Sathish V
Asst. Professor
Department of Commerce & Management
PES Institute of Advanced Management Studies, Shimoga

Organisational Behaviour
OB is the study of human behaviour
The study is about behaviour in organisations
OB is defined as “the systematic study and
application of knowledge about how
individuals and groups act within the
organizations where they work”

There are three key levels of analysis in OB. They
are examining the individual, the group, and the
organization. For example, if I want to
understand my boss’s personality, I would be
examining the individual level of analysis. If we
want to know about how my manager’s
personality affects my team, I am examining
things at the team level. But, if I want to
understand how my organization’s culture affects
my boss’s behaviour, I would be interested in the
organizational level of analysis.

Definitions
• “Organisational behaviour is a subset of
management activities concerned with
understanding, predicting and influencing
individual behaviour in organisational
setting.”—Callahan, Fleenor and Kudson.
• “Organisational behaviour is the study and
application of knowledge about how people
act within an organisation. It is a human tool
for human benefit. It applies broadly to the
behaviour of people in all types of
organisation.”— Newstrom and Davis.

According to Luthans “OB is directly concerned with
the understanding, predicting and controlling oh
human behaviour in organisations”
OB can be defined as the understanding,
predicting and management of human behaviour
both individually or in a group that occur within
an organization.

Why Organizational Behaviour Matters
• it matters because it is all about
things you care about. OB can help you
become a more engaged organizational
member. Getting along with others, getting a
great job, lowering your stress level, making
more effective decisions, and working
effectively within a team…these are all great
things, and OB addresses them

Conti…
it matters because employers care about OB. A
recent survey by the National Association of
Colleges and Employers (NACE) asked employers
which skills are the most important for them
when evaluating job candidates, and OB topics
topped the list (NACE 2007 Job Outlook Survey,
2008). The following were the top five personal
qualities/skills:
• Communication skills (verbal and written)
• Honesty/integrity
• Interpersonal skills (relates well to others)
• Motivation/initiative
• Strong work ethic

Conti…
it matters because organizations care about OB.
The best companies in the world understand that
the people make the place. organizations that value
their employees are more profitable than those
that do not.
Research shows that organizations that are
considered healthier and more effective have
strong OB characteristics throughout them such as
role clarity, information sharing, and performance
feedback. Unfortunately, research shows that most
organizations are unhealthy, with 50% of
respondents saying that their organizations do not
engage in effective OB practices

Nature of OB
 A field of study and not a Discipline
 Interdisciplinary Approach
 An applied Science
 Normative and Value centred
 Humanistic and Optimistic
 Oriented towards Organisational Objective
 A total systems approach

A field of study and not a Discipline
OB can be treated as a distinct field of study and
not a discipline.
A discipline is an accepted science with a
theoretical foundation that serves as the basis
for research and analysis. OB, because of its
broad base, recent emergence and
interdisciplinary orientation, is not accepted as
science. Therefore, it is reasonable to call it a
field of study rather than a discipline.

Interdisciplinary Approach
OB is basically an interdisciplinary
Approach. OB draws heavily
From psychology, sociology,
Anthropology, economics, political science, law and
history. These disciplines exist separately, but OB
integrates the relevant contents of these
disciplines to make them applicable for
organisational analysis.

An applied Science
The basic objective of OB is to make application of
various researches to solve the organizational
problems particularly related to human behaviour
aspect. Unlike the pure science which
concentrates on fundamental researches. OB
concentrates on applied researches. Though many
of the researches may be carried on in laboratory
situations and controlled conditions, they are
meant for general application in organizational
analysis. Thus, OB is both science as well as art.

Normative and Value centred
OB is a normative science. It suggests only
cause-effect relationships. Prescribes how the
various findings of the researches can be
applied to get organisational results which are
acceptable to the society.

Humanistic and
Optimistic
OB focuses the attention on people from
humanistic point of view. It is based on the belief
that needs and motivation of people is of high
concern.
there is optimism about the innate potential of
man to be independent, creative, productive,
and capable of contributing positively to the
objectives of the organisation.

