WHAT IS 'ORGANIZATIONAL BEHAVIOR - OB'

Organizational behavior (OB) is the study of the way people interact within groups. Normally this study is
applied in an attempt to create more efficient business organizations. The central idea of the study of
organizational behavior is that a scientific approach can be applied to the management of workers.
Organizational behavior theories are used for human resource purposes to maximize the output from individual
group members.
BREAKING DOWN 'Organizational Behavior - OB'
There are a variety of different models and philosophies of organizational behavior. Areas of research include
improving job performance, increasing job satisfaction, promoting innovation and encouraging leadership. In
order to achieve the desired results, managers may adopt different tactics, including reorganizing groups,
modifying compensation structures and changing the way performance is evaluated.
HISTORY
While Organizational Behavior as a field of academic study wasnt fully recognized by the American
Psychological Association until the 1970s, its roots go back to the late 1920s when the Hawthorne Electric
Company set up a series of experiments designed to discern how changes in environment and design changed
the productivity of their employees.
Their various studies, conducted between the years of 1924 and 1933, were broad and meticulously measured
over large periods of time. The studies included the effect of various types of breaks (lots of small breaks, a few
long ones, etc.) on productivity, productivity in isolation, and productivity in varying levels of light. The most
famous finding resulting from the of the Hawthorne Studies is what is now called the Hawthorne Effect, the
change in behavior of a test subject when they know theyre being observed.
To focus on that one finding, some have argued, is to ignore a wider set of studies that would become credited
for the development of organizational behavior as a field of study and the human resources profession as we
now know it. The idea of looking scientifically at behavior and productivity in the workplace with the goal of
increasing the amount and quality of work an employee can get done, along with the idea that workers were
not interchangeable resources but were instead unique in terms of their psychology and potential fit with a
company. These ideas were radically new when Hawthorne first began the studies, and they helped create a
field of study and an entire professional field.
Organizational behavior has focused on various different topics of study. In part because of the second world
war, during the 1940s the field focused on logistics and management science. During this period the emphasis
was on using mathematical modeling and statistical analysis to find the best answers for complex problems.
Studies by the Carnegie or freshwater School economics in the 1950s and 1960s furthered these rationalist
approaches to decision making problems.
In the 1970s, theories of contingency and institutions, as well as organizational ecology, resource dependence,
and bounded rationality came to the fore as the field focused more on quantitative research. These findings and
sets of theories helped organizations better understand how to improve business structure and decision making.
Since the 1970s, a good deal of the work being done in the field of organizational behavior has been on cultural
components of organizations, including topics such as race, class, gender roles, and cultural relativism and their
roles on group building and productivity. These studies, a part of a shift in focus in the field
towards qualitative research, and among other things, take into account the ways in which identity and
background can inform decision making.
ORGANIZATIONAL BEHAVIOR (OB): DEFINITION, IMPORTANCE & LIMITATIONS
What Is Organizational Behavior
Organizational Behavior has included two terms in it. Therefore, these two terms should be detailed first
before diving into the title in question.

 Organization: It is a group of people who are collected to work for a common goal with collective efforts.
Organization works through two concepts i.e coordination and delegation among its group members.
Delegation is necessary to allocate group members with equal work according to their capability, and
coordination is required to achieve organizational goal with precision.
Behavior: It is a verbal or physical response shown by a person as a consequence of the impact of his/her
surroundings. Individual Behavior varies in accordance with their mental reactivity to particular circumstances
because of their deeply imbibed morals and value system.
Organizational Behavior: Organizational Behavior is the observation of individual and/or group Behavior in
response to the other individuals or group as a whole. It studies Behavior of people or group to know their
attitude towards particular circumstances.
FUNDAMENTAL ASPECTS OF ORGANIZATIONAL BEHAVIOR:
There are various aspects of Organizational Behavior which it has to deal with, to know the soul of particular
Organization. Below mentioned are some of the fundamental aspects of Organizational Behavior1) People: This element is the soul of the Organization because people work to achieve the target of
Organization and Organization works to fulfill the needs of individual or group of individuals. The word
people can be anyone who is working inside the Organization, like employees or any external person like
supplier, customer, auditor, or any government official.
2) Structure: It is the body of the Organization which is to be taken care of to bring coordination between
different levels of Organization, because Organization does not work aloof and is dependent on people which
again work on the concept of division of labor. So, there is always a hierarchy in Organization which if not
properly dealt with can mess the system because of nil scrutiny and flow of control.
3) Technology: Organizations work on technologies to help people in efficiently doing their work. Same
technology does not apply to each Organization but different Organizations demand different technologies for
their different line of businesses e.g bank needs mediating technology which connects customers and bankers,
Manufacturing companies need long linked technology because of their assembly line process, and hospitals
work on intensive technology because of their responsibility to provide specialized services in terms of doctors
and medical equipments.
4) Environment: Organizations are influenced by the environment in which they work, at a substantial level.
Environment is important to Organizations because of the following factors:
# Supply and demand comes from this environment.
# Human resource, competitors, government agencies, unions, and political parties comes from environment in
which Organization is surviving.
# The Organizations have to follow rules and regulations fostered by this environment.
IMPORTANCE OF ORGANIZATIONAL BEHAVIOR:
1.
It builds better relationship by achieving peoples, organizational, and social objectives.
2.
It covers a wide array of human resource like behavior, training and development, change management,
leadership, teams etc.
3.
It brings coordination which is the essence of management.
4.
It improves goodwill of the organization.
5.
It helps to achieve objectives quickly.
6.
It makes optimum utilization of resources.
7.
It facilitates motivation.
8.
It leads to higher efficiency.
9.
It improves relations in the organization.
10. It is multidisciplinary, in the sense that applies different techniques, methods, and theories to evaluate
the performances.
LIMITATIONS OF ORGANIZATIONAL BEHAVIOR:
1.
Behavioral bias: It further causes dependence, dis-contentment, indiscipline, and irresponsibility.
2.
Law of diminishing returns: It says that beyond a certain point, there is a decline in output even after
each additional good or positive factor.

