Organisational behaviour ch 1

Organizational Behaviour

• Prepared By-

Prof. Niraj RajyaguruNET (Management)

NET (Commerce)

MBA (Marketing)

M.com (Marketing)

M. Phil (Pursuing)

Organizational Behaviour

Unit – 1 Basic Understanding of the context of Organizational Behaviour

Organization

• The Term Organization means an entity, such as an institution or association, that has a collective goal and is linked to an external environment.

• On the basis of this definition manufacturing and service firms are organizations, and so schools, hospitals, Temples, Police Department, government agencies.

Behaviour

• “It is the response of the system or organism to various stimuli or inputs, whether internal or external, conscious or sub conscious, overt or covert, and voluntary or involuntary.”

Organizational Behaviour

• “Organizational Behaviour is a field of study that investigates the impact that individuals, groups and structure have on behaviour within organization.”

• “Organizational Behaviour is the term used to describe the actions and reactions of individuals and groups in the system as they interact with each other in the course of their working day.”

• Organizational behaviour is a field of study.

• It studies three determinants of behaviour in organizations:

Individual

Group

Structure

• Organizational behaviour applies the knowledge gained about individuals, groups, and the effect of structure on behaviour in order to make organization work more effectively.

What Managers Do

What is Management?• It is the art of getting things done through

others• Perform the functions of management to

achieve organizational goals

Importance of Management• Improves relations• Encourages team work• Encourage innovations• Motivates employee• Optimum use of resources

Levels of Management

TOP LEVEL

MIDDLE LEVEL

LOWER LEVEL

5 Important functions of management

PlanningPlanning

ControllingControlling

DirectingDirecting

OrganizingOrganizing

StaffingStaffing

Planning• Planning is deciding in advance what is to be done in

the future• “According to koontz and O ‘Donnell defines

planning is deciding in advance what to do, how to do it, when to do it and who is to do it. Planning bridges the gap from where we are to where we want to go. It makes it possible for things to occur which would not otherwise happen”

Organizing• It is the process of identifying & grouping works

• Defining & delegating responsibility

• Authority & establishing relationships

• Helps to work efficiently

• According to Henri Fayol “To organize a business means to provide it with everything useful to its functioning-raw materials, tools, capital and personnel”

Staffing• Ensuring of the right person for the right job at the right time

• According to koontz and O Donnel “The managerial functions of staffing involves manning the organizational structure through proper and effective selection, appraisal and development of personnel to fill the roles designed in to the structure.

Directing • Giving instructions, guiding, counseling, motivating

and leading staffs

• To achieve organizational goals

• It is concerned with the execution of plans through organized action.

Controlling • Involves measuring against the established objectives and

goals• Linked with planning• “ according to Harold koontz controlling is the

measurement and correction of performance in order to make sure that enterprise objectives and the plans devised to attain them are accomplished”

Mintzberg’s Management Roles

Management skills

Technical skills- the ability to apply specialized knowledge or expertise.

Human skills- the ability to work with, understand, and motivate other people, both individually and in groups.

Conceptual skills- the mental ability to analyze and diagnose complex situations.

Importance of Organizational Behaviour

Through Organizational Behaviour a Manager can know.. How to Motivate subordinates How to lead Attitude of workers Value system Methods of Enhance Job Satisfaction How to Develop Team spirit How to solve disputes

Disciplines that contribute to the OB Field:-

Disciplines that contribute to the OB Field:-Psychology:- Psychology is the science that seeks to

measure, explain and sometimes change the behaviour of humans and animals. Psychologist concern themselves with studying and attempting to understand individual behaviour.

Earlier Psychologist Modern Psychologist

Fatigue Learning Perception

boredom Personality Training

Working condition Leadership Motivation

Job satisfaction Performance appraisal

Attitude Stress

Sociology:- Sociology studies People in relation to their social environment or culture. Sociologist have contributed to OB through their study of group behaviour in organizations, Organizational culture, communication, power and conflict.

