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Organizational Behavior

Anubha Maurya

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COURSE CONTENT

1. CONTEXT OF ORGANIZATIONAL BEHAVIOUR Meaning and significance of OB; contributing

disciplines; basic assumptions & characteristics

New context of O.B.: Historical evolution

Challenges and opportunities for O.B.: Emergingissues

Framework for O.B.

2 ORGANIZATIONAL ENVIRONMENT

External environment

Organization- environment relationship

Linking environments and organization

Internal environment

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3. ORGANIZATION BEHAVIOUR AND FOUNDATIONCOMPETENCIES

Self competency Communication competency Diversity competency Across culture competency Teams competency Change competency

4.INDIVIDUAL PROCESSES 1: PERSONALITY Meaning; person situation debate; psychological

contracts; ability and aptitude Differences in personality; Heredity, learning, culture as

determinants Personality traits and dimensions: Approaches to

understanding the traits Psychological solving behaviours Personality traits

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5.INDIVIDUAL PROCESSES 2:PERCEPTION

The concept and need for studying

Perceptual organization Perceptual interpretation Attribution process Perceiving others

Comparison of own perception with othersestimation

6. INDIVIDUAL PROCESSES 3:LEARNINGS AND REINFORCEMENT

Meaning and importance; barriers; approaches Cognitive and programmed learnings Sense making Learning styles

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Reinforcement: Positive; negative; contingencies of reinforcement;schedules of reinforcement

Behavior and its modification Transfer of learning through training

7. INDIVIDUAL PROCESSES ATTITUDES AND VALUES Meaning and scope; attitude and behaviour Work attitude Belief & trust Attitudes and values

8. INDIVIDUAL PROCESSES WORK MOTIVATION Meaning; process; need performance link General model; motivation and performance Content model of motivation Process models of motivation Motivation by comparison

Applications of motivation Reward system Behaviour modification; job design and redesign Motivation by employment

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9 INDIVIDUAL PROCESS : WORK STRESS

Meaning, nature and types

Cause of stress; contributing factors Consequences

Management of stress

10. ORGANIZATIONAL DECISION MAKING Nature of decision making

Decision making and managerial process

Problems in decision making process Improving decision making

Models of individual decision making

Employee reactions to organizational decision

making

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Job Specialization and

the Division of Labor

Adam Smith (18th century economist)

Observed that firms manufactured

pins in one of two different ways:- Craft-styleeach worker did all

steps.

- Productioneach workerspecialized in one step.

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First Management Issues of Industry

How do we efficiently organize people at

work with these new technologies of

production and large markets?

How do we hire, pay, and coordinate

people at work to gain productivity?

How do we do all of these to create

economic wealth (profit)?

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The Beginning of Management Pay?

1886 Henry Towne, Pres. of Yale and Town

Manufacturing Co., The Engineer as Economist: How dowe relate work to increasing economic development?

Gain sharing or Towne Plan Link profits to workers

pay: Wage rate + performance incentive All savings incosts were shared with workers.

Halsey Plan: Sharing profits does not work.

Bosses hide profits. Pay people on basis of a wage + 1/3rdpay incentive for higher productivity.

1938 Fair Labor Standards Act set min. wage at 25/hr

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Frederick Taylor Cont.

Biography: Wealthy Philadelphia

1905 wrote Shop Management

1909-14: Lecturer at Harvard

Management consultant US Navy andArmy

1911- Wrote Scientific Management

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F.W. Taylor and Scientific

Management

Scientific Management

The systematic study of the

relationships between people and

tasks for the purpose of redesigning

the work process to increase

efficiency.

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Four Principles of Scientific

Management

1) Study the way workers perform their tasks, gather all theinformal job knowledge that workers possess and experimentwith ways of improving how tasks are performed

Time-and-motion study

In 1895- proposed a Piece Rate System:

Observe & Analyze set the standard for job

(use Time and Motion studies)

Pay workers for meeting/exceeding standard

Pay individual worker not everyone, or group/department, or the job =pay according to individual value to business

What Adam Smith had done for markets, Taylor does

for the firm place wealth creation squarely on the

individual worker who is managed, rewarded for

effort.

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Management

2) Codify the new

methods of

performing tasks

into written rulesand standard

operating

procedures

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Management

3) Carefully select workers who

possess skills and abilities that match

the needs of the task, and train them

to perform the task according to theestablished rules and procedures

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Management

4) Establish a fair or acceptable level of

performance for a task, and then

develop a pay system that provides a

reward for performance above theacceptable level

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Problems with Scientific Management

Managers frequently implemented only the

increased output side of Taylors plan.

