1. Introduction to Organizational Behavior || BBS 2nd Year Notes || Organizational Behavior & Human Resource Management

1. Concept of Organizational Behavior

a. Organization

A structured social system where people work together to achieve common goals.
Consists of resources (people, materials, finance, technology).
Example: Schools, companies, hospitals, government agencies.

b. Behavior

The way individuals act, react, and interact.
Influenced by thoughts, feelings, environment, and social context.

c. Organizational Behavior (OB)

The systematic study of human behavior in organizational settings.
Focuses on individuals, groups, and organizational processes.
Deals with predicting, understanding, and influencing behavior at work.

Definition:

“Organizational Behavior is the study of human behavior in organizations with the purpose of improving individual and group performance and organizational effectiveness.”

d. Importance of Organizational Behavior

Helps managers understand and predict employee behavior.
Improves leadership, communication, and teamwork.
Enhances motivation and productivity.
Resolves conflicts and builds better work culture.
Supports organizational change and innovation.

2. Level of OB Analysis (Scope)

Organizational Behavior (OB) is studied at three main levels because human behavior is complex and influenced by multiple factors. These levels are:

1. Individual Level

Focuses on understanding the behavior of a single person in the organization.
Each person has unique personality traits, values, attitudes, and needs that affect how they act at work.
Topics studied:

i. Personality → stable traits (extrovert, introvert, risk-taker).

ii. Perception → how individuals interpret reality and situations.

iii. Motivation → reasons behind a person’s effort.

iv. Learning → how behavior changes from experience.

v. Attitude → positive/negative feelings toward job, boss, or organization.

📌 Example: Why one employee is more motivated and productive than another in the same job.

2. Group Level

Humans work in teams and groups, so OB also studies group behavior.
Groups create their own rules, norms, and leadership styles that influence individual actions.
Topics studied:

i. Group Dynamics → how people interact within groups.

ii. Leadership → guiding and influencing team members.

iii. Communication → flow of information among people.

iv. Teamwork → collaboration to achieve common goals.

v. Conflict → disagreements and how they are resolved.

📌 Example: How a motivated individual’s performance may decline if the group culture is negative.

3. Organizational Level

The organization as a whole is also studied because structure, culture, and environment affect both individuals and groups.
Topics studied:

i. Organizational Culture → shared values, beliefs, traditions.

ii. Structure → formal roles, hierarchy, authority system.

iii. Change & Development → adapting to new technology, policies, competition.

iv. Policies & Environment → rules, regulations, external factors (economic, social, political).

📌 Example: A company with an innovative culture (like Google) encourages employees to be creative, while a rigid bureaucratic culture may discourage innovation.

3. Organizational Behavior System

Organizational Behavior can be understood as a system, where different parts work together in a continuous cycle. A system approach means OB does not study people in isolation but looks at how inputs, processes, and outputs are connected and influenced by feedback.

1. Inputs

These are the resources and conditions that enter into the organization.

People (Human Resource): Employees with skills, personality, attitudes, values, and expectations.
Structure: The way jobs, roles, and responsibilities are formally arranged in the organization.
Technology: Tools, machines, IT systems, and methods used in work.
Environment: External factors like economy, society, culture, politics, and competition.

📌 Example: Hiring skilled employees (input) is essential for achieving high performance.

2. Processes

These are the activities and interactions that transform inputs into results.

Motivation: Encouraging employees to perform better.
Leadership: Guiding and inspiring individuals or groups.
Communication: Sharing information effectively.
Decision-Making: Choosing the best course of action among alternatives.

📌 Example: A motivated and well-led team will work effectively toward goals.

3. Outputs

These are the results or outcomes of organizational behavior.

Performance: Productivity and quality of work.
Satisfaction: Level of happiness and fulfillment among employees.
Effectiveness: Achievement of organizational goals.
Efficiency: Optimal use of resources (minimum input for maximum output).

📌 Example: High employee satisfaction (output) often leads to lower turnover and higher performance.

4. Feedback

Feedback is the information about the results that goes back into the system for continuous improvement.
Helps organizations adjust strategies, policies, and processes.
Creates a learning loop where mistakes are corrected, and success is reinforced.

📌 Example: If employees are dissatisfied (feedback), management can improve motivation or communication strategies.

4. Basic Assumptions of OB (Fundamental Concepts)

Organizational Behavior (OB) is based on certain fundamental assumptions about people and organizations. These concepts guide how managers understand and deal with human behavior at work.

