IMPORTANCE OF ORGANIZATIONAL BEHAVIOR TO MANAGERS

 Managers perform four major functions such as planning, organizing, directing and controlling. In addition to these functions there are ten managerial roles, which can be defined as organized set of behaviors identified with the position. These roles are developed by Henry Mintzberg in 1960s after a careful study of executives at work. All these roles, in one form or other deal with people and their behavior. These ten managerial roles are divided into three categories. The first category called the interpersonal roles arises directly from the manager's position and the formal authority given to him. The second category, the informational role arises as a direct result of the interpersonal roles and these two categories give rise to the third category called decisional roles. 

The roles, in the context of organizational behavior, are as follows:

Interpersonal Roles                 

In every organization managers spend a considerable amount of time in interacting with other people both within their own organizations as well as outside. These people include peers, subordinates, superiors, suppliers, customers, government officials and community leaders. All these interactions require an understanding of interpersonal behavior. Studies show that interacting with people takes up nearly 80% of a manager's time. These interactions involve the following three major interpersonal roles:

• Figure/lead Role: Managers act as symbolic figureheads performing social or legal obligations. These duties include greeting visitors, signing legal documents, taking important customers to lunch, attending a subordinate's wedding and speaking at functions in schools and churches. All these, primarily, are duties of a ceremonial nature but are important for the smooth functioning of an organization.
• Leadership Role: The influence of the manager is most clearly seen in the leadership role as a leader of a unit or an organization. Since he is responsible for the activities of his subordinates therefore he must lead and coordinate their activities in meeting task-related goals and motivate them to perform better. He must be an ideal leader so that his subordinates follow his directions and guidelines with respect and dedication.
• Liaison Role: The managers must maintain a network of outside contacts. In addition, they need to have a constant contact with their own subordinates, peers and superiors in order to assess the external environment of competition, social changes or changes in governmental rules and regulations. In this role, the managers build up their own external information system. This can be achieved by attending meetings and professional conferences, personal phone calls, trade journals and informal personal contacts with outside agencies.

 

Information Roles

A manager, by virtue of his interpersonal contacts, emerges as a source of information about a variety of issues concerning an organization. In this capacity of information processing, a manager executes the following three roles.

• Monitor Role: The managers are constantly monitoring and scanning their internal and external environment, collecting and studying information regarding their organization. This can be done by reading reports and periodicals, interrogating their liaison contacts and through gossip, hearsay and speculation.
• Information   Disseminator Role: The   managers   must   transmit   the information  regarding  changes  in policies  or  other  matters  to  their subordinates, their peers and to other members of an organization. This can be done through memos, phone calls, individual meetings and group meetings.
•  Spokesman Role: A manager has to be a spokesman for his unit and represent his unit in either sending relevant information to people outside his unit or making some demands on behalf of his unit.

Decision Roles

A manager must make decisions and solve organizational problems on the basis of the environmental information received. In that respect, a manager plays four important roles.

• Entrepreneur Role: Managers, as entrepreneurs are constantly involved in improving their units and facing the dynamic technological challenges. They are constantly on the lookout for new ideas for product improvement or product addition. They initiate feasibility studies, arrange capital for new products   and   ask   for suggestions   from   the   employees   to   improve organization. This can be achieved through suggestion boxes, holding strategy meetings with project managers and R&D personnel.
• Conflict Handling Role: The managers are constantly involved as judge in solving conflicts among the employees and between employees and management. Mangers must anticipate such problems and take preventive action and take corrective action once the problem arises. These problems may involve labor disputes, customer complaints, employee grievances, machine breakdowns, cash flow shortages and interpersonal conflicts.
• Resource Allocation Role: The managers establish priorities among various projects or programs and make budgetary allocations to different activities of an organization based on these priorities.
• Negotiator Role: The managers in their negotiator role represent their organization in negotiating deals and agreements within and outside of an organization. They negotiate contracts with the unions. Sales managers may negotiate prices with prime customers. Purchasing managers may negotiate prices with vendors.

All these ten roles are important in a manager's job and are interrelated, even though some roles may be more influential than others depending upon the managerial position. For example, sales manager gives more importance to interpersonal roles, while the production manager may give more importance to decisional roles.