Workers did not share in the increased

output. Specialized jobs became very boring, dull.

Workers ended up distrusting the Scientific

Management method. Workers could purposely under-perform.

Management responded with increased use

of machines and conveyors belts.

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Question?

What is the process by which a division of

labor occurs as different workers

specialize in specific tasks over time?

A. Job Diversification

B. Job Sterilization

C. Job SpecificationD. Job Specialization

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2Administrative Management Theory Administrative

Management

The study of how to

create an organizationalstructure that leads to

high efficiency and

effectiveness.

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Administrative Management Theory

Max Weber

Developed the principles of bureaucracy as a

formal system of organization and

administration designed to ensure efficiencyand effectiveness.

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Webers Principles of Bureaucracy

1) A managers formal authority derives

from the position he holds in the

organization.

2) People should occupy positions

because of their performance, not

because of their social standing or

personal contacts.

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3) The extent of each positions formalauthority and task responsibilities andits relationship to other positionsshould be clearly specified.

4) Authority can be exercised effectivelywhen positions are arrangedhierarchically, so employees know

whom to report to and who reports tothem.

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5) Managers must create a well-definedsystem of rules, standard operatingprocedures,

and norms so theycan effectivelycontrol behavior .

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14 - Rules, SOPs and Norms

Rules formal written instructions that specifyactions to be taken under different circumstancesto achieve specific goals

Standard Operating Procedures (SOPs) specific sets of written instructions about how toperform a certain aspect of a task

Norms unwritten, informal codes of conduct that

prescribe how people should act in particularsituations

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Fayols Principles of Management

Division of Labor: allows for job specialization.

jobs can have too much specialization leading to

poor quality and worker dissatisfaction.

Authority and Responsibility both formal and informal authority resulting from

special expertise.

Unity of Command

Employees should have only one boss.

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Line of Authority

A clear chain of command from top tobottom of the firm.

Centralization The degree to which authority rests at the

top of the organization.

Unity of Direction

A single plan of action to guide theorganization.

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Equity - The provision of justice and the fairand impartial treatment of all employees.

Order- The arrangement of employees where

they will be of the most value to theorganization and to provide careeropportunities.

Initiative - The fostering of creativity and

innovation by encouraging employees to acton their own.

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Discipline

Obedient, applied, respectful employees

are necessary for the organization to

function. Remuneration of Personnel

An equitable uniform payment system that

motivates contributes to organizationalsuccess.

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Stability of Tenure of Personnel

Long-term employment is important for the

development of skills that improve the

organizations performance. Subordination of Individual Interest to the

Common Interest

The interest of the organization takesprecedence over that of the individual

employee.

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Esprit de corps

Comradeship (amity), shared

enthusiasm foster devotion to the

common cause (organization).

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Discussion Question?

Which of the following is the most

important aspect of Fayols principles

of management?

A. Division of Labor

B. Unity of Command

C. Remuneration of Personnel

D. Esprit de corps

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Behavioral Management

Mary Parker Follett

Concerned that Taylor ignored thehuman side of the organization

Suggested workers help inanalyzing their jobs

If workers have relevant knowledge

of the task, then they should controlthe task

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The Hawthorne Studies

Studies of how characteristics of the work

setting affected worker fatigue and

performance at the Hawthorne Works of

the Western Electric Company from1924-1932.

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The Hawthorne Studies: New DirectionThe Hawthorne Experiments were a series ofstudies into worker productivity performed at theCicero plant beginning in 1924 and ceasing in 1932,initially conducted by the National Research Counciland later by Western Electric and HarvardUniversity

Illumination Studies, 1924 -1927: Does Use of ElectricLights Increase Productivity?

Hypothesis: Increased illumination is correlated withhigher productivity.

Finding: No relationshipHawthorne effect or "halo effect Researcheraffects outcome (bias)

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2nd Hawthorne Experiment

Relay Assembly Test Room Experiments, 1927-1929Harvard research team set up experiment with 5females from Relay Assembly area to test impact ofincentives and work conditions on worker fatigue

There is no conclusive evidencethat these affected fatigue orproductivity.

Productivity and worker

satisfaction increase whenconditions are improvedand made worse.

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3rd Hawthorne Experiment

Mica-Splitting Test group, 1928 1930

Relationship between work conditions and

productivity, by maintaining a piece-rate incentive

system and varying work conditions

Productivity increased by about 15% and

researchers concluded that productivity was

affected by non-pay considerations

Conclusion: social dynamics were the basis of worker performance.