1. Human Dignity

Every individual should be respected as a person and not treated like a machine.
OB assumes people deserve fairness, recognition, and ethical treatment.
Ignoring human dignity leads to dissatisfaction, conflict, and low morale.

📌 Example: Respecting employee opinions during meetings reflects human dignity.

2. Individual Differences

No two individuals are exactly the same. Each person is unique in personality, skills, values, and needs.
Managers must recognize and handle employees differently, not with a "one-size-fits-all" approach.
This assumption explains why some workers perform better under pressure while others prefer stability.

📌 Example: Some employees may be motivated by money, while others value flexible working hours.

3. Motivation

People are motivated by their needs (physiological, social, esteem, self-actualization) and by external rewards (salary, recognition, promotions).
OB assumes behavior at work is driven by the desire to satisfy these needs.
Managers should design reward systems that align organizational goals with employee needs.

📌 Example: Bonus and recognition programs motivate employees to work harder.

4. Goal Orientation

Human behavior is purposeful and goal-directed, not random.
Employees work to achieve personal and organizational goals.
Clear goals help individuals focus and stay motivated.

📌 Example: A student studies hard (behavior) to pass the exam (goal). Similarly, an employee works overtime to get a promotion.

5. Social System

Organizations are not just technical structures but social systems where people interact.
Formal relationships (roles, hierarchy) and informal relationships (friendships, group norms) both shape behavior.
OB recognizes that teamwork, culture, and group norms strongly influence individual actions.

📌 Example: A positive team culture boosts employee morale and performance.

6. Mutual Interest

Organizations need employees to achieve goals, and employees need organizations for salary, career, and growth.
Both parties must work together to fulfill their mutual interests.
Conflict arises if either side’s interests are ignored.

📌 Example: A company provides salary and career opportunities, while employees contribute skills and effort.

7. Holistic Concept

Human behavior is shaped by multiple factors—biological, psychological, social, cultural, and economic.
OB assumes we cannot study a person in isolation but must consider the whole person in a given situation.
This prevents oversimplified solutions to complex human problems.

📌 Example: An employee’s poor performance may not be due to laziness alone but also stress, family issues, or organizational culture.

5. Contributing Disciplines to the Field of OB

Organizational Behavior (OB) is multidisciplinary, meaning it borrows knowledge, theories, and methods from different fields of study. This helps in better understanding and managing human behavior in organizations.

1. Psychology

Concerned with individual behavior and mental processes.
Helps OB in studying:

1. Personality → introvert/extrovert traits.

2. Perception → how individuals interpret reality.

3. Learning → how experience changes behavior.

4. Motivation → what drives people to act.

5. Attitudes & Emotions → influence on performance.
📌 Example: Understanding why some employees are more motivated than others.

2. Sociology

Studies social systems, groups, and society.
In OB, it explains how people behave in teams and organizations.
Focus areas:

1. Group Behavior & Dynamics → how individuals behave in groups.

2. Culture & Norms → shared beliefs and values shaping behavior.

3. Teamwork & Roles → formal and informal roles within groups.
📌 Example: Why group pressure sometimes changes an individual’s decision.

3. Anthropology

Study of humans, culture, and societies (past and present).
Helps OB understand:

1. Organizational Culture → traditions, rituals, and values in organizations.

2. Cross-cultural Behavior → how employees from different backgrounds interact.

3. Values & Beliefs → their effect on work practices.
📌 Example: A multinational company adjusting to cultural differences in different countries.

4. Political Science

Focuses on power, authority, and political behavior in society.
In OB, it helps in understanding:

1. Power & Influence → how managers and leaders exercise authority.

2. Conflict & Negotiation → resolving disputes in organizations.

3. Organizational Politics → informal networks and hidden agendas.
📌 Example: Office politics affecting promotions and decision-making.

5. Economics

Study of resources, incentives, and decision-making.
In OB, it contributes to:

1. Incentives & Rewards → how salary, bonuses, and benefits affect performance.

2. Decision-Making Models → rational vs. behavioral economics.

3. Resource Allocation → efficient use of organizational resources.
📌 Example: Employees work harder when offered performance-based incentives.

6. Management

The study of planning, organizing, leading, and controlling.
Directly related to OB since managers deal with people daily.
Contributions:

1. Leadership Styles → autocratic, democratic, laissez-faire.

2. Motivation Techniques → reward systems, job enrichment.

3. Communication Systems → formal and informal channels.

4. Decision-Making & Control → ensuring organizational effectiveness.
📌 Example: A manager using participative leadership to improve employee morale.

