MCom I Semester What is Organizational Behavior Study Material Notes

MCom I Semester What is Organizational Behavior Study Material Notes: what manager do management functions effective versus successful managerial activities Enter organizational behavior replacing intuition with systematic study there are few absolutes in OB challenges and opportunities for OB Managing workforce Diversity most Important Notes for MCom I semester Organizational Behavior :

BBA I Semester Managerial Economics Profit Maximization Study Material Notes

What is Organizational Behavior? 

AI though practicing managers have long understood the importance of interpersonal skills to managerial effectiveness, business schools were slower to get the message. Until the late 1980s. business school curricula emphasized the technical aspects of management, specifically focusing on economics, accounting, finance, and quantitative techniques. Coursework in human behavior and people skills received minimal attention relative to the technical aspects of management. Over the past decade and a half, however, business faculty have come to realize the importance that an understanding of human behavior plays in determining a manager’s effectiveness, and required courses on people skills have been widely added to curricula. As the director of leadership at M.I.T.’s Sloan School of Management recently put it, “M.B.A. students may get by on their technical and quantitative skills the first couple of years out of school. But soon, leadership and communication skills come to the fore in distinguishing the managers whose careers really take of

Recognition of the importance of developing managers’ interpersonal skills is closely tied to the need for organizations to get and keep high-performing employees. Regardless of labor market conditions, outstanding employees are always in short supply. Companies with reputations as a good place to work-such as Infosys, Thermax, HCL Comment, TISCO, TCS, HDFC, and Hughes Software have a big advantage. A study of the U.S. workforce found that wages and fringe benefits are not the reasons people like their jobs or stay with an employer. Far more important is the quality of the employees’ jobs and the supportiveness of their work environments. So having managers with good interpersonal skills is likely to make the workplace more pleasant, which in turn, makes it easier to hire and keep qualified people. In addition, creating a pleasant workplace appears to make good economic sense. For instance, companies identified as good places to work (defined as being included among the “100 Best Companies to Work for”) have been found to generate financial performance superior to that of firms in general.

We have come to understand that technical skills are necessary but insufficient for succeeding in management. In today’s increasingly competitive and demanding workplace, managers can’t succeed in their technical skills alone. They also have to have good people skills. This book has been written to help both managers and potential managers develop those people skills.

What Managers Do

Let’s begin by briefly defining the terms manager and the place where managers work-the organization. Then let’s look at the manager’s job; specifically, what do managers do?

Managers get things done through other people. They make decisions, allocate resources, and direct the activities of others to attain goals. Managers do their work in an organization. This is a 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. On the basis of this definition, manufacturing and service firms are organizations and so are schools, hospitals, churches, military units, retail stores, police departments, and local, state, and central government. The people who oversee the activities of others and who are responsible for attaining goals in these organizations are managers (although they’re sometimes called administrators, especially in a not-for-profit organization

Management Functions

In the early part of the 20th century, a French industrialist by the name of Henri Fayol wrote that all managers perform five management functions: They plan, organize, command, coordinate, and control. Today, we have condensed these to four planning, organizing, leading, and controlling.

Because organizations exist to achieve goals, someone has to define those goals and the means for achieving them. Management is that someone. The planning function encompasses defining an organization’s goals, establishing an overall strategy for achieving those goals, and developing a comprehensive set of plans to integrate and coordinate activities.

Managers are also responsible for designing an organization’s structure. We call this function organizing. It includes 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.

Every organization contains people, and it’s management’s job to direct and coordinate those people. This is the leading function. When managers motivate employees, direct the activities of others, select the most effective communication channels, or resolve conflicts among members, they’re engaging in leading.

The final function managers perform is controlling. To ensure that things are going as they should, management must monitor the organization’s performance. Actual performance must be compared with the previously set goals. If there are any significant deviations, it’s management’s job to get the organization back on track. This monitoring, comparing, and potential correcting is what is meant by the controlling function.

So, using the functional approach, the answer to the question, What do managers do? is that they plan, organize, lead, and control.

Management Roles

In the late 1960s, a graduate student at MIT, Henry Mintzberg, undertook a careful study of five executives to determine what these managers did on their jobs. On the basis of his observations of these managers. Mintzberg concluded that managers perform 10 different, highly interrelated roles or sets of behaviors attributable to their jobs. As shown in Exhibit 1-1. these 10 roles can be grouped as being primarily concerned with interpersonal relationships, the transfer of information, and decision making

Interpersonal Roles All managers are required to perform duties that are ceremonial and symbolic in nature. For instance, when the president of college hands out diplomas at the commencement of a factory supervisor gives a group of high school students a tour of the plant, he or she is acting in a figurehead role. All managers also have a leadership role. This role includes hiring, training, motivating, and disciplining employees. The third role within the interpersonal grouping is the liaison role, Mintzberg described this activity as contacting outsiders who provide the manager with information. These may be individuals or groups inside or outside the organization. The sales manager who obtains information from the quality control manager in his or her own company has an internal liaison relationship. When that sales manager has contacts with other sales executives through an ade association, he or she has an outside liaison relationship.

