Dr . SABIYA . MUFTI ASSISTANT PROFESSORDEPARTMENT OF BUSINESS & FINANCIAL STUDIES UNIVERSITY OF KASHMIR
What is an Organization? An organization is a collection of people who work together to achieve individual and organizational goals.
What is an OrganizationA consciously coordinated social unit, composed of two or more people, that functions on a relatively continuous basis to achieve a common goal or set of goals.
What is Organizational Behavior? Organizational behavior (OB) is the study of factors that affect how individuals and groups act in organizations and how organizations manage their environments.
Levels of Analysis Organizational Level Group Level Individual Level
Components of Organizational Behavior Understanding organizational behavior requires studying Individuals in Organizations Group and Team Processes Organizational Processes
What is Management?Management is the process ofplanning, organizing, leading, andcontrolling an organization’shuman, financial, material, andother resources to increase itseffectiveness.
The Functions Of Management Management process of working with people and resources to accomplish organizational goals effective - achieve organizational goals efficient - achieve goals with minimum waste of resources1-10
Managers’ JobManagement OrganizingFunctionsHenry Fayol a French Determines what tasks are toIndustrialist wrote that allmanagers perform fourmanagement functions be done; Who is to do them;PlanningOrganizing How the tasks are to beLeadingControlling grouped; Who reports to whom; and Planning Where decisions are to be Organizing made. Leading controlling
Managers’ JobManagement Functions LeadingHenry Fayol a French Industrialistwrote that all managers performfour management functions Motivating employees; Direct their activities;PlanningOrganizing Select the most effectiveLeadingControlling communication channels; or Resolve conflicts among Planning members. Organizing Leading controlling
Managers’ JobManagement Functions ControllingHenry Fayol a French Industrialistwrote that all managers performfour management functions Monitoring performance; Comparing performance withPlanningOrganizing the set standard;Leading Making corrections, ifControlling necessary. Planning Organizing Leading Controlling
Management Levels Management level Top-level managers senior executives responsible for overall management of an organization focus on long-term issues emphasize the survival, growth, and effectiveness of the firm concerned with the interaction between the organization and its external environment1-17
Management Levels Management level (cont.) Middle-level managers (tactical managers) located between top-level and frontline managers in the organizational hierarchy responsible for translating strategic goals and plans into more specific objectives and activities traditional role was that of an administrative controller who bridged the gap between higher and lower levels growing role is that of a developmental coach to the people who report to them1-18
Management Levels Management level (cont.) Frontline managers (operational managers) lower-level managers who supervise the operational activities of the organization directly involved with non management employees increasingly being called on to be innovative and entrepreneurial Working leaders with broad responsibilities in leading small companies, managers have strategic, tactical, and operational responsibilities have a knowledge of all business functions, are accountable for results, and focus on internal and external customers1-19
Managerial Roles Manager: Any person who supervises one or more subordinates. Role: A set of behaviors or tasks a person is expected to perform because of the position he or she holds in a group or organization. Managerial roles identified by Mintzberg. Figurehead Leader Liaison Monitor Disseminator Spokesperson Entrepreneur Disturbance handler Resource allocator Negotiator
Management Roles In 1960s, Mintzberg after studying 5 executives to determine what those managers did on their jobs. Mintzberg concluded that mangers perform 10 different, highly interrelated roles – or set of behaviors – attributable to their jobs.
Mintzberg’s Managerial RolesRole DescriptionInterpersonalFigurehead Symbolic head, required to perform a number of routine duties of a legal or social natureLeader Responsible for the motivation & direction of employeesLiaison Maintains a network of outside contacts who provide favors & information
Mintzberg’s Managerial RolesRole DescriptionInformationalMonitor Receives a wide variety of information; serves as nerve centre of internal & external information of the organizationDisseminator Transmits information received from outsiders or from other employees to members of the organizationSpokesperson Transmits information to outsiders on organizations plans, policies, actions, & results; serves as an expert on organization’s industry
Mintzberg’s Managerial RolesRole DescriptionDecisionalEntrepreneur Searches organization & its environment for opportunities & initiatives projects to bring about changeDisturbance handler Responsible for corrective action when organization faces important, unexpected disturbancesResource allocator Makes or approves significant organizational decisionsNegotiator Responsible for representing the organization at major negotiation
Managerial Skills Conceptual Skills: The ability to analyze and diagnose a situation and distinguish between cause and effect. Human Skills: The ability to understand, work with, lead, and control the behavior of other people and groups. Technical Skills: Job-specific knowledge and techniques.