6. Individual Behavior as an Input-Output System

Organizational Behavior sees individuals not just as workers but as dynamic systems where behavior is the result of different inputs, processes, and outputs. Over time, three viewpoints developed to explain individual behavior:

A. Traditional Viewpoint

This is the oldest approach, mainly from the Industrial Revolution era.
Assumptions:

1. People work mainly for money.

2. Workers are lazy and must be closely supervised.

3. Motivation comes from fear, punishment, and strict discipline.

4. Focus was on efficiency, rules, and control, ignoring human and social needs.

Weakness: It neglected employee satisfaction, creativity, and higher-level needs.

📌 Example: Early factory systems where workers were treated like machines and controlled through penalties.

B. Behavioral Viewpoint (S–O–B Model)

Developed as a reaction to the shortcomings of the traditional view.
Considers workers as humans with feelings and perceptions, not machines.
S–O–B Model:

1. Stimulus (S): External factor (e.g., pay raise, praise, punishment).

2. Organism (O): The internal state of the individual (perception, needs, feelings, attitudes).

3. Behavior (B): The resulting action/response (e.g., higher performance, resistance, satisfaction).

Focuses on how people interpret stimuli before responding.

📌 Example:

Incentive (Stimulus) → employee feels motivated and valued (Organism) → works harder (Behavior).

C. Individual Behavior as Input–Output System (Alternative Viewpoint Model)

A modern and more comprehensive model.
Sees individuals as systems with continuous input, processing, and output, along with feedback.
Components:

i. Inputs: Needs, abilities, values, expectations, past experiences.

ii. Process: Internal thinking, perception, decision-making, motivation.

iii. Outputs: Observable results like performance, behavior, satisfaction, innovation.

iv. Feedback: Organization responds (reward, recognition, criticism), which influences the next cycle.

This model is more dynamic because it includes continuous learning and adjustment.

📌 Example:

Employee has a need for recognition (Input) → interprets manager’s appreciation (Process) → works harder and performs well (Output) → gets a promotion (Feedback) → increases motivation for future.

7. Mental Process

Concept:

Mental processes are internal psychological activities that occur in a person’s mind.
They influence how individuals think, feel, and act in the workplace.
OB studies mental processes because behavior at work is often a result of what happens inside the mind before it is expressed externally.

📌 Example: An employee may appear calm but internally feel anxious about a project deadline. This internal process affects their decision-making and performance.

Variables of Mental Process

a. Beliefs

Personal convictions or perceptions about what is true or real.
Beliefs shape judgments and decisions at work.
Example: Believing that hard work always leads to success motivates an employee to put in extra effort.

b. Attitude

Positive or negative feelings toward people, objects, or situations.
Attitude influences behavior and interactions in organizations.
Example: A positive attitude toward teamwork encourages collaboration, while a negative attitude may lead to conflict.

c. Values

Deeply held principles that guide behavior.
Reflect what a person considers important, such as honesty, respect, loyalty, or responsibility.
Example: An employee who values honesty will report mistakes rather than hide them.

d. Needs

Deficiency states that drive behavior.
Can be:

i. Physiological: Basic survival needs (food, shelter, salary).

ii. Social: Need for belonging and friendship.

iii. Esteem: Desire for recognition and status.

iv. Self-Actualization: Desire to achieve one’s full potential.

Example: A promotion may satisfy esteem needs, motivating higher performance.

e. Motives

Internal drives that push a person to act in a certain way to satisfy needs.
Motives are the force behind behavior.
Example: An employee motivated by career growth may take extra training courses.

f. Behavior

The observable actions of an individual, influenced by internal motives and external environment.
Behavior is the output of mental processes.
Example: Completing a task on time, helping a colleague, or showing initiative.

g. Emotions

Strong feelings such as happiness, anger, fear, or frustration.
Emotions affect decision-making, communication, and interpersonal relationships.
Example: Fear of criticism may prevent an employee from sharing new ideas.

h. Cognitive Dissonance

Psychological discomfort that occurs when beliefs and actions conflict.
People are motivated to reduce dissonance by changing beliefs, attitudes, or behavior.
Example: An employee who values honesty but lies to a client may feel guilt and try to justify or correct the action.

8. New Challenges for Manager in OB

Globalization → Managing diverse workforce across cultures.
Workforce Diversity → Age, gender, cultural, ethnic differences.
Technological Change → Coping with AI, automation, remote work.
Employee Empowerment → Sharing authority and decision-making.
Work-life Balance → Supporting flexible work arrangements.
Ethics & CSR → Promoting ethical behavior and social responsibility.
Innovation & Change → Leading organizational transformation.
Managing Stress → Helping employees cope with job pressure.