Four models of organizational behavior

 A. Autocratic model

B. Custodial model

C. Supportive model

D. Collegial model

 Autocratic Model  

In an autocratic model', the manager has the power to command his subordinates to do a specific job. Management believes that it knows what is best for an organization and therefore, employees are required to follow their orders. The psychological result of this model on employees is their increasing dependence on their boss. Its main weakness is its high human cost.

 Custodial Model

This model focuses better employee satisfaction and security. Under this model organizations satisfy the security and welfare needs of employees. Hence, it is known as custodian model. This model leads to employee dependence on an organization rather than on boss. As a result of economic rewards and benefits, employees are happy and contented but they are not strongly motivated.

 

Supportive Model

The supportive model depends on 'leadership' instead of power or money. Through leadership, management provides a climate to help employees grow and accomplish in the interest of an organization. This model assumes that employees will take responsibility, develop a drive to contribute and improve them if management will give them a chance. Therefore, management's direction is to 'Support' the employee's job performance rather than to 'support' employee benefit payments, as in the custodial approach. Since management supports employees in their work, the psychological result is a feeling of participation and task involvement in an, organization.

Collegial Model

The term 'collegial' relates to a body of persons having a common purpose. It is a team concept. Management is the coach that builds a better team. The management is seen as joint contributor rather than as a boss. The employee response to this situation is responsibility. The psychological result of the collegial approach for the employee is 'self-discipline'. In this kind of environment employees normally feel some degree of fulfillment and worthwhile contribution towards their work. This results in enthusiasm in employees' performance.

 

FOUR MODELS OF ORGANIZATIONAL BEHAVIOR

 

	Autocratic	Custodial	Supportive	Collegial
Basis of Model	Power	Economic resources	Leadership	Partnership
Managerial-  orientation	Authority	Money	Support	Teamwork
Employee psychological result	Dependence on boss	Dependence on organization	Participation	Self-discipline
Employee needs met	Subsistence	Security	Status and recognition	Self-actualization
Performance result	Minimum	Passive cooperation	Awakened drives	Moderate enthusiasm

 It is wrong to assume that a particular model is the best model. This is because a model depends on the knowledge about human behavior in a particular environment, which is unpredictable. The primary challenge for management is to identify the model it is actually using and then assess its current effectiveness.

 The selection of model by a manager is determined by a number of factors such as, the existing philosophy, vision and goals of manager. In addition, environmental conditions help in determining which model will be the most effective model.

CONCEPT OF ORGANIZATIONAL BEHAVIOR SYSTEM

 Organizations achieve their goals by creating, communicating and operating an organizational behavior system. Organizational behavior system defines organizational structure and culture and explains their impact on employees. The figure 3.1 shows the major elements of a good organizational behavior system:

These systems exist in every organization, but sometimes in varying forms. They have a greater chance of being successful, though, if they have been consciously created, regularly examined and updated to meet new and emerging conditions. The primary advantage of organizational behavior system is to identify the major human and organizational variables that affect organizational outcomes. For some variables managers can only be aware of them and acknowledge their impact whereas for other variables, managers can exert some control over them. The outcomes are measured in terms of quantity and quality of products and services, level of customer service, employee satisfaction and personal growth and development.

 

These systems exist in every organization, but sometimes in varying forms. They have a greater chance of being successful, though, if they have been consciously created, regularly examined and updated to meet new and emerging conditions. The primary advantage of organizational behavior system is to identify the major human and organizational variables that affect organizational outcomes. For some variables managers can only be aware of them and acknowledge their impact whereas for other variables, managers can exert some control over them. The outcomes arc measured in terms of quantity and quality of products and services, level of customer service, employee satisfaction and personal growth and development.

Factors That Influence Organizational Buying Decisions

 If your organization is a B to B organization, you must consider the factors that influence organizational buying decisions, when developing your marketing plans and sales strategies. To know more about these factors, keep reading.

