Organizational Behavior; Group F,
28June, 3rd & 4th class
Coverage








Summing up from last session
Why OB
What is an Organization
Challenges for today’s organization
How excellent organizations are responding;
What is Organization Behavior
Manager.
Leading..
Questions..







What are 4 managerial activities.
How do Managers allocate their time in these 4
managerial activities.
What Managers do.
What are different approaches to management.
What is classical, behavioral & quantitative approach to
management.
Who are exponent of these approaches.
What is Howthrone studies.
What is an Organization



Exist for a purpose or goal
What all go in to achieving the goal? 7 S model
Manager & Leader make it happen(we will discuss little later)
Questions;
Challenges & Issues for today’s
organization




Competition. Survival of fittest. How to win over
customer who have options.
Future is not secured just because you are best today.
Need to improve, innovate & adapt..
Internal – coping with employee expectations, diverse
workforce,
Means are important –
How excellent organization are
responding








Strategy – out side in, clear communication to align
every body, hedgehog concept,
Structure
Execution
Performance culture. GE example- normal curve &
performance-values
Leadership
Talent development
Innovation.
Growth.
What is Organization Behavior
Study of
Behavior of individuals & groups. Why they behave in
the manner that they do & what impact their behavior.
What impact or influence their behavior.
Ref; my note book
Why individuals & people behave the manner
they do
 Hitler
& Nazi killed thousands of Jews.
 Why
workmen go on strike even if
most of their needs taken care.
 How
can otherwise timid & peaceful
person become part of violent mob
Why individuals & people behave the manner
they do

A non performer in one dep't/organization
become outstanding performer in another
dep't/organization

How somebody who is a mediocre in one
role/job, excel in another role/job

How a Sales/Finance Manager not fitting in
to sales profile excel contrary to perception
& vice versa
Why individuals & people behave the manner
they do

Why an individual take extreme step which is
quite unexpected. Examples

Do different nationals have certain defined
behavior pattern. If yes, why is it so.
Example- Indians are not good team player

Why a customer prefer not to go some body
who is offering the best value for money.
Why individuals & people behave the manner
they do

Why financial institutions & investor at times
bet with seemingly wrong horse or with
specific horses.

Why employees or workmen not necessarily
follow the technically most brilliant Manager
in the company.

What make soldiers embrace death.
Why individuals & people behave the manner
they do

Why a terrorist unrepentant of killing innocent people.

Why millions of people either ready to undergo sacrifice for a
cause

When an employee give his best in an organizational context.

Why some employees or people can not make that extra effort in
spite of manager’s best efforts to motivate them.
What I can learn as an individual & future manager?
I am specializing in finance, how can OB be useful to me?
The Manager




All important role of Manager in achieving
organizational goals
What a Manager does to achieve goals (P,O,C, L); Lagan
Part 1
What skill he needs to have? Tech..
Will the skill level vary at different levels?
Leading….

Barak Obama & leadership skill.Video Film & discussion
Next class 
Individual Behavior
Definition of Learning
Theoritical process of learning
Application of learniing theories
modification.
for
behavioral
Management Defined

Process of working with and through individuals &
groups and other resources (equipment, capital &
technology)
to
accomplish
organisational
goals………… Hersey & Blanchard, pp9

Attainment of organisational goals in an effective &
efficient manner through planning, organsing, leading &
controlling organisational resources………Aswathappa
Management as a Discipline
Classifying management as a discipline suggests that there is a
body of knowledge that can be learned.
(1) Management is a subject with principles, concepts, and
theories.
(2) A critical purpose of studying management is to learn how
in the process of managing to apply principles, concepts, and
theories of management.
Organisation
Group
Individual
Physiology
Economics
Semantics
OB
Anthropology
Political
Science
Sociology
Psychology Social &
Industrial
Psychology
Social
Psychology
Sociology
Learning
Motivation
Personality
Emotions
Job Satisfaction
Individual
Attitude Change
Communication
Group Processes
Conflict
Power
Intergroup
Behavior
Group
Org Theory
Org Culture
Org Change
Anthropology
Comparative
Values / Attitudes
Cross-cultural
Analysis
Org. Culture
Org Environment]
Organisatio
nal System
O
B
What Managers Do
Plan
Control
Organise
Managers
Coordinate
Command
4 managerial activities

Traditional management: Decision making, planning,
controlling, etc.

