Chapter 1
Organization and Organizational
Behaviour
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1.0 Objectives
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1.1 Introduction
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1.2 Organization
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1.3 Organizational Behaviour
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1.4 Intuition and Systematic Study
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1.5 Organization and Organization Behaviour
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1.6 Disciplines and OB
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1.7 Historical Evolution of OB
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1.8 Organizational Behaviour Models
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1.9 Summary
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1.10 Check your Progress - Answers
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123456789012345678901234567890121
1.11 Questions for Self - Study
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1.12 Suggested Readings
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1.0 OBJECTIVES
After studying this chapter, you should be able to:
v Define Organizational Behaviour(OB)
v Explain the value of Systematic study of OB
v Identify the contributions made to OB by major disciplines of behavioural
science.
v List the major challenges and opportunities for managers to use OB concepts.
1.1 INTRODUCTION
Organizations are found in all walks of life. Government offices, banks, schools,
colleges, hospital, factories, shops, institutes, political parties and so on. This is neces-
sary to carry on activities of each one of them. Organizing is a basic function of manage-
ment. It refers to the process involving the identification and grouping of activities to be
performed, defining and establishing the authority-responsibility relationship. This enables
people to work most effectively together in achieving the organizational objectives.
In general, organizing consists of determining and arranging for men, materials.
machines and money required by an enterprise for the attainment of its goals. In its
operational sense, the term organizing means defining responsibilities of the employed
people and the manner in which their activities are to be related. The final result of
organizing is the creation of a structure of duties and responsibilities of persons in orga-
nizational different positions, grouping them according to the similarity, Behaviour and
interrelated nature of activities. In brief, organizing process results in the outcome called
“organization”, consisting of a group of people working together for the achievement of one
or more common objectives.
1.2 ORGANIZATION
We will consider a few definitions of some authors. Money and Reiley: “Organi-
zation is the form of every human association for the attainment of a common purpose”.
Puffier and Sherwood: “Organization is the pattern of ways in which large numbers of
people have intimate face to face contact with all others, are engaged in a variety of
tasks, relate themselves to each other in conscious, systematic establishment and ac-
complishment of mutually agreed purposes”.
Organisation And Organisational Behaviour / 1
, The basic feature of any organization is the hierarchy of persons in it. It, therefore,
distinguishes among different persons and decides who will be superior and the subordi-
nate. All the organizations allow an unwritten rule that the subordinate cannot defy the
orders of the superiors.
1.1.1 Need for Organization
We need organization to execute the management function. Study of organiza-
tion has to be made necessarily for following reasons:
a. It provides an ideal setting for the study of human behaviour. The study of organiza-
tion leads to man’s important discoveries that are vital for the continued well-being
of the institutes particularly and the society in general.
b. Knowledge of organization helps managers to effectively, know various things, such
as how to run the organization and protect the environment needs, how to motivate
run the organizational subordinates, how to manage conflicts, how to introduce
behavioural changes and so on.
c. Organizations pervade in all the important phases of man’s life. A man is born in
organizations (hospitals, clinics etc.); he is educated in organizations (schools,
colleges etc.), and works in organization (factories, office etc.).
1.1.2 Process of Organizing
We have seen that the outcome of an organizing process is the ‘Organization’.
Organizing is the process by which managers bring order out of chaos and create proper
conditions for effective teamwork. Organizing involves the following interrelated steps:
a. Objectives: Every organization must have objectives. Therefore, every manage-
ment essentially has to identify the objectives before starting any activity.
b. Activities: Identifying and grouping several activities is an important process. If
individuals of the groups are to pool their efforts effectively, there must be proper
division of the major activities. Each and every job must be properly classified and
grouped.
c. Duty:Every individual needs to be allotted his duty. After classifying and grouping
the activities into various jobs, they should be allotted to the individuals so that they
perform them effectively. Every individual should be given a specific job to do ac-
cording to his ability. He may also be given adequate responsibility to do the job
allotted to him.
d. Relationship: Many individuals work in an organization. It is the responsibility of
management to lay down the structure of relationships in the organization and
authority.
e. Integration: All groups of activities must be properly integrated. This can be achieved
in the following ways: through relationship of authority: horizontal, vertical or lateral.
The unity of objectives can be achieved along with teamwork and team spirit by
the integration process of different activities.