·         Organizational buying is much more complex than consumer buying, and thus deserves to be studied separately. The entwined interpersonal relationships and the multiple communication processes between the organizational members, involved in the buying decision process, are some of the major contributors to this complexity. The list of affecting factors isn’t limited to these; there are many more important determinants. Let’s take a look at what factors influence organizational buyers and their buying behavior. But before that we’d just like to divert your attention to why organizational buying is so different.

·         Unique Features of Organizational Buying

1.   Organizational buying is mostly a multi-person activity, and that’s true for more than 90% of the organizational buying. Decisions for some of the bigger purchases may have participants from a range of departments and from different management levels. Think about the purchase of new software – it may require a collective decision made by end users and people from the IT, finance and administration departments.

2.   When organizations make purchases there is always a meticulous formal process that precedes the actual purchasing.

3.   Organizational buying decisions are never made at the spur of a moment. The buying decision making is stretched and this drag can even be a year long, when it comes to critical purchases.

·         External Environmental Factors

As a major constraint under which a business operates, the external environment impacts nearly every aspect of a business, including its buying decisions. Here’s a list of the external elements that affect organizational buying.

Economic Conditions: The fluctuations in the money markets and the interest rates have a major impact on the buying strategies. The interest rates and organizational buying have an inverse relation; in most cases, an increase in the interest rates may bring about a drop in the buying.

Regulatory Changes: Any changes in the corporate laws, rules and regulations will also influence how, when and what the organizations buy. There are also regulatory changes that may affect only a particular industry and accordingly the related organizations will change their buying patterns to stay in-line with the new regulations.

Political Environment: A change of the government or policy has a direct impact on the economic scenario, and this ultimately translates into a shift in the organizational buying patterns as well.

Social Environment: Societies and cultures are ever evolving, and every business has to change its practices and procedures to meet up with the societal changes. For instance with the rise in the number of animal lovers, pure leather suppliers have seen a slump in their business. The clothing and footwear manufacturers have shifted to artificial leather suppliers. This points out how the social environment can affect the buying patterns of organizations.

Competition: Today’s business is all about beating competition and staying ahead. So when an organization's competitors move on to a newer product or service, or if they get to enjoy a competitive edge because of their suppliers, it's very likely for the organization to change its trends too and thus its buying pattern will change accordingly.

The external environment is the first of the four major factors that influence organizational behavior as shown in this diagram which you can click on to enlarge.

·         Internal Organizational Factors

More than the external factors, it’s the internal organizational factors that influence organizational buying. These internal factors are the:

Organization's Goals and Objectives: The goals and objectives of an organization are major determinants as to how and what the organization will purchase. An organization that wants to capture a bigger chunk of the market by selling cheaper stuff is more likely to look for suppliers who can supply larger quantities at a low price. However, a company whose goal is to deliver quality products may have a very contrasting buying pattern, and they will focus more on the quality issues than on the price advantage.

Organizational Structure: Hierarchical and management structures vary from one organization to another. While some organizations have a well established purchase department, others may assign this job to the HR or Administration department. There are also organizations where the purchase decisions must be taken collectively by all concerned departments. The organizations also have well-defined guidelines as to which purchase decisions can be made by which management level. The internal setup and how authority and responsibility flow through it, play an important role in the organizational purchasing.

Policies and Procedures: How the purchase order is routed, depends on the organization's policies. How does the buying procedure begin, who will participate and who has the ultimate authority to decide on the purchase are all dependent on the policies and procedures of the organization. Some organizations prefer to invite public bids, while others may contact only the few suppliers on their list. There are also budgetary policies that have a say in the purchase decisions, for instance while some organizations may have a flexible policy to make purchases as and when the need arises, others may have to wait till the allocation of the annual or biannual budget.

Technological Levels: Whenever making new purchases, organizations take into consideration their current technology. Some purchases are meant to replace the current technology with a newer version, so their buying decision will be influenced by what level of technology they currently own. Also, organizations try to ensure that all new purchases being made are technologically compatible with their existing technology. So, one way or the other – an organization's existing technology has a major influence on its future purchases.

Manpower Skills: Whether the organization has the skilled manpower to make proper and optimum use of the new purchases being made, especially equipment and machinery, is another issue that influences organizational buying.

