ORGANIZATIONAL BEHAVIOURDr. Sunil R. MisraAssociate Professor

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Course TopicsCh 1: O.B. Introduction, Definition, HistoryCh 2: Personality & LearningCh 3: Perception, Attribution, JudgmentCh 4: Values, Attitudes & Work BehaviourCh 5: Theories of Work MotivationCh 6: Motivation in PracticeCh 7: Groups and Teamwork Ch 8: Influence, Socialization, CultureCh 9: Leadership

Ch 10: CommunicationCh 11: Decision MakingCh 12: Power, Politics and EthicsCh 13: Conflict & StressCh 14: Organizational StructureCh 15: Environment, Strategy, TechnologyCh 16: Change, Development, Innovation

MID-TERMFINAL EXAM2

Course OverviewText available:Organizational Behaviour, Stephen P. Robbins, Timothi A. Judge and Seema Sanghi, 12th ed, Prentice Hall India.

Format:Combination of lectures and in-class exercises.3

Course OverviewFurther Text:1. Organizational Behaviour: Understanding and Managing Life at Work (8th Edition), by Gary Johns and Alan Saks (Prentice Hall). 2. Organizational Behaviour-Human Behaviour at work by John W Newstrom, 12th edition, McGrawHill.3. Organizational behavior and management by Ivancevich, Konopaske and Matteson -7th edition, Tata McGrawHill. 4. Organisational Behaviour by Steven L Mc Shane Mary Ann Von Glinow Radha R Sharma Tata McGrawHill. 5. Organizational Behavior by Don Hellriegel; John W. Slocum; Richard W. Woodman-8th edition, Thomson South-Western.4

How to find meContact info: Email: misra@lycos.comWebsite: http://www.sunilmisra.webs.comMobile phone: +91-909 808 1129Office hours: By appointment5

ExpectationsWhat I expect of youAttendance. I expect you to attend every class. Participation. Strongly encouragedGroup work.What to expect from meLecture notes will be posted by Saturday of each week.Exams will be based on text and lecture notes; so even if we dont review it in the lecture, if it is in the text, it is fair game.Available after class or by appt.

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Questions?7

UNIT 1INTRODUCTION TO ORGANIZATIONAL BEHAVIOR

TOPICS TO BE COVERED1. Define organizational behavior (OB).2. Identify the primary behavioral disciplines contributing to OB.3. Describe the three goals of OB.4. List the major challenges and opportunities for managers to use OB concepts.5. Discuss why workforce diversity has become an important issue in management.6. Discuss how a knowledge of OB can help managers stimulate organizational innovation and change.

IcebreakerWhat do we have in common?Make groups of four to five studentsFind two things in common with each otherE.g., food likes, sports, music, TV shows, hobbiesRule: The thing in common cant be that you are a OCM student studying MBA Pick a spokesperson who will introduce the group members and tell the class what they have in common.10

OB is concerned with the study of what people do in an organization and how their behavior affects the organizations performance.Specifically with employment-related situations - Jobs, work, absenteeism, employment turnover, productivity, human performance, and management.Organizational Behavior (OB)

Organizational Behavior (OB)OB theories have widespread applicationsKnowing these theories can help you to:Evaluate solutions proposed by consultants and managersSolve new problems and adapt to new situationsStay current in your fieldEvidence-based management is crucial12

Definition of OBThe study of human behavior, attitudes, and performance within an organizational settingdrawing on theory, methods, and principles from such disciplines as psychology, sociology, political science, and cultural anthropologyto learn about individual, groups, structure, and processes

It studies three determinants of behavior in organizations: individuals, groups, and structure.In addition, OB applies the knowledge gained about individuals, groups, and the effect of structure on behavior in order to make organizations work more effectively.Organizational Behavior (OB)

Key Points About OBOB is a way of thinkingOB is multidisciplinaryThere is a distinctly humanistic orientation within OBThe field of OB is performance-orientedThe role of the scientific method is important in studying variables and relationshipsOB has a distinctive applications orientation

Insert Figure 1.1 here

What is Organizational Behavior?

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Why Study Organizational Behavior?OB theories help you to make sense of the workplaceQuestion and rebuild your personal theories for work Important -- much of our time is in organizationsOB provides knowledge/tools to work with othersHelps you to get things doneOB improves an organizations financial healthEffective and competitive organizationsHelp you to retain the people who came up with the good ideas

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Components of Organizational Behavior

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The Basic Elements of a System

InputsProcessOutputsEnvironment

IntroductionOrganizations are much more than only a means for providing goods and service

They create the settings in which most of us spend our lives

They have profound influence on employee behavior

The core 21st century qualities needed to create the ideal work atmosphere begin with intelligence, passion, a strong work ethic, and a genuine concern for people.