1.3 ORGANIZATIONAL BEHAVIOUR
Each of us is a student of behaviour. We are aware that certain types of behaviour
are linked to certain types of responsibilities. As we mature, we expand our observations
to include the behaviour of others. We develop generalizations that help us to predict and
explain what people do and will do. How accurate are these generalizations? Some may
represent extremely sophisticated appraisals of behaviour and prove highly effective in
explaining and predicting the behaviour of others. Most of us also carry about with us a
number of beliefs that frequently fail to explain why people do what they do. As a result, a
Organizational Behaviour / 2
,systematic approach to the study of behaviour can improve an individual’s explanatory
and predictive abilities.
1.3.1 Importance
Organizational Behaviour (OB) is a study involving the impact of individuals, group
and structure or behaviour within the organization. This study is useful for the effective
working of an organization. It is a study of what people do within an organization and how
their behaviour affects the performance of an organization. Organizational Behaviour is
concerned mainly with employment related matters such as job, work, leaves, turnover,
productivity, human performance and management. Organizational Behaviour also includes
the core topics like motivation, leader behaviour and power, interpersonal communication,
group structure and process, learning attitude, perception, conflicts, work design and
work stress.
Organizational Behaviour introduces you to a comprehensive set of concepts and
theories, it has to deal with a lot of commonly accepted ‘facts’ about human behaviour and
organizations that have been acquired over the years, like “you can teach an old dog new
tricks”. “Two heads are better than one”. These facts are not necessarily true. Then one
off-line objective of Organizational Behaviour is to replace popularly held notions.
Organization Behaviour does offer challenges and opportunities for managers since
it focuses on ways and means to improve productivity, minimize absenteeism, increase
employee job satisfaction, etc. Organization Behaviour can offer managers guidance in
creating an ethical work climate. This is because organizational behaviour cam improve
prediction of behaviour.
1.3.2 Need for Organizational Behaviour
Organizational Behaviour is an applied behavioural science that is built on contri-
bution from a number of other behavioural discipline like psychology, sociology, social
psychology, anthropology and political science. Understanding Organizational Behaviour
is becoming very important for managers. Due to global competition, it is becoming nec-
essary for the employees to become more flexible and to cope with rapid changes. It is
becoming challenging for the managers to use Organizational Behaviour concepts. Orga-
nizations are no longer constrained by national borders. Burger King is owned by a British
firm, and McDonald’s sell hamburgers in Moscow. Exaction Mobile, an American com-
pany receives 75% of its revenue from sales outside US. All the major automobile manu-
factures build their cars out side their border, for example, Honda builds cars in Ohio,
USA, Ford in Brazil and Mercedes and BMW in South Africa. This shows that the world
has become a global village. Hence, managers have to diversify work force . Work force
diversity means the organizations are becoming more heterogeneous in terms of gender,
race and ethnicity.
Diversity if managed positively, can increase creativity and innovation in organiza-
tions as well as improve decision making by providing different perspective on preplans.
Quality management is driven by the constant attainment of customer satisfaction through
continuous improvement of all organizational processes (productivity, absenteeism, turn-
over, job satisfaction and recently added fifth dependent variable is organizational citizen-
ship).
1.3.3 Overall concept
Behaviour is generally predictable if we know how the person perceives the situ-
ation and what is important to him or her. An observer sees the behaviour as non-rational
because he does not have the knowledge of the entire situation in the same way. However,
predictability can be improved by replacing your intuition power by a more systematic
approach.
The systematic approach consists of important suits and relationships and will
provide a base for more accurate predictions of the behaviour. Systematic approach be-
Organisation And Organisational Behaviour / 3
, holds a basic concept that behaviour is not random. It projects the individual’s belief,
concept and then interest, etc. there are differences in every individual and placed in
similar situations they do not react alike. However, there are some fundamental consis-
tencies in each individual’s behaviour, which can be identified and modified to find out the
individual differences. Systematic study means looking at relationships, attempting to
attribute causes and effects and base our conclusions on scientific evidence. That is data
gathered under controlled conditions and interpreted in a rigourous manner. Systematic
study replaces intuition. Systematic approach does not mean that things that are be-
lieved in an unsystematic way are necessarily incorrect. Sometimes, research findings
may also run counter to what you thought was common sense. The objective of system-
atic approach is to move away from intuitive views of behaviour towards a systematic
analysis.
1.4 INTUITION AND SYSTEMATIC STUDY
The use of casual or common sense approaches for obtaining knowledge about
human behaviour is inadequate. Underlying a systematic approach is the belief that
behaviour is not random. It is caused and directed towards some end, which the individual
believes, rightly or wrongly, in his or her best interest. Certainly there are differences
between individuals. There are certain fundamental consistencies underlying the behaviour
of all individuals that can be identified and used to alter conclusions based on individual
differences. Behaviour is generally predictable and the systematic study of behaviour is a
means to making reasonably accurate predictions. “Systematic study” means looking at
relationship, attempting to attribute causes and effects, and base our conclusions, on
scientific evidence, that is, on data gathered under controlled conditions and measured
and interpreted in a reasonably rigorous manner. Systematic study replaces intuition or
those “gut feelings” about “why I do what I do” and “what makes others tick”.
