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ethics

1. Organization Behavior
LIC
Department of Management
Master of Business Administration

2. About
BUZEYE ZEGEYE
Ph.D.,MBA,MPA,BA,BED,JICABusinessAdvisor,UNCTAD
certifiedEntrepreneurshiptrainer,MemberofBoardof
DirectorforGebrihierIndustryandServiceS.C,ChairPersonof
BoardofDirectorforFinoteLihiketTradingS.C,Researcher,
FounderandmemberofZemenPostgraduateCollege,Founder
andmemberofDBHManagementConsultingPLC

3. CHAPTER ONE
AN OVER VIEW OF
ORGANIZATIONAL BEHAVIOR

4. 1.1. What Is Organizational Behavior?
•Themajorfaultwiththetraditionalapproachofmanagement
isthatitoverlooksandoversimplifiesfartoomanyaspectsof
themanagerialandadministrativeproblem.
–Humanbehavioratworkismuchmorecomplicatedanddiverse
thanissuggestedbytheeconomic-security–working-conditions
approach.
–Thenewperspectiveassumesthatemployeesareextremely
complexandthatthereisaneedfortheoreticalunderstanding
backedbyrigorousempiricalresearchbeforeapplicationscanbe
madeformanagingpeopleeffectively.

5. 1.1. What Is Organizational Behavior?
•Organization
–isacollectionofpeople(i.e.agroup/individualwithdifferentskillsandbackground)
workingtogetherinadivisionoflabortoachieveacommonpurpose.
–isaconsciouslycoordinatedsocialunit,composedoftwoormorepeoplethatfunctions
onarelativelycontinuousbasistoachieveacommongoalorsetofgoals.
–referstoaformalsocialgroupthatisdeliberatelycreatedandmaintainedtoachieve
someintendedgoals.
•Behavior
–Itisawayofaction.Itiswhatapersondoes.moreprecisely,behaviorcanbedefined
astheobservableandmeasurableactivityofhumanbeing.
–Itcanincludeanythinglikedecisionmaking,handlingofmachine,communication
withtheotherpeople,reactionorresponsetoanorderorinstruction.

6. 1.1. What Is Organizational Behavior?
•OrganizationalBehavior(OB)canbedefinedas:
–thesystematicstudyandapplicationofknowledge
abouthowindividualsandgroupsactwithinthe
organizationswheretheywork.
–theunderstanding,prediction,and
managementofhumanbehaviorin
organizations.)

7. 1.1. What Is Organizational Behavior?
•OrganizationalBehavior(OB)canbedefinedas:
–thestudyofhumanbehaviorinorganizations.Itis
anacademicdisciplinedevotedtounderstanding
individualandgroupbehavior,interpersonal
processes,andorganizationaldynamicswiththe
goalofimprovingtheperformanceof
organizationsandthepeopleinthem.
–thestudyoffactorsthathaveanimpactonhow
peopleandgroupsact,think,feel,andrespondto
workandorganizations,andhoworganizations
respondtotheirenvironments.

8. Cont’d…
•Tosumupourdefinition,OBisconcernedwiththestudyof
whatpeopledoinanorganizationandhowthatbehavior
affectstheperformanceoftheorganization.

9. 1.1. What Is Organizational Behavior?
•Definition Summary
–OBindicatesthatbehaviorsofpeopleoperateatindividual,group,andorganizational
levels.
–OBismultidisciplinary;itusesprinciples,models,theories,andmethodsfromother
disciplines.
–There’sadistinctlyhumanisticorientationwithinorganizational
–thefieldofOBisperformanceoriented.
–Theexternalenvironmentisseenashavingsignificanteffectonorganizationalbehavior.
–OBreliesheavilyonrecognizeddisciplines,thescientificmethodisimportantin
studyingvariablesandrelationships.
–thefieldhasadistinctiveapplicationsorientation

10. 1.2. The Three Basic Units of Analysis in OB
•IndividualLevelOfAnalysis
–Individualperformanceisthefoundationoforganizational
performance.Understandingindividualbehavioristhereforecriticalfor
effectivemanagement,
–Attheindividuallevelofanalysis,organizationalbehaviorinvolvesthe
studyof:
•learning,task,perception,creativity,motivation,personality,
turnover,performance,cooperativebehavior,deviantbehavior,
ethics,andcognition.
–Atthislevelofanalysis,organizationalbehaviordrawsheavilyupon
psychology,engineering,andmedicine.