Managing and Working Today and in the Future:Managers must become agile and flexible to help their firms develop and sustain competitive advantage

To be successful, managers will need to harness the powers of:information technologyhuman capital

Rapidity ofChange

New Worker-EmployerPsychologicalContract

Technology

Globalism

CulturalDiversity

Power ofHumanResources

Environmental Forces Reshaping Management Practice

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Break-even Analysis identifies profit or loss at various sales volumes

Return on Investment measures productivity of assets

Marginal Analysis compares the additional cost in a particular decision rather than average cost

Game Theory mathematical models that analyze multi-party decision contexts

Linear Programming for optimally solving resource allocation problems

Queuing Theory for calculating waiting lines

Challenges of These Forces to ManagersResisting the reality of these forces will likely lead to:Unnecessary conflictReduced managerial performanceReduced non-managerial performanceLost opportunitiesFailing to cope and deal with these forces will likely result in:Job dissatisfactionPoor moraleReduced commitmentLower work qualityBurnoutPoor judgmentUnhealthy consequences

IndividualGroupOrganizationOrganizationalBehavior

Social PsychologyPolitical ScienceAnthropologyPsychologySociologyDisciplineUnit of AnalysisOutputContributions to the Study of Organizational Behavior

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OrganizationalProcesses

OrganizationalStructure

Change andInnovation

Understandingand ManagingIndividualBehavior

Group BehaviorandInterpersonalInfluence

TheOrganizationsEnvironment

Topics in Studying and Understanding OB

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Break-even Analysis identifies profit or loss at various sales volumes

Return on Investment measures productivity of assets

Marginal Analysis compares the additional cost in a particular decision rather than average cost

Game Theory mathematical models that analyze multi-party decision contexts

Linear Programming for optimally solving resource allocation problems

Queuing Theory for calculating waiting lines

27OB studies what people do in an organization and how that behavior affects the performance of the organization.

The field of OB seeks to replace intuitive explanations with systematic study

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Individual effectivenessGroup effectivenessOrganizational effectivenessThree Perspectives on Effectiveness

Systems Theory and Effectiveness (1 of 2)Effectiveness criteria must reflect the entire input-process-output cycle, not simply output

Effectiveness criteria must reflect the interrelationships between the organization and its outside environment

Systems Theory and Effectiveness (2 of 2)Organizational effectiveness is an all-encompassing concept that includes a number of component concepts

The managerial task is to maintain the optimal balance among these components

Managers can lead the way to higher levels of effectiveness by: (1 of 2)Providing opportunities for training and continuous learningSharing information with employeesEncouraging cross-development partnershipsLinking compensation to performance

Managers can lead the way to higher levels of effectiveness by: (2 of 2)Avoiding layoffsBeing a supportive role modelRespecting the differences across employeesBeing a good listener

Key Points (1 of 2)The key to an organizations success is its human resources

Organizations need human resources that:work hardthink creativelyperform excellently

Key Points (2 of 2)Rewarding, encouraging, and nurturing the human resources in a timely and meaningful manner is what is required

The behavior of employees is the key to achieving effectiveness

A Short History of Organizational BehaviorF.W. Taylor and Scientific ManagementMary Parker FollettHawthorne StudiesTheory X and Y

35The systematic study of OB began in the closing decades of the nineteenth century after the industrial revolution.

F.W. Taylor and Scientific ManagementScientific management: the systematic study of relationships between people and tasks for the purpose of redesigning the work process to increase efficiencyThe amount of and effort each employee expends to produce a unit of output can be reduced by increasing specialization and the division of labor

36Frederick Taylor (1856-1915) is best known for defining the techniques of scientific management. Taylor was a manufacturing manager who eventually became a consultant and taught other managers how to apply the principles of scientific management.

Four Principles of Scientific Management1. Study the way employees perform their tasks, gather informal job knowledge that employees possess, and experiment with ways of improving the way tasks are performed2. Codify the new methods of performing tasks into written rules and standard operating procedures

37To discover the most efficient method of performing specific tasks, Taylor studied and measured the ways different employees went about performing their tasks. He used time and motion studies. Once he understood the existing method of performing a task, he would experiment with ways to increase specialization.

