1. MODULE 1.
FUNDAMENTALS OF
ORGANIZATIONAL BEHAVIOR

2. 1. Dynamics of People
and Organizations

3. Definition of Terms and
Important Concepts
 Organization is a structured social system
consisting of groups of individuals working together
to meet a common objectives. It is formally
structured through various departments/divisions.
Consciously coordinated social unit that functions on
a relatively continuous basis to achieve a common
set of goals.
 Organization Chart is a diagram which shows
structure of an organization and the relationships
and relative ranks of its parts and positions or jobs.
 Organizational Structure defines how the activities
are directed towards the achievement of
organizational goals and objectives

4. Organizational Behavior
 It is the systematic study and careful application of knowledge
about how people as individuals and as groups act within
organizations
 Study of human behavior in the workplace, interaction between
people and the organization, and the organization itself.
 It is the study and application of knowledge and theories about
how people as individuals and as groups act within an
organization (Newstrom & Davies, 2007)
 It is the field that seeks knowledge of behaviour in organizational
settings by systematically studying individual, group, and
organizational processes (Greenberg & Baron, 2008)
 Organizational Behavior studies the influence that individuals,
groups and structure have on behavior within organizations.
(Judge & Robbins, 2010)
 It has 3 Levels:
 Individuals
 Work Groups
 Entire organizations

5. Historical Overview of OB
 A. Human Relations Approach
 Frederick W.Taylor- founded the scientific approach, also
known as the disciple of the scientific management
movement. He’s the first person to study human behavior
at work with his research known asTime and Motion
Studies. According toTaylor, the ff. are the purpose of
scientific management
 Focus on the role of employees as individuals
 Employees should undergo careful selection and training to
perform their jobs well
 Raising workers wages and salaries would increase their
motivation
 Emphasize the importance of motivation in job performance
 Elton Mayo- founded the human relations approach and
focused on the ff.:
 Social factors influencing the workplace
 The way employee were treated by management
 The relationship that they formed with one another

6.  B. PersonalityTheories
 Sigmund Freud- “people are motivated by far than conscious
logical reasoning. Irrational motives make up the subconscious
mind, which determines major parts of people’s behavior
 Burrhus Frederic Skinner- a behaviorist theory based on the
fundamental idea that behaviors that are reinforced will tend to
continue, while behavior that are punished will actually end.
“When people receives a positive stimulus like money or praise
for what the employee have done, they will tend to repeat their
behavior, while when they are ignored and receive no response to
the action they will not incline to repeat it
 Carl Rogers- focused on the person as an individual instead of
adhering to a rigid methodology. “people should acquire their
own attitudes and values rather than be committed to a
prescribed set of goals”
 Fritz Perls- the object of Gestalt psychology is to integrate
conflicting needs into an organized whole, in which all parts of a
person work together towards growth and development
 Abraham Maslow- espouses the idea of developing the
personality towards the ultimate achievement of human
potential.To achieve the object of self-actualization process, the
person must work his way up the succeeding steps of a hierarchy
of needs

7.  C. InformationTechnology Age
 Computer technology has changed the way
people work
 Because of computer databases, employees can
gather their own facts needed in making
decisions.

8. Goals of Organizational
Behavior
 Describe systematically how people behave under a
variety of conditions
 Understand/Explain why people behave as they do.
OB needs to systematically describe how people
behave under a variety of condition, and understand
why people behave as they do
 Predict future employee behavior so that support
can be provided to productive and dedicated
employees, and measures could be instituted to
control the disruptive and less productive ones
 Control and develop some human activity at work is
an important component of effective performance,
the usefulness of OB must not be overlooked

9. Organizational Process

10. 5 Levels of Analysis in OB
 Helps managers look at the behavior of
individuals
 Aids managers in understanding the
complexities involved in interpersonal relations
when two people interact
 The dynamics of relationships within small
groups
 When two groups need to coordinate their
efforts, intergroup relations
 Organizations can be viewed and managed as
whole systems that have inter-organizational
relationships

11. Fundamental Concepts of OB
 A Whole Person- the person employed; the
skills that is wanted and some; someone who
could be a better employee; want to move up
and stay motivated
 Value of a Person- people deserve to be
treated differently from other factors of
productions
 Motivated Behavior- people get motivated
by what they themselves want

12.  Law and Individual Differences- the belief that
each person is different from all others
 Perception- the unique way people in which
each person sees, organize, and interpret things
 Selective- people tend to pay attention to those
features of their work environment that are
consistent with or reinforce their own
expectations
 Desire for Involvement- most employees have a
hunger to share and be a part of organizations
with their specific skills and know how of certain
things which can be achieved through employee
empowerment, a practice that will benefit both
parties

