Culture and Process of Change (Organizational Change)

Creating Culture for Change

According to some OB (Organization Behavior) scholars, a culture for the change should be created. Culture for the change can be created with the help of following two approaches:

1. Stimulating a Culture of Innovation 

An innovation is a new idea that applies in initiating or improving a product, process or service. Although there is no guaranteed formula, certain characteristics surface repeat when researchers study innovative organizations. These can be grouped as structural, cultural and human resources categories. Change agents should consider introducing these characteristics into their organization to create an innovative climate. 

Related Topic: 

Concept of Organizational Change

2. Creating a Learning Organization 

Creating a learning organization is another approach that is used to facilitate or develop climate for the organizational change. Learning organization is an organization that has developed the continuous capacity to adopt the change. All organizations learn for their sustained existence in a competitive business environment. A learning organization has following characteristics on the basis in which climate for the organizational change can be created: 

• People openly communicate with each other (across vertical and horizontal boundaries) without fear of criticism or punishment.
• People sublimate their personal self-interest and fragmented departmental interests to work together to achieve the organization's shared vision.
• People discard their old ways of thinking and the standard routines they use for solving problems or doing their jobs.
• There exists a shared vision that everyone agrees on.
• Members think of all organizational process, activities, functions and interactions with the environment as part of a system of interrelationship.

Process or Steps of Change 

Organization must maintain a viable relationship with a changing environment. To achieve long term viability, an organization must turn out good performance by managing changes in the environment intelligently. Modern organizations are learning to cope with changes. They are beginning to realize the importance of managing change in a planned way. Generally speaking, management of change involves a series of steps which is shown in the following figure.

1. Recognition of the Forces Demanding Change 

The first step in the management of change is the recognition of forces necessitating change urgently or over a period of time. Forces may be internal or external. External changes include changing technological levels, changing market situations, changing products, changing consumer tastes and preferences etc. Internal forces comprise launch of a new product mix, erection of a separate departmental unit, etc. All forces certainly do not demand change. At least some require careful attention from management. The concerned manager should find out the discrepancy between what is and what should be. He should also find out the real forces demanding change. 

2. Identifying the Need for Change 

There are many forces, many demands for change but all changes may not be important and possible. Therefore, management must try to analyze the reasons of demand for change accurately. In this connection, the help of external consultant or unconnected internal staff may be sought for objective analysis of the causes demanding change. In any way, management must come to know the need for change and its true causes. 

3. Diagnosis of the Problem 

Diagnosis leads to locating the specific problem areas and identifying of the source of problem/s. It also enables a manager to know which activities need further improvement and systematization. A manager may use various diagnostic techniques such as interviews, questionnaires, present observations, etc. Diagnosis helps the change agent to see what changes are needed in the structure, system or in people. Actually, the initial diagnostic focus of a manager is on the organizations variables rather than on the psychology of individuals. 

4. Planning the Change 

Change can be made from one of (or all of, or some of) the four ways – change in structure, change in task, change in people, change in technology. A change agent has to consider the following points during the planning phase: 

• He should be in a position to convince the members of the benefits of payoffs from change and also alerts them to the negative consequences and adverse effects in the absence of change.
• He should select appropriate strategy - whether to change structure or people or technology or task. Normally all the changes include the change in behavior of people.
• He should try to involve the subordinates in decision-making.
• He should enlighten the need for change to the organizations participants.

5. Implementation of Change

The next step in the process of change is to implement the change plan successfully. While implementing change, the change agent encounters resistance from members of organization. Research supports the view that creating and implementing change is more difficult than planning the change. In addition to the problem of resistance, manager also confronts the problem of control. Change disrupts normal course of events and during change, it is quite likely that organizations lose control and many activities easily. 

6. Feedback

To ensure smooth implementation of change in the given direction, it is necessary to make review and evaluation of progress made regarding implementation of change. Without proper feedback, management of change is rendered incomplete and useless. A manager or change agent must compare the standards present during the pre-change period with actual performance after implementing the change and ensure whether the change has been fruitful or wasteful.

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Challenges and Opportunities for Organizational Behavior

The world order is changing dramatically and is in the process of complete transformation. The impossible things of yesterdays have become possible today and impossible things of today will become possible tomorrow. That is why it is said that change is the only permanent aspect of nature. The concept of self-sufficient nations is losing importance and the concept of ‘Global Village’ is emerging. Management of organization is bound to cope up with the radical transformation by developing new techniques and practices in the global perspective after carefully analyzing the real challenges being faced by the professional managers.

Challenges and opportunities for organizational behavior can be better understood with the help of following points.

Challenges and Opportunities of Organizational Behavior

1. Globalization

Globalization is the process of economic integration at the international level. Multinational companies are helping this process with the whole world being converted into a single global market place. Individuals and organizations buy raw materials, technology, services and resources from the providers who offer high quality with low price. In this respect, the most critical component is human resource. It is extremely difficult to get the requisite competence because of the high competition to acquire that, which is in short supply.

While globalization has opened up global opportunities, it has also led to the failure of local business, different impact on cultural ethics, values and customers etc. It has positive (opportunities) impact as well as negative (threats) impact in an organizational behavior. Some of the challenges posed by globalization are:

• Organizational change and restructuring
• Adopting new technology
• Downsizing and their impact on human behavior etc.

Similarly, some of the opportunities posed by globalization are:

• Low cost advantages by completing in global market.
• New career perspectives
• Transform of skills and technology
• New investment opportunities
• Positive changes in attitudes of different people from different countries etc.

2. Changing Profiles of Employees and Customers

There has been a drastic change in the profile of people joining organizations (employees) and those benefiting from the services of organizations (customers). Both employees and customers are now better informed and better educated because of the available choices, which are increasing every day. Both are highly demanding and are beginning to almost dictate to organization.

The best and the brightest people (employees) look for organizations that will fasten their personal growth and help them to feel empowered so that they have a sense of ownership, both psychological as well as physical. Expectation and values are changing. Bright young individuals who join organizations want assignments that are challenging and that allow them to prove themselves. Therefore, the changing profiles of employees and customers have opened opportunities as well as provide threats to the organizational behavior.

