Project Management

Managing People and Organizations Prepared by Dr. Ayman El-Moesrawy

Lecture 1

MGM603

Organizational Behavior

Course Outlines

Part 1: introduction to

organizational behavior

An overview of organizational behavior

The changing environment of organizations

Part 2: individual

behaviors and processes in

organizations

Individual characteristics

Individual values, perceptions, and reactions

Motivating behavior

Motivating behavior with work and rewards

Part 3. Social and group

processes in organizations

Groups and teams

Decision making and problem solving

Communication

Managing conflict and negotiating

Part 4. Leadership and influence

processes in organizations

Traditional leadership approaches

Contemporary views of leadership in organizations

Power, influence, and politics

Part 5. Organizational processes

and characteristics

Organizational structure and design

Organizational culture

Course Outline

REFERENCES

An Overview of Organizational Behavior

Outcomes of the chapter:

❑ Define the organizational behavior and describe how it impacts both personal; and organizational

success.

❑ Identify the basic management functions and essential skills that compromise the management

process and relate them to organizational behavior.

❑ Describe the strategic context of organizational behavior and discuss the relationships between

strategy and organizational behavior.

❑ Identify and describe contextual perspectives on organizational behavior.

❑ Describe the role of organizational behavior in management for effectiveness and discuss the role

of research in organizational behavior.

CHAPTER 1

Managing Growth at Google

- Google search engine was created at 1998 by Larry Page and Sergey Brin with the goal

of making world’s information available to every one.

- The founders of google realized that google explosive growth needed to be closely

monitored and that its employees needed to continue feeling like an important part of the

team.

- The founders wanted to make google an engaging place to work and set out to design the

organization and its culture in away that would appeal to its current and future

employees.

Imagine that: the founders of google asked you for advice during the early days of

google what advice would you give them about the roles of its people in its future success and

how to setup the company to maximize the employees innovations and loyalty.

What's organizational behavior :

Organizational behavior (OB) is a study of:

- Human behavior in the organizational settings.

- The interface between the human behavior and

organization.

- Organization itself.

ORGANIZATIONAL BEHAVIORCHAPTER 1

Organizational behavior (OB): is the study of how people behave in organizational settings. Its

principles are applied with the goal of making organizations and therefore the people in them work more

effectively together.

Organizational behavior (OB): research can specialize in individual behavior within the organization,

how groups work together, how the organization itself behaves, and the way all of those are interconnected

and impact one another.

The Nature of Organizational Behavior :

Figure 1.1

The field of organizational behavior attempt to

understand human behavior in organizational settings,

the organization itself, and the individual organizations

interface. As illustrated here this area is highly

interrelated. Thus although its possible to focus on only

one of these area at a time, complete understanding of

organizational behavior requires acknowledge of three

area.

ORGANIZATIONAL BEHAVIORCHAPTER 1

The Nature of Organizational Behavior :

- Each individual brings the organizations a unique set of personal characteristics, unique

personal background and set of experience from other organizations.

- But the individual don't work in isolation. They come in contact with other people and

with organizations in a variety of ways.

- An organization of course exist before a particular person joins it and continues to exist

after he or she leave. The organizational it self represents a crucial third perspective

from which to view organizational behavior.

ORGANIZATIONAL BEHAVIORCHAPTER 1

How organizational behavior impacts personal success?

You might think I don’t know any organizational behavior why this topic important?

- Understanding why people behave in their organization and why they do what they do.

- OB gives any one the knowledge and the tools they need to be effective at any

organizational level.

- The study of OB can greatly clarify the factors that affect how manager manage.

- Hence the field attempts to describe the complex human context of organization, and

define opportunities, problems, challenges, and issues associated with that realm.

ORGANIZATIONAL BEHAVIORCHAPTER 1

Home-Depot Case Study:

Summery of turnover in Home-Depot:

- The individuals don't work in isolations they come in contact with other people and with the

organization in different ways (they have different needs and cultures).

- Points of contact include coworkers, managers, formal polices and procedures in organization.

- In additions the individual overtime change as a result of a function the individual experience and

maturity as well as through work experiences and organizational developments.

- So the organization is affected by the absence and eventual absence of individuals.

- Clearly then managers must also consider how the individual and organization interact.