Informational Roles All managers, to some degree, collect information from organizations and institutions outside their own. Typically, they get information by reading magazines and talking with other people to learn of changes in the public’s tastes, what competitors may be planning, and the like. Mintzberg called this the monitor role. Managers also act as a conduit to transmit information to organizational members. This is the disseminator role. In addition, managers perform a spokesperson role when they represent the organization to outsiders.

Decisional Roles Finally, Mintzberg identified four roles that revolve around the making of choices. In the entrepreneur role, managers initiate and oversee new projects that will improve their organization’s performance. As disturbance handlers, managers take corrective action in response to unforeseen problems. As resource allocators, managers are responsible for allocating human, Pry, and monetary resources. Last, managers perform a negotiator role, in which they discuss issues and bargain with other units to gain advantages for their own unit.

Management Skills

Still another way of considering what managers do is to look at the skills or competencies they need to achieve their goals. Robert Katz has identified three essential management skills: technical human, and conceptual.

Technical Skills Technical skills encompass the ability to apply specialized knowledge or expertise. When you think of the skills held by professionals such as civil engineers or oral surgeons, you typically focus on their technical skills. Through extensive formal education, they have learned the special knowledge and practices of their field. Of course, professionals don’t have a monopoly on technical skills, and not all technical skills have to be learned in schools or formal training programs. All jobs require some specialized expertise, and many people develop their technical skills on the job.

Human Skills The ability to work with, understand, and motivate other people, both individually and in groups, describes human skills. Many people are technically proficient but interpersonally incompetent. They might be poor listeners, unable to understand the needs of others or have difficulty managing conflicts. Because managers get things done through other people, they must have good human skills to communicate, motivate, and delegate.

Conceptual Skills Managers must have the mental ability to analyze and diagnose complex situations. These tasks require conceptual skills. Decision-making, for instance, requires managers to identify problems, develop alternative solutions to correct those problems, evaluate those alternatives, and select the best one. Managers can be technically and interpersonally competent yet still fail because of an inability to rationally process and interpret information.

Effective Versus Successful Managerial Activities

Fred Luthans and his associates looked at the issue of what managers do from a somewhat different perspective. They asked the question: Do managers who move up most quickly in an organization do the same activities and with the same emphasis as managers who do the best job? You would tend to think that the managers who were the most effective in their jobs would also be the ones who were promoted the most quickly. But that’s not what appears to happen.

Luthans and his associates studied more than 450 managers. What they found was that these managers all engaged in four managerial activities:

1 Traditional management. Decision making, planning, and controlling

2. Communication. Exchanging routine information and processing paperwork

3. Human resource management. Motivating, disciplining, managing conflict, staffing, and train Ing

4. Networking. Socializing, politicking, and interacting with outsiders

The “average” manager in the study spent 32 percent of his or her time in traditional management activities, 29 percent communicating, 20 percent in human resource management activities, and 19 percent networking. However, the amount of time and effort that different managers spent on those four activities varied a great deal. Specifically, as shown in Exhibit 1-2, managers who were successful (defined in terms of the speed of promotion within their organization) had a very different emphasis from managers who were effective (defined in terms of the quantity and quality of their performance and the satisfaction and commitment of their employees). Among successful managers, networking made the largest relative contribution to success, and human resource management activities made the least relative contribution. Among effective managers, communication made the largest relative contribution and networking the least. A more recent study of Australian managers further confirms the importance of networking. Australian managers who actively networked received more promotions and enjoyed other rewards associated with career success.

This research adds important insights to our knowledge of what managers do. On average, managers spend approximately 20 to 30 percent of their time on each of the four activities: traditional management, communication, human resource management, and networking. However, successful managers don’t give the same emphasis to each of those activities as do effective managers. In fact, their emphases are almost the opposite. This finding challenges the historical assumption that promotions are based on performance, vividly illustrating the importance that social and political skills play in getting ahead in organizations.