Luthans’ Study of Managerial Activities Four types of managerial activity: 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. Managers who promoted faster (were successful) did different things than did effective managers (those who did their jobs well)
Wilson Managerial Skills ResearchStatistically Dealing effectively with people isvalidated profile what management is all about;of managerial The 11 skills constitute a goalskills: over 20 creation/communication/feedbyears’ research by ack/reward/accomplishmentClark Wilson et al cycle with human interaction at every turn.(2003) Managers with high skills’ mastery tend to have better subunit performance & employee morale than managers with low skills’ mastery
Wilson Managerial Skills Research (cont.)Statistically Effective female & male managersvalidated profile of do not have significantly differentmanagerial skills: skill profiles, contrary to claims inover 20 years’ the popular business press inresearch by Clark recent years.Wilson et al (2003) At all career stages, derailed managers (those who failed to achieve their potential) tended to be the ones who overestimated their skill mastery ( rated themselves higher than their employees did).
Research evidence Concluding remarks of researcher: “when selecting individuals for promotion to managerial positions, those who are arrogant, aloof, insensitive, and defensive should be avoided”
Skills exhibited by Effective Manager Clarifies goals & objectives for everyone involved; Encourages participation, upward communication, & suggestions; Plans & organizes for an orderly work flow; Has technical & administrative expertise to answer organization-related questions; Facilitates work through team building, training, coaching, & support;
Skills exhibited by Effective Manager (Cont.) Provides feedback honestly & constructively; Keeps things moving by relying on schedules, deadlines, & helpful reminders; Controls details without being arrogant; Applies reasonable pressure for goal accomplishment; Empowers & delegates key duties to others while maintaining goal transparency & commitment; Recognizes good performance with rewards & positive corroboration.
Managing For Competitive Advantage Cost competitiveness costs are kept low enough so that you can realize profits and price your products at levels that are attractive to consumers key is efficiency - accomplishing goals by using resources wisely and minimizing waste Quality excellence of a product, including its attractiveness, lack of defects, reliability, and long-term durability importance of quality has increased dramatically must identify specific elements of quality to correct problems, target needs, and deliver world-class value1-33
Managing For Competitive Advantage (cont.) Speed often separates winners from losers in world competition speed became a vital requirement in the 1990s requirement has increased exponentially Innovation the introduction of new goods and services important to adapt to changes in consumer demands and to new sources of competition Best managers and companies delivering all four1-34
Organizational BehaviorA field of study that investigates the impact thatindividuals, groups, and structure have on behavior withinorganizations, for the purpose of applying such knowledgetoward improving an organization’s effectiveness. “Gregory Moorhead :2007”
Organizational Behavior The field of OB deals with human behavior in organizations OB is the multidisciplinary field that seeks knowledge of behavior in organizational settings by systematically studying individual, groups, and organizational processes. “Jerald Greenberg:2008”
Organizational Behavior This knowledge is used both by scientists interested in understanding human behaviour & by practitioners interested in enhancing organisational effectiveness & individuals well being. “Robert A .Baron:2008”
Organizational BehaviorOrganisation Behaviour is concerned with the study of what people do in an organisation and how that behaviour affects the performance of the organisation. “Robbins: 1998,9”
Organizational BehaviorOB highlights four central characteristics of the field. It is firmly grounded in the scientific method. It studies individuals, groups & organisations. It is interdisciplinary in nature. It is used as the basis for enhancing organisational effectiveness & individual well-being.
Organizational BehaviorThe study of Organisational Behaviour involves: consideration of the interaction among the formal structure (organisational context in which the process of management takes place) the technology employed and the methods of carrying out work the behaviour of people the process of management the external environment
Organizational BehaviorInterrelated dimensions influencing behaviour: The Individual - working environment should satisfy individual needs as well as attainment of organisational goals. The Group - formal and informal. Understanding of groups complements a knowledge of individual behaviour. The Organisation - impact of organisation structure and design, and patterns of management, on behaviour. The Environment - technological and scientific development, economic activity, governmental actions.
Intuition and Systematic Study Intuition Gut feelings Individual observation Common sense Systematic Study Looks at relationships Scientific evidence Predicts behaviors The two are complementary means of predicting behavior.