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Hawthorne : Final Experiment

Bank Wiring Observation group, 1931-1932 The final test studying 14 male workers in the

Bank Wiring factory to study the dynamics of thegroup when incentive pay was introduced.

There was no effect. Why?Work group established a work norm a shared

expectation about how much work should be

performed in a day and stuck to it, regardless of

pay. The conclusion: informal groups operate inthe work environment to manage behavior.

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Hawthorne Experiments - Importance

Changed perspective in management from Taylors engineeringapproach to a social sciences approach, leading to "Human Relations"approach and, later, "Organization Behavior" approach:

Engineering approach subordinated to social sciences

Managers = leaders, motivators, communicators

At one time major contributors to Management theory worked on

Hawthorne experiments. Elton Mayo - Human Relations

approach (to 1950s). Mayos

views lead to the construction

of manager as a leader.

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The Hawthorne Studies

Demonstrated the importance of

understanding how the feelings,

thoughts, and behavior of work-group

members and managers affectperformance

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Question?

What theory assumes the average worker

is lazy, dislikes work and will do as little

as possible?

A. Theory X

B. Theory Y

C. Theory Z

D. Theory QZ

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McGregor: Theory X, Theory Y

Theory Y: Work is as natural as play or rest- not disliked..

Workers will exercise self-direction and

self-control

Meeting goals is satisfying and motivating. . Workers seek responsibility. ...

Workers will be creative and are willing to do more.

Theory X:

The average human inherently dislikes to work, So,

people must be coerced, controlled, directed. Workers prefer this but want security.

The average worker is only partially utilized.

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Willi G O hi

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William G. Ouchi

An American professor and author in the field

of business management He was a pioneer in introducing interactional

leadership theory in his application ofJapanese-style management to corporateAmerica.

Studied the differences between Japanese and

American companies and management styles

Born 1943

Honolulu, Hawaii

He earned a B.A. from WilliamsCollege (1965), an MBA fromStanford University (1967) and a

Ph.D. in Business Administration

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D l t f Th

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Development of Theory z

Has been called a sociological description of thehumanistic organizations advocated by managementpioneers such as Elton Mayo, Chris Argyris, RensisLikert, and Douglas McGregor.

In the 1970s and 1980s, many United States industries

lost market share to international competitors, particularlyJapanese companies.

Concerns about the competitiveness of U. S. companiesled some to examine Japanese management practices for

clues to the success enjoyed by many of their industries.This led to many articles and books purporting to explainthe success of Japanese companies.

It was in this atmosphere that Theory Z was introducedinto the management lexicon.

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Theory Z: How AmericanManagement Can Meetthe Japanese Challenge

His first book in 1981summarized his

observations. It currentlyranks as the seventh mostwidely held book of the 12million titles held in 4000

U.S. libraries.

Differences between American and Japanese

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Differences between American and Japanese

Management Practices

American Organizations Japanese Organizations

Short-term employment Lifetime employment

Individual decision making Collective decision

makingIndividual responsibility Collective responsibility

Rapid evaluation & promotion Slow evaluation &

promotion

Explicit control mechanisms Implicit control

mechanisms

Specialized career paths Non specialized career paths

Segmented concern for

employee as an employee

Holistic concern for

employee as a person

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Characteristics of Theory ZCharacteristics of Theory Z

consensus decision making guarantee of lifetime employment

job security

slower promotions quality circles

establishment of strong bonds of

responsibility between superiorsand subordinates fitting employees totheir jobs

a holistic concern for the workers

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Comparison & Contrast of Theories X Y & Z

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Comparison & Contrast of Theories X, Y & Z

ManagementConcept

Douglas McGregor(Theory X & Y)

William Ouchi(Theory Z)

Leadership Theory X leaders

would be more

authoritarian, while

Theory Y leaders

would be moreparticipative. But in

both cases it seems

that the managers

would still retain a

Theory Z managers

would have to have a

great deal of trust that

their workers could make

sound decisions.Therefore, this type of

leader is more likely to

act as "coach", and let

the workers make most

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4

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4Management Science Approach Post World War II British use of mathematics,Operations Research, in military operations find

applications in US post war industrial development.

Quantitative management use of mathematicmodels, linear programming, simulation systems and chaos

theory to solve management problems.

Operations management techniques used to analyzeall aspects of the production system.

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Management Science Approach- Cont.

Total Quality Management (TQM)

analyzinginput, conversion, and output

to increase product quality.

Management Information Systems(MIS) provides information vital for

effective decision making

M S i Th

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Management Science Theory

Contemporary approach to management

that focuses on the use of rigorous

quantitative techniques to help

managers make maximum use oforganizational resources to produce

goods and services.