A Review of the Manager’s Job

One common thread runs through the functions, roles, skills, and activities approach to management: Each recognizes the paramount importance of managing people. Regardless of whether it is called “the leading function,” “interpersonal roles,” “human skills,” or “human resource management, communication, and networking activities,” it’s clear that managers need to develop their people skills if they’re going to be effective and successful.

Enter Organizational Behavior

We’ve made the case for the importance of people skills. But neither this book nor the discipline on which it’s based is called People Skills. The term that is widely used to describe the discipline is Organizational Behavior.

Organizational behavior (often abbreviated as OB) is a field of study that investigates the impact that individuals, groups, and structures have on behavior within organizations for the purpose of applying such knowledge toward improving an organization’s effectiveness. That’s a lot of words, so let’s break it down.

Organizational behavior is a field of study. This statement means that it is a distinct area of expertise is with a common body of knowledge. What does it study? It studies three determinants of hay organizations: individuals, groups, and structure. In addition, OB applies the knowledge gained about individuals, groups, and the effect of structure on behavior in order to make organ tions work more effectively

To sum up our definition, OB is concerned with the study of what people do in an organ and how that behavior affects the performance of the organization. And because OB is once specifically with employment-related situations, you should not be surprised to find that it emphasizes behavior as related to concerns such as jobs, work, absenteeism, employment turnover, product tivity, human performance, and management.

There is increasing agreement as to the components or topics that constitute the subject area of OB. Although there is still considerable debate about the relative importance of each, there appears to be general agreement that OB includes the core topics of motivation, leader behavior, and power,

interpersonal communication, group structure and processes, learning, attitude development, and perception, change processes, conflict, work design, and work stress.

Replacing Intuition with Systematic Study

Each of us is a student of behavior. Since our earliest years, we have watched the actions of others and have attempted to interpret what we see. Whether or not you’ve explicitly thought about it before, you’ve been “reading” people almost all your life. You watch what others do and try to explain to yourself why they have engaged in their behavior. In addition, you’ve attempted to predict what they might do under different sets of conditions. Unfortunately, your casual or commonsense approach to reading others can often lead to erroneous predictions. However, you can improve your predictive ability by replacing your intuitive opinions with a more systematic approach.

The systematic approach used in this book will uncover important facts and relationships and will provide a base from which more accurate predictions of behavior can be made. Underlying this!

organizational behavior (OB) A field of study that investigates the impact that individuals, groups, and structure have on behavior within organizations, for the purpose of applying such knowledge toward improving an organization’s effectiveness.

a systematic approach is a belief that behavior is not random. Rather, there are certain fundamental consistencies underlying the behavior of all individuals that can be identified and then modified to reflect individual differences.

These fundamental consistencies are very important. Why? Because they allow predictability. When you get into your car, you make some definite and usually highly accurate predictions about how other people will behave. In North America, for instance, you would predict that other drivers will stop at stop signs and red lights, drive on the right side of the road, pass on your left, and not cross the solid double line on mountain roads. In New Delhi, drivers ensure fastening of seatbelts as it has been made mandatory by the traffic police, or else a fine is imposed. Similar rules may not be strictly followed in other cities. Notice that your predictions about the behavior of people behind the wheels of their cars are almost always correct. Obviously, the rules of driving make predictions about driving behavior fairly easy.

What may be less obvious is that there are rules (written and unwritten) in almost every setting. Therefore, it can be argued that it’s possible to predict behavior (undoubtedly, not always with 100 percent accuracy) in supermarkets, classrooms, doctors’ offices, elevators, and in most structured situations. For instance, do you turn around and face the doors when you get into an elevator? Almost everyone does. But did you ever read that you’re supposed to do this? Probably not! Just as I make predictions about automobile drivers (for which there are definite rules of the road). I can make predictions about the behavior of people in elevators (where there are few written rules). In a class of 60 students, if you wanted to ask a question of the instructor, I predict that you would raise your hand. Why don’t you clap, stand up, raise your leg, cough, or yell “Hey, over here!”? The reason is that you have learned that raising your hand is appropriate behavior in school. These examples support a major contention in this textbook: Behavior is generally predictable, and the systematic shuvo behavior is a means to making reasonably accurate predictions.

When we use the phrase systematic study, we mean looking at relationships, attempting to attribute causes and effects, and basing our conclusions on scientific evidence that is, on data gath cred under controlled conditions and measured and interpreted in a reasonably rigorous (See Appendix A for a basic review of research methods used in studies of organizational behavior

Systematic study replaces intuition or those “gut feelings about “why I do what I do and what makes others like. Of course, a systematic approach does not mean that the things you have come to believe in an unsystematic way are necessarily incorrect. Some of the conclusions we make in this text, based on reasonably substantive research findings will only support what you always knew was true. But you’ll also be exposed to research evidence that runs counter to what you may have thought was common sense. One of the objectives of this book is to encourage you to move away from your intuitive views of behavior toward a systematic analysis, in the belief that such analysis will improve your accuracy in explaining and predicting behavior.