Oriented towards Organisational Objective
• OB, being an applied science and emphasising
human aspect of the organisation, is oriented
towards organisational objectives. Though an
organisation may have several objectives and
sometimes conflicting with individual
objectives, it should not be understood that OB
only emphasises the achievement of individual
objectives at the cost of the organisational
objectives. In fact, OB tries to integrate both
types of objectives so that these are achieved
simultaneously.

A total systems approach
The systems approach is an integrative approach
which takes into account all the variables
affecting organisational functioning. Human
behaviour can be analysed keeping in view his
psychological framework, interpersonal
orientation, group influence and social and
cultural factors. Thus, man’s nature is quite
complex and OB by applying systems approach
tries to find solution of this complexity.

Importance of OB
While working in an organisation, it is very
important to understand others behaviour as
well as make others understand ours. In order to
maintain a healthy working environment, we
need to adopt to the environment and
understand the goals we need to achieve. This
can be done easily if we understand the
importance of OB.

Importance of OB Conti…
 it helps in explaining the interpersonal
relationships employees share with each other as
well as with their higher and lower subordinates.
 the prediction of individual behaviour can be
explained.
 it balances the cordial relationships in an
enterprise by maintaining effective
communication.
 it helps managers to encourage their
subordinates.

Importance of OB Conti…
 any change within the organisation can be
made easier.
 it helps in predicting human behaviour and
their application to achieve organisational goals.
It helps in making the organisation more
effective.
 Organizational Behavior is multidisciplinary and
it helps us multiple ways.
 OB helps the managers to understand the basis
of motivation and what he should do to
motivate his subordinates.

Importance of OB Conti…
OB implies that the effective utilization of people
working in the organization guarantees the
success of the organization.
OB has a great impact on individuals
and also in organizations that cannot be
ignored. To run the businesses effectively and
efficiently, the study of organizational behavior
is very essential.

Contributing disciplines to OB
OB is not a discipline in itself but it uses knowledge
developed in the relevant disciplines.
OB draws knowledge from different
disciplines but it does not draw the whole
knowledge of these disciplines but only the
relevant knowledge which helps in predicting
and directing human behaviour in the
organisation. The contributions of core
disciplines of behavioural sciences to OB are as
follows:

CONTRIBUTING DISCIPLINES TO THE OB FIELD
Psychology
Sociology
Anthropology
Social
Psychology
Political Science

Multidisciplinary Nature of OB
Discipline Relevant OB topics
Psychology Perception and learning, personality,
emotion, stress, attitudes, motivation,
decision making and creativity.
Sociology Group dynamics, communication,
intergroup behaviour and socialisation.
Anthropology Organisational culture, leadership,
organisational empowerment
Social Psychology Intergroup collaboration, group decision-
making, integration of individual needs
with group activities
Political science Conflict, intra-organisational politics,
manipulating power for individual self-
interest.

Psychology

Psychology is defined as the science of behaviour.
Psychology studies behaviour in various conditions-
normal, abnormal, social, industrial, childhood, old
age, adolescence etc. It also studies processes of
human behaviour such as learning, thinking, memory,
perception, emotion, feeling and personality.
In fact, there is a separate branch of industrial
psychology which deals with the application of
psychological facts and principles to the problems
concerning human relations in organisations.
Human relations is the integration of human factor
into work situation which motivates it to work together
effectively providing it social, psychological and
economic satisfaction. From this point of view, the
contribution of psychology is quite significant.

Sociology

It is an academic discipline that utilises the
scientific method in accumulating knowledge
about man’s social behaviour.
It studies the behaviour in which people act
towards one another. It specifically studies social
groups, social behaviour, society, customs, status
and prestige.
it has also developed sub-fields of political
sociology, industrial sociology, family sociology,
educational sociology etc.

Anthropology

Anthropology can be defined as the science of
man. It particularly studies civilisation, forms
of cultures and their impact on individuals and
groups, biological features of man and
evolutionary pattern, speech etc..
anthropology contributes in understanding
the cultural effects on organisational
behaviour, effects of value system, sentiments,
cohesion and interaction.