Communication: Exchanging routine info. Processing
paperwork, etc.

Human Resources Management: Motivating, disciplining
staff, managing conflict, training, staffing, etc.

Networking: Socializing, politicking, interacting with outsiders,
etc.
Source: Robbins, pg 8
What Managers Do
Planning
Controlling
Managers
Leading
Organising
Process of Management



The management process is an integrated whole even
though we may describe the process as a series of
separate activities to understand the parts.
The model we are using identifies the management
functions as planning, organizing, and controlling linked
together by leading.
What does this mean? Planning determines what results
the organization will achieve, organizing specifies how it
will achieve the results, and controlling determines
whether results are achieved and by using planning,
organizing
and
controlling
managers
exercise
leadership.
Planning


The organizing, leading, and controlling
functions all come from planning. How? These
functions carry out the planning decisions.
These plans may differ in focus from goals for
the short or long term but as a whole these
plans are the primary tools for preparing for
and dealing with changes in the organization’s
environment.
Organizing


The purpose of the organizing function is to
create a structure of task and authority
relationships to achieve the organization’s
objectives.
Organizing can be viewed as turning plans
into action and this allows an organization to
function effectively as a cohesive whole.
Controlling
The controlling function of management
requires 3 elements:
1. Established standards of performance.
2. Information that indicates deviations between
actual performance and the established
standards.
3. Action to correct performance that does not
meet these standards.
Leading


Leading is the management
process that integrates everything
else a manger does.
Leadership is a difficult concept to define but
means the ability to influence others to pursue
a common goal.
Think about good leaders that you have
known. Good leaders are typically driven by
an overriding vision or mission.
Roles & Functions
Interpersonal
• Figurehead
• Leader
• Liaison
Informational
• Monitor
• Disseminator
• Spokesperson
Decisional
•
•
•
•
Entrepreneur
Disturbance Handler
Resource Allocator
Negotiator
Source: Adapted from "The Nature of Managerial Work" - H. Mintzberg , (Robbins, pg 6)
Management Affects Everyone
Peter
Drucker,
a
nationally
recognized
management consultant describes 3 major tasks
of managers as:
1. To decide the purpose and mission of the
organization.
2. To make work productive.
3. To manage social impacts and responsibilities.
APPROACHES TO MANAGEMENT

Classical

Behavioral

Quantitative
OPERATIONAL APPROACH
•Management is a process.
•Universalist/ Classist/ Traditional Approach.
•This school concentrates on the role and functions of managers and
distills the principles to be followed by them.
•Features
–Functions of managers remain same
–Functions of management
–Core of good management
–Framework of management
–Principles of management
•Contributors
–Fayol, Lyndall Urwick, Harold Koontz, Newman, Mc Farland, Taylor.
•Uses
–Flexible & practical but not universal.
The Classical Approach
The serious study of management began in the
late 19th century with the need to increase the
efficiency and productivity of the workforce.
 The classical approach to management can be
understood by looking at 2 perspectives:
1. Scientific management concentrated on the
problems of lower-level managers
2. Classical organizational theory focused on
problems of top-level managers.

The Classical Approach (Cont.)

Think about the context. At the turn of the 20th century,
business was expanding and creating new products
and new markets, but labor was in short supply.

The solutions were


(1) substitute capital for labor or
(2) use labor more efficiently.
Classical Organizational Theory


Another body of ideas developed at the
same time. While scientific management
focused on the management of work, the
Classical approach focused on the
management of organizations.
The classical organizational theory focus was on (1)
developing principles that could guide the design,
creation, and maintenance of large organizations
and (2) to identify the basic functions of managing
organizations.
Engineers were the main contributors to scientific
management while practicing executives were the
major contributors to classical organizational theory.
Human labour becomes alienated labour, an idea first put forward by
Marx. He set out a number of dimensions of alienation, describing
the impact of class relations on work and on the wider human
community.
1. Workers are divorced from the product of their labour and from
the process of production
2. The fact that labour is ‘external’ to the worker, a mere means to an
end follows from this
3. These economic factors have social consequences in the people
become alienated from themselves.
4. A broader social alienation occurs - people stand in an
instrumental relationship to one another
The Contributors to Classical Organizational Theory:
Weber and Fayol