He advocated that once the best method was found for performing a particular task, it should be recorded so that it could be taught to all employees performing the same task.

Four Principles of Scientific Management_23. Carefully select employees so that they possess skills and abilities that match the needs of the task, and train them to perform the task according to the established rules and procedures4. Establish an acceptable level of performance for a task, and then develop a pay system that provides a reward for performance above the acceptable level

38Employees who could not be trained to the level required were transferred to a job where they were able to reach the minimum required level of proficiency.

Taylor advocated that employees should benefit from any gains in performance. They should be paid a bonus and receive some percentage of the performance gains achieved through the more efficient work process.

Mary Parker FollettManagement must consider the human sideEmployees should be involved in job analysisPerson with the knowledge should be in control of the work process regardless of positionCross-functioning teams used to accomplish projects

39Mary Parker Follett (1868-1933) was concerned that Taylor was ignoring the human side of the organization. Her approach was very radical for the time.

The Hawthorne StudiesHawthorne Works of the Western Electric Company; 1924-1932Initiated as an attempt to investigate how characteristics of the work setting affect employee fatigue and performance (i.e., lighting)Found that productivity increased regardless of whether illumination was raised or lowered

40The Hawthorne Studies refers to a series of studies conducted from 1924 to 1932 at the Hawthorne Works of the Western Electric Company. The study was initiated to investigate how the level of lighting would affect employee fatigue and performance. The researchers conducted an experiment in which they systematically measured employee productivity at various levels of illumination. However, no matter whether the lighting was raised or lowered, productivity increased. The researchers were puzzled and invited Elton Mayo to assist them.

Mayo proposed the use of the relay assembly test to investigate other aspects of the work context on job performance. Eventually, they found that the employees were responding to the increased attention from the researchers.

The Hawthorne Effect suggested that the attitude of employees toward their managers affects the employees performance.

The Hawthorne Studies_2Factors influencing behavior:Attention from researchersManagers leadership approachWork group normsThe Hawthorne Effect

41Elton Mayo and F.J. Roethlisberger found that employees adopted norms of output to protect their jobs. Those who performed above the norms were called ratebusters and those who performed below the norms were called chisellers. Workgroup members discipline both in order to create a fair pace of work.

Douglas McGregor: Theory X and Theory YTheory XAverage employee is lazy, dislikes work, and will try to do as little as possibleManagers task is to supervise closely and control employees through reward and punishmentTheory YEmployees will do what is good for the organization when committedManagers task is create a work setting that encourages commitment to organizational goals and provides opportunities for employees to be exercise initiative

42Several studies after World War II revealed how assumptions about employees attitudes and behavior affect managers behaviors. Douglas McGregor proposed that two different sets of assumptions about work attitudes and behaviors dominate the way managers think and affect how they behave in organizations.

Evolution of OBClassical View (Early 1900s)Attempts to prescribe the correct way to manage an organization and achieve its goalsHigh specialization of labour (each dept tended to its own business, and decision making was centralized)BureaucracyMax WeberStrict chain of command, detailed rules, high specialization, centralized power, and selection and promotion based on technical competenceScientific ManagementFrederick TaylorUse of careful research to determine degree of specialization

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Evolution of OBHuman Relations MovementHawthorne Studies research conducted at the Hawthorne plant of Western Electric in the 1920s that examined how psychological and social processes affect productivityHow physical environment affects productivityEffect of interest being shown in themAdvocates management styles that are more participative and oriented towards employee needs

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QuestionWhich approach (classical or human relations) is better? Which approach would you use?45

Evolution of OBWhere are we today???The Contingency Approach No one best way to manageManagement style depends on the demands of the situation46

What Managers Do?A.Management Function:Henri Fayol----Planning Organizing Commanding Coordinating ControllingToday----planning, organizing, leading, controlling

What do Managers do?MintzbergInformational Roles: Ways the manager receives and transmits information (e.g., attend workshop)Interpersonal Roles: Establishing and maintaining interpersonal relations (e.g., mentor, discipline)Decisional Roles: Deal with decision making (e.g,. conflicts)

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Quiz QuestionThe contingency approach to management suggests that:A) Management style depends on the demands of the situation.B) The best management style depends on the size of the organization.C) Management style makes no difference.D) Management styles are constantly changing.E) One management style should work for all individuals.49

Contemporary Management Concerns50

Focus on Quality, Speed, and FlexibilityIntense competition has given rise to the need for organizations to improve quality, speed, and flexibility. This requires a high degree of employee involvement, commitment, and teamwork.Organizational behaviour is concerned with these issues.

