ORGANIZATIONAL BEHAVIOUR

UNIT-I

What is Organisation – Meaning and Concept of Organisation

Meaning of Organisation:
In common parlance, the word ‘organisation’ refers to ‘institution’. Educational
institution, a private agency, Government department or business firm; all are
organisations. In the context of management, it means formal arrangement of
work amongst members of the institution with clear identification of authority
and responsibility so that organisational goals can be achieved optimally. If
duties of every member and their relationship with peers, superiors and
subordinates are not defined, the planning process will be ineffective.
Different authors have defined ‘organisation’ as follows:
Organisation is “the process of identifying and grouping the work to be
performed, defining and delegating responsibility and authority, and
establishing relationships for the purpose of enabling people to work most
effectively together in accomplishing objectives.” — Louis A. Allen
Organisation defines the part which each member of an enterprise is expected to
perform and the relations between such members, to the end that their concerted
endeavour shall be most effective for the purpose of the enterprise.” — Alwin
Brown
Organising is a “process of defining the essential relationships among people,
tasks and activities in such a way that all the organisation’s resources are
integrated and coordinated to accomplish its objectives efficiently and
effectively.”— Pearce and Richard B. Robinson
The above definitions highlight organising as a (i) structure and (ii) process.
(i) As a Structure:
Organising is a set of relationships that defines vertical and horizontal
relationships amongst people who perform organisational tasks and duties. The
organisational task is divided into units, people in every unit (departments) are
assigned specific tasks and their relationship aims to maximise organisational
welfare and individual goals.
The relationship amongst people is both vertical and horizontal. As vertical
relationships, the authority-responsibility structure of people at different levels
in the same department is defined and as horizontal relationships, authority-
responsibility structure of people in different departments at same levels is
defined.
Organisation structure specifies division of work and shows how different
functions or activities are linked; to some extent it also shows the level of
specialisation of work activities. It also indicates the organisation’s hierarchy
and authority structure and shows its reporting relationships. — Robert H. Miles
Organising as a structure is a network of relationships (authority-responsibility
structure) amongst all those who are part of the organisation, working at
different levels in different departments.
Organisation defines relationships amongst jobs and people working at the jobs
at various levels. It emphasises more on positions than people.
(ii) As a Process:
Organising defines relationships amongst people through a process that aims to
achieve organisational goals efficiently.
It Involves:
(i) Identification of work
(ii) Grouping of work into smaller groups
(iii) Assigning work to every individual at every level in every department
(iv) defining its authority and responsibility, and
(v) Establishing relationships amongst people to make them contribute towards
organisational goals in an integrated manner.

Organisation structure and process are not independent concepts. They are
complementary to each other. Once the organisation process is defined,
organisation structure is the end result or outcome of that process. Organisation
structure is the result of organisation process. Organisation is, in fact, a
structured, on-going process that defines how to achieve pre-defined goals.

Concepts of Organisation:
There are two concepts of organisation:
1. Static concept

2. Dynamic concept,

1. Static Concept:
Under static concept the term ‘organisation’ is used as a structure, an entity or a
network of specified relationship. In this sense, organisation is a group of
people bound together in a formal relationship to achieve common objectives. It
lays emphasis on position and not on individuals.
2. Dynamic Concept:
Under dynamic concept, the term ‘organisation’ is used as a process of an on-
going activity. In this sense, organisation is a process of organising work,
people and the systems. It is concerned with the process of determining
activities which may be necessary for achieving an objective and arranging
them in suitable groups so as to be assigned to individuals. It considers
organisation as an open adoptive system and not as a closed system. Dynamic
concept lays emphasis on individuals and considers organisation as a continuous
process.