13. Basic Approaches in OB
 Human Resources Approach-
developmental; concerned with the growth
and development of people toward higher
levels of competency, creativity, and
fulfillment, because people are the central
resource in any organization and any society.
It helps employees become better, more
responsible people, and then it tries to create
a climate in which they may contribute to the
limits of their improved abilities

14.  Supportive Approach- manager’s primary role
changes from control of employees to active
support of their growth and performance.
 Contingency Approach- different situations
require different behavioral practices for
greatest effectiveness. Managers need to know
under what conditions they should choose one
behavioral method over another.
 Results-Oriented Approach- all organizations
need to achieve some relevant outcomes or
results. A dominant goal for many is to be
productive, so this results orientation is common
thread woven through organizational behavior.
Productivity is a ratio that compares units of
output often against predetermined standard

15.  System Approach- viewing managers
compels managers to take a holistic and
synthesizing view of the subject, as a result
managers need to interpret people-
organizations relationships in terms of the
whole person, whole group, whole
organizations, and whole social system.

16. Major Forces Affecting OB
 People
 Makes up the internal social system
 Individuals or groups
 Structure
 Formal relationship and use of people in organizations
 Jobs and relationships
 Technology
 Provides the resources with which people work and affects the
task they perform
 Computers and machineries
 Environment
 Part of the larger system on how the organizations operate
 Government, competition, pressures from the society

17. Benefits of Studying OB
 Development of people skills
 Work skill
 Interpersonal skill
 Personal growth
 Make the person highly competitive in the work
place.
 The chance to achieve personal growth is
enhanced by knowledge of OB.
 A person who strives to know himself better is
entering the realm of interpersonal intelligence,
which is a very useful type of intelligence for one
who wants to achieve his personal goals.

18.  Enhancement of organizational and
individual effectiveness
 Effectiveness is a major attribute of successful
organizations, as well as individuals. When the
right decisions are made, effectiveness
follows.
 Knowledge in OB can be very useful in making
decisions.
 Sharpening and refinement of common
sense.
 this type of ability can be made and great
benefits can be derived if this is improved.
 Knowledge in OB can be very useful in
different areas of concerns

19. 2. Systems of
Organizational Behavior

20. Organizations achieve their goals by
creating, communicating, and operating
an organizational behavior system.
The primary purposes of organizational
behavior systems are to identify and then
help manipulate the major human and
organizational variables that affect the
results organizations are trying to achieve.

21. Elements of the System
 The philosophy and values: It means an
integrated set of assumptions and beliefs about
the way things are of the organization, the
purposes of these activities and the way they
should be.The philosophy of organizational
behavior originated from two sources:
 Fact premises represent our descriptive view of how
the world behaves.They are drawn from both
behavioral science research and our personal
experiences.
 Value premises represent our view of the desirability
of certain goals and objectives .These are a variable
beliefs we hold and therefore under our control.

22.  Vision: It means a challenging portrait of what the
organization and its members can be a possible
and desirable future. It basically focused on
achieving long-term goals and objectives
 Mission: It identifies the business it is in the
market niches it tries to serve the types of
customers it is likely to have, and the reasons for
its existence. In contrast to vision, mission
statements are more descriptive and less future
oriented.’
 Goal: are relatively concrete formulations of
achievements the organization is aiming for
within set periods of time, i.e.. one to five years.
Goals may exist at the individual , group and larger
organizational level. Goals are more specific

24. Philosophy , values, vision, mission, goals all
help to create a recognizable
organizational culture.This culture also a
reflection of the formal organization with
its formal policies, structures and
procedures and the existing social and
cultural environment.The formal and
informal organizations provide the glue
that binds the varied elements of the
institution into an effective working team.
Managers are then expected to use a
leadership style, communications skills
and their knowledge of interpersonal and
group dynamics to create an appropriate
quality of work life for the employees.

25. Theory X, Theory Y
In his 1960 book,The Human Side of Enterprise,
Douglas McGregor proposed two theories by
which to view employee motivation. He
avoided descriptive labels and simply called the
theoriesTheory X andTheoryY. Both of these
theories begin with the premise that
management's role is to assemble the factors of
production, including people, for the economic
benefit of the firm. Beyond this point, the two
theories of management diverge.

26.  Theory X assumes that the average
person:
1. Dislikes work and attempts to avoid it.
2. Has no ambition, wants no
responsibility, and would rather follow
than lead.
3. Is self-centered and therefore does not
care about organizational goals.
4. Resists change.
5. Is gullible and not particularly
intelligent.

27.  TheoryY makes the following general
assumptions:
1. Work can be as natural as play and rest.
2. People will be self-directed to meet their
work objectives if they are
committed to them.
3. People will be committed to their
objectives if rewards are in place that address
higher needs such as self-fulfillment.
4.Under these conditions, people will seek
responsibility.
5. Most people can handle responsibility
because creativity and ingenuity are common
in the population.