11. 1.2. The Three Basic Units of Analysis in OB
•GroupLevelOfAnalysis
–Groupbehaviorandinterpersonalinfluencearealsopowerfulforces
affectingorganizationalperformance,
–Atthegrouplevelofanalysis,organizationalbehaviorinvolvesthe
studyof
–groupdynamics,intra-andintergroupconflictandcohesion,
leadership,power,norms,interpersonalcommunication,
networks,androles.
–Atthislevelofanalysis,organizationalbehaviordrawsuponthe
sociologicalandsocio-psychologicalsciences.

12. 1.2. The Three Basic Units of Analysis in OB
•OrganizationLevelOfAnalysis
–Toachieveorganizationaleffectiveness,managersmustclearlyunderstandthe
organizationalstructure.
•Viewinganorganizationchartonapieceofpaperorframeonawall,we
seeonlyaconfigurationofpositions,jobduties,andlinesofauthority
amongthepartsofanorganization.However,organizationalstructure
canbefarmorecomplex
–Attheorganizationlevelofanalysis,organizationalbehaviorinvolvesthestudy
oftopicssuchas
•organizationalculture,organizationalstructure,culturaldiversity,inter-
organizationalcooperationandconflict,change,technology,andexternal
environmentalforces.
–Atthislevelofanalysis,organizationalbehaviordrawsuponanthropologyand
politicalscience.

13. Cont’d…
•Insummary,oneofOB’smajorconcernsisproductivity.We
wanttoknowwhatfactorswillinfluencetheeffectiveness
andefficiencyofindividuals,ofgroups,andoftheoverall
organization.

14. Dependent Variable-Productivity
•PRODUCTIVITYAnorganizationisproductiveifitachievesits
goalsanddoessobytransferringinputstooutputsatthe
lowestcost.Assuch,productivityimpliesaconcernforboth
effectivenessandefficiency.

15. Cont’d…
•Ahospital,forexample,iseffectivewhenitsuccessfullymeets
theneedsofitsclientele.
•Itisefficientwhenitcandosoatalowcost.Ifahospital
managestoachievehigheroutputfromitspresentstaffby
reducingtheaveragenumberofdaysapatientisconfinedto
abedorbyincreasingthenumberofstaff-patientcontacts
perday,wesaythatthehospitalhasgainedproductive
efficiency.

16. Cont’d…
•Abusinessfirmiseffectivewhenitattainsitssalesormarket
sharegoals,butitsproductivityalsodependsonachieving
thosegoalsefficiently.
•Measuresofsuchefficiencymayincludereturnon
investment,profitperdollarofsales,andoutputperhourof
labor.

17. Cont’d…
•Wecanalsolookatproductivityfromtheperspectiveofthe
individualemployee.TakethecasesofFeyisaandSolomon,
whoarebothlong-distancetruckers.
•IfFeyisaissupposedtohaulhisfullyloadedrigfromDjibouti
toitsdestinationinAddisAbabain48hoursorless,heis
effectiveifhemakesthe1,000-miletripwithinthattime
period.

18. Cont’d…
•Butmeasuresofproductivitymusttakeintoaccountthecosts
incurredinreachingthegoal.That’swhereefficiencycomes
in.
•Let’sassumethatFeyisamadetheDjiboutitoitsdestination
inAddisAbabarunin48hoursandaveraged7milesper
gallon.Solomon,ontheotherhand,madethetripin48hours
alsobutaveraged9milespergallon(rigsandloadsare
identical).

