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BBA 201: Organizational Behavior

Unit I

Introduction; Concept and nature of Organizational behavior
OB is a field of study that investigates the impact that individuals, groups, and structure have on
behavior within organizations, for the purpose of applying such knowledge toward improving an
organization's effectiveness.

Organizational behavior can be defined as the understanding, prediction, and management of
human behavior in Organizations.

Nature & Scope of OB

A Separate Field of Study
Organizational behavior can be treated as a distinct field of study. It is yet to become a science.
Now efforts are being made to synthesize principles, concepts and processes in this field of
Interdisciplinary Approach
Organizational behavior is basically an interdisciplinary approach. It draws heavily from other
disciplines like psychology, sociology and anthropology.
An Applied Science
The basic objective of organizational behavior is to make application of various researches to
solve the organizational problems, particularly related to the human behavioral aspect.
Normative and Value Centered
Organizational behavior is a normative science. A normative science prescribes how the various
findings of researches can be applied to get organizational results, which are acceptable to the
society. Thus, what is acceptable by the society or individuals engaged in an organization is a
matter of values of the society and people concerned.
Humanistic and Optimistic
Organizational behavior focuses the attention on people from humanistic point of view. It is
based on the belief that needs and motivation of people are of high' concern. Further, there is
optimism about the innate potential of man to be independent, creative, predictive and capable of
contributing positively to the objectives of the organization.
Oriented towards Organizational Objectives
Organizational behavior is oriented towards organizational objectives. In fact, organizational
behavior tries to integrate both individual and organizational objectives so that both are achieved
A Total System Approach
An individual's behavior can be analyzed keeping in view his psychological framework,
interpersonal-orientation, group influence and social and cultural factors; Thus, individual's
nature is quite complex and organizational behavior by applying systems approach tries to find
solutions for this complexity.
Determinants of OB
A collect set of Forces affects the nature of organization today can be classified as:

- People
- Structure
- Technology
- Environment


People make up the internal Social System of the Organization. That System consists of
individuals and groups. Remember that Organizations exist to serve people, rather than people
existing to serve organizations. The Workforce of today organizations are richly diverse
(Employees have a wide array of educational background, talents and perspectives) Managers
need to be tuned in to these diverse pattern and trends and be prepared to adapt to them.


It defines the formal relationship and use of people in organizations. Different Jobs are required
to accomplish all of an organizations activities. People in the Organization have to be related in
some structural way so that their work can be effectively coordinated.


Technology provides the resources with which people work and affects the tasks that they
perform. The Technology used has a significant influence on working relationships. The great
benefit of technology is that it allows people to do more and better work, but it also restricts
people in various ways. It has cost as well as benefits.


All organizations operate within an internal and an external environment. A single organization
does not exist alone. It is part of a larger System that contains many other elements, such as
government, the family, and other organizations. Numerous changes in the environment create
demands on organizations. Individual organizations, such as a Factory, or a school, cannot
escape being influenced by the external environment. It influences the attitudes of people,
affects working conditions, and provides competition for resources and power.



- Individual differences
- Perception
- A whole Person
- Motivated Behavior
- Desire for involvement
- Value of the People

Individual Differences

People have much in common but each person in the world is also individually different. This
belief that each person is different from all other is typically called the Law of Individual


People look at the world and see things differently. Even when they are presented with the same
object, two people may view it in two different ways. Their view of their objective environment
is filtered by perception, which is the unique way in which each person sees, organizes, and
interprets things. Employees see their work worlds differently for a variety of reasons since they
may differ in personalities, needs, demographic factors, and past experiences, or they may find
themselves in different physical settings, time periods, or social surroundings. Whatever the
reason, they tend to act on the basis of their perceptions. Managers must learn to expect
perceptual differences among their employees, accept people as emotional beings, and manage
them in individual ways.

A Whole Person

Organizations employ a Whole person not only a persons skills or brain. A persons home life
cannot be separated from his/her work life.When Managers practices Organizational Behaviour,
it is actually trying to develop a better employee, but it also wants to develop a better person in
terms of growth and fulfilment. Jobs shape people somewhat as they perform job, management
needs to care about the jobs effect on the whole person. If the whole person can be improved,
then benefits will extend beyond the firm into larger society in which each employees lives.

