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Organizational behavior is directly concerned with the understanding, prediction, and control of human
behavior in organizations.” — Fred Luthans

This area of study examines human behavior in a work environment and determines its impact
on job structure, performance, communication, motivation, leadership, etc.

It is the systematic study and application of knowledge about how individuals and groups act
within the organizations where they work. OB draws from other disciplines to create a unique

For example, when we review topics such as personality and motivation, we will again review
studies from the field of psychology. The topic of team processes relies heavily on the field of

When we study power and influence in organizations, we borrow heavily from political sciences.

Even medical science contributes to the field of Organizational Behavior, particularly in the
study of stress and its effects on individuals.

There is increasing agreement as to the components or topics that constitute the subject area of

Although there is still considerable debate as to the relative importance of change, there appears
to be general agreement that OB includes the core topics of motivation, leader behavior, and
power, interpersonal communication, group structure and processes, learning, attitude
development and perception, change processes, conflict, work design, and work stress.

13 Challenges and Opportunities of

Organizational Behavior
Challenges and opportunities of organizational
behavior are massive and rapidly changing for improving productivity and meeting business

Although the problems with organizations and the solutions over the ages have not really
changed, the emphasis and surrounding environmental context certainly have changed.

Although the resulting lean and mean organizations offered some short-run benefits in terms of
lowered costs and improved productivity, if they continued to do business, as usual, they would
not be able to meet current or future challenges.

As a Harvard Business Review article argues, “These are scary times for managers”.

The singular reason given for these frightening times – the increasing danger of disruptive

The nature of work is changing so rapidly that rigid job structures impede the work to be done
now, and that may drastically change the following year, month, or even week.

Main challenges and opportunities of organizational behavior are;

1. Improving Peoples’ Skills.

2. Improving Quality and Productivity.
3. Total Quality Management (TQM).
4. Managing Workforce Diversity.
5. Responding to Globalization.
6. Empowering People.
7. Coping with Temporariness.
8. Stimulating Innovation and Change.
9. Emergence of E-Organization & E-Commerce.
10. Improving Ethical Behavior.
11. Improving Customer Service.
12. Helping Employees Balance Work-Life Conflicts.
13. Flattening World.

Improving People’s Skills

Technological changes, structural changes, environmental changes are accelerated at a faster rate
in the business field.

Unless employees and executives are equipped to possess the required skills to adapt those
changes, the targeted goals cannot be achieved in time. These two different categories of skills –
managerial skills and technical skills.

Some of the managerial skills include listening skills, motivating skills, planning and organizing
skills, leading skills, problem-solving skill, decision-making skills etc.

These skills can be enhanced by organizing a series of training and development programs,
career development programs, induction, and socialization etc.

Improving Quality and Productivity

Quality is the extent to which the customers or users believe the product or service surpasses
their needs and expectations.

For example, a customer who purchases an automobile has a certain expectation, one of which is
that the automobile engine will start when it is turned on.

If the engine fails to start, the customer’s expectations will not have been met and the customer
will perceive the quality of the car as poor. The key dimensions of quality as follows.

 Performance: Primary rating characteristics of a product such as signal coverage, audio quality,
display quality etc.
 Features: Secondary characteristics, added features, such as calculators, and alarm clock
features in hand phone
 Conformance: Meeting specifications or industry standards, workmanship of the degree to
which a product’s design or operating characteristics match pre- established standards
 Reliability: The probability of a product’s falling within t a specified period of time
 Durability: It is a measure of product’s life having both economic and technical dimension
 Services: Resolution of problem and complaints, ease of repair
 Response: Human to human interfaces, such as the courtesy of the dealer « Aesthetics: Sensory
characteristics such exterior finish
 Reputations: Past performance and other intangibles, such as being ranked first.

More and more managers are confronting to meet the challenges to fulfill the specific
requirements of customers.
In order to improve quality and productivity, they are implementing programs like total quality
management and reengineering programs that require extensive employee involvement.

Total Quality Management (TQM)

It is a philosophy of management that is driven by the constant attainment of customer

satisfaction through the continuous improvement of all organizational process.

