Unit-I. The organization is above all social. It is people. Peter Drucker. Presented By: Mrs. Preeti Sarda, Asst. Prof., MCGCBM

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1 Unit-I The organization is above all social. It is people. Peter Drucker Presented By: Mrs. Preeti Sarda, Asst. Prof., MCGCBM

2 Organization Behavior Roman J. Alday has defined O.B as a branch of the social science that seeks to build theories that can be applied to predicting understanding and controlling behavior in work organizations. Organization Behavior is the study of application of knowledge about how people act within organizations. It is a human tool for human benefit. It applies broadly to the behavior of people in all types of organizati ons, such as business, government, school and service organizations Organization -When two or more individual are interacting with each other within a deliberately structured set up and working in an independent way to achieve goals and objective. OR Organization is an institution. Behavior -Behavior is a way how people react to certain situation

3 What is Organizational Behavior?

4 Nature and Features of Organizational Behavior1: 1. It has assumed the status of a distinct field of study. It is a part of general management. It represents behavioral approach to management. 2.It contains a body of theory, research, application associated when a growing concern for in work place. Its study helps in understanding human behavior. 3.The study of theories and research experiences of organization facilitates manager for creative thinking to solve human problems in organizations. 4. This discipline is heavily influenced by several other behavioral sciences and social sciences like psychology, Sociology and anthropology.

5 Nature and Features of Organizational Behavior: 5.It provides rational thinking about people. It concentrates on t hree level of behavior. They are individual behavior, group beh avior and organizational behavior. 6.O.B. has psychological foundations. The concept like learning, perception,attitude, motivation etc is borrowed from psychology, sociology and anthropology. 7.Organization behavior is both art and science. It is considered as art because it contains knowledge about behavior of individuals. It is considered as science because it involves application of science. 8.Organization behavior is dynamic rather than static. It essence is reflected in change in behavior of individuals in organization.

6 Different Fields from which Organization Behavior takes its matter include:-

7 Psychology: Psychology is defined as the study of human behavior which tries to identify the characteristics of individuals and provides an understanding why an individual behaves in a particular way. Thus psychology provides us with useful insight into areas such as human motivation, perceptual processes or personality characteristics. Sociology: Sociology is the study of social behavior, relationships among social groups and societies, and the maintenance of social order. The main focus of attention is on the social system. This helps us to appreciate the functioning of individuals within the organization which is essentially a socio-technical entity. Social Psychology: Social psychology is the study of human behavior in the context of social situations. This essentially addresses the problem of understanding the typical behavioral patterns to be expected from an individual when he takes part in a group.

8 Anthropology: Anthropology is the science of mankind and the study of human behavior as a whole. The main focus of attention is on the cultural system, beliefs, customs, ideas and values within a group or society and the comparison of behavior amongst different cultures in the context of today s organizational scenario. It is very important to appreciate the differences that exist among people coming from different cultural back grounds as people are often found to work with others from the other side of the globe. Economics: Any organization to survive and sustain must be aware of the economic viability of their effort. This applies even to the non-profit and voluntary organizations as well. Political Science: Although frequently overlooked, the contributions of political scientists are significant to understand arrangement in organizations. It studies individuals and groups within specific conditions concerning the power dynamics.

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17 Organization System in Global Environment Globalization: Organizational operations are no longer limited by national borders. Managers throughout the world must deal with new opportunities and challenges inherent in the globalization of business.

18 Managers in all types and sizes of organizations must constantly monitor changes and consider the particular characteristics of their own location as they plan, organize, lead, and control in this dynamic environment. Managers might have one of three perspectives or attitudes toward international business: 1. An ethnocentric attitude is the parochialistic belief that the best work approaches and practices are those of the home country (the country in which the company s headquarters are located). 2. A polycentric attitude is the view that the managers in the host country (the foreign country where the organization is doing business) know the best work approaches and practices for running their business. 3. A geocentric attitude is a world-oriented view that focuses on using the best approaches and people from around the globe. To be a successful global manager, an individual needs to be sensitive to differences in national customs and practices

19 Different Types of Global Organizations: Business has been conducted internationally for many years Multinational corporations did not become popular until the mid- 1960s. Global organizations can be classified in the following categories: 1. The term multinational corporation (MNC) is a broad term that refers to any and all types of international companies that maintain operations in multiple countries A transnational corporation (TNC), sometimes called a borderless organization, is a type of international company in which artificial geographical barriers are eliminated.

20 Stages of Internationalization: An organization that goes international typically progresses through three stages. Companies that go international may begin by using global sourcing (also called global outsourcing). In this stage of going international, companies purchase materials or labor from around the world, wherever the materials or labor are least expensive. Beyond the stage of global sourcing, each successive stage to become more international involves more investment and risk. In the next stage, companies may go international by exporting (making products domestically and selling them abroad) or importing (acquiring products made abroad and selling the products domestically). Both exporting and importing require minimal investment and risk.