An Outgrowth of Systematic Study… Evidence-Based Management (EBM) Basing managerial decisions on the best available scientific evidence. Must think like scientists: Pose a managerial question Search for best available evidence Apply relevant information to case
Intuition and Systematic Study The trick is to know when to go with your gut. “Jack Welch” Intuition is often based on inaccurate information Faddism is prevalent in management Systematic study can be time-consuming Use evidence as much as possible to inform your intuition and experience. That is the promise of OB. Managers Should Use All Approaches
Behavioral Contributions Unit of Output science Learning analysis Motivation Personality Emotions Perception Training Leadership effectiveness Psychology Job satisfaction Individual decision making Performance appraisal Attitude measurement Employee selection Wok design Individual Work stress Behavioral change Attitude change Social Communication psychology Group processes Group decision making Communication Study of Group Power organizational Conflict behavior Intergroup behavior Sociology Formal organization theory Organizational technology Organizational change Organizational culture Organizational Comparative values system Comparative attitudes Cross-cultural analysisAnthropology Organizational environment power Organizational culture
Four Contributing Disciplines Psychology The science that seeks to measure, explain, and sometimes change the behavior of humans and other animals. Unit of Analysis: Individual Contributions to OB: Learning, motivation, personality, emotions, percepti on Training, leadership effectiveness, job satisfaction Individual decision making, performance appraisal, attitude measurement Employee selection, work design, and work stress
Four Contributing Disciplines Social Psychology An area within psychology that blends concepts from psychology and sociology and that focuses on the influence of people on one another. Unit of Analysis: Group Contributions to OB: Behavioral change Attitude change Communication Group processes Group decision making
Four Contributing Disciplines • Sociology The study of people in relation to their fellow human beings. – Unit of Analysis:Organizational System –GroupContributions to OB: Group dynamics Formal organization theory Work teams Organizational technology Communication Organizational change Power Organizational culture Conflict Intergroup behavior 1-48
Four Contributing Disciplines AnthropologyThe study of societies to learn about human beings andtheir activities.Unit of Analysis: Organizational System -- GroupContributions to OB: •Comparative values Organizational culture Organizational •Comparative attitudes environment •Cross-cultural analysis
SIGNIFICANCE OF OB Road map to our lives in organizations Helps us understand and predict organizational life Influences events in organizations Helps understand self and others better Helps a manager get things done better Helps maintain cordial relations Highly useful in the field of marketing Helps in career planning and development
Limitations of OB Knowledge about OB does not help an individual manage personal life better Qualities of OB are mysterious Has become a fad with managers Is selfish and exploitative Managers expect quick-fix solutions-not possible Principles and practices may not work in the events of declining fortunes Cannot eliminate totally conflict and frustration
Challenges & Opportunities forOB Responding to Globalization Managing Workforce Diversity Improving Quality and Productivity Improving Customer Service Improving People Skills Stimulating Innovation and Change Coping with “Temporariness” Working in Networked Organizations Helping Employees Balance Work-Life Conflicts Creating a Positive Work Environment Improving Ethical Behavior 1-52
Globalization Refers to the economic, social and cultural connectivity within people in other parts of the world. It is all about the ongoing process of increasing interdependence with each other around the planet, whether through trading goods & services, sharing knowledge or interacting with people from different cultures & locations in the world.
Challenges and Opportunities for OB Responding to Globalization Increased foreign assignments Working with people from different cultures Overseeing movement of jobs to countries with low- cost labor Managing people during the war on terror 1-55
Why Globalization? Access to additional resources (including skilled workforce) Low cost Economies of scale Favorable regulations & tax systems Direct access to new and growing markets Ability to customize products to local tastes & styles
Workforce Diversity Workforce diversity means that organisations are becoming a more heterogeneous mix of people in terms of gender , age , race , physical ability etc . A diversity workforce e.g. may include , Women Color of people The physically disabled Senior citizens etc.
Workforce Diversity in India Indian organisations have accommodate a very diverse social group of employees based on socio- economic, cultural and linguistic composition. Scheduled castes & Scheduled tribes Other Backward castes Bonafide members of the state Ex-defense & paramilitary personnel Disabled persons Gender issues
DiversityDiversity enhances creativity and innovation (Adler, 1997;Jackson et al., 1992), andproduces competitive advantages(Coleman, 2002; Jackson et al., 1992).Diverse teams make it possible to enhance flexibility (Fleury, 1999) andRapid response and adaptation to change (Adler, 1997; Jackson et al., 1992.
The Four Layers of Diversity Functional Level/ Classification Geographic Location Marital Work Mgmt. Income Status Content/ Status Age Field Parental Personal Status Race Habits Personality Recreational Division/ Appearance Habits Sexual Dept./ Union Ethnicity Orientation Unit/ Affiliation Group Physical Work Ability Religion Experience Educational Background Work Location Seniority
Test Your Knowledge Sam is a 55 year-old, male Sales Manager for XYZ corporation. He likes to drive fast cars and is Native American. Which layer of diversity has not been mentioned about Sam? A. Personality B. Internal C. External D. Organizational
Challenges and Opportunities for OB Managing Workforce Diversity The people in organizations are becoming more heterogeneous demographically (disability, gender, age, national origin, non- Christian, race, and domestic partners) Embracing diversity Changing demographics etc.
