What managers do?

Before OB it is useful to understand the related concepts

Managers:

Managers are Individuals who coordinates and oversees the work of other people
(subordinates) so that organizational goals can be accomplished.

They make decisions, allocate resources, and direct the activities of others to attain goals.
Managers do their work in an organization.

Organizations need their managerial skills and abilities more than ever in these uncertain,
complex, and chaotic times. [Steve jobs, Sundar Pitchai]
They’re critical to getting things done

Managers’ good interpersonal skills are likely to make the workplace more pleasant, which in
turn makes it easier to hire and retain high performing employees

Organization:

An organization is a consciously coordinated social unit, made up of a group of people, who

work together on common goals on a relatively continuous basis.

Manufacturing and service firms are organizations, and so are schools, hospitals, churches,
military units, retail stores, police departments, volunteer organizations, start-ups, colleges.

Management Functions

According to Henri Fayol managers perform five management functions: planning,

organizing, commanding, coordinating, and controlling.
Modern management have condensed to four: planning, organizing, leading, and controlling.
(POLC)
Planning - Defining goals, setting specific objectives, identifying the actions needed to
achieve them

Organizing – Creating work structures and systems, arranging resources to achieve goals and
objectives
Leading - It includes motivating employees, directing others, selecting the most effective
communication channels and resolving conflicts.

Controlling - It includes monitoring activities to ensure that they are being accomplished as
planned and correcting any significant deviations

Definition:

Organizational behavior is a field of study that investigates the impact that individuals,
groups, and structure have on behavior within an organization, for the purpose of
applying such knowledge toward improving organizations effectiveness.

Importance of OB

 OB is concerned with the study of what people do in an organization and how their
behaviour affects the organizations performance.
 OB concerns about jobs, works, absenteeism, employment turnover, productivity, human
performance and organization citizenship.
 OB is not just for managers and leaders it’s for all employees. Many employees play
informal leadership role.
 OB is not just for managers and employees. Entrepreneurs and self-employed individuals
may not act as managers, but they certainly interact with other individuals and
organizations as part of their work
 Its focus is on employee behavior, decisions, perceptions, and emotional responses.
 Firms that apply performance-based rewards, employee communication, work–life
balance, and other OB practices have three times the level of financial success that
companies have where these practices are absent
 The field of OB uses scientific research to help us understand and predict organizational
life. OB helps us to make sense of the work place and to some extent predict what people
will do under various conditions
 A manager in a business establishment is concerned with getting things done through
delegation. OB will help the manager understand the basis of motivation and what he or
she should do to motivate subordinates.
 The field of OB is useful for maintaining cordial industrial relations. Relations between
management and employees are often strained for reasons which are personal issues, not
technical. Human problems need to be tackled humanely. OB is very useful in this
context as it helps understand the cause of the problem predicts its course of action and
control its consequences.
 Effective management of human resources is possible with OB which enables a manager
to motivate his subordinates towards higher productivity and better results.

Contributing Disciplines to OB

Organizational behavior is an applied behavioural science that is built upon contributions

from a number of behavioural disciplines. The main areas are psychology, sociology, social
psychology, anthropology, and political science

PSYCHOLOGY: The discipline that has the greatest influence on the field of OB is
psychology. Psychology is the science that seeks to measure, explain, and sometimes change
the behavior of humans. It is a science that focuses directly on understanding and predicting
individual behavior. Topics such as personality, perception, attitude, opinion, learning and
motivation describe interpersonal aspects of OB.

SOCIOLOGY: Sociology is the study of people in relation to their fellow human beings.
Whereas psychologists focus on individuals, sociologists study groups of individuals. The
field of sociology has made valuable contributions to our understandings of group dynamics
within organizations. The topics derived from sociology include group dynamics, formation
of groups, communication, formal and informal organizations.

SOCIAL PSYCHOLOGY: Social psychology blends concepts from both psychology and
sociology. The behavioural patterns that take place when an individual takes part in a group
are studied. It focuses on the influence of people on one another. In addition, we find social
psychologists making significant contributions in the areas of measuring, understanding and
changing attitudes; communication patterns; and group decision-making processes.
ANTHROPOLOGY: Anthropology is the study of societies to learn about human beings
and their activities. Anthropology helps us understand differences in fundamental values,
attitudes and behavior between people in different regions and organizations. In sum and
substance, anthropology studies culture. Culture dictates what people learn and how they
behave. Organizations create a unique culture that influences the way organizational
members think about the organization and how they should behave.

