Chapter 1Chapter 1The Dynamics of people and The Dynamics of people and

organizationsorganizations

CHAPTER OBJECTIVECHAPTER OBJECTIVETO UNDERSTANDTO UNDERSTANDThe Meaning of Organizational BehaviorThe Meaning of Organizational BehaviorThe Key Goals and Forces with Which It Is The Key Goals and Forces with Which It Is ConcernedConcernedBasic Concepts of Organization BehaviorBasic Concepts of Organization BehaviorMajor Approaches Taken in This BookMajor Approaches Taken in This BookHow Organizational Behavior Affects How Organizational Behavior Affects Organizational performanceOrganizational performanceLimitations of Organization BehaviorLimitations of Organization Behavior

UNDERSTANDING UNDERSTANDING ORGANIZATIONAL BEHAVIORORGANIZATIONAL BEHAVIOR

In order provide an understanding In order provide an understanding of what goes on at the work place, we of what goes on at the work place, we begin with the definition, goals, begin with the definition, goals, forces, and major characteristic of an forces, and major characteristic of an organizational behavior (OB). Later in organizational behavior (OB). Later in the chapter we introduce the key the chapter we introduce the key concepts that OB deals with, lay out concepts that OB deals with, lay out the for basic approaches taken in this the for basic approaches taken in this book, and identify some factors that book, and identify some factors that limit the success of OB.limit the success of OB.

DefinitionDefinition

Organizational behavior is the study Organizational behavior is the study and application of knowledge how people and application of knowledge how people – as individual and as groups – act within – as individual and as groups – act within organizations. It strives to identify ways in organizations. It strives to identify ways in which people can act more effectively. which people can act more effectively. Organizational behavior is scientific Organizational behavior is scientific discipline in which a large number of discipline in which a large number of research studies and conceptual research studies and conceptual development are constantly adding to its development are constantly adding to its knowledge base. It is also an applied knowledge base. It is also an applied science, in that information about science, in that information about effective practices in one organization is effective practices in one organization is being extended to many others. being extended to many others.

GoalsGoals

Most sciences share four goals – to Most sciences share four goals – to describe, understand, predict, and control describe, understand, predict, and control some phenomena. These are also the some phenomena. These are also the goals of organizational behavior. The first goals of organizational behavior. The first objective is to describe, systematically, objective is to describe, systematically, how people behave under variety of how people behave under variety of conditions. Achieving this goal allows conditions. Achieving this goal allows managers to communicate about human managers to communicate about human behavior at work using a common behavior at work using a common language. For example, one benefit from language. For example, one benefit from the study of this book is the acquisition of the study of this book is the acquisition of a new vocabulary about organizational a new vocabulary about organizational behavior (see, for example, the Glossary at behavior (see, for example, the Glossary at the end of this book).the end of this book).

ForcesForces

A complex set of affects the A complex set of affects the nature of organizations today. A nature of organizations today. A wide array of issues and trends in wide array of issues and trends in these forces can be classified into these forces can be classified into four areas – people , structure, four areas – people , structure, technology, and the environment technology, and the environment in which the organization in which the organization operatesoperates

Key forces affecting organizational Key forces affecting organizational behaviorbehavior

Environment• Government• Competition• Social pressures

People•Individuals•Groups

Technology•Machinery•Computer hard and software

Structure•Job•Relationship

Organizational behavior

PeoplePeople

People make up the internal social People make up the internal social system of organization. That system system of organization. That system consists of individuals and groups, and consists of individuals and groups, and large groups as well as small ones. There large groups as well as small ones. There are unofficial, informal groups and more are unofficial, informal groups and more official , formal ones. Groups are dynamic. official , formal ones. Groups are dynamic. They form, change, and disband. People They form, change, and disband. People are the living, thinking, feeling beings are the living, thinking, feeling beings who work in the organization to achieve who work in the organization to achieve their objectives. We must remember that their objectives. We must remember that organizations exits to serve people, rather organizations exits to serve people, rather than people existing to serve than people existing to serve organizations.organizations.

StructureStructure

Structure defines the formal Structure defines the formal relationship and use of people in relationship and use of people in organizations. Different jobs are required organizations. Different jobs are required to accomplish all of an organization’s to accomplish all of an organization’s activities. There are managers and activities. There are managers and employees, accountants and assemblers. employees, accountants and assemblers. These people have to be related in some These people have to be related in some structural way so that their work can be structural way so that their work can be effectively coordinated. These relationships effectively coordinated. These relationships create complex problems of cooperation, create complex problems of cooperation, negotiation, and decision making.negotiation, and decision making.

