BU288 – Textbook Notes – Chapter 1
Chapter 1 – Organizational Behaviour and
What are Organizations?
Definition of “Organizations”
Organizations are social inventions for accomplishing common
goals through group effort.
When we say that organizations are “social inventions”, we mean that
their essential characteristic is the coordinated presence of people, not
Organizations have people who present both opportunities and
The field of organizational behaviour is about understanding people
and managing them to work effectively.
Individuals are assembled into organizations for a reason.
The field of organizational behaviour is concerned with
how organizations can survive and adapt to change.
Certain behaviours are necessary for survival and adaptation.
People have to:
Be motivated to join and remain the organization
Carry out their basic work reliably,
in terms of
The field of OB
is concerned with quality, and
all these basic services.
Be willing to continuously learn and
upgrade their knowledge and skills
Be flexible and innovative
PS: Flexibility and innovation provide for adaptation to
which are especially important for contemporary
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“Organizations are based on group effort.”
It means organizations depend on interaction and coordination
among people to accomplish their goals.
The field of organizational behaviour is concerned with how to get
people to practice effective teamwork.
What is Organizational Behaviour?
---the attitudes and behaviours of individuals and groups in organizations
The discipline of OB:
Studying these attitudes and behaviors and providing insight
about effectively managing and changing them.
Studying how organizations can be structured more effectively and
how events in their external environments affect organizations.
Goals of OB include
predicting, explaining and managing behaviour that occurs in
Those who study OB are interested in attitudes…
How satisfied people are with their jobs.
How committed people feel to the goals of the organization.
How supportive people are of
promoting women and minorities into management position.
Behaviours [e.g. cooperation, conflict, innovation, resignation, ethical
are important areas of study in the field of OB.
Human Resources Management
---programs, practices, and systems
to acquire, develop, and retain employees in organizations
Compared to OB, human resources management is a close related but
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Why Study Organizational Behaviour?
Organization Behaviour is Interesting
OB is about people and human nature.
OB helps us understand why employees becomes committed to an
and what motivates them to work hard.
Organization Behaviour is Important
OB is important to managers, employees, and consumers.
Understanding OB can make us
more effective managers, employees, or consumers.
There is tremendous variation in OB.
e.g. skilled sales people in insurance
make many more sales than some of their peers.
The field of OB is concerned with explaining these differences
and using the explanations
to improve organizational effectiveness and efficiency.
Organization Behaviour Makes a Difference
“Organizations can no longer achieve a competitive advantage
through the traditional sources of success. <>
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and economies of scale]”
Today, the main factor that differentiates organizations
is their workforce and human capital.
Sustained competitive advantage and organizational
are increasingly related to
the management of human capital and OB.
There is direct positive link
OB can make a big difference between
for the effectiveness and competitiveness of employees relations
organizations. & attitudes
PS: Suggesting company should & financial performance
How create attractive workplace without hurting the bottom
Much do You
Know about Organizational Behaviour?
A list of statements which concerns the behaviour of people in
1) Effective organizations leaders tend to possess identical
2) Nearly all workers prefer stimulating, challenging jobs.
3) Managers have a very accurate idea
These 5 statements
about how much their peers and
are all wrong! superiors and are paid.
4) Workers have a very accurate idea
5) Pay is the best way
to motivate most employees and improve job
You should not jump to unwarranted conclusions based on the inaccuracy of
these statements until we determine why they tend to be incorrect.
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Goals of OB
A number of commonly agreed upon goals of the field of OB
are effectively predicting, explaining, and managing behaviour
that occurs in organizations.
Goal 1: Predicting OB
In organizations, there is considerable interest in predicating
when people will make ethical decisions, create innovative products,
or engage in sexual harassment.
The vary regularity of behaviour in organizations
permits the prediction of its future occurrence.
BUT, untutored predictions of OB are not always as accurate.
So, through systematic study,
the field of OB provides a scientific foundation
that helps improve predictions of organizational events.
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Since being able to predict OB does not guarantee
that we can explain the reasons for the behaviour
and develop an effective strategy to manage it.
So, this bring us to the second goal of the field of OB.
Goal 2: Explaining OB
In general, accurate prediction precedes explanation.
OB is especially interested in determining
why people are more or less motivated, stratified or prone to resign.
Explaining events is more complicated than predicting them.
A behaviour could have multiple causes.
The underlying causes of some behaviour can change over time.
The ability to understand behaviour
is necessary prerequisite for effectively managing it.
Goal 3: Managing OB
the art of getting things accomplished in organizations through others.
This definition does not include a prescription
about how to get things accomplished.
Managers acquire, allocate, and utilized physical and human
to accomplish goals.
If behaviour can be predicted and explained,
then the behaviour can often be managed.
If prediction & explanation constitute analysis,
then management constitutes action.
But, in many cases, managers act without analThe result is often disaster.
looking for a quick fix to problems.