Ex: Bangalore – Sikkim students

POLITICAL SCIENCE

1. Frequently overlooked as a contributing discipline.

2. Political science studies the behavior of individuals and groups within a political
environment.

Challenges and opportunities for managers to use OB

A) Responding to Globalization

1. Organizations are no longer constrained by national borders. In the process the manager’s
job has changed
2. Globalization affects a manager’s people skills in at least two ways.
 A manager is more likely to find himself in a foreign assignment. There he has to
manage a work force with different needs, attitudes and aspirations.
 Even in their own country, employees will be working with bosses, peers, and other
employees who were born and raised in different cultures.

B) Managing Workforce Diversity

1. Workforce diversity is one of the most important and broad-based challenges currently
facing organizations.
2. While globalization focuses on differences between people from different countries,
workforce diversity addresses differences among people within given countries.
3. Workforce diversity means that organizations are becoming more heterogeneous in terms
of gender, race, and ethnicity; people who differ in age and sexual orientation. Managing
this diversity is a global concern.

4. Employees do not set aside their cultural values and lifestyle preferences when they come
to work.
5. Workforce diversity has important implications for management practice. Organizations
have started recognizing differences and responding to those differences by providing
diversity training and revamping benefit programs.
C) Improving Quality and Productivity

1. Implementing quality programs requires extensive employee involvement

2. Rather than make incremental changes, often old systems are eliminated entirely
and replaced with new systems and to improve productivity and quality, managers
must include employees.

D) Improving Customer Service and People Skills

1. The majority of employees in developed countries work in service jobs—jobs that

require substantive interaction with the firm’s customers. For example, 80 percent
of U.S. workers are employed in service industries.
2. Employee attitudes and behavior are directly related to customer satisfaction
requiring management to create a customer responsive culture.

3. People skills are essential to managerial effectiveness.

4. OB provides the concepts and theories that allow managers to predict employee
behavior in given situations.

F) Empowering People

1. Today managers are being called coaches, advisers, sponsors, or facilitators, and in
many organizations, employees are now called associates.
2. There is a blurring role between managers and workers; decision making is being
pushed down to the operating level, where workers are being given the freedom to
make choices about schedules and procedures and to solve work-related problems.

3. Managers are empowering employees.

 They are putting employees in charge of what they do.
 Managers have to learn how to give up control.
 Employees have to learn how to take responsibility for their work and make
appropriate decisions.

G) Coping with “Temporariness”

1. Managers have always been concerned with change:

 Change is an ongoing activity for most managers.

 In the past, managing could be characterized by long periods of stability,
interrupted occasionally by short periods of change.
 Today, long periods of ongoing change are interrupted occasionally by short
periods of stability!
2. Permanent “temporariness”:
 Both managers and employees must learn to live with flexibility, spontaneity,
and unpredictability
 The jobs that workers perform are in a permanent state of flux, so workers
need to continually update their knowledge and skills to perform new job
requirements.

3. Work groups are also increasingly in a state of fluctuation.

 There are lot of temporary work groups, teams that include members from
different departments and whose members change all the time, and the
increased use of employee rotation to fill constantly changing work
assignments.
4. Organizations themselves are in a state of flux.
 They reorganize their various divisions, sell off poor-performing businesses,
downsize operations, subcontract non-critical services and operations to other
organizations, and replace permanent employees with temporaries.

H) Stimulating Innovation and Change

1. Successful organizations must foster innovation and the art of change.

2. Companies that maintain flexibility, continually improve quality, and beat their
competition to the marketplace with innovative products and services will be
tomorrow’s winners.
3. Employees are critical to an organization’s ability to change and innovate.

