Organizational Behavior

Chapter note
Prepared by SM Nahidul Islam
Dept. of Finance & Banking
Islamic University, Kushtia.

Chapter 1 Introduction

Questions at a glance:
1. Definition of organizational behaviour.
2. Describe the nature of organizational behaviour.
3. Describe the scope of organizational behaviour.
4. Describe the factors / elements effecting Organizational Behavior
5. Describe the contributing disciplines to organizational behaviour.
6. Discuss the goals of organizational behaviour.
7. Briefly discuss the fundamental concepts of organizational behaviour.
8. Describe the Challenges and Opportunities for organizational behaviour.
9. Describe the managing workforce diversity
10. Describe the levels of management.
11. Describe the managerial skills.
12. Describe the role of manager.
13. Describe the functions of management
14. Effective versus Successful Managerial Activities

Prepared by SM Nahidul Islam 1

Dept. of Finance and Banking

1. Definition of organizational behaviour

Answer: Organizational behavior is defined as the actions and attitudes of people in organizations. It is a
field of study that investigates the impact that individuals, groups and organizational structure have on
behaviour within the organization, for the purpose of applying such knowledge towards improving an
organizational effectiveness.
According to Fred Luthans, Organizational behaviour is directly concerned with the understanding,
prediction and control of human in organizations.
At last, we can say that Organizational behavior (OB) is the study of human behavior in organizational
settings, how human behavior interacts with the organization, and the organization itself.

2. Describe the nature of organizational behaviour (OB)

Answer: The nature of organizational behaviour is given below:

A separate field of study and not a discipline only: Organizational behaviour has a multiinterdisciplinary orientation that is not based on a specific theoretical background. So, it is a better
reasonable call OB a separate field of study rather than a disciplinary only.
An interdisciplinary approach: OB is essentially an interdisciplinary approach to study human
behaviour at work. It tries to integrate the relevant knowledge drawn from related disciplines like
psychology, sociology and anthropology.
An applied science: OB involves both applied research and its application in organizational
analysis. So, it can be called both science as well as art.
A normative science: OB is a normative science and it prescribes how the findings of applied
researches can be applied to socially accepted organizational goals.
A humanistic and optimistic approach: OB applies humanistic approach towards people
working in the organization. It treats people as thinking and feelings of human beings.
A total system approach: The system approach is one that integrates all the variables affecting
organizational functioning.

3. Describe the scope of organizational behaviour (OB)

Answer: OB is the study of human behaviour at work in organizations. The scope of OB involves the
following points:

Individuals: Organizations are the associations of individuals. Individuals differ in many respects.
The study of individuals includes aspects such as personality, perception, attitudes, values, job
satisfaction, learning and motivation.
Groups of individuals: Groups includes aspects such as group dynamics, group conflicts,
communication, leadership, power and politics.
Organization / Structure: The study of organization / structure includes aspects such as
formation of organizational structure, culture and change and development.
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Prepared by SM Nahidul Islam 2

Dept. of Finance and Banking

Individuals

Personality
Perception
Attitudes
Motivations
Job satisfaction
Learning
Values

Group Dynamics
Group Conflicts
Communication
Leadership
Organizational
Power and politics
Behaviour

Groups

Structure
Culture
Change
Development

Structure

4. Describe the factors / elements affecting Organizational Behavior

Answer: The four key forces affecting organizational behavior consist of the following:

People: People make up the internal and social system of the organization. They consist of
individuals and groups. Various personal characteristics that may influence organizational
behavior include the education level of employees, their backgrounds, abilities and beliefs.
Structure: Structure defines the formal relationships of the people in organizations. Different
people in the organization are performing different type of jobs and they need to be elated in some
structural way so that their work can be effectively co-ordinated.
Technology: Technology provides the resources with which people work and also affects the
tasks that they perform. The great benefit of technology is that it allows people to do more and
better work.
Environment: Organizations have both an internal and external environment. Every organization
is part of a larger system that consists of elements such as government, competitors, family, and
other organizations.

5. Describe the contributing disciplines to organizational behaviour (OB)

Answer: OB is an applied behavioural science. It has drawn heavily from a number of other applied
interdisciplinary behavioural disciplines that are given below:

Psychology: Psychology is a science that focuses directly on understanding and predicting

individual behaviour. It has greatly contributed to the intra-personal dynamics of human
behaviour. Topics such as personality, perception, attitude, opinion, learning and motivation
describe intra-personal aspects of OB.