Solution: evidence-based management
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---translating principles based on the best scientific evidence
into organizational practices
By using evidence-based management,
managers can make decisions
based on the best available scientific evidence
from social science and organizational research,
rather than personal preference & unsystematic experience.
derives principles from research evidence
and translate them into practices that solve organizational
The use of evidence-based management
is more likely to result in the attainment of organizational goals,
including those affecting employees, stockholders, and the public in
Early Prescriptions Concerning Management
For many years, experts interested in organizations were concerned
prescribing the “correct” way to manage an organization to achieve its
There were 2 basic phrases to this prescription:
1) The Classical View
2) The Human Relations View
A summary of these viewpoints will illustrate
how the history of management thought and OB has developed.
The Classical View and Bureaucracy
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The Classical Viewpoint
---an early prescription on management that advocated
high specialization of labour,
and centralized decision making
Each department was to tend to its own affairs,
with centralized decision making
from upper management providing coordination.
To maintain control,
the classical view suggested that managers have fairly few
except for lower-level jobs
where machine pacing might substitute for close supervision.
Most of the major advocates of the classical viewpoint were
experienced managers or consultants
who took the time to write down their thoughts on organizing.
This activity occurred in the early 1900s.
---Frederick Taylor’s system
for using careful research to determine the optimum degree of
specialization and standardization of work tasks.
Frederick Taylor supported the development of
written instructions that clearly defined work procedures
Frederick Taylor encouraged supervisors
to standardize workers’ movements and breaks for maximum
Frederick Taylor extended scientificmanagement to the
advocating “functional foremanship”
whereby supervisors would specialize in particular functions.
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---Max Weber’s ideal type [OR theoretical model] of organization
that would standardize behaviour in organizations
and provide workers with security and a sense of purpose.
A bureaucracy has the following qualities:
1) A strict chain of command
in which each member reports to only a single superior.
2) Criteria for selection and promotion
based on impersonal technical skills
rather than nepotism or favoritism.
3) A set of detailed rule, regulations, and procedures
ensuring that the jobs gets done
regardless of who the specific worker is.
4) The use of strict specialization
to match duties with technical competence.
5) The centralization of power at the top of the organization.
Jobs would be performed as intended
rather than following the whims of the specific role occupant.
In exchange for this conformity, workers would have a fair
being promoted and rising in the power structure.
The Human Relations Movement and a Critique of Bureaucracy
The human relations movement generally began with
the famous Hawthorne studies.
conducted at the Hawthorne plant of Western Electric near
in the 1920s and 1930s
that illustrated how psychological and social processes
affect productivity and work adjustment
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This impact suggested that
there could be dysfunctional aspects to how work was
A obvious sign was resistance to management
through strong informal group mechanisms.
[e.g. norms that limited productivity
to less than what management wanted]
Human Relations Movement
---a critique of classical management and bureaucracy
that advocated more people-oriented management styles
that catered more to the social & psychological employees’
This critique of bureaucracy addressed several specific problems:
1) Strict specialization
is incompatible with human needs for growth & achievement.
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This can lead to employee alienation
from the organization and its clients.
2) Strong centralization and reliance on formal authority
often fail to take advantage of the creative ideas and
of lower-level members, who are often closer to the customer.
So, the organization will fail to learn from its mistakes,
which threatens innovation and adaptation.
Resistance to change will occur as a matter of course.
3) Strict, impersonal rules lead members to adopt
the minimum acceptable level of performance that the rules
If a rule states that employees must process at least eight
claims a day, eight claims will become the norm,
even though higher performance levels are possible.
4) Strong specialization cause employees
to lose sight of the overall goals of the organization.
Forms, procedures, and required signatures become ends in
themselves, divorced from the true needs of customers,
clients, and other departments in the organization. This is
the “red-tape mentality” that we sometimes observe in
PS: Not all bureaucratic organizations have these problems.
But, they were common enough that human relations advocates:
The adoption of more flexible systems of management
and the design of more interesting jobs.
Open communication ,
more employee participation in decision making,
and less rigid, more decentralized forms of control.
Contemporary Management – The Contingency Approach
Contemporary scholars and managers recognize the merits of both
The classical advocates
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pointed out the critical role of control and coordination
in getting organizations to achieve their goals.
The human relationists
pointed out the dangers of certain forms of control and coordination
and addressed the need for flexibility and adaptability.
Contemporary scholars have learned that
management approaches need to be tailored to fit the situation.
There is a growing body of research and management experience
to help sort out the complexities of what happens in organizations.
But, the general answer to many of the questions
that we will pose in the following chapters is “It depends”.
These dependencies are called contingencies.
---an approach to management that recognizes
that there is no one best way to manage;
an appropriate management style depends on the demands of
Contingencies illustrate the complexity of OB
and show why we should study it systematically.
What do Managers do?
There is no shortage of texts and popular press books oriented toward
what managers should do.
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the field of OB is also concerned with what really happens in
Managers can have a strong impact on
what happens in and to organizations.
Managers both influence and are influenced by OB.
Let’s look at several research studies that explore what managers
which provides a context for
appreciating the usefulness of understanding OB.
Mintzberg’s Managerial Roles---Exhibit 1.2 [P15]
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The relative importance of the following roles will
vary with management level and organizational technology.
Mintzberg’s major contribution to OB is
PS: to highlight the complexity