Organisational Behaviour
Organisational Behaviour
POST GRADUATE
DEPARTMENT OF COMMERCE
ST. XAVIERS COLLEGE, MAPUSA-GOA
ACADEMIC YEAR 2015-2016
INDEX
CHAPTER
PG.NO.
NO.
CONTENT
INTRODUCTION
3-9
RESEARCH DESIGN
10
CASE STUDIES
11-20
CONCLUSION
21
BIBLIOGRAPHY
22
CHAPTER 1: INTRODUCTION
1.1 INTRODUCTION TO ORGNISATION BEHAVIOUR
Organizations are social systems. If one wishes to work in them or to manage them, it is
necessary to understand how they operate. Organizations combine science and people
technology and humanity. Unless we have qualified people to design and implement, techniques
alone will not produce desirable results. Human behavior in organizations is rather unpredictable.
It is unpredictable because it arises from peoples deep-seated needs and value systems.
However, it can be partially understood in terms of the framework of behavioral science,
management and other disciplines. There is no idealistic solution to organizational problems. All
that can be done is to increase our understanding and skills so that human relations at work can
be enhanced.
1.2 CONCEPT OF ORGNISATION BEHAVIOUR
Organizational Behavior is field of study that investigates the impact that individuals, groups and
structure have on behavior within organization. It is the study and application of knowledge
about how people act within organizations. It is a human tool for human benefit. It applies
broadly to the behavior of people in all types of organizations, such as business, government,
schools and services organizations. It covers three determinants of behavior in organizations:
individuals, groups, and structure. OB is an applied field. It applies the knowledge gained about
individuals, and the effect of structure on behavior, in order to make organizations work more
effectively. OB covers the core topics of motivation, leadership behavior and power,
interpersonal communication, group structure and process, learning, attitude development and
perception, change process, conflict, job design and work stress.
1. A technical component concerned with the efficient use of resources to achieve output goals,
and the application of technology to achieve productivity goals.
2. A conceptual component concerned with the development of new systems and methods of
operation. An example would be creating a smartphone application to give salesmen up-to-theminute pricing for rival firms products.
3. A human component concerned with workforce and employee well-being. Examples of this
are launching a programme to assist troubled employees or designing an employee health
programme to reduce insurance costs.
The amount of time a manager spends on these activities is a function of his level in the
organisational hierarchy. Generally speaking, technical work occupies most of the time of firstline supervisors. They spend far less time on conceptual and human work. For middle managers
it is generally true that conceptual workload and human workload both increase while technical
workloads diminish. Top executives spend the bulk of their time engaged in conceptual and
human work. An example of their conceptual work would be strategic planning (building and
holding competitive advantage and sustaining operational effective- ness). Managing workforce
pay and benefits and authorizing training and development are human components of executives
work.
1.4.4 MANAGEMENT AND TECHNICAL PROBLEM SOLVING
Virtually all firms want managers and employees to be technical problem solvers in the areas of
product and service quality improvement. Managers are promoted almost always on their ability
to resolve complex technical issues, for example new process and product development or the
creation of better distribution systems, more accurate pricing systems and enhanced service
delivery systems. The glitch in many organisations is that managers are mistakenly promoted
on the basis of their technical work expertise alone. Managers, being rational, wish to acquire
technical skills in their careers because they know that their employers will reward them for
these skills. This seduces managers to make all job challenges fit their technical work skills. This
may work on low-level managerial challenges but not on higher-level ones. And so, in entrylevel managerial positions, we find that managerial success is too narrowly defined in technical
terms.
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If managers demonstrate conceptual and human skills as well, their promotion prospects and,
more importantly, their performance potential are both greatly enhanced. These seasoned
managers become candidates for executive positions precisely because they have moved beyond
conceptualizing managerial problems purely in technical terms. The missing ingredient in the
skill mix of many ambitious managers is capability (expertise) in the human component of
managerial work. Executives and managers with poor people skills demoralize the workforce
and thereby reduce the firms operational effective- ness. There is no faster way to tear down
competitive advantage. Much of the content of this text is aimed squarely at reviving the
workforce so that it is a willing and enthusiastic contributor to competitive advantage. This
practical (and pressing) need creates a wide and well-trod bridge between OB and management.
1.4.5 WHY DO MANAGERS CARE ABOUT OB?
According to researchers, when managers are interviewed about the problems they face, they
invariably turn to annoying workplace issues. The quotes that follow are fairly typical.
manager of special events: My employees wont give that extra 5 per cent when a crisis occurs
on the convention floor.