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Recruitment and RetentionA major challenge facing organizations today is the recruitment and retention of skilled employees.Canadian organizations face severe shortages of labour in the coming years and many are already having trouble hiring and retaining employees.Question: Why do you think this is the case?Organizational behaviour can help companies improve their recruitment and retention and become an employer of choice.

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Workplace DiversityMore women in workforce and professions Different needs of Gen-X/Gen-Y and baby-boomersDiversity has advantages, but firms need to adjust

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Employee-Employer RelationshipsEmployabilityNew deal relationshipContinuously learn new skillsContingent workNo contract for LT employmentMinimum hours of work varyConsequencesDecreased trust, lower morale, decline in job satisfaction, increased stress, absenteeism on the rise

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Questions?55

Contributing Disciplines to the OB FieldMicro:The IndividualMacro:Groups &Organizations

57Psychology seeks to measure,explain, and change behaviorSociology studies people in relation to their fellow human beings Social psychologyfocuses on the influence of peopleon one another

Anthropology is the study of societies to learn about human beings and their activitiesPolitical science is the study of the behavior of individuals and groups within a political environment Contributing Disciplines

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Contributing DisciplinesOrganizational behavior is an applied behavior science that is built on contributions from a number of behavior disciplines.the predominant areas :psychology, social psychology,sociology,anthropology,political science

Psychology----individuallearning, motivation, personality, emotions, perception, training, job satisfaction, leadership effectiveness, individual decision making, performance appraisal, attitude measurement, employee selection, work design, work stressSocial psychology----group Behavioral change, attitude change, communicate, group processes, group decision making

SociologyCommunication, power, conflict, intergroup behavior, ----groupformal organization theory, organizational technology, organizational change, organizational culture ----organization system

AnthropologyComparative values,comparative attitudes, cross-culture analysis, ----grouporganizational culture,Organizational enviroment,Power ----organization systemPolitical scienceConflict,Intra-organizational politics, ----groupPower ----organization system

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Levels of Analysis

Group Level

Individual LevelOrganizational Level

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Goals of OBExplanationIf we are to understand a phenomenon,we must begin by trying to explain it. We can then use this understanding to determine a cause.PredictionIt seeks to determine what outcomes will result from a given action.Control The control objective is frequently seen by manager as the most valuable contribution the OB makes toward their effectiveness on the job.

Challenges and Opportunities for OB1.Responding to GlobalizationIncreased foreign assignmentsWorking with people from different culturesCoping with anticapitalism backlashOverseeing movement of jobs to countries with low-cost laborManaging people during the war on terror

2.Managing workforce diversityWorkforce diversity:Gender, race, national origin, age, disability, Embracing diversityChanging demographics

Workforce diversity can increase creativity and innovation in organizations as well as improve decision making by providing different perspective on promble.

3.Improving quality and productivityAlmost all quality improvement comes via simplification of design, manufacturing, layout, processes, and procedures.----Tom PetersTodays managers understand that success of any effort at improving quality and productivity must include their employees.

4.Improving people skillsWell present relevant concepts and theories that can help you explain and predict the behavior of people at work.Learn a ways to motivate peopleHow to be a better communicatorHow to create more effective teams

5.Empowering peopleDecision making is being pushed down to the operating level, where workers are being given the freedom to make choices about schedules and procedures and to solve work-related problems.Self-management teamManagers are empowering emplyees.Managers-how to give up controlEmplyees-how to take responsibility for their work and make appropriate decisionsLeading style, power relationships, the way work is designed, the way organizations are structured

6.Stimulating innovation and changeTodays successful organizations must foster innovation and master the art of change or theyll become candidate for extinction.An organizations employees can be the impetus for innovation and change or they can be a majors stumbling block.The challenge for managers is to stimulate their employees creativity and tolerance for change.

7.Coping with temporariness Managing today would be more accurately described as long periods of ongoing change, interrupted occasionally by short periods of stability!The actual jobs that workers perform are in a permanent state of flux.So workers need to continually update their knowledge and skills to perform new job requirements.

