Introduction to Organization Behaviour

INTRODUCTION

The most commonly described managerial problems are those that deal with people. In the past
twenty years, business schools have come to realize this truth and have added required courses in
organizational behavior. We now know that technical skills alone are insufficient for managerial
success: it is the understanding of human behavior that separates successful from unsuccessful
managers. Businesses that place a strong emphasis on taking care of their “human element” by
creating a supportive work environment tend to be more successful in the marketplace and
generate superior financial results.

THE FIELD OF ORGANIZATIONAL BEHAVIOR

Organizational Behavior (OB) studies the influence that individuals, groups, and structure have
on behavior within organizations. The chief goal of OB is to apply that knowledge toward
improving an organization’s effectiveness.
Focal points of OB are jobs, absenteeism, turnover, productivity, human performance, and
management. This subject will focus on:
 Motivation
 Leader behavior and power
 Interpersonal communication
 Group structure and processes
 Perceptions and attitudes
 Personality, emotions, and values
 Change processes
 Conflict and negotiation
 Work design

COMPLEMENTING INTUITION WITH SYSTEMATIC STUDY

People develop intuitive understandings of the behaviors of other people through experience. This
experiential, common sense method of “reading” human behavior can often lead to erroneous
predictions.

You can improve your predictive ability by taking the systematic approach to the study of human
behavior.

The fundamental assumption of the systematic approach is that human behavior is not random.
Rather, OB has shown that there are “fundamental consistencies [that] underlie the behavior of
all individuals, and these fundamental consistencies can be identified and then modified to reflect
individual differences.”

Systematic study of behavior means: examining relationships, attempting to attribute causes and
effects, and basing our conclusions on scientific evidence- that is, on data gathered under
controlled conditions and measured and interpreted in a reasonably rigorous manner.

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Evidence-based Management (EBM): This complementary approach to systematic study
involves basing managerial decisions on the best available scientific evidence. Managers
must become more scientific about how they think about managerial problems and not rely
on instinct.

Intuition: your “gut feelings” about “what makes others tick.” This natural ability to guess how
people will react is most accurate when coupled with systemic thinking and evidence- based
management.

Our goal is to teach you how to use the systematic study of OB to enhance your intuitive
understanding of behavior and improve your accuracy in explaining and predicting behavior in
the workplace.

CONTRIBUTING DISCIPLINES TO THE OB FIELD

OB is an applied behavioral science that uses the contributions from a number of related
behavioral disciplines:

 Psychology: seeks to measure, explain, and sometimes change behavior of humans and other
animals. Psychologists examine factors relevant to work performance, including: learning,
perception, personality, emotions, training, leadership effectiveness, needs and motivation,
job satisfaction, and job stress, just to name a few. Psychology helps OB at the micro
(individual) level.
 Social Psychology: a branch of psychology that focuses on people’s influences on each other.
Primarily focused on the implementation of change, social psychology secondarily focuses
on attitudes, communication patterns, trust, group behavior, power, and conflict. Social
psychology helps OB at the macro (group) level.
 Sociology: studies people in relation to their social environment or culture. Sociology
contributes to OB by studying organizational culture, formal organization theory,
communications, power, and conflict. This study is at the macro (group and organization)
level.
 Anthropology: study of societies for the purpose of learning about human beings and their
activities. Anthropology helps us understand differences in fundamental values, attitudes, and
behavior by examining culture and environment. Much of our understanding of
organizational culture, organizational environments, and differences among national cultures
comes from anthropology. Anthropology tells us things about cultures at the macro level.

FEW ABSOLUTES IN OB

People are a much more complex subject of study than any physical science. Humans are far
more variable in their reactions and reasoning than any other subject you can investigate. That
is greatest challenge and the most interesting aspect of OB.

Despite the variability and complexity, we can still discover reasonably accurate explanations of
human behavior, so long as we factor in the effect of the situations in which the behavior occurs.
We describe these situations by identifying the contingency variables or unique aspects of those
situations.

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Because OB theories are so tied to contingencies you are not going to discover direct cause- and-
effect relationships expressed in OB theories: there aren't any!

CHALLENGES AND OPPORTUNITIES FOR OB

The modern workplace contains a diverse mix of cultures, races, ethnic groups, genders, and ages.
Employees have to learn to cope with rapid change due to global competition, while corporate
downsizing and the heavy use of temporary workers has severed the bonds of corporate loyalty.

There are many challenges faced by managers that can benefit by the use of OB concepts,
including:

A. Responding to Globalization: Organizations are no longer constrained by national

borders which changes the manager's job through:
1. Increased foreign assignments. Managers increasingly find themselves working
overseas dealing with a workforce that may hold different needs, aspirations, and
attitudes.
2. Working with people from different cultures. Even if the manager stays in the
domestic environment, the workers that the manager deals with may come from
different cultures and backgrounds. Motivational techniques and managerial
styles may have to be modified to remain effective.
3. Overseeing movement of jobs to countries with low-cost labor. Outsourcing tasks
and jobs to low-labor-cost countries may make economic sense, but such
decisions are not without local ramifications. Managers must be able to deal with
unions, government, and the public, who see outsourcing as a threat to their
livelihood. Balancing the needs of the company with the needs of the community
is at the heart of a firm’s concerns over social responsibility.