Social Psychology

While psychology deals with individual behaviour
and sociology deals with group behaviour, the
social psychology examines interpersonal
behaviour ( influence of people on one
another).
the social psychology focus attention on
intergroup activities and decision-making
processes, integration of individual needs with
group activities, effect of change on individuals
and how people cope with ‘change’

Political Science

Political science examines the behaviour of
individuals and groups within a political
environment. Major areas of interest that are
related to organisational behaviour include
political manipulation, allocation of power,
conflict and conflict resolution, using power for
personal gains, etc.
it provides clue to conflicts in organisations,
power and authority structure and overall
administrative process.

Models of OB
Models are the techniques which help us to
understand complex things and ideas in a clear
manner.
Models are frameworks or possible
explanations why do people behave as they do
at work. There are so many models as many are
organizations. Varying results across the
organizations are substantially caused by
differences in the models of organizational
behaviour.

in the field of organisational behaviour, models
are developed to provide framework about ‘how
people will be treated in an organisation’
every organisation develops a particular model in
which behaviour of the people takes place. This
model is developed on the basis of management’s
assumptions about people and the vision of the
management. Since these assumptions vary to great
extent, this has resulted in development of different
models.
Almost all organizations develop the models on the
basis of which behavior of the people is determined.

Different Models of OB
 Autocratic model
 Custodial model
 Supportive model
 Collegial model

Autocratic model

 The basis of this model is the power of the boss.
 Organisation with an autocratic environment is authority
oriented. This authority is delegated by the right of
command over the people to whom it applies.
 It assumes that the employees have to be directed,
persuaded and pushed into performance.
 Under autocratic model, the employee’s orientation is
obedience to the boss
 The bosses have absolute power to hire and fire
employees.
 The employees depend upon the boss and are paid
minimum wages for minimum performance.
 The employees sometimes give minimum performance,
because they have to satisfy the subsistence needs of
themselves and their families.

 The autocratic model has been successful in some
situations where the workers are actually lazy and have a
tendency of avoiding work. It is also required in the
situation where the work to be done is time bound.
 The leadership in an autocratic model is negative
because the employees are uninformed, insecure and
afraid.
 Nowadays, this model is not applicable in strict sense
because there are minimum wages laws in most of the
countries. Thus, the managers cannot threaten to cut
down the wages or rewards of the workers. Moreover,
the workers are educated and organized, thus they
cannot be dictated to by the managers all the time.

Custodial model

Custodial model
To overcome the shortcomings of the Autocratic
model, the custodial model came into existence.
The insecurity and frustration felt by the
workers under the autocratic model sometimes
led to aggression towards the boss and their
families. To dispel (remove) this feeling of
insecurity and frustration, the need was felt to
develop a model which will improve the
employer-employee relations. The custodial
model was used by the progressive managers.

 The success of the Custodial Model depends upon the
economic resources because this model emphasizes the
economic rewards and benefits. Since employee’s
physiological needs are already met the employer looks
to security needs as a motivating force.
 The employees under Custodial Model depend upon
organisation rather than their boss. If the organisation
has got good welfare and development programmes for
the employees, they cannot afford to leave the
organisation.
 Under this model, the employees are satisfied and
happy and they are not strongly motivated. So they give
only passive cooperation. They do not work more
vigorously than under the autocratic approach.

 The main benefit of this model is that it brings
security and satisfaction to the employees.
 The difficulty with this model is that it depends
upon material rewards only to motivate the
employees. But the workers have their
psychological needs also.
Due to the drawbacks of this method, a
search began to find out the best way to motivate
the workers so that they produce with their full
capacity and capabilities.

Supportive model

Supportive model
The supportive model has originated from the
‘Principles of Supportive Relationships.”
According to Rensis Likert, “The leadership and
other processes of the organisation must be such
as to ensure a maximum probability that in all
interactions and all relationships with the
organisation, each member will, in the light of his
background, values and expectations, view the
experience as supportive, and one which builds
and maintains his sense of personal worth and
importance.”