Impact of Diversity Organizational culture Calls for diverse approaches to managing people including training the staff in desired skills For example, “people with adequate programming skills are not available in US & UK markets” (HR Head, Infosys, Economic Times, 2009)
Prominent world level companies McDonald Founded in 1967 in Canada Operating income 50% earned from outside US operations (2005) Every three hrs. a new McDonald opens somewhere on earth 2/3rd of its workforce non-US
Prominent world level companies Coca-Cola Operates in more than 200 countries 80% of its workforce are non- US citizens Has 500 trained personnel to go anywhere in the world to offer advice and expertise concerning operational and customer service problems 70% of its operating income comes from operations out side of US
Prominent world level companiesNokia the cell phone giant from Finland employs over 1000 foreign workers in Finland & over 60% of its 53000 employees are non-finsPhilips an electronic giant employs 83% of its workforce outside of its headquarters in the NetherlandsIBM employ almost 80000 people in India (Eco. Times, April, 2010)
Prominent world level companiesTCS an Indian IT giant is planning to increase its non- Indian workforce to 20000 from present 10000 over the next 5 yearsInfosys & Wipro could see non-Indians account for 10-15% of their total employee base in next 3-5 years, from around 5% presently (Economic Times, 27th April, 2009)
Increased Workforce Diversity - Women Glass Ceiling Invisible barrier blocking women and minorities from top management positions Women CEO’s (as of 2/2007): 10 of Fortune 500 23 of Fortune 1000 What helps break the ceiling?
Increased Workforce Diversity - Race Racial minorities are growing 2006 – 1,016 race-based charges of discrimination to EEOC
Benefits from Managing DiversityXerox plants using diverse work teams are now 30 per cent more productive than conventional plants.Procter & Gamble achieves 30-40 per cent higher productivity at its 18 diverse team-based plants than at its non-diverse plants.Motorola beat its competition by producing the world’s most efficient and high-quality cellular phones which are produced almost exclusively by diverse work teams.Research has shown that organizations that proactively recruit, develop, and leverage multinational leaders are in better positions in the global marketplace.
Benefits from Managing Diversity GE Power Systems achieved 13 per cent productivity gains from cross-functional and multicultural teams versus homogeneous teams. Numerous empirical studies of work teams demonstrate that when tasks are complex and not clearly defined, heterogeneous teams outperform homogeneous teams. ‘Super teams’, those that were diverse in numerous respects and selected because of their differences, outperformed those that were homogeneous.
Benefits from Managing Diversity ‘Unlike other MNCs, diversity for us is a business imperative and not an issue of legal compliance. We want HLL’s management to be representative of our diverse customer base so that they understand the needs of the customer better. If a manager understands the brand she is handling, the learning curve is that much shorter. For instance, in marketing, if the target audience is women, it is an advantage if a woman is incharge of the brand’. Says Prem Kawath, HR Manager, HLL.4
Leaders in Diversity Pepsi’s CEO & direct reports are each assigned different employee group (e.g., GLT, Asian, women of color) Responsible for: Understanding the issues these employees face Facilitating their growth and development Hold themselves accountable
Evolution of Organizational BehaviourThree significant Eras: The Classical Era (1880-1930) Administrative theory Scientific Management The Behavioural Era (1930-1960) The Hawthorne Legacy The Modern Era (1960 onwards) Contingency Approach
A Brief History of OB Classical approach to management (scientific management and administrative management) Hawthorne studies (workers respond to attention) Human relations movement (treat workers well to boost productivity) contd.
A Brief History of OB Contd. The contingency approach (examine individual and situational differences before taking action) Positive organizational behavior (focus on measurable strengths of workers to improve performance)
The classical approach The focus of scientific management was the application of scientific methods to increase individual worker’s productivity. According to the principles of scientific management, there is a division of work between managers and workers.
The classical approachTAYLOR’S PRINCIPLES the development of a true science for each person’s work the scientific selection, training and development of the workers co-operation with the workers to ensure work is carried out in the prescribed way the division of work and responsibility between management and the workers.
The classical approach Administrative management was concerned primarily with how organizations should be managed and structured. The core of management knowledge lies within the classical school, including the framework of planning, organizing, and controlling.