3.

Unethical practices and manipulation of people: Knowledge of motivation and communication acquired
can be used to exploit subordinates in an Organization by the manipulative managers.

CHAPTER 1. Organizational Behaviour (O.B.)

Organizational Studies, Organizational Behaviour and Organizational Theory is the systematic study and
careful application of knowledge about how people - as individuals and as groups - act within organizations.

OVERVIEW
Organizational Behaviour studies encompasses the study of organizations from multiple viewpoints, methods and
levels of analysis. For instance, one textbook divides these multiple viewpoints into three perspectives: modern,
symbolic and postmodern. Another traditional distinction, present especially in American academia, is between the
study of "micro" organizational behavior - which refers to individual and group dynamics in an organizational setting
and "macro" organizational theory which studies whole organizations, how they adapt and the strategies and
structures that guide them. To this distinction, some scholars have added an interest in "meso" - primarily interested
in power, culture and the networks of individuals and units in organizations - and "field" level analysis which study
how whole populations of organizations interact. In Europe these distinctions do exist as well, but are more rarely
reflected in departmental divisions.
Whenever people interact in organizations, many factors come into play. Modern organizational studies attempt to
understand and model these factors. Like all modernist social sciences, organizational studies seek to control,
predict and explain. There is some controversy over the ethics of controlling workers' behaviour. As such,
organizational behaviour or OB (and its cousin, Industrial psychology) have at times been accused of being the
scientific tool of the powerful. Those accusations notwithstanding, OB can play a major role in organizational
development and success.
The goal of the organizational theorist is to revitalize organizational theory and develop a better conceptualization
of organizational life. An organizational theorist should carefully consider levels assumptions being made in theory
and is concerned to help managers and administrators.

HISTORY OF ORGANIZATIONAL STUDY

The Greek philosopher Plato wrote about the essence of leadership. Aristotle addressed the topic of persuasive
communication. The writings of 16th century Italian philosopher Niccolo Machiavelli laid the foundation for
contemporary work on organizational power and politics. In 1776, Adam Smith advocated a new form of
organizational structure based on the division of labour. One hundred years later, German sociologist Max Weber
wrote about rational organizations and initiated discussion of
charismatic leadership. Soon after, Frederick Winslow Taylor introduced the systematic use of goal setting and
rewards to motivate employees. In the 1920s, Australian-born Harvard professor Elton Mayo and his colleagues
conducted productivity studies at Western Electric's Hawthorne plant in the United States.
Though it traces its roots back to Max Weber and earlier, organizational studies is generally considered to have
begun as an academic discipline with the advent of scientific management in the 1890s, with Taylorism representing
the peak of this movement. Proponents of scientific management held that rationalizing the organization with
precise sets of instructions and time-motion studies would lead to increased productivity. Studies of different
compensation systems were carried out.
After the First World War, the focus of organizational studies shifted to analysis of how human factors and
psychology affected organizations, a transformation propelled by the identification of the Hawthorne Effect. This

