UNIT – 1

CONCEPT OF ORGANIZATIONAL
BEHAVIOUR
CONCEPT OF BEHAVIOR
Behavior refers to……
• range of actions and mannerisms
• made by individuals, organisms or artificial
entities
• which are influenced by culture, attitudes,
emotions, values, authority, genetics etc.
CONCEPT OF ORGANIZATIONAL BEHAVIOR

A field of study that…..

• investigates the impact that
• individuals, groups, and structure have
• on behavior within organizations,
• with a purpose to improve organizational
effectiveness
• by applying the learned knowledge
Meaning of OB:
Organizational behavior is concerned with people’s thoughts,
feelings, emotions, and actions in a work setting.
Understanding an individual behavior is in itself a challenge,
but understanding group behavior in an organizational
environment is a monumental managerial task.
Definition of OB:
“Organizational Behavior is a subset of management activities
concerned with understanding, predicting and influencing individual
behavior in Organizational setting.”

“The study of human behavior in organizational settings, the

interface between human behavior and the organizational context,
and the organization itself.”
 Purpose / Need and Importance of OB:
The need and importance of organizational behavior are as
under:
1. Skill Improvement:
• Study of Organizational Behavior helps to improve skills.
• This includes the ability of employees and use of knowledge to become more efficient.
• It also improves managers, as well as other employees, work skill.

2. Understanding Consumer Buying Behavior:

It also an important part to improve the marketing process by understanding consumer
(buying) behavior.
3. Employee Motivation:
OB helps to understand the basis of Motivation and different ways to
motivate employees properly.

4. Nature of Employees:
• Understanding of personnel and employee nature is important to manage
them properly.
• With the help of OB, we can understand whether employees or people are
Introvert, Extrovert, Motivated, Dominating etc.
5. Anticipating Organizational events:
• The scientific study of behavior helps to understand and predict organizational events.
• For example Annual Business Planning, Demand Management, Product line management,
Production Planning, Resources Scheduling, Logistics etc.

6. Efficiency & Effectiveness:

Study of organizational behavior helps to increase efficiency and effectiveness of the
organization.

7. Better Environment of Organization:

OB helps to create a healthy, ethical and smooth environment in an organization.
8. Optimum or Better Utilization of Resources:
• Study of OB helps to understand employees and their work style and skill better way.
• By understanding this, management can train and motivate employees for optimum
utilization of resources.

9. Importance of OB in the Goodwill of organization:

Organizational Behavior helps to improve Goodwill of organization. This is all about the
significance and importance of organizational behavior and its impact on overall business
activities. Ultimately OB helps to increase efficiency and productivity. This may lead to an
increase in the profit of the organization.
Focus of Organizational Behaviour (OB)
Focus of Organizational Behaviour:
Organizational Behaviour (OB) is primarily concerned with understanding, predicting, and
influencing human behaviour within organizational settings. It draws from disciplines such as
psychology, sociology, anthropology, and management to study individual and group
dynamics.

The key focus areas of OB include:

1. Individual Behaviour
• Personality, perception, values, and attitudes
• Motivation theories and applications
• Learning and decision-making processes
2. Group Behavior
• Team dynamics and communication
• Leadership styles and influence
• Conflict resolution and negotiation
3. Organizational Aspects
• Organizational culture and climate
• Structure and design
• Change management and innovation
• Power, politics, and ethics

4. Interpersonal Processes
• Communication
• Group decision-making
• Emotional intelligence and interpersonal skills
 Nature of Organizational Behavior (OB)
The nature of OB can be understood through the following key
characteristics:
1. Multidisciplinary Approach
OB integrates knowledge from various disciplines such as:
• Psychology – understanding individual behaviour, perception,
motivation, learning, etc.
• Sociology – studying group behaviour, social systems, and
organizational structure.
• Anthropology – understanding organizational culture and values.
• Economics & Political Science – influencing organizational policies and
power structures.
2. Human-Centric
• OB places people at the center of organizational functioning.
• It focuses on understanding individual needs, emotions, values, and
behavior.
• It treats employees as valuable assets, not just as inputs in a system.

3. Goal-Oriented
OB aims to achieve both individual and organizational goals.
It helps align employee goals with organizational objectives to ensure mutual
benefit.