5

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5Organizational Environment Theory

Organizational Environment

The set of forces and conditions that

operate beyond an organizationsboundaries but affect a managers ability

to acquire and utilize resources

Th O S t Vi

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The Open-Systems View

Open System

A system that takes resources for its

external environment and transforms

them into goods and services that arethen sent back to that environment

where they are bought by customers.

Th O S t Vi

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The Open-Systems View

Inputs: the acquisition of external resources

to produce goods and services

Conversion: transforms the inputs into

outputs of finished goods and services. Output: the release of finished goods and

services to its external environment.

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Systems Approach

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Figure 2.4

Cl d S t

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Closed System

A self-contained system that is not

affected by changes in its external

environment.

Likely to experience entropy and lose itsability to control itself

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C ti Th

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Contingency Theory

There is no one best way to organize

The idea that the organizational

structures and control systems manager

choose depend onare contingent oncharacteristics of the external

environment in which the organization

operates.

C ti Th

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Contingency Theory

Figure 2.5

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Contingency Approach

There is no one best way.

Organizing (and other) decisions that match the

demands of the environment provide adaptation.

Type of Structure

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Type of Structure

Mechanistic Structure Authority is centralized at the top.

Emphasis is on strict discipline and order

Employees are closely monitored andmanaged.

Can be very efficient in a stable

environment.

Type of Structure

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Type of Structure

Organic Structure Authority is decentralized throughout

the organization.

Departments are encouraged to take across-departmental or functionalperspective

Works best when environment isunstable and rapidly changing

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What is organizational behavior

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g

and why is it important?

Organizational behavior.

Study of individuals and groups in organizations.

Emphasizes high performance organizations.

Occurs in a global context. Dimensions of individual and group behavior.

Nature of organizations.

Core processes.

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So-What does a manager do?

It depends on where they are in the

organization:

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What do Top Managers Do?

Myth FactWork is reflective andinvolve systematicplanning.

Work is action oriented, stressedimmediate response, and work wasVaried.

No Regular Duties Duties are ritual and ceremonial,negotiations, and processing softinformation

Relies on formal MIS for

decision-making

Favor verbal, immediate information

even informal, soft data which isprocessed into coherent picture

Management is aScience

Relies on judgment and intuition toMake decisions

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What is the nature of managerial work?

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HENRY MINTZBERG MODEL

Managerial roles. Interpersonal roles.

Figurehead. (Diploma, tour in plant)

Leader. (Handling subordinates)

Liaison. (Acknowledgement of mails,externalwork

Informational roles.

Monitor (Internal External Info)

Disseminator. (Forward) Spokesperson. (Board meeting)


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Decisional roles.

Entrepreneur. (Strategy and review)

Disturbance handler. (Strategy and

review) Resource allocator. (Scheduling,

budgeting)

Negotiator. (Contract Negotiation)


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Managerial networks.

Task networks.

Specific job-related contacts.

Career networks.

Career guidance and opportunity

resources.

Social networks.

Trustworthy friends and peers.


ROBERT KATZ

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ROBERT KATZ

Managerial skills and competencies.

A skill is an ability to translate knowledge into

action that results in a desired performance.

Categories of skills:

Technical.( Ability to apply special knowledge)

Human.( Ability to work with, understand and

motivate people)

Conceptual. Mental ability to analyze anddiagnoise complex situation)


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Managerial skills and competencies cont.

Technical skills are relatively more

important at entry levels. Human skills are consistently important

across all managerial levels.

Conceptual skills are relatively moreimportant at top management levels.

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Managerial skills and competencies cont.

Conceptual skills.

An ability to see and understand how thesystem works, and how the parts are

interrelated.

Used to:

Identify problems and opportunities.

Gather and interpret relevant information.

Make good problem-solving decisions.