Social Psychology:- It focuses on peoples influence on one another. One major area receiving considerable investigation from social psychology has been change- how to implement it and how to reduce barriers to its acceptance. Social psychologist making contribution in areas of understanding and changing attitudes, building trust etc.

Anthropology:- Anthropology is the study of societies to learn about human beings and their activities. Anthropologists’ work on cultures and environments has helped us understand differences in fundamental values, attitudes and behaviour between people in different countries and within different organizations.

Challenges and Opportunities for OB

Responding to Globalization• Increased Foreign Assignments

• Working with people from different cultures

• Coping with anticapitalism Backlash

• Overseeing Movement of Jobs to Countries with low Cost Labour

• Managing people during the war on Terror

Managing Workforce Diversity

• Workforce diversity

• Embracing diversity

• Changing demographics

Improving quality and productivityImproving customer serviceImproving people skillsStimulating innovation and changeCoping with “Temporariness”Working in Networked OrganizationsHelping employees balance work-life conflictCreating a positive work environmentImproving Ethical Behaviour

Challenges and Opportunities for OB

• 1.Responding to Globalization– Increased foreign assignments– Working with people from different cultures– Coping with anticapitalism backlash– Overseeing movement of jobs to countries with

low-cost labor– Managing people during the war on terror

• 2.Managing workforce diversity– Workforce diversity:

• Gender, race, national origin, age, disability, ethnicity– Embracing diversity– Changing demographics

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

• 3.Improving quality and productivity– “Almost all quality improvement comes via

simplification of design, manufacturing, layout, processes, and procedures.”----Tom Peters

– Today’s managers understand that success of any effort at improving quality and productivity needs process reengineering and quality management with extensive employee involvement.

• 4.Improving people skills• Here are some points that create challenge for

a manager to improve skill in people at work place.– Learn a ways to motivate people– How to be a better communicator– How to create more effective teams

• 5.Empowering people– Decision 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 team– Managers are empowering employees.– Managers-how to give up control– Emplyees-how to take responsibility for their work and

make appropriate decisions

• 6.Stimulating innovation and change– Today’s successful organizations must foster

innovation.– An organization’s employees can be the impetus for

innovation and change or they can be a major stumbling block.

– The challenge for managers is to stimulate their employees’ creativity and acceptance 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!

– So workers need to continually update their knowledge and skills to perform new job requirements.

• 8.Helping employees balance work/life conflicts– A 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.Improving ethical behavior– Members 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.

• 10. Improving customer service-In this consumer centric market it becomes

challenging to provide best services to customers.

• 11.Working in networked organization-Computerization, the internet and the ability to link

computers within organization and between organizations have created a different workplace for many employees- a Networked organization. It is challenging for traditional managers to settle down and perform his functions at these type or Organizations.

Basic OB Model

• OB model proposes that there are three levels of analysis in OB and that, as we move from the individual level to the Organizational level, we add systematically to our understanding of behaviour in organizations. In OB model each level is constructed on the previous level. Group concept grow out of the foundation laid in the individual section; we overlay structural constraints on the individual and group in order to arrive at organizational behaviour.

The Dependent Variables

Following are the primary dependent variables in OB• Productivity• Absenteeism• Turnover• Job satisfaction• Deviant workplace behaviour• Organizational Citizenship Behaviour (OCB)

The Dependent Variables (cont’d)

The Dependent Variables (cont’d)

The Dependent Variables (cont’d)

The Dependent Variables (cont’d)

The Independent Variables

IndependentIndependentVariablesVariables

IndependentIndependentVariablesVariables

Individual-Level Individual-Level VariablesVariables

Individual-Level Individual-Level VariablesVariables

OrganizationOrganizationSystem-LevelSystem-Level

VariablesVariables

OrganizationOrganizationSystem-LevelSystem-Level

VariablesVariables

Group-LevelGroup-LevelVariablesVariables

Group-LevelGroup-LevelVariablesVariables

Leadership

• “Leadership is the ability to influence a group towards the achievement of a vision or set of goals.”