Max Weber was the primary architect of the
theory of the organization as a bureaucracy.
His view of a bureaucracy was a smoothly
functioning, highly efficient machine in which
each part is tuned to perform its prescribed
function.
Weber and Rationalization (1800s)

Thoughts on “personal” family like organisations




Employees loyal to indivual supervisors rather than organisations
Rational Behaviour - Central dynamic of western capitalist
societies
Spirit of Rationality
 Rationality here refers to the use of formal procedures (capital
accounting, systematic management, corporate planning, etc)
 Formal & Substantive Rationality
 Formal rationality refers to the calculation of economic means
 Substantive rationality refers to the persistent intervention of
human ends and values
The two rationales were ‘always in principle in conflict’, since
human needs are not necessarily met by rational calculation
Max Weber (Cont.)
Weber believed that an efficient organization
should be
based on 5 principles
Principle 1. In a bureaucracy, a manager’s formal authority
comes from the position held in the organization.
Principle 2. In this context people should occupy positions
because of their performance, not because of their social
standing or personal contacts.
Principle 3. The extent of each position’s formal authority and
task responsibilities should be clearly understood.
Principle 4. Positions should be arranged hierarchically to that
authority is exercised effectively and employees know to
whom they are to report and who reports to them.
Principle 5. Managers must create a will-defined systems of
rules, standard operating procedures, and norms to control
behavior within an organization.
Webers’ Bureaucracy







Weber believed that all bureaucracies have the following characteristics:
A well-defined hierarchy All positions within a bureaucracy are structured in a
way that permits the higher positions to supervise and control the lower
positions. This clear chain of command facilitates control and order throughout
the organization.
Division of labor and specialization All responsibilities in an organization are
specialized so that each employee has the necessary expertise to do a
particular task.
Rules and regulations Standard operating procedures govern all organizational
activities to provide certainty and facilitate coordination.
Impersonal relationships between managers and employees Managers should
maintain an impersonal relationship with employees so that favoritism and
personal prejudice do not influence decisions.
Competence Competence, not “who you know,” should be the basis for all
decisions made in hiring, job assignments, and promotions in order to foster
ability and merit as the primary characteristics of a bureaucratic organization.
Records A bureaucracy needs to maintain complete files regarding all its
activities.
Henri Fayol







Division of work: Division of work and specialization produces more and better
work with the same effort.
Authority and responsibility: Authority is the right to give orders and the
power to exact obedience. A manager has official authority because of her
position, as well as personal authority based on individual personality,
intelligence, and experience. Authority creates responsibility.
Discipline: Obedience and respect within an organization are absolutely
essential. Good discipline requires managers to apply sanctions whenever
violations become apparent.
Unity of command: An employee should receive orders from only one
superior.
Unity of direction: Organizational activities must have one central authority
and one plan of action.
Subordination of individual interest to general interest: The interests of one
employee or group of employees are subordinate to the interests and goals of
the organization.
Remuneration of personnel: Salaries — the price of services rendered by
employees — should be fair and provide satisfaction both to the employee and
employer.
Centralization: The objective of centralization is the best utilization of personnel.
The degree of centralization varies according to the dynamics of each
organization.
Scalar chain: A chain of authority exists from the highest organizational authority
to the lowest ranks.
Order: Organizational order for materials and personnel is essential. The right
materials and the right employees are necessary for each organizational function
and activity.
Equity: In organizations, equity is a combination of kindliness and justice. Both
equity and equality of treatment should be considered when dealing with
employees.
Stability of tenure of personnel: To attain the maximum productivity of
personnel, a stable work force is needed.
Initiative: Thinking out a plan and ensuring its success is an extremely strong
motivator. Zeal, energy, and initiative are desired at all levels of the
organizational ladder.
Esprit de corps: Teamwork is fundamentally important to an organization. Work
teams and extensive face-to-face verbal communication encourages teamwork.
Modern management and Taylorism




19th C Capitalism
The Principles of Scientific Management – 1911
Scientific management methods called for optimizing the
way that tasks were performed and simplifying the jobs
enough so that workers could be trained to perform
their specialized sequence of motions in the one "best"
way.
Time & Motion Studies - Use of a stopwatch to time a
worker's sequence of motions, with the goal of
determining the one best way to perform a job.
The Classical Approach (Cont.)