• The Supportive Model depends on leadership instead of
power or money.
• Management with the help of leadership try to create a
favorable organisational climate in which the
employees are helped to grow to the greater capacities
and achieve things of which they have the capability in
compliance with the goals of the organisation.
• The leader assumes that the worker will take
responsibility, make their contributions and improve
themselves, if given a chance. It is assumed that the
workers are not lazy by nature. If properly motivated,
they can be self directed and creative to the
organisation.

• It should be the orientation of the management to support
the employees’ job performance, rather than simply giving
them payments and benefits as in the custodial approach.
• This model takes care of the psychological needs of the
employees in addition to their subsistence and security
needs.
Supportive behaviour helps in creating friendly
superior-subordinate interaction with a high degree of
confidence and trust. This model has been found to be
effective in affluent countries where the workers are
more concerned about their psychological needs like
high self esteem, job satisfaction etc. But it has limited
application in India, where the majority of the workers
are below the poverty line. For them, the most
important requirement is the satisfaction of their
physiological needs and security. They are not much
concerned about the psychological needs.

Collegial model

Collegial model
The collegial model is an extension of the supportive
model. The Dictionary meaning of collegial is a body
of persons having a common purpose. As is clear
from the meaning, this model is based upon the
partnership between employees and the
management.
This model creates a favorable climate in the
organisation as the workers feel that they are the
partners in the organisation. They don’t see the
managers as their bosses but as joint contributors.
Both the management and workers accept and
respect each other.

• The collegial model inculcates the team spirit in an
organisation. The workers accept responsibilities because
they find it their obligation to do so, not because that they
will be punished by the management. This helps in
developing a system of self discipline in the organisation.
• In this kind of collegial environment, the workers have job
satisfaction, job involvement, job commitment and some
degree of fulfillment.
After studying all the four models it becomes very clear
that there is no single model which is best suited to the
requirements of all the organisations. The managers will
have to make use of a combination of models depending
upon the circumstances of the case. But keeping in view the
emergence of professional management, we can say that the
use of Supportive and Collegial will be more as compared to
the Autocratic and Custodial Models.

Challenges of OB
Organizational behavior is the manner in
which individuals and groups act and relate
with each other in the workplace. Various
factors influence these acts and relations, such
as leadership, organizational culture, and the
personal objectives of individuals within the
organization.

Various challenges confront managers and the
entire organization within the context of the
company’s organizational behavior.
 Diversity at Work
 Ethical Behavior
 Globalization Response
 Technology and Innovation

Diversity at Work
The workplace is an increasingly diverse space.
There are people of different races, cultural
backgrounds, gender and ages. The challenge
facing managers from an organizational behavior
point of view is how to manage this diversity in a
way that will positively impact the organization.
Managers have to move away from treating
everyone alike while at the same time valuing
every individual employee’s contribution to the
growth of the organization so as to maintain its
valuable employees.

Ethical Behavior
The challenge for managers is to promote an
ethical organizational behavior and culture
such that employees will not put their
individual interests ahead of organizational
interests. Personal interest is an aspect of
organizational behavior and managers face
the task of encouraging group interest over
personal interest so as to preserve ethical
values

Globalization Response
Through globalization, organizations that were
once local become global. Managers have to
manage international personnel with different
cultural backgrounds, work ethics and values.
As such, managers have the challenge of
understanding the organizational behavior of
the personnel in the company's subsidiary
organizations.

Technology and Innovation
Information technology plays an integral role in
workplace communication. Additionally,
workplace communication also influences
how people and groups behave in the
organization. Although technology brings with
it efficiency in collating and disseminating
knowledge.
The challenge here is in finding ways in
which technology promotes organizational
communication and inclusion rather than
exclusion and discrimination.

Organizational Structure
An organizational structure is a system that
outlines how certain activities are directed in
order to achieve the goals of an organization.
These activities can include rules, roles,
and responsibilities.
The organizational structure also determines
how information flows between levels within the
company. For example, in a centralized structure,
decisions flow from the top down, while in a
decentralized structure, decision-making power
is distributed among various levels of the
organization.