Human Relations Movement focused on teams, motivation and the actualization of the goals of individuals within
organizations.
Prominent early scholars included Chester Barnard, Henry Fayol, Frederick Herzberg, Abraham Maslow, David
McClelland and Victor Vroom.
The Second World War further shifted the field, as the invention of large-scale logistics and operations research
led to a renewed interest in rationalist approaches to the study of organizations. Interest grew in theory and methods
native to the sciences, including systems theory, the study of organizations with a complexity theory perspective and
complexity strategy. Influential work was done by Herbert Alexander Simon and James G. March and the so-called
"Carnegie School" of organizational behavior.
In the 1960s and 1970s, the field was strongly influenced by social psychology and the emphasis in academic
study was on quantitative research. An explosion of theorizing, much of it at Stanford University and Carnegie
Mellon, produced Bounded Rationality, Informal Organization, Contingency Theory, Resource Dependence,
Institutional Theory and Organizational Ecology theories, among many others.
Starting in the 1980s, cultural explanations of organizations and change became an important part of study.
Qualitative methods of study became more acceptable, informed by anthropology, psychology and sociology. A
leading scholar was Karl Weick.
Specific Contributions
Frederick Winslow Taylor (1856-1915) was the first person who attempted to study human behavior at work using
a systematic approach. Taylor studied human characteristics, social environment, task, physical environment,
capacity, speed, durability, cost and their interaction with each other. His overall objective was to reduce and/or
remove human variability. Taylor worked to achieve his goal of making work behaviors stable and predictable so that
maximum output could be achieved. He relied strongly upon monetary incentive systems, believing that humans are
primarily motivated by money. He faced some strong criticism, including being accused of telling managers to treat
workers as machines without minds, but his work was very productive and laid many foundation principles for
modern management study.
Mary Parker Follett was a pioneer management consultant in the industrial world. As a writer, she provided
analyses on workers as having complex combinations of attitude, beliefs and needs. She told managers to motivate
employees on their job performance, a "pull" rather than a "push" strategy.
Douglas McGregor proposed two theories/assumptions, which are very nearly the opposite of each other, about
human nature based on his experience as a management consultant. His first theory was "Theory X", which is
pessimistic and negative; and according to McGregor it is how managers traditionally perceive their workers. Then,
in order to help managers replace that theory/assumption, he gave "Theory Y" which takes a more modern and
positive approach. He believed that managers could achieve more if they start perceiving their employees as selfenergized, committed, responsible and creative beings. By means of his Theory Y, he in fact challenged the
traditional theorists to adopt a developmental approach to their employees. He also wrote a book, 'The Human Side
of Enterprise', in 1960; this book has become a foundation for the modern view of employees at work.
Current State of the Field
Organizational behaviour is currently a growing field. Organizational studies departments generally form part of
business schools, although many universities also have industrial psychology and industrial economics programs.
The field is highly influential in the business world with practitioners like Peter Drucker and Peter Senge, who
turned the academic research into business practices. Organizational behaviour is becoming more important in the

global economy as people with diverse backgrounds and cultural values have to work together effectively and
efficiently. It is also under increasing criticism as a field for its ethnocentric and pro-capitalist assumptions.
During the last 20 years organizational behavior study and practice has developed and expanded through
creating integrations with other domains:
Anthropology became an interesting prism to understanding firms as communities, by introducing concepts like
'organizational culture', 'organizational rituals' and 'symbolic acts' enabling new ways to understand organizations as
communities.
Leadership Understanding: The crucial role of leadership at various level of an organization in the process of
change management.
Ethics and their importance as pillars of any vision and one of the most important driving forces in an
organization.

THE ORGANIZATION SEEN AS A SOCIAL SYSTEM

The systems
A quite modern way -in historical terms- of analyzing the organizations of any type and size, consists on
visualizing them as a dynamic whole. In such dynamics take part all and each one of the parts that compose the
system or organization. When the parts interact with each other in harmony, the phenomenon called SINERGY
is produced, according to which, the result obtained from the harmonic interaction is highly superior to the
outcome which would be obtained if each component acted in an isolated and autonomous way. A clear
example would be that the result obtained by the different organs of the digestive apparatus (liver, vesicle,
stomach, etc.) working in a harmonically coordinated way is the DIGESTION. A goal which can be only
obtained through sinergy.

Taking these concepts to the field of the Behavior, we can also focus on companies as big unities where the
behavior is processed as a result of the interaction. And this will be as favorable or unfavorable as the sinergy
degree we had been able to implement in the social body. In this case, we refer -sharing with Seiler- to the
system composed by a set of people and groups, strongly interrelated with each other, that permanently interact
willing to reach specific objectives.
ELEMENTS OR INPUTS
In order to understand the human behavior in the organization, we must consider that the external environment
affects the organizational system, among other ways, simultaneously with the addition of inputs, which, in order
to continue with this point of view, would be:
-Human Elements or Inputs
-Technological Elements or Inputs
Formal Organization
-Organizational Elements or Inputs
Informal Organization
Human Elements or Inputs

