CHAPTER 2

History of Human Relations & Organizational Behaviour

In this Chapter, we shall understand:

1. Concepts of Human
Relations/Organizational Behaviour
2. Interdisciplinary nature of
Organizational Behaviour
3. Why Organization Behaviour?
4. Theories X and Y?
5. Future of Organization Behaviour
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History of Human Relations & Organizational Behaviour

The Organization & the Individual

Individual Behavior affects and is affected
by several factors.
Three factors principally affect Individual
Behavior:
1. Actions
2. Structure
3. Context
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History of Human Relations & Organizational Behaviour

In a global world, human beings occupy

centre stage in any business.
The interplay of roles in an organization,
also called human dynamics is quite
complex.
Another term to explain this dynamics is
‘OB’.
Ob is defined as an interdiciplinary
behavioural science, studying phenomena
related to dynamics of an organization
And their various human units.
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History of Human Relations & Organizational Behaviour

An organixation, as a unit, consists of

social, technical and economic subunits,
which co-ordinate human and material
resources to achieve its goals.
These goals are :
1. To make profits
2. To produce goods and provide services
3. To compete in the market place
4. To ensure well being of the staff
5. To achieve stability, continuity and
growth
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History of Human Relations & Organizational Behaviour

Definition of Human Relations and OB

There are a few definitions of human
relations and OB, one of which is
‘motivating people in organizational
settings to develop team work which
accomplishes individual as well as
organizational goals effectively’ – Keith
Davis.
Another definition by Fred Luthans states
OB as ‘the understanding, prediction and
the management of human behaviour in
organizations’.
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History of Human Relations & Organizational Behaviour

Historical developments of human relations and OB
Human relations always existed, though the scientific study
of such relations and consequent behavior is of recent
origin.
Prior to the industrial revolution, people were either self
employed or worked in small groups. There were issues
regarding working conditions and resources, which were
managed in an appropriate manner. Since the numbers
were not large, the issues were small and the solutions
were easy to find.
With the advent of industrial revolution and mass production,
levels of earnings, supply of goods and working conditions
improved. The human element gradually started playing a
important role in systemizing businesses.
The category of people called ‘Managers’ were born.
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History of Human Relations & Organizational Behaviour

Scientific Management movement

F. W. Taylor was the first to recognize the
importance of human element. He
improved working conditions, simplified
operations, eliminated waste, improved
house keeping. As a result productivity
improved. The concept of division of
labour and work measurement emerged.
He also suggested scientific methods of
training and incentives to enhance
performance.
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History of Human Relations & Organizational Behaviour

Scientific Management movement …

The human relations movement gave rise to

behavioural thinkers and social scientists.
Taylor’s theory was found to be
inadequate on some aspects. Elton Mayo,
Mary Parker Follet, Abraham Maslow,
Douglas McGregor, Chris Argyris and
many others emphasized through their
findings the impact of the human element
on workplace productivity.
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History of Human Relations & Organizational Behaviour

Scientific Management movement…
Assumptions of human relations movement :
1. Organizations are social systems
2. People are motivated by many needs
3. People always do not behave in a rational or logical
manner
4. People depend on each other for work
5. Informal groups in a workplace decide performance
behaviour to a large extent
6. Team work is essential for the success of an organization
7. Job satisfaction gives rise to higher performance.

Thus the ‘human face’ to the organization was created.

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History of Human Relations & Organizational Behaviour

Contributory Disciplines to OB
Human behaviour being unscientific needs a
multi disciplinary approach to be
understood. The disciplines that
contribute to the study of OB are :
1. Psychology
2. Sociology
3. Social Psychology
4. Anthropology
5. Political Science
(Refer to block diagram in course material)
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History of Human Relations & Organizational Behaviour

Significance of OB :
OB and HR contribute significantly to the
performance and effectiveness to people and
organization.
The human resources are the sum total of potential
and acquired skills and knowledge. Skills need to
be improved through proper training.
Similarly man management and interpersonal skills
play an important role in handling complex work
pressures.
This activity is called management development –
an important part of OB
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History of Human Relations & Organizational Behaviour

Organizational Performance :
HR and OB make effective organizations.
Knowledge x Skill = Ability
Attitude x Situation = Motivation
(Keith Davis)

Ability x Motivation = Potential Performance

Human Performance x Resources =
Organization Performance
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History of Human Relations & Organizational Behaviour

Theory X & Theory Y
Douglas McGregor formulated two sets of assumptions: Theory X & Theory
Y to study human behavior at work.

Theory X assumes:
a. The average employee dislikes work and tries to avoid it, if he can.
b. He has to be “pushed” into working effectively, through punishment or
rewards.
c. He seldom takes risk, is not ambitious and gives high importance to his
security.

Theory Y assumes:
a. People naturally put in effort to accomplish tasks. They need not be
“pushed” into it.
b. People are self driven to solve work related issues using their own
creativity.
C. Employees do take risk and stretch themselves to action when they see a
meaningfulness.
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History of Human Relations & Organizational Behaviour

Theory X & Theory Y…..

This model creates Theory X & Theory Y
Managers.
Theory X Manager is:
a) Hard driving, ambitious, result oriented.
b) Demanding, autocratic, does not
delegate easily.
Theory Y Manager is:
a) Balanced emotionally, moderately/low
ambitious.
b) Trusting towards people and delegates.
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History of Human Relations & Organizational Behaviour

Prospects in the 21st century

1) Organizations in the 21st century are perceived as global entities.

2) They are compared with their counterparts globally and corrective
actions taken to create uniformity.
3) Since automation and computerization are taking over manpower,
human resources need to develop alternate skills.
4) Organizations are getting leaner with fewer jobs than before.
5) Workforce consists of both sexes, with women getting equal
opportunities as men.
6) Relocation of people and jobs are routine. Those who adapt to
relocation rise to seniors positions.
OB has major challenges which are more significant than before.
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History of Human Relations & Organizational Behaviour

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History of Human Relations & Organizational Behaviour

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History of Human Relations & Organizational Behaviour

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History of Human Relations & Organizational Behaviour

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History of Human Relations & Organizational Behaviour