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Dept. of Finance and Banking

Sociology: Sociology is the study of people in relation to their fellow human beings. The topics
derived from sociology include group dynamics, formation of groups, communication, formal and
informal organizations and the like.
Social Psychology: Social psychology is an area within psychology that blends concepts from
psychology and sociology and that focuses on the influence of people on one another. The topics
derived from social psychology include behavioural change, attitude change, communication and
group processes.
Anthropology: Anthropology is the study of societies to learn about human beings and their
activities. The topics derived from anthropology include comparative values and attitudes, crossculture analysis, organizational culture and environment.
Political Science: Political science has contributed to the field of Organizational behaviour.
Stability of government at national level is one major factor for promotion of international
business, financial investments, expansion and employment.

6. Describe the goals of organizational behaviour

Answer: The main goals of organisational behaviour are given below:
a. To describe: organizational behaviour is a science, that analyses as to how people behave in
different situations in the organization. A manager should be able describe the behaviour of each
of the individuals under his command, identify attitude, and be able to pinpoint his behaviour so
that the situation in the organization is under control.
b. To Understand: Leaders must understand human behaviour as to why people behave in particular
manner and try to identify reasons so that corrective actions can be taken.
c. To Predict: By frequent closer interaction, a leader is in a position to identify the nature of
workers. Some are more productive while the others are tardy and disruptive. In such situation, a
leader should be able to handle each individual differently so that his or her actions can be
channelized to higher productivity.
d. To Control: Managers in the organizations should train their subordinates continuously. He must
lay down control measures so that the energy of workers is diverted towards organizational
objectives. Communication should be used to ensure that the behaviour of individual is controlled.

7. Describe the fundamental concept of organizational behavior

Answer: Organizational behavior has certain philosophical concepts that are given below:
1. Individual differences: Every individual in the world is different from others. From the day of
birth, each person is unique, and individual experiences after birth tend to make people even more
different.
2. Perception: Peoples perceptions are also different when they see an object. Two people can
differently present a same object.
3. A whole person: An employee's personal life is not detached from his working life. So manager
should treat an employee as a whole person.
4. Motivated behavior: An employee has so many needs inside him. So, they want to fulfill those
needs. Some motivations are needed to enrich the quality of work.
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Dept. of Finance and Banking
5. Desire for involvement: Every employee is actively seeking opportunities at work to involve in
decision-making problems. So, organization should provide them a chance to express their
opinions, ideas and suggestion for decision-making problem.
6. Social Systems: Organizations are social systems and governed by social and psychological laws.
Organization environment in a social system is dynamic. All parts of the system are
interdependent.
7. Mutual interest: In order to develop the organization behavior mutually of interest organizations
and people is necessary.
8. Ethics: In order to attract and retain valuable employees in an era in which good workers are
constantly required away, ethical treatment is necessary. To succeed, organization must treat
employees in an ethical fashion.

8. Describe the Challenges and Opportunities for OB

Answer: There are many challenges and opportunities today for managers to use OB concepts that are
given below:
1. G l o b a l i z a t i o n t o R e s p o n d : Organizations are no longer constrained by national
borders, world become global village by.
Increased foreign assignment
Working with different people
Coping with Anti-capitalism backlash
Overseeing Movement of jobs to countries with low cost labor
Managing people During the war on terror
2. M a n a g i n g w o r k f o r c e d i v e r s i t y : Workforce diversity means that organizations are
becoming a more heterogeneous mix of people in terms of gender, age, race, and sexual
orientation.
3. Improving Quality and productivity: World added capacity in response to increase
demand. Excess capacity translates in increase competition, is forcing managers to
reduce costs and, at the same time; improve the organization quality and productivity.
4. I m p r o v i n g C u s t o m e r s e r v i c e : OB can contribute to improving an organization
performance by showing that how employees attitude and behavior are associated with
customer satisfaction.
5. I m p r o v i n g p e o p l e s k i l l s Designing motivating jobs, how creating effective teams,
techniques for improving interpersonal skills
6. Helping employees Balance work-life conflicts: Flexible Working hours, reporting
time, creating opportunities for employees, job security, design workplace and jobs
7. Creating positive Work Environment: Human strength, vitality, right person appointed at right
place, effort on what good for organization
8. W o r k i n g i n n e t w o r k o r g a n i z a t i o n : Technology has allowed people to communicate
and work together even though they may be thousands of miles apart.