The components of TQM are;

(a) An intense focus on the customer,

(b) Concern for continual improvement,
(c) Improvement in the quality of everything the organization does,
(d) Accurate measurement and,
(e) Empowerment of employees.

Managing Workforce Diversity

This refers to employing different categories of employees who are heterogeneous in terms of
gender, race, ethnicity, relation, community, physically disadvantaged, elderly people etc.

The primary reason to employ heterogeneous category of employees is to tap the talents and
potentialities, harnessing the innovativeness, obtaining synergetic effect among the divorce

In general, employees wanted to retain their individual and cultural identity, values and life
styles even though they are working in the same organization with common rules and

The major challenge for organizations is to become more accommodating to diverse groups of
people by addressing their different life styles, family needs, and work styles.

Responding to Globalization

Today’s business is mostly market driven; wherever the demands exist irrespective of distance,
locations, climatic Conditions, the business
Operations are expanded to gain their market share and to remain in the top rank etc. Business
operations are no longer restricted to a particular locality or region.

Company’s products or services are spreading across the nations using mass communication, the
internet, faster transportation etc.

More than 95% of Nokia (Now Microsoft) hand phones are being sold outside of their home
country Finland.

Japanese cars are being sold in different parts of the globe. Sri Lankan tea is exported to many
cities around the globe.

Garment products of Bangladesh are exporting in USA and EU countries. Executives of

Multinational Corporation are very mobile and move from one subsidiary to another more

Empowering People
The main issue is delegating more power and responsibility to the lower level cadre of
employees and assigning more freedom to make choices about their schedules, operations,
procedures and the method of solving their work-related problems.

Encouraging the employees to participate in work related decision will sizable enhance their
commitment to work.

Empowerment is defined as putting employees in charge of what they do by eliciting some sort
of ownership in them.

Managers are doing considerably further by allowing employees full control of their work.

Movement implies constant change an increasing number of organizations are using self-
managed teams, where workers operate largely without a boss.

Due to the implementation of empowerment concepts across all the levels, the relationship
between managers and the employees is reshaped.

Managers will act as coaches, advisors, sponsors, facilitators and help their subordinates to do
their task with minimal guidance.

Coping with Temporariness

In recent times, the product life cycles are slimming, the methods of operations are improving,
and fashions are changing very fast. In those days, the managers needed to introduce major
change programs once or twice a decade.
Today, change is an ongoing activity for most managers.

The concept of continuous improvement implies constant change.

In yesteryears, there used to be a long period of stability and occasionally interrupted by a short
period of change, but at present, the change process is an ongoing activity due to competitiveness
in developing new products and services with better features.

Everyone in the organization faces today is one of permanent temporariness. The actual jobs that
workers perform are in a permanent state of flux.

So, workers need to continually update their knowledge and skills to perform new job

Stimulating Innovation and Change

Today’s successful organizations must foster innovation and be proficient in the art of change;
otherwise, they will become candidates for extinction in due course of time and vanished from
their field of business.

Victory will go to those organizations that maintain flexibility, continually improve their quality,
and beat the competition to the market place with a constant stream of innovative products and

For example, Compaq succeeded by creating more powerful personal computers for the same or
less money than EBNM or Apple, and by putting their products to market quicker than the bigger
competitors. is putting a lot of independent bookstores out of business as it proves you can
successfully sell books from an Internet website.

Emergence of E-Organization & E-Commerce

It refers to the business operations involving the electronic mode of transactions. It encompasses
presenting products on websites and filling the order.

The vast majority of articles and media attention given to using the Internet in business are
directed at online shopping.

In this process, the marketing and selling of goods and services are being carried out over the

In e- commerce, the following activities are being taken place quite often – the tremendous
numbers of people who are shopping on the Internet, business houses are setting up websites
where they can sell goods, conducting the following transactions such as getting paid and
fulfilling orders.

It is a dramatic change in the way a company relates to its customers. At present e-commerce is
exploding. Globally, e-commerce spending was increasing at a tremendous rate.

Improving Ethical Behavior

The complexity in business operations is forcing the workforce to face ethical dilemmas, where
they are required to define right and wrong conduct in order to complete their assigned activities.