B. Managing Workforce Diversity: Our workplaces are increasing populated by a wider

mix of people and this trend will continue. Managing a diverse group of people effectively
is one of the most important challenges of organizations today.

Workforce Diversity: organizations are becoming a more heterogeneous mix of people

in terms of gender, age, race, ethnicity, and sexual orientation.

Globalization focuses on differences among people from different countries while

workforce diversity addresses differences among people within given countries.

Management practice has changed from defining fairness as treating everyone equally
despite their differences to a view of fairness as being the need to be responsive to each
of those individual differences while not inadvertently discriminating against anyone else
while doing so. This is a much more difficult task.

Diversity, if properly managed, as been shown to increase creativity, innovation, and

decision quality.

C. Improving Quality and Productivity: Managers are increasingly aware that workers
are the key to gains in quality and productivity. Change efforts must actively seek the
input and assistance of workers to succeed.

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D. Improving Customer Service: The majority of the workforce in developed nations
works in service jobs. These jobs require substantial interaction with the organization’s
customers: poor service experiences can lead to organizational failure.

Managers must create customer-responsive cultures whose members are:

 Friendly and courteous
 Accessible
 Knowledgeable
 Prompt in responding to customer needs
 Willing to do, what is necessary to please the customer

E. Improving People Skills: Studying OB allows managers to be better at explaining and

predicting the behavior of people at work. They can design more motivational jobs, apply
techniques to improve listening skills, and can create more effective teams.

F. Stimulating Innovation and Change: To survive, modern businesses must adapt to new
market conditions and foster innovation. OB theories and concepts help managers to
stimulate employee creativity and tolerance for change.

G. Coping with “Temporariness.” Organizations must be fast and flexible if they are to
survive. Because of this need for constant change, almost everything an organization is
temporary. Job descriptions, job skills, and even jobs themselves have all become
temporary. Successful firms, managers, and workers must be able to adapt, to invest in
continuous learning, and to live with flexibility, spontaneity, and unpredictability.

H. Helping Employees Balance Work-Life Conflicts: Work scheduling is becoming far

more flexible than it was in the past. This change allows more freedom for workers to
adjust their work life around their personal life, but many people now find the line
between work and their personal lives so blurred that they seem to be always at work.

This feeling that work is inescapable creates stress and increases personal conflicts. OB
can help by giving managers the tools they need to help reduce that stress by redesigning
the work itself.

I. Improving Ethical Behavior: In a highly competitive environment, the pressure to “bend

the rules” in order to produce becomes very strong. Unfortunately, no standard of ethics
is universally accepted, especially when a global perspective is taken. Managers need to
create an ethically healthy climate in which employees can work productively and
confront a minimal degree of ambiguity regarding what constitutes right and wrong
behaviors.

J. Creating a Positive Work Environment: As competition increases, some companies

have found that by fostering a positive work environment they can realize a competitive
advantage.

A growth area in OB research has been positive organizational scholarship (positive

organizational behavior), which examines how organizations develop human

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 strengths, foster vitality and resilience, and unlock potential. They try to find out what
is good about an organization: focusing on employees’ strengths, not their weaknesses.

IMPLICATIONS FOR MANAGERS

To be effective, managers must understand and work through people. OB gives managers the
tools they need to enhance their natural understanding of human behavior with systematic
analysis in order to achieve greater results. OB can help managers by:

 Offering specific insight into behavior to improve people skills.

 Helping managers to see the value of workforce diversity and flexibility in global
situations.
 Showing managers how to empower people, design and implement change programs,
improve customer service, and help employees balance work-life conflicts.
 Suggesting means for meeting chronic labor shortages.
 Helping managers to cope with temporariness and to stimulate innovation.
 Providing guidance in creating an ethically healthy work climate.

Keep in Mind...

1. OB's goal is to understand and predict human behavior in organizations; the

assumption is, fundamental consistencies underlie behavior.

2. It is more important than ever to learn OB concepts.

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 Perception and Individual Decision Making

INTRODUCTION
This chapter examines perception and the influences on perception. It continues with an
exploration of how individuals make decisions and how perception can influence those decisions.

WHAT IS PERCEPTION?
The world as it is perceived is the world that is behaviorally important.
Perception: A process by which individuals organize and interpret their sensory impressions in
order to give meaning to their environment.

