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Unit 2

Organizational Behavior
Smita Choudhary Faculty HR/OB

1 Organizational Behavior
Definitions of OB
Historical evolution
of OB as a discipline
disciplines to the OB

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 Organizations need to develop their interpersonal
or people skills for being effective.
 Organizational behavior is a field of study that
investigates the impact that individuals, groups,
and structure have on behavior within an
organization, then applies that knowledge to make
organizations work more effectively.
Robbins (2003)
 OB concentrates on how to
 Improve productivity
 Reduce absenteeism and turnover
 Increase employee citizenship
 Increase employee job satisfaction

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 The field of organizational behavior takes extracts
from the behavioral science disciplines like
psychology, social psychology, and cultural
 Some basic ideas included in OB are personality
theory, attitudes and values, motivation and
learning, interpersonal behavior, group dynamics,
leadership and teamwork, organizational
structure and design, decision-making, power,
conflict and negotiation.

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Learning Objectives

After this unit, you will be able to


Historical evolution of OB as a discipline

Contributing disciplines to the OB field

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Definitions of OB
 Organizations are defined as social arrangements,
constructed by people, who can also change them.
----Buchanan and Huczynski (1997)
 Organizations are a system of cooperative activities - and
their coordination requires something intangible and
personal that is largely a matter of personal relationships.
---- Barnard (1938)
 OB is concerned with “the study of the structure,
functioning and performance of organizations, and the
behavior of groups and individuals within them”.
---- Pugh (1971)

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OB is about----
1. “the study of human behavior, attitudes and performance within an
organizational setting;
2. drawing on theory, methods and principles from such disciplines---
3. as psychology, sociology, and cultural anthropology to learn about
individual perception, values, learning capabilities, and actions
4. while working with groups and within the total organization;
5. analyzing the external environment’s effect on the organization
6. and its human resources, missions, objectives and strategies.”

 Organizational behavior is defines as “The understanding, prediction and

management of human behavior in organizations.”
Fred Luthans

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 From the above definitions, OB can be seen
A way of thinking
An interdisciplinary field
Having a distinctly humanistic outlook
Performance oriented
Seeing the external environment as critical
Using scientific method
Having an application orientation

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Levels of Analysis
Wood (1997) suggested that different levels of
analysis can be applied when judging the
importance of an organizational issue. He proposed
eight levels----
 Individual
 Team
 Inter-group
 Organizational
 Inter-organizational
 Societal
 International
 Global

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Historical Evolution of OB as a
 Many people have contributed to the growth of
OB. Some important contributions are-
A) Early Theorists
 1. Adam Smith’s contribution
 In the Wealth of Nations published in 1776,
Adam Smith stated that organizations and
society would benefit if they practice division of
 Division of labor increased productivity by
improving workers’ skills and expertise and by
saving time.

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2. Work of Charles Babbage

 He added some more advantages to the list of

advantages of division of labor proposed by Adam
 It decreases the time needed to learn a job.
 It reduces wastage of material during the learning
 Improves skill levels.
 It matches people’s skills and physical abilities
with specific tasks.

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B) The Classical Era

Classical era covers the period from

1900 to mid 1930s.
The main contributors during this period
Frederick Taylor
Henri Fayol
Max Weber
Mary Parker Follet
Chester Barnard

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1.Frederick Taylor
 His main focus was on finding one best way of doing a job.
 He gave importance on selecting the right people for the right job
and train them to do the job in one best way.
 His scientific principles of management highlighted the following
 Shift all responsibility for the organizational work from worker to manager.
 Use scientific methods to find the most efficient way of doing work.
 Select the best person to do the job.
 Train the worker to do the work effectively.
 Observe the performance of workers to make sure that proper work methods
are used and correct results are obtained.

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2.Henri Fayol
 He was a mining engineer and a manager by profession.
 He defined the nature and working patterns of twentieth century
organizations in his book, General and Industrial Management,
published in 1916.
 In this book 14 principles of management are defined. They
1. Division of work – Tasks should be divided among employees.
2. Authority and responsibility – Authority is the right to give
orders. It should match with responsibility.
3. Discipline – It is necessary for proper functioning of business.
4. Unity of command – An employee should receive orders from one
superior only.
5. Unity of direction – Activities related to a single objective should
be coordinated by a single plan.

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6. Subordinates of individual interest to general interest – Individual or
group goals must not take priority over business goals.
7. Remuneration of personnel – It should be fair, encourage effort and there
should be no overpayment.
8. Centralization – The extent of centralization of power of issuing orders at
the top depends on size of the organization and the skills of its personnel.
9. Scalar chain (line of authority) – Flow of communication should be up and
down the line of authority.
10. Order – Material and personnel should be at proper place.
11. Equity – People should be treated with kindness and justice.
12. Stability of tenure of personnel – Quick turnover of people should be
avoided because it takes time to develop expertise.
13. Initiative – Employees should be encouraged to take initiatives.
14. Esprit de corps – All efforts should be made to maintain peace and
harmony within the organization.

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3.Max Weber
 His theory is also known as bureaucratic theory in
 He described an ideal kind of organization and called it
The features of Weber’s bureaucratic structure are-------
 Areas of authority should be clearly specified.
 Organizations follow principle of hierarchy where subordinates
follow instructions of superiors but have a right to appeal.
 Abstract rules guide decisions and actions.
 Officials are selected on the basis of technical qualifications.
 Employment by the organization is a career.