For example,

 Should the employees of chemical company blow the whistle if they uncover the discharging its
untreated effluents into the river are polluting its water resources?
 Do managers give an inflated performance evaluation to an employee they like, knowing that
such an evaluation could save that employee’s job?

The ground rules governing the constituents of good ethical behavior has not been clearly
defined, Differentiating right things from wrong behavior has become more blurred.

Following unethical practices have become a common practice such as successful executives
who use insider information for personal financial gain, employees in competitor business
participating in massive cover-ups of defective products etc.

Improving Customer Service

OB can contribute to improving an organizational performance by showing drat how employees’
attitude and behavior are associated with customer satisfaction.

In that case, service should be the first production oriented by using technological opportunities
like a computer, the internet etc.

To improve the customer service need to provide sales service and also the after sales service.

Helping Employees Balance Work-Life Conflicts

The typical employee in the 1960s or 1970s showed up at the work place Monday through Friday
and did his or her job 8 or 9-hour chunk of time.

The workplace and hours were clearly specified. That’s no longer true for a large segment of
today’s workforce.

Employees are increasingly complaining that the line between work and non-work time has
become blurred, creating personal conflict and stress.
A number of forces have contributed to blurring the lines between employees’ work life and
personal life.

First, the creation of global organizations means their world never sleeps. At any time and on
any day, for instance, thousands of General Electric employees are working somewhere.

Second, the communication technology allows employees to do their work at home, in their cars,
or on the beach in Cox’s Bazar.

This lets many people in technical and professional jobs do their work anytime and from any

Third, organizations are asking employees to put in longer hours.

Finally, fewer families have only a single breadwinner. Today’s married employee is typically
part of a dual-career couple. This makes it increasingly difficult for married employees to find
the time to fulfill commitments to home, spouse, children, parents, and friends.

Today’s married employee is typically part of a dual-career couple.

This makes it increasingly difficult for married employees to find the time to fulfill commitments
to home, spouse, children, parents, and friends.

Employees are increasingly recognizing that work is squeezing out personal lives and they’re not
happy about it.

For example, recent studies suggest that employees want jobs that give them flexibility in their
work schedules so they can better manage work/life conflicts.

In addition, the next generation of employees is likely to show similar concerns.

A majority of college and university students say that attaining a balance between personal life
and work is a primary career goal. They want a life as well as a job.

Flattening World
Thomas Friedman’s book The World Is Flat: A Brief History of the Twenty-First Century makes
the point that the Internet has “flattened” the world and created an environment in which there is
a more level playing field in terms of access to information.

This access to information has led to an increase in innovation, as knowledge can be shared
instantly across time zones and cultures.

It has also created intense competition, as the speed of business is growing faster and faster all
the time.
In his book Wikinomics, Don Tapscott notes that mass collaboration has changed the way work
gets done, how products are created, and the ability of people to work together without ever

3 Limitations of Organizational Behavior


Actually, the topics which include here are from

a specialized point of view that emphasizes primarily the human side of organizations and the
kinds of benefits that attention to that side can bring.

It describes the research results identifying payoffs in the areas of stress levels, employee
turnover, absenteeism, and a decrease in employee performance.

Nevertheless, we also recognize the limitations of organizational behavior. It will not abolish
conflict and frustration; it can only reduce them.

It is a way to improve, not an absolute answer to problems.

Furthermore, it is but part of the whole cloth of an organization. We can discuss organizational
behavior as a separate subject, but to apply it, we must tie it to the whole reality.

Improved organizational behavior will not solve unemployment. It will not make up for our
deficiencies. It cannot substitute for poor planning, inept organizing, or inadequate controls. It is
only one of the many systems operating within a larger social system.

3 major limitations of OB are;

1. Behavioral Bias.
2. The Law of Diminishing Returns.
3. Unethical Manipulation of People.

Behavioral Bias
Behavioral Bias is a condition which is a reflection of tunnel vision, in which people have
narrow viewpoints as if they were looking through a tunnel.
They see only the tiny view at the other end of the tunnel while missing the broader landscape.

