Chapter 1

The Dynamics of people and

organizations
CHAPTER OBJECTIVE
TO UNDERSTAND
The Meaning of Organizational Behavior
The Key Goals and Forces with Which It Is
Concerned
Basic Concepts of Organization Behavior
Major Approaches Taken in This Book
How Organizational Behavior Affects Organizational
performance
Limitations of Organization Behavior
 UNDERSTANDING
ORGANIZATIONAL BEHAVIOR
In order provide an understanding of
what goes on at the work place, we begin
with the definition, goals, forces, and major
characteristic of an organizational behavior
(OB). Later in the chapter we introduce the
key concepts that OB deals with, lay out the
for basic approaches taken in this book,
and identify some factors that limit the
success of OB.
Definition
Organizational behavior is the study and
application of knowledge how people – as
individual and as groups – act within
organizations. It strives to identify ways in
which people can act more effectively.
Organizational behavior is scientific discipline
in which a large number of research studies
and conceptual development are constantly
adding to its knowledge base. It is also an
applied science, in that information about
effective practices in one organization is being
extended to many others.
Goals
Most sciences share four goals – to describe,
understand, predict, and control some
phenomena. These are also the goals of
organizational behavior. The first objective is to
describe, systematically, how people behave
under variety of conditions. Achieving this goal
allows managers to communicate about human
behavior at work using a common language. For
example, one benefit from the study of this book
is the acquisition of a new vocabulary about
organizational behavior (see, for example, the
Glossary at the end of this book).
Forces

A complex set of affects the nature

of organizations today. A wide array of
issues and trends in these forces can
be classified into four areas – people ,
structure, technology, and the
environment in which the organization
operates
Key forces affecting organizational behavior
People
•Individuals
•Groups

Environment
• Government Structure
•Job Organizational behavior
• Competition
• Social pressures •Relationship

Technology
•Machinery
•Computer hard and software
People
People make up the internal social system
of organization. That system consists of
individuals and groups, and large groups as
well as small ones. There are unofficial,
informal groups and more official , formal
ones. Groups are dynamic. They form,
change, and disband. People are the living,
thinking, feeling beings who work in the
organization to achieve their objectives. We
must remember that organizations exits to
serve people, rather than people existing to
serve organizations.
Structure

Structure defines the formal relationship and

use of people in organizations. Different jobs
are required to accomplish all of an
organization’s activities. There are managers
and employees, accountants and assemblers.
These people have to be related in some
structural way so that their work can be
effectively coordinated. These relationships
create complex problems of cooperation,
negotiation, and decision making.
Technology

Technology provides the resources with

which and affect the task that they
perform. They can not accomplish much
with their bare hands, so they build
buildings, design machines, create work
processes, and assemble resources. The
technology used has a significant influence
on working relationships.
Environment

All organizations operate within an

internal and an external environment. A
single organization does not exist alone. It is
part of a large system that contains many
other elements such as government, the
family, and other organizations. Numerous
changes in the environment create demands
on organization. Citizens expect organization
to be socially responsible; new product and
competition for customer come from around
the globe; the direct impact of unions (as
measured by the proportion of the labor
force that s unionized) diminishes; the
dramatic pace of change in society quickens.
Positive Characteristic of
the Organizational
behavior Field
Theories

Theories offer explanations of how and

why people think, feel and act as they do.
Theories identify important variables and link
them to form tentative propositions that can
be tested through research. Good theories are
also practical – they address significant
behavioral issues, they contribute to our
understanding, and they provide guidelines for
managerial thought and action. You will be
introduced to several practical and interesting
theories in this book, presented in a
straightforward fashion.
Research

Research is the process of gathering and

interpreting relevant evidence that will either
support a behavioral theory or help change
it. Research hypothesis are testable
statements connecting the variables in a
theory, and they guide the process of data
collection. Data are generated through
various research methods, suck as case
studies, field and laboratory experiments,
and serveys. The results of these research
studies as reported in various journal, can
affect both the theory being examined and
future managerial practices.
 Neither research nor theory can stand
alone and be use full, however Manager
apply the theoretical models to structure
their thinking ; they use research results to
provide relevant guides to their own
situations. In these ways, there is a natural
and healthy flow from theory and research to
practice, which is the conscious application of
conceptual models and research results in
order to improve individual and
organizational performance at work
The interaction of theory, research, and
practice in organizational behavior, and
sample sources for each