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Dept. of Finance and Banking

9. Describe the managing workforce diversity

Answer: Workforce diversity means that organizations are becoming a more heterogeneous mix of people
in terms of gender, age, race, and sexual orientation and inclusion of other diverse group.. Managing these
diversity has become a global concern. Such as inclusion
a. Gender: organizations need to ensure that hiring and employment policies create equal access and
opportunities to individuals regardless of gender.
b. Race: Organizations need to ensure that policies provide equal access and opportunities regardless
of race.
c. National origin: Language sometimes makes communication barriers. Foreigners cannot
understand with the national language (internal language).
d. Age: Organizations should not discriminate on the basis of age and need to make accommodations
to the needs of older workers.
e. Disability: Organizations need to ensure that jobs and workplaces and accessible to the mentally
and physically challenged as well as to the health challenged.
f. Religion: Organizations need to be sensitive to the customs, rituals and holidays as well as the
appearance and attire of individuals.

10. Describe the level of management

Answer: An enterprise may have following three levels of management: Top level management: This level of the company consists of owners/shareholders, Board of
Directors, its Chairman, Managing Director and so on. The important functions of top
management include:
To establish the objectives or goals of the enterprise.
To set up an organizational frame work to conduct the operations as per plans.
To provide overall leadership to the enterprise.
Middle level management: This level consists of Purchase Manager, Production Manager,
Marketing Manager, Financial controller and so on. The following are the main functions of
middle management :
To interpret the policies chalked out by top management.
To motivate personnel to attain higher productivity.
To report to top management
Lower level or operative management: It is placed at the bottom of the hierarchy of
management, and actual operations are the responsibility of this level of management. It consists
of foreman, supervisors, sales officers, accounts officers and so on.

11. Describe the skills of management

Answer: Managers need certain skills in order to perform the duties and activities associated with various
functions. Robert Katz (1974) found that managers need the following three essential skills:
Technical skills: Technical skill is the ability to apply specialized knowledge. All jobs require
some specialized expertise, and many people develop their technical skills on the job. Vocational
and on the job training programs can be used to develop this type of skill.
Human skills: Human skill is the ability to work, understand, and motivate other people, both
individually and in groups. This skill develops in the manager sufficient ability (a) to recognize
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Dept. of Finance and Banking

the feelings and sentiments of others; (b) to judge the possible actions and (c) to examine his own
concepts and values.
Conceptual Skills: Conceptual skill is an ability to critically analyze, diagnose a situation and
forward a feasible solution. It requires creative thinking, generating options and choosing the best
available option. A mark of a good leader is to be able to provide consistent motivation to his team
encouraging them to attain excellence and quality in their performance.

12. Describe the Role of Managers

Answer: In 1960, Henry Mintzberg identified ten managerial roles. These roles can be grouped in the
following ways:

1. Interpersonal Roles

Leader Responsible for staffing, training, and associated duties.

Figurehead the manager performs ceremonial and symbolic duties as head of the
organization.
Liaison develops and maintains a network of external contacts to gather information.

2. Informational Roles

Monitor gathers internal and external information relevant to the organization.

Disseminator transmits factual and value based information to subordinates
Spokesperson communicates to the outside world on performance and policies

3. Decisional Roles

Entrepreneur designs and initiates change in the organization;

Negotiator Represents the organization at major negotiations.
Resource Allocator controls and authorizes the use of organizational resources.
Disturbance Handler participates in negotiation activities with other organizations and
individuals.

13. Describe the functions of management

Answer: The main functions of management are given below:

Planning: A process that includes defining goals, establishing strategy, and developing plans to
coordinate activities.
Organizing: determining what tasks are to be done, who is to do them, how the tasks are to be
grouped, who reports to whom, and where decisions are to be made.
Leading: A function that includes motivating employees, directing others, selecting the most
effective communication channels, and resolving conflicts.
Controlling: Monitoring activities to ensure they are being accomplished as planned and
correcting any significant deviations.

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Prepared by SM Nahidul Islam 7

Dept. of Finance and Banking

14. Effective versus Successful Managerial Activities

Answer: Luthans and his associates studied more than 450 managers. They found that all managers
engage in following four managerial activities:

Traditional management: Decision making, planning, and controlling.

Communication: Exchanging routine information and processing paperwork.
Human resource management: Motivating, disciplining, managing conflict, staffing, and
training.
Networking: Socializing, politicking, and interacting with others.

Successful managers: It may be defined in terms of the speed of promotion within their organization.
Among successful managers
Networking made the largest relative contribution to success.
Human resource management activities made the least relative contribution.
Effective managers: It may be defined as quality and quantity of performance, as well as, commitment to
employees. Among effective managers Communication made the largest relative contribution.
Networking made the least relative contribution.
Successful managers do not give the same emphasis to each of those activities as do effective managers
it almost the opposite of effective managers.

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