ORGANIZATIONAL BEHAVIORCHAPTER 1

Summery of the case study

The consultant who studying turnover at the Home-Depot came over to:

- The necessity of the orientation procedure and the initial training of the newcomer.

- Needs to study the culture and structure of Home-Depot.

- Needs to understand factors such as firms’ performance and reward systems.

- decision making techniques and communication pattern.

Conclusion of this case: the field of organizational behavior interacts and explains many of the

complicated factors to make the managers understand some of the dynamics of how individuals

are introduced and interact with the bro ader organizational context. And also provide unique and

important opportunities to enhance personal and organizational effectiveness.

ORGANIZATIONAL BEHAVIORCHAPTER 1

Global Mindset

- A global mindset reflects your ability to influence people, groups, and organizations from

different backgrounds and culture.

- Multinational companies’ ability to create globally integrated systems depends on their:

1- Ability to get employees, managers, and executives able to understand and adapt to

the realities of globalization economies.

2- Ability to integrate talent from many parts of the world faster and more effectively

than other competitors.

ORGANIZATIONAL BEHAVIORCHAPTER 1

Case study (HSBC):

- Because global mindset is learned, experiences can

influence it in a positive and a negative manner.

- Every year the financial services of HSBC send

promising new hires and managers in long-term

business experiences abroad to build a cohort

international officers, the locations include western

countries as well as Saudi Arabia , Indonesia, and

Mexico.

- To make career at HSBC manager must perform this

mission

- This enables HSBC to continuous supply of globally

minded managers capable of cross-broader learning.

ORGANIZATIONAL BEHAVIORCHAPTER 1

Understand Yourself

ORGANIZATIONAL BEHAVIORCHAPTER 1

How organizational behavior impacts organizational success?

- By applying OB knowledge in the organization about individuals and groups the effect on the

organization structures on workers behavior with the conditions can be created that make the

organization more effective, and perform well.

- By listening to the employees, recognizing their work, building trust, and behave ethically,

managers have boosted such performance measures as operating earning and return on

investments.

- In addition to financial performance and job satisfaction, OB influences the rate of turnover

and absenteeism which can be worth of millions of dollars to organizations.

ORGANIZATIONAL BEHAVIORCHAPTER 1

Summery of Why study OB?

▪ Studying OB can help you in :

✓ Become a better employee

✓ Become a better manager

✓ Understand why people behave and why the do what they do.

✓ Help you focus on developing a global mindset.

▪ Organizations that successfully implement OB principles have

✓ Motivated, engaged employees whose goals align with business strategy.

✓ Strong leadership and direction.

✓ Better bottom lines

ORGANIZATIONAL BEHAVIORCHAPTER 1

The managerial Context of OB?

The Managerial Contexts of OB can be viewed from perspective of:

1- Basic Management Functions,

(Planning, Organizing , Leading and Controlling)

2- Critical Management Skills,

( Technical , Interpersonal , Conceptual, and Diagnostic)

3- Overall Human Resources Management.

ORGANIZATIONAL BEHAVIORCHAPTER 1

1- Functions of Management:

Planning Determining an organization’s desired future position and best means of getting

there.

Organizing Designing jobs, grouping jobs into units, and establishing patterns of authority

between jobs and units.

Leading Getting the organizations’ members to work together toward the organizations’

goals.

Controlling Monitoring and correcting the actions of the organization and its members to keep

them directed toward their goal.

ORGANIZATIONAL BEHAVIORCHAPTER 1

An Overview of Organizational BehaviorCHAPTER 1

1- Functions of Management:

Planning:

• Deciding in advance :

✓ What to do

✓ How to do

✓ When to do

✓ Who is going to do it

• Bridges a gap between where we are today and where we want to reach.

• Sets the goals of the organization.

1- Functions of Management:

Planning

• It is the basic function of management.

• deciding in advance the most appropriate course of actions for achievement of pre-determined

goals.

• Thus, planning is a systematic thinking about ways & means for accomplishment of pre-

determined goals.

• Planning is necessary to ensure proper utilization of human & non-human resources. It is an

intellectual activity and it also helps in avoiding confusion, and uncertainties.

ORGANIZATIONAL BEHAVIORCHAPTER 1

1- Functions of Management:

Organizing:

• It is the process of bringing together physical, financial and human resources and developing

productive relationship amongst them for achievement of organizations’ goals.