TechnologyTechnology

Technology provides the Technology provides the resources with which and affect the resources with which and affect the task that they perform. They can not task that they perform. They can not accomplish much with their bare accomplish much with their bare hands, so they build buildings, design hands, so they build buildings, design machines, create work processes, machines, create work processes, and assemble resources. The and assemble resources. The technology used has a significant technology used has a significant influence on working relationships. influence on working relationships.

EnvironmentEnvironment

All organizations operate within an All organizations operate within an internal and an external environment. A internal and an external environment. A single organization does not exist alone. It single organization does not exist alone. It is part of a large system that contains is part of a large system that contains many other elements such as many other elements such as government, the family, and other government, the family, and other organizations. Numerous changes in the organizations. Numerous changes in the environment create demands on environment create demands on organization. Citizens expect organization organization. Citizens expect organization to be socially responsible; new product to be socially responsible; new product and competition for customer come from and competition for customer come from around the globe; the direct impact of around the globe; the direct impact of unions (as measured by the proportion of unions (as measured by the proportion of the labor force that s unionized) the labor force that s unionized) diminishes; the dramatic pace of change diminishes; the dramatic pace of change in society quickens.in society quickens.

Positive Characteristic Positive Characteristic of the Organizational of the Organizational

behavior Fieldbehavior Field

TheoriesTheories

Theories offer explanations of how Theories offer explanations of how and why people think, feel and act as they and why people think, feel and act as they do. Theories identify important variables do. Theories identify important variables and link them to form tentative and link them to form tentative propositions that can be tested through propositions that can be tested through research. Good theories are also practical – research. Good theories are also practical – they address significant behavioral issues, they address significant behavioral issues, they contribute to our understanding, and they contribute to our understanding, and they provide guidelines for managerial they provide guidelines for managerial thought and action. You will be introduced thought and action. You will be introduced to several practical and interesting to several practical and interesting theories in this book, presented in a theories in this book, presented in a straightforward fashion.straightforward fashion.

ResearchResearch

Research is the process of gathering Research is the process of gathering and interpreting relevant evidence that and interpreting relevant evidence that will either support a behavioral theory or will either support a behavioral theory or help change it. Research hypothesis are help change it. Research hypothesis are testable statements connecting the testable statements connecting the variables in a theory, and they guide the variables in a theory, and they guide the process of data collection. Data are process of data collection. Data are generated through various research generated through various research methods, suck as case studies, field and methods, suck as case studies, field and laboratory experiments, and serveys. The laboratory experiments, and serveys. The results of these research studies as results of these research studies as reported in various journal, can affect reported in various journal, can affect both the theory being examined and both the theory being examined and future managerial practices.future managerial practices.

Neither research nor theory can Neither research nor theory can stand alone and be use full, however stand alone and be use full, however Manager apply the theoretical models to Manager apply the theoretical models to structure their thinking ; they use structure their thinking ; they use research results to provide relevant research results to provide relevant guides to their own situations. In these guides to their own situations. In these ways, there is a natural and healthy flow ways, there is a natural and healthy flow from theory and research to practice, from theory and research to practice, which is the conscious application of which is the conscious application of conceptual models and research results conceptual models and research results in order to improve individual and in order to improve individual and organizational performance at work organizational performance at work

The interaction of theory, research, The interaction of theory, research, and practice in organizational and practice in organizational

behavior, and sample sources for behavior, and sample sources for eacheach

Practice

Theory Research

FUNDAMENTAL CONCEPTSFUNDAMENTAL CONCEPTSEvery field of social science, or even Every field of social science, or even

physical science, has a philosophical foundation physical science, has a philosophical foundation of basic concepts that guide its development. In of basic concepts that guide its development. In accounting, for example, a fundamental concept accounting, for example, a fundamental concept is that “for every debit there will be credit”. The is that “for every debit there will be credit”. The entire system of double entry accounting was entire system of double entry accounting was built on this equation when that system built on this equation when that system replaced single entry bookkeeping many years replaced single entry bookkeeping many years ago. In physic, a basic belief is that elements of ago. In physic, a basic belief is that elements of nature are uniform. The law of gravity operate nature are uniform. The law of gravity operate uniformly in Tokyo and London, and an atom of uniformly in Tokyo and London, and an atom of hydrogen is identical in Moscow and hydrogen is identical in Moscow and Washington, D.C. Even though such uniformity Washington, D.C. Even though such uniformity cannot be applied to people, certain basic cannot be applied to people, certain basic concepts regarding human behavior do existconcepts regarding human behavior do exist