3. Increasing Workforce Diversity

Diversity has emerged as an issue because of imbalanced representation of diverse groups in the workforce. Nepal has not only been a diverse society, it has also valued and celebrated diversity. The term “synergic pluralism” has been suggested to describe Nepalese culture, citing examples and legends of how diverse religious and ethnic groups coming from outside were made welcome and were encouraged to maintain their identities. There are several bases on diversity which are as follows:

• Demographic: Age, gender, education etc.
• Social: Religion, language, region, caste, tribes, physical and mental handicaps etc.
• Ideological: Different ways of perceiving issues, own thoughts, ideas etc.

Such diversities are increasing in developing as well as developed countries. Increasing workforce diversity has opened new opportunities to the today’s business organizations and has provided threats to the organizations and its behavior.

4. Social Responsibility and Ethics

While corporate organizations are using all facilities available in the society for their growth, they need to reciprocate by doing something for the societies where they exist and benefit from. This need is reflected in the concept of corporate social responsibilities. Corporate social responsibility (CSR) is a company’s commitment to operating in an economically, socially and environmentally sustainable manner, while recognizing the interest of its stakeholders, including employees, government, investors, customers, business partners, local communities and society.

Similarly, a commitment to ethical conduct lives at the heart of corporate social responsibility. To successfully adopt strong CSR practices, a company must define its ethical principles and reflect how they impact the company’s business practices. An important step in this process is reinforcing ethical conduct among employees through ethics training programs. Therefore, social responsibility and ethics have opened opportunities as well as challenges to the organizational behavior.

5. Quality and Employee’s Productivity

As a result of globalization and free-market economy, demand for better quality services and products is increasing both domestically and internationally. As a result of the global competitiveness industries have to adopt internationally recognized and proven quality management system in their operations in order to stay in the business. As customers have become highly quality conscious and have a wide array of choices for different products, goods that do not meet quality standards (rejected goods), they find a new “second market”. The concept of total quality management (TQM) is highly emphasized in today’s business organizations to improve quality as per customer’s expectations.

Total quality management (TQM) is defined as an organization’s total dedication to strive for quality and customer satisfaction, and benefits, growth of all members of the organizations and to make a better society by participation of all its members. In the other hands, productivity can be defined as producing maximum with minimum cost. Productivity is the ratio of total outputs divided by total inputs for a particular point of time. Similarly, employee’s productivity can be defined as getting best from employees irrespective of compensation and benefits paid to them. The challenge, therefore, is to evolve strategies so that employees give their 100 percent to the organization, feel that they are a part of it. And to help them grow as well as enhance the productivity of the organization.

As the essence, the matter of quality and employee’s productivity provides opportunity as well as challenges to the today’s organizations behavior.

6. Organizations Change and Development

Individuals develop with the change and development of their organization. The behavior of the individuals and groups is highly influenced by organizational change and development processes. An organization which keeps on running various organizational change programs and works for organizational development creates environment of positive vibrations. Organizational change and development factor creates opportunities to the organization as well as provides threats to the organization and its behavior.

7. Information Technology

The world has entered the information age surpassing the industrial age which has been made possible by the ever increasing developments in the field of information technology (IT). The way we access and assimilate information and the emergence of new methods of packaging information have given birth to a revolution more complex and powerful than the liberation of the printed word that started in the Middle Europe around the 15th century. The IT revolution is about real-time access and sharing of digital information, consisting of visual images, sound and virtual worlds, made possible by core information technologies like digital networks, information data banks and computer graphics.

It has a significant influence on work, the work environment and working relationships. Information technology results in better work, because it incorporates technical skills which encompass the ability to apply specialized knowledge. It has been studied that people get more satisfaction if they develop their technical skills. Interpersonal roles, information roles and managerial function are improved with technology. In other words, it is an application of knowledge to perform work. Information technology has the following characteristics:

• It determines the level of skills required.
• It improves efficiency and thus organization feels secure.
• It determines the productivity of an organization.
• It influences the social situation.
• It influences organizational structure.

All these factors shape the behavior of people concerned. Therefore, it opens opportunities as well as threats to the organization and its behavior.

8. Corporate Re-organization

Because of changes in the economic, political and international environment, many corporations have resorted to reorganization to remain competitive in the market. Mergers and acquisitions in today’s business environment are not uncommon. Such events require reorganization having impact on the employees of concerned companies. The employees experience anxiety and uncertainty about their places in the new organization. The employees of both the ‘taking over’ as well as the ‘taken over’ companies will have anxious moments because of the following factors:

• Fear of loss of jobs
• Job changes, including new roles and assignments
• Transfer to new geographic location
• Changes in career possibilities
• Changes in remuneration and benefits
• Changes in organization power, status and prestige
• Changes in group dynamics
• Change in corporate culture

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Basic Assumptions of Organizational Behavior (OB)

Every field of social science has a philosophical foundation of basic concepts that guides its development. Organizational behavior is based on the basic concept of human relations which is a noteworthy social approach towards the establishment of inter-personal relationship between superiors and subordinates. Organizational behavior deals with a set of fundamental concepts revolving around the nature of the people and organization. These concepts of organizational behavior are as follows:

Basic Assumptions of OB

1. The Nature of People

With regard to people, there are four basic assumptions: individual differences, a whole person, caused behavior (motivation) and value of the person (human dignity).

a) Individual Differences

People have much in common but each person in the world is also individually different. The idea of individual differences comes originally from psychology. From the day of birth, each person is unique and individual experiences after birth make people even more different. So, management can get the subordinates motivated by treating them individually and differently. Only one measure of motivated all people working in an organization. Some are motivated by money, but some other by status and any other. Hence, overall motivation plan is needed to deal with subordinates individually. Therefore, individual differences mean that management can get the greatest motivation among employees by treating them differently.