• According to Henry Fayol, “To organize a business is to provide it with everything useful or its

functioning i.e. raw material, tools, capital and personnel’s”. To organize a business involves

determining & providing human and non-human resources to the organizational structure.

ORGANIZATIONAL BEHAVIORCHAPTER 1

1- Functions of Management:

Organizing:

• Establishing the framework of working:

- How many units or sub-units or departments are needed.

- How many posts or designations are needed in each department.

- How to distribute authority and responsibility among employees

Once these decisions are taken, organizational structure gets set up.

• Organizing as a process involves:

✓ Identification of activities.

✓ Classification of grouping of activities.

✓ Assignment of duties.

✓ Delegation of authority and creation of responsibility.

✓ Coordinating authority and responsibility relationships.

ORGANIZATIONAL BEHAVIORCHAPTER 1

1- Functions of Management:

Leading:

• Giving direction or instruction to employees to get the job done.

• Leadership qualities are required.

• Motivating employees by providing different types of incentives.

• Communicating with them at regular intervals.

• It is that part of managerial function which moves the organizational methods to work efficiently

for achievement of organizational purposes. It is considered life-spark of the enterprise which

sets it in motion of the action of people because planning, organizing and staffing are the more

preparations for doing the work.

• Leading is that inert-personnel aspect of management which deals directly with influencing,

guiding, supervising, motivating subordinate for the achievement of organizational goals.

ORGANIZATIONAL BEHAVIORCHAPTER 1

1- Functions of Management:

Leading:

• Supervision- implies overseeing the work of subordinates by their superiors. It is the act of

watching & directing work & workers.

• Motivation- means inspiring, stimulating or encouraging the sub-ordinates with zeal to work.

Positive, negative, incentives may be used for this purpose.

• Leadership- may be defined as a process by which manager guides and influences the work of

subordinates in desired direction.

• Communications- is the process of information, experience, opinion etc. from one person to

another. It is a bridge of understanding

ORGANIZATIONAL BEHAVIORCHAPTER 1

1- Functions of Management:

Controlling:

• Matching actual performance with the planed goal.

• If problem, tries to find out the reasons of deviation.

• Suggesting corrective measures come on the path of the plan.

• It implies measurement of accomplishment against the standards and correction of deviation if

any to ensure achievement of organizational goals.

• The purpose of controlling is to ensure that everything occurs in conformities with the standards.

• An efficient system of control helps to predict deviations before they actually occur.

• According to Theo Haimann, “Controlling is the process of checking whether or not proper

progress is being made towards the objectives and goals and acting if necessary, to correct any

deviation”.

ORGANIZATIONAL BEHAVIORCHAPTER 1

1- Functions of Management:

Controlling:

• Therefore controlling has following steps:

✓ Establishment of standard performance.

✓ Measurement of actual performance.

✓ Comparison of actual performance with the standards and finding out deviation if any.

✓ Corrective action.

ORGANIZATIONAL BEHAVIORCHAPTER 1

1- Functions of Management:

Figure 1.2

Managers engage in four basic functions planning,

organizing, leading and controlling. These functions are

applied to human , financial, physical, and information

resources with ultimate purpose of efficiently and

effectively attaining organizational goals.

ORGANIZATIONAL BEHAVIORCHAPTER 1

2- Critical Managerial Skills:

Technical skills

Skills necessary to accomplish specific tasks within the organizations.

Interpersonal skills

Ability to effectively communicate with, understand, and motivate individuals and groups.

Conceptual skills

Ability to think in abstract

Diagnostic skills

Ability to understand cause-and-effect relationships and to recognize the optimal solutions to the problem.

ORGANIZATIONAL BEHAVIORCHAPTER 1

2- Critical Managerial Skills:

Technical skills:

Technical skills involve skills that give the managers the ability and the knowledge to use a variety

of techniques to achieve their objectives. These skills not only involve operating machines and

software, production tools, and pieces of equipment but also the skills needed to boost sales,

design different types of products and services, and market the services and the products.

Example:

- The chairman and CEO of Xerox cooperation, Ursula Burns, started her career as mechanical

engineer

- Manager with strong technical skills include Rex Tillerson (CEO of EXXON Mobil ) who

stared his career as production engineer.