1.5 ORGANIZATION AND ORGANIZATIONAL BEHAVIOUR
What is organizational behaviour? (Abbreviated as OB)
OB is a field of study that investigates the impact that individuals, groups and
structure have on behaviour within organizations for the purpose of applying such knowl-
edge towards improving an organization’s effectiveness. It is a distinct area of expertise
with a common body of knowledge. It studies 3 determinants of behaviour in organiza-
tions: individual, groups and structure. OB is also an applied field. It applies the knowl-
edge gained about individuals, groups and the effect of structure on behaviour towards the
end of making organizations work more effectively. OB is concerned with the study of
what people do in an organization and how that behaviour affects the performance of the
organization. OB includes the core topics of motivation, leader behaviour and power, inter-
personal communication, group structure and process, learning, attitude development
and perception, interpersonal change and conflict.
1.6 DISCIPLINE & ORGANIZATIONAL BEHAVIOUR
OB is applied as behavioural science and as a result, is built upon contributions
from a number of behavioural disciplines. They can be illustrated by means of a diagram.
1.7 HISTORICAL EVOLUTION OF ORGANIZATIONAL BEHAVIOUR
By looking back at the history of organizational behavioural, you gain a great deal
of insight into how the field got to where it is today. Three individuals are important who
promoted ideas which had major influence in shaping the direction and boundaries of
Organizational Behaviour (OB). They are: Adam Smith, Charles Babbage and Robert
Owen.
Adam Simth, in his discussion made in “The Wealth of Nations” in 1776, bril-
liantly argued on the economic advantage that organization and society would reap from
the division of labor — called work application in an industry. He illustrated it with the help
Organizational Behaviour / 4
Organization and Organizational
Behaviour
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123456789012345678901234567890121
123456789012345678901234567890121
123456789012345678901234567890121
1.0 Objectives
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1.1 Introduction
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123456789012345678901234567890121
1.2 Organization
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1.3 Organizational Behaviour
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123456789012345678901234567890121
1.4 Intuition and Systematic Study
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123456789012345678901234567890121
1.5 Organization and Organization Behaviour
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1.6 Disciplines and OB
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123456789012345678901234567890121
1.7 Historical Evolution of OB
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1.8 Organizational Behaviour Models
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123456789012345678901234567890121
1.9 Summary
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1.10 Check your Progress - Answers
123456789012345678901234567890121
123456789012345678901234567890121
1.11 Questions for Self - Study
123456789012345678901234567890121
1.12 Suggested Readings
123456789012345678901234567890121
123456789012345678901234567890121
1.0 OBJECTIVES
After studying this chapter, you should be able to:
v Define Organizational Behaviour(OB)
v Explain the value of Systematic study of OB
v Identify the contributions made to OB by major disciplines of behavioural
science.
v List the major challenges and opportunities for managers to use OB concepts.
1.1 INTRODUCTION
Organizations are found in all walks of life. Government offices, banks, schools,
colleges, hospital, factories, shops, institutes, political parties and so on. This is neces-
sary to carry on activities of each one of them. Organizing is a basic function of manage-
ment. It refers to the process involving the identification and grouping of activities to be
performed, defining and establishing the authority-responsibility relationship. This enables
people to work most effectively together in achieving the organizational objectives.
In general, organizing consists of determining and arranging for men, materials.
machines and money required by an enterprise for the attainment of its goals. In its
operational sense, the term organizing means defining responsibilities of the employed
people and the manner in which their activities are to be related. The final result of
organizing is the creation of a structure of duties and responsibilities of persons in orga-
nizational different positions, grouping them according to the similarity, Behaviour and
interrelated nature of activities. In brief, organizing process results in the outcome called
“organization”, consisting of a group of people working together for the achievement of one
or more common objectives.
1.2 ORGANIZATION
We will consider a few definitions of some authors. Money and Reiley: “Organi-
zation is the form of every human association for the attainment of a common purpose”.
Puffier and Sherwood: “Organization is the pattern of ways in which large numbers of
people have intimate face to face contact with all others, are engaged in a variety of
tasks, relate themselves to each other in conscious, systematic establishment and ac-
complishment of mutually agreed purposes”.