Practice

Theory Research
FUNDAMENTAL CONCEPTS
Every field of social science, or even physical
science, has a philosophical foundation of basic
concepts that guide its development. In accounting,
for example, a fundamental concept is that “for
every debit there will be credit”. The entire system
of double entry accounting was built on this
equation when that system replaced single entry
bookkeeping many years ago. In physic, a basic
belief is that elements of nature are uniform. The
law of gravity operate uniformly in Tokyo and
London, and an atom of hydrogen is identical in
Moscow and Washington, D.C. Even though such
uniformity cannot be applied to people, certain basic
concepts regarding human behavior do exist
The Nature of People
Individual differences is supported by science.
Each person is different from all others, probably in
million of ways, just as each person’s DNA profile is
different, as far we know. And these differences are
usually substantial rather than meaningless. Think,
for example, of a person’s billion brain cells and the
billions possible combinations of connection and bits
of experience that are stored there. All people are
different, and this diversity needs to be recognized
and viewed as a valuable asset to organizations.

Individual differences require that a manager’s

approach to employees be individual, not statistical.
This belief that each person is different from all
others is typically called the law of individual
differences
Perception

People look at the world and see things

differently. Even when presented with the
same object, two people may view it in two
different ways. Their view of their objective
environment is filtered by perception, which
is the unique way in which each person sees,
organizes, and interprets things. People use
an organized framework that they have built
out of a lifetime of experiences and
accumulated values. Having unique views is
another way in which people insist on acting
like human beings rather than rational
machines.
A whole person

Although some organizations may wish they

could employ only a person’s skill or brain, they
actually employ a whole person rather than
certain characteristics. Different human traits
may be studied separately, but in the final
analysis they are all part of one system making
up whole person. Skill does not exist apart
from background or knowledge. Home life is
not totally separable from work life, and
emotional conditions are not separate from
physical conditions people function as total
human beings.
Motivated Behavior

From psychology we learn that

normal behavior has certain causes.
These may relate to a person’s needs or
the consequences that result from acts.
In the casw of needs, people are
motivated not by what we think they
ought to have but by what they
themselves want. To an out side
observer, a person’s needs may be
unrealistic, but they are still controlling.
 This fact leaves management with two
basic ways to motivate people. It can show
them how certain actions will increase their
need fulfillment, or it can threaten decreased
need fulfillment if they follow an undesirable
course of action. Clearly, a path toward
increased need fulfillment is the better
approach. Motivation is essential to the
operation of organizations. No matter how
muck technology and equipment an
organization has, these resources cannot be
put to use until they are released and guide
by people who have been motivated.
Desire for involvement

Many employees to day are actively

seeking opportunities at work to
become involved in relevant decision,
there by contributing their talents and
ideas to the organization’s ir skills and
success.
Value of the Person

People deserve to be treated differently

from other factors of production (land,
capital, technology) because they are of a
higher order in the universe. Because of this
distinction, they want to be treated with
caring, respect, and dignity; increasingly,
they demand such treatment from their
employers. They refuse to accept the old
ideal that they are simply economic tools.
They want to be valued for their skills and
abilities and to be provided with opportunities
to develop themselves.
The nature of Organization
Social system

From sociology we learn that

organizations are social systems;
consequently, activities therein are governed
by social laws as well as psychological laws.
Just as people have psychological needs,
they also have social roles and status. Their
behavior is influenced by their group as well
as by their individual drives. In fact, two
types of social systems exist side by side in
organizations. One is the formal social
system, and the informal social system.
Mutual Interest

Organizations need people, and

people need organizations.
Organizations have a human
purpose. They are formed and
maintained on the basic of some
mutuality of interest among their
participants
Ethics