Frederick W. Taylor made an important contribution
to scientific management. He observed workers
producing far less than capacity in steel firms. He
recognized their were no studies to determine
expected daily output per worker in the form of work
standards and the relationship between these
standards and wages. Then he tried to find the one
best way to do a job, determining the optimum work
pace, the training of people to do the job properly
and successful rewards for performance but using
an incentive pay system.
The Classical Approach
Taylor’s work lead to the following 4 principles:
Principle 1. Study the way workers perform their tasks,
gather all the informal knowledge that workers possess,
and experiment with ways to improves the performance
of tasks.
Principle 2. Codify the new methods of performing tasks
into written rules and standard operating procedures
(sops).
Principle 3. Carefully select workers so that they possess
skills and abilities that match the needs of the task and
train them to perform according to rules and procedures.
Principle 4. Establish a fair or acceptable level of
performance for a task and then develop a pay system
that awards acceptable performance.
Taylor's 4 Principles of Scientific Management

Replace rule-of-thumb work methods with methods based on
a scientific study of the tasks.

Scientifically select, train, and develop each worker rather
than passively leaving them to train themselves.

Cooperate with the workers to ensure that the scientifically
developed methods are being followed.

Divide work nearly equally between managers and workers, so
that the managers apply scientific management principles to
planning the work and the workers actually perform the tasks.
Used by Henry Ford in automobile industry
Contributions of the Classical Approach



The greatest contribution of the classical approach
was the identification of management as an
important element of organized society.
The identification of management functions:
planning, organizing and controlling provided the
basis for training new managers and was a valuable
practice.
Many management techniques used today: time
and motion analysis, work simplification, incentive
wage systems, production scheduling, personnel
testing, and budgeting are
techniques from the classical approach.
Limitations of the Classical Approach

One major criticism is that the majority of
insights are to simplistic for today’s complex
organization. The classical approach and the
scientific management approach worked in
organizations that were very stable and
predictable and today little of that exists.
Behavioral Approach




The behavioral approach to management has 2 branches: the
Human relations approach from the 1950’s and the behavioral
science approach.
In the human relations approach managers must know why
their subordinated behave as they do and what psychological
and social factors influence them.
Advocates of this approach try to show how the process and
functions of management are affected by differences in
individual behavior and the influence of groups in the
workplace.
This approach requires managers to recognize employees’
need for recognition and social acceptance and this results in
training in human relation skills for managers.
The Behavioral
Science Approach


The individuals in the behavioral science branch of
the behavioral approach believe that the human is
more complex than the “economic man” description
of the classical approach and the “social man”
description of the human relations approach.
The behavioral science approach concentrates
more on the nature of work itself and the degree to
which it can fulfill the human need to use skills and
abilities.
Behavioral Management




The behavioral management theory is often called the human
relations / behavioral science approach because it addresses
the human dimension of work.
Behavioral theorists believed that a better understanding of
human behavior at work, such as motivation, conflict,
expectations, and group dynamics, improved productivity.
Psychological & Social factors that influence them.
The theorists who contributed to this school viewed
employees as individuals, resources, and assets to be
developed and worked with — not as machines.
HUMAN BEHAVIOUR APPROACH
•Organisation as people
–a) Interpersonal Behavior Approach -Individual Psychology
–b) Group Behaviour Approach -Organisation Behavior
•Features
–Draws heavily from psychology & sociology.
–Understand human relations.
–Emphasis on greater productivity through motivation & good
human relations
–Motivation, leadership, participative management & group
dynamics are core of this approach.
HUMAN BEHAVIOUR APPROACH
•Uses
–Demonstrates how management can be effective by applying
knowledge of organisation behaviour.
•Contributors
–Maslow, Herzberg, Vroom, McCleland, Argyris, Likert, Lewin,
Mc Gregor, etc.
•Limitations
–Treating management as equivalent to human behaviour.
–Talks about organisation & organisation behaviour in vague
terms.
Contributions of Behavioral Approach


Contributions
of
the
Behavioral
Approach
include
increased
use
of
teams
to
accomplish
organizational
goals,
focus
on training and development of employees, and the
use of innovative reward and incentive systems.
In addition the focus on modern management theory
resulted in empowering employees through shared
information.
The Behavioral Science Approach