Scope of Organisation
Organisation is the executive structure of an enterprise and a basic framework
within which the executive’s decision making behaviour occurs.
Organisation, as an element of management, is concerned with the
following aspects, called as scope of organisation:
1. Identifying and grouping of activities to attain corporate objectives and goals.
2. Assigning these activities to appropriate divisions, departments, sections and
individuals.
3. Providing authority, delegation, co-ordination and communication.
4. Providing facilities and equipment, i.e. physical factors of good work
environment.
There are four basic elements of all forms of living organisations around which
any organisation centers – (i) The work (ii) The People, (iii) The authority,
responsibility and (iv) The relationships.
Clear-cut division of work defines and prescribes each part of the work to be
handled by each person, giving allocation of duties and responsibilities and
defining authority or power at each position in the organisation chart. Co-
ordination and integration ensure elimination of duplication of work and unity
of action.
A good organisation has to fulfill four special functions:
1. It must enable the management to maximise the outputs through provision of
an efficient man-machine system.
2. It must ensure smooth and effective net-work of communication and
information.
3. It must offer interesting and meaningful jobs to all individuals working in the
organisation. This alone will ensure job satisfaction. Organisation is developed
for people. It must, therefore, be humanistic also and not merely mechanistic.
Both the approaches can be reconciled.
4. It must create, maintain and develop its own image or individuality. This
ensures customer goodwill. Investors will also have confidence in the
enterprise. Employees can develop a sense of belonging to the organisation.

Nature of Organisation
Nature of Organization:
1. Common goal – The main reason for the existence of an organization is to
accomplish some common goals. The structure of the organization is bound by
a common purpose.
2. Division of labour – The work needed to accomplish the goals is divided into
a number of functions and sub-functions. These, functions are organized in the
form of departments. Each department is headed by a specialist. Such a division
of function on specialty basis infuses specialisation.
3. Authority structure – There is an arrangement of positions into graded series.
Such an arrangement creates a series of superior and subordinate relationships
called chain of command. Authority and responsibility associated with various
positions are defined.
4. Group – It is people who constitute the dynamic element of an organization.
They work in groups in the various departments of an organization.
5. Communication – There is free flow of communication through various
official channels among the people across various departments. Most of the
communication is in a written form. However, grapevine communication is also
in vogue.
6. Coordination – The diverse efforts of various functional departments are
integrated towards the common objective through the process of coordination.
7. Environment – No organization is functioning in a vacuum. Social, political,
economic and legal factors exert influence on the environment. Beside it is
influenced by internal factors like materials, machines, level of technology,
economic resources, human resources, etc.
8. Rules and regulations – Every organization is governed by a set of rules and
regulations for the orderly functioning of people.

Characteristics of Organisation:
Different authors look at the word ‘organisation’ from their own angle. One
thing which is common in all the viewpoints is that organisation is the
establishment of authority relationship among persons so that it helps in the
achievement of organisational objectives.

Some of the characteristics of organisation are studied as follows:

1. Division of Work:
Organisation deals with the whole task of business. The total work of the
enterprise is divided into activities and functions. Various activities are assigned
to different persons for their efficient accomplishment. This brings in division
of labour. It is not that one person cannot carry out many functions but
specialisation in different activities is necessary to improve one’s efficiency.
Organisation helps in dividing the work into related activities so that they are
assigned to different individuals.

2. Co-Ordination:
Co-ordination of various activities is as essential as their division. It helps in
integrating and harmonising various activities. Co-ordination also avoids
duplications and delays. In fact, various functions in an organisation depend
upon one another and the performance of one influences the other. Unless all of
them are properly coordinated, the performance of all segments is adversely
affected.

3. Common Objectives:
All organisational structure is a means towards the achievement of enterprise
goals. The goals of various segments lead to the achievement of major business
goals. The organisational structure should build around common and clear cut
objectives. This will help in their proper accomplishment.

4. Co-operative Relationship:
An organisation creates co-operative relationship among various members of
the group. An organisation cannot be constituted by one person. It requires at
least two or more persons. Organisation is a system which helps in creating
meaningful relationship among persons. The relationship should be both vertical
and horizontal among members of various departments. The structure should be
designed that it motivates people to perform their part of work together.

