1. ORGANIZATIONAL BEHAVIOR Ace Institute of Management M-B-A-e Term IV Spring Trimester 2011 Module 1: Organizational Behaviour Module 1: Organizational Behavior & Leadership – Ace Institute of Management PowerPoint Compilation by Course Moderator Satish Jung Shahi

2. © 2003 Prentice Hall Inc. All rights reserved.1–21–2 Ice Breaker Game: Questions:  Gender: Female? Male?  Origin: Valley? Outside?  Religion: Muslim? Christian? Buddhist? Hindu? Others?  Ethnicity: Lama/Sherpa? Rai/Limbu? Gurung? Magar? Thakali? Newar? Chhetri? Bahun? Others?  Employment: Yes? No? “In between” jobs?  Status: Married? Unmarried? Single? [Children?]  Living status: Parents? Self?  Lifestyle: Somewhat private? Social?  Extracurricular: Games? Music? Movies? Reading?  Pets: Dogs? Cats? Others?  Travelled: Abroad, where? Inside Nepal? None?  Choice: Home Assignments? Class Tests? Both? None?

3. © 2003 Prentice Hall Inc. All rights reserved.1–31–3 Theme: “People are like fingerprints, unique in their own ways.”

4. © 2003 Prentice Hall Inc. All rights reserved.1–41–4 The Organization

5. © 2003 Prentice Hall Inc. All rights reserved.1–51–5 Some definitions of OB:  “Organizational Behavior is a field of study that investigates the impact that individuals, groups and structure have on behavior within organizations, for the purpose of applying such knowledge toward improving and organization's effectiveness,” - Stephen P. Robbins.  “Organizational Behaviour is the study and application of knowledge about how people – as individuals and as groups – act within organizations,” - Keith Davis & John Newstorm.

6. © 2003 Prentice Hall Inc. All rights reserved.1–61–6 The Organization  Mission  Vision  Goals  Objectives  What do you plan to achieve in the next five years?

7. © 2003 Prentice Hall Inc. All rights reserved.1–71–7 Individual Goals  You have to work hard to be good.  When goal is easy, stretch.  Be yourself, you are the best contributor to who can make a difference.  Best way to change a habit is to be determined.  Learn from past mistakes and not repeat them.  You can make a difference, the choice is entirely yours.

8. © 2003 Prentice Hall Inc. All rights reserved.1–81–8 We the People  People constitute an organization’s most important vital factor in its success or failure. Eg. Nepal Army, A-I-M, Citizen’s Bank, Chaudhary Group, Kantipur Television Pvt. Ltd., C-I-A, Shell Oil Company, Dell, FedEx, etc.  It is only the people who can deal with four “any” – anybody, anyplace, anytime, and anyway environment of the future.  An organization may start with zero funding but will become financially viable with creativity resourcefulness, hardworking and honest people.  Over abundance of finances and materials may go to waste if handled by incompetent and dishonest people.

9. © 2003 Prentice Hall Inc. All rights reserved.1–91–9 Types of Organization: IMAGINE, how would it be: Case 1: If your grandfather was running a supermarket 50 years ago in Kathmandu? Case 2: If you were to open a supermarket now in Kathmandu?

10. © 2003 Prentice Hall Inc. All rights reserved.1–10 Traditional & Learning Organizations: FunctionsTraditional Org.Learning Org. Determination of Overall Directions: The top mgmt. provides vision. Shared vision though teamwork. Idea Formulation & Implementation: Top mgmt. decides what is to be done. Takes place at all levels. Nature of Org. Thinking: Each person is responsible for one's individual job, duties, & needs. Both individual and others job with utmost care for work inter- linkages.

11. © 2003 Prentice Hall Inc. All rights reserved.1–11 Types of Organization: FunctionsTraditional Org.Learning Org. Conflict Resolution: Use of power & influence. Use of collaborative learning & problem solving. Leadership & Motivation: Leader establishes org. vision, provides rewards & punishment, & maintains overall control. Leader builds a shared vision, empowers the personnel, inspires commitment & encourages teamwork.

12. © 2003 Prentice Hall Inc. All rights reserved.1–12 Extra Reading 1 & Discussion: A New Kind of Company (Newsweek International, published on 04/07/2005)  What makes Ratan Tata a good manager?  What does your own bosses, i.e. managers do at your respective offices?

13. © 2003 Prentice Hall Inc. All rights reserved.1–13 What Managers Do (Cont’d): Managerial