FACTORS INFLUENCING PERCEPTION

A number of factors operate the shape and sometimes distort perception:

A. Perceiver: the individual looking at a target who attempts to interpret what is seen. An
individual’s personal characteristics filter and modify what is perceived.
B. Target: the object being perceived. Characteristics of the target will affect how it is perceived.
Things that are bright, beautiful, loud, or unusual are far more likely to be noticed. The
relationship of the target to its background influences perception as does the human trait of
grouping similar things together.
C. Situation: the context in which the perception is made. The context (time, location, light,
heat, the appropriateness of attire) can influence the extent of perception of a target.

PERSON PERCEPTION: MAKING JUDGMENTS ABOUT OTHERS

OB is concerned with “people perception” because how people see each other can, in large part,
determine how well these individuals can work together and indicate an organization’s level of
potential conflict.

Person Perception: the perceptions people form about each other

 Attribution Theory. People make inferences about the actions of other people and these
explanations of behavior can color perception as well and influence manager’s abilities to
predict behavior. In attribution theory, perceivers try to determine if the target person’s

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 behaviors were internally or externally caused. Perceivers try to “attribute” the behavior to
cause.

1. Internally Caused Behaviors: Behaviors that are believed to be under the personal control
of the individual.
2. Externally Caused Behaviors: Behaviors that are believed to be outside of the personal
control of the individual. The person is forced into the behavior by outside causes.
3. Fundamental Attribution Error: The tendency to underestimate the influence of external
factors and overestimate that of internal factors.
4. Self-Serving Bias: A variant of fundamental attribution error, this error occurs when
individuals overestimate their own (internal) influence on successes and overestimate the
external influences on their failures.

 Frequently Used Shortcuts in Judging Others: Uniquely assessing and interpreting

behavior in each instance of occurrence is time consuming and difficult. As a result, people
tend to develop shortcuts to their understanding of others. This natural tendency is often prone
to error and can lead to prejudice (literally “judging before the facts are known”).
1. Selective Perception. The mental filtering of incoming stimuli to reduce it to a
manageable level. The filters can be based on interests, background, experience, and
attitudes. Selective perception can allow observers to draw unwarranted conclusions from
an ambiguous situation.
2. Halo Effect. Drawing an overall impression based on a single characteristic, such as
intelligence, sociability, or appearance. Halo effects can falsely enhance or reduce the
perceived overall characteristics of an individual. This effect can also result in a negative
impression (“Horns”).
3. Contrast Effect. An effect based on the situation, specifically how much the target differs
from those objects that surround it. Like halo effects, this shortcut can lead to false
perception of the characteristics of an individual.
4. Stereotyping. Judging an individual based on the perception of a group to which the target
belongs. This useful (but dangerous) shortcut can block perception of an individual who
is acting outside of the perceived typical group behavior.

LINK BETWEEN PERCEPTION AND INDIVIDUAL DECISION MAKING

Every decision requires some degree of interpretation and evaluation of information. The decision
maker’s perceptions will select when problems are deemed actionable and limit what information
is sought and used. Biases and perceptual distortions may well skew both the analysis and
conclusions.

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Decisions: choosing from among two or more alternatives to solve a problem or take
advantage of an opportunity.

Problem: a discrepancy between some current state of affairs and some desired state that
requires a person to consider alternative courses of action.

ORGANIZATIONAL CONSTRAINTS ON DECISION-MAKING

Organizations can constrain decision-makers, creating deviations from the rational model.
These constraints can take the form of:
 Performance Evaluations. People are strongly influenced in their decision-making by
the criteria on which they are evaluated.
 Reward Systems. The reward system influences which choices are preferable in
terms of a personal payoff.
 Formal Regulations. Rules and policies limit the decision-maker’s choice of action.
 Self-Imposed Time Constraints. Explicit deadlines create time pressures and often
make it difficult to gather necessary information prior to making the decision.
 Historical Precedence. Commitments that have already been made constrain current
options. The historic context of a decision limits available alternatives.

IMPLICATIONS FOR MANAGERS

 Perception: To know how to anticipate behavior in order to influence productivity,
managers must understand that the reality to which their employees are reacting is based
on their own perceptions.

A manager’s task is to understand employee perceptions and when those perceptions are
misaligned with reality, try to bring them back in alignment. Failure to do so will result in
higher turnover, absenteeism, as well as lower job satisfaction.

 Suggestions for Individual Decision Making.

1. Analyze the situation: Adjust your decision-making approach to the national culture
you are operating in and the criteria your organization evaluates and rewards.
2. Adjust your decision approach to ensure it is compatible with the organization’s culture.
3. Be aware of biases, and try to minimize their impact.
4. Combine rational analysis with intuition: By using both approaches together, the
quality of your decisions will rise.
5. Enhance your creativity: Go out of your way to find novel solutions and approaches.
Make a creative environment of your workplace to the greatest extent you can.

Keep in Mind...
1. People have inherent biases in perception and decision-making. Understanding
those biases helps managers better predict behavior.
2. Biases can be helpful. Managers must be self-aware and determine when a bias
may be counterproductive.
3. Creativity is also helpful. It allows managers to better appraise, understand, and
identify problems.