You are on page 1of 13



Understanding organizational behavior has never been more important for managers. A quick
look at a few dramatic changes now taking place in organizations supports this claim. For
instance, the typical employee is getting older; more and more women and nonwhites are in the
workplace; corporate downsizing and cost cutting are severing the bonds of loyalty that
historically tied many employees to their employers; and global competition is requiring
employees to become more flexible and to learn to cope with rapid change.In short, there are a
lot of challenges and opportunities today for managers to use OB concepts.


oday¶s business is mostly market driven; wherever the demands exist irrespective of
distance, locations, climatic conditions, the business operations are expanded to gain their
market share and to remain in the top rank etc. Business operations are no longer
restricted to a particular locality or region. Company¶s products or services are spreading
across the nations using mass communication, internet, faster transportation etc. An
Australian wine producer now sells more wine through the Internet than through outlets
across the country. More than 95% of Nokia hand phones are being sold outside of their
home country Finland. Japanese cars are being sold in different parts of globe. Sri
Lankan tea is exported to many cities across the globe. Executives of Multinational
Corporation are very mobile and move from one subsidiary to another more frequently.

Implications for Managers: Globalization affects a managerial skills in at least two

ways: i) an Expatriate manager have to manage a workforce that is likely to have very
different needs, aspirations and attitudes from the ones that they are used to manage in
their home countries. ii) Understanding the culture of local people and how it has shaped
them and accordingly learn to adapt ones management style to these differences is very
critical for the success of business operations. One of the main personality traits required
for expatriate managers is to have sensitivity to understand the individual differences
among people and exhibit tolerance to itá


his refers to employing different categories of employees who are heterogeneous in
terms of gender, race, ethnicity, relation, community, physically disadvantaged,
homosexuals, elderly people etc. he primary reason to employ heterogeneous category
of employees is to tap the talents and potentialities, harnessing the innovativeness,
obtaining synergetic effect among the divorce workforce. In general, employees wanted
to retain their individual and cultural identity, values and life styles even though they are
working in the same organization with common rules and regulations. he major
challenge for organizations is to become more accommodating to diverse groups of
people by addressing their different life styles, family needs and work styles.

Implications for Managers: Managers have to shift their philosophy from treating
everyone alike to recognizing individual differences and responding to those differences
in ways that will ensure employee retention and greater productivity while, at the same
time not discriminating. If work force diversity is managed more effectively, the
management is likely to acquire more benefits such as creativity and innovation as well
as improving decision making skills by providing different perspectives on problems. If
diversity is not managed properly and showed biases to favor only a few categories of
employees, there is potential for higher turnover, more difficulty in communicating and
more interpersonal conflicts.


Quality is the extent to which the customers or users believe the product or service
surpasses their needs and expectations. For example, a customer who purchases an
automobile has certain expectation, one of which is that the automobile engine will start
when it is turned on. If the engine fails to start, the customer¶s expectations will not have
been met and the customer will perceive the quality of the car as poor. Deming defined
quality as a predictable degree of uniformity and dependability, at low cost and suited to
the market. Juran defined it as fitness for use. he key dimensions of quality as follows:

i) Performance: Primary operating characteristics of a product such as signal

coverage, audio quality, display quality etc.

ii) Features: Secondary characteristics, added features, such as calculators, and

alarm clock features in hand phone.

iii) Conformance: Meeting specifications or industry standards, workmanship of the

degree to which a product¶s design or operating characteristics match preestablished

iv) Reliability: he probability of a product¶s failing within t a specified period of


v) Durability: It is a measure of product¶s life having both economic and technical


vi) Services: Resolution of problem and complaints, ease of repair.

vii) Response: Human to human interface, such as the courtesy of the dealer.

viii) Aesthetics: Sensory characteristics such exterior finish.

ix) Reputations: Past performance and other intangibles, such as being ranked first.
More and more managers are confronting to meet the challenges to fulfill the specific
requirements of customers. In order to improve quality and productivity, they are
implementing programs like total quality management and reengineering programs that
require extensive employee involvement.

echnological changes, structural changes, environmental changes are accelerated at a
faster rate in business field. Unless employees and executives are equipped to possess
the required skills to adapt those changes, the achievement of the targeted goals cannot be
achieved in time. here two different categories of skills ± managerial skills and technical
skills. Some of the managerial skills include listening skills, motivating skills, planning
and organizing skills, leading skills, problem solving skill, decision making skills etc.
hese skills can be enhanced by organizing a series of training and development
programmes, career development programmes, induction and socialization etc.