19. Cont’d…
•BothFeyisaandSolomonwereeffective—theyaccomplished
theirgoal—butSolomonwasmoreefficientthanFeyisa
becausehisrigconsumedlessgasand,therefore,heachieved
hisgoalatalowercost.

20. DV-ABSENTEEISM
•Theannualcostofabsenteeismhasbeenestimatedatover$40billionfor
U.S.organizationsand$12billionforCanadianfirms.
•InGermany,absencescostindustrialfirmsmorethan60billion
Deutschmarks(U.S.$35.5billion)eachyear.
•Atthejoblevel,aone-dayabsencebyaclericalworkercancostaU.S.
employerupto$100inreducedefficiencyandincreasedsupervisory
workload.
•Thesefiguresindicatetheimportancetoanorganizationofkeeping
absenteeismlow

21. DV-TURNOVER
•Ahighrateofturnoverinanorganizationresultsinhigh
recruiting,selection,andtrainingcosts.
•Aconservativeestimatewouldbeabout$15,000per
employee
•Ahighrateofturnovercanalsodisrupttheefficientrunning
ofanorganizationwhenknowledgeableandexperienced
personnelleaveandreplacementsmustbefoundand
preparedtoassumepositionsofresponsibility.

22. DV-JOB SATISFACTION
•Thebeliefthatsatisfiedemployeesaremoreproductivethan
dissatisfiedemployeeshasbeenabasictenetamong
managersforyears.Althoughmuchevidencequestionsthat
assumedcausalrelationship,itcanbearguedthatadvanced
societiesshouldbeconcernednotonlywiththequantityof
life—thatis,concernssuchashigherproductivityandmaterial
acquisitions—butalsowithitsquality

23. The Independent Variables
•Whatarethemajordeterminantsofproductivity,
absenteeism,turnover,andjobsatisfaction?
•Ouranswertothatquestionbringsustotheindependent
variables.
•Consistentwithourbeliefthatorganizationalbehaviorcan
bestbeunderstoodwhenviewedessentiallyasasetof
increasinglycomplexbuildingblocks,thebase,orfirstlevel,of
ourmodelliesinunderstandingindividualbehavior.

24. … INDIVIDUAL-LEVEL VARIABLES
•Ithasbeensaidthat“managers,unlikeparents,mustwork
withused,notnew,humanbeings—humanbeingswhom
othershavegottentofirst.
•Whenindividualsenteranorganization,theyareabitlike
usedcars.Eachisdifferent.
•Someare“low-mileage”—theyhavebeentreatedcarefully
andhavehadonlylimitedexposuretotherealitiesofthe
elements.Othersare“well-worn,”havingbeendrivenover
someroughroads.

25. Cont’d…
•Thismetaphorindicatesthatpeopleenterorganizationswith
certaincharacteristicsthatwillinfluencetheirbehaviorat
work.Themoreobviousofthesearepersonalorbiographical
characteristicssuchasage,gender,andmaritalstatus;
personalitycharacteristics;valuesandattitudes;andbasic
abilitylevels

26. Cont’d…
•There are four other individual-level variables that have been
shown to affect employee behavior: perception, individual
decision making, learning, and motivation.

27. … GROUP-LEVEL VARIABLES
•The behavior of people in groups is more than the sum total
of all the individuals acting in their own way.
•You will study this in chapter three

28. … ORGANIZATION SUSTEMS LEVEL
BARIABLES
•Organizationalbehaviorreachesitshighestlevelofsophisticationwhen
weaddformalstructuretoourpreviousknowledgeofindividualand
groupbehavior.
•Justasgroupsaremorethanthesumoftheirindividualmembers,soare
organizationsmorethanthesumoftheirmembergroups.
•Thedesignoftheformalorganization,workprocesses,andjobs;the
organization’shumanresourcepoliciesandpractices(thatis,selection
processes,trainingprograms,performanceappraisalmethods);andthe
internalcultureallhaveanimpactonthedependentvariables.