The Nature of PeopleThe Nature of PeopleIndividual differences is supported by Individual differences is supported by

science. Each person is different from all others, science. Each person is different from all others, probably in million of ways, just as each probably in million of ways, just as each person’s DNA profile is different, as far we person’s DNA profile is different, as far we know. And these differences are usually know. And these differences are usually substantial rather than meaningless. Think, for substantial rather than meaningless. Think, for example, of a person’s billion brain cells and the example, of a person’s billion brain cells and the billions possible combinations of connection and billions possible combinations of connection and bits of experience that are stored there. All bits of experience that are stored there. All people are different, and this diversity needs to people are different, and this diversity needs to be recognized and viewed as a valuable asset be recognized and viewed as a valuable asset to organizations.to organizations.

Individual differences require that a Individual differences require that a manager’s approach to employees be manager’s approach to employees be individual, not statistical. This belief that each individual, not statistical. This belief that each person is different from all others is typically person is different from all others is typically called the law of individual differences called the law of individual differences

PerceptionPerception

People look at the world and see People look at the world and see things differently. Even when presented things differently. Even when presented with the same object, two people may with the same object, two people may view it in two different ways. Their view view it in two different ways. Their view of their objective environment is filtered of their objective environment is filtered by perception, which is the unique way by perception, which is the unique way in which each person sees, organizes, in which each person sees, organizes, and interprets things. People use an and interprets things. People use an organized framework that they have organized framework that they have built out of a lifetime of experiences built out of a lifetime of experiences and accumulated values. Having unique and accumulated values. Having unique views is another way in which people views is another way in which people insist on acting like human beings insist on acting like human beings rather than rational machines.rather than rational machines.

A whole personA whole person

Although some organizations may Although some organizations may wish they could employ only a person’s wish they could employ only a person’s skill or brain, they actually employ a whole skill or brain, they actually employ a whole person rather than certain characteristics. person rather than certain characteristics. Different human traits may be studied Different human traits may be studied separately, but in the final analysis they separately, but in the final analysis they are all part of one system making up whole are all part of one system making up whole person. Skill does not exist apart from person. Skill does not exist apart from background or knowledge. Home life is not background or knowledge. Home life is not totally separable from work life, and totally separable from work life, and emotional conditions are not separate from emotional conditions are not separate from physical conditions people function as total physical conditions people function as total human beings.human beings.

Motivated BehaviorMotivated Behavior

From psychology we learn that From psychology we learn that normal behavior has certain causes. normal behavior has certain causes. These may relate to a person’s needs These may relate to a person’s needs or the consequences that result from or the consequences that result from acts. In the casw of needs, people are acts. In the casw of needs, people are motivated not by what we think they motivated not by what we think they ought to have but by what they ought to have but by what they themselves want. To an out side themselves want. To an out side observer, a person’s needs may be observer, a person’s needs may be unrealistic, but they are still unrealistic, but they are still controlling. controlling.

This fact leaves management with This fact leaves management with two basic ways to motivate people. It can two basic ways to motivate people. It can show them how certain actions will show them how certain actions will increase their need fulfillment, or it can increase their need fulfillment, or it can threaten decreased need fulfillment if they threaten decreased need fulfillment if they follow an undesirable course of action. follow an undesirable course of action. Clearly, a path toward increased need Clearly, a path toward increased need fulfillment is the better approach. fulfillment is the better approach. Motivation is essential to the operation of Motivation is essential to the operation of organizations. No matter how muck organizations. No matter how muck technology and equipment an organization technology and equipment an organization has, these resources cannot be put to use has, these resources cannot be put to use until they are released and guide by until they are released and guide by people who have been motivated. people who have been motivated.

Desire for involvementDesire for involvement

Many employees to day are Many employees to day are actively seeking opportunities at actively seeking opportunities at work to become involved in work to become involved in relevant decision, there by relevant decision, there by contributing their talents and contributing their talents and ideas to the organization’s ir skills ideas to the organization’s ir skills and success.and success.