4. Applied Science
OB is a practical discipline applied to solve real-world organizational
problems.
It offers tools and strategies for better management of people and systems.
5. Dynamic Nature
OB evolves continuously in response to changes in the environment, technology,
workforce diversity, and global business practices.
It adapts to new trends like remote work, digital transformation, and emotional
intelligence.

6. Both Science and Art

Science: It uses research, theories, models, and data to understand behavior
systematically.
Art: Managers apply this knowledge creatively and intuitively in different
organizational contexts.
7. Individual and Group Level Study
OB analyzes behavior at three levels:
• Individual level – personality, perception, motivation.
• Group level – leadership, communication, team dynamics.
• Organizational level – structure, culture, change, systems.

8. Interdisciplinary and Behavioral

OB focuses on observable behavior and the factors that influence it.
It includes both internal (attitudes, personality) and external (work
environment, social norms) factors.

9. Prescriptive and Descriptive

Descriptive: OB explains how people behave in organizations.
Prescriptive: It suggests how they should behave to improve performance and
harmony.
Disciplines Contributing to OB
Psychology:
Organizational behavior is a scientific field that explores human behavior mainly concerned
with the psychology of the individuals. Industrial psychology can be defined as a scientific
study of employees, workplaces, organizations and Organizational behavior. Industrial
psychology helps in improving the workplaces, satisfaction and motivation levels of the
employees, and helping the overall productivity of the organization.”

Sociology:
According to Dictionary of the social sciences, sociology is “the study of society patterns of
social relationships, social interaction, and culture that surrounds everyday life.” From the
definition it is very much clear that sociology also has a major impact on the study of
Organizational behavior.
Anthropology:
It’s the study of human biological and physiological characteristics and their evolution
Anthropology deals with the relationships between people and their environment and it
contributes to understanding the cultural impact on Organizational behavior, the impact of
value structures, expectations, emotions, unity and interaction.

Political Science:
Political science has some fascinating implications in researching Organizational behavior as it
helps in understanding how and why people gain control, political actions, decision-making,
conflict, interest group activity and creation of unions. And the same is also true of major
areas of Organizational behavior. It has been stated many times that political parties and
government are actively active in many of the activities of the ORGANIZATION.
Economics
Lionel Robbins stated the term economics as, “the science which studies human behavior as
a relationship between ends and scares means which have alternative uses.” Economics
tackles the problem of fear resources and limitless uses or restricted resources and infinite
desires. And studying different economic subfields helps to illustrate the Organizational
actions in a very useful way such as understanding the dynamics of the labor market,
efficiency, human resource planning and forecasting, and cost benefit analysis.
Science:
Scientific approaches are the foundation of organization's actions. Organizational behavior is
based on the systematized analysis of data, actions, their relationships and predictions. New
research methods help to learn modern analytical tools and techniques and to apply them.
Technology:
Technological progress often impacts employee behavior. Because we live in an era of
information technology in which technology plays a very important role. To understand the
Organizational actions, the study of technological development becomes important because
people are affected by technological growth. Technology influences consumer behavior,
manufacturing practices, and storage and distribution activities. To match the pace people
need to be educated and/or technically qualified about technological development.
Engineering:
Engineering too plays significant role in the study of Organizational behavior. Certain topics
are very common in both engineering as well as Organizational behavior.
Medicine:
Medicine has a link to researching human behavior in the workplace, as stress
has become a very common issue in organizations as well as in people
employed in organizations. To control the causes and consequences of stress,
since it is important for the well-being of both the individual and the
organizations. Medicine helps with treating emotional disorders as well as
emotional related problems.
 Scope of Organizational Behavior (OB)
The scope of Organizational Behavior refers to the various aspects of
individuals, groups, and organizations that OB studies to improve organizational
effectiveness, efficiency, and employee satisfaction. It covers a wide range of
behavioral issues at multiple levels:
1. Individual Behaviour
Focuses on how individuals behave and perform within an organization. Key
elements include:
• Personality and Attitudes: Understanding how traits influence workplace
behavior.
• Perception: How employees interpret and respond to situations.
• Motivation: Exploring what drives individuals to perform well (e.g.,
Maslow’s, Herzberg’s, McClelland’s theories).
• Learning: How individuals acquire and apply knowledge.
• Values and Ethics: Moral principles that influence actions and decisions.
2. Group Behavior
Studies how people behave in groups and how group dynamics influence
performance. This includes:

• Team Formation and Development

• Group Norms and Cohesiveness
• Leadership: Leadership styles, traits, and theories (e.g., transformational,
transactional).
• Communication: Verbal, non-verbal, and formal/informal channels.
• Power and Politics: Influence processes and organizational politics.
• Conflict and Negotiation: Understanding the causes and managing
interpersonal and intergroup conflict.
3. Organizational Level
Examines how the entire organization functions and how its systems, processes,
and structures affect behavior. Areas include:

• Organizational Structure and Design: Centralization, decentralization,

formalization, span of control, etc.
• Organizational Culture: Shared beliefs, values, and practices within an
organization.
• Organizational Change and Development: Managing resistance to change,
implementing new strategies, innovation.
• Technology and Work Design: Impact of automation, job design, and digital
transformation.
• Decision-Making Process: How decisions are made at various levels and their
effectiveness.
4. Environment Interface
OB also considers how external factors affect organizational behavior:
• Globalization: Managing cross-cultural teams and global workforces.
• Workforce Diversity: Gender, ethnicity, age, and managing inclusion.
• Legal and Ethical Environment: Adherence to labor laws, ethical business
practices.
• Technological Advancements: Adapting to digital tools and their influence on
human interaction and job roles.
5. Applications of OB
• Human Resource Management: Recruitment, training, performance
appraisal, employee retention.
• Organizational Development: Improving processes, diagnosing problems,
implementing change.
• Enhancing Productivity: Streamlining behavior-related inefficiencies.
• Improving Quality of Work Life (QWL): Balancing personal and professional
goals.
• Leadership Development and Succession Planning
 Models of OB
Every organization develops a particular type of culture or value system or a model
according to which people of an organization are supposed to behave. And the system is
developed by taking into account the assumptions of the management regarding people,
mission and management vision.

Custodial
Model

Autocratic OB Supportive
Model Model Model

Collegial
Model
Autocratic Model
In the autocratic model there is managerial orientation toward power. Managers see power as
the only way to get the job done, and employees are forced to obey orders which lead to high
boss dependence. The Organizational mechanism is largely formalized; power is delegated by
the right of command to the individuals to whom it refers. In this model employees are
closely and strictly supervised in order to attain desired performance. Employees are
supposed to obey the order of the managers and there is no place for employee's suggestion
in this model which sometimes result in minimal performance.
Custodial Model
Under this model, the key goal relating to management is to use money or resources to
support workers. Employee works towards security attainment and in return organization
uses the organization's economic resources to benefit the organization's employees which
lead to high employee dependence on organization.

Employee Organizational reliance reduces personal dependence on boss. Employees in this

model feel satisfied when working and their performance level is a little higher than the
autocratic Organizational model but overall performance is not that good.
Supportive Model
In this supportive model mangers are very supportive towards employees. Here
Managerial leadership is the key criterion of Organizational behavior, rather
than using money or influence or authority. The main goal is to assist
employees in achieving results with the aid of employee involvement and
participation in managerial decision making process.
Collegial Model
This model is an extension of the positive model. Within this model all work
for a common target. Collegial meaning a community of shared-intentioned
individuals. This model requires less guidance and control from the side of
management. And the organization's environment is so favorable that
Regulation is essentially carried out by team members by self-discipline.
Collegial model is more useful where there is flexibility in behavior, an
intellectual environment and considerable freedom of employment.
 Theories of Organizational Behavior (OB)
1. Classical Theories of OB

a. Scientific Management Theory – Frederick W. Taylor

• Focus: Efficiency and productivity through time-and-motion studies.
• Key Idea: "One best way" to perform a task.
• Contribution: Standardization of work, job specialization.
b. Bureaucratic Theory – Max Weber
• Focus: A formal structure with clearly defined rules and roles.
• Key Idea: Hierarchical organization, impersonal relationships, strict procedures.
• Contribution: Emphasis on efficiency, authority, and rationality in organizations.
c. Administrative Theory – Henri Fayol
• Focus: Management functions and principles.
• Key Idea: Planning, organizing, commanding, coordinating, and controlling (POCCC).
• Contribution: Laid the foundation for modern management practices.
2. Human Relations and Behavioral Theories

a. Hawthorne Studies – Elton Mayo

• Focus: Impact of social factors and employee attention on productivity.
• Key Finding: Employee performance improves when they feel valued and
involved.
• Contribution: Introduced the concept of the human factor in the workplace.

