Chapter 1

Introduction to
Organizational Behavior

McGraw-Hill/Irwin Copyright © 2008 by The McGraw-Hill Companies, Inc. All rights reserved.
Learning Objectives
 Define in applied terms organizational behavior (OB)
 Describe the disciplines that have contributed to the
field of organizational behavior
 Discuss the importance of understanding behavior in
organizations
 Explain the time dimension model of measuring
effectiveness
 Explain the relationship between quality and
organizational effectiveness
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Introduction
 Imagine working where…
 Workers are excited about their jobs
 Managers listen carefully to worker’s comments
 The atmosphere is vibrant
 People work hard, and have pride in their jobs
 They trust each other and share ideas to improve
performance
 A setting in which groups work together, solve
problems, set high quality standards
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 How would such a place come about?
 The
keys are how people and situations are
managed
 Managers should use a target to achieve
 Human being is essential and the key to the
organization’s success
 Build a place where people have the freedom
to be creative, where they feel a sense of
accomplishment
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 The key to managing people in ways that
lead to profits, productivity, innovation and
organizational learning lies in the
managers’ perspective: The importance of
people as assets

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Definition of OB

 It is the systematic study and careful

application of knowledge about how people
-as individuals and as groups- act within
organizations
 It strives to identify ways in which people
can act more effectively

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What is OB?
A way of thinking: we must identify clearly
the level of analysis being used: individual,
group and/or organizational
A humanistic orientation, people and their
attitudes, perceptions, learning capacities,
feelings, goals are of a major importance to the
organization
 Performance-oriented,
why is performance low
or high? How can performance be enhanced?
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 Based on recognized disciplines
 Multidisciplinaryin which it utilizes
principles, models, theories and methods from
other disciplines
 Applied science in that information about
effective practices in one organization is being
extended to many others

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Why studying OB?
 Studying OB can help us describe, understand,
predict and control human behavior at work
 Describe how people behave under a variety of
conditions
 Understand why people behave as they do
 Predict future employees’ behavior (motivated,
dedicated and more productive or not to take
preventive actions)
 Control and develop human activity at work
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 Studying OB can help us understand…
 Why employees behave as they do?
 Why one individual or group is more
productive than another?
 Why managers continually seek ways to
design jobs and delegate authority?

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Environmental Forces
Reshaping Management Practice

Human
Resources

Cultural
Globalism
Diversity

Rapidity of Psychological Technology

Change Contract

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1- The power of human resources:
 The ability to get things done in the way
one wants them to be done
 The way people work, think and behave
dictates the direction and success of a firm

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 2- Globalism
 The interdependency of transportation,
distribution, communication, and economic
networks across int’l borders
 Firms must make not only capital investments,
but also investments in people
 How well a firm recruits, selects, retains and
motivates a skilled workforce will have a major
impact on its ability to compete in the global
interdependent world

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3- Cultural diversity
- The differences created by cultural
phenomena such as history, economic
conditions, personality characteristics,
language, norms
- Increased minority and female
participation in the workforce raises a
number of issues like paying, higher status
jobs
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 4- The rapidity of change
 The speed at which change occurs
 Rapid change is found in many areas such
as technology, demographics, globalism,
new products and services
 Internet, more demanding consumers who
want better quality at lower price and on
time are some of these changes
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5- Psychological contract: unwritten
agreement between an employee and the
organization which specifies what each
expect to give and receive from the other
6- Technology: the processes that convert raw
materials or intellectual capital into
products or services
Organizations must attract and retain human
assets to continue advancing
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The purpose of the book

 Helps to learn how to manage and lead

individuals and groups in organizations
 Organizations are much more than only a
means for providing goods and services.
They create the settings in which most of
people spend their lives