Organisation And Organisational Behaviour / 1
, The basic feature of any organization is the hierarchy of persons in it. It, therefore,
distinguishes among different persons and decides who will be superior and the subordi-
nate. All the organizations allow an unwritten rule that the subordinate cannot defy the
orders of the superiors.
1.1.1 Need for Organization
We need organization to execute the management function. Study of organiza-
tion has to be made necessarily for following reasons:
a. It provides an ideal setting for the study of human behaviour. The study of organiza-
tion leads to man’s important discoveries that are vital for the continued well-being
of the institutes particularly and the society in general.
b. Knowledge of organization helps managers to effectively, know various things, such
as how to run the organization and protect the environment needs, how to motivate
run the organizational subordinates, how to manage conflicts, how to introduce
behavioural changes and so on.
c. Organizations pervade in all the important phases of man’s life. A man is born in
organizations (hospitals, clinics etc.); he is educated in organizations (schools,
colleges etc.), and works in organization (factories, office etc.).
1.1.2 Process of Organizing
We have seen that the outcome of an organizing process is the ‘Organization’.
Organizing is the process by which managers bring order out of chaos and create proper
conditions for effective teamwork. Organizing involves the following interrelated steps:
a. Objectives: Every organization must have objectives. Therefore, every manage-
ment essentially has to identify the objectives before starting any activity.
b. Activities: Identifying and grouping several activities is an important process. If
individuals of the groups are to pool their efforts effectively, there must be proper
division of the major activities. Each and every job must be properly classified and
grouped.
c. Duty:Every individual needs to be allotted his duty. After classifying and grouping
the activities into various jobs, they should be allotted to the individuals so that they
perform them effectively. Every individual should be given a specific job to do ac-
cording to his ability. He may also be given adequate responsibility to do the job
allotted to him.
d. Relationship: Many individuals work in an organization. It is the responsibility of
management to lay down the structure of relationships in the organization and
authority.
e. Integration: All groups of activities must be properly integrated. This can be achieved
in the following ways: through relationship of authority: horizontal, vertical or lateral.
The unity of objectives can be achieved along with teamwork and team spirit by
the integration process of different activities.
1.3 ORGANIZATIONAL BEHAVIOUR
Each of us is a student of behaviour. We are aware that certain types of behaviour
are linked to certain types of responsibilities. As we mature, we expand our observations
to include the behaviour of others. We develop generalizations that help us to predict and
explain what people do and will do. How accurate are these generalizations? Some may
represent extremely sophisticated appraisals of behaviour and prove highly effective in
explaining and predicting the behaviour of others. Most of us also carry about with us a
number of beliefs that frequently fail to explain why people do what they do. As a result, a
Organizational Behaviour / 2
,systematic approach to the study of behaviour can improve an individual’s explanatory
and predictive abilities.
1.3.1 Importance
Organizational Behaviour (OB) is a study involving the impact of individuals, group
and structure or behaviour within the organization. This study is useful for the effective
working of an organization. It is a study of what people do within an organization and how
their behaviour affects the performance of an organization. Organizational Behaviour is
concerned mainly with employment related matters such as job, work, leaves, turnover,
productivity, human performance and management. Organizational Behaviour also includes
the core topics like motivation, leader behaviour and power, interpersonal communication,
group structure and process, learning attitude, perception, conflicts, work design and
work stress.
Organizational Behaviour introduces you to a comprehensive set of concepts and
theories, it has to deal with a lot of commonly accepted ‘facts’ about human behaviour and
organizations that have been acquired over the years, like “you can teach an old dog new
tricks”. “Two heads are better than one”. These facts are not necessarily true. Then one
off-line objective of Organizational Behaviour is to replace popularly held notions.
Organization Behaviour does offer challenges and opportunities for managers since
it focuses on ways and means to improve productivity, minimize absenteeism, increase
employee job satisfaction, etc. Organization Behaviour can offer managers guidance in
creating an ethical work climate. This is because organizational behaviour cam improve
prediction of behaviour.
1.3.2 Need for Organizational Behaviour
Organizational Behaviour is an applied behavioural science that is built on contri-
bution from a number of other behavioural discipline like psychology, sociology, social
psychology, anthropology and political science. Understanding Organizational Behaviour
is becoming very important for managers. Due to global competition, it is becoming nec-
essary for the employees to become more flexible and to cope with rapid changes. It is
becoming challenging for the managers to use Organizational Behaviour concepts. Orga-
nizations are no longer constrained by national borders. Burger King is owned by a British
firm, and McDonald’s sell hamburgers in Moscow. Exaction Mobile, an American com-
pany receives 75% of its revenue from sales outside US. All the major automobile manu-
factures build their cars out side their border, for example, Honda builds cars in Ohio,
USA, Ford in Brazil and Mercedes and BMW in South Africa. This shows that the world
has become a global village. Hence, managers have to diversify work force . Work force
diversity means the organizations are becoming more heterogeneous in terms of gender,
race and ethnicity.