• Focus on things

• Do things right

• Plan

• Organize

• Direct

• Control

• Give Orders

• Focus on people

• Do the right things

• Inspire

• Influence

• Motivate

• Build

• Take initiate

Theories of Leadership• Great Man Theory• Trait Theories• Behavioural Theories• Contingency Theories• Leader-Member Exchange (LMX) Theory

“Great Man” Theories

• great leaders are simply born with the necessary internal characteristics such as charisma, confidence, intelligence, and social skills that make them natural-born leaders.

• Great man theories assume that the capacity for leadership is inherent – that great leaders are born, not made.

• The term "Great Man" was used because, at the time, leadership was thought of primarily as a male quality,

Trait Theories

• Similar in some ways to Great Man theories,

• Trait theories assume that people inherit certain qualities and traits that make them better suited to leadership.

• leaders like Buddha, Napoleon, Gandhi, Churchill, Hitler, Ratan tata, Narayan murthy, Dhirubhai ambani are recognized as leaders and discribed in terms such as Charismatic, Enthusiastic, and Courageous.

• Big five personality framework give some important inputs to Understand Trait Theory.

• It becomes clear that most of the dozens of traits emerging in various leadership reviews could be subsumed under one of the Big Five personality frame work like..

Extraversion (Extrovert, Active, Active, High energy... Etc.)

Agreeableness (cooperative, good nature, trustful.. Etc.)

Conscientiousness (conscientious, dependable, Persistent.. Etc.)

Emotional stability (calm, confident, secure... Etc.)

Openness (creative, Curious, artist.. Etc.)

• This approach resulted in consistent and strong support for traits as predictors of leadership.

• Number of research conclude that if consider Big Five Personality framework- ‘Extraversion’ is the most important trait of effective leader.

• Assertive is important Extravert is a positive.

• High Assertiveness - Less effective leader

• Moderate Assertiveness - More effective leader

• Conscientiousness and openness Strong and consistent relationship to leadership

• Agreeableness and emotional stability weren't strongly correlated with leadership

• Recent studies are indicating that another trait that may indicate effective leadership is emotional intelligence (EI)

• A core component of EI is empathy. Empathetic leaders can sense other’s needs, listen to what followers say (and don’t say) and are able to read the reactions of others.

Behavioral Theory In contrast with trait theory, behavioral theory

attempts to describe leadership in terms of what leaders do, while trait theory seeks to explain leadership on the basis of what leaders are. Leadership according to this approach is the result of effective role behavior. Leadership is shown by a person’s acts more than by his traits.

• Trait research provides a basis for selecting the “Right” persons to assume formal positions in groups and organizations requiring leadership. In contrast, behavioural theory believes- we could Train people to be leader.

• Trait theory assume that leaders are born rather than made. However Behavioural theories assume there were specific behaviours that identified leaders, we could teach leadership; we could design programs that implanted these behavioural patterns in individuals who desired to be effective leaders

Ohio state studies

• The most comprehensive behavioural theories resulted from research that began at Ohio State University in the late 1940s.

• Researcher at ohio state identify 1000 dimensions and categories in two heads that accounted for most of the leadership behaviour described by employees

Initiating structure Consideration

Ohio State StudiesInitiating Structure

The extent to which a leader is likely to define and structure his or her role and those of sub-ordinates in the search for goal attainment.

Consideration

The extent to which a leader is likely to have job relationships characterized by mutual trust, respect for subordinate’s ideas, and regard for their feelings.

• The follower of leaders who were high in consideration were more satisfied with their jobs and more motivated and also had more respect for their leader.

• Initiating structure was more strongly related to higher levels of group and organization productivity and more positive performance evaluations.

