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Faculty of Business & Management

May 2015

Organisation Behaviour










Negeri Sembilan Learning Centre


Students of Bachelor of Human Resources Management are required to analyses
current challenges faced by managers in organization and provide recommendations
from the organizational behavior perspective on how managers can better handle these
challenges. The purpose of this assignment is to develop learners ability to analyses
organizational challenges and suggest managerial improvements from an organizational
behavior perspective.

Organizational behavior is concerned with people's thoughts, feelings, emotions and

actions in setting up a work. It studies of the many factors that have an impact on how
individuals and groups respond to and act in organizations and how organizations manage their
environments. It is a field of study that specifically focuses on the impact that people have on
organizational effectiveness and efficiency. It does this by taking a system approach it
interprets people organization relationships in terms of the four levels , the whole person,
whole group, whole organization, and whole social system. Understanding an individual
behavior is in itself a challenge, but understanding group behavior in an organizational
environment is a monumental managerial task.

"Understanding one individual's behavior is challenging in and of itself;

understanding a group that is made up of different individuals and comprehending the
many relationships among those individuals is even more complex. Ultimately, the
organizations work gets done through people, individually or collectively, on their, own or
in collaboration with technology. Therefore, the management of organizational behavior is
central to the management taska task that involves the capacity to "understand" the behavior
patterns of individuals, groups and organizations, to ''predict'" what behavioral responses
will be elicited by various managerial actions and finally to use this understanding and these
predictions to achieve "control" - Nadler and Tushman .


Organizational behavior is concerned with the characteristics and behaviors of

employees in isolation; the characteristics and processes that are part of the organization
itself; and the characteristics and behaviors directly resulting from people with their
individual needs and motivations working within the structure of the organization. One
cannot understand an individuals behavior completely without learning something about
that individual's organization. Similarly, he cannot understand how the organization operates
without; studying the people who make it up. Thus, the organization influences and is
influenced by individuals. Organizational behavior offers several ideas to management as to how
human factor should be properly emphasized to achieve organizational objectives.

Barnard has observed that an organization is a conscious interaction of two or

more people. This suggests that since an organization is the interaction of persons, they
should be given adequate importance in managing the organization. Organizational
behavior provides opportunity to management to analyze human behavior and prescribe means
for shaping it to a particular direction.

Organization behavior is resistant to change due to

human cognitive processes and defensive routines. People make sense of past behavior by
forming beliefs that rationalize them and by escalating commitment to them. They also avoid
embarrassment and threat to self and others. These human characteristics prevent managers
from leaving that their actual behavior their theory in action is inconsistent with their
stated asporation their espoused theory. These human characteristics cause organizational
policies and practices to perset in the face of new realities unless skills and normal of
inquiry are developed -Argyus and Schon, 1996.


For this assignment, The organization that I choose is Air Asia Berhad ( now on it
will be known as Air Asia). It is Asia's largest low-fare, no-frills airline and a pioneer of low-cost
travel in Asia. air asia group operates scheduled domestic and international flights to over 400
destinations spanning 25 countries. Its main hub is the Low-Cost Carrier Terminal (LCCT) at
Kuala Lumpur International Airport (KLIA). Tan Sri Anthony Francis Fernandes (also known as
Tony Fernandes) is a Malaysian Indian entrepreneur. He is the founder of Tune Air Sdn. Bhd.,
who introduced the first budget no-frills airline, AirAsia, to Malaysians with the tagline "Now
everyone can fly". AirAsia has sparked a revolution in air travel with more and more people
around the region choosing AirAsia as their preferred choice of transport. He has since founded
the Tune Group of companies. Fernandes to prominence by turning AirAsia, a failing
government-linked commercial airline, into a highly successful budget airline public-listed
AirAsia Values

To be the largest low cost airline in Asia and serving the 3 billion people
who are currently underserved with poor connectivity and high fares.