Effective Employees

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Effective Employees

Absenteeism Failure to report to work

Turnover

Voluntary and involuntary permanent withdrawalfrom the organization

Organizational citizenship behaviour

Discretionary behaviour that is not part of an

employees formal job requirements, but is helpfulto the organization

Productivity

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Productivity

Productivity A performance measure including

effectiveness and efficiency

Effectiveness Achievement of goals

Efficiency The ratio of effective work output to the

input required to produce the work

Challenges Facing the Workplace

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Workplace

Organizational Level

Productivity Developing Effective Employees

Global Competition Managing in the Global Village

Group Level

Working With Others Workforce Diversity

Individual Level

Job Satisfaction Empowerment Behaving Ethically

Contributing Disciplines to the OB

Fi ld

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Field

Psychology

Sociology

Social Psychology Anthropology

Political Science

Toward an OB DisciplineBehavioural

scienceContribution Unit of

analysisOutput

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Social psychology

Psychology

science analysis

Anthropology

Sociology

Political science

Study of

Organizational

Behaviour

Organization

system

Learning

Motivation

Perception

Training

Leadership effectiveness

Job satisfaction

Individual decision makingPerformance appraisal

Attitude measurement

Employee selection

Work design

Work stress

Group dynamics

Work teams

Communication

Power

Conflict

Intergroup behaviour

Formal organization theory

Organizational technology

Organizational change

Organizational culture

Conflict

Intraorganizational politics

Power

Organizational culture

Organizational environment

Behavioural change

Attitude change

Communication

Group processes

Group decision making

Group

Comparative values

Comparative attitudes

Cross-cultural analysis

Individual

Beyond Common Sense

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Beyond Common Sense

Systematic Study Looking at relationships, attempting to

attribute causes and effects and drawingconclusions based on scientific evidence

Behaviour is generally predictable

There are differences between individuals

There are fundamental consistencies

There are rules (written & unwritten) inalmost every setting

Summary and Implications

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Summary and Implications

OB is a field of study that investigates theimpact that individuals, groups, and structure

have on behaviour within an organization.

OB focuses on improving productivity,reducing absenteeism and turnover, and

increasing employee job satisfaction and

organizational commitment.

OB uses systematic study to improvepredictions of behaviour.

Exhibit 1-5

C ti V l F k

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Competing Values Framework

Flexibility

Control

InternalFocus

ExternalF

ocus

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Skills in the New Workplace

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Flexibility

Control

Mentor Innovator

BrokerFacilitator

Monitor Producer

Coordinator DirectorIntern

al

Focu

sExternalFoc

us


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Source: R.E. Quinn. Beyond Rational Management. San Francisco: Jossey-Bass Inc.,1988, p. 48.

Flexibility

Control

MENTOR INNOVATOR

Living with change

Creative thinkingManaging change

FACILITATOR

BROKER

MONITOR PRODUCER

COORDINATORDIRECTOR

Understanding yourself andothersInterpersonal communicationDeveloping subordinates

ExternalInternal

Receiving andorganizing infoEvaluating routineinfoResponding toroutine info Planning

OrganizingControlling

Team buildingParticipativedecision makingConflictmanagement

Building and maintaininga power baseNegotiating agreementand commitmentNegotiating and sellingideas

Personalproductivity andmotivationMotivating othersTime and stressmanagement

Taking initiativeGoal settingDelegating effectively

How Companies are Changing

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Cool companies

Think casual Fridays are pitiful

Believe titles are obsoleteDon't impose on employees' personal

time

Allow staff to come and go as they

please

Offer all employees stock options

Let employees make decisionsOffer assistance with childcare

Have minimal bureaucracy

Old companies

Believe casual days are

progressive Charge employees for parks and

incentives

Hold events on employee time

Have flex time: but only between

7:30 a.m. and 6:30 p.m.

Hide financial results from theiremployees

Encourage employee input -- but

rarely act on it

Employ rigid hierarchies

Stop at open door policies


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Managers:

Perform jobs that involve directly supporting

the work efforts of others.

Help other people get important things done

in timely, high-quality, and satisfying ways.

Assume roles such as coordinator, coach,

or team leader.

How do ethics influence human behavior in

organizations?

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organizations?

Ethical behavior. Good and right as opposed to bad or

wrong in a particular setting.

Ways of thinking about ethical behavior. Utilitarian view.

Individualism view.

Moral rights view. Justice view.


organizations?

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organizations?

Ethical dilemmas in the workplace. Nature of an ethical dilemma.

Ethical dilemmas occur in relationships with:

Superiors. Subordinates.

Customers.

Competitors.

Suppliers.

Regulators.


organizations?

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organizations?

Ethical dilemmas in the workplace cont. Rationalizations for unethical behavior:

Pretending the behavior is not really unethicalor illegal.

Saying the behavior is really in theorganizations or persons best interest.

Assuming the behavior is acceptable if othersdont find out about it.

Presuming that superiors will support andprotect you.

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organizations?

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organizations?

Work and the quality of life. Quality of work life (QWL).

The overall quality of human experiencein the workplace.

QWL commitment reflects an endorsementof Theory Y assumptions.

Work-life balance.

Job demands should fit personal life andnonwork responsibilities.

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OB IIPM

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