5. Well-Defined Authority-Responsibility Relationships:

An organisation consists of various positions arranged in a hierarchy with well
defined authority and responsibility. There is always a central authority from
which a chain of authority relationship stretches throughout the organisation.
The hierarchy of positions defines the lines of communication and pattern of
relationships.

MODELS OF ORGANIZATIONAL BEHAVIOUR

Organizational behavior reflects the behavior of the people and management all
together, it is considered as field study not just a discipline. A discipline is an
accepted science that is based upon theoretical foundation, whereas OB is an
inter-disciplinary approach where knowledge from different disciplines like
psychology, sociology, anthropology, etc. are included. It is used to solve
organizational problems, especially those related to human beings.
There are four different types of models in OB. We will throw some light on
each of these four models.
Autocratic Model
The root level of this model is power with a managerial orientation of authority.
The employees in this model are oriented towards obedience and discipline.
They are dependent on their boss. The employee requirement that is met is
subsistence. The performance result is less.
The major drawbacks of this model are people are easily frustrated, insecurity,
dependency on the superiors, minimum performance because of minimum
wage.
Custodial Model
The root level of this model is economic resources with a managerial orientation
of money. The employees in this model are oriented towards security and
benefits provided to them. They are dependent on the organization. The
employee requirement that is met is security.
This model is adapted by firms having high resources as the name suggest. It is
dependent on economic resources. This approach directs to depend on firm
rather than on manager or boss. They give passive cooperation as they are
satisfied but not strongly encouraged.
Supportive Model
The root level of this model is leadership with a managerial orientation of
support. The employees in this model are oriented towards their job
performance and participation. The employee requirement that is met is status
and recognition. The performance result is awakened drives.
This model is dependent on leadership strive. It gives a climate to help
employees grow and accomplish the job in the interest of the organization.
Management job is to assist the employee’s job performance. Employees feel a
sense of participation.
Collegial Model
The root level of this model is partnership with a managerial orientation of
teamwork. The employees in this model are oriented towards responsible
behavior and self-discipline. The employee requirement that is met is self-
actualization. The performance result is moderate zeal.
This is an extension of supportive model. The team work approach is adapted
for this model. Self-discipline is maintained. Workers feel an obligation to
uphold quality standard for the better image of the company. A sense of
“accept” and “respect” is seen.
6 organizational theories

Social and behavioral scientists have developed various theories to describe the
correct way to understand and approach the key to an organization's
productivity and success. These organizational theories discuss different ways
that managers and supervisors may address their leadership responsibilities in
order to yield the most productive and efficient results.

The six primary organizational theories include:

1. Classical theory

Classical theory can address the primary aspects of a business's formal

organizational structure. This theory discusses how to divide up professional
tasks in the most efficient and effective way.
6 organizational theories

Social and behavioral scientists have developed various theories to describe the
correct way to understand and approach the key to an organization's
productivity and success. These organizational theories discuss different ways
that managers and supervisors may address their leadership responsibilities in
order to yield the most productive and efficient results.

The six primary organizational theories include:

1. Classical theory

Classical theory can address the primary aspects of a business's formal

organizational structure. This theory discusses how to divide up professional
tasks in the most efficient and effective way.

Classical theorists pay particular attention to the professional dynamics and

relationships within an organization and how these relationships may impact the
company's function and production.