The businessmen in the organization, their managers and subordinates bring with them certain abilities,
knowledge, needs, values, behaviors, and thoughts.
RELATION WITH OTHER ELEMENTS OR INPUTS:
-The technology used by the organization will determine which technical abilities are required from the
individuals who will enter the organization.
-The organizational structure also affects the kind of person who enters the company, per example, according to
the work conditions and the levels of wage offered by the organization will be determined if the elements or
inputs can attract or not the people of higher or lower level of qualification.
TECHNOLOGICAL ELEMENTS OR INPUTS:
Lets remember that the kind or branch of business in which an organization is operating will establish the kind
of technology with which the employees will have to work.
RELATION WITH OTHER ELEMENTS OR INPUTS:
-In the manufacturing branch, the kind of machinery used affects the physical position of the individuals on
their work place, and therefore affects the communications.
-Also, the levels of noise will determine, per example, if the individuals will be able to communicate with each
other or not.
-The increase of the use of PCs could lead to each person working isolated from the group.
-The space technology and the electronics tend to be associated to a fast lost of use. In those companies which
are dedicated to such production or services branches, there is many times a high rotation of employees, and
therefore in this kind of companies there are week relations and the commitment made by people towards the
company is week as well.
ORGANIZATIONAL ELEMENTS OR INPUTS:
FORMAL ORGANIZATION
When we say "formal", as we have seen, we refer to the structure established by the company and which is a
result of the departmentalization. It is also the politics, the norms and formal procedures, the leadership styles,
the punishments and rewards established by the company and which are specifically destined to influence the
behaviours in a way that is favourable to the organization. Per example: it is pre-supposed that a system of
incentives will increase the productivity, but these organizational designs often have unexpected consequences
as well. George Elton Mayo, with his experiences in the Western Electric Company, found important evidences
on the fact that the norms of the informal group, per example, established that it shouldn't give up until reaching
or surpassing the standard. The origins of such informal norms (non-written) were based, among other caused,
on the workers' fear to a dismissal.
INFORMAL ORGANIZATION
The organizational behaviour -taking into account that human beings are sociable animals and generally work
in a group- cannot be understood or foreseen only through the analysis of the formal organization, since its
behavior is also guided by the presence of the informal organization, with its own structure, the leaders and
informal norms. The last aspect leads to the fact that the behavior of each individual will be determined also:
-by what could be approved or disapproved by his co-workers

-by the need of keeping the acceptance within the company from those people whose affection and respect the
worker values.
Besides this, the informal norms are also generally accompanied by a group of rewards and punishments
established by the informal group, Those norms, which are characterized, most of the times, by the fact of not
being explicitly written, exist within every informal group influencing the behavior developed in a system, and
generally do not greatly coincide with the formal norms established by the company.

What is the Socio-Technical System Approach?

February 10, 2011
The Socio-technical System approach is about harnessing the people aspects and technical aspects of
organizational structure and processes to achieve joint optimization, with a focused emphasis on achieving
excellence in both the technical performance and the quality in peoples work. The term socio-technical system
was coined in the 1960s by Eric Trist and Fred Emery who were working as consultants at the Tavistock
Institute in London.
Trist noted in his book Organizational Choice that Inherent in the socio-technical approach is the notion that
the attainment of optimum conditions in any one dimension does not necessarily result in a set of conditions
optimum for the system as a whole.The optimization of the whole tends to require a less than optimum state
for each separate dimension.
The work of Trist and Emery provide the basic foundation for High Performance Work Team Organization
(HPWO) and the empowerment of teams in the following:

Responsible autonomy. Shifting work to teams or groups with internal supervision and leadership, but
avoiding the silo thinking by engaging the whole system

Adaptability, agility. In an environment of increasing complexity, giving groups responsibility for

solving local problems

Whole tasks. Specifying the objective to be completed, with a minimum of regulation of how it is to be
done

Meaningfulness of tasks. In the words of Trist et al: For each participant the task has total significance
and dynamic closure.

From the works of Eric Trist and Fred Emery, Centre for Performance Transformation define High Performance
Work Team as:
1. People working together to produce a product or services;
2. They are focus on meeting or exceeding customers requirements;
3. They have a clear understanding of their mission, roles, measures and operating guidelines;
4. They demonstrate a high level of trust and interdependence skills that results in effective
communication, team meetings and handling of differences;
5. They seek continuous improvement by monitoring their performance, setting goals, analyzing their
processes and identifying and solving problem on a regular basis; and
6. They are empowered to plan, control, coordinate and improve their work

What do we offer?
Our Socio-technical system of consulting and training services involves the following:
People
Transformation
We help leaders and team develop a focus to build flexibility and discipline, demonstrating a high level of trust
and interdependence among teams, constantly seeking to improve their performance by setting goals,
monitoring and analyzing their processes and identifying and solving problems on a regular basis.
Process
Transformation
We help organization develop a focus on defining core business processes, and instilling a system and
capabilities to empower team with the ability to leverage process transformation methodologies (Kaizen, Lean,
Six Sigma and others) to accelerate innovation, achieving results and honing competitive edge for their
organization. Let our Master Black Belts and Lean Masters jump start your organizations road to greater
efficiency and effectiveness.