To be the best company to work for whereby employees are treated as part
of a big family
Create a globally recognized ASEAN brand
To attain the lowest cost so that everyone can fly with AirAsia
Their main activities are to provide air transportation services worldwide. The primary

undertakings of subsidiaries are supplying inflight repasts, trip functioning enterprise, supplying
airplane leasing amenities, newspapers proprietor with announcing division. Their secondary
activity is tune budget hotels for their flyers they can book hotel and tour packages along the
ticket with AirAsia Go. they provide sponsor ships to various event held at their destination
country but most in Malaysia, they also organize big events and customers can buy ticket from
their website along flight tickets. The primary undertakings of subsidiaries are supplying inflight
repasts, trip functioning enterprise, supplying airplace leasing amenities, newspapers proprietor
with announcing division. Other than that, AirAsia creates values through the following vision
and mission :


Disciplines That Contribute Towards Organisational Behaviour

According to Henry Mintzberg, a manager has three main roles:
a) Interpersonal Role
This refers to the need to communicate with the subordinates and/or colleagues. There are
three types of interpersonal roles:
i) As a figurehead in an organization who has a key responsibility during official
functions of an organization such as officiating and closing functions, and
visiting hospitalized employees.
ii) As a leader who needs to motivate, train and take disciplinary action against an
iii) As a liaison who needs to interact with other parties and form mutually
beneficial work relationships as well as networking.

Role of Providing Information

A manager is almost and always responsible in obtaining and disseminating
information from within an organization and externally. This information is gathered
and monitored whilst suitable and related information will ne disseminated to staff and
other parties in the organization. In addition, a manager also acts as a representative or
spokesperson for the organization when dealing with external parties.

b) The Role of Decision Making

In this role, a manager may contribute ideas to a particular project whilst displaying his role
as an entrepreneur, handling employees in related problems and making
appropriate decisions. A manager is also responsible in allocating resources and being a
negotiator in all business related transactions.


The discipline of organizational behavior is concerned with identifying and

managing the attitudes and actions of individuals and groups, looking particularly at how
people can be motivated to join and remain in the organization, how to get people to
practice effective teamwork, how people can accomplish their jobs more efficiently, and how
employees can be encouraged to be more flexible and innovative. Attention is brought to
these attitudes and actions in order to help managers identify problems, determine how to
correct them, and change behavior so that individual performance and ultimately
organization effectiveness increase. Organizational behaviour is an applied behavioural
science that is built upon contributions from a number of behavioural disciplines. They are
psychology, sociology, social psychology, anthropology and political science. The history of
Organizational Behavior (OB) can be traced back to the Scientific Management approaches
from the Industrial Revolution as early as the late 1800s with the work of Frederic Winslow
Taylor (1856-1915) (Wertheim). It is in this case, behavioral disciplines that have shaped
Organizational Behavior into a distinguishable discipline. Within each major category there
exist individual contribution dimensions that carry with it a unit of analysis affecting
the individual, group, and organizational system.

Each of following dimensions has

been assigned to an individual behavioral science (Robbins, Judge, 2007), as follows:

i) Psychology
It is the science or study of behavior and includes human as well as
animal behavior. Intrapersonal aspects of organizational behavior such as
motivation, personality, perception attitude learning, training and development, work
stress, emotions, conflict management owe their study to psychology. Various
psychological tests are conducted in organizations for selection of employees,
measuring personality attributes and ability. Contribution of psychology has enriched
the field of organizational behavior greatly.


ii) Sociology
It is the study of group behavior. Sociology has enriched organizational
behavior in the field of leadership, group dynamics, communication, formal and
informal organizations, group process and decision making.

Social Psychology
This subject is a blend of the concepts from psychology and sociology. It focuses
on the influence of people on one another and tries to achieve better human
behavior in the organization. One of the key areas which it has helped to manage is
Change how to implement it successfully and reduce the resistance to it.

iv) Anthropology
It is the study of human race and its culture. Organizations have their own culture.
Culture influences human behavior. An employees perception about things and his
functioning is influenced by the culture of his organization. Anthropology is more
relevant to organizational behavior today due to globalization, mergers and acquisitions
of various industries. Today the people have to work in organizations having work
force diversity.