This structuring provides a company with a
visual representation of how it is shaped and how it
can best move forward in achieving its goals.
Organizational structures are normally illustrated in
some sort of chart or diagram like a pyramid, where
the most powerful members of the organization sit
at the top, while those with the least amount are at
the bottom.
Not having a formal structure in place
may prove difficult for certain organizations. For
instance, employees may have difficulty knowing to
whom they should report. That can lead to
uncertainty as to who is responsible for what in the
organization.

Definition
Organization structure is defined
as “ the logical arrangement of task
and the network of relationships and
roles among the various positions
established to carryout the business.

Types of Organizational
Structure
 Line organization structure
 Functional Organization structure
 Line and staff organization structure
 Matrix organization structure
 Committee organization structure

Line organization structure

Line organization is the simplest framework for
the whole administrative organization. Line
organization approaches the vertical flow of
the relationship.
In these organizations, a supervisor
exercises direct supervision over a subordinate.
Also, authority flows from the top-most person in
the organization to the person in the lowest
rung. This type of an organization is also called a
military organization or a scalar-type
organization.

ADVANTAGES
• Simple to work
• Economical and effective. It also allows
quick decisions.
• it promotes the unity of command.
• In a line organization, the responsibility for the
performance of tasks is fixed upon definite
individuals. Therefore, there is accountability of
delegated tasks.
• There is excellent discipline in a line organization
due to unified control and undivided loyalties.

Disadvantages
• A line organization can suffer from a lack of
specialization. This is because each department
manager is concerned only with the activities of his
own department. Therefore, employees are skilled
in tasks pertaining to their departments alone.
• A line organization is usually rigid and inflexible. In
fact, such organizations maintain discipline so
rigorously that they can rarely change.
• The division of work is not based on any scientific
plan but on the whims of the manager.

Functional Organization structure

A functional structure divides the organization into
departments based on their function. Each is headed
by a functional manager and employees are grouped as
per their role.
Employees are classified according to their function
in this structure. The organizational chart for a
functional structure shows the role hierarchy: for
example, president, vice president, finance
department, sales department, customer service,
administration, etc.
Each department has a head responsible for it. This
helps the organization control the quality and
uniformity of their performance

Advantages
 Employees are grouped by their knowledge and
skills, allowing them to achieve high
performance.
 Their roles and responsibilities are fixed,
facilitating easy accountability for the work.
 The hierarchy is clear. This reduces the number
of communication channels.
 Work is not duplicated as all departments have
defined responsibilities.
 Cooperation is excellent within the department.

Disadvantages
 Employees may feel bored because of repetitive
work. This monotony causes loss of enthusiasm.
 There is a lack of teamwork among different
departments.
 Employees may have little concern about events
outside their group.
 The functional structure is rigid and adapting to
changes difficult and slow

Line and staff organization structure

In a line and staff organization structure, both the line
managers and the staff have their own important roles
to play. In this structure, the authority flows from the
top down.
The line manager is the one in charge. He is
the one with the authority to make all the important
decisions of the company. And he is also responsible for
these decisions and the performance of his employees.
The staff is the experts in this scenario. They
have the knowledge and expertise of their field and are
there to assist their line managers. They have an
advisory role in the firm.

Advantages
 line executives receive expert advice from the staff.
The staff has expertise on the matter, and the line
executives can greatly benefit from this advice.
 There is the benefit of specialization in this system.
The whole organization is planned in such a way that
the work is divided according to specialization.
 There is also a lot of scope for growth of employees
in a line and staff organization. It gives each
individual the freedom to grow in flourish in their
own specialty..

Disadvantages
 There are sometimes conflicts between the line
executives and the staff managers. They could
have a difference of opinions. This can prevent
the harmonious relations between the two and
cause an imbalance in the company.
 Sometimes the expert advice given by the staff is
misunderstood or misinterpreted by the line
executives.
 .

Matrix organization structure

This is also called project organisation. It is a
combination of all relationships in the
organisation – vertical, horizontal and diagonal.
It is mostly used in complex projects. It provides
a high degree of operational freedom, flexibility
and adaptability for both the line and the staff
managers in performing their respective roles.
The main objective of matrix organisation is
to secure a higher degree of coordination than
what is possible from the conventional
organisational structures such as – the line and
staff.

