Understanding Organizational Behaviour

Oxford University Press Malaysia, 2009

All Rights Reserved

Ch. 1: 1

Introduction to
Organizational
Behaviour
CHAPTER

Organizational Behaviour
Oxford University Press Malaysia, 2009

All Rights Reserved

Ch. 1: 2

Learning Objectives
In this chapter, you will:

Explain what organizational behaviour (OB) is.

Understand why we study OB.
Describe three levels of analysis.
Learn about the history of OB.
Identify disciplines that contribute to OB.
Explain current OB challenges in global organizations.

Organizational Behaviour
Oxford University Press Malaysia, 2009

All Rights Reserved

Ch. 1: 3

1.1

What is an Organization?

An organization refers to a group of two or

more individuals working together to achieve a
common goal.
An organization may refer to different types of
organizations besides businesses including
government agencies, statutory bodies, nongovernmental organizations (NGO),
associations, clubs and many types of
formalized groups.
Understanding Organizational Behaviour
Oxford University Press Malaysia, 2009

All Rights Reserved

Ch. 1: 4

1.1.0

Mission

Mission, Goals, Strategy

and Plan

Goals

Strategy

Plans

Figure 1.1 Interrelationship between mission, goals, strategy and plan.

Understanding Organizational Behaviour

Oxford University Press Malaysia, 2009

All Rights Reserved

Ch. 1: 5

1.1.1

Mission

An organization exists due to its mission or

purpose that asks the question Why are we
here?
To answer that question, organizations may
develop several goals or objectives to translate
the mission into some specific measurable
performance measures.

Understanding Organizational Behaviour

Oxford University Press Malaysia, 2009

All Rights Reserved

Ch. 1: 6

1.1.2 Vision and Mission of

Proton
Vision
We want to become a successful Malaysian
automobile manufacturer globally by being customer
oriented and producing competitively priced and
innovative quality products.
(http://www.proton.com/about_proton/corp_id/vision.php)

Mission
Proton is guided in [its] daily efforts by a mission that
qualifies what [it does] in the marketplace.
(http://www.proton.com/about_proton/corp_id/personality.php)
Understanding Organizational Behaviour
Oxford University Press Malaysia, 2009

All Rights Reserved

Ch. 1: 7

1.1.3

Strategy

Strategy: A broad action plan to interact with the

environment in order to achieve the long-term
goals of the organization.
Strategic management: A planning process that
involves the formulation and implementation of
strategies to achieve the organizations longterm goals by analysing its internal and external
environments.
The formulation of strategy would lead to plans
or how to achieve the goals.
Understanding Organizational Behaviour
Oxford University Press Malaysia, 2009

All Rights Reserved

Ch. 1: 8

1.1.4

Plans

Plans can be developed at various levels

strategic, tactical or operationalwithin the
context of strategic management.
Strategic plansplans that are developed by
the top level of management.
Tactical plansstrategic plans are translated
into tactical plans at the division or business unit
level.
Operational plansfurther refined at
departmental level.
Understanding Organizational Behaviour
Oxford University Press Malaysia, 2009

All Rights Reserved

Ch. 1: 9

1.2

What is Organizational
Behaviour?

Organizational behaviour is a field of study

that investigates how individuals, groups and
structures impact behaviour within organizations
and how such knowledge can be used to
improve the effectiveness of the organizations.
OB involves the systematic study of behaviour,
processes and structure found in an
organization.
Understanding Organizational Behaviour
Oxford University Press Malaysia, 2009

All Rights Reserved

Ch. 1: 10

1.3

Three Goals of Studying

Organizational Behaviour

Explain: To identify and explain phenomenon

that occurs within an organization.
Clarify: To clarify and forecast behaviours that
are taking place in organizations.
Control: To control the behaviours that happen
in organizations.

Understanding Organizational Behaviour

Oxford University Press Malaysia, 2009

All Rights Reserved

Ch. 1: 11

1.4

Basic Assumptions of OB

OB focuses on three areas, namely, individuals,

their interactions with other individuals, and the
organization as the context within which we are
observing these interactions. In making these
observations, we may have to make certain
assumptions.
Contingency
Level of analysis

Understanding Organizational Behaviour

Oxford University Press Malaysia, 2009

All Rights Reserved

Ch. 1: 12

1.4.1 Basic Assumptions:

Contingency
Contingency: OB is dependent on certain
factors that may influence the behaviour that is
being observed.
Contingency perspective whereby
organizational behaviour is dependent upon
certain factors that influence the interaction or
behaviour.