ORGANIZATIONAL BEHAVIORCHAPTER 1

2- Critical Managerial Skills:

Interpersonal skills:

The human or the interpersonal skills are the skills that present the managers’ ability to interact,

work or relate effectively with people. These skills enable the managers to make use of human

potential in the company and motivate the employees for better results.

Examples :

- Howard Schultz is the CEO of Starbucks who is able to relate to employee by demonstrating

respect and dignity. Schultz remains committed to providing health care benefits despite rising

health care costs and has created educational opportunities for Starbucks partner. These qualities

inspired others through out the organizations and make them work hard to help Starbucks reach its

goals.

ORGANIZATIONAL BEHAVIORCHAPTER 1

2- Critical Managerial Skills:

Conceptual skills:

These involve the skills of the managers present in terms of the knowledge and ability for abstract

thinking and formulating ideas. The manager is able to see an entire concept, analyze and diagnose

a problem, and find creative solutions. This helps the manager to effectively predict hurdles their

department or the business as a whole may face (big picture).

Examples :

- After Steve Woznick , and Steve Jobs built their own small computer for their design in garage,

Woznick essentially saw new toy they could be tinker with. That should start a company to sell

computer, the result ? Apple. In subsequent years, Jobs also used his conceptual skills to identify

to potential in digital media technology leading to the introduction of such product like iPad.

ORGANIZATIONAL BEHAVIORCHAPTER 1

2- Critical Managerial Skills:

Diagnostic skills:

Diagnostic skills go almost hand-in-hand with the conceptual skills listed above. While conceptual

skills are used to better understand a problem, diagnostic skills are used to find a way to effectively

solve the problem. In this way, diagnostic skills and conceptual skills are two sides of the same

managerial coin. Of course, diagnostic skills aren't only used to help find solutions to difficult

problems. Any issue that crops up at a workplace can be easier to deal with when a manager has

strong diagnostic skills. The key is to develop the ability to use these skills quickly and without the

need for long deliberation.

Examples :

- When Ed Whitacre was CEO of SBC he recognized that although SBC performs well in

communication market it lacked of strong brand name in business environment. SBC would buy

AT&T ( for 16 billion) after completing acquisition the company changed its name from SBC to

AT&T .

ORGANIZATIONAL BEHAVIORCHAPTER 1

3- Human Resources Management (HRM)

▪ Human Resources Management (HRM):

- The set of organizational activities directed at attracting, developing, and maintaining an

active workforce.

▪ Questions OB helps HR managers to answer

1- which applicants should be hired ?

2- which rewards will be motivating than others?

ORGANIZATIONAL BEHAVIORCHAPTER 1

3- Human Resources Management (HRM)

Human resource management can be defined as – “

employing people, developing & utilizing their

resources, maintaining and compensating their

services in tune with the job and organizational

requirements”

ORGANIZATIONAL BEHAVIORCHAPTER 1

3- Human Resources Management (HRM)

ORGANIZATIONAL BEHAVIORCHAPTER 1

3- Human Resources Management (HRM)

Nature of HRM:

▪ Inherent part of management- selecting people, training, motivating, appraising their performance

for improving their quality.

▪ Pervasive function-present in all levels of mg in an organization

▪ Action oriented-solve problem through rational(balanced) policies rather than record keeping

▪ People oriented-HRM is all about people at work. Assign jobs, produce results, reward, motivate

them towards improvements in productivity

▪ Future oriented- Effective HRM helps organization meet its goals

▪ Development oriented-HRM develops full potential of employees through reward, training, job

rotation.

ORGANIZATIONAL BEHAVIORCHAPTER 1

3- Human Resources Management (HRM)

Nature of HRM:

▪ Integrating mechanism: HRM maintains cordial relationship between people working at various

levels in organization.

▪ Comprehensive function: Workforce signifies people working at all levels, HRM differs with

form & shape but the basic objective of effective utilization of human resource remains the same.

▪ Continuous function: HRM is not a one shot deal it requires constant awareness and alertness of

human relations in every day operation.

▪ Based on human relation: Every person has different need, perception and expectations. The

manger should give due attention to these factors.

ORGANIZATIONAL BEHAVIORCHAPTER 1

3- Human Resources Management (HRM)

Example:

▪ Recent years announcement by Walmart. In early of 2015 the firm began giving pay raises to

500,000$ workers. At the same time the company indicated that it was changing the method it

to hire and train new employees. The managers expect that the higher wags and the new HR

practices will enable the company to better hire new employees and retain the existing one.

