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Importance of Organization Behaviour in Modern Business

Paper Type: Free Essay Subject: Business
Wordcount: 2843 words Published: 6th Dec 2017

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Organizational Behavior is the identification, analyzing and application of knowledge about how individuals and groups act in organizations. It interprets people-organization relationships in terms of the person, group, organization, and whole social system. Objective of it is to build better relationships by achieving people objectives, organizational objectives, and social objectives. It encompasses a wide range of areas, such as human behavior, Training and development, change management, leadership, teams, Group behavior etc.

In the study of organizational behavior is helpful in gaining a complete understanding of the business. It is not the study of how organizations behave, but rather the study of individual behavior in an organization. This includes the study of how individuals be have alone as well as in groups.

The main focus of the organizational behavior is to obtain a greater understanding of those factors which influence individual and group dynamics in an organization. Therefore individuals and the groups and organizations to which they belong may become more efficient and effective. Organizational behavior research is ultimately focused at providing human resource management professionals with the information and techniques which they need to select, train, and retain employees in a fashion which gives maximum benefit for the individual employee and for the organization.

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Organizational behavior is a modern interdisciplinary field. It draws most heavily from the psychological and sociological sciences and it also looks to other scientific fields. The interdisciplinary approach is used because the field of organizational behavior involves multiple levels of analysis, which are necessary to understand behavior within organizations as people influence their environment as well as people are influenced by their environment.

The business organization based on vales, missions , visions, objectives, goals and management philosophy which drives formal or informal organizations towards culture & social environment

The culture decides the type of leadership, group dynamics, communication, within the business organization. The employee perceives this as the quality of work type which leads their quantity of motivation, which will benefited to employee performance, individual satisfaction, and personal development and growth. The combination of all above elements will lead to build the model that the organization operates from. Following are the main features of the organization behavior

Organization behavior analyzing the relationship between organization, individual and the group.

It more concern about people attitudes, perception, feelings, learning capabilities and specific objectives goals.(Distinctly humanistic orientation)

It consists of different techniques, methods & theories to evaluate the performances. (Multidisciplinary)

It provides vital answers to questions which arise when managing organization.

It analyses the factors influence the performance of a organization and describe the way of improve the performance.

It uses the scientific method to analyze the performance which helps to identify the variables and relationships.

It creates to achieve the path of business needs as it is concern in understanding of organization processes and skills.

Factors Influence the Organization Behavior

The feathers of people at work- attitudes, individual Differences, attributes, roles of the people and direction

The way people are motivated

Organizational commitment

Employment engagement process

The way organizations factions

Culture of the organization

Models of Organizational Behavior

There are four main models organizations operate out of, Autocratic, Custodial, Supportive, and Collegial:

Autocratic – this model is power with the management. The employees are oriented towards obedience and dependence on the boss. The performance result is minimal.

Custodial – this model is monetary resources with a managerial direction of wealth. The employees in turn are leaning towards security and reimbursement and dependence on the organization. The outcome is passive cooperation.

Supportive – this model is leadership with a managerial direction of support. The employees are leaning towards job performance and contribution. The member of staff need that is met is status and appreciation. The performance outcome is awakening drive.

Collegial – this model is related with a managerial direction of teamwork. The team also work oriented towards responsible behavior and self-discipline. The performance result is moderate

Even though there are several models, most of the organizations used combination of above models.

The organizational behavior does not depend upon deductions based on gut feelings where as trying to collect details, information for issue in a scientific manner under controlled situations. It provides information for the findings so that the behavior of personnel and group could be canalized as desired. Majority of psychologists, social scientists and have carried out research on various aspects related to organization behavior. Job satisfaction and individual performance are determinants of achievement of employee and organizational goals.

Organizations are set up to fulfill the requirement of the people. In modern competitive

world, the organizations should have growth & task-oriented which can achieve at the time of productivity is ensured with zero defect in quality. Employee turnover and absenteeism has a negative impact on efficiency and productivity. It is required to motivate & retained the skill workers by enhancing the job satisfaction. In formal structure of organization all divisions have to function in a coordinated manner to accomplish the organizational goals, vision and objectives. Due to that it is require maintaining positive attitude towards work. Also it is more valuables for managers to develop the suitable work culture by using authority, delegation of certain powers to team members. Benchmarking, re-engineering, job re-design and empowerment are some of the valuables factors.


Leadership is most important aspect of organizational behavior which can be define as ability to influence, motivate others to achieve the set of organizational objectives or goals. In today’s context the managers now are leaders of their groups, their divisions. Event though it may require certain specialist knowledge, the human relations part of the management job. Currently People have more flexibility and more options in their careers, which are them selves more fluid, so keeping employee motivated is very important, due to that Leadership is also important in attempting to minimize employee dissatisfaction. Leadership consists of the effective process of delegation and empowerment.

Broad classification of leadership styles

There are several dimensions to leadership style and different ways of describing leadership styles such as, bureaucratic, benevolent, charismatic, dictatorial, unitary consultative, participative and abdicator. The different types of managerial leadership towards subordinate staff can be classified in following heading.

Authoritarian style which focus on all interactions within the group move towards the manager due to power is with the manager, in this style manager him selves exercises decision-making and authority for determining policy, procedures and regulations for achieving set of objectives. Eg- The employees achieve the task will be given rewards & others who have not achieved punishments. Chemanex group allocating certain objective to be achieved by each employee for a given time, then evaluate the performance based on the task achieved. Evaluation as follows

Marks Category

81-100 Excellent

61-80 Good

41-60 Average

Employee who perform excellently, entitle 4 month bonus, good category 3 months, average category 2.5monthe & less than average No bonus at all. It shows how above style is applicable in today’s context.