·         Interpersonal and Individual Factors

Since organizational buying decisions are never a one person affair, interpersonal relationships among the decision makers plays a vital role in this type of buying.

Participation and Authority: In organizational buying situations, there are always re-defined rules as to who can participate in the purchase decision and who is the ultimate deciding authority.

Interpersonal Conflict: Interpersonal conflicts and conflicts of interest amongst the decision makers often results in delays and changes. Thus, the kind of thinking and the kind of relationship the decision makers share have a major role to play in corporate buying.

Education and Awareness: The educational background of the decision makers and their level of awareness have a major bearing on what type of purchases they will make.

Risk Taking Ability: If the buying committee constitutes high risk takers, they will not be averse to the idea of choosing the latest technology or new suppliers. While on the other hand, decision makers with a low risk taking tolerance are more likely to stick to proven and tested technology or to well known and well established suppliers.

Individual Factors: Individual factors such as age, cultural background and social status, of the members on the buying team, also influence the buying decisions.

·         Situational Factors

In this final section we’ll take a look at some of the situational factors that can influence organizational buyers.

Time Factor: Sometimes, organizations don’t have all the time to follow the detailed buying procedure. If the organization needs a replacement for equipment that broke down suddenly, it may decide to place its order with some existing supplier or a supplier that is at close proximity.

Current Financial Situation: If the organization is crunched for cash, it may decide to place its order with one of its existing supplier who offers extended credit. Also, if the organization cannot spare out enough money for a certain purchase, it may opt for a readily available cheaper version that fits into its budget.

Availability: Some buying decisions can wait while others cannot, thus if the supplier cannot make available the exact product by the desired date, the organizational buyers may shift to a new supplier or to a more readily available alternative.

Special Offers: Special offers being given by a supplier may also be one of the situational factors affecting the buying decision.

As a supplier, now that you know what factors influence organizational buyers, you can work up your business to business sales strategies to manipulate organizational buying activities and thus procure more orders for your supply business.

FUNDAMENTAL CONCEPTS OF ORGANIZATIONAL BEHAVIOR

 Organizational behavior starts with the following six fundamental concepts revolving around the nature of people and organizations:

The nature of people:

• Individual differences
• A whole person
• Motivated behavior
• Value of the person

The nature of organization:

• Social system
• Mutual interest
• Individual Differences: Individuals are different in their physical and mental traits. They are different not only in the physical appearance such as sex, age, height, weight, complexion and so on but also different in their psychological trait such as intelligence, attitude, motivation and perception. This belief that each person is different from all others is typically called the 'Law of Individual Differences'. Individual differences mean that the management has to treat them differently to get the best out of them.
• A Whole Person: Though the organization may feel that they are employing only the individual's skill or intelligence, in fact, they employ the 'whole person'. This means that individual does not have only the skill and intelligence but he has a personal life, needs and desires as well. In other words, his personal life cannot be separated from his work life since people function as total human beings.

When management practices Organizational behavior, it is not only trying to develop a better employee but it also wants to develop a 'better person' in terms of all round growth and development. The benefit will extend beyond the firm into the larger society in which each employee lives.

• Motivated behavior: It is the urge of the individual to satisfy a particular need that motivates him to do an act. The motivation could be positive or negative.

     Motivation is essential for the proper functioning of organizations. The organization can show to its employees how certain actions will increase their need fulfilment.

• Value of the Person: It is more an ethical philosophy. It stresses that people are to be treated with respect and dignity. Every job, however simple, entitles the people who do it to proper respect and recognition of their unique aspirations and abilities.  Since Organizational behavior involves people, ethical philosophy is involved in one way or the other.

The nature of an organization can be understood with the help of tjie description of following two points:

 

• Social System: A system is a group of independent and interrelated elements comprising a unified whole. In context with an organization, the individuals of a society are considered as a system organised by a characteristic pattern of relationships having a distinctive culture and values. It is also called social organization or social structure. It can be further divided into following categories:

• Feudal system: This is a social system, which is developed in Europe in the 8th Century. A political and economic system based on the holding of. land and relation of lord to vassal and characterized by homage, legal and military service of tenants, and forfeiture.
• Patriarchate: This is social system, in which a male is considered to be the family head and title or surname is traced through his chain. In other words, power lies in his hands.
• Matriarchate: This is social system, in which a female is considered to be the family head and title or surname is traced through her chain. In other words, power lies in her hands.
• Meritocracy: This is a social system, in which power vests in the hands of the person with superior intellects.
• Class Structure: This is a social system of different classes with in a society.
• Segregation: This is a social system, which provides separate facilities for minority groups of a society.