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The Origins of Management
 Before 1900, management…
 Was based on trial and error
 Had little or no theory
 Did not share ideas and practices
 No common body of knowledge or theoretical basis
for building the pyramids as an example
 The industrial revolution in England, Management of
workshops emphasized on efficiency, strict controls,
and rigid rules and procedures
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 Industrialization
 Began around the time of the Civil War in USA
A dramatic expansion of mechanical industries
 Attempts to better plan, organize, and control
the work of these complexes led managers to
discuss their situations and present papers at
meetings (they covered topics such as strikes,
principles of work cooperation)
 The first management publications emerged
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The Origins of Management

Frederic W. Taylor’s Henri Fayol’s Functions

Scientific Management of Management
Principles

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Scientific Management

 Frederick Taylor (Father of all present day

management
 The maximum good for society can come
only through the cooperation of
management and labor in the application of
scientific methods
 He stated that there is a unified way to
improve the way managers perform their
jobs
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The Principles of Management
 Develop a science for each element of an
employee’s work
 Scientifically select and then train, teach and
develop the worker, (in the past, the worker chose
the work to do and was self trained)
 Cooperate with each other to ensure that all work
was done in accordance with the principles of
science
 There is almost equal division of the work and the
responsibility between management and non
managers
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Functions of Management

 Henri Fayol presented a general theory of

management

 He emphasized the importance of carefully

practicing efficient planning, organizing,
commanding, coordinating and controlling

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 Fayol’s approach was a significant contribution
in that it presented three important developments
as follows:
 1- Management is a separate body of knowledge
that can be applied in any type of organization
 2- A theory of management can be learned and
taught
 3- There is a need for teaching management in
colleges

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Psychology

Individual

Sociology

Organizational
Social Psychology Group
Behavior

Anthropology

Organization
Political Science

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The Hawthorne Studies
 Trade unions rebelled against Taylor’s focus on
scientific management principles
 Mary Parker Follet was opposed to Taylor’s lack of
specific attention on human needs and relationships in
the workplace
 The human element was the focus of her view about
how to manage
 She promoted participatory decision making and
decentralization, but she had no empirical evidence
 Industry wanted concrete evidence that focusing on
human resources produces higher productivity
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The Hawthorne Studies

 Initial study examined the effects of

illumination on worker output
 Additional studies investigated the effect of
rest pauses, shorter work days, incentives, and
type of supervision
 Workers produced more merely by being
observed and studied
 Social pressures and group norms could
increase or restrict output
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 Elton Mayo and others were the leaders of
the Harvard study team, they continued
their work at the Hawthorne plant
 They learned that economic rewards did not
totally explain worker behavior. Workers
complied with norms and respected the
informal social structure of their group
 They also learned that social pressures
could restrict output
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Framing the Study of Organizational Behavior
 Studying organizations
 Part 1: The Field of Organizational Behavior
 Part2: Understanding and Managing Individual
Behavior
 Part 3: Group Behavior and Interpersonal
Influence
 Part 4: Organizational Processes
 Part5: Organizational Design, Change, and
Innovation
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The Organization’s Environment

 Organizations exist in societies, and are

created by societies
 Environmental forces in these societies…
 Customer/client needs
 Legal and political constraints
 Economic and technological changes

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Leaders and Organizational Behavior

 Internal and external challenges

 Changing and diversity of the workforce
 Increased emphasis on value by consumers,
customers consider the total value of a product
or service, they expect organizations to be
responsive to their needs and to produce high
quality goods or services at the best price
possible
 Changes in markets and competition
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 Using and managing information technology
 Everything is in motion
 Establishingthe work team, department, or
organization that can respond, compete and
negotiate globally is what leaders are asked to
accomplish

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The Individual in the Organization
 Individual performance is the foundation of
organizational performance
 Important influences on individual behavior and
motivation
 Individual characteristics (the relationships between
attitudes, perceptions, emotions, personality, values, and
individual performance)
 Individual motivation (motivation and ability to work
interact to determine performance. Motivation theory
attempts to explain and predict how behavior of
individuals is started, sustained and stopped
 Rewards (or punishments to increase performance, to
attract skilled employees to join the organization)
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Group Behavior and Interpersonal Influence