Diversity if managed positively, can increase creativity and innovation in organiza-
tions as well as improve decision making by providing different perspective on preplans.
Quality management is driven by the constant attainment of customer satisfaction through
continuous improvement of all organizational processes (productivity, absenteeism, turn-
over, job satisfaction and recently added fifth dependent variable is organizational citizen-
ship).
1.3.3 Overall concept
Behaviour is generally predictable if we know how the person perceives the situ-
ation and what is important to him or her. An observer sees the behaviour as non-rational
because he does not have the knowledge of the entire situation in the same way. However,
predictability can be improved by replacing your intuition power by a more systematic
approach.
The systematic approach consists of important suits and relationships and will
provide a base for more accurate predictions of the behaviour. Systematic approach be-
Organisation And Organisational Behaviour / 3
, holds a basic concept that behaviour is not random. It projects the individual’s belief,
concept and then interest, etc. there are differences in every individual and placed in
similar situations they do not react alike. However, there are some fundamental consis-
tencies in each individual’s behaviour, which can be identified and modified to find out the
individual differences. Systematic study means looking at relationships, attempting to
attribute causes and effects and base our conclusions on scientific evidence. That is data
gathered under controlled conditions and interpreted in a rigourous manner. Systematic
study replaces intuition. Systematic approach does not mean that things that are be-
lieved in an unsystematic way are necessarily incorrect. Sometimes, research findings
may also run counter to what you thought was common sense. The objective of system-
atic approach is to move away from intuitive views of behaviour towards a systematic
analysis.
1.4 INTUITION AND SYSTEMATIC STUDY
The use of casual or common sense approaches for obtaining knowledge about
human behaviour is inadequate. Underlying a systematic approach is the belief that
behaviour is not random. It is caused and directed towards some end, which the individual
believes, rightly or wrongly, in his or her best interest. Certainly there are differences
between individuals. There are certain fundamental consistencies underlying the behaviour
of all individuals that can be identified and used to alter conclusions based on individual
differences. Behaviour is generally predictable and the systematic study of behaviour is a
means to making reasonably accurate predictions. “Systematic study” means looking at
relationship, attempting to attribute causes and effects, and base our conclusions, on
scientific evidence, that is, on data gathered under controlled conditions and measured
and interpreted in a reasonably rigorous manner. Systematic study replaces intuition or
those “gut feelings” about “why I do what I do” and “what makes others tick”.
1.5 ORGANIZATION AND ORGANIZATIONAL BEHAVIOUR
What is organizational behaviour? (Abbreviated as OB)
OB is a field of study that investigates the impact that individuals, groups and
structure have on behaviour within organizations for the purpose of applying such knowl-
edge towards improving an organization’s effectiveness. It is a distinct area of expertise
with a common body of knowledge. It studies 3 determinants of behaviour in organiza-
tions: individual, groups and structure. OB is also an applied field. It applies the knowl-
edge gained about individuals, groups and the effect of structure on behaviour towards the
end of making organizations work more effectively. OB is concerned with the study of
what people do in an organization and how that behaviour affects the performance of the
organization. OB includes the core topics of motivation, leader behaviour and power, inter-
personal communication, group structure and process, learning, attitude development
and perception, interpersonal change and conflict.
1.6 DISCIPLINE & ORGANIZATIONAL BEHAVIOUR
OB is applied as behavioural science and as a result, is built upon contributions
from a number of behavioural disciplines. They can be illustrated by means of a diagram.
1.7 HISTORICAL EVOLUTION OF ORGANIZATIONAL BEHAVIOUR
By looking back at the history of organizational behavioural, you gain a great deal
of insight into how the field got to where it is today. Three individuals are important who
promoted ideas which had major influence in shaping the direction and boundaries of
Organizational Behaviour (OB). They are: Adam Smith, Charles Babbage and Robert
Owen.
Adam Simth, in his discussion made in “The Wealth of Nations” in 1776, bril-
liantly argued on the economic advantage that organization and society would reap from
the division of labor — called work application in an industry. He illustrated it with the help
Organizational Behaviour / 4