Value of the PersonValue of the Person

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

The nature of OrganizationThe nature of Organization

Social systemSocial system

From sociology we learn that From sociology we learn that organizations are social systems; organizations are social systems; consequently, activities therein are consequently, activities therein are governed by social laws as well as governed by social laws as well as psychological laws. Just as people have psychological laws. Just as people have psychological needs, they also have psychological needs, they also have social roles and status. Their behavior is social roles and status. Their behavior is influenced by their group as well as by influenced by their group as well as by their individual drives. In fact, two types their individual drives. In fact, two types of social systems exist side by side in of social systems exist side by side in organizations. One is the formal social organizations. One is the formal social system, and the informal social system.system, and the informal social system.

Mutual InterestMutual Interest

Organizations need people, Organizations need people, and people need organizations. and people need organizations. Organizations have a human Organizations have a human purpose. They are formed and purpose. They are formed and maintained on the basic of maintained on the basic of some mutuality of interest some mutuality of interest among their participantsamong their participants

EthicsEthics

In order to attract and retain valuable In order to attract and retain valuable employees in an era in which good employees in an era in which good workers are constantly recruited away, workers are constantly recruited away, ethical treatment is necessary. To succeed ethical treatment is necessary. To succeed organization must treat employees in an organization must treat employees in an ethical fashion. More and more firm are ethical fashion. More and more firm are recognizing this need and are responding recognizing this need and are responding with a variety of program to ensure a with a variety of program to ensure a higher standard of ethical performance by higher standard of ethical performance by managers and employees alike. managers and employees alike. Companies have astablished codes of Companies have astablished codes of ethics, publicized statement ò ethical ethics, publicized statement ò ethical values, provided ethics training, rewaeded values, provided ethics training, rewaeded employees for notable ethical behavior, employees for notable ethical behavior, publicized positive role models, and set up publicized positive role models, and set up internal procedures to handle misconduct.internal procedures to handle misconduct.

Mutual interest provides a Mutual interest provides a superordinate goal for employees, the superordinate goal for employees, the organization, and socityorganization, and socity

Employee goals

Superordinategoal of mutual

iterrest

Organizational goals

Ethics

MutualAccomplishment

of goals

Employee

Organization

Society

Basic approaches of this bookBasic approaches of this bookOrganization behavior seeks to Organization behavior seeks to

integrate the four elements of integrate the four elements of people, structure, technology, and people, structure, technology, and environment. It rests on an environment. It rests on an interdisciplinary foundation of interdisciplinary foundation of fundamental concepts about the fundamental concepts about the nature of people and organizations. nature of people and organizations. The four basic approaches- human The four basic approaches- human resources, contingency, results- resources, contingency, results- oriented, and systems- are oriented, and systems- are interwoven throughout subsequent interwoven throughout subsequent chapterchapter

A Human resources (Supportive) ApproachA Human resources (Supportive) ApproachThe human resources approach is The human resources approach is

developmental. It is concerned with the developmental. It is concerned with the growth and development of people growth and development of people toward higher levels of competency, toward higher levels of competency, creativity, and fulfillment, because creativity, and fulfillment, because people are the central resources in any people are the central resources in any organization and any society. The nature organization and any society. The nature of the human resources approach can be of the human resources approach can be understood by comparing it with the understood by comparing it with the traditional management approach of the traditional management approach of the early 1900s. in the traditional approach, early 1900s. in the traditional approach, manager decided what should be done manager decided what should be done and then closely controlled employees to and then closely controlled employees to ensure task performance. Management ensure task performance. Management was directive and controlling.was directive and controlling.

A Contingency ApproachA Contingency Approach

Different managerial behaviors are Different managerial behaviors are required by different environments for required by different environments for effectivenesseffectiveness

Results- orientedResults- oriented

Outcomes of organization behavior Outcomes of organization behavior programs are assessed in term of their programs are assessed in term of their efficiencyefficiency

SystemsSystems

All parts of an organization interact in a All parts of an organization interact in a complex relationshipcomplex relationship

Cost- benefit analysis of organizational Cost- benefit analysis of organizational behavior optionsbehavior options

Propossed OB actions

Potential costs

Potential benefits

Compare Decide

LIMITATIONS OF LIMITATIONS OF ORGANIZATIONAL BEHAVIORORGANIZATIONAL BEHAVIOR

Behavior BiasBehavior Bias

People who lack system understanding may People who lack system understanding may develop a behavior bias, which gives them develop a behavior bias, which gives them a narrow viewpoint that emphasizes a narrow viewpoint that emphasizes satisfying employee experiences while satisfying employee experiences while overlooking the broader system of the overlooking the broader system of the organization in relation to all its publics. organization in relation to all its publics. This condition is a reflection of tunnel This condition is a reflection of tunnel vision, in which people have narrow vision, in which people have narrow viewpoint, as if they were looking through viewpoint, as if they were looking through a tunnel. They see only the tiny view at a tunnel. They see only the tiny view at the other end of the tunnel while missing the other end of the tunnel while missing the broader landscapethe broader landscape