Contributing Disciplines to the OB Field Organizational behavior is an applied behavioral science that is built on contributions from a number of behavioral disciplines. The predominant areas are psychology, sociology, social psychology, anthropology, and political science. As we shall learn, psychology’s contributions have been mainly at the individual or micro level of analysis, while the other four disciplines have contributed to our understanding of macro concepts such as group processes and organization. Exhibit 1-3 is an overview of the major contributions to the study of organizational behavior.

Psychology

Psychology is the science that seeks to measure, explain, and sometimes change the behavior of humans and other animals. Psychologists concern themselves with studying and attempting to understand individual behavior. Those who have contributed and continue to add to the knowledge of OB are learning theorists, personality theorists, counseling psychologists, and most important, industrial and organizational psychologists.

Early industrial-organizational psychologists concerned themselves with the problems of fatigue, boredom, and other factors relevant to working conditions that could impede efficient work performance. More recently, their contributions have been expanded to include learning, perception, personality, emotions, training, leadership effectiveness, needs, and motivational forces, job satisfaction, decision-making processes, performance appraisals, attitude measurement, employee selection techniques, work design, and job stress.

Sociology

While psychology focuses on the individual, sociology studies people in relation to their fellow human beings. Specifically, sociologists have made their greatest contribution to OB through their study of group behavior in organizations, particularly formal and complex organizations. Some of the areas within OB that have received valuable input from sociologists are group dynamics, design of work teams, organizational culture, formal organization theory and structure, organizational technology, communications, power, and conflict.

Social Psychology

Social psychology blends concepts from both psychology and sociology. It focuses on the influence of people on one another. One of the major areas under considerable investigation by social psychologists has been changing how to implement it and how to reduce barriers to its acceptance.

In addition, we find social psychologists making significant contributions in the areas of measuring. understanding, and changing attitudes; communication patterns, building trust; the ways in which group activities can satisfy individual needs and group decision-making processes.

Anthropology

Anthropology is the study of societies to learn about human beings and their activities. For instance. anthropologists’ work on cultures and environments has helped us understand differences in fundamental values, attitudes, and behavior between people in different countries and within different organizations. Much of our current understanding of organizational culture, organizational environments, and differences between national cultures is the result of the work of anthropologists of those using their methods.

Political Science

Although frequently overlooked, the contributions of political scientists are significant to the under anding of behavior in organizations. Political science studies the behavior of individuals and ups within a political environment. Specific topics of concern here include the structuring of flict, allocation of power, and how people manipulate power for individual self-interest.

There Are Few Absolutes in OB

There are few, if any, simple and universal principles that explain organizational behavior. There are laws in the physical sciences-chemistry, astronomy, physics–that are consistent and apply in a wide range of situations. They allow scientists to generalize about the pull of gravity or to be confident about sending astronauts into space to repair satellites. But as a noted behavioral researcher aptly concluded, “God gave all the easy problems to the physicists.” Human beings are complex. Because they are not alike, our ability to make simple, accurate and sweeping generalizations is limited. Two people often act very differently in the same situation, and the same person’s behavior changes in different situations. For instance, not everyone is motivated by money, and you behave differently at the temple then you did at a party the night before.

That doesn’t mean, of course, that we can’t offer reasonably accurate explanations of human behavior or make valid predictions. However, it does mean that OB concepts must reflect situationally. or contingency, conditions. We can say that x leads to y, but only under conditions specified in the contingency variables). The science of OB was developed by using general concepts and then altering their application to the particular situation. So, for example, OB scholars would avoid stating that effective leaders should always seek the ideas of their followers before making a decision. Rather, in some situations a participative style is clearly superior, but, in other situations, an autocratic decision-making style is more effective. In other words, the effectiveness of a particular leadership style is contingent on the situation in which it’s used.

As you proceed through this book, you will encounter a wealth of research-based theories about how people behave in organizations. But don’t expect to find a lot of straightforward cause-and-effect relationships. There aren’t many! Organizational behavior theories mirror the subject matter with which they deal. People are complex and complicated, and so too must be the theories developed to explain their actions.