In order to attract and retain valuable

employees in an era in which good workers are
constantly recruited away, ethical treatment is
necessary. To succeed organization must treat
employees in an ethical fashion. More and more
firm are recognizing this need and are
responding with a variety of program to ensure
a higher standard of ethical performance by
managers and employees alike. Companies
have astablished codes of ethics, publicized
statement ò ethical values, provided ethics
training, rewaeded employees for notable
ethical behavior, publicized positive role
models, and set up internal procedures to
handle misconduct.
Mutual interest provides a superordinate goal
for employees, the organization, and socity

Employee goals Ethics Employee

Superordinate Mutual
goal of mutual Accomplishment Organization
iterrest of goals

Organizational
goals Society
Basic approaches of this book
Organization behavior seeks to integrate the
four elements of people, structure,
technology, and environment. It rests on
an interdisciplinary foundation of
fundamental concepts about the nature of
people and organizations. The four basic
approaches- human resources,
contingency, results- oriented, and
systems- are interwoven throughout
subsequent chapter
A Human resources (Supportive) Approach
The human resources approach is
developmental. It is concerned with the
growth and development of people toward
higher levels of competency, creativity,
and fulfillment, because people are the
central resources in any organization and
any society. The nature of the human
resources approach can be understood by
comparing it with the traditional
management approach of the early 1900s.
in the traditional approach, manager
decided what should be done and then
closely controlled employees to ensure
task performance. Management was
directive and controlling.
A Contingency Approach
Different managerial behaviors are required
by different environments for effectiveness
Results- oriented
Outcomes of organization behavior programs
are assessed in term of their efficiency
Systems
All parts of an organization interact in a
complex relationship
Cost- benefit analysis of organizational
behavior options

Potential costs

Propossed OB actions Compare Decide

Potential benefits
 LIMITATIONS OF
ORGANIZATIONAL BEHAVIOR
Behavior Bias
People who lack system understanding may
develop a behavior bias, which gives them a
narrow viewpoint that emphasizes satisfying
employee experiences while overlooking the
broader system of the organization in relation to
all its publics. This condition is a reflection of
tunnel vision, in which people have narrow
viewpoint, as if they were looking through a
tunnel. They see only the tiny view at the other
end of the tunnel while missing the broader
landscape
The Law of Diminishing Returns
Overemphasis on an organization behavior
practice may produce negative results, as
indicated by the law of diminishing
returns. It is a limiting factor in
organizational behavior the same way that
it is in economics. In economics the law of
diminishing returns refers to a declining
amount of extra outputs when more of a
desirable input is added to an economic
situation. After a certain point, the output
eventually may reach zero and even
continue to decline when more units of
input are added.
The law of diminishing returns in
organizational behavior works in a similar
way. It states that at some point, increase
of a desirable practice produce declining
returns, eventually zero returns, and then
negative returns as more increase are
added. The concept implies that for any
situation there is an optimum amount of a
desirable practice, such as recognition or
participation. When that point is exceeded,
there is a decline in returns. In other
words, the fact that a practice is desirable
does not mean that more of it is more
desirable. More of a good thing is not
necessarily good.
Unethical Manipulation of people
A significant concern about
organizational behavior is that its
knowledge and techniques can be
used to anipulate people unethically
as well as to help them develop their
potential.
The philosophy of organizational
behavior is supportive and oriented
toward human resources.
Ethics leadership will recognize such
principles as the following:
 Social responsibility: Responsibility to
other arises whenever people have power
in an organization
 Open communication: the organization
shall operate as a two-way, open system,
with open receipt of inputs from people
and open disclosure of its operations to
them
 Cost- benefit analysis: In addition to
economic costs and benefits, human and
social cost and benefits of an activity shall
be analyzed in determining whether to
proceed with the activity.
CONTINUING CHALLENGES
Seeking Quick Fixes
One problem that has plagued
organizational behavior has been the
tendency for business firms to have
short time horizons for the excepted
pay off from behavioral programs. This
search for a quick fix sometimes leads
managers to embrace the newest fad,
to address the systems while
neglecting underlying problem.
Varying Environments
Another challenges that confronts
organizational behavior is to see
whether the ideas that have been
developed and tested during periods
of organizational growth and
economic plenty will endure with
equal success under new conditions.
Lack of single Definition
Organizational behavior, as a relatively
new discipline, has experienced
some difficulty emerging as a clearly
defined field of study and application