Following the behavioral bias, people who lack system understanding may develop a behavioral
bias, which leads them to develop a narrow viewpoint that emphasizes employee satisfaction
while overlooking the broader system of the organization in relation to all its stakeholders.

It should be clear that the concern for employees can be so greatly overdone that the original
purpose of bringing people together, which is “productivity organizational outputs for society”
could be lost.

An effective organizational behavior should help accomplish organizational purposes. It should

not replace them.

The person who does not consider the needs of people as consumers of organizational output
while fighting for employee needs is not applying the ideas of organizational behavior correctly.

It is a mistake to make an assumption that the objective of organizational behavior is as simple as

to create a satisfied employee-base, as that goal will not automatically turn into new products and
stellar customer service.

It is also a fact that the person who pushes production outputs without regard for employee needs
is also not applying organizational behavior in the right fashion.

The most effective OB dwells, acknowledges and appreciates a social system that consists of
many types of human needs that are served in many ways.

Behavioral bias can be so misapplied in a way that it can be harmful to employees as well as the
organization as a whole. Some individuals, despite having good intentions, so overwhelm others
with the care that the recipients of such care become dependent and unproductive.

They find excuses for failure rather than take responsibility for progress. They do not possess a
high degree of self-respect and self-discipline.

The Law of Diminishing Returns

Overemphasis on an organizational behavior, the practice may produce negative results, as
indicated by the law of diminishing returns. It places an overemphasis on an OB practice may
produce negative results.

It is a limiting factor in organizational behavior in the same way that it is in economics. In

economics, the law of diminishing return refers to a declining amount of extra outputs when
more of a desirable input is added to an economic situation.

After a certain point, the output from each unit of added input tends to become smaller. The
added output eventually may reach zero and even continue to decline when more units of input
are added.
The law of diminishing returns in organizational behavior works in a similar way.

According to the law of diminishing returns, at some point, increases of a desirable practice
produce declining returns, finally resulting in zero returns, and then follows negative returns as
more increases are added. More of a good thing is not necessarily good.

The concept means that for any situation there is an optimum level of a desirable practice, such
as recognition or participation.

When that point is exceeded, there is a decline in returns realized. To put it differently, the fact
that a practice is desirable does not necessarily imply that more of the same practice is more

Unethical Manipulation of People

A significant concern about organizational behavior is that its knowledge and techniques can be
used to manipulate people unethically as well as to help them develop their potential.

People who lack respect for the basic dignity of the human being could learn organizational
behavior ideas and use them for selfish ends.

They could use what they know about motivation or communication in the manipulation of
people without regard for human welfare. People who lack ethical values could use people in
unethical ways.

The philosophy of organizational behavior is supportive and oriented toward human resources. It
takes to improve the human environment and help people grow toward their potential. However,
the knowledge and technique of this subject may be used for negative as well as positive

This possibility is true of knowledge in almost any field, so it is no special limitation of

organizational behavior. Nevertheless, we must be cautious so that what is known about people
is not used to manipulate them.

The possibility of manipulation means that people in power in organizations must maintain high
ethical and moral integrity and not misuse their power.

Without ethical leadership, the new knowledge that is learned about people becomes a dangerous
instrument for possible misuse.
4 Key Forces Affecting Organizational

Organizational Behavior is affected by 4 complex

set of key forces.

These key forces are;

1. People.
2. Structure.
3. Technology.
4. Environment.

There is an interaction of people, structure, and technology and these elements are influenced by
the environment.

People make up the internal social system of the organization. That system consists of
individuals and groups and groups may be large and small, formal and informal. Groups are

Group form, change and disband. Since the organization is a combination of a group of people,
managers must handle the people in the right direction.

This is very challenging to guide people or employees who have different educational
backgrounds, talent, and perspectives. So managers must understand predict and control the

They build up relationship among the employees and motivate themselves.

The structure defines the formal relationship and use of people in the organization. There are
managers and employees, accounts assemblers in order to accomplish a different kind of

They are related in a structural way so that their work can be effectively coordinated. Because
there is no organization can be successful without proper coordination.