A sales manager: My sales staff is constantly making errors in quoting prices and deliver- ing
service. How can I get them to be more customers focused?
A union official: We no longer have members who are committed to union values. They carry
their cards, and thats all.
A marketing manager: My employees refuse to work with the fellows from production. They
believe production managers are only interested in output quotas and inventory control. Their
poor customer orientation is causing us severe problems in our product warranties.
The problems noted above are aptly referred to as people problems, and each one
represents an opportunity for a manager to apply knowledge of OB in his or her job.
Seasoned managers with knowledge of OB are able to find creative solutions to the problems just
noted because they know the following to be true.
1. Behavioural theories help solve problems in the work setting. Managers use objective
methods to attack problems related to the needs of employees and the interests of the
organisation; these often conflict.
2. Knowledge of new behavioural theories expands the managers skill set. Managers must
scan new developments in OB to ensure that their practices are up to date.
3. An understanding of behavioural theories helps managers evaluate proposed solutions to
behavioural problems in their organisations. Just as you need knowledge of accounting and
finance, you need knowledge of behavioural theories to predict how employees and
organisations will act.
The scope of the study has been limited to only 5 case studies and data has been taken
from secondary source only.
The study has been conducted using secondary data i.e. through internet
Time was the importing limiting factor for deciding the scope of the study.
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poisoning in Tylenol capsules, Johnson & Johnson permanently removed all of the capsules from
the market. Once the product was removed from the market, Johnson & Johnson had to come up
with a campaign to re-introduce its product and restore confidence back to the consumer.
Solution:
In order to motivate consumers to buy the product, they offered a $2.50 off coupon on the
purchase of their product. They were available in the newspapers as well as by calling a
toll-free number.
To recover loss stock from the crisis, Johnson & Johnson made a new pricing program
that gave consumers up to 25% off the purchase of the product.
Over 2250 sales people made presentations for the medical community to restore
confidence on the product.
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Second, artists typically worked weekdays in the studio until 9:00 p.m., sometimes even later.
Therefore, when Charlesgate residents returned home from work in the evening, the artists were
still in the gallery working on their projects. Third, Officer Hayes recognized that the placement
of the stereo employees played while working contributed significantly to the problem.
Specifically, the stereo was situated next to the back delivery door. As such, no barriers existed
to prevent the noise from carrying across the alley over to the apartments.
Solution to the issue:
From this meeting, the owner agreed to take proactive steps to reduce the complaints. He
instituted a policy, which he explained to each artist who utilized the studio, that limited the
hours the back delivery door and windows could be opened during the summer. Since the
complaints occurred in the evening hours when residents of the Charlesgate Apartments returned
home form work, the owner mandated that the delivery door and windows close at 5:00 p.m.
additionally, he relocated the stereo to the other side of the business in an effort to reduce the
noise that carried across the alley. Through taking these steps, noise complaints were eliminated
and everyone benefited. Patrol officers were no longer called to the scene to handle these repeat
complaints, Charlesgate Apartment residents were no longer disturbed by the galley. And the
owner of the gallery was made aware of the problem and allowed the opportunity to address the
issue before it escalated any further.
CASE STUDY 3: NUCOR CORPORATION-STEEL MANUFACTURING; MOTIVATE
WORKERS AND REDUCE EMPLOYEE TURNOVER
Problem
Producing steel is hot and demanding work. Employees who are motivated are much more
productive, as evidenced by Nucors success. Manufacturing steel is not a glamorous job. The
industry is beset by many problems, and more than 40 steel manufacturers have filed for
bankruptcy in recent years. Most young employees do not view working at a steel mill as their
dream job. Yet, one company distinguished itself from all the rest by remaining profitable for
over 130 quarters and by providing an over 350% return on investment to shareholders. The
company is clearly doing well by every financial metric available and is the most profitable in its
industry.
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Solution:
How do they achieve these amazing results?
For one thing, every Nucor Corporation employee acts like an owner of the company.
Employees are encouraged to fix the things they see as wrong and have real power on
their jobs.
When there is a breakdown in a plant, a supervisor does not have to ask employees to
work overtime; employees volunteer for it. In fact, the company is famous for its
decentralized structure and for pushing authority and responsibility down to lower
levels in the hierarchy. Tasks that previously belonged to management are performed
by line workers.