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C) The Human Relations
1. Mary Parker Follet------
 The view that people are important to the world of
business was given by Mary Parker Follet. With this the
concept of human relations movement started.
 Follet believed that organizations should be based on
collectivism (group ethics) rather than individualism.
 The manager’s task was to coordinate group efforts.
 Managers and workers should be like partners.

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2. Chester Barnard
 Barnard believed that organizations consist of
people who have interacting social relationships.
 He believed that organizations can be successful
if they cooperate with various stakeholders such
as employees, customers, investors, suppliers,
 He emphasized on the need for development of
skills and motivation of employees for the success
of organization.

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3. Elton Mayo
 He is known as the founder of human relations movement.
 He is also known for his research including the Hawthorne
Studies and his book ‘The Social Problems of an
Industrialized Civilization (1933)’.
 The research conducted under the Hawthorne Studies
showed the importance of groups in affecting the behavior
of individuals at work.
 He found that work satisfaction depended on the social
relationship of the workgroup.
 Physical conditions and financial incentives have very low
motivational value.
 He concluded that performance depends on both social
issues and job content.
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4. Dale Carnegie
 His book How to Win Friends and Influence
People is used by management experts even
 He believed that to succeed, an organization
should win the cooperation of its people.
 He advised------
 Make others feel important by appreciating their
 Try to make a good impression.
 Win people by being sympathetic and never telling
that they are wrong.
 Change people by praising their good qualities.
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5. Abraham Maslow

 He proposed the need hierarchy theory (physiological,

safety, social, esteem and self actualization needs).
 Each step in the hierarchy must be satisfied before
moving on to the next step.
 After a need is satisfied, it does not motivate an
 The final goal of human existence is self actualization.
 Managers who accepted this theory tried to change
organization and management practices to reduce
hurdles that prevent employees from reaching self

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Hierarchy Self Be where you want to be
of Needs
Need for respect from others

Need to be in a group, be loved


Need for stability and consistency


Physiological Basic needs like food, water

6. Douglas McGregor

 He gave two statements about human nature – Theory X and

Theory Y.
 Theory X put forward a negative view of people stating that
this category has
 Little ambition
 Dislike work
 Want to avoid responsibility
 Need close supervision at work
 Theory Y put forward a positive view of people stating that
this category has
 Self direction
 Take responsibility
 Consider work as a natural activity
 McGregor believed that managers should give freedom to
their subordinates to utilize their creativity and potential.

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D) Behavioral Science
1. B.F. Skinner-
 His research on classical and operant
conditioning and behavior modification
affected the design of organization’s training
programs and reward systems.
 According to Skinner, behavior depends on
 He stated that people show a desired behavior
only if they are rewarded for it.
 A behavior is not repeated if an individual is
not rewarded or punished for it.

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2.David McClelland
 His work has helped organizations to match
people with jobs and in redesigning jobs for
high achievers to motivate them.

 For example, people who have received

achievement training in India, work for longer
hours, initiate more new business ventures,
make greater investments in productive assets
as compared to people who did not receive
such training.

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3.Fred Fiedler
 His work in the field of leadership has a big
contribution to the growth of OB as a discipline.

 He highlighted the situational aspects of

leadership and tried to develop a complete
theory of leadership behavior.

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4.Frederick Herzberg
 He tried to find answer to the
question: What individuals want
from their jobs?
Hygiene Factors Motivational Factors
 By his study, he reached a
conclusion that people preferred
jobs that provided recognition,
achievement, responsibility and
 Only hygiene factors were not •Company policies • Achievement
sufficient to motivate people at
workplace. • Quality of supervision • Career advancement
 This work is important in OB • Relations with others • Personal growth
because it helped in enriching
jobs and the quality of work life • Personal life • Job interest
in modern organizations.
• Rate of pay • Recognition
• Job security • Responsibility
• Working conditions

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E) OB in Present Times
Only a single theory cannot improve
organizational functioning and
Therefore a contingency approach is
Today, the focus is on understanding
the situational factors and how they
affect a behavior pattern of individuals.

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Contributing Disciplines to the
OB Field
Organizational behavior is a behavioral science that
takes contributions from various behavioral
disciplines like----
Social psychology
Political science

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 It is the science that tries to measure, explain and change the
behavior of humans and other animals.
 Early industrial or organizational psychologists were concerned
with problems of tiredness, boredom and other factors that affect
 But now, they are concerned with learning, perception,
personality, training, leadership effectiveness, etc.
 It is the study of the social system in which the individual lives.
 It studies people with respect to their colleagues.
 Sociologists make an important contribution to OB through their
study of group behavior in organizations.

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Social Psychology
 It mixes the concepts of psychology and sociology.
 It focuses on influence of people on one another.
 It is the study of societies to learn about human beings and
their activities.
 Anthropologists work on culture and environments.
 They help in understanding differences in fundamental values,
attitudes and behavior of people in different countries and
different organizations.
Political Science
 It studies behavior of individuals and groups within a political
 It focuses on areas like conflict, intra-organizational politics
and power.
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