Advantages
• It offers operational freedom and flexibility.
• b. It seeks to optimize the utilization of
resources.
• c. It focuses on end results.
• d. It maintains professional identity.
• e. It holds an employee responsible for
management of resources.

Disadvantages
• It calls for greater degree of
coordination.
• It may be difficult to define authority and
responsibility precisely.
• Employees may find it frustrating to work
with two bosses.

Committee organization structure

Committee organization structure
Committee can be defined as a group of
organizational members who discuss and
develop solutions to problems.
the purpose of such committee is to discuss
various problems and recommend solutions to
the management.
the Board of Directors of a company is an
example of Committee organization.

Advantages
• It is an excellent medium of discussion and education
and of communication between management and
workers.
• Sometimes problems are so complex or of inter-
departmental nature that they are best solved
by committees composed of concerned executives.
• It is able to serve as a mechanism of participative
decision making. By participating in
discussions or decision, a member feels motivated in
accepting a situation or implementing a decision.

Disadvantages
• It is an expensive device both in terms of time
and cost.
• Nobody is accountable for committee decisions.
A committee decision is nobody's decision just
because it is everybody's decision.
• Often committees result into more conflict than
problem solving

Organizational Goals
Organizational goals are strategically set objectives
that outline expected results and guide
employees’ efforts.
Purposes of organizational goals are to
provide direction to employees of the
organization.
3 types of organizational goals are strategic,
tactical, and operational goals.

Strategic goals are set by and for top
management of the organization. Tactical
goals are for middle managers to focus on the
actions necessary to achieve goals.
Operational goals are for lower-level
managers to tackle shorter-term issues.
Goals are critical to organizational
effectiveness as they serve as an objective for
the employees and they work to achieve it.
Organizational goals differ in three different
criteria; level, area, and time frame.

Types of Organizational Goals
3 types of organizational goals are;
Strategic Goals.
Tactical Goals.
Operational Goals.

Strategic Goals
Strategic goals are goals set by and for top
management of the organization. These
goals are made by focusing on broad
general issues.
Strategic goals or strategies are usually long-
term and from this goal, other goals are
made and set for different time-frames and
areas.

Tactical Goals
Tactical goals are set for middle managers.
These goals focus on how to operationalize
actions necessary to achieve the strategic
goals.
Middle managers of various departments
are usually responsible for their attainment.
Tactical goals are set by the middle
managers, but often top-managers set tactical
goals for the middle managers.

Operational Goals.
Operational goals are set by and for lower-level
managers. Operational goals are usually made
to tackle shorter-term issues associated with
the tactical goals and lower-managers are
responsible for their attainment.

Nature of Organizational Goals
 RELATED TO FUTURE
 MULTIPLE IN NUMBERS
 TYPES OF GOAL
 GOALS HAVE HIERARCHY
 GOALS ARE CONFLICTING

RELATED TO FUTURE
Goals are always related to future, they
are statements ,which an organization
aims to achieve in the future ,goals
provides a clear vision of future ,hence
goals refer to the future destinations of
an organization.

MULTIPLE IN NUMBERS
Goals are needed in all areas of
organization this implies that every
organization has a packages of goals set
in various key areas.

TYPES OF GOAL
Organizational goals exist at each
organizational level hence and
organization needs to establish a great
many goals they vary by organizational
level.

GOALS HAVE HIERARCHY
Goals are hierarchical from corporate
mission to specific individual goals the goals,
which are based on mission or purpose of the
organization, from a hierarchy from top to
the lowest position in the organization
structures

GOALS ARE CONFLICTING
Organizations have many goals which tend
to be different ,these goals are not only
complementary but also conflicting with one
another for ex. manufacturing firm could have
such goals as to -produce a stylish product-
produce high quality product and keep the
production cost to minimum ,those two goals
to produce a stylish product with high quality
conflict with the goal to keep manufacturing
costs as low as possible.