The classical approach Henry Fayol classified all the business activities into six functions: Technical activities Commercial activities Financial activities Security activities Accounting activities Managerial activities
The Hawthorne Studies During the 1920s, attention began to focus on social factors at work, groups, leadership, the informal organisation and behaviour of people. ‘Behavioural’ and ‘informal’ are alternative headings sometimes given to this approach. Turning point came with the famous Hawthorne experiments at the Western Electric Company in America (1924-32) One of the researchers (leader) was ELTON MAYO (1880-1949)
The Hawthorne StudiesFour Main Phases to the Hawthorne Experiments The Illumination Experiments - level of production was influenced by factors other than changes in physical conditions of work. The Relay Assembly Test Room - attention and interest by management reason for higher productivity.
The Hawthorne Studies The Interviewing Programme -20,000 interviews. Gave impetus to present-day personnel management and use of counselling interviews. Highlighted the need for management to listen to workers. The Bank Wiring Observation Room - Piecework Incentive Scheme. Group pressures stronger than financial incentives offered by management
The Hawthorne Studies A major conclusion from these studies was the workers reacted positively because management cared about them (the Hawthorne effect). The Hawthorne effect is the tendency of people to behave differently when they receive attention because they respond to the demands of the situation. contd.
The Hawthorne Studies contd. The Hawthorne studies also led to many other conclusions, such as the fact that effective communication with workers is critical to managerial success
The Human Relations Movement The human relations movement was based on the belief that an important link exists among managerial practices, morale, and productivity. Key points of the movement are that satisfied workers are more productive and that, given the proper working environment, virtually all workers would be highly productive.
Contingency Approach Writers in the 1950s and 1960s who adopted a more psychological orientation. Major focus was the personal adjustment of the individual within the work organisation and the effects of group relationships and leadership styles. Main contributors: MASLOW, HERZBERG AND McGREGOR.
Contingency Approach MASLOW’S HIERARCHY OF HUMAN NEEDSGeneral Examples NEEDS Organisational ExamplesAchievement SELF-ACTUALISATION Challenging JobStatus ESTEEM Job TitleFriendship social Friends in the Work GroupStability SECURITY Pension PlanSustenance PHYSIOLOGICAL Base Salary
Contingency ApproachHERZBERG isolated two different sets of factors affectingmotivation and satisfaction at work.1. Hygiene or Maintenance Factors - concerned basically with job environment. Extrinsic to the work itself.2. Motivators or Growth Factors - concerned with job content. Intrinsic to the work itself.Goal of managers is to achieve a state of no dissatisfaction byaddressing Hygiene Factors. Task of improving motivation isthen by addressing the Motivators.
Contingency ApproachMcGREGOR argued that the style of Management adopted is afunction of the manager’s attitudes towards human nature andbehaviour at work.He put forward two suppositions called Theory X and Theory Y which are based on popular assumptions about work and people.
Contingency Approach THEORY X ASSUMPTIONS People do not like work and try to avoid it. People do not like work, so managers have to control, direct, compel, and threaten employees to get them to work toward organisational goals. People prefer to be directed, to avoid responsibility, to want security, and have little ambition.
Contingency Approach THEORY Y ASSUMPTIONS People do not naturally dislike work; work is a natural part of their lives. People are internally motivated to reach goals to which they are committed. People are committed to goals to the degree that they receive personal rewards when they reach their objectives. People will seek and accept responsibility under favourable conditions. People have the capacity to be innovative in solving organisational problems. People are bright, but generally their potentials are under-utilised.
Contingency Approach A cornerstone of the human relations movement is Theory X and Theory Y of Douglas McGregor. Theory X is the somewhat stern and pessimistic traditional assumptions about worker capabilities. Theory Y is an alternative, and optimistic, set of assumptions
The Contingency Approach The contingency approach to management emphasizes there is no one best way to manage people or work. The contingency approach is derived from the study of leadership styles. The strength of the contingency approach is that it encourages managers and professionals to examine individual and situational differences before deciding on a course of action.
Milestones in the History of Organization BehaviourIndustrial Revolution Robert Owen, Andrew Ure and J.N. Tata provided certain welfare facilities. The ideas degenerated into paternalistic approach. Taylor believed in rationalizing production. HeScientific Management– believed Early 20th Century that human behaviour was based on ‘rabble hypothesis.’Human Relations Movement Great Depression, labour movement and during 1920s to 1940s Hawthorne led to the movement. The movement subsequently became a fad Organisational behaviour – 1950’s The contingency approach is that it encouragesContingency Approach managers and professionals to examine individual and situational differences before deciding on a course of action-1960 onwards.