Management listens to lower level employees and routinely implements their new
ideas.
The reward system in place at Nucor is also unique, and its employees may be the
highest paid steelworkers in the world. In 2005, the average Nucor employee earned
$79,000, followed by a $2,000 bonus decided by the companys annual earnings and
$18,000 in the form of profit sharing. At the same time, a large percentage of these
earnings are based on performance.
People have the opportunity to earn a lot of money if the company is doing well, and
there is no upward limit to how much they can make. However, they will do much
worse than their counterparts in other mills if the company does poorly. Thus, it is to
everyones advantage to help the company perform well. The same incentive system
exists at all levels of the company.
The incentive system penalizes low performers while increasing commitment to the
company as well as to high performance.
Nucors formula for success seems simple: Align company goals with employee goals and
give employees real power to make things happen. The results seem to work for the company
and its employees. Evidence of this successful method is that the company has one of the lowest
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employee turnover rates in the industry and remains one of the few remaining nonunionized
environments in manufacturing.
CASE STUDY 4: PROBLEM-SOLVING APPROACH OF MOBARAKEH STEEL
COMPANY:
This study illustrates a case study on how problem solving techniques were applied in
Mobarakeh Steel Company (MSC) to identify and resolve a problem in the production line. More
specifically, this case study examines the problems of the deviation in the baking machine at the
pelletizing unit of MSC. Being one of Irans largest steel makers, Mobarakeh Steel Company is
an Iranian company, placed 65 km south west of Esfahan, close to the city of Mobarakeh,
Esfahan Province, Iran. It is one of the largest industrial complexes working in Iran.
Problem-Solving Approach
The quality improvement projects at MSC use either a group-oriented or problem- oriented
approach (Figure 1). In a group-oriented approach, after forming the improvement group, several
steps are undertaken to identify the problem and improvement opportunities. However, in a
problem-oriented approach, the main focus would be on the problem. Only after identifying the
problem can the necessary teams and groups for handling the problem be formed.
Figure 1:
*Group Oriented
*Problem Oriented
identifying problem
and then forming
group
In the current study, a problem-oriented approach was applied. First, a major problem in the
production line was identified which was related to the erosion of the rails and the wheels of the
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baking machine in the pelletizing unit. Then, the necessary team to address the problem was
formed. The group comprised of 9 chief members, 4 guest members, and 1 assistant, who were a
combination of technical experts, production managers and quality control staff. The group
thoroughly investigated the assigned problem on the deviation of the baking machine in the
pelletizing unit and identified that the extreme deviation of the unit to the left in one of the
production lines had caused numerous problems including the erosion of the rails and the wheels,
making excessive noise, and damaging the wheels bearings. Thus, the key problem to address
was the conveyor deviation. To remove the negative effects of this problem, the group aimed to
remove the key causes through addressing the problem of the deviation in the conveyor of the
baking machine.
In order to identify the causes of the problem, fish-bone analysis was performed (Figure 2) and
the major causes were determined under six main categories, namely Materials, Methods,
Machines, Measurements, Environment and People.
Figure 2: Fishbone Analysis
This stage aimed at identifying the principle causes of the problem and solutions to minimize or
resolve them.
The findings of this step revealed that:
Causes:
the major causes of the problem included staff not following guidelines in accordance to the
map, deformation of the edges, insufficient training of the maintenance staff, and lack of
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sufficient time for maintenance. In other words, it comprised of both human error in not
following the guidelines and having insufficient training, and equipment deficiency in terms of
the parts (i.e. edge deformation) and insufficient maintenance.
Solution:
The next stage involved assessing the proposed solutions by the team members and selecting the
most suitable one to address the causes of the problem. Overall, the team identified four potential
solutions to the problem, including the use of a shifting device to make standard ironstone
pellets, using a scheme plate to balance the conveyor on the rails, using standardised pellets, and
positioning pellets in the centre of baking rail. However, after examining all aspects of the
proposed solutions and their potential impacts on production, they eventually selected the use of
shifting device as the appropriate solution to the problem, as after lengthy consideration of the
options a majority of group members supported this solution. A shifting device was installed in
the production line and the team monitored its impacts. It was found that the shifting device
significantly reduced the problem.
Concluding remarks:
The current short case study on the problem-solving approach utilized by the Mobarakeh Steel
Company to address a problem in the production line serves as a benchmark. The problemoriented approach applied by MSC started by understanding the problem in depth and forming
the necessary team of experts and staff to analyze the problem and explore its potential causes.