29. 1.4. The Characteristics of OB
1.MultidisciplinaryCharacter:theareaofstudyofOBis
developedfromdifferenttraditionaldisciplineslike
psychology,sociology,anthropology,politicalscience,
economics,andindustrialengineering.
2.GoalOrientedCharacter:OBisgoal-orientedandaction
orienteddiscipline.
–ItsMainconcernistoobtaintheorganizationalgoalswith
fulfillingindividualgoalsofemployeesconcerningwith
organization.

30. Cont’d…
3.Multi-LevelStudyCharacter:OBisstudiedindifferentlevels.Itconcerns
withindividuallevel,grouplevelandorganizationallevel.
‾OBinvestigatestheinfluenceofeachlevelintheoverall
organizationaleffectiveness.
4.SituationalCharacter:OBstudieshumanbehaviorunderavarietyof
situations.Everyorganizationneedstooperateindynamicenvironment.
Changesinpoliticallegal,economic,socio-culturalandtechnological
environmentmakesthedecisionmakingandimplementationmorecomplex
andchallenging.

31. 1.4. The Characteristics of OB
5.SystematicandScientificstudyCharacter:OBisthe
systematicstudyanditconcernswithcausesandeffects
relationship.
•Conclusionsaredrawnwithevidencebutnotinintuitions
ofthemanagers.Itcompletelyfollowssystem.
•Similarly,thestudyofOBfollowsscientifictools,
techniquesanddecisionmakingcriteria.

32. Cont’d…
6.NormativeScienceCharacter:OBisanormativescienceasitprescribes
variousfindingsofresearchestoapplytogetorganizationalresultsacceptable
tothesociety.
•OB,thus,concernswithvaluesofthesocietyandpeopleconcerned.
7.DynamicCharacter:OBisdynamicasitconcernswithchangingbehavior
ofindividual.
•Groupsnorms,valuesandinterestsarethematterofchangewhichare
directlyorindirectlyinfluencetheindividualbehavior.

33. Importance OB
•1.UnderstandingofSelfandOthers:Organizationbehaviorisauseful
toolofunderstandinghumanbehaviorinallthedirectionsinwhichhuman
beingsinteract.Humanbehaviorcanbestudiedattheindividuallevel,inter-
personallevel,grouplevelandinter-grouplevelasdiscussedbelow:
•i.IndividualBehavior:Themainfocusofpsychologyisthestudyof
individualbehavior.Ittriestoanalyzewhyandhowanindividualbehavesina
particularway.Humanbehaviorisaffectedbyanumberofpsychological,
socialandculturalfactors.Organizationalbehaviorintegratesthesefactorsto
understandindividualbehavior.

34. Cont’d…
•ii.Inter-personalBehavior:Inter-personalinteractiontakes
placebecauseofindividual’snaturaldesireofsocialization.By
studyingthebehavioralsciences,anindividualcanunderstand
himselfandothersbetter.Thiswillhelphimtoimprove
interpersonalrelationsconsiderably.Understandingofinter-
personalbehaviorisfacilitatedbythestudyofattitude,
perception,roleanalysis,transactionalanalysis,etc.

35. Cont’d…
•iii.GroupBehaviour:Anindividualbehavesdifferentlyasanindividual
andasamemberofthegroupasrevealedbyHawthorneStudies.His
behaviourisoftenmodifiedbygroupnorms.Therefore,studyofgroup
dynamicshasassumedgreaterimportanceinorganizationalbehaviour.
•Ithelpsinknowinghowgroupsareformed,whypeoplejoingroupsand
howgroupsexertpressuresontheindividuals,groupsandmanagement.
•Managementcanusegroupdynamicsforbettercommunication,effective
leadershipandbuildinghighmorale.

36. Cont’d…
•2.MotivationofHumanResources:Thejobofmanagerin
anorganizationistogetthingsdonethroughothers.
•Hewillbesuccessfulinhisjobwhenhecanmotivatehis
subordinatestoworkfororganizationalgoals.
•Organisationalbehaviourhelpsthemanagerunderstandthe
needsanddesiresofthesubordinatesandotherforceswhich
affecttheirmotivation.
•Hecanusesuitableincentivestomotivatethesubordinates.