Understanding Organizational Behaviour

Oxford University Press Malaysia, 2009

All Rights Reserved

Ch. 1: 13

1.4.2

Basic Assumptions:
Three Levels of Analysis

Individual level

Group level

Organization level

Table 1
Chapter

Individual

Chapter

2
2
3
4

Perception
Learning
Personality
Emotion

7
8
9
10

Groups & Teams

Communication
Decision Making
Power

12
12
13
14

4
5

Stress
Attitudes and
behaviour
Motivation

10
10

Influence
Politics

14

11

Leadership

Group

Understanding Organizational Behaviour

Oxford University Press Malaysia, 2009

Chapter

Organization
Culture
Creativity/Innovation
Structure
Organizational
Development
Managing Change

All Rights Reserved

Ch. 1: 14

1.4.2.1 Individual Level Analysis

In studying organizational behaviour in an
organization, many individual factors can be
taken into consideration.
Among the factors that can influence the
behaviour of individuals are their perceptions,
the way they learn, their personalities and
abilities, the way they control their emotions and
work stress, their attitudes at work and
motivation.
Understanding Organizational Behaviour
Oxford University Press Malaysia, 2009

All Rights Reserved

Ch. 1: 15

1.4.2.2 Group Level Analysis

We need to understand behaviour that happen
due to the individuals interaction with other
individuals at the group level.
Behaviour at the group level involves how one
becomes a member of a group, teamwork, the
way one communicates, makes decisions and
handles interpersonal conflicts in a group setting.
We also have to have skills and a good
understanding of power, influence, politics and
leadership in order to be effective working in
groups.
Understanding Organizational Behaviour
Oxford University Press Malaysia, 2009

All Rights Reserved

Ch. 1: 16

1.4.2.3 Organization Level

Analysis
The third level of analysis in OB can be carried
out by looking at the whole organization.
We can analyse the culture, structure and
design of the organization.
We also need to understand how the
organization encourages creativity and to
maintain the sustainability via organizational
development.
Understanding Organizational Behaviour
Oxford University Press Malaysia, 2009

All Rights Reserved

Ch. 1: 17

1.5

History of OB

Throughout the history of human civilization,

management and organizational behaviour have
been around:
Egyptbuilding of the pyramids
South AmericaInca, Machu Picchu
Greek empireAlexander the Great
Roman empireJulius Caesar
China empireGreat Wall of China
Understanding Organizational Behaviour
Oxford University Press Malaysia, 2009

All Rights Reserved

Ch. 1: 18

1.5

History of OB (cont.)

Islam empire4 Caliphs

Ottoman empire
Colonization by the British, German,
Japanese, Italian and French

In Malaysia, documents such as Sejarah Melayu

(The Malay Annals) and Hikayat Hang Tuah are
replete with examples related to organizational
behaviour:
Understanding Organizational Behaviour
Oxford University Press Malaysia, 2009

All Rights Reserved

Ch. 1: 19

1.5

History of OB (cont.)

The rise and downfall of the Malaccan

empire and sultanate.
The development of the Malay kingdoms as
well as the strategic alliances with kingdoms
of Siam, China and Majapahit.
The confrontations and colonizations of the
Portuguese, Dutch, Siamese, British and
Japanese.

Understanding Organizational Behaviour

Oxford University Press Malaysia, 2009

All Rights Reserved

Ch. 1: 20

1.5.1

Historical Evidences of
Management and OB

Hieroglyphics in the tombs and pyramids in

Egypt (2700 BC)
The annals of war tactics from the Chinese
general Sun-tzu (400 BC)
First Industrial Revolution (17601840) in
England and Europe
Second Industrial Revolution (18501950) in the
United States, Japan, Russia, China and India
Understanding Organizational Behaviour
Oxford University Press Malaysia, 2009

All Rights Reserved

Ch. 1: 21

1.6

Contributing Disciplines
to OB

Anthropology Anthropology is a discipline that

studies the relationships between
individuals and their environment
organizational culture.
Economy

In OB, the economic perspective is

borrowed in order to understand how
individuals make decision.

Psychology

Psychology is one of the disciplines

that have a major influence on
organizational behaviour
organizational
psychology.

Understanding Organizational Behaviour

Oxford University Press Malaysia, 2009

All Rights Reserved

Ch. 1: 22

1.6

Contributing Disciplines
to OB (cont.)