Implications for Managers: Designing an effective performance appraisal system with

built-in training facilities will help upgrade the skills of the employees to cope up the
demands of the external environment. he lower level cadre in management is required to
possess more of technical skills. As they move towards upward direction, their roles will
be remarkably changed and expected to have more of human relations and conceptual


It is a philosophy of management that is driven by
the constant attainment of customer satisfaction through the continuous improvement of
all organizational process. he component of QM are (a) intense focus of the customer,
(b) concern for continual improvement (c) improvement in the quality of everything the
organization does (d) accurate measurement and (e) empowerment of employees.

Reengineering: his refers to discrete initiatives that are intended to achieve radically
redesigned and improved work process in a bounded time frame. Business Process
Reengineering employees a structural methodology that reduces work process to their
essential composite activist and provides cost performance matrices to facilitate a
business case for dramatic improvements. Both functional and cross-functional processes
are evaluated through workflow analysis and activity based costing. In many cases, the
application of new technology and industries best practices will enable quantum
improvement in an organization¶s cost and performance.

Implications for Managers: oday¶s managers understand that any efforts to improve
quality and productivity must influence their employees. hese employees will not only
be a major force in carrying out changes, but increasingly will participate actively in
planning those changes. Managers will put maximum effort in meeting the customer¶s
requirements by involving everyone from all the levels and across all functions. Regular
communications (both formally and informally) with all the staff at all levels is must.
wo way communications at all levels must be promoted. Identifying training needs and
relating them with individual capabilities and requirements is must. op management¶s
participation and commitment and a culture of continuous improvement must be


he main issue is delegating more power and responsibility to the lower level cadre of
employees and assigning more freedom to make choices about their schedules, operations,
procedures and the method of solving their work-related problems. Encouraging the
employees to participate in work related decision will sizably enhance their commitment
at work. Empowerment is defined as putting employees in charge of what they do by
eliciting some sort of ownership in them. Managers are doing considerably further by
allowing employees full control of their work. An increasing number of organizations are
using self-managed teams, where workers operate largely without boss. Due to the
implementation of empowerment concepts across all the levels, the relationship between
managers and the employees is reshaped. Managers will act as coaches, advisors,
sponsors, facilitators and help their subordinates to do their task with minimal guidance.
Implications for Manager: he executive must learn to delegate their tasks to the
subordinates and make them more responsible in their work. And in so doing, managers
have to learn how to give up control and employees have to learn how to take
responsibility for their work and make appropriate decision. If all the employees are
empowered, it drastically changes the type of leadership styles, power relationships, the
way work is designed and the way organizations are structured.

c%&#a#a c#

American Express recently turned Joan Abraham¶s worst nightmare into a nonevent. It was 10
P.M. Joan was home in Mumbai, packing for a week-long trip, when she suddenly realized she
had left her AmEx Gold Card at a restaurant in Colaba, Mumbai earlier in the evening. he
restaurant was 30 miles away. She had a flight to catch at 7:30 the next morning and she wanted
her card for the trip. She called American Express. he phone was quickly answered by a
courteous and helpful AmEx customer service representative. He told Ms.Abraham not to worry.
He asked her a few questions and told ³help was on the way.´ o say Joan was flabbergasted
would be an understatement when her doorbell rang at 11:45 P.M.-less than 2 hours after she had
called AmEx. At her door was a courier with a new card. How the company was able to produce
the card and get it to her so quickly still puzzles Joan. But she said the experience made her a
customer for life.