Many organizational structures have become flatter. This downsizing and restructuring have
occurred as a result of the pressure to lower costs while remaining competitive.

Other structures have grown more complex as a result of mergers, acquisitions, and new
ventures. Several organizations have experimented with hiring contingent workforces
(temporary, part-time, or contract employees).

Finally, many firms have moved from a traditional structure to a team-based one.

Technology provides the resources with which people work and affects the tasks that they
perform. They cannot accomplish work with their bare hands.

The technology used has a significant influence on working relationships.

The great benefit of technology is that it allows people to do more and better work, but it also
restricts people in various ways’ it has cost as well as benefits.

Examples of the impact of technology include the increasing use of robots and automated control
systems in an assembly line.

The dramatic shift from a manufacturing to a service economy, the impressive advances in
computer hardware and software capabilities, the rapid move toward the widespread use of the
information highway (internet).

And the need to respond to societal demands for improved quality of goods and services at
acceptable prices.

If any person has a lack of technological knowledge he/she cannot work. Moreover, technology
decrease per unit cost and improve the quality of the products and services.

All organizations operate within an internal and an external environment. A single organization
does not exist alone.
An organization is a part of a lager system that contains many other elements, such as
government, the family, and other organizations. Numerous changes in the environment create
demands on organizations.

Citizens expect organizations should be socially responsible; new products and competition for
customers come from around the globe; the direct impact of unions diminishes; the dramatic
pace of change in society quickens.

There is a direct impact of several trade unions of organizations.

So all the elements of environments influence the attitude and provide competition. It must be
considered in the study of human behavior in an organization.

Fundamental Concepts of Organizational


Organization Behavior is based on a few

fundamental concepts which revolve around the nature of people and organizations.

Such basic concepts are not specific to the field of OB. In every field of social science or even
physical science, has a philosophical foundation of basic concepts that guide its development.

There are some certain philosophical concepts in organizational behavior also.

The fundamental concepts of organizational behavior are;

 Individual Differences.
 Perception.
 A whole Person.
 Motivated Behavior.
 The desire for Involvement.
 The value of the Person.
 Human Dignity.
 Organizations are Social System.
 Mutuality of Interest.
 Holistic Concept.

Individual Differences
Every individual in the world is different from others. Science supports this idea. Each person is
different from all others, probably in a million ways, just as each’s DNA profile is different.

The idea of the individual difference comes originally from psychology. From the day of birth,
each person is unique, and personal experiences after birth tend to make people even more

Peoples’ perceptions are also different when they see an object. Two people can differently
present the same object. And this is occurring for their experiences.

A person always organizes and interprets what he sees according to his lifetime of experience
and accumulated value.

Employees also see work differently for differ in their personalities, needs, demographics
factors, past experiences and social surrounding.

A whole Person
An employee’s personal life is not detached from his working life.

As an example, A women who attend the office at 9:00 AM is always anxious for her children’s
school time (if her kids can participate in the school or not).

As a result, its impact falls on her concentration that means her working life.

For this reason, we cannot separate it. So manager should treat an employee as a whole person.

Motivated Behavior
An employee has so many needs inside him. So, they want to fulfill those needs. That’s why;
they had to perform well in the organization.

Some motivations are necessary to enrich the quality of work.

A path toward increased need fulfillment is the better way of enhances the quality of work.
Desire for Involvement
Every employee is actively seeking opportunities to work to involve in decision-making
problems. They hunger for the chance to share what they know and to learn from the experience.

So, the organization should provide them a chance to express their opinions, ideas, and
suggestions for decision-making problem.

A meaningful involvement can bring mutual benefit for both parties.

Value of the Person

An employee wants to be treated separately from another factor of production, (land, capital,

They refuse to accept the old idea that they are just treated as economic tools because they are
the best creation of Almighty Allah.

For this, reason, they want to be treated with carrying respect, dignity and other things from their
employers and society.

Human Dignity
This concept is very philosophical. Every person needs to be treated with dignity and respect,
whether it’s the CEO of the company or labor.

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 human dignity because people are of

It recognizes human dignity because people are of a higher order; they want to be treated with
respect and dignity and should be treated this way.

