Chapter 1: What is Organisational Behaviour?
The Importance of Interpersonal Skills
• A lack of interpersonal skills is the top reason why some employees fail to advance
• Incorporating organisational behaviour principles into the workplace can yield many important
organisational outcomes
o Superior financial performance
o Able to attract and keep high-performing employees
o Higher employees job satisfaction, less stress, and less employee turnover
o Can foster social responsibility awareness
Management and Organisational Behaviour
• Manager: an individual who achieves goals through other people
• Organisation: a consciously coordinated social unit, composed of two or more people, that
functions on a relatively continuous basis to achieve a common goal or set of goals
• The manager’s primary activities
o Planning: A process that includes defining goals, establishing strategy, and developing
plans to coordinate activities.
§ The need for planning increases the most as managers move from lower-level to
mid-level management
o Organising: Determining what tasks are to be done, who is to do them, how the tasks are
to be grouped, who reports to whom, and where decisions are to be made.
o Leading: A function that includes motivating employees, directing others, selecting the
most effective communication channels, and resolving conflicts.
o Controlling: Monitoring activities to ensure they are being accomplished as planned and
correcting any significant deviations.
• Management Roles
o Henry Mintzberg concluded that managers perform 10 different, highly interrelated roles,
or sets of behaviours, and serve a critical function in organisation.
o Interpersonal Roles
§ Figurehead: Symbolic head; required to perform a number of routine duties of a
legal or social nature
§ Leader: Responsible for the motivation and direction of employees
§ Liaison: Maintains a network of outside contacts who provide favours and
information
o Informational Roles
§ Monitor: Receives a wide variety of information; serves as nerve center of internal
and external information of the organisation
§ Disseminator: Transmits information received from outsiders or from other
employees to members of the organisation
§ Spokesperson: Transmits information to outsiders on organisation’s plans, policies,
actions, and results; serves as expert on organisation’s industry
o Decisional Roles
§ Entrepreneur: Searches organisation and its environment for opportunities and
initiates projects to bring about change
§ Disturbance handler: Responsible for corrective action when organisation faces
important, unexpected disturbances
§ Resource allocator: Makes or approves significant organisational decisions
§ Negotiator: Responsible for representing the organisation at major negotiations
• Management Skills
o Technical skills: The ability to apply specialised knowledge or expertise
, o Human skills: The ability to work with, understand, and motivate other people, both
individually and in groups
o Conceptual skills: The mental ability to analyse and diagnose complex situations
• Effective versus Successful Managerial Activities
o “Do managers who move up most quickly in an organisation do the same activities and
with the same emphasis as managers who do the best job?”
o Four managerial activities
§ Traditional management:
Decision making, planning,
and controlling.
§ Communication: Exchanging
routine information and
processing paperwork.
§ HR management:
Motivating, disciplining,
managing conflict, staffing,
and training.
§ Networking: Socializing,
politicking, and interacting
with outsiders.
o Successful (in terms of promotion) managers give almost the opposite emphases to
traditional management, communication, human resource management, and networking
as do effective managers.
o Organisational behaviour (OB): A field of study that investigates the impact individuals,
groups, and structure have on behaviour within organisations, for the purpose of applying
such knowledge toward improving an organisation’s effectiveness.
§ Field of study that studies three determinants of behaviour in organisations:
individuals, groups, and structure
§ OB examines behaviour in the context of job satisfaction, absenteeism,
employment turnover, productivity, human performance, and management.
§ OB includes these core topics:
• Motivation
• Leader behaviour and power
• Interpersonal communication
• Group structure and processes
• Attitude development and perception
• Change processes
• Conflict and negotiation
• Work design
Complementing Intuition with Systematic Study
• Behaviour is not random
o We can identify fundamental consistencies underlying the behaviour of all individuals and
modify them to reflect individual differences
o These fundamental consistencies are important because the allow predictability
• Systematic study: looking at relationships, attempting to attribute causes and effects, and drawing
conclusions based on scientific evidence
• Evidence-based management (EBM): the basing of managerial decisions on the best available
scientific evidence (complements systematic study)
• Intuition: an instinctive feeling not necessarily supported by research
o Systematic study and EBM add to intuition
, o If we make all decisions with intuition or gut instinct, we’re likely working with incomplete
information
§ Relying on intuition is made worse because we tend to overestimate the accuracy
of what we think we know.