b. Theory X and Theory Y – Douglas McGregor

• Theory X: Assumes employees are lazy, dislike work, and need control.
• Theory Y: Assumes employees are self-motivated, enjoy work, and seek
responsibility.
• Contribution: Shifted focus toward participative management and
empowerment.
c. Maslow’s Hierarchy of Needs
• Five levels: Physiological → Safety → Social → Esteem → Self-
actualization.
• Contribution: Motivational theory that shows how needs influence
behaviour.

d. Herzberg’s Two-Factor Theory

• Motivators: Achievement, recognition, work itself (cause satisfaction).
• Hygiene Factors: Salary, supervision, work conditions (prevent
dissatisfaction).
• Contribution: Importance of job enrichment for motivation.
3. Contemporary Theories

a. Equity Theory – J. Stacy Adams

• Focus: Perceived fairness in the workplace.
• Employees compare input/output ratios with others to determine fairness.
• Contribution: Basis for understanding job satisfaction and motivation.

b. Expectancy Theory – Victor Vroom

• Focus: Motivation is based on expected outcomes.
• Formula: Motivation = Expectancy × Instrumentality × Valence
• Contribution: Employees are motivated when they believe effort will lead to
good performance and desired rewards.
c. Goal-Setting Theory – Edwin Locke
• Focus: Clear, specific, and challenging goals improve performance.
• Contribution: Widely used in performance management and
employee development.

d. Reinforcement Theory – B.F. Skinner

• Focus: Behavior is shaped by its consequences.
• Types: Positive reinforcement, negative reinforcement, punishment,
extinction.
• Contribution: Basis for reward and disciplinary systems.
4. Systems Theory
Organization is seen as an open system interacting with the external
environment.
Emphasizes interdependence of various subsystems (people,
technology, structure, etc.).
Contribution: Promotes holistic thinking and adaptability.

5. Contingency Theory
No single best way to manage or lead.
The best approach depends on situational variables like environment,
task, team dynamics.
Contribution: Flexibility in leadership and organizational design.
 Models of Man in Organizational Behavior (OB)
1. Economic Man
Assumption: Man is rational and motivated solely by economic
rewards.
Behavior: Works only for monetary gain and chooses options that
maximize personal financial benefit.
• Origin: Classical and Scientific Management theories (e.g.,
Taylorism).
• Limitations: Ignores social, emotional, and psychological needs.
• Managerial Implication: Emphasis on financial incentives, piece-
rate systems, and tight supervision.
2. Social Man
Assumption: Man is motivated by social needs such as belongingness,
acceptance, and interpersonal relationships.
Behavior: Seeks group affiliation and harmony more than monetary
rewards.
• Origin: Human Relations Movement (e.g., Elton Mayo’s Hawthorne
Studies).
• Limitations: Underestimates the importance of individual ambition
and growth needs.
• Managerial Implication: Focus on teamwork, open communication,
and employee involvement.
3. Self-Actualizing Man
Assumption: Man seeks personal growth, self-fulfillment, and realization of
potential.
Behavior: Motivated by intrinsic rewards like achievement, creativity, and
purpose.
• Origin: Based on Maslow’s hierarchy of needs (top level) and Theory Y
(McGregor).
• Limitations: Assumes all individuals are growth-oriented, which may not
always be the case.
• Managerial Implication: Job enrichment, autonomy, empowerment, and
opportunities for personal development.
4. Complex Man
Assumption: Man is complex, adaptive, and influenced by multiple
variables (economic, social, psychological).
• Behavior: Changes with context—no single factor or motivation
applies to all.
• Origin: Contemporary OB thinking and contingency approaches.
• Strength: Realistic, as it recognizes diversity and situational
variability in human behaviour.
• Managerial Implication: Use of customized motivational strategies
and flexible management styles depending on the employee and
situation.
5. Rational and Administrative Man
• Rational Man: Makes logical decisions after evaluating all
alternatives (based on complete information).
• Administrative Man: Makes decisions that are satisficing (good
enough), rather than optimizing, due to limited information and
bounded rationality (Herbert Simon).
• Managerial Implication: Understand that not all decisions are
perfectly rational; design systems that support informed and
practical decision-making.