I) Helping Employees Balance Work-Life Conflicts

1. The creation of the global workforce means work no longer sleeps. Workers are
on-call 24-hours day or working non-traditional shifts.
2. Communication technology has provided a vehicle for working at any time or any
place.
3. Employees are working longer hours per week—from 43 to 47 hours per week
since 1977.
4. The rise of dual career couples makes it difficult for married employees to fulfil
commitments to home, children, spouse, parents, and friends. Single parent
households with dependant parents face significant challenges.
5. Employees want jobs that allow flexibility and provide time for a “life.”
J) Improving Ethical Behavior

1. In an organizational world characterized by cutbacks, expectations of increasing

worker productivity, and tough competition, many employees feel pressured to
engage in questionable practices. ( ICICI insurance TG / Organ , HuL – export)

2. Members of organizations are increasingly finding themselves facing ethical

dilemmas

3. Examples of decisions employees might have to make are:

 “Blowing the whistle” on illegal activities
 Following orders with which they do not personally agree
 Playing politics to help with career advancement, etc.

4. Organizations are responding to this issue by:

 Writing and distributing codes of ethics
 Providing in-house advisors
 Creating protection mechanisms for employees who reveal internal unethical
practices

5. Managers need to create an ethically healthy environment for employees where

they confront a minimal degree of ambiguity regarding right or wrong behaviors.

Three key levels of analysis in OB.

There are three levels of analysis in OB - individual, the group, and the organization. For
example, if I want to understand my boss’s personality, I would be examining the individual
level of analysis. If we want to know about how my manager’s personality affects my team, I
am examining things at the team level. But, if I want to understand how my organization’s
culture affects my boss’s behavior, I would be interested in the organizational level of
analysis.
1. Individuals:
Organizations are the associations of individuals. Individuals differ in many respects. The
study of individuals, therefore, includes aspects as personality, perception, attitudes, values,
job satisfaction, learning and motivation.
2. Groups of individuals:
Groups include aspects such as group dynamics, group conflicts, communication, leadership,
power and politics and the like.
3. Organization structure:
The study of organization/structure includes aspects such as formation of organizational
structure, culture and change and development

APPROACHES TO OB:

1) Classical Approach (Assumption: People are rational)

2) Behavioural Approach (Assumption: People are social and self-actualizing)

3) Modern Approach (Assumption: People are complex and variable)

Classical Approach

Classical theories originated during the Industrial Revolution.

Primarily concerned with the structure and activities of formal organization
Issues such as the division of work, the establishment of a hierarchy of authority, and the
span of control were seen to be of the utmost importance in the achievement of an effective
organization.
The two greatest contributors of classical theories were Henri Fayol and F. W. Taylor
Further divided into
a) Scientific management approach (F.W. Taylor, Henry Gantt, Frank and Lillian Gilbreth)
b) Administrative approach (Henry Fayol, Mary parker Follet)
c) Bureaucratic approach (Max Weber)

A. Scientific Management approach

Scientific management means application of the scientific methods to the problem of

management. The followings individuals contribute in development of scientific management
school of management thoughts
Fredrick W. Taylor (1856-1915):
Fredrick Taylor is known as “the father of Scientific Management”. In 1911 he published
“The Principles of Scientific Management”. Taylor sought to create a mental revolution
among both the workers and management by creating clear guidelines for improving
production efficiency.
He developed four principles to increase efficiency in the work
1) Develop a science for each job. Determine the “one best way” to do the job.
2) Scientifically select and train the right workers for the right job
3) Heartily cooperate with the men through incentives and adequate working conditions.
4) Divide the work and the responsibility equally between management and workers.
(Previously, almost all the work and the greater part of the responsibility were thrown upon
the workers)
Taylor argued that following these principles would result in the prosperity on both
management and workers.
To motivate workers he favored incentive wage plans.

Henry Gantt (1861-1919):

He developed the Gantt chart, which visually displays what tasks must be completed at which
times in order to complete a project. It is the best tool for production control

Frank and Lillian Gilbreth:

Gilbreths gave importance to time study and motion study.