Democratic style leadership functions are shared with other staff of the group and the leader and focus of power is more with the group as a whole and there is high integration within the group. All members have a high decision-making, determination of policy and procedure. Eg- Janashakthi Insurance organize the foreign trips based on high performance team for the year

.Laissez-faire style manager are observing that subordinate of the team are working well independently. The manager, enhance them freedom of doing the objectives to carry out they think best and without interfering where as it is required to provide support if help is needed. Where as some confusion over this style, since the word of Genuine is emphasized since which is contrasted with the manager who could not care, of results keeps away from the problem points and manager does not want to get involved.

Eg; Vertusa -Employee has given the freedom to achieve the certain task

Most of the organization having combinations of above styles & employees are not interest to work under the 100% authoritarian style

There are 4 main types of leadership behavior available in accordance with goal path theory

Directive Leadership- Which consist of the way of directing to the subordinates to achieve the goals by considering rules & regulations. Eg- This model applicable in the most of the government organization (The Department head is giving the instructions for its subordinates achieve the task with in the circulars or based on government rules & policies.

Supportive leadership which consist of open and reachable manner and displaying the

needs and welfare of subordinate.

Participative leadership which consists of consult with their subordinates and the evaluation of opinions and different ideas before the manager makes the final decision.

Achievement-oriented leadership consist of setting demanding goals for subordinates, looking for development in their performance and show confidence in subordinates ability to perform well.

Leader should identify the people capability, proper execution and continuous improvement

People capability

It includes setting up the ability, competencies and skills required for the modern world, and how to accomplish those requirements, including competencies evaluation, gap analysis, job and role definitions and career development. Those will lead the modern business is key to the success of this activity.


This consists of delivery of the new model. It includes both “hard” deliverables in the form of project plans, progress reports and budget variances, stakeholder management and “soft” deliverables in the form of communications

Continuous Improvement

This consists of measuring the effectiveness of performances and which ensure opportunities for the further improvements. Balance score card, Reward alignment and performance management are the key methods of evaluating the performances

Every organization the leadership should delegate the authorities to subordinates by considering the capability of the employees & leader should lead the team, motivated, review the out come , continuous training & evaluate the performance.


The basic character of a group is that its members regard themselves as belonging to the group. Although there is no exact definition for ‘group’ it can be defined as follows.

‘A set of people who interact with one another are psychologically aware of one another; and perceive them selves to be a group.

Simply a group can be define as a set of people who share most following characteristics

a definable membership;

group awareness;


common purpose;

interaction; and

ability to act in a unitary manner.

A social system contains all the people in system and their relationships to each other and to the external world. It is a complex set of human relationships interacting in many ways. The behavior of individual affect on the behavior of others directly or indirectly. Groups has basic feature of the working style of any organization. Group Members as well as the managers must co-operate each other to carry out works to achieve objectives of the organization as well as the individuals. Group pressures influence over the performance of the organization as well as the individual members of the organization. Group performance id directly related with the leadership which influence the behavior of the group members. Pleasant working relationships and good teamwork help to improve the morale of employees and work performance. Successful teamwork is a basic feature of modern management practices such as total quality management, empowerment, quality circles and change management. Teamwork is very important as it increases the competitiveness power of the organization in following ways;

increase the productivity

improve quality

encourage innovation

motivate employees and improve their commitment


Employee training is most important aspect in any organization. Employees are key assts of the organization & there are is direct relationship with organizational performance & employee performances. As a result of that employee should improve the skills, capabilities, and strength to compete with technological & global changes. Due to that employee should develop following skills,

Computer skills: employee should develop computer skills which is most important to negotiate with global environment.

Customer service: In today customer satisfaction is most key area of business environment due to high competition of global market, due to that it is required to give proper training.

Diversity: It consist of explanation about how people have different views and perspectives, and includes methods to value diversity

Ethics: It consists of a view about social and corporate responsibility. Further, today’s employees bring a wide variety of values and morals to the organization.

Human relations: Presently organizational employees work under pressure & more stress on work load. Therefore there may be lots of misunderstandings and conflicts. Proper training will minimized the unnecessary conflict & misunderstandings.

Quality initiatives: It consist of basic training requirement about the quality concepts, Guidance for qualities,& procedures Eg; benchmarking, Total Quality Management, Quality Circles..

Safety: Safety training is more important specially for the employees undertaking risk jobs eg: working with heavy equipment , chemicals, Fuel, gas or Electricity related employments

Most of the organization has given safety equipments when doing the risk operations

Eg Hayleys ADC PLC operating chemical related productions & employees are given safety manual, safety equipments & proper training

Sexual harassment: This includes training about sexual harassment on inappropriate behavior. Normally this is included in organizational policies.

Why training is important and Benefits from Employee by proper Training and Development

There are several sources that the employee can train & develop them selves. They can use organizational policies, procedures, safety manuals, online information on training and development. Employees are benefiting by proper training & developments. It may increase moral , job satisfaction, motivation of employee, Enhanced the productivity, efficiency of employee resulting financial benefit to the organization, Minimized the employee turnover, due to the new technologies & methods enhanced the production capacity

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Diversity energizes customer service, employee motivation & improvement of moral of employee, decision making & team performances. With rapid change of global market employment relationships have also emerged from the changing work force, information technology, and globalization factors. Currently most of the organization more concentrates on corporate social responsibility to compete with standardization of values and ethics of other organizations. Currently organizational behavior pushes the competitiveness.

Considering the above facts organizational behavior, play major role in today’s context


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