• Mutual Interest: Organizational relationships are most likely to be strong if different groups can negotiate strategies. This can be defined as the interests that are common to both the parties and are related to the accomplishment of their respective goals. This space for sharing ideas builds trust. Individuals who have shared mutual interests are likely to make their organization the strongest, because even though the views are different they have a shared concern for similar objectives. It is important for the individuals to think about their issues openly, and to incorporate the perspectives of their colleagues. This helps to build sustainable and harmonious activities that can operate in the mutual direct interests of the organization.

Holistic Organizational Behavior: When the above six concepts of Organizational behavior are considered together, they provide a holistic concept of the subject. Holistic Organizational behavior interprets people-organization relation­ships in terms of the whole person, whole group, whole organization and whole social system.

Thus, the blending of nature of people and organization results in an holistic Organizational behavior.

Organizational behavior LEVELS OF ANALYSIS

 Organizational behavior can be viewed from different perspectives or levels of analysis. At one level, the organization can be viewed as consisting of individuals working on tasks in the pursuit of the Organizational goals. A second level of analysis focuses upon the interaction among Organizational members as they work in' teams, groups and departments. Finally, Organizational behavior can be analyzed from the perspective of the organization as a whole.

• Organization at the Individual Level: Organizational behavior can be studied in the perspective of individual members of the organization. This approach to Organizational behavior draws heavily on the discipline of psychology and explains why individuals behave and react the way they do to different Organizational policies, practices and procedures. Within this perspective, psychologically based theories of learning, motivation, satisfaction and leadership are brought to bear upon the behavior and performance of individual members of an organization. Factors such as attitudes, beliefs, perceptions and personalities are taken into account and their impact upon individuals’ behavior and performance on the job is studied.
• Organization at the Group Level: People rarely work independently in organizations; they have to necessarily work in coordination to meet the Organizational goals. This frequently results in people working together in teams, committees and groups. How do people work together in groups? What factors determine whether group will be cohesive and productive? What types of tasks could be assigned to groups? These are some of the questions that can be asked about the effective functioning of groups in organizations. An important component of Organizational behavior involves the application of knowledge and theories from social psychology to the study of groups in organizations.
• Organization at the Organizational Level: Some Organizational behavior researchers take the organization as a whole as their object of study. This j macro perspective on Organizational behavior draws heavily on theories and concepts from the discipline of 'sociology'. Researchers seek to understand the implications of the relationship between the organization and its environment for the effectiveness of the organization. Emphasis is placed upon understanding how Organizational structure and design influences the effectiveness of an organization. Other factors such as the technology employed by the organization, the size of the organization and the organization's age are also examined and their implications for effective Organizational functioning are explored.

These different perspectives on the study of Organizational behavior are not in conflict with one another. Instead they are complementary. A full and complete understanding of the nature of organizations and the determinants of their effectiveness requires a blending of knowledge derived from each perspective.

IMPORTANCE OF ORGANIZATIONAL BEHAVIOR

 Organizational behavior offers several ideas to management as to how human factor should be properly emphasised to achieve Organizational objectives. Barnard has observed that an organization is a conscious interaction of two or more people. This suggests that since an organization is Ihe interaction of persons, they should be given adequate importance in managing the organization. Organizational behavior provides opportunity to management to analyze human behavior and prescribe means for shaping it to a particular direction.

 Understanding Human Behavior Organizational behavior provides under­standing the human behavior in all directions in which the human beings interact. Thus, Organizational behavior can be understood at the individual level, interpersonal level, group level and inter-group level.