The underlying purpose of this theory is to help businesses create the most
beneficial structures within a company that can then help the organization
accomplish its goals. The four principles of the classical theory include:

 Division of labor: This principle argues that the production of a

commodity splits into various divisions of manufacturing, and the people
work within each division according to their area of specialization. This
process results in maximum product output with minimum expenses.
 Scalar and functional processes: The scalar process deals with a
company's vertical growth, meaning the relationships between business
leaders and their employees. This means that professionals in
management instruct their employees, and employees carry out the
actions.
 Structure: The principle of structure describes patterns of professional
behavior that lead to the accomplishment of the organization's goals.
Structure is a tool that may facilitate relationships between all aspects of
the company or business.
 Span of control: The span of control means attributing the appropriate
numbers of employees to a supervisor so they can implement the
 principles of coordination, planning, motivation and leadership. This is
about assigning the maximum number of employees to a manager while
also allowing them enough time and support to lead their staff.

2. Neo-classical theory

Beginning with the Hawthorne studies in the 1920s, the neo-classical theory
focuses on the emotional and psychological components of peoples' behavior in
an organization. Sociologists and psychologists found topics like leadership,
morale and cooperation contribute to professional habits and behaviors.

This theory argues that a sense of belonging and social acceptance is an

important aspect of positive performance in the workplace. This means that
effective leaders understand how the group dynamics may contribute to the
success of the organization overall.

Business leaders may implement systems and strategies to improve the

interpersonal skills of their employees and facilitate meaningful professional
connections through motivation, counseling and communication.

3. Modern theory

Modern theory, also called modern organizational theory, includes multiple

management development approaches. This theory considers interactions
between people within an organization and the surrounding environment, as
well as the interpersonal interactions between members of the organization.

Theorists based this approach on systems analysis and used both quantitative
and behavioral sciences to develop it. This means that professional leaders who
adopt this theory may use statistical and mathematical information to make
business decisions while also considering the satisfaction and happiness of their
employees.

Managers who implement this approach may require an in-depth knowledge of

their employees' behaviors in order to implement programs that further their
productivity and professional development.

4. Contingency theory
Contingency theory, also called decision theory, views organizations as a
structure composed of choice-makers, and argues that there is no one right way
to make a decision. Herbert A. Simon, a primary contributor to this theory,
found that while people make business decisions at all levels of an organization,
employees working at higher levels make the most valuable or impactful
choices.

This theory argues that the ideal decision or choice may differ from one
organization to another, so choices are dependent on various internal and
external factors. This means that the success of a business is contingent on the
decisions made by the organization's leaders. Contingency theorists believe that
management is responsible for analyzing business situations and then acting
accordingly to address any issues or challenges.

5. Motivation theory

The motivational theory includes the study of what drives and inspires members
of an organization to work toward their professional goals. Theorists who
support this approach argue that employees perform their job duties accurately
and productively when management knows how to motivate them correctly.

This may require business leaders to thoroughly understand their employees'

behavioral patterns and preferences to recognize the most beneficial way to
support them. The goal of this is to increase company productivity on the basis
that appropriately encourages employees to perform more efficiently, thus
increasing production and profit.

Managers may consider intrinsic and extrinsic factors that can impact their
employees' feelings and experiences in order to develop effective systems and
managerial strategies.

6. Open systems theory

Open systems theory is a concept that argues that an organization's environment

influences it, and understanding the impact of this influence may help managers
develop more effective leadership strategies. Theorists categorize
the environmental factors that impact an organization as specific or general.
Specific factors may include the vendors or distributors that a company works
with, industry competitors or government agencies that control or interact with
production and regulation. Alternatively, general factors include four primary
aspects that occur because of the geographic location of the organization.

These aspects include:

 Economic conditions: The geographic location of a business can have a

great impact on the company's ability to grow and remain successful
because of local economic trends and events, including recessions and
economic upswings.
 Cultural values: The cultural values of a community can influence
customers' viewpoints and standards. This may influence whether they
support your business or organization, and business leaders may use this
theory to adapt to local cultural ethics.
 Education systems: Areas with strong education systems may be ideal
for businesses that are in the technology industry or other companies that
may rely on employees with extensive academic training.
 Legal consideration: The legal and political environment, including the
taxes and regulations on business operations, may impact the stability and
security of an organization. This may influence its ability to remain
productive and successful.