University of Michigan studies

• Leadership studies undertaken at the University of Michigan’s survey research centre at about the same time as those being done at Ohio state had similar research objectives:

• “To Locate behavioural characteristics of leaders that appeared to be related to measures of performance effectiveness.”

University of Michigan Studies

Employee-Oriented Leader

Emphasizing interpersonal relations; taking a personal interest in the needs of employees and accepting individual differences among members.

Production-Oriented Leader

One who emphasizes technical or task aspects of the job.

• The Michigan group also came up with two dimensions of leadership behaviour-

This dimension of Michigan studies are closely related with the Ohio state dimensions.

• Employee oriented leadership is similar to Consideration.

• Production oriented leadership is similar to initiating structure.

• Michigan studies researchers arrived at conclusion that Employee Oriented leaders were associated with higher group productivity and greater job satisfaction. While production oriented leaders are less productive and with poor job satisfaction.

• Ohio state studies conclude that both consideration and Initiating structure are important to effective leadership.

Managerial Grid

• Drawing from Ohio state and Michigan studies, Blake and Mouton proposed a managerial grid (leadership grid) based on the style of “Concern for people” and “concern for production”, which essentially represent the Ohio state dimensions of considerations and initiating structure or the Michigan dimensions of employee oriented and production oriented.

The Managerial Grid

(Blake and Mouton)

• Based on the findings of Blake and Mouton, managers were found to perform best under a 9,9 style, as contrasted, for example, with a 9,1 (authority type) or 1,9 (laissez-faire) style.

CONTINGENCY THEORIES

• All Consider the Situation– Fiedler’s Contingency Model– Cognitive Resource Theory – Hersey and Blanchard’s Situational Leadership

Model– Path Goal Theory

Fiedler Model

• The first contingency model for leadership was developed by Fred Fiedler.

• Leader: Style is Fixed (Task oriented vs. Relationship oriented)

• Assumption: Leader’s Style is Fixed & Can be Measured by the Least Preferred Co-Worker (LPC) Questionnaire.

• The LPC Questionnaire contains sets of 16 contrasting adjectives.

• It asks respondent to think of all the co-workers they have ever had and to describe the one person they Least enjoyed working.

• Fiedler believes that based on the respondents answer to the LPC questionnaire, he can determine their basic leadership style.

• If you essentially describe the person you are least able to work with in favourable terms, Fiedler would label you relationship oriented. In contrast if the least preferred co-worker is seen in relatively unfavourable terms (a low LPC score), the respondent is primarily interested in productivity and thus would be labelled task oriented.

LPC Questionnaire-

• Defining the situation-• After an individual’s basic leadership style has been assessed

through the LPC questionnaire, it is necessary to match the leader with the situation. Fiedler has identified three contingency dimensions.

– Leader-member relations

– Task structure

– Position power

Fiedler’s Model: Defining the Situation

Leader-Member Relations

The degree of confidence, trust, and respect subordinates have in their leader.

Position Power

Influence derived from one’s formal structural position in the organization; includes power to hire, fire, discipline, promote, and give salary increases.

Task Structure

Degree of Job (structured or unstructured)

Matching Leadership style and SituationsMatching Leadership style and Situations

• Category• Leader-Member Relations• Task Structure• Position Power

I

Good

HighStrong

II

Good

HighWeak

III

Good

LowStrong

IV

Good

LowWeak

V

Poor

HighStrong

VI

Poor

HighWeak

VII

Poor

LowStrong

VIII

Poor

LowWeak

Good

Poor

Per

form

ance

Relationship-Oriented

Task-Oriented

Favorable Moderate Unfavorable

Cognitive Resource Theory

• In cognitive resource theory Fiedler focuses on the role of stress as a form of situational unfavourableness and how a leader’s intelligence and experience influence his or her reaction or stress.

• Stress is the enemy of rationality. It’s difficult for leaders to think logically and analytically when they’re under stress. Moreover, the importance of a leader’s intelligence and experience to effectiveness differs under low and high stress situations.

