGregor (b) Chris Argyris (c) Likert Renis (d) None of the above 7. Who has put forward Theory Z? (a) William Ouchi (c) Rangnekar (b) Urwick (d) Douglas McGregor 8. Theory Z is an integration of which management practices? (a) US Japanese System (c) Japanese Chinese System 13 (b) US Russian System (d) None of the above

9. Which theory followed Carrot and Stick Approach? (a) Theory X (b) Theory Y (c) Theory Z (d) All of the above 10. The Organisational Behaviour consists of (a) Organisational Theory (c) Personnel Resources (b) Organisational Development (d) All of the above ANSWERS 1 2 3 4 5 6 7 8 9 10 a b d d a b a a a d 14