• Big Data
o = the extensive use of statistic compilation and analysis
o The challenge for Amazon was to identify which statistics were persistent, giving relatively
constant outcomes over time, and predictive, showing steady causality between certain
inputs and outcomes.
§ The company used these statistics to develop algorithms to forecast which books
customers would like to read next.
§ Amazon then could base its wholesale purchase decisions on the feedback
customers provided, both through these passive collection methods and through
solicited recommendations for upcoming titles.
o The reasons for data analytics:
§ Predicting any event
§ Detecting how much risk is incurred at any time
§ Preventing catastrophes large and small
o Employees expect the next transformation in the way people work will rely more on
technological advancements than on any other factor, such as demographic changes.
o A manager who uses data to define objectives, develop theories of causality, and test those
theories can determine which employee activities are relevant to the objectives
o Increasingly, big data is applied toward making effective decisions and managing human
resources
o Limitations à issue of privacy and being the source of the data
Disciplines that Contribute to the OB Field
• Psychology: The science that seeks to measure,
explain, and sometimes change the behaviour
of human and other animals
• Social psychology: An area of psychology that
blends concepts from psychology and sociology
to focus on the influence of people on one
another.
• Sociology: The study of people in relation to
their social environment or culture.
• Anthropology: The study of societies to learn
about human beings and their activities.
There are a Few Absolutes in OB
• Because we are not alike, our ability to make
simple, accurate, and sweeping generalizations
about ourselves is limited.
• Two people often act very differently in the
same situation, and the same person’s
behaviour changes in different situations.
• Contingency variables: situational factors;
variables that moderate the relationship
between two or more variables
o x leads to y, but only under conditions
specified in z.
, Challenges and Opportunities for OB
• Some dramatic changes in organisations:
o The typical employee is getting older; the workforce is becoming increasingly diverse; and
global competition requires employees to become more flexible and cope with rapid
change.
o As a result of these changes and others, employment options have adapted to include new
opportunities for workers.
• Economic Pressures
o When times are bad, as they were during the recession, managers are on the front lines
with employees who are asked to make do with less, who worry about their futures, and
who sometimes must be fired.
o In good times, understanding how to reward, satisfy, and retain employees is at a
premium.
o In bad times, issues like stress, decision making, and coping come to the forefront.
• Continuing Globalisation
o Organisations are no longer constrained by national borders.
o Increased foreign assignments
§ Increasingly likely to find oneself in a foreign assignment—transferred to
employer’s operating division or subsidiary in another country.
§ Once there, one has to manage a workforce very different in needs, aspirations,
and attitudes from those at home
o Working with people from different cultures
§ To work effectively with people from different cultures, one needs to understand
how their culture and background have shaped them and how to adapt the
management style to fit any differences.
o Overseeing movement of jobs to countries with low-cost labour
§ In a global economy, jobs tend to flow where lower costs give businesses a
comparative advantage, though labourgroups, politicians, and local community
leaders see the exporting of jobs as undermining the job market at home.
§ Managers face the difficult task of balancing the interests of their organisations
with their responsibilities to the communities in which they operate.
o Adapting to differing cultural and regulatory norms
§ To be effective, managers need to know the cultural norms of the workforce in
each country where they do business.
§ Managers of subsidiaries abroad need to be aware of the unique financial and legal
regulations applying to “guest companies” or else risk violating them.
• Violations can have implications for their operations in that country and
also for political relations between countries.
• Workforce Demographics
o The workforce has always adapted to variations in economies, longevity and birth rates,
socioeconomic conditions, and other changes that have widespread impact.
• Workforce Diversity
o = the concept that organisations are becoming more heterogeneous in terms of gender,
age, race, ethnicity, sexual orientation, and other characteristics.
o Diversity presents great opportunities and poses challenging questions for managers and
employees.
• Customer Service
o Management needs to create a customer-responsive culture
§ …in which employees establish rapport with customers, put customers at ease,
show genuine interest, and are sensitive to a customer’s individual situation.
• People Skills
• Networked Organisations
