UNIT-1

INTRODUCTION

1.1 Organizational Behavior- concept and definition

Organizational Behavior (OB) is the study of human behavior in organizational settings, the interface between human behavior and the organization, and the organization itself. It is the study and application of knowledge about how people as individuals and as groups behave or act in organizations. It revitalizes organizational theory and develops a better conceptualization of organizational life.

According to Fred Luthans, “OB is directly concerned with the understanding, prediction and control of human behavior in organizations.”

According to L. M. Prasad, “Organizational Behavior can be defined as the study and application of knowledge about human behavior related to other elements of an organization such as structure, technology and social systems”.

According to Davis and Newstram, “Organizational Behavior is the study and application of knowledge about how people act within organizations”.

To sum up, OB is concerned with the study of how and what people act in organizations and also how their acts affect the performance of the organization. It also applies the knowledge gained about individuals, groups and the effect of structure on human behavior in order to make organizations work more effectively.

1.2 Features of Organizational Behavior

• It is a Separate Field of Study: Organizational behavior has evolved as a separate field of study due to the relevance of human behavior in an organization. OB has a multi-disciplinary orientation and thus not based on a specific theoretical background. There are many issues as regards human behavior which needs to be studied separately.
• It has an Interdisciplinary Approach: Organization behavior has drawn concepts from different disciplines like psychology, anthropology and sociology.
• It is a part of Applied Science: The very nature of OB is applied. OB applies various researches to solve the organizational problems related to human behavior.
• It has a Humanistic and Optimistic Approach: OB applies humanistic approach towards the employees in an organization. It deals with the thinking and feeling of human beings. It also realizes that employees actually possess innate capabilities which can be actualized if they are given proper conditions and environment.
• It is a Total System Approach: The system approach is one which integrates all the variables affecting organizational functioning. OB studies all those variables to study the complexity man possess.

1.3 Scope of Organizational Behavior

The scope of Organizational Behavior includes people, technology, structure and social systems which may be briefly discussed as under:

People: People refer to the individuals and groups which are evident in an organization. The study of individual behavior, the behavior exhibited by the different groups present in an organization comprises an important element in organizational behavior studies.

Technology: Technology means the equipment’s, machines, technology used by the people who are working in the organization.

Structure: Structure represents the relationships between the people working in the organization. The relationship may be hierarchical like boss subordinate or between same positions or between different departments.

Social Systems: Organization doesn’t operate alone; it does exist in a society which the organization needs to take care of the values and beliefs of the society. The organization also needs to interact with the society where it does business. Organization is just a part of the large supra system consisting of many elements.

Key Takeaway

1. OB is the study and application of knowledge about how people- as individuals and groups- behave at work places.
2. The scope of OB includes the study of individuals, groups and organization/structure.

1.4 Historical development of organizational behavior

Although there are traces to the effect that behavioral approaches had existed in the ancient Egypt as early as in 1700 BC, its actual origin could not be traced beyond doubt. However, behavioral scientists actually tried to chronicle the growth of OB only from the beginning of the 19th century. The hitherto development in behavioral thought can be presented under the following stages for the sake of convenience of analysis: 1) industrial revolution, 2) scientific management, 3) human relations movement and  Hawthorne Studies.

These are discussed in brief below:

1) The Industrial revolution (1776) led to increase in production that eventually gave workers increased wages followed by increased job satisfaction and decreasing work hours. In this new environment, Robert Owen, a young Welsh Factory owner, about the year 1800, was one of the first to emphasize the human needs of employees. Though it could hardly be called organization behavior, but it was the beginning of modern organization behavior. That is why he was called the ‘father of personnel administration’ by an early writer Frank Podmore.

In 1835, Andrew Ure, a pioneering behavioral scientist, in his published work on The Philosophy of Manufacturers, recognized human factor, beside mechanical and commercial parts of manufacturing.

In India also, J.N. Tata took a special interest in the welfare of his workers.

2) Then came the era of scientific management in the early 1900s, introduced by Frederick Winslow Taylor. He converted broad generalizations into practical and scientific manners which paved the way for later development of organizational behavior. His work eventually led to improved recognition and productivity for industrial workers.