Motivated Behavior

Motivation is essential to the operation of organizations. No matter how much technology and
equipment an organization has, these resources can not be put to the use until they are released
and guided by people who have been motivated.

Desire for Improvement

Many employees today are actively seeking opportunities at work to become involved in relevant
decisions, thereby contributing their talents and ideas to the organizations success. Desire for
improvement can be achieved through employee empowerment.

Value of the Person

People deserve to be treated differently from other factors of production (Land, Capital,
technology) because they are of a higher order in the universe. Because of this distinction,
people want to be treated with caring, respect, and dignity; increasingly they demand such
treatment from their employers. They refuse to accept the old idea that they are simply
economic tools. People want to be valued for their skills and abilities and to be provided with
opportunities to develop themselves.


The three key concepts are:

Social Systems
Mutual Interest
Ethical Treatment
Social Systems

Organizations are Social systems. The existence of a Social System implies that the
organizational environment is one of dynamic change rather than a static set of relations as
pictured on an organization chart. All Parts of the system are inter-dependent; each part is subject
to influence by other parts.

Mutual Interest
Organizations need people and people need organizations. Organizations have a human purpose.
They are formed and maintained on the basis of some Mutuality of Interest among their
participants. Managers need employees to help them reach organizational objectives. And People
need organizations to help them reach individual objectives.

In order to attract and retain valuable employees in an era in which good workers are constantly
recruited away Ethical Treatment is necessary. To succeed organizations must treat employees
in an ethical fashion. Companies have established Codes of Ethics , publicized statements of
ethical values, provided ethics training, reward employees for notable ethical behavior,
publicized positive role models and a set of internal procedures to handle misconducts.

Why Study OB?

Studying organizational behavior can clarify factors that affect how managers manage
Describing the complex human context of organizations
Defining the associated opportunities, problems, challenges, and issues
Isolating important aspects of the managers job
Offering specific perspectives on the human side of management
Studying OB helps managers understand:
The behaviors of others in the organization
Personal needs, motives, behaviors, feelings and career dynamics
Attitudinal processes, individual differences, group dynamics, inter group
dynamics, organization culture, power, and political behavior
Interactions with people outside of the organization and other organizations
The environment, technology, and global issues

Figure : Reasons for studying organizational behaviour


Organizational behavior is an applied behavioral science that is built upon contributions from a
number of behavioral disciplines. The predominant areas are psychology, sociology, social
psychology, anthropology, and political science. As we shall learn, psychology's contributions
have been mainly at the individual or micro level of analysis, while the other four disciplines
have contributed to our understanding of macro concepts such as group processes and

Organizational behavior can be viewed from different perspectives or levels of analysis. At one
level, the organization can be viewed as consisting of individuals working on tasks in the pursuit
of the organizational goals. A second level of analysis focuses upon the interaction among
organizational members as they work in' teams, groups and departments. Finally, organizational
behavior can be analyzed from the perspective of the organization as a whole.
Organization at the I ndividual Level: Organizational behavior can be studied in the perspective
of individual members of the organization. This approach to organizational behavior draws
heavily on the discipline of psychology and explains why individuals behave and react the way
they do to different organizational policies, practices and procedures. Within this perspective,
psychologically based theories of learning, motivation, satisfaction and leadership are brought to
bear upon the behavior and performance of individual members of an organization. Factors such
as attitudes, beliefs, perceptions and personalities are taken into account and their impact upon
individuals behavior and performance on the job is studied.
Organization at the Group Level: People rarely work independently in organizations; they have
to necessarily work in coordination to meet the organizational goals. This frequently results in
people working together in teams, committees and groups. How do people work together in
groups? What factors determine whether group will be cohesive and productive? What types of
tasks could be assigned to groups? These are some of the questions that can be asked about the
effective functioning of groups in organizations. An important component of organizational
behavior involves the application of knowledge and theories from social psychology to the study
of groups in organizations.
Organization at the Organizational Level: Some organizational behavior researchers take the
organization as a whole as their object of study. This macro perspective on organizational
behavior draws heavily on theories and concepts from the discipline of 'sociology'. Researchers
seek to understand the implications of the relationship between the organization and its
environment for the effectiveness of the organization. Emphasis is placed upon understanding
how organizational structure and design influences the effectiveness of an organization. Other
factors such as the technology employed by the organization, the size of the organization and the
organizations age are also examined and their implications for effective organizational
functioning are explored.
These different perspectives on the study of organizational behavior are not in conflict with one
another. Instead they are complementary. A full and complete understanding of the nature of
organizations and the determinants of their effectiveness requires a blending of knowledge
derived from each perspective.