b) A Whole Person

Some managers think that they have employed a person just for his labor, skills or brain. So, they are concerned with his labor of work only but he has to employ a whole person rather than certain separate characteristics. Managers have to do a lot with a person’s personality, personal life, knowledge, development and other things. Though a person’s different traits may be separately studied, but in final analysis, they are integral part of one system making up a whole person. Skill does not exist apart from background or knowledge. Home life is not totally separable from work life and emotional conditions are not totally separable from work life and emotional conditions are not separable from physical conditions.

c) Caused Behavior (Motivation)

We know that behavior has certain causes. These may related to a person’s needs, and/or the consequences that result from acts. In case of needs, all normal human behavior and his/her course of future actions, both are caused by a person’s need structure. This fact leaves management with two basic ways to motivate people. It can show them how certain actions will increase their need fulfillment, or it can threaten decreased need fulfillment unless they follow a required course of action. Clearly a path towards increased need fulfillment is the better approach. Motivation is essential for the operation of organization. No matter how much machinery and equipment an organization has, these things cannot be put to use until they are released and guided by people who have been motivated. The management can create a suitable environment in the organization, conductive to the fulfillment of individual needs within the overall structure.

d) Value of the Person (Human Dignity)

Value of the person is more an ethical philosophy than a scientific conclusion. It confirms that people are to be treated differently from other factors of production because they are of a higher order in the universe. It recognizes that people are of a higher order, they want to be treated with respect and dignity, and should be treated this way. Every job, however simple, entitles the people who do it to get respect and recognition of their unique aspirations and abilities. The concept of human dignity rejects the old idea of using employee as economic tool. Therefore, treatment of the working staffs as a respectable human being, appreciation of their skills and recognition of their personality are very important basis of human relations.

2. The Nature of the Organization

With regard to organizations, the key assumptions are that they are social systems and that they are formed on the basis of mutual interest.

a) Mutual Interest

Organization theory tells us about the mutuality of interest between individuals and organization. In the other words, mutual interest is represented by the statement “Organizations need people, and people also need organizations”. Organizations have a human purpose. They are formed and maintained on the basis of some mutuality of interest among their participants. People see organizations as a means to help them reach their goals while at the same time, organizations need people to help reach organizational objectives. If mutuality is lacking, it makes no sense to try to assemble a group and develop co-operation, because there is no common base on which to build. Mutual interest provides a super-ordinate goal that unites the variety of needs that people bring to organizations. The result is that people are encouraged to attack organizational problems rather than each other. So, the management should try to co-ordinate the common goals and to motivate individual in a nice manner because members will like to continue within the organization as long as they feel that their interest are being served by attaching to the organization.

b) Social Systems

Organizations are social systems, consequently activities therein are governed by social laws as well as psychological laws. In other words, each organization is a social group having small number of groups. As people have needs, these organizations also have their needs, status and role. In fact, two types of social systems exist side-by-side in organizations. One is the formal (official) social system, and the other is the informal social system. The existence of a social system implies that the organizational environment is one of dynamic change, rather than a static set of relations as pictured on an organization chart. All parts of the system are inter-dependent and subject to influence by any other part. Everything is related to everything else. The idea of a social system provides a framework for analyzing organizational behavior issues. It helps to make organizational behavior problems understandable and manageable.

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Difference between Consumer Buying Behavior and Organizational Buying Behavior

The differences between consumer buying behavior and organizational buying behavior can be listed as follows:

Bases	Consumer Buying Behavior	Organizational Buying Behavior
Purpose of Buying	The individual consumers buy goods and services for ultimate use or satisfy their needs. The buying purpose of such consumers is not to earn profit by reselling the goods and services.	The organizations buy goods and services for their business needs. The buying purpose of them is to earn profit by using and reselling the goods and services.
Quantity	Although consumers buy various kinds of goods, the quantity of goods remains small. They buy only the necessary quantity of goods, which they need for regular use.	Organizational buying is done in large quantities. There are several reasons why organizations must buy the goods they need in bulk. In the first place, they use large quantities of each item and must maintain inventories at a level high enough that they will not run out of stock. Secondly, it is cheaper and more efficient to make large-volume purchases.
Purchase Decision	Consumer buying takes decision by consumers themselves. Sometimes they can consult with family members and friends. They need not fulfill any formality like organizational buying.	Organizational purchasing is a rational process because the purchasing behavior of organizations is guided by objective factors having to do with production and distribution. It takes long time than consumer buying.
Market Knowledge	Most of the consumers may not have adequate knowledge and information about market situation, available goods and services, etc. The educated customers may be aware and have knowledge about market and goods.	Organizational purchase criteria are specifically defined. Organizational buyers usually have fewer brands to choose from than do individuals, and their purchases must be evaluated on the basis of criteria that are specific to the overall needs of the organization. The organizational buyers have full knowledge of market and suppliers.
Types of Goods	Consumers buy many goods to use to satisfy personal or family needs.	Organizational buyers buy limited goods to use to conduct business.
Effect	Consumer buying behavior is effected by age, occupation, income level, education, gender etc. of consumers.	Many individuals are involved in the buying process. Within large organizations, rarely is one individual solely responsible for the purchase of products for the purchase of products or services. Instead, many individuals and departments may be involved and departments may be involved in the buying process.
Buying Process	The consumer buying process is very simple. No need to fulfill any formality. There is also no need to maintain extensive contact with sellers.	Buyers and sellers in the organizational market must maintain extensive contact.

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Factor Determining Organizational Buying Decision | Buying Behavior

The behavior of an organization shown in buying goods or services is called organizational buying behavior. The organizations buy goods or services for business use, resale, produce other goods or provide services. Business and industrial organizations buy goods to use in business or produce other goods. 

Related Topic:

Meaning and Features of Organizational Buying Behavior

Several factors affect organizational buying decision. They can be grouped in environmental, organizational, interpersonal and personal factors. They are shown as follows:

Factors Affecting Organizational Buying Behavior

I. Environmental Factors           

Environment factors affect organizational buying behavior. This includes economic, technological, political-legal, social responsibility and competition.