3) Improving scientific management principles, the human relations movement was developed around 1920. Elton Mayo, an Australian psychologist and organizational theorist, began his research on human behavior in groups and how it affects individuals in the workplace, through the Hawthrone Studies. Unlike Talyor’s scientific management, Mayo’s theory popularized the idea of ‘social person’, meaning organizations should treat people as individuals with individual needs and not as machines.

The period between 1920 and 1950 was witnessed as the human relations movement period which further contributed in the development of organizational behavior studies. Scholars like Elton May, Chester Barnard, Henry Fayol, Mary Parker Follet, and many others contributed to the development and growth of organizational behavior as a discipline. However, Herbert Sinon’s Administrative Behavior introduced a number of important concepts such as decision making into the field of organizational behavior.

In 1960’s and 1970’s the field of organizational behavior started gaining more importance by the introduction of concepts like informal organization, resource dependence, Contingency theory, Institutional theory and organizational ecology.

In the starting of 1980’s, organizational change and organizational culture became another area of study under organizational behavior.

Key Takeaway

1. The actual origin of OB could not be traced. The hitherto development in behavioral thought can be studied under three stages for the sake of convenience of analysis: 1) industrial revolution, 2) scientific management, 3) human relations movement and Hawthorne Studies.
    

1.5 Environmental Context of OB

Environmental context for OB is markedly different from past. Management is forced to rethink approaches to operations and human resources because of: Information technology, globalization, diversity and ethics. Organization has to respond to its environment- both external and internal. Let us study the following in brief:

Information Technology

Intense competition is forcing the organization to become more efficient and effective. One way to increase efficiency and effectiveness is the use of information technology. Information technology has helped in regulating OB up to a great extent. It provides more effective ways of accessing information from multiple sources, including use of external information on databases and on the internet. Newer types of IT such as electronic mail and groupware (application software to help people in achieving their common goals) are creating significant changes in the way that information flows around groups and their customers and suppliers. As the industry becomes more global in its procurement, manufacturing and marketing operations, it requires greater use of information technology to reduce time and space barriers. With constant reorganization as well as increased mergers and acquisitions, top management recognizes the need for flexibility through compatible IT such as BPR.

Globalization

Globalization is the free movement of goods, services and people across the world in a seamless and integrated manner. Globalization means to increase their base of operations, expand their workforce with minimal investments and provide new services to a broad range of consumers. Globalization has created a large shift in organizational behavior as increasing diversity has brought together people of different backgrounds with different values, cultures and beliefs working together for common objective. It affects managers in two ways- in a foreign country and in one’s own country.

Diversity, Ethics, Culture

Diversity and ethics have a drastic impact on the study and application of management and OB. As organizations have become more global, their work force has become culturally and ethically diverse. Diversity in the workplace means that a company’s workforce includes people of varying gender, age, religion, race, ethnicity, cultural background, nationality, education, abilities etc. Diversity must be recognized and nurtured as the organization’s greatest asset and the ability to attract and retain diverse talent must be seen as a critical competitive advantage as it plays a central role in today’s environmental context. One of the most important and broad based challenges currently facing organizations is adapting people who are different. Problems with diversified workforce include resistance to change, fears of discrimination, unsupportive and hostile work environment etc. Diversity, if positively managed, can increase creativity and innovation in the organization.

Ethics involve moral principles that govern a person’s behavior or the conducting of an activity. In order to prohibit ethical issues such as illegal practices, looting, frauds etc. in an organization, implementation of ethical conducts are essential. A number of cultural (family, friends, religion etc.), organizational (policies, ethical codes, reward and punishment systems etc.) and external forces (political, legal, economic and international developments) help determine ethical behavior.

Reward System

The organization’s reward system also affects the OB. How the company appreciates hard working and efficient employees, how it motivates them positively, how they compensate employees determine the OB.

Key Takeaway

1. Environmental context for OB is markedly different from past.
2. Management is forced to rethink approaches to operations and human resources because of: Information technology, globalization, diversity and ethics.

References:

1. Prasad, L.M. Organizational Behavior. S.  Chand & Sons (2014), pp. 740.

2.     Robbin, S.P. & Sanghi, S. Organizational behavior. Pearson Education (2005), pp. 648.

3.     www.business.com/articles/human-relations-management-theory-basics/