Organizations differ in the quality of organizational behaviour that they develop. These
differences are substantially caused by different models of organizational behaviour that
dominant management's thought in each organization. The model that a manager holds usually
begins with certain assumptions about people and thereby leads to certain interpretations of
organizational events.
The following four models of organizational behaviour are as follows: A. Autocratic model
B. Custodial model
C. Supportive model
D. Collegial model

Autocratic Model
In an autocratic model', the manager has the power to command his subordinates to do a specific
job. Management believes that it knows what is best for an organization and therefore,
employees are required to follow their orders. The psychological result of this model on
employees is their increasing dependence on their boss. Its main weakness is its high human
Custodial Model
This model focuses better employee satisfaction and security. Under this model organizations
satisfy the security and welfare needs of employees. Hence, it is known as custodian model. This
model leads to employee dependence on an organization rather than on boss. As a result of
economic rewards and benefits, employees are happy and contented but they are not strongly
Supportive Model
The supportive model depends on 'leadership' instead of power or money. Through leadership,
management provides a climate to help employees grow and accomplish in the interest of an
organization. This model assumes that employees will take responsibility, develop a drive to
contribute and improve them if management will give them a chance. Therefore, management's
direction is to 'Support' the employee's job performance rather than to 'support' employee benefit
payments, as in the custodial approach. Since management supports employees in their work, the
psychological result is a feeling of participation and task involvement in an, organization.
Collegial Model
The term 'collegial' relates to a body of persons having a common purpose. It is a team concept.
Management is the coach that builds a better team. The management is seen as joint contributor
rather than as a boss. The employee response to this situation is responsibility. The psychological
result of the collegial approach for the employee is 'self-discipline'. In this kind of environment
employees normally feel some degree of fulfillment and worthwhile contribution towards their
work. This results in enthusiasm in employees' performance.
Autocratic Custodial Supportive Collegial
Basis of Model Power Economic
Leadership Partnership
Authority Money Support Teamwork
Dependence on
Participation Self-discipline
needs met
Subsistence Security Status and
Minimum Passive
Moderate enthusiasm

It is wrong to assume that a particular model is the best model. This is because a model
depends on the knowledge about human behavior in a particular environment, which is
unpredictable. The primary challenge for management is to identify the model it is actually using
and then assess its current effectiveness. The selection of model by a manager is determined by a
number of factors such as, the existing philosophy, vision and goals of manager. In addition,
environmental conditions help in determining which model will be the most effective model.
Challenges and Opportunities for OB

Responding to Globalization
Increased foreign assignments
Working with people from different cultures
Coping with anti-capitalism backlash
Overseeing movement of jobs to countries with low-cost labor
Managing people during the war on terror.
Managing Workforce Diversity
Embracing diversity
Changing U.S. demographics
Implications for managers
Recognizing and responding to difference
Improving Quality and Productivity
Quality management (QM)
Process reengineering
Responding to the Labor Shortage
Changing work force demographics
Fewer skilled laborers
Early retirements and older workers
Improving Customer Service
Increased expectation of service quality
Customer-responsive cultures
Improving People Skills
Empowering People
Stimulating Innovation and Change
Working in Networked Organizations
Helping Employees Balance Work/Life Conflicts
Improving Ethical Behavior