21 In the early stages of going international, managers may also use licensing (giving another organization the right to make or sell its products using its technology or product specifications) or franchising (giving another organization the right to use its name and operating methods. After an organization has done international business for a period of time, managers may decide to make more of a direct investment in international markets by forming a strategic alliance, which is a partnership between an organization and a foreign company partner(s) In a strategic alliance, partners share resources and knowledge in developing new products or building production facilities. A joint venture (a specific type of strategic alliance) may be undertaken to allow partners to form a separate, independent organization for some business purpose. Managers may decide to make a direct investment in a foreign countr by establishing a foreign subsidiary, in which a company sets up a separate and independent production facility or office. Establishing a

22 Managing in a global environment entails the following challenges. The Legal-Political Environment: The legal-political environment does not have to be unstable or revolutionary to be a challenge to managers. The fact that a country s political system differs from that of the United States is important to recognize. The Economic Environment: The economic environment also presents many challenges to foreign-based managers, including fluctuations in currency rates, inflation, and diverse tax policies. In a market economy, resources are primarily owned by the private sector. In a command economy, all economic decisions are planned by a central government. The Cultural Environment: Countries have different cultures, just as organizations do. National culture is the values and attitudes shared by individuals from a specific country that shape their behavior and their beliefs about what is important.

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25 Importance of Organizational behavior for the managers Organizational behavior provides a useful set of tools at five levels of analysis. It helps managers to look at the behavior of individuals within an organization. It aids their understanding of the complexities involved in interpersonal relations, when two people (two coworkers or a superiorsubordinate pair) interact. Organizational Behavior is valuable for examining the dynamics of relationships within small groups, both formal teams and informal groups. When two or more groups need to coordinate their efforts, managers become interested in the intergroup relations that emerge. Organizations can also be viewed and managed as whole systems that have inter organizational relationships.

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31 Developing O.B. Model

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61 Human Resources Approach: This approach recognizes the fact that people are the central resource in any organization and that they should be developed towards higher levels of competency, creativity and fulfillment. People thus developed will contribute to the success of the organization. The human resources approach is also called as the supportive approach in the sense that he manager s role changes from control of employee to active support of their growth and performance. The supportive approach contrasts with the traditional management approach. In the traditional approach managers decided what employees should do and closely monitored their performance to ensure task accomplishment. In the human resources approach, role of managers changes, as was stated above, from structuring and controlling to supporting.

62 Contingency Approach : The contingency approach (sometimes called the situational approach) is based on the premise that methods or behaviors which work effectively in one situation fail in another. OD programmes, for example, way work brilliantly in one situation but fail miserably in another situation. Results differ because situations differ, the manager s task, therefore, is to identity which method will, in a particular situation, under particular circumstances, and at a particular time, best contribute to the attainment of organization's goals. The strength of the contingency approach lies in the fact it encourages analysis of each situation prior to action while at the same time discourages habitual practice of universal assumptions about methods and people.

63 The contingency approach is also more interdisciplinary, more system oriented and more research-oriented than14 in any other approach. The contingency approach recognizes that different organizations require different ways of managing. The contingency approach to management is a view that the organization recognizes and responds to situational variables as they arise.

64 Productivity Approach : Productivity which is the ratio of output to input, is a measure of an organization's effectiveness. It also reveals manager s efficiency in optimizing resource utilization. The higher the numerical value of this ratio, the greater the efficiency. Productivity is generally measured in terms of economic inputs and outputs, but human and social inputs and outputs also are important. For example, if better organizational behaviour can improve job satisfaction, a human output or benefit occurs. In the same manner, when employee development programmes lead to a by product of better citizens in a community, a valuable social output occurs. Organizational behaviour decisions typically involve human, social, and / or economic issues, and so productivity usually a significant part of these decisions is recognized and discusses extensively in the literature on

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66 Systems Approach : Systems approach to OB views the organization as a united, purposeful system composed of interrelated parts. This approach gives managers a way of looking at the organization as a whole, whole person, whole group, and the whole social system. In so doing, systems approach tells us that the activity of any segment of an organization affects, in varying degrees the activity of every other segment. A systems view should be the concern of every person in an organization. The clerk at a service counter, the machinist, and the man-agerall work with the people and thereby influence the behavioral quality of life in an organization and its inputs. Managers, however, tend to have larger responsibility, because they are the ones who make majority are people-oriented. The role of managers, then, is to use organisational behaviour to help build an organisation culture in which talents are utilized and further developed, people are motivated, teams become productive, organizations achieve their goals and society reaps the reward.

67 During the 1960s researchers began to analyze organizations from a systems perspective based on the physical sciences. A system is a set of interrelated and interdependent parts arranged in a manner that produces a unified whole. The two basic types of systems are open and closed. A closed system is not influenced by and does not interact with its environment. An open system interacts with its environment. Using the systems approach, managers envision an organization as a body with many interdependent parts, each of which is important to the well-being of the organization as a whole. Managers coordinate the work activities of the various parts of the organization, realizing that decisions and actions taken in one organizational area will affect other areas. The systems approach recognizes that organizations are not self-contained; they rely on and are affected by factors in their external

68 Interactionalism Approach It is integrating many disciplines. It integrates social sciences and other disciplines that can contribute to the Organizational Behavior. It draws from these disciplines any ideas that will improve the relationships between people and organization. Its interdisciplinary nature is similar to that of medicine, which applies physical, biological and social science into a workable medical practice. Organizations must have people, and people working toward goals must have organizations, so it is desirable to treat the two as a working unit.

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70 People are the key Sam Walton, the founder of Wal-Mart and the richest person in the world when he died.