▪ Hence this significant and expense decision by Walmart had its origin in theories and

researches from OB and will be implemented by HRM

ORGANIZATIONAL BEHAVIORCHAPTER 1

The strategic context of organizational behavior:

▪ Successful business strategy are grounded in creating and maintaining sustainable competitive

advantages, which exists any time an organization has an edge over rivals in attracting

customers and defending it self against competitions.

▪ The effective management of people is the key to the creation of a competitive advantage and

business strategy execution.

▪ As former of General electric CEO “ We now know where limitless of productivity comes

from. It comes from challenged, empowered, rewarded team of people” which is related to the

relation between management and OB.

ORGANIZATIONAL BEHAVIORCHAPTER 1

The strategic context of organizational behavior:

Sources of competitive advantages:

Competitive advantages is any thing that gives a firm an edge over rivals in attracting customers

and defending it self against competitions.

▪ Sources of competitive advantages as following:

ORGANIZATIONAL BEHAVIORCHAPTER 1

The strategic context of organizational behavior:

Types of Business strategies:

There are three primary business strategies are :

1- Cost Leadership: Striving to be the lowest cost producer

for a particular level of quality. Which makes completive

advantage of operational excellence ( Maximizing the

efficiency of manufacturing or developing the product to

minimize cost”

2- Differentiations: developing a product or services that

have unique characteristics than the other competitors.

3- Specifications: focusing on the production of a very

limited range of products or services in order to gain

maximum productivity, expertise and leadership in the

targeted field. Companies that specialize say they get a better

return on investment.

ORGANIZATIONAL BEHAVIORCHAPTER 1

Contextual Perspective of Organizational Behaviors

A history :

▪ First formal study of OB (1890’s), following the

industrial relations movement by Adam Smith.

▪ 1890’s Fredrik Taylor developed OB on the belief

that productivity is maximized when organizations

are rationalized with precise sets of instructions

based on time-and-motions studies. Their idea

known as scientific management

ORGANIZATIONAL BEHAVIORCHAPTER 1

Contextual Perspective of Organizational Behaviors A history :

Scientific management Guiding principles:

1- Replace rule-of-thump work methods with methods based on scientifically studying the task

using time-and-motion studies.

2- Scientifically select, train, and develop all workers rather than leaving them to passively train

themselves.

3- Managers provide detailed instructions and supervision to workers to ensure that they are

following the scientifically developed method.

4- Divide work nearly equally between workers. Managers should apply scientific management

principles to planning the work, and workers should actually perform tasks.

ORGANIZATIONAL BEHAVIORCHAPTER 1

Contextual Perspective of Organizational Behaviors A history :

▪ Human relations movement : Treats workers’ orientations, values, and feelings as important part of

organizational dynamic and performance.

▪ Organization as open system : ( system : a set of interrelated elements functionating as whole)

- The theory of the system was development in the physical science but it was transferred to

management science.

- According to this perspective an organization system receives four kinds of inputs from its

environment (material, human, financial, and information). The organization managers combine and

transform these inputs and return them to the environment in the form of product or services. Then the

systems receives feedback from the environments regarding these output.

ORGANIZATIONAL BEHAVIORCHAPTER 1

The systems Approach of Organizations

Figure 1.3

The systems approach of organizations provides a useful

framework for understanding how elements of an

organization interact among themselves and with their

environment. Various inputs are transformed into

different outputs, with important feedback from the

environment. If managers do not understand these

interrelations, they may tend to ignore their environment

or overlook important interrelationships within

organizations.

ORGANIZATIONAL BEHAVIORCHAPTER 1

Situational Versus Universal Approach of Organizations

Figure 1.4

ORGANIZATIONAL BEHAVIORCHAPTER 1

Managing for Effectiveness:

Effectiveness in Management refers to the capability of the management to achieve the desired

targets in the specified time. It is concerned with doing what is right or what should be done. On

the other hand, efficiency refers to doing the task correctly, timely and at minimum possible cost.

•Effectiveness Goal achievement Doing the right thing!

•Efficiency Level of resources used to achieve goals Doing things right!

Managers’ goals

▪ Enhance behaviors and attitudes.