 Interpersonal influence and group behavior

are powerful forces affecting organizational
performance
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Group Behavior and Interpersonal Influence

Inter-group
Behavior & Conflict Politics

Organizational
Behavior
Power

Group
Behavior
Leadership

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 Group Behavior: Managers create formal groups to carry out
assigned jobs and tasks. Groups also form as a consequence of
employees’ actions, they are termed informal groups, they
develop around common interests and friendships.
 Intergroup Behavior and conflict: as groups interact with
other groups, they develop their unique set of characteristics,
so they may cooperate or compete, this competition can lead
to conflict.
 Power and Politics: power is the ability to get someone to do
something you want, the essence of power is control over
others. Managers derive power from both organizational and
individual sources.

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Organizational Processes
 When behavioral process in an organization do not function
well, problems can arise
 There are number of processes that lead to effective
organizational performance as follows:
 Communication: the ability of management to receive,
transmit, and act on information. The communication process
links people within the organization.
 Decision-making: the quality of decision making in an
organization depends on selecting proper goals and identifying
means to achieve them.
 Leadership

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Organizational Structure

 Managers must understand

the organizational
structure
 The formal pattern
of activities and
interrelationships among
the various units of the
organization

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Organizational Change and Innovation
 Effectiveness might be improved by
changing the total organization
 Organizational change and development
represent planned attempts to improve
overall individual, group and
organizational performance.
 Beprepared to deal with employee reactions
when changes occur
 Reactions can range from mild to extreme
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Effectiveness in Organizations

 Whether and how managers influence

behavior, and thus effectiveness, is hard to
determine
 Three levels of analysis… individual, group,
and organizational
 Three levels of managerial responsibility…
individuals, groups of individuals, the
organization itself

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 Levi has emphasized on quality, being
socially responsible, and using the most
talented people to recruit them in the firm.
 He presented some value principles, when
practiced in the firm, effectiveness will
increase: behaviors, diversity, recognition,
ethical practices, empowerment.

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Systems Theory and the Time Dimension of
Effectiveness
 1- Enables managers to describe the behavior of
organizations (Internally and externally)

Inputs Process Outputs

Environment

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 Internally:how and why people within
organizations perform their individual and
group tasks
 Externally: through relating the transactions
with other organizations and institutions

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Systems Theory

 2- Is used to integrate organizational

effectiveness and time
 Effectiveness criteria must reflect…
 The entire input-process-output cycle
 The interrelationships between the
organization and its outside environment
 The stage of the organization’s life

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Systems Theory

 Indicators of organizational effectiveness

and survival
 Short term: quality, productivity, efficiency,
and satisfaction
 Intermediate term: quality, adaptability, and
development
 Long term: quality and survival
 The overarching criterion is quality
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Time-Based Criteria

 Time-based criteria include…

 Quality: effective company is the one that provides
customers with quality goods and services. Managers
must translate quality improvements into results:
more satisfied customers, a more involved workforce,
better designed products.
 Productivity: the relationship between inputs and
outputs.
 Efficiency: the ratio of outputs to inputs.

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 Satisfaction:the extent to which the
organization meets the needs of the employees.
Measures of satisfaction include employee
attitudes, turnover, absenteeism, tardiness.
 Adaptiveness: the extent to which the
organization can and does response to internal
and external changes.
 Development: the ability of the organization to
increase its capacity to deal with
environmental demands. Ex: training programs
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 Introducing the time dimension into a discussion
of effectiveness enables us to understand the work
of managers in organizations.
 The basic job of managers is to identify and
influence the causes of individual, group, and
organizational effectiveness in the short,
intermediate, and long run.
 Reviewing, evaluating, and modifying a
manager’s roles and responsibilities with time,
effectiveness, and a systems perspective is our
goal all over the course.
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Improving Effectiveness

 Providing opportunities for training and

continuous learning
 Sharing information with employees
 Linking compensation to performance
 Avoiding layoffs
 Respecting the differences across
employees, and being a good listener

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