• Less intelligent individuals perform better in leadership roles under high stress than do more intelligent individuals.

• Less experienced people perform better in leadership roles under low stress than do more experienced people.

• Less intelligent individuals perform better in leadership roles under high stress than do more intelligent individuals.

• Less experienced people perform better in leadership roles under low stress than do more experienced people.

Hersey and Blanchard’s Situational Theory

• This Model called- Situational leadership theory (SLT) has been incorporated into leadership training programs at more than 400 of the fortune 500 companies and more than 1million managers per year from a wide variety of organizations are being taught its basic element.

• SLT theory focus on followers and readiness.

• Followers can check effectiveness of leader, and can accept or reject them.

• The term readiness, refers to the extent to which people have the ability and willingness to accomplish a specific task.

Situational Leadership Theory (SLT)

A contingency theory that focuses on followers’ readiness; the more “ready” the followers (the more willing and able) the less the need for leader support and supervision.

LOW Amount of Follower Readiness HIGH

Amount of Leader Support &

Supervision Required HIGH LOW

• Hersey and Blanchard identify four specific leader behaviour-

If followers are...1) Unable and Unwilling- The leader needs to give clear and

specific directions.

2) Unable and willing- The leader needs to display high task orientation to compensate for the follower’s lack of ability.

3) Able and Unwilling- The leader needs to use a supportive and participative style.

4) Able and willing- The leader doesn’t need to do much.

Leadership Styles and Follower Readiness(Hersey and Blanchard)

WillingUnwilling

Able

Unable DirectiveDirective High Task High Task OrientationsOrientations

Supportive Supportive Participative Participative MonitoringMonitoring

Follower Readiness

LeadershipLeadershipStylesStyles

Path-Goal Theory• Path-Goal theory believes that leader’s job to provide

followers with the information, support or other resources necessary for them to achieve goals.

• The term path goal is derived from the belief that effective leaders clarify the path to help their followers.

• Leader Behaviours-• Directive leader- schedules work to be done, and gives

specific guidance as to how to accomplish tasks.

• Supportive leader- supportive leader is friendly and shows concern for the needs for followers.

• Participative leader- consults with followers and uses their suggestions before making a decision.

• Achievement oriented leader- sets challenging goals and expects followers to perform at their highest level.

• Path-Goal theory proposes two classes of contingency variables that moderate the leadership behaviour-outcome relationship.

Environmental contingency factors- (that are outside the control of employee.)

Personal characteristics- (almost under the control of employee)

The Path-Goal Theory

Leader-Member Exchange (LMX) Theory

• The leader member exchange theory argues that, because of time pressure leaders establish a special relationship with a small group of their followers. These Individuals make up the in-group.

• Members of In-group are trusted, get a special response, receive special privilege.

• Other followers fall into the out-group. They get less of the leader’s time, get fewer of the preferred rewards that the leader controls, and have leader follower relations based on formal authority interactions.

Leader-Member Exchange Theory

Decision Theory: Vroom and Yetton’s Leader-Participation Model

Premise:

•Rule based decision tree to guide leaders about when and when not to include subordinate participation in decision making

•Considers 12 contingency variables to consider whether or not to include subordinates in decision making

Contingency Variables in the Revised

Leader-Participation Model1. Importance of the decision

2. Importance of obtaining follower commitment to the decision

3. Whether the leader has sufficient information to make a good decision

4. How well structured the problem is

5. Whether an autocratic decision would receive follower commitment

6. Whether followers “buy into” the organization’s goals

7. Whether there is likely to be conflict among followers over solution alternatives

8. Whether followers have the necessary information to make a good decision

9. Time constraints on the leader that may limit follower involvement

10. Whether costs to bring geographically dispersed members together is justified

11. Importance to the leader of minimizing the time it takes to make the decision

12. Importance of using participation as a tool for developing follower decision skills