Political Science
Organizations are political entities and it is political science which helps in
understanding behaviors of individuals within a political environment. Government rules
and regulations play a decisive role in growth of the organizations.



Managers initiate and design change. They allocate resources and negotiate on behalf of the
organization. Here managers deal with various affairs such as, overseeing new projects, taking
corrective measure in an unforeseen event and discuss issues and bargain with other units to gain
advantages for their own unit. These roles demand a deep understanding of human behavior in
both individual and group forms, and so OB provides us with the means of tackling these issues
with confidence. Understanding OB has never been more important for managers than it is today.
In todays world, the people of earth are much closer than before and managers need to deal with
a vast array of diversities, such as,




Higher demand of customer satisfaction

Coping with rapid changes in technology

Balancing Stress related lifestyle of the workers

Ethical behavior

As a manager, the teachings of Organization Behavior can significantly increase ones personal
sensibilities and outlook on these attributes;


Working with people from different cultures:

What might seem motivating to a manager might not appeal to his workforce at all. Or a
managers style of communication may be straightforward, but the workforce may find it
threatening and uncomfortable. As a manager one must learn how to adapt his managerial style
to their cultural, geographic and religious disparities.



Workforce diversity:

Organizations are increasingly becoming a more heterogeneous mix of people in terms of gender,
race, age, ethnicity and sexual orientation. No longer can these disparities and clichs be ignored,
these people are in the real world educated and ready to work. So mangers must recognize the
fact that they dont leave their lifestyles, cultural values and perception at home, so we as
managers must learn to accommodate this diverse group of people by addressing their different
lifestyles, family needs and work styles.

Customer Service:

Many an organization has failed because its employees failed to please its customers.
Management needs to create a customer-responsive culture. OB can provide considerable
guidance in guidance in helping managers create such cultures- cultures in which employees are
friendlier and courteous, accessible, knowledgeable and prompt in responding to customer needs,
in order to please the patron.


Todays manager needs to create an ethically healthy climate for his employees, where they can
work productively and confront a minimal level of uncertainty regarding what constitutes right
and wrong behavior. Organizational behavior is the path to understanding how elements of the
work place fall into place. As a nascent manager one can develop the self with the help of these
learnings and partake in managerial roles confidently.

By understanding organizational behavior concepts, managers can better understand

and appreciate the behavior of those around them. For example, most managers in an
organization are directly responsible for the work related behaviors of a set of other


people their immediate subordinates. Typical managerial activities in this area include
employees to work harder, ensuring that their jobs are properly designed, resolving
conflicts, evaluating their performance, and helping them set goals to achieve rewards.
The field of organizational behavior abounds with theory and research regarding each of these

Managing Globalisation
Company must learn about many different kinds of factors when they operate
globally. There are problems related to understanding organizational behavior in
different global settings. Organizational behavior becomes especially complex at
a global level because the attitudes, aspirations, and values of the work force
different from country to country. Problems of coordinating the activities of an
organization to match its environment become much more complex as an
organizations activities expand across the globe. In many cases, global
organizations locate in a particular country abroad because this allows them to
operate more effectively, but in doing so, also has major effects on their home
operations. Global learning is the process of acquiring and learning the
skills, knowledge, and organizational behaviors and procedures that have helped
companies abroad become major global competitors. To respond to the global
challenge, more and more companies are rotating their employees to their overseas
operations so they can learn firsthand the problems and opportunities that lie
abroad. Expatriate employees are those who live and work for companies
located abroad. These employees assist their organizations by learning about the
sources of low cost inputs and the best places to assemble their products
throughout the world. Expatriate managers in functions such as research and
development, manufacturing, and sales can take advantage of their presence in a
foreign country to learn the skills and techniques those companies have to offer.