oday, the majority of employees in developed countries work in service jobs. For instance, 80
percent of the U.S. labor force is employed in service industries. In Australia, 73 percent work in
service industries. In the United Kingdom, Germany and Japan the percentages are 69, 68 and
65, respectively. Examples of these service jobs include technical support representatives, fast-
food counter workers, sales clerks, teachers, waiters or waitresses, nurses, automobile repair
technicians, consultants, credit representatives, financial planners, and flight attendants. he
common characteristic of these jobs is that they require substantial interaction with an
organization¶s customers. And since an organization can¶t exist without customers-whether that
organization is DaimlerChrysler, Merrill Lynch, L.L.Bean, a law firm, a museum, a school, or a
government agency-management needs to ensure that employees do what it takes to please its
customers. OB can help in that task.
Organizational Behavior can contribute to improving an organization¶s
performance by showing managers how employee attitudes and behavior are associated with
customer satisfaction. Many an organization has failed because its employees failed to please the
customer. So management needs to create a customer-responsive culture. And OB can provide
considerable guidance in helping managers create such cultures-cultures in which employees are
friendly and courteous, accessible, knowledgeable, prompt in responding to customer needs, and
willing to do what¶s necessary to please the customer.

''& &'

Whatever happened to Montgomery Ward, Woolworth, Smith Corona, WA, Bethlehem Steel,
and WorldCom? All these giants went bust. Why have other giants, such as Sears, Boeing, and
Lucent echnologies implemented huge cost-cutting programs and eliminated thousands of jobs?
o avoid going bust.

oday¶s successful organizations must foster innovation and master the art of change or
they¶ll become candidates for extinction. Victory will go to the organizations that maintain their
flexibility, continually improve their quality, and beat their competition to the marketplace with a
constant stream of innovative products and services. Domino¶s single-handedly brought on the
demise of thousands of small pizza parlors whose managers thought they could continue doing
what they had been doing for years. is putting a lot of independent bookstores out
of business as it proves you can successfully sell books from an Internet Web site. Dell has
become the world¶s largest seller of computers by continually reinventing itself and outsmarting
its competition.

An organization¶s employees can be the impetus for the innovation and change or they
can be a major stumbling block. he challenge for managers is to stimulate their employees¶
creativity and tolerance for change. he field of OB provides a wealth of ideas and techniques to
aid in realizing these goals.

A network organization is a collection of autonomous firms or units that behave as a
single larger entity, using social mechanisms for coordination and control. he entities that make
up a network organization are usually legally independent entities (separate firms) but not
always. Some of the entities may be wholly owned subsidiaries. hey can even be divisions
within the company, but treated as separate companies that sell to outside customers.

Computerization, the internet, and the ability to link computers within organizations and
between organizations have created a different workplace for many employees-a networked
organization. hese technology changes allow people to communicate and work together even
though they maybe thousands of miles apart. he Managers job different in a networked
organization, especially when it comes to managing people. For instance, motivating and leading
people and making collaborative decisions ³online´ requires different techniques than are needed
in dealing with individuals who are physically present in a single location.


With change comes temporariness. Globalization, expanded capacity, and advances in

technology have combined in recent years to make it imperative that organization be fast and
flexible if they are flexible to survive. he result is that most managers and employees today
work in a climate best characterized as ³temporary´.

  $     "

Jobs are being continually redesigned; tasks are increasingly being done by flexible teams
rather than individuals; companies are relying more on temporary workers; jobs are being
subcontracted out to other firms; and pensions are being redesigned to move with people as they
change jobs.

Employees need to update their knowledge and skills continually to perform new job
requirements. For example, employees at nationalized banks like the State Bank of India, Punjab
National Bank and Corporation bank now need to know how to operate computers. hat was not
part of their job description 20 years ago.

Work groups are also in a state of flux. In the past, employees were assigned to a specific
work group, and that assignment was relatively permanent. here was a considerable amount of
security in working with the same people day in and day out. hat predictability has been
replaced by temporary work groups, teams that include members from different departments and
whose members change all the time, and the increased use of employee rotation to fill constantly
changing work assignments.