Political Science Topics such as power, authority and

politics are contributions from the
discipline of political science.
Sociology

Sociology refers to the study of social

system and human interactions in
social situations.

Humanities
We learn better about human
interactions in social situations.
Understanding Organizational Behaviour
Oxford University Press Malaysia, 2009

All Rights Reserved

Ch. 1: 23

1.6

Contributing Disciplines
to OB (cont.)

Education The educational fields provided a

plethora of theories on learning styles as
applied in training and development even
though some may have originated from
psychology.

Understanding Organizational Behaviour

Oxford University Press Malaysia, 2009

All Rights Reserved

Ch. 1: 24

1.7

Current OB Challenges
in Global Organizations

Globalization
Quality
Technology
Ethics
Diversity
Nation building

Understanding Organizational Behaviour

Oxford University Press Malaysia, 2009

All Rights Reserved

Ch. 1: 25

1.7.1

Globalization

As businesses and industries grow and

become global, Malaysian organizations
are doing business in international
settings that requires a better
understanding of organizational behaviour
across national boundaries.

Understanding Organizational Behaviour

Oxford University Press Malaysia, 2009

All Rights Reserved

Ch. 1: 26

1.7.2

Quality

In order for Malaysian companies to export

their products to European Union or the United
States, they must subscribe and be accredited
to quality standards such as ISO 9000, ISO
18000, Q9000, HAACP, GLP, GSP and many
other regulatory requirements.

Understanding Organizational Behaviour

Oxford University Press Malaysia, 2009

All Rights Reserved

Ch. 1: 27

1.7.3

Technology

Local companies must further develop

technological capabilities in order to be more
competitive globally
These developments include leaner production,
lower costs, zero defects supply and flexible
manufacturing. For example:
Proton should move to modular production
techniques whereby key functions can be
delegated to the first-tier suppliers.
Understanding Organizational Behaviour
Oxford University Press Malaysia, 2009

All Rights Reserved

Ch. 1: 28

1.7.3

Technology (cont.)

Proton must have e-business infrastructure in

place to enable it to maximize margins.
Protons vendors should engage in cost
reduction exercises, upgrading of its R&D
capabilities and maintaining quality as per the
QS 9000 standards.

Understanding Organizational Behaviour

Oxford University Press Malaysia, 2009

All Rights Reserved

Ch. 1: 29

1.7.4

Ethics

The present focus on corporate social

responsibility and transparency in both the
private and public sectors necessitates the
sensitivity of managers to be heightened on
issues relating to ethical behaviour in the
workplace.

Understanding Organizational Behaviour

Oxford University Press Malaysia, 2009

All Rights Reserved

Ch. 1: 30

1.7.5

Diversity

As a multicultural and multi-ethnic country,

Malaysians have been exposed to working
in environments where people come from
different cultural backgrounds.

Understanding Organizational Behaviour

Oxford University Press Malaysia, 2009

All Rights Reserved

Ch. 1: 31

1.7.6

Nation Building

Nine strategic challenges to become a fully industrialized

country:
Challenge 1: To form a nation that stands as one.
Challenge 2: To produce a Malaysian community that has
freedom, strength and full of self-confidence.
Challenge 3: To develop a mature democratic community.
Challenge 4: To form a community that has high morale, ethics
and religious strength.
Challenge 5: To cultivate a community that is matured and
tolerant.
Understanding Organizational Behaviour
Oxford University Press Malaysia, 2009

All Rights Reserved

Ch. 1: 32

1.7.6

Nation Building (cont.)

Challenge 6: To form a progressive science community.

Challenge 7: To cultivate a community rich in values and
loving culture.
Challenge 8: To ensure the formation of a community with a
fair economy.
Challenge 9: To cultivate a prosperous community.
These challenges are very relevant to researchers in the field
of OB as they invoke various levels of analyses (individual,
group and organizational) as well as the impact of society at
large.
Understanding Organizational Behaviour
Oxford University Press Malaysia, 2009

All Rights Reserved

Ch. 1: 33

1.8

Revision Questions

1. What is organizational behaviour?

2. What are the goals of studying organizational
behaviour?
3. What are the three levels of analysis in
organizational behaviour?
4. Give examples of the contributions of other
disciplines to organizational behaviour.
5. What organizational behaviour challenges do
global organizations face?
Understanding Organizational Behaviour
Oxford University Press Malaysia, 2009

All Rights Reserved

Ch. 1: 34