By eliminating inappropriate motions and focusing on appropriate motion, the Gilbreth
methodology reduces work fatigue and improves workers performance.
Gilbreth found out 18 basic elements in all work through analysis of several methods at work.
He identified these elements by using flow process charts. He called these elements as
THERBLIG

B. Administrative Management:
The emphasis was on the development of managerial principles rather than work methods.
Henri Fayol
Fayol is best known for developing five functions of managers and 14 principles of
management.
According to Fayol, for managers to be successful, they need to perform five managerial
functions or elements: planning, organizing, coordinating, commanding, and controlling
According to Fayol, effective management will be based on 14 principles:

(Division of work, authority and responsibility, discipline, unity of command, unity of

direction, subordination of individual interests to the general interest, remuneration,
centralization, scalar chain, order, equity, stability of tenure of personnel, initiative, and esprit
DeCorps ).

Mary Parker Follett:

Follett is known for developing ideas regarding constructive conflict and coordination.
Manager should rely more on their expertise and knowledge to lead subordinates than on the
formal authority of their position.

C. Bureaucratic Approach
Max Weber developed the principles of bureaucracy.
He wanted to frame a rigid form of organization. He framed rigid rules to eliminate
managerial inconsistencies which lead to ineffectiveness. He emphasized strict adherence of
rules and regulations in an organization. This form of organization is called as bureaucratic
organization.
In bureaucracy, though there are many advantages such as specialization, consistent
employee behavior, etc., there are disadvantages too, such as red tapism, rigidity,
displacement of goal.
Human Resources Approach or Behavioral approach:

The human relations approach is based upon the premise of increase in productivity and
managerial efficiency through an understanding of the people. It was a movement
spearheaded by Elton Mayo. The essence of the movement was the belief that the key to
higher productivity was employee satisfaction. Abraham Maslow and Douglas McGregor
also made the contribution to this approach

A. Hawthorne Studies - Elton Mayo (1880-1949):

He served as the leader of the team which carried out the famous Hawthorne Experiments
at the Hawthorne plant of the Western Electric Company

Objective of the experiments: To find out the behavior and attitudes of employees under
better working conditions.

Elton Mayo and his colleagues conducted researches in three phases:

• Illumination experiments
• Relay assembly test room experiment
• Bank wiring observation room experiments

Illumination Studies:

The objective of the study was to “examine the effect of various illumination levels on
productivity.” For the research two groups of employees were formed - control group and
experimental group. In the case of experimental group, variations in lighting were made
periodically and results were observed and recorded.

As the illumination was increased in the experiment group, output increased in both the
groups. As the light level was dropped in the experimental group, productivity continued to
increase in both the groups. Productivity decrease was observed in the experimental group
only when the light intensity had been reduced to that of moonlight. These findings confused
the engineers of the Western electric company, who concluded that illumination levels were
not responsible for higher productivity.

Relay Room Experiment

Mayo started relay room experiment in 1927, which may be treated as actual beginning of
Hawthorne studies. This study involved 5 women workers who assembled electrical relays in
test room. This phase of the study tried to study specific variables such as length of workday,
rest breaks and method of payment. Instead of supervisor the workers operated under the
general direction of the researchers. The workers were also given special privileges such as
free mid- morning lunch, able to leave their workstation without permission, a five day work
week and variations in method of payment. Results were basically the same as those of
illumination studies: each test period yielded higher productivity than the previous one. Even
when the workers were subjected to the original conditions of the experiment, productivity
increased.

Mayo was surprised that production steadily increased from 2,400 relays per day at the
beginning of the study to 3,000 relays per day five years later.
The researchers felt that physical changes such as rest pauses, free lunches and incentive
payments were of lesser importance. Something was still not being controlled that was
causing the change in the productivity.

Conclusion: Productivity increases because of socio economic factors such as feeling of

being important, recognition, attention, complete communication, participation, small size of
informal and cohesive work group and no-directive supervision.

Bank Wiring Experiment

Just like the previous studies the bank wirers were placed in a separate test room. Unlike the
relay room experiments the bank wiring room study did not involved any experimental
changes .Instead an observer was stationed in the work room with instructions to take notes
continuously on workers actions. The department’s regular supervisor was used for the study.
The results were opposite to those of the relay room experiments. In the bank wiring room
study there was no continuous increase in productivity. Rather output was actually restricted
by the bank wirers.