Then, through group discussion on the problem and its principle causes, several potential
solutions to address the problem were proposed and the most suitable one was selected and
implemented gradually. The selection of the solution was made by the group after
comprehensive consideration of each alternative. The results of the solution implementation were
constantly monitored by the team and upon satisfactory results, it was fully implemented,
standardized and documented for future reference.
CASE STUDY 5: PROJECT MANAGEMENT AT GLOBAL GREEN BOOKS
PUBLISHING
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Global Green Books Publishing was started two years ago by two friends, Jim King and Brad
Mount, who met in college while studying in Philadelphia, USA. In the new business Jim
focused on editing, sales and marketing while Brad Mount did the electronic assembly and
publishing of books for Global Green Books. Their business was successful and profitable in the
first two years, largely due to contracts from two big businesses.
In their third year they got very busy thanks to their third major customer, a local college that
needed customized eBooks. They hired several part time employees to help them with their
publishing business.
Problem:
But by the end of third year of operation, Global Green Books started experiencing critical
problems. They were:
Unable to provide quality textstime and money was being spent fixing defects in their
products.
Unable to control coststheir business was not profitable in the third year.
Global Green Books saw a significant rise in issues, a lot of unpleasant surprises were
cropping up; business was down as new resources were hired, also some of the projects were
poorly estimated. The local university was unhappy as their eBook products reached campus late
for use by professors and student. In some cases, the books were a week or two late. Since the
courses must start on schedule and students need their books at the beginning of their courses,
the new lucrative college customer was unhappy.
One of the new part-time employees hired by Jim and Brad, Samantha, had taken a project
management course at college.
One fine day, Jim invited Samantha, for a lunch meeting. He was aware that Samantha was
familiar with project management, and wanted to hear what she had to say about the problems he
and Brad were facing. Over lunch he questioned why their small business which had operated
and implemented projects so successfully over the first two years was being challenged
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significantly now. He specifically listed the problems they were facing and asked for input to
solve them.
Causes
Samantha asked for more time to research all the issues but noted that Global Green Books,
While being innovative, completed projects without a roadmap or a project plan and
lacked a disciplined approach to project management.
She noted that Jim and Brad did not use any project software for scheduling and they did
not use tools or techniques to estimate, budget or to communicate with stakeholders.
Finally, they had no processes in place to manage project risks and quality.
Solution:
Impressed with this and other conversations, Jim King asked Samantha if she would consider
joining them as a project associate or project manager on a full-time basis to help them introduce
project management practices and help them tide over their current crisis. Samantha accepted
the offer! She has several key skillsshe is an excellent communicator with very good
interpersonal skills and detail-oriented. Within the first three months in her new role as PM, she
introduced formal project management processes, created a PM manual and trained the
employees to get the work done well.
around. Due to proactive risk analysis and risk response planning, surprises and issues reduced.
Communication with stakeholders was enhanced. Brad and Jim noted that the company was
delivering projects on schedule, the quality processes workedand customers were happy with
the products.
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CHAPTER 4: CONCLUSION
OB is a social science that advances knowledge about the behaviour of people at work. It studies
the relationship between operational effectiveness and employee needs. All as- pects of
organisation performance relate to the former; work attitudes such as job satisfaction,
organisational commitment and job involvement relate to the latter.
Organisational Behaviour plays an important role in the management of business. It is that field
of study which finds out the impact that individuals, groups and structure have on behaviour
within an organisation and it applies that knowledge to make organisations work more
effectively.
Behavioural theories help solve problems in the work setting. Managers use objective methods to
attack problems related to the needs of employees and the interests of the organisation; these
often conflict. Knowledge of new behavioural theories expands the managers skill set.
Managers must scan new developments in OB to ensure that their practices are up to date.
An understanding of behavioural theories helps managers evaluate proposed solutions to
behavioural problems in their organisations. Just as you need knowledge of accounting and
finance, you need knowledge of behavioural theories to predict how employees and
organisations will act. Thus a significant relationship exists between OB and management.
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BIBLIOGRAPHY
WEBSITES:
www.wikipedia.com
www. OnlineCollege.org.html
PDF
1. Problem-Solving Approach : Case Study of Mobarakeh Steel Company- by Sasan
Ghasemi CEO, ALA Excellence Consulting Group
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