Finally, organizations themselves are in a state of flux. hey continually reorganize their
various divisions, sell off poorly performing businesses, downsize operations, subcontract non-
critical services and operation to other organizations, replace permanent employees with
temporary workers, and outsource various activities.

oday¶s managers and employees must learn to cope with temporariness. hey have to
learn to live with flexibility, spontaneity, and unpredictability. he study of OB can provide
important insights into helping to understand better a work world of continual change, how to
overcome resistance to change, and how best to create an organizational culture that thrives on


Work-Life balance means a harmonious balance of work and domestic life. It allows an
employee to fulfill all the roles in his/her life effectively and efficiently. Researchers have
proved that employees are at their best when they are contented and motivated both at work and

Achieving a work-life balance is not as easy as it seems. In the corporate world, change is
constant and imminent. he impact of globalization has further fuelled hese changes. he
corporate world signifies uncertainties, too many responsibilities, and long work hours. hese
changes in the environment disturb he balance between domestic and work life of employees. He
increasing competition and demands of society further aggravate the situation. All this adds up to

 $ )"

he corporate is realizing the importance of the work-life balance. Companies are
realizing the fact the work-life balance of employees has a direct effect on the productivity of
their organizations.

 $ )     $  "

c    " In today¶s world, maintaining work-life balance is the greatest
challenge employee face. Employees have realized that their personal lives have an effect on
their work-life. Hence, they are striving hard to maintain the balance.

c  $    " here is a shift in the organizational work culture. oday¶s work
culture provides flexible work hours, focus on results, and recognition of achievements.
However, this has made the workplace even more competitive as employees are expected to
always give their best, and this leads to stress.

  $  " With globalization, organizations are working 365 days, and 7 days a
week irrespective of time zones. Businesses are focusing more on customer care. With the
coming of call centers, this focus has doubled. he technology has added to the speed of work
but the workload remains the same.
  " he shift in attitudes, work styles, and cultures has disturbed the work-
life balance. Working mothers have major responsibilities of managing both and work place.
his makes it all the more important for them to balance work and life. Organizations are helping
women by providing facilities like work from home, day care etc.

+  $ )"

Achieving a work-life balance benefits both employers and employees. While the
employers get the benefit of productive and active employees, the employees feel secure and
loyal. It also improves confidence, concentration, self-esteem, and loyalty among the employees.
he concept of work-life balance is still fresh in India. Indian I companies are probably the first
ones to provide a fun-work environment. Some companies are now investing in recreational
facilities at the worksite.

  $ )"

o build up an awareness of the importance of work-life balance in employees,

companies should regular workshops and programs on work-life balance.


ù? Discourage employees from working late.
ù? ake a regular employee satisfaction survey that can identify the pitfalls in the work
ù? Provide vocations and encourage employees to take breaks.
ù? Provide opportunities like work from home, flexi times.

c     #  á






Although competitive pressures on most organizations are stronger than ever, we¶ve
noticed an interesting turn in both r RRrR R!r research and management
practice, at least in some organizations. Instead of responding to competitive pressures by
³turning up the heat,´ some organizations are trying to realize a competitive advantage by
fostering a positive work environment. For example, Jeff immelt and Jim McNerney. Both
disciplines of Jack Welch (former CEO of GE), have tried to maintain high performance
expectations (a characteristic of GE¶s culture) while also fostering a positive work environment
in their organizations (GE and Boeing). ³In this time of turmoil and cynicism about business,
you need to be passionate, positive leaders, ³Mr.Immelt recently told his top managers.

At the same time, real growth area in r RRrR R!r research has
(also called 
 "  #which
concerns how organizations develop human strengths, foster vitality and resilience, and unlock
potential. Researchers in this area argue that too much of r RRrR R!r 
research and management practice has been targeted toward identifying what¶s wrong with
organizations and their employees. In response, these researchers try to study what¶s  about

For example, positive organizational scholars have studied a concept called ³reflected
best ±self´- asking employees to think about situations in which they were at their ³personal
best´ in order to understand how to exploit their strengths. hese researchers argue that we all
have things at which we are unusually good, yet too often we focus on addressing our limitations
and too rarely think about how to exploit our strengths.