8.Helping employees balance work/life conflictsA number of forces have contributed to blurring the lines between employee work and personal lives.First, the creation of global organizations means their world never sleeps.Second, communication technology allows employee to do their work at home, in their car, or on the beach in Tahiti.Third, organizations are asking employees to put in longer hours.Finally, fewer families have only a single breadwinner.

9.Declining employee loyaltyBeginning in the mid-1980s, in response to global competition, unfriendly takeovers, leveraged buyouts, and the like, corporations began to discard traditional policies on job security, seniority and compensation.An important OB challenge will be for managers to devise ways to motivate workers who feel less committed to their employers, while maintaining their organizations global competitiveness.

10.Improving ethical behaviorMembers of organizations are increasingly finding themselves facing ethical dilemmas, situations in which they are required to define right and wrong conduct.In recent years, the line differentiating right from wrong has become even more blurred.Managers and their organizations are writing and distributing codes of ethics to guide employees through ethical dilemmas.

Individual behaviorvalues, attitudes, perception, and learning the role of personality and emotionsmotivation issuesGroup behaviorGroup behavior modelWays to make teams more effectiveCommunication issues and group decision makingLeadership, trust, power, politics, conflict and negotiationOrganizational behaviorsCulture, structure, .

SummaryOB has widespread applicationsEvolution of OB Classical Human Relations ContingencyManagers have different rolesReceive and transmit informationInteract with peopleMake decisionsContemporary Concerns

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For Next ClassRead chapters two and three.77

AAA

Organizational Learning ProcessesApplying knowledge to organizational processes in ways that improves the organizations effectivenessDistributing knowledge throughout the organizationExtracting information and ideas from its environment as well as through insightKNOWLEDGEACQUISITION

KNOWLEDGESHARING

KNOWLEDGEUSEExamples in practiceHiring skilled staffPosting case studies on intranetGiving staff freedom to try out ideas

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Types ofIndividual Behavior

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Types of Individual BehaviorOrganizational CitizenshipPerformance beyond the required job dutiesTask PerformanceGoal-directed behaviors under persons controlmore

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Types of Behavior in Organizations (cont)Maintaining Work AttendanceAttending work at required timesJoining/staying with the OrganizationGoal-directed behaviors under persons controlCounterproductive Work BehaviorsVoluntary behavior that potentially harms the organization

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Contemporary Challengesfor Organizations

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GlobalizationEconomic, social, and cultural connectivity with people in other parts of the worldHigher connectivity (and interdependence) due to better information technology and transportation systems Globalization has many effects on organizations, as discussed throughout this booke.g., leadership, diversity, conflict, org structures

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Increasing Workforce DiversitySurface-level diversityObservable demographic or physiological differences in people (e.g. race, ethnicity, gender, age, physical disabilities)Increasing surface-level diversityDeep-level diversityDifferences in the psychological characteristics of employees (e.g. personalities, beliefs, values, and attitudes)Example: Differences across age cohorts (e.g. Gen-X, Gen-Y)ImplicationsLeveraging the diversity advantageAlso challenges of diversity (e.g. team development, conflict)Ethical imperative of diversity

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Employment RelationshipsWork hoursLess separation from work 24/7 work scheduleDue mainly to info technology and globalizationPush for more work-life balanceminimizing conflict between work and non-work demands Virtual workPerform jobs away from traditional workplace (e.g. telecommuting)Some benefits, but also suited more to some types of people

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Anchors of Organizational Behavior Knowledge

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Organizational Behavior AnchorsMultidisciplinary anchorMany OB concepts adopted from other disciplinesOB develops its own theories, but also scans other fieldsSystematic research anchorOB researchers rely on scientific methodShould apply evidence-based managementProblems applying evidence-based managementBombarded with theories and models from many sourcesChallenge translating general OB theories to specific situationsPeople swayed by heavy marketing of some theories/modelsPerceptual biases -- we ignore evidence contrary to our current theories

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Organizational Behavior Anchors (cont)Contingency anchorA particular action may have different consequences in different situationsNeed to diagnose the situation and select best strategy under those conditionsMultiple levels of analysis anchorIndividual, team, organizational level of analysisOB topics usually relevant at all three levels of analysis

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Introduction to the Field of Organizational BehaviorChapter One

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1-91Define organizational behavior (OB).Explain the value of the systematic study of OB.Identify the contributions made to OB by major behavioral science disciplines.Describe how OB concepts can help make organizations more productive.List the major challenges and opportunities for managers to use OB concepts.Identify the three levels of analysis in OB.?