Work Force Diversity

Diversity is important to companies because with a diverse environment
people can benefit and learn from others ideas. Other reasons for the importance of
diversity to many organizations are the recognition of differences as prerequisites
for high performance and continuous improvement, enhancing the effectiveness
and creativity of the organization, and valuing conflicts as opportunities for
more effective decision making and problem solving (Outtz, James L, 2004).
Diversity has a major impact on our behaviors in the work place. Diversity
refers to differences in age, gender, race, ethnicity, religion, sexual orientation,
socioeconomic background, and capabilities/disabilities. The numbers of minorities
and women being hired by organizations is increasing. Diversity is an
important issue because the demographic composition of employees has
changed drastically as more minorities and female employees enter the
workforce. To be successful, organizations need diverse employees as a
resource to improve performance. Experience has shown that the quality of
decision making in terms of diverse employees is richer and broader. Work,
promotions, and rewards must be allocated in a fair and equitable manner.
Managers must interact with employees who differ widely on a number of
characteristics, while avoiding conflict and mistrust among the team members.
Workforce diversity is a necessity for clarity and efficiency of all
organizations. In order to make this work, strategies must be put into place to
make the each organization become a multicultural, diverse workplace. This
process begins with managers but must include assistance from employees
within the corporation.



In working with these individuals, understanding 14 basic issues associated with

leadership, power and political behavior, decision making, organization structure and
design, and organization culture can also be extremely beneficial. Again, the field of
organizational behavior provides numerous valuable insights into these processes. Managers can
also use their knowledge from the field of organizational behavior to better understand
their own behaviors and feelings. For example, understanding personal needs and motives,
how to improve decision making capabilities, how to respond to and control stress, how to better
communicate with others, and the way in which career dynamics unfold can all be of
enormous benefit to individual managers. Organizational behavior once again provides
useful insights into these concepts and processes. Managers must also interact with a
variety of colleagues, peers, and coworkers inside the organization. Understanding attitudinal
processes, individual differences, group dynamics, intergroup dynamics, organization culture,
and power and political behavior can help managers handle such interactions more
effectively. Many useful ideas from the field of organizational behavior have provided a
variety of practical insights into these processes. Finally, managers also interact with
various individuals from outside the organization, including suppliers, customers,
competitors, and government officials, representatives of citizens groups, union officials,
and potential joint venture partners. Virtually all of the behavioral processes
already noted can be relevant. In addition, special understanding of the environment,
technology, and, increasingly, international issues is also of value. Here again, the field of
organizational behavior offers managers many different insights into how and why things

Reality reflects what is going on in all types of organizations public and private,
large and small, product and service oriented. It also reflects the themes of globalization,
diversity, technology, and ethics. Challenges provide opportunities for us to grow and
develop both as individuals and organizations. Challenge and opportunity are watchwords
in organizations during these challenging times. Managers and employees alike are challenged


to positively and optimistically meet change in how work gets done, change in
psychological and legal interactions between individuals and organizations, change in
personnel, and change in the basis for organization. As organizational behavior deals with
understanding and managing people in the workplace, it is important to note that a successful
organization makes use of the various kinds of expertise it possesses in order to enhance
performance and pursues goals in a changing environment by adapting its behavior according to
its knowledge about itself and the world it operates in. Moreover, it is skilled at creating,
acquiring, organizing, and sharing knowledge, and at applying this knowledge to create its
workplace culture. Human behavior influences key areas of management and is a means to an
end for an organization to achieve its goals. The challenge of organizational behavior is to
establish a mechanism for broadscale performance improvement (quantity, quality, customer
satisfaction, and systems analysis) and organizational change so that the employees will be more
productive and happy, and as a result organizations will be more effective and efficient in
achieving their goals by producing significant and measurable outcomes.

1.) https://en.wikipedia.org/wiki/Organizational_behavior
2.) http://www.ukessays.com/essays/business/airasia.php
3.) http://www.academia.edu/4315152/management_airasia
4.) http://www.academia.edu/6792185/A_Study_on_LowCost_Leadership_Strategy_The_Ca
se _of_AirAsia
5.) http://www.thinkingwellconsulting.com/CHALLENGES_MANAGERS_FACE_TODAY.