Organizations are Social System

From sociology, we learn that organizations are social systems; consequently, activities therein
are governed by social laws as well as psychological laws. Just as people have psychological
needs, they also have social roles and status.

Their behavior is influenced by their group as well as by their drives. In fact, two types of social
systems exist side by side in organizations. One is a formal system, and the other is the informal
social system.

Mutuality of Interest
Mutual interest is represented by the statement that organizations need people and people also
need organizations. Organizations have a human purpose. They are formed and maintained by
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 achieve organizational objectives.

If mutuality is lacking, it makes no sense to try to assemble a group and develop cooperation,
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.

Holistic Concept
When the fundamental concepts of Op are placed together, a holistic concept emerges.

This concept interprets people-organization relationships regarding the whole person, the whole
group, whole organization and whole social system.

It takes an across the board view of people in organizations to understand as many as possible of
the factors that influence their behavior.

Issues are analyzed in terms of the total situation affecting them rather than in terms of an
isolated event or problems.

The concept of OB is based on two key elements namely −

 Nature of people
 Nature of the organization

Nature of People
In simple words, nature of people is the basic qualities of a person, or the character that
personifies an individual they can be similar or unique. Talking at the organizational level, some
major factors affecting the nature of people have been highlighted. They are −

 Individual Difference − It is the managerial approach towards each employee

individually, that is one-on-one approach and not the statistical approach, that is,
avoidance of single rule. Example− Manager should not be biased towards any particular
employee rather should treat them equally and try not to judge anyone on any other factor
apart from their work.
 Perception − It is a unique ability to observe, listen and conclude something. It is
believing in our senses. In short, the way we interpret things and have our point of view
is our perception. Example − Aman thinks late night parties spoil youth while Anamika
thinks late night parties are a way of making new friends. Here we see both Aman and
Anamika have different perception about the same thing.
 A whole person − as we all know that a person’s skill or brain cannot be employed we
have to employee a whole person. Skill comes from background and knowledge. Our
personal life cannot be totally separated from our work life, just like emotional conditions
are not separable from physical conditions. So, people function is the functioning of a
total human being not a specific feature of human being.
 Motivated behavior − It is the behavior implanted or caused by some motivation from
some person, group or even a situation. In an organization, we can see two different types
of motivated employees −
o Positive motivation − Encouraging others to change their behavior or say
complete a task by luring them with promotions or any other profits. Example −
“If you complete this, you will gain this.”
o Negative motivation − Forcing or warning others to change their behavior else
there can be serious consequences. Example − “If you don’t complete this, you
will be deprived from the office.”
 Value of person − Employees want to be valued and appreciated for their skills and
abilities followed by opportunities which help them develop themselves.

Nature of Organization
Nature of organization states the motive of the firm. It is the opportunities it provides in the
global market. It also defines the employees’ standard; in short, it defines the character of the
company by acting as a mirror reflection of the company. We can understand the nature of any
firm with its social system, the mutual interest it shares and the work ethics.

Let us take a quick look at all these factors −

 Social system − every organization socializes with other firms, their customers, or simply
the outer world, and all of its employees - their own social roles and status. Their
behavior is mainly influenced by their group as well as individual drives. Social system
are of two types namely −
o Formal − Groups formed by people working together in a firm or people that
belong to the same club is considered as formal social system. Example − A
success party after getting a project.
o Informal − A group of friends, people socializing with others freely, enjoying,
partying or chilling. Example − Birthday party.
 Mutual interest − every organization needs people and people need organizations to
survive and prosper. Basically it’s a mutual understanding between the organization and
the employees that helps both reach their respective objectives. Example − we deposit
our money in the bank, in return the bank gives us loan, interest, etc.
 Ethics − they are the moral principles of an individual, group, and organization. In order
to attract and keep valuable employees, ethical treatment is necessary and some moral
standards need to be set. In fact, companies are now establishing code of ethics training
reward for notable ethical behavior.