37. Cont’d…
•3.EffectiveCommunication:Behavioralscienceshelpin
improvingcommunicationintheorganization.
•Itiscommunicationthroughwhichpeoplecomeincontract
witheachother.
•Toachieveorganizationaleffectiveness,thecommunication
mustbeeffective.

38. Cont’d…
•4.EffectiveOrganisationalClimate:Behavioralsciencessuggestthecreationof
organizationalclimateintotallyratherthanmerelyimprovingthephysiological
conditionsorincreasingemployeesatisfactionbyisolatedwork-process.
•Satisfactoryworkingconditions,adequatecompensation,andbetterequipmentsfor
thejobareviewedasonlyasmalleffortincreatingasoundorganizationalclimate.
•Ofgreaterimportancearethecreationofanatmosphereofparticipativeleadership,
two-waycommunication,theopportunitiesfortherealizationsofpersonalgoals,
congenialrelationswithothersatthework-place,andthelike.

39. Cont’d…
•5.GoodHumanRelations:Organisationalbehaviourcanbe
usefultoachieveandmaintaincordialrelationsinthe
organization.
•Organizationalbehaviorhelpsunderstandcausesofpoor
industrialrelationsintheorganizationandsuggestsuitable
measuresfortheirimprovement.

40. Cont’d…
•6.IntroductionofchangeintheOrganization:Changeisthelawof
nature.Changesareoftenresistedbytheorganizationalmembers.
•Thisproblemcanbesuccessfullyhandledbytheuseofbehavioralscience
knowledge.
•Changecanbeintroducedthroughgroupdynamicsandbyproper
educationofemployeesthrougheffectivecommunication.
•Thebenefitsofchangeshouldbehighlightedandinformationshouldbe
sharedwithallthoselikelytobeaffectedbythechange.

41. 1.5. ContributingDisciplines to OB
•1.Psychology:Psychologyisanappliedscience,which
attemptstoexplainhumanbehaviorinaparticularsituation
andpredictsactionsofindividuals.
•contributedtowardsvarioustheoriesonlearning,motivation,
personality,traininganddevelopment,theoriesonindividual
decisionmaking,leadership,jobsatisfaction,performance
appraisal,attitude,egostate,jobdesign,workstressand
conflictmanagement.

42. Cont’d…
•2.Sociology:ScienceofSociologystudiestheimpactof
cultureongroupbehavior.Contributedtoalargeextentto
thefieldofgroup-dynamics,rolesthatindividualplaysinthe
organization,communication,norms,status,power,conflict
management,formalorganizationtheory,groupforming
processesandgroupdecision-making.

43. Cont’d…
•3.Socialpsychology:Workingorganizationsareformal
assemblyofpeoplewhoareassignedspecificjobsandplaya
vitalroleinformulatinghumanbehavior.Itisasubjectwhere
conceptofpsychologyandsociologyareblendtoachieve
betterhumanbehaviorinorganization.
•Thefieldhascontributedtomanagechange,groupdecision-
making,communicationandabilityofpeopleinthe
organization,tomaintainsocialnorms.

44. Cont’d…
•4.Anthropology:Itisafieldofstudyrelatingtohuman
activitiesinvariousculturalandenvironmentalframeworks.
Itunderstandsdifferenceinbehaviorbasedonvaluesystem
ofdifferentculturesofvariouscountries.Thestudyismore
relevanttoorganizationalbehaviortodayduetoglobalization,
mergersandacquisitionsofvariousindustries.

45. Cont’d…
5.PoliticalScience:thestudyofthebehaviorofindividualsand
groupswithinapoliticalframework.
–Topics:organizationalpolitics,PowersandInfluence
tactics,Powerandethics,Politicalstrategies,
Empowerment,Conflictanditsresolution

46. Group assignment 1 (5%)
•Q1: discuss in detail the challenges and
opportunities of OB?

47. The end of the CHAPTER