▪ Promote citizenship.

▪ Minimize dysfunctional behaviors

▪ Drive strategic execution

ORGANIZATIONAL BEHAVIORCHAPTER 1

Managing for Effectiveness:

1- Managers’ goals

Goals should be:

Goals must be : - clearly- identifiable - measurable - time bound

Manager should consider:

▪ Enhance behaviors and attitudes.

▪ Promote citizenship.

▪ Minimize dysfunctional behaviors

▪ Drive strategic execution

▪ Effectiveness is the ability to excel at one or more goals

▪ The goal attainment states that an organization effectiveness must be appraised in terms of the

accomplishment of its end goals based on the identification of goals and the achievement of

those goals

ORGANIZATIONAL BEHAVIORCHAPTER 1

Managing for Effectiveness:

2- Individual behaviors

▪ Productivity

- Narrow measure of efficiency. Number of products or services created per unit of input

▪ Performance

- Broader concept made up of all work-related behaviors

▪ Commitment

- The degree to which an employee considers himself or herself a true member of the

organizations. Overlooks minor sources of dissatisfaction, and intends to stay with the

organization

ORGANIZATIONAL BEHAVIORCHAPTER 1

Managing for Effectiveness:

3- Organizational citizenship

Behavior of individuals that makes a positive overall contribution to the organization

▪ Examples:

- Willingness to train new hires

- Works late/overtime

- Good attendance

- Represents the organization well

- Personal values consistent with the organizations

ORGANIZATIONAL BEHAVIORCHAPTER 1

Managing for Effectiveness:

4- Dysfunctional behaviors

Behaviors that detract from, rather than contribute to, organization performance.

▪ Examples:

- Absenteeism

-Turnover

- theft, sabotage

- Sexual and Racial Harassment

- Politicized behavior (spreading rumors, etc.)

- Incivility, rudeness

- Bullying and workplace violence

ORGANIZATIONAL BEHAVIORCHAPTER 1

Managing for Effectiveness:

5- Quality of information:

How do we know what we know?

▪ “common” sense and institution and are often wrong-examples where one thing doesn’t

necessary lead the other

- Goals, confidence and performance

- Satisfaction and productivity

- Cohesion and performance

- Reward and motivation

ORGANIZATIONAL BEHAVIORCHAPTER 1

Managing for Effectiveness:

5- The scientific method :

• Intuition : Many people think that they good understanding of the others from observations and

they can motivate them to do certain job by using observation only but this was right in the past .

▪ A theory is a collection of verbal and symbolic that specify how and why variables are related, and

the conditions under which they should and should not relate.

▪ A hypothesis is a written prediction specifying expected relationships between certain variables.

▪ The Independent variable is the variable that is predicted and not affected by something else.

▪ The dependent variable is variable predicted to be affected by something else.

▪ Correlations: reflects the size and strength of the statistical relationships between two variable.

ORGANIZATIONAL BEHAVIORCHAPTER 1

The scientific method :

Figure 1.4

The scientific method is useful approach to learning

more about organizational behavior. Using theory to

develop hypotheses and then collecting and studying

relevant data can help generate new knowledge.

ORGANIZATIONAL BEHAVIORCHAPTER 1

Organizational Behavior

Framework:

Figure 1.5

An array of environment, individual,

group team, leadership, and

organizational characteristics impact

organizational behavior. If managers

understand these concepts and

characteristics they can better promote

organizational effectiveness.

ORGANIZATIONAL BEHAVIORCHAPTER 1

Organizational Behavior in actions:

Based on the study of this chapter :

- What do you think are the most important things the manger does? Is how a manger does these also

important? Why or why not?

- Some people have suggested that understanding human behavior at work is a single most important

requirement for managerial success. Do you agree with this statement? Why?

- The chapter identifies four basic functions. Based on your own experiences and observations. Provide

an example of each function.

- Why will learning about OB help you to get abettor job and a better career, and be a better manager?

- Some people believe that individuals working in an organization have basic human rights to

satisfaction with their work and to the opportunity to grow and develop. How would you defend this

position? How would you argue against it?

- Think of something that you believe leads to employee productivity based on intuition that may not

prove to be true if tested systematically. Now apply the scientific method and describe how you might

test your theory?

ORGANIZATIONAL BEHAVIORCHAPTER 1

Thanks