Organizational behavior reflects the behavior of the people and management all together, it is
considered as field study not just a discipline. A discipline is an accepted science that is based
upon theoretical foundation, whereas OB is an inter-disciplinary approach where knowledge
from different disciplines like psychology, sociology, anthropology, etc. are included. It is used
to solve organizational problems, especially those related to human beings.

There are four different types of models in OB. We will throw some light on each of these four

Autocratic Model
The root level of this model is power with a managerial orientation of authority. The employees
in this model are oriented towards obedience and discipline. They are dependent on their boss.
The employee requirement that is met is subsistence. The performance result is less.

The major drawbacks of this model are people are easily frustrated, insecurity, dependency on
the superiors, minimum performance because of minimum wage.

Custodial Model
The root level of this model is economic resources with a managerial orientation of money. The
employees in this model are oriented towards security and benefits provided to them. They are
dependent on the organization. The employee requirement that is met is security.

This model is adapted by firms having high resources as the name suggest. It is dependent on
economic resources. This approach directs to depend on firm rather than on manager or boss.
They give passive cooperation as they are satisfied but not strongly encouraged.

Supportive Model
The root level of this model is leadership with a managerial orientation of support. The
employees in this model are oriented towards their job performance and participation. The
employee requirement that is met is status and recognition. The performance result is awakened

This model is dependent on leadership strive. It gives a climate to help employees grow and
accomplish the job in the interest of the organization. Management job is to assist the employee’s
job performance. Employees feel a sense of participation.
Collegial Model
The root level of this model is partnership with a managerial orientation of teamwork. The
employees in this model are oriented towards responsible behavior and self-discipline. The
employee requirement that is met is self-actualization. The performance result is moderate zeal.

This is an extension of supportive model. The team work approach is adapted for this model.
Self-discipline is maintained. Workers feel an obligation to uphold quality standard for the better
image of the company. A sense of “accept” and “respect” is seen

There are only two ways to influence human behavior: you can manipulate it or you can inspire
it” – Simon Sine, Author, Motivational Speaker and Marketing Consultant

Understanding why people behave the way they do and studying the complex nature of human
being in an organization is important to better manage and increase the value of the human
capital in an organization. Organizational Behavior helps us understand this by studying the
cause and effect of human behavior within an organization.

Some of the reasons why Organizational Behavior is an integral part of most management
programmers is as follows:

1. Understanding the relationship between an organization and its employees: The

study of Organizational Behavior helps in the better understanding of the relationship
between an organization and its employees thereby helping in the development of better
Human Resource strategies in creating a better work environment, employee loyalty and
increasing the overall value of the human capital for the organization.
2. Motivating employees: Studying Organizational Behavior help managers to better
understand their employees and motivate them, applying different motivational tools as
per individual requirements resulting in the better performance of the organization as a
3. Improving industrial/ labor relations: Organizational Behavior help in understanding
the cause of a problem, predict its future course and control its consequences. As a result,
managers are able to maintain better relations with their employees by nipping any
problem in the bud.
4. Effective utilization of Human Resource: Knowledge of Organizational Behavior help
managers to effectively and efficiently manage their employees, inspiring and motivating
them to higher efficiency and productivity through a better understanding and analysis of
human behavior.
5. Predicting human behavior: This is probably the most important reason for studying
Organizational Behavior in management. Knowledge of Organizational Behavior
prepares students to become better managers by becoming a student of human behavior
from a management perspective and thereby contributing to organizational effectiveness
and profitability.
Meaning and Definition:

Before understanding the meaning of organizational climate, we must first understand the
concept of climate.

“Climate in natural sense is referred to as the average course or condition of the weather at a
place over a period of years as exhibited by temperature, wind, velocity and precipitation.”


However, it is quite difficult to define organizational climate incorporating the characteristics of

natural climate. This is so because the most frustrating feature of an attempt to deal with
situational variables in a model of management performance is the enormous complexity of the
management itself. People have defined organizational climate on the basis of its potential
properties. A few important definitions are as given below.

According to Forehand and Gilmer, “Climate consists of a set of characteristics that describe an
organization, distinguish it from other organizations are relatively enduring over time and
influence the behavior of people in it.”