28. 1st Model: Autocratic
Autocratic model depends on power.The people who
are in command must have the power to demand
“you do this or else”, meaning that an employee
who does not follow order will be penalizes.
In the autocratic environment the managerial
orientation is formal, official, authority.This
authority is delegated by right of command over
the people to whom it applies.
Management believes that it knows what is best and
that the employee’s obligation is to follow orders.
It assumes that employees have to directed, and
pushed into performance and such prompting is
management’s task.
Under autocratic conditions the employee
orientation is obedience to boss not respect for a
manager.The psychological result for employees is
dependence on their boss, whose power to hire ,
fire etc.

29. 2nd Model: Custodial
In autocratic model employees did not talk back to their
boss, but they certainly thought back.
A successful custodial approach depends on economic
resources.The resulting managerial orientation is
toward money to pay wages and benefits. Since
employees’ physical needs are already reasonably met,
the employer looks to security needs as a motivating
force. If an organization does not have the wealth to
provide pensions and pay other benefits, it cannot
follow a custodial approach.
The custodial approach leads to employee dependence
on the organization. Rather than being dependent on
their boss for their weekly bread, employees now
depend on organizations for their security and welfare.
The custodial model is describe in its extreme in order to
show its emphasis on material rewards, security, and
organizational dependence.

30. 3rd Model: Supportive
The supportive model of organizational behavior had
its origins in the “principle of supportive
relationships”. It depends on leadership instead of
power or money .
Through leadership, management provides a climate
to hope employees grow and accomplish in the
interests of the organization the things of which
theft are capable
The leader assumes that workers are not by nature
passive and resisted to organizational needs, but
that they are made so by an inadequately
supportive climate at work.They will take
responsibility , develop a drive to contribute, and
improve themselves if management will give them a
chance.
Here management’s concentration is to support the
employee’s job performance rather than to simply
support employee benefit payments as in the
custodial approach. Employee says “we” instead of
“they” when referring to their organization.

31. 4th Model: Collegial
A useful extension of the supportive model is
the collegial model.The term “collegial”
relates to a body of people working together
cooperatively.The collegial model embodies
a team concept.
The collegial model depends on management’s
building a feeling of partnership with
employees.The result is that employees feel
needed and useful.They feel that managers
are contributing also , so it is easy to accept
and respect their roles in the organization.
Managers are seen as joint contributors
rather than as bosses.
The managerial orientation is toward teamwork
and management is the coach that builds a
better team.The employee response to this
situation is responsibility.

32. 5th Model: System
Under the system model managers try to
convey to each worker, “you are an important
part of our whole system.We sincerely care
about each of you.We want to join together to
achieve a better product or service, local
community and society at large.We will make
every effort to make products that are
environmentally friendly

34. 3. Managing
Communications

35. What is Communication?
 refers to the process by which information is
transmitted and understood between two or
more people.
 sharing of information between two or more
individuals or groups to reach a common
understanding.
 means of connecting people or places

36. Communication Process

37.  Ideation- is the conception of an idea or thought by
a person, group or organization
 Encoding- is the translation of ideas or thoughts into
symbols that are understood by others
 Transmission- takes place when an idea is through
one or more available channels or some medium
 Decoding- is the interpretation of the message
 Understanding- the receiver grasps the essentials of
the message
 Acceptance and Action- acceptance implies
willingness to comply with the message in the part
of the receiver; action entails implementation
 Noise- interference in the communication process
 Feedback- returned message from the receiver to
the sender

38. Barriers to Communication
 Filtering – manipulation of info
 Selective Perception – receiver chooses the info based on
their needs experience motivation
 Information Overload – exceeding individual’s processing
capacity
 Emotions – inerpretation dependes upon the current
feelings
 CommunicationApprehension – experience of undue
tension and anxiety in oral/written communication
 Gender Differences – sometimes; men use talk to
empahasize status, women to create connections
 Political Correct Communication– avoidance of offense
 Global Implications – different cultures

39. Upward Communication
 It is the flow of
information from
front line employees
to managers,
supervisors, and
directors.
 Subordinate to
Superior
 Attitude Surveys
 Focus Groups and
Exit Interviews
 Suggestion Boxes
 Third-Party
Facilitators

40. ADVANTAGES DISADVANTAGES
 Fosters friendly relations
 Participation
 Valuable feedback
 Mutual trust due to two-
way process
 Introduction of new
policies/projects
 Resistance from
employees
 Fear of incompetence
 Indecisive superiors
 Messages not heard
 Unwillingness to admit
failure

41. Downward Communication
 Occurs when information and messages flow
down through an organization’s formal chain
of command or hierarchical structure.
 Messages and orders start at the upper levels,
down toward the bottom.
 Considered the backbone of the organization
 Bulletin Boards
 Policy Manuals
 Newsletters
 Intranets