The Hawthorne Studies: a series of research studies conducted
at the Hawthorne Works of General Electric helped lend support
to the behavioral approach to management theory.
The research used varying lighting levels in the plant’s
secretarial pool to determine the effects of different levels on
productivity expecting productivity levels to drop when lighting
levels dropped. The Result was surprising: productivity only
dropped when workers could no longer see well enough to do
their work.
The results showed that the presence of the researchers was
affecting the results because the workers enjoyed the attention
and produced the results they believed the researchers wanted.
Summary: The Hawthorne effect was used to describe this
effect of increased productivity due to increased attention.
Hawthorne Effect

The general conclusion from the Hawthorne studies was
that human relations and the social needs of workers are
crucial aspects of business management. This principle of
human motivation helped revolutionize theories and
practices of management
Limitations of the Behavioral
Approach

The limitations included the difficulty for
managers in problem situations and the fact
that human behavior is complex. This
complicated the problem for managers trying
to use insights from the behavioral sciences
which often changed when different
behavioral scientists provided different
solutions.
The Management
Science Approach


The Management Science approach is a modern
version of the early emphasis on the “management of
work” in scientific management. It features the use of
mathematics and statistics to aid in resolving production
and operations problems, thus focusing on solving
technical rather than human behavior problems.
The management science approach was used in World
War II when the English formed teams of scientists,
mathematicians, and physicist into units called
operations research teams, and today businesses use
these teams to deal with operating issues.
Quantitative Approach




Resulted from research during WW II
The quantitative approach to management involves the
use of quantitative techniques, such as statistics,
information models, and computer simulations, to
improve decision making
Operations Management - Focuses on managing the
process of transforming materials, labor, and capital into
useful goods and/or services
MIS - Organizes past, present, and projected data from
both internal and external sources and processes it into
usable information, which it then makes available to
managers at all organizational levels
Contributions of the Management Science
Approach

Most important contributions are in production
management focusing on manufacturing
production and the flow of material in a plant
and in operations management solving
production scheduling problems, budgeting
problems and maintenance of optimal
inventory levels.
Limitations of the
Management
Science Approach

The shortfall of this approach is that management
science does not deal with the people aspect of
an organization.
Attempts to Integrate the Three
Approaches to Management



One attempt to integrating the three approaches to
management is the Systems Approach. The Systems
Approach stresses that organizations must be viewed as
systems in which each part is linked to each other.
The other approach is the Contingency Approach. The
Contingency Approach stresses that the correctness of a
managerial practice is contingent on how it fits the
particular situation.
The system’s approach views the elements of an
organization as interconnected and as being linked to its
environment.
Attempts to Integrate the Three Approaches to
Management

It is important to understand that most organizations
must operate as open systems to survive and use a
systems perspective to management. And the
objectives of the individual parts of the organization
must be compromised for the objectives of the entire
firm.
Attempts to Integrate the Three Approaches to
Management

The contingency theorists believe that most workplace
situations are too complex to analyze and control as the
scientific management approach suggests. Paul Hersey
has developed a situationalist theory of leadership. He
believes managers should not ascribe to one best
approach. Instead managers should identify the appropriate
principles, along with relevant contingency variables and
then evaluate these factors. In summary, the contingency
approach involves identifying the important variables in
different situations, evaluating the variables, and then
applying appropriate management knowledge and principles
in selecting an effective approach to the situation.
And Now To The Fun!
Learning How to Manage



The MBA program will help you develop your
knowledge, attitudes and skills. And it will teach
you how to apply your formal education so that
once you become a manager you will understand
how to face challenges and make decisions.
The term management refers to the body of
knowledge, concepts and procedures used by
managers.
A great deal of management knowledge comes
from the autobiographies of people who practiced
management.
EMPIRICAL APPROACH
•Study of managerial experiences and cases (mgt)
•Features
–Study of Managerial Experiences
–Managerial experience passed from practitioner to students for
continuity in knowledge management.
–Study of Successful & failure cases help practising managers.
–Theoretical research combined with practical experiences.
•Uses
–Learning through experience of others
•Limitations
–No Contribution for the development of management as a
discipline
–Situations of past not the same as present.