Although positive organizational scholarship does not deny the presence (or even the
value) of the negative (such as critical feedback), it does challenge researchers to look at
r RRrR R!r through a new lens. It also challenges organizations to think
about how to exploit their employees¶ strengths rather than dwell on their limitations.


In organizational world characterized by cutbacks, expectations of increasing worker
productivity, and tough competition in the marketplace, it¶s not altogether surprising that many
employees feel pressured to cut corners, break rules, and engage in other forms of questionable
Members of organizations are increasingly finding themselves facing  ,
situations in which they are required to define right and wrong conduct. For example, should
they ³blow the whistle´ if they uncover illegal activities taking place in their company? Should
they follow orders with which they don¶t personally agree? Do they give an inflated performance
evaluation to an employee whom they like, knowing that such an evaluation could save that
employee¶s job? Do they allow themselves to ³play politics´ in the organization if it will help
their career advancement?

What constitutes good ethical behavior has never been clearly defined, and in recent
years, the line differencing right from wrong has become even more blurred. Employees see
people all around them engaging in unethical practices-elected officials are indicted for padding
their expense accounts or taking bribes; corporate executives inflate company profits so they can
cash in lucrative stock options; and university administrators ³look the other way´ when winning
coaches encourage scholarship athletes to take easy courses in place of those needed for
graduation in order to stay eligible. When caught, these people give excuses such as ³every one
does it´ or ³you to seize every advantage nowadays.´ Is it any wonder that employees are
expressing decreased confidence and trust in management and that they¶re increasingly uncertain
about what constitutes appropriate ethical behavior in their organizations.

Mangers and their organizations are responding to this problem from a number of
directions. hey¶re writing and distributing codes of ethics to guide employees through ethical
dilemmas. hey¶re offering seminars, work-shops, and other training programs to try to improve
ethical behaviors. hey¶re providing in-house advisors who can be contacted, in many cases
anonymously, for assistance in desaling with ethical issues, and they¶re creating proection
mechanisms for employees who reveal internal unethical practices.

oday¶s mangers needs to create an ethically healthy climate for his or her employees,
where they can do their work productively and confront a minimal degree of ambiguity regarding
what constitutes right and wrong behaviors. In upcoming chapters, we¶ll discuss the kinds of
actions mangers can take to create an ethically healthy climate and help employees sort through
ethically ambiguous situations. We¶ll also present ethical-dilemma exercises at the end of each
chapter that will allow you to think through ethical issues and asses how you would handle them.

Corporate employees used to believe that their employers would reward their loyalty and
good work with job security, generous benefits, and steady pay increases. But beginning in the
mid-1980¶s in response to global competition, unfriendly takeovers, leveraged buyouts, and the
like, corporations began to discard traditional policies on job security, seniority, and
compensation. hey sought to become ³lean and mean´ by closing factories, moving operations
to lower-cost countries, selling off or closing down less-profitable businesses, eliminating entire
levels of management, replacing permanent employees with temporaries, and substituting
performance- based pay systems for seniority-based programs. It is important to note that this is
not just a North American phenomenon. European companies are doing the same. For instance,
Barclays, the big British bank, recently cut staff levels by 20 percent. And some German firms
have trimmed their workforce and management ranks: Siemens, the electronic engineering
conglomerate, shed more than 3,000 jobs in one year alone; and steelmaker Krupp-Hoesch cut its
management hierarchy from five levels to three.

here changes have resulted in as harp decline in employee loyalty. Employees perceive
that their employers are less committed to them, and as a result, employees respond by being less
committed to their compines.

An important r RRrR R!r challenge will be for mangers to devise

ways to motivate workers who feel less committed to their employers, while maintaining their
organization¶s global competitiveness.

U? ³Organizational Behavior" Stephen p Robbins & imothy.A.j 13th Edition.
U? ³ Essential of Organizational Behavior´ ± Stephen p Robbins 7th Edition