42. ADVANTAGES DISDVANTAGES
 Organizational discipline
 Efficiency
 Effective communication
goals
 Ease of delegation
 Distortion
 Slow feedback
 Interpretative problems
 Time consuming
 Over and under
communication
 No confidential matters
 Different priorities

44. Business Communication
 It is the transmission of business-related
information among employees,
management, and customers.
 Memos
 TelephoneCalls
 Email andVoicemail
 Business Meetings
 Office Design

45. Informal Communication
 Also known as grapevine
communication
 Communication is made without
following any predetermined
rules of policy.
 It is not controlled by the
management.
 It is perceived by most
employees as being more
believable and reliable than
formal communication issued by
top management.
 It is largely used to serve the self-
interest of the people within it.
 It is part of the workplace; it can’t
be eliminated.

47. 4. Social Systems and
Organizational Culture

48. What is a Social System?
 A social system is a
complex set of
human
relationships.
 All parts are
mutually
interdependent.
 It engages in
exchanges with its
environment; “open
system”

49. Social Equilibrium
 A system is said to be in social equilibrium when its
interdependent parts are in dynamic working
balance.
 Equilibrium is a dynamic concept, not a static one.
Despite constant change and movement in every
organization, the system’s working balance can
still be retained.
 Disequilibrium happens when the interdependent
parts are working against each other.
 A single event can throw a system out of balance.
 Over time, the basic character changes a bit.

50. Functional Effects Dysfunctional Effects
 Creativity
 Productive employees
 Quality improvements
 Lower productivity
 Lower satisfaction
 Lower commitment

51.  Economic Contract
 Where time, talent and energy are exchanged for
wages, hours, and reasonable working conditions.
 Psychological Contract
 The conditions of each employee’s psychological
involvement – both contributions and
expectations – with the social system.
 ExchangeTheory –whenever a continuing
relationship exists between two parties, each
person regularly examines the rewards and costs
of that interaction. In order to remain positively
attracted to the relationship, both parties must
believe that a net positive ratio (rewards to costs)
exists from their perspective.

53. What is a Social Culture?
 An environment of human-created beliefs,
customs, knowledge and practices.
 Acting in accordance with the expectations of
others.
 Distinctive social cultures can exist in a single
nation.
 Managers must understand and appreciate
the backgrounds and beliefs of work unit
members.

54. Cultural Diversity
 Rich variety of differences among people at
work.
 Differences that need to be recognized,
acknowledged, appreciated, and used to
collective advantage.
 Raises the issue of fair treatment for workers
who are not in positions of authority.

55. JOB RELATED DIVERSITY NON-JOB RELATED
DIVERSITY
 Type of work
 Rank
 Physical proximity
 Group affiliation
 Culture
 Ethnicity
 Socio-economics
 Sex

56.  Discrimination – generally an action
 Prejudice – an attitude
 Mixture of beliefs (stereotypes), emotions (hostility,
fear), and predisposition to action (to discriminate)
 Stereotype – generalization of certain traits or
characteristics to any person or group without regard
to individual differences.
 Ethnophaulisms – derogatory words or expressions
used to describe racial or ethnic groups

57. Social Cultural Values
 TheWork Ethic
 Group differences
 Gradual decline
 Social Responsibility
 Costs and benefits
 Strive for balance
 Social, economic and technical values

58. What is a Role?
 A pattern of expected actions
 Reflects a person’s position within its
accompanying rights and obligations, and power
and responsibility
 Social Role
 “To anticipate other’s behavior”
Role Conflict
Happens when others have different perceptions or
expectations of a person’s role

59. Status
 Social rank of a person in a group
 The amount of recognition, honor, esteem and acceptance
given to a person
 Significance:
 Influences transfers and jobs employees take
 Helps determine informal leaders
 Motivates those seeking to advance
 Some societal backlash
 Status symbols:
 Organizational membership
 Location of workplace
 Job title or organizational level
 Fashion

60. Organizational Culture
 Set of shared mental assumptions that guide interpretation
and action in organizations byt defining proper behavior for
various situations (Ravasi and Schultz, 2006).
 Complex system of laws, values and customs
 Importance:
 Provides organizational identity
 Source of stability, security and continuity
 Provides context
 Typically identifies and rewards high-producing and creative
individuals

61.  Characteristics:
 Distinctive
 Implicit
 Stable
 Symbolic
 Integrated
 Reflection of top management
 Subcultures
 Varying strength
 NO ONETYPE IS BEST

62. Communicating and Changing
Culture
 People are generally more willing to adapt
and learn when they want to please others,
gain approval and learn about their new work
environment.
 Socialization affects employees
 Individualization affects organization