Challenges and Opportunities for OB

Understanding organizational behavior has never been more important for managers. A quick look at a few of the dramatic changes now taking place in organizations supports this claim. For instance, the typical employee is getting older: more and more women and people of color are in the workplace; corporate downsizing and the heavy use of temporary workers are severing the bonds of loyalty that historically tied many employees to their employers, and global competition is requiring! employees to become more flexible and to learn to cope with rapid change.

In short, there are a lot of challenges and opportunities today for managers to use OB concepts. In this section, we review some of the more critical issues confronting managers for which OB offers solutions-or at least some meaningful insights toward solutions.

Responding to Globalization

Organizations are no longer constrained by national borders. Burger King is owned by a British firm, and McDonald’s sells hamburgers in India. Exxon-Mobil, a so-called American company receives almost 75 percent of its revenues from sales outside the United States. New employees at Finland-based phone maker Nokia are increasingly being recruited from India, China, and other developing countries-with non-Finns now outnumbering Finns at Nokia’s renowned research center in Helsinki. And all major automobile manufacturers now build cars outside their borders; for instance, Honda builds cars in Ohio: Ford in Brazil; and both Mercedes and BMW in South Africa. American soft drinks and Japanese cars have established a strong presence in India. With more! options to choose from, customers have the power to insist on their needs and preferences. To satisfy the customers, firms need to provide services and products of their choice.

These examples illustrate that the world has become a global village. In the process, the manager’s job is changing.

Increased Foreign Assignments If you’re a manager, you’re increasingly likely to find yourself in a foreign assignment transferred to your employer’s operating division or subsidiary in another country. Once there, you’ll have to manage a workforce that is likely to be very different in needs. aspirations, and attitudes from those you were used to backing home.

Working with People from Different cultures Even in your own country, you’re going to find yourself working with bosses, peers, and other employees who were born and raised in different cultures. What motivates you may not motivate them. Or your style of communication may be straightforward and open, but they may find this approach uncomfortable and threatening. To work effectively with these people, you’ll need to understand how their culture, geography, and religion have shaped them, and how to adapt your management style to their differences

Coping with Anticapitalism Backlash Capitalism’s focus on efficiency, growth, and profits may be generally accepted in the U.S., Australia, and Hong Kong. But these capitalistic values aren’t nearly as popular in places like France, the Middle East, and Scandinavian countries. For instance, because Fin land’s egalitarian values have created a “soak the rich” mentality among politicians, traffic fines are based on the offender’s income rather than the severity of the offense. 13 So when one of Finland’s rich est men (he is heir to a sausage fortune), who was making close to $9 million a year, was ticketed for doing so kilometers per hour through a 40 kph zone in central Helsinki, the Finnish court hit him with a fine of $217,000!

Managers at global companies like McDonald’s, Disney, and Coca-Cola have come to realize that economic values are not universally transferable. Management practices need to be modified to reflect the values of the different countries in which an organization operates.

Overseeing the Movement of Jobs to Countries with Low-Cost Labor It’s increasingly difficult for managers in advanced nations, where minimum wages are typical $6 or more an hour, to compete against firms who rely on workers from China and other developing nations where labor is available for 30 cents an hour. It is due to this advantage that India has become the business hub of outsourcing various functions. It’s not by chance that a good portion of Americans wears clothes made in China, work on computers whose microchips came from Taiwan and watch movies that were filmed in Canada or an Indian operator attends call at the U.S.-based call center in India, or an Indian, employed in a call center in India, attends calls from U.S. based customers of a U.S. based organization ion. In a global economy, jobs tend to flow to places where lower costs provide business firms with a comparative advantage.

Managers are under increasing pressure from the marketplace to keep costs down in order to maintain competitiveness. For labor-intensive businesses, this means moving jobs to places with relatively low labor costs. Such practices, however, often come with strong criticism from labor groups. politicians, local community leaders, and others who see this exporting of jobs as undermining the job markets in developed countries. Managers must deal with the difficult task of balancing the interests of their organization with their responsibilities to the communities in which they operate.

Managing Workforce Diversity

One of the most important and broad-based challenges currently facing organizations is adapting to people who are different. The term we use for describing this challenge is workforce diversity. While globalization focuses on differences between people from different countries, workforce diversity addresses differences among people within given countries.

Workforce diversity means that organizations are becoming a more heterogeneous mix of people in terms of gender, age, race, ethnicity, and sexual orientation. A diverse workforce, for instance, may include women, people of color, the physically disabled, senior citizens, and gays and lesbians in the United States. However, categories are a little different in India. Managing this diversity has become a global concern. It’s not just an issue in the United States, but also in Canada, Australia South Africa, Japan, and Europe. For instance, managers in Canada and Australia are having to :

What is Organizational Behavior