By scientific management analysis the companies engineers found that 2 ½ equipments

(banks) can be made per day. But the workers had established an informal daily norm of
producing 2 banks per day and were the actual output. Even though the workers were paid
according to their output almost all the workers restricted output. Mayo discovered that the
workers, as a group, had deliberately adopted a norm of output restriction to protect their
jobs. Workers who violated this informal production norm were subjected to punishment by
other group members.
Findings of Hawthorne Experiments:
Social factors are responsible for deciding the level of output.
Production level is determined by social norms, not by physiological capacities.
There is no direct relationship between production level and working conditions.
Financial incentives weren’t necessarily the most important motivator for workers.
Group standards established individual output.

Elton Mayo made a new beginning on human factor in functioning of the organization and
attainment of organizational goals. Hawthorne studies have proved that experiment and
behavioural research can play a vital role in management and decision making. Mayo’s
contribution will ever be remembered for its contribution to the behavioral approach to
management.

B. Need Hierarchy Theory-Abraham Maslow

Maslow’s theory generally state five needs of human beings Viz, Physiological, safety,
belonging, (Social) esteem and self-actualization. Before a person enters to fulfil higher order
needs he must achieve minimum two basic needs (Physiological and Safety). He further
stated that needs do not disappear but its potency is reduced and the next higher order need
takes precedence, once that is fulfilled the next needs becomes dominating and so on.

Physiological Needs – ( food, drink, shelter )

Security Needs- (security and protection from physical and emotional harm)

Social Needs – (affection, belongingness, acceptance, friendship)

Self esteem –

Internal esteem factors such as – self respect achievement autonomy

External esteem factors such as – status recognition attention

Self – actualization –Growth, self fulfilment, drive to become what one is capable of
becoming

Maslow’s hierarchy of needs theory can be applied to the individual’s life span. In the early
years of life a person is concerned about fulfilment of basic needs. But when a person takes
up a job and experience independence, which is marked by crave for autonomy, he feels that
he should be consulted and works to achieve recognition. Employees first want physical and
job security later a suitable working environment, appreciation, job stability recognition,
growth and autonomy. Thus making a full cycle of need beginning with physiological needs
to self – actualization needs

C. Theory X and Theory Y – McGregor

Theory X and Theory Y were introduced by Douglas McGregor based on two diagonally
opposite views of human behaviour. Theory x assumes physiological and safety needs
dominated individuals were as Theory y assumes social and esteem needs dominate
individuals.

Theory X

Theory x assumed that

Average human being dislikes work and will try to avoid it if possible.

Employees are lazy; they must be controlled, coerced and even punished to achieve
organizational goals.

Average employees do not accept responsibility and seek direction from their superiors. They
lack ambition.

McGregor therefore recommends organizations so structured that enable close supervision,

tight control and mangers must exert energy to achieve organizational objective.

Theory Y
Theory Y suggests that

Average human being likes work and takes it as natural as play.

Employees can exercise self-direction and self-control and given the proper working
conditions, average person seeks responsibilities.

McGregor felt that wisdom is widely spread among the employees and they are innovative
and can take quality decisions. It therefore assumes that management must appreciate the
potential among employees and adopt such management practices like delegation, job
enlargement and management by objective. Management must appreciate the individual and
organizational goals and create such environment, which is conducive for its attainment.

Modern Approach

A. Contingency Approach:

A contingency approach to organizational behaviour implies that different situations require

different behavioural practices for effectiveness instead of following a traditional approach
for all situations. Each situation must be analyzed carefully to determine the significant
variables that exist in order to establish the more effective practices. The strength of this
approach is that it encourages analysis of each situation prior to action. Thus, it helps to use
all the current knowledge about people in the organization in the most appropriate manner.
The contingency approach of management was first proposed by Fred.E.Fiedler

B. Systems Approach

A system is an interrelated part of an organization or a society that interacts with everyone

related to that organization or society and functions as a whole. The two basic types of
system are closed and open. Closed systems are not influenced by and do not interact with
their environment. An open system approach recognizes the dynamic interaction of the
organization with its environment. In management terms , we call this relationship dealing
with the organizations stakeholders. Stakeholders are any group that is affected by
organizations decisions and policies