According to Campbell, “Organizational climate can be defined as a set of attributes specific to a

particular organization that may be induced from the way that organization deals with its
members and its environment. For the individual members within the organization, climate takes
the form of a set of attitudes and experiences which describe the organization in terms of both
static characteristics (such as degree of autonomy) and behavior outcome and outcome- outcome

Thus, organizational climate is a relatively enduring quality of the internal environment that is
experienced by its members, influences their behavior and can be described in terms of the value
of a particular set of characteristics of the organization. It may be possible to have as many
climates as there are people in the organization when considered collectively, the actions of the
individuals become more meaningful for viewing the total impact upon the climate and
determining the stability of the work environment. The climate should be viewed from a total
system perspective. While there may be differences in climates within departments these will be
integrated to a certain extent to denote overall organizational climate.

Characteristics of Organizational Climate:

The nature of organizational climate will be clear from the following characteristics:

1. General Perception:

Organizational climate is a general expression of what the organization is. It is the summary
perception which people have about the organization. It conveys the impressions people have of
the organizational internal environment within which they work.

2. Abstract and Intangible Concept:

Organizational climate is a qualitative concept. It is very difficult to explain the components of

organizational climate in quantitative or measurable units.

3. Unique and District Identity:

Organizational climate gives a distinct identity to the organization. It explains how one
organization is different from other organizations.

4. Enduring Quality:


Organizational climate built up over a period of time. It represents a relatively enduring quality
of the internal environment that is experienced by the organizational members.

5. Multi-Dimensional Concept:

Organizational climate is a multi- dimensional concept. The various dimensions of the

organizational climate are individual autonomy, authority structure, leadership style, pattern of
communication, degree of conflicts and cooperation etc.

Factors Influencing Organizational Climate:

Organizational climate is a manifestation of the attitudes of organizational members towards the

organization. Researchers have used the data relating to individual perception of organizational
properties in identifying organizational climate. Even in this context, there is a great amount of

Lit win and Stringer have included six factors which affect organizational climate. These
factors are:


(In) Organizational Structure: Perceptions of the extent of organizational constraints, rules,

regulations, red tape,

(ii) Individual Responsibility: Feeling of autonomy of being one’s own boss,

(iii) Rewards: Feelings related to being confident of adequate and appropriate rewards,
(iv) Risk and risk taking: Perceptions of the degree of challenge and risk in the work situation,

(v) Warmth and Support: Feeling of general good fellowship and helpfulness prevailing in the
work setting.

(vi) Tolerance and Conflict: Degree of confidence that the climate can tolerate, differing

Importance of Organizational Behavior

Organizational Behavior provides direction to Organization. OB helps to

understand and predict
Organizational life. It also helps to understand nature and activities of people in
organization. It helps to
Motivate employees and to maintain interrelations in organization.
The importance of the organizational behavior is as under:
1. Skill Improvement: Helps to improve skills (ability to employees and use of
knowledge to become more
Efficient). Improves managers as well as employees work skill.
2. Understanding Consumer Buying Behavior: It also an important part to
improve marketing process
By understanding consumer (buying) behavior.
3. Employee Motivation: OB helps to understand basis of Motivation and
different ways to motivate
Employees properly.
4. Nature of Employees: Understanding of personnel/employee nature is
important to manage them
Properly. With the help of OB, we can understand whether employees/people are
Introvert, Extrovert,
Motivated, Dominating etc.
5. Anticipating Organizational events: The scientific study of behavior helps to
understand and predict
Organizational events. For e.g. Annual Business Planning, Demand Management,
Product line management, Production Planning, Resources Scheduling, Logistics
6. Efficiency & Effectiveness: Helps to increase efficiency and effectiveness of
7. Better Environment of Organisation: It helps to create healthy, ethical and
smooth environment in
8. Optimum/Better Utilization of Resources: Study of OB helps to understand
employees and their work
Style and skill better way. By understanding this, management can train and
motivate employees for
Optimum utilization of resources.
9. Goodwill of organization: OB helps to improve Goodwill of organization.
This is all about importance of organizational behavior and its impact on overall
business activities.
Ultimately OB helps to increase efficiency and productivity i.e. profit of