 Organizational behavior helps to analyze 'why' and 'how' an individual behaves in a particular way. Human behavior is a complex phenomenon and is affected by a large number of factors including the psychological, social and cultural implications. Organizational behavior integrates these factors to provide* simplicity in understanding the human behavior.

 

• Interpersonal Level: Human behavior can be understood at the level of interpersonal interaction. Organizational behavior provides • means for understanding the interpersonal relationships in an organization. Analysis of reciprocal relationships, role analysis and transactional analysis are some of the common methods, which provide such understanding.
• Group Level: Though people interpret anything at their individual level, they are often modified by group pressures, which then become a force in shaping human behavior, Thus, individuals should be studied in groups also.. Research in group dynamics has contributed vitally to Organizational behavior and shows how a group behaves in its norms, cohesion, goals, procedures, communication pattern and leadership. These research results are advancing managerial knowledge of understanding group behavior, which is very important for Organizational morale and productivity.
• Inter-group Level: The organization is made up of many groups that develop complex relationships to build their process and substance. Understanding the effect of group relationships is important for managers in today's organization. Inter-group relationship may be in the form of co-operation or competition.

 

The co-operative relationships help the organization in achieving its objectives. Organizational behavior provides means to understand and achieve co-operative group relationships through interaction, rotation of members among groups, avoidance of win-lose situation and focusing on total group objectives.

 

• Controlling and Directing Behavior: After understanding the mechanism of human behavior, managers are required to control and direct the behavior so that it conforms to the standards required for achieving the Organizational objectives. Thus, managers are required to control and direct the behavior at all levels of individual interaction. Therefore, Organizational behavior helps managers in controlling and directing in different areas such as use of power and sanction, leadership, communication and building Organizational climate favorable for better interaction.
• Use of Power and Sanction: The behaviors can be controlled and directed by the use of power and sanction, which are formally defined by the organization. Power is referred to as the capacity of an individual to take certain action and may be utilized in many ways. Organizational behavior explains how various means of power and sanction can ,be utilized so that both Organizational and individual objectives are achieved simultaneously.
• Leadership: Organizational behavior brings new insights and understanding to the practice and theory of leadership. It identifies various leadership styles available to a manager and analyzes which style is more appropriate in a given situation. Thus, managers can adopt styles keeping in view the various dimensions of organizations, individuals and situations.
• Communication: Communication helps people to come in contact with each other. To achieve Organizational objectives, the communication must be effective. The communication process and its work in inter-personal dynamics have been evaluated by Organizational behavior.
• Organizational Climate: Organizational climate refers to the total Organizational situations affecting human behavior. Organizational climate takes a system perspective that affect human behavior. Besides improving the satisfactory working conditions and adequate compensation, Organizational climate includes creation of an atmosphere of effective supervision; the opportunity for the realization of personal goals, congenial relations with others at the work place and a sense of accomplishment.
• Organizational Adaptation: Organizations, as dynamic entities are characterized by pervasive changes. Organizations have to adapt themselves to the environmental changes by making suitable, internal arrangements such as convincing employees who normally have the tendency of resisting any changes.

NEED FOR STUDYING ORGANIZATIONAL BEHAVIOR

 The rules of work are different from the rules of play. The uniqueness of rules and the environment of organizations forces managers to study Organizational behavior in order to learn about normal and abnormal ranges of behavior.

 

More specifically, Organizational behavior serves three purposes:

• What causes behavior?
• Why particular antecedents cause behavior?
• Which antecedents of behavior can be controlled directly and which are beyond control?

 

A more specific and formal course in Organizational behavior helps an individual to develop more refined and workable sets of assumption that is directly relevant to his work interactions. Organizational behavior helps in predicting human behavior in the Organizational setting by drawing a clear distinction between individual behavior and group behavior.

 

Organizational behavior does not provide solutions to all complex and different behavior puzzles of organizations. It is only the intelligent judgment of the manager in dealing with a specific issue that can try to solve the problem. Organizational behavior only assists in making judgments that are derived from tenable assumptions; judgment that takes into account the important variables underlying the situation; judgment that are assigned due recognition to the complexity of individual or group behavior; judgment that explicitly takes into account the managers own goals, motives, hang-ups, blind spots and weaknesses.