The Law of Diminishing ReturnsThe Law of Diminishing ReturnsOveremphasis on an organization Overemphasis on an organization

behavior practice may produce behavior practice may produce negative results, as indicated by the negative results, as indicated by the law of diminishing returns. It is a law of diminishing returns. It is a limiting factor in organizational limiting factor in organizational behavior the same way that it is in behavior the same way that it is in economics. In economics the law of economics. In economics the law of diminishing returns refers to a diminishing returns refers to a declining amount of extra outputs declining amount of extra outputs when more of a desirable input is when more of a desirable input is added to an economic situation. After added to an economic situation. After a certain point, the output eventually a certain point, the output eventually may reach zero and even continue to may reach zero and even continue to decline when more units of input are decline when more units of input are added.added.

The law of diminishing returns in The law of diminishing returns in organizational behavior works in a organizational behavior works in a similar way. It states that at some similar way. It states that at some point, increase of a desirable practice point, increase of a desirable practice produce declining returns, eventually produce declining returns, eventually zero returns, and then negative returns zero returns, and then negative returns as more increase are added. The as more increase are added. The concept implies that for any situation concept implies that for any situation there is an optimum amount of a there is an optimum amount of a desirable practice, such as recognition desirable practice, such as recognition or participation. When that point is or participation. When that point is exceeded, there is a decline in returns. exceeded, there is a decline in returns. In other words, the fact that a practice In other words, the fact that a practice is desirable does not mean that more of is desirable does not mean that more of it is more desirable. More of a good it is more desirable. More of a good thing is not necessarily good.thing is not necessarily good.

Unethical Manipulation of peopleUnethical Manipulation of people

A significant concern about A significant concern about organizational behavior is that organizational behavior is that its knowledge and techniques its knowledge and techniques can be used to anipulate people can be used to anipulate people unethically as well as to help unethically as well as to help them develop their potential.them develop their potential.

The philosophy of organizational The philosophy of organizational behavior is supportive and behavior is supportive and oriented toward human oriented toward human resources.resources.

Ethics leadership will recognize such Ethics leadership will recognize such principles as the following:principles as the following:

Social responsibility: Responsibility to Social responsibility: Responsibility to other arises whenever people have other arises whenever people have power in an organizationpower in an organization

Open communication: the Open communication: the organization shall operate as a two-organization shall operate as a two-way, open system, with open receipt way, open system, with open receipt of inputs from people and open of inputs from people and open disclosure of its operations to themdisclosure of its operations to them

Cost- benefit analysis: In addition to Cost- benefit analysis: In addition to economic costs and benefits, human economic costs and benefits, human and social cost and benefits of an and social cost and benefits of an activity shall be analyzed in activity shall be analyzed in determining whether to proceed with determining whether to proceed with the activity.the activity.

CONTINUING CHALLENGESCONTINUING CHALLENGES

Seeking Quick FixesSeeking Quick Fixes

One problem that has plagued One problem that has plagued organizational behavior has been organizational behavior has been the tendency for business firms to the tendency for business firms to have short time horizons for the have short time horizons for the excepted pay off from behavioral excepted pay off from behavioral programs. This search for a quick programs. This search for a quick fix sometimes leads managers to fix sometimes leads managers to embrace the newest fad, to embrace the newest fad, to address the systems while address the systems while neglecting underlying problemneglecting underlying problem..

Varying EnvironmentsVarying Environments

Another challenges that confronts Another challenges that confronts organizational behavior is to see organizational behavior is to see whether the ideas that have whether the ideas that have been developed and tested been developed and tested during periods of organizational during periods of organizational growth and economic plenty will growth and economic plenty will endure with equal success under endure with equal success under new conditions.new conditions.

Lack of single DefinitionLack of single Definition

Organizational behavior, as a Organizational behavior, as a relatively new discipline, has relatively new discipline, has experienced some difficulty experienced some difficulty emerging as a clearly defined emerging as a clearly defined field of study and applicationfield of study and application