1. Economic Factors

Economic factors affect organizational buying behavior. This includes level of demand and economic health. The level of demand includes capacity and desire for buying goods. This is affected by income distribution and price of product. Prosperity, recession and recovery are included in economic health. The prosperity condition is economically good condition. Recession is economically bad condition.

2. Technological Factors

Technological factors also affect organizational behavior. This includes level of technology, pace of technology, technology transfer etc. E-commerce as well as information technology has got revolutionary change. It has directly affected organizational buying behavior.

3. Political and Legal Factors

Political and legal factors also affect organizational buying process directly. Political factors include political system, political situation, and political thought, government policies etc. whereas constitution, laws, rules and regulations etc. are included in legal factors.

4. Social Responsibility

A business organization should consider social responsibility while buying any goods or services. Indigenous goods should be given preference in buying and interest of society should be protected. Interest of different pressure group of the society also should be considered while buying goods or services.

5. Competition

Competition also affects buying behavior. This competition includes pure competition, monopolistic competition and oligopoly competition.

II. Organizational Factors            

Organizational factors also affect organizational buying behavior. This includes objectives, policies, procedures, organizational structure and system.

1. Objectives

Buying objective is determined according to organizational goal. Goods should be purchased according to organizational objective. As goods or services need to be purchased according to organizational goal, buying is affected by objective.

2. Policies

Purchasing or buying policy also effects organizational buying behavior. Goods should be purchased according to buying policy of the organization. If the organization has the policy of buying indigenous goods, the buyer cannot buy foreign goods. If the purchasing policy is silent in this matter, whichever goods, foreign or indigenous, can be purchased as desired.

3. Procedures

The methods and process adopted by an organization to buy goods or services is called procedure. Goods or services can be purchased directly through agreement, or through tender, demanding catalog etc. Any of the method can be adopted to buy goods or services. Whichever procedure the organization has adopted, the buyer should follow it.

4. Organizational Structure

Organizational structure defines authority and relations which directly affects buying behavior. In some organizations, goods or services are purchased by direct order of chief executive while in some other organizations, goods or services are bought through purchase department. So, buying behavior is affected by organizational structure.

5. System

Purchasing system also directly affects buying behavior. An organization can adopt any one or more such as centralized system, decentralized system, huge quantity purchase system and others.

III. Interpersonal Factors            

Interpersonal factors also affect buying behavior. This includes authority, status, interest etc.

1. Authority

The personnel whom the organizational structure gives authority to order for purchase, no goods can be purchased without his order. Buying decision of such authority plays an important role in buying.

2. Status

The persons to purchase goods or services and to give order for purchase may be different in an organization. As much the behavior of the person issuing purchase order affects behavior of the buyer. If the status or level of the buyer is high, his buying decision becomes rational and quick. His/her behavior becomes mature.

3. Interest

Users, influencers, buyers, decider and gate keeper are involved in organizational buying process. Their interest affects organizational buying process. As their interest becomes different, buying process may be complicated.

IV. Personal Factors             

Personal factors also affect buying behavior. This includes age of person, education, level of job, personality etc.

1. Age

Age of person also affects selection and priority. Younger persons make buying decision and supplier selection quicker than older aged persons. Similarly, the younger persons try to find new suppliers whereas older persons try to give continuation to the same who is supplying. So this also affects buying process.

2. Education

Education makes person able to analyze good or bad. So, an educated person takes buying decision rationally whereas uneducated person makes buying decision at hit and miss or hunch. Educated person selects goods or services carefully. So, buyer’s education also affects organizational buying behavior.

3. Job Position

Job position also shows a person’s status. Buyer’s position or status also affects his buying behavior. Buyer’s status may be low or high.

4. Personality

Personality of person working in an organization may be different. Personality affects selection of quality, brand, price etc. So, buyer’s personality also affects organizational buying behavior.

5. Risk Attitude

Risk bearing capacity of men becomes different. Some can bear more risk and others like to take less risk. Similarly, some like to avoid risk and some others like to face. The capacity and attitude to bear risk also affect buying behavior. The buyers having the capacity to take high risk become aggressive. But those having less risk bearing capacity and having no risk bearing capacity do not do so.

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Pre-requisites of OD (Organizational Behavior)

Organizational development does not emerge itself. There are some conditions, which must be accomplished as pre-requisites to OD are mentioned below:

1. There should be the explicit commitment of the top management to change and improve the organization, denote its time and resources to this long term effort, take the risk and experiment, with new methods of handling the problems, be keen to assess its own behaviors and attitudes for personal development purpose, and be able to tolerate confusing results which may occur at the initial stages of the OD programme. Usually, we find that top executives suffer from the misconception that all is fine with them and it is lower level personnel who are to be trained and improved. This attitude towards subordinates hampers an effective OD programme. 
2. The existence of strong and competent internal change facilitators and resourceful individuals, who can perform the role of internal change agents, provides momentum to the OD work.
3. Successful experience with the earlier efforts in some parts of the organization provides momentum to further efforts and thus, forms a significant prerequisite, to the effective performance of an organizational development programme.
4. The involvement of capable and experimented external consultants, especially during the earlier stages of OD work, provides the objectivity and variety of skills, which may make the programme highly effective. However, it is necessary that the consultant develop the internal change facilitators and the problem solving ability of the organization instead of making the organization dependent upon himself.
5. The presence of some influential managers, who act as like link pins between crucial groups and are willing to introduce change and experiment with new methods of work, forms another prerequisite to a successful OD programme.
6. The internationalization of concern for renewal, re-education, constant assessment of the organizational health and corporate excellence forms a very crucial prerequisite to effective OD effort.
7. There is the prerequisite in the form of built-in reward systems. Attempts should be made to build the reward systems for the effective performance of results.

Needs for Understanding Organizational Behavior

Organizational Behavior System

Organizational behavior is now considered as an open and adaptive living system which means that it is in constant interaction with its dynamic or ever changing environment. It receives inputs or resources in the form of raw materials, people’s energy and information from its environment. It transforms these inputs into outputs in the form of products and services that are demanded by its environment to satisfy the needs and desires of the community. The organization is a system with multiple purposes and functions that involve multiple interactions between the organization and its environment.

Organizational Behavior System

1. Inputs

The first element of organizational behavior system is input. It is known as independent variable. Inputs further can be classified as individual inputs, group inputs and organizational inputs. Individual inputs include an individual’s ability, skills, mental condition, age, gender and physical condition. Group inputs include group status, group role, and human relations and similarly, organizational inputs include organizational structure, culture etc.

2. Processing

The second element of organizational behavior system is processing. It is, in a psychological order, also known as organism. In other words, processing is central and major part of OB system. It helps in converting available inputs into the outputs or behavior. Processing further can be classified into three categories as individual process, group process and organizational process. Individual process includes motivation, perception, learning, participation etc. Group process includes communication, group dynamics, leadership, conflict, power and politics etc. Similarly, organizational process includes design of formal organization, human resource policies and practices, intention with external environment etc.

3. Outputs

The third and last basic element of organizational behavior system is output. It is also known as dependent variable. In the psychological term, it is also defined as behavior. Outputs can be classified as individual outputs, group outputs and organizational outputs. Individual outputs include productivity, satisfaction, less turnovers and less absenteeism. Group outputs include group productivity, group satisfaction and co-operation. Similarly, organizational outputs include organizational citizenship, goal achievement and social effectiveness.

Need for Understanding Organizational Behavior

As we know, organizational behavior is the study of people at work in organizations. And we study organizations because we spend our lives interacting with them. If the world is a stage, it is a stage filled with organizations. Regardless of the part we play as a student, employee, manager or customer, we play our roles/parts on an organizational stage. By acting our parts, we influence organizations and organizations also influence us.

The study of OB (Organizational Behavior) benefits us in several ways.

Firstly, the study of OB helps us understand ourselves and others in a better way. This helps greatly in improving our inter-personal relations in the organizations. Friendly and cordial relations between employees and management and also among the employees create a congenial work environment in organizations.

Secondly, the knowledge of OB helps the managers know individual employees better and motivate employees to work for better results. It helps managers apply appropriate motivational techniques in accordance to the nature of individual employees who exhibit glaring differences in many respects.

Thirdly, one of the basic characteristics of OB is that it is human in nature. So to say, OB tackles human problems humanly. It helps understand the cause of the problem predicts its future course of action and controls its evil consequences. Thus, treating employees as human beings enables the managers to maintain cordial industrial relations which, in turn, create peace and harmony in the organization.

Fourthly, the most popular reason for studying OB is to learn how to predict human behavior and, then, apply it is some useful way to make the organization more effective. Thus, knowledge of OB becomes a pre-requirement for a person like the students for a person like the students of MBA/MBS who is going to assume a managerial job and succeed as a manager.

Finally, all organizations are run by man. It is man working in the organizations makes all the difference. Then, it implies that effective utilization of people working in the organization guarantees success of the organization. This is where OB comes into the picture. OB helps managers how to efficiently manage human resources in organization. It enables managers to inspire and motivate employees towards productivity and better results.

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Contributing Disciplines to Organizational Behavior (OB)

Organization behavior is an applied science that is built up on contribution from a number of behavioral science such as:

1. Psychology
The terms psychology comes from the Greek word ‘Psyche’ meaning soul or spirit. Psychology is the science that seeks to measure, explain and sometimes change the behavior of human beings. Modern psychology is almost universally defined as the science of behavior which is nearly identical with behavioral science, in general. Psychology has a great deal of influence on the field of organizational behavior. Psychology is concerned with individual behavior.

Psychology studies behavior of different people in various conditions such as normal, abnormal, social, industrial legal, childhood, adolescence, old age, etc. It also studies processes of human behavior, such as learning, motivation, perception, individual and group decision-making, pattern of influences change in organization, group process, satisfaction, communication, selection and training. 

It is a science, which describes the change of behavior of human and other animals. It is concerned with the more study of human behavior. The major contribution of psychology in the field of OB (Organizational Behavior) have been concerned are following:

• Learning
• Personality
• Perception
• Individual decision-making
• Performance appraised
• Attitude measurement
• Employee selected
• Work design
• Motivation
• Emotions
• Work strain
• Job satisfaction

2. Social Psychology

Social psychology is that part of psychology that integrates concepts from psychology and sociology. In other words, social psychology studies all aspects of social behavior and social thought – how people think about and interact with others. One of the areas receiving considerable attention from social psychology is change law to reduce its resistance and implement it successfully. Additionally, social psychology is useful in the areas of measuring and understanding changing attitudes; communication patterns; the ways in which group activities can satisfy individual needs and group decision making processes. It focuses on the influences of people on one another.

It is an area within psychology that blends concepts from psychology and sociology and that focuses on the influence of people on one another. The major contributions of social psychology to OB are as follows:

• Behavior change
• Attitude change
• Communication
• Group process
• Group decision-making

3. Sociology

Sociology is the study of group behavior. It can be described as an academic discipline that utilizes the scientific method in accumulating knowledge about a person’s social behavior. In other words, it studies the behavior of the people in relation to their fellow human beings. Some of the areas within OB that have received valuable input from sociologist include group dynamics, organizational culture, formal organization theory and structure, organizational technology, bureaucracy, communication power, conflict and inter-group behavior. To the managerial practice, its contribution is mainly in the field of bureaucracy, role structures, social system theory, group dynamics, effect of industrialization on the social behavior etc.

It is the study of society, social institution and social relationship. The main contributions of sociology to the field of OB are as follows:

• Group dynamics
• Communication
• Power
• Conflict
• Inter group behavior
• Formal organizational theory
• Organizational technology
• Organizational change
• Organizational culture

4. Anthropology

The term anthropology combines the Greek term ‘anthropo’ meaning man and the noun ending ‘logy’ meaning science. Thus, anthropology can be defined as the science of man. It is also known as ‘science of humanity’ which encompasses a broad range of studies including the evolutionary history of human beings and features of different societies, cultures and human groups. In other words, the field of anthropology studies the relationship between individuals and their environment. Groups of individual living together create a body of shared ideas that are called culture. Culture is embodies in the system of symbols shared by a group of people and is reflected in their language and beliefs. The culture of a civilization or the sub-culture of a defined group is transmitted by the stories and myths told by members of the group. These stories and myths help the groups to understand who they are and what things are important.

It is the study of society to learn human beings and their activities. The major contributions of Anthropology in the field of OB are as follows:

• Comparative values
• Comparative attitudes
• Cross-culture analysis
• Organization environment
• Organization culture

5. Political Science

Political science is the branch of social science which deals with politics in its theory and practice, and the analysis of various political system and political behaviors. Political scientists study the behavior of individuals and groups within a political environment. Specific topics of concern to political scientists include conflict resolution, group coalition, allocation of power and how people manipulate power for individual self-interest. In other words, political science helps us to understand the dynamics of power and politics within organizations, since there is usually a hierarchical structure of differing levels of managers and subordinates.

It is the study of the behavior of individuals and group within or political environment. The main contribution of political science in the field of OB have been concerned with:

• Conflict
• Intra-organizational policies
• Power

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Fundamental Concept of OB

Like all other discipline/subjects, OB (Organizational Behavior) is also based on certain key elements also called 'Fundamental concepts or assumptions'. There are four key elements in OB. These are people, structure, technology, and the environment in which organization operates.

People
Organizations are run by people. People consist of individuals and groups. Though people have much in common (they become happy by having gains and sad by in losing something valuable), yet they differ from each other. One can find glaring differences in people's trait, intelligence, personality or any such trait. It is, in fact, individual differences the manager cannot adopt one formula or standard across the board for dealing with employees. Instead, manager has to treat employees with individual differences differently. It is because of individual differences, the subject matter of OB begins with individual.

An individual joins organization along with his/her social background, likes and dislikes, pride and prejudices. What is to say is that an individual's family life cannot be separated from organizational life. Therefore, OB studies an individual as a whole person.

Human behavior is always caused. Behavior is directed towards some goals. There is always a cause behind every human behavior or act. For example, when a worker is absent from work, there is a cause behind. The manager must know the cause to solve the problem. People are living, thinking, feeling beings. The manager, therefore, needs to treat them with human dignity, not just like an economic tool.

Structure
Organizations are social systems. There are two types of social systems that exist side by side in an organization. One is the formal and other is the informal social system. The formal relationship of people in organizations is called structure. Different jobs are required to accomplish the organizational goals and objectives. For example, there are managers and employees, accountants and assemblers. These all people performing different jobs at different levels have to be related in some structural way so that their work can be effectively coordinated.

That people need organizations and organizations also need people also comes under the purview of OB. It means that OB is based on mutuality of interest. It is mutual interest that unities people and organization to go side by side for accomplishing individual and organization goals.

Technology
Technology provides the resources with which people work and also affects the tasks that they perform. The great benefit of technology is that it allows people to do more and better work. But, it also restricts people from doing things in various ways. In fact, it has costs as well as benefits.

Environment
All organizations operate within a given internal and external environment. In fact, no organization exists alone. An organization is a part of a larger system that contains other factors or elements, such as a government, the family, and other organizations. All of these of mutually influence one another in a complex way. Thus, organizations are influenced by the external environment. Environment, thus, affects people by influencing their attitudes, working conditions, etc. It will not be less than correct to mention that an organization is the effect for which environment is the cause. Hence, environment also becomes a key element in the study of OB.

Levels of Organizational Behavior

A system is defined as the set of interrelated and interdependent component arranged in a manner that produces a unified whole. The system is composed of a number of sub-systems and all the subsystem are related to each other. Organizational behavior (OB) in a system perspective consists of the following interacting and interrelated components.

i. Input: It provides stimulus to behavior

ii. Processing: It can be at individual, group and organization level

iii. Output: Outputs are the behavioral consequences

iv. Feedback

Input, Processing, Output System

Critical Behavioral Issues

Human beings are a complex phenomenon. Two people act differently in same situation. As we know behavior of an individual and behavior of group are quite different. Thus, due to the complexities that are found in behavior, regulating an organization smoothly has become a problem, which have been great challenges for the managers. The challenges that has to be faced due to critical behavior by the manager are as follows:

1. Responding to globalization: Today, world is like a small village due to globalization. Manager of today are required to work with people from different cultures. Globalization requires managers to modify their management practices to suit differences among people from different cultures and countries.
2. Work force diversity: Work force diversity refers different types of work force in organization. It means that there is the diversity of the work force. Organization has become heterogeneous in terms of gender, race and ethnicity. So due to work force diversity, there is a great challenge for the manager to manage all its manpower towards the goal of the organization. But this challenges can be an opportunity for the manager if s/he innovates and creates the idea handling them properly.
3. Skill deficiency: Skill deficiency has been another critical behavioral issues for the manager to be confronted. Due to the development of IT sector, companies are installing advance technologies to cope with competition. Company at one hand has installed the advance technology but at the other hand they have lacking of the required skill to operate this technology. They have the problem that the existing staff do not posses the required skill and they can't replace those existing staff by the new having required skill. Providing training to the existing staff costs much that hiring from outside. Thus, this behavioral issue is also facing by the present day managers.
4. Managing change: Change is an on-going activity for most organizations. Change is need for both employee and managers. Employee needs change to continually update their knowledge and skill to meet new job requirements. Managers are familiars about change to live with flexibility. Spontaneous and unpredictability change effectively managed can only protect organization norms, culture, values etc.
5. Improvising ethical behavior: Managers of today face a lot of ethical dilemmas. Managers need to create an ethically healthy climate for employee. They should establish codes of conduct, and offer training and seminars to improve to ethical behavior.

Organizational Behavior and its Emerging Trends

Organizational Behavior: Concept 

The term ‘Organizational Behavior” is an integrated form of two separate words. Organizational and Behavior. The first word ‘Organizational’ is derived from the word ‘Organization’ which means ‘relating to organization’. The other word is ‘Behavior’ which means ‘what a person does’ or is a way of action.’ In other words, behavior can be defined as the observable and measurable activities of human beings. Thus, organizational behavior can be defined as the study of human behavior in the organizations and application of knowledge to make it more purposive, responsive and co-operative. It represents the human side of management, not the whole of management.

In other words, organizational behavior is the study and application of knowledge about how people act within organization. It applies broadly to the behavior of people in all types of organization, such as business, government, school and service organizations. Wherever organizations are, there is a need to understand organizational behavior. It is the set of actions to understand, predict, manage or control individual and group activities in the organization for improving organizational effectiveness.

The answer of following questions shows the scope of organizational behavior.

• How people behave in an organization in given circumstances?
• Why people join and continue the membership of an organization?
• How do the people use the structure and technology to achieve the goals of the organization as well as of their own motives?
• What internal and external factors influence their behavior in and outside the organization?

Organization are human association which consist of structure, technology and resources that are aimed to achieve desired goals by operating in a complex dynamic environment. Behavior refers to the series of activities performed by an individual which can be observed by others in a given environmental situation. The behavioral patterns and tendencies of an individual are important for understanding the individual behavior.

In simple words, organization behavior is the study of how people behave in an organization and how their behavioral activities affects the performance and outcome of an organization. Organizational behavior is concerned with understanding attitude, beliefs, feelings, emotions and sentiments of people working in an organization. The success and failure of an organization largely depends upon the behavioral attributes of the people working in an organization. The organizational behavior is related to the systematic study of the behavior of individuals and groups in an organization. It is focused on understanding, predicting and managing the human behavior in an organization for improving the organizational effectiveness. It focuses about human aspect of management in an organization which helps management to improve interpersonal relation, initiate motivational factors, minimize conflicts and assist to solve human related problem.

The organizational behavior is related with the behavior of human beings at work. It is the study and application of knowledge about how people as individual and as group behave or act in organizations. It provides a useful set of tools at many levels of analysis. For instance, it helps manager to look at the behavior of individuals and groups (both formal and informal) with in an organization. It is a human tool for human benefit and seeks to know the behavior of people in all types of organizations.

All organizations, be these business, educational or government, are social system. It is the combination of men, money, machinery, material and management, commonly known as 5 Ms. In fact, it is management i.e. people who actually take care of other 4 Ms. Then, it means that the functioning of an organization depends upon how people work or behave in the organization.

Organizational behavior can be defined as an interdisciplinary behavioral science which studies phenomena related to organizations and their human units. It is the field of study involving the integration of the behavioral sciences (e.g. psychology, sociology, anthropology etc.) to study of people’s behavior within organization. The study of organizational behavior, basically, focuses on individual behavior, group behavior, tasks and technology, organizational structure and environmental factors. 

Various experts and authors have defined organizational behavior as follows:

"The field that seeks knowledge of all aspects of behaviors in organizational settings by the use of the scientific method." – Greenberg and Baron

"Organizational behavior is the systematic study of the nature of organizations; how they begin, grow and develop and their effect on individual members, Constituent groups, other organizations and larger institutions." – Joe Killy

"Organizational behavior is a field of study that investigates the impact that individuals, groups, and structure have on behavior with in organizations for the purpose of applying such knowledge towards improving an organization’s effectiveness." – Stephen P. Robbins

"Organizations behavior is the study of organizational components and their impact on human behavior and organizational performances. Such study can benefit from various behavioral and social sciences." – Kae. H. Chung & Leon C. Megginson

"Organizational behavior is the study and application of knowledge about how people act within organizations. It is a human tool for human benefit. It apply broadly to the behavior of people in all types of organizations such as business, government, schools and service organizations." – Keith Davis & J. W. Newstorm

"Organizations behavior is directly concerned with the understanding, prediction and control of human behavior in organizations." – Fred Luthans

From the above definitions, organizational behavior is primarily concerned with that aspect of human behavior which is relevant for organizational performance. It studies human behavior at individual level, group level and organizational level. It applies the knowledge gained about individuals, groups and the effect of organization structure on behavior towards the end of making organization work more effective and efficient.

Organizational behavior is concerned with understanding and describing human behavior in an organizational setting. It seeks to shed light on the complex human factor in organizations by identifying causes and effects of human behavior. It is also called a social science because its main concern is people and their behavior. It is the field of study that integrates behavioral sciences like psychology, sociology and anthropology for the human behavior in and around organizations. OB studies three determinants of behavior in organizations, i.e. individuals, groups and structure. The behavior of individuals and groups and the impact of structural design on the behavior of individuals and groups are the major concern of organizational behavior. The knowledge of all these is applied to make the organization work more effectively.

To sum up, organizational behavior is concerned with the study of how and what people act in organizations and also how their behave affect the performance of the organization from one side. The other sides, it applies knowledge gained about an individuals and groups in order to make organizations work more effectively.

Elements of Organizational Behavior

The basic elements of organizational behavior are people, structure, technology and the environment in which the organization operates. When people join together in an organization to accomplish an objective, some kind of structure is done, so there is an interaction of people, structure and technology. These elements are influenced by the external environment, and they influence it.

Elements of Organizational Behavior

1. People

People constitute the internal social system of the organization. They consist of individuals and groups. Group may be classified as formal and informal, large and small, interrelated and complex, effective and non-effective, contributing and non-contributing and so on. People are living, thinking and feeling beings who work in organization to achieve their objectives. Organizations exist to serve people, rather than people existing to serve organization. People are very dynamic in nature, therefore, human organizations change every day. People may form, change and disband the organizations. Different attitudes, feelings, emotions, values, customs and behaviors of the people are studied in the organizational behavior.

2. Structure

It defines the formal relationships of people in organization. Structure defines the roles and relationship of the people in an organization. Different jobs are required to accomplish all of the organization’s activities. Organizational people have to be related in some structural way so that their work can be effectively coordinated. In other words, different people in an organization are given different roles and they have certain relationship with others. Proper structure focuses to division of labor so that people can perform their duties or works to accomplish the organizational goals. A well structure is developed focusing the works designed to different people like managers, accountants, clerks, workers, peons etc in the organization. All people are related to each other to accomplish the organizational goals in a coordinated manner. Thus, structure relates to power and duties. Structure must be effective, efficient, appropriate and should also ensure that it suits organizational people or participants.

3. Technology

Technology imparts the physical and economic conditions within the people’s work. It provides the resources with which people work and affects the task that they perform. People cannot accomplish anything without technology. The technology used has a significant influence on working relationships. The nature of technology depends on the nature of organization and influences work and working condition. The great benefit of technology is that it allows people to do more and better work but it also restricts people in various ways. Technology brings effectiveness in the works classified to different people in an organization. The stated tasks can be better performed by the related people in the easy way with less time consuming.

4. Environment

All organizations operate within an external environment. A single organization does not exist alone. It is a part of a larger system that contains many other elements, such as government, family and other organizations. All of these elements mutually influence each other in a complex system that creates a context for a group of people. It influences the attitude of people, affects working conditions and provides competition for resources and power. The environment is considered very important in the study of human behavior and organizational behavior.

Nature of Organizational Behavior

Organizational behavior is concerned with understanding values, attitudes, beliefs and emotions or feelings of people working in the organization. In other words, it is an academic discipline concerned with understanding and describing human behavior in an organizational environment. Organizational behavior is emerging as a separate field of study. Therefore, its nature is likely to change over the period of time. The nature of organizational behavior can be understood with the light of following points: 

Nature of Organizational Behavior

1. A Dynamic Discipline 

Organizational behavior is dynamic discipline by nature. Its main focus is on human behavior but also considers technical component of the organizations. It fully appreciates and recognizes the constraints of the working environment, their changes and takes due note of their implications on both behavioral as well as operational aspects. 

2. Interdisciplinary Approach 

Organizational behavior is basically an interdisciplinary approach. It integrates the relevant knowledge drawn from different disciplines for some specific purpose. It draws heavily from sociology, psychology, anthropology, political science and so on. These disciplines exist separately, but organizational behavior integrates the relevant contents of these disciplines to make them applicable for organizational analysis. 

3. Science as well as Art 

The knowledge about human behavior proves it as a science while application of this knowledge and skills clearly lead towards being an art. The basic objective of organizational behavior is to make application of various researches to solve the organizational problems particularly related to human behavior aspect. 

4. Multiple Levels 

Organizational behavior has a three-tier system. It deals with the individual behavior, group behavior and organizational behavior as a whole. All these three levels interact with each other and organizational behavior tries to assimilate them for the good results. 

5. Goal Directed Discipline 

Organizational behavior, being an applied science and emphasizing human aspect of the organization, is oriented towards organizational goals and objectives. The major goal of organizational behavior is to explain and predict human behavior in organizational context so that it may be molded to result-yielding situations. It provides a rational thinking, not an emotional feeling about people and their behavior. 

6. Humanistic and Optimistic 

Organizational behavior focuses the attention on people from humanistic and optimistic point of view. It is based on the belief that needs and motivation of people are highly concerned. There is an acceptance of the value of the individual as a thinking, feeling and many more. There is optimism about the innate potential of man to be independent, creative, productive and capable of contributing positively to the objectives of the organization. 

7. An Inexact Science 

Organizational behavior is an inexact science. It cannot provide specific answers to specific organizational problems. The exact prediction of the behavior of people in organizations is also not possible. It is possible to predict relationships between variables on a broad scale but it is difficult to apply predictive models on an individual basis.

Emerging Trends in Organizational Behavior

Business environment are dynamic which changes frequently. The dynamics of the environment arises from globalization, the changing work force diversity, increasing concern for quality and productivity, rapid technological change etc. Competition has been intense so management are expected to continually update their understanding of organizational behavior. The key emerging trends in organizational behavior are:

1. System Approach

Organizations are viewed as complex open system interacting with various elements to achieve a desired goal. Organizational behavior is viewed from system perspective. The behavioral relationship are interpreted in terms of whole person, whole group and as a whole organization. The system aspect of organizational behavior provides synergistic effect.

2. Contingency Variable

It refers to application of different behavioral practices for different situation. Each situation should be carefully analyzed and diagnosed prior to action. The universal principle of organizational behavior are being replaced by the contingency variables, there is no more “one best way” to solve the behavioral aspect of an organization.

3. Human Orientation

Organizational behavior has supported and practiced human orientation. It simply refers to putting people first as they are viewed as most important resources in an organization. It is concerned with developing of individual to their full potential, which increase the competency, creativity and skills needed to perform the job. The employee growth, initiation and performance are actively supported. The positive attitude towards employees are encouraged.

4. Distribution of power

The traditional organization system focused on power centralization at the top level. However the new trends are concerned with employee empowerment by providing autonomy at work and flexible work schedules. The decentralization and distribution of power has provided opportunities for employees to manage their work and enhance organizational effectiveness.

5. Self-Discipline

Discipline implies obligation to set rules, regulation and procedures. It is concerned with regulating the employee behavior. The past practices of organizational behavior was concerned with enforcement of discipline. However the emerging trend is self-discipline maintained by individual at work as they are willing adhering to set rules and acceptable behavioral standards. The self-direction and control is exercised by employees.

6. Intrinsic Motivation

Motivation is concerned with stimulating the energies of employees to achieve the desired result. It is concerned with individual’s intensity, direction and persistence of efforts towards attaining goals. Traditionally organizational behavior focused on extrinsic motivation which was induced in the form of financial incentives however, at present the intrinsic motivation is encouraged which is self-generated through sense of job satisfaction. The encouragement for teamwork, power delegation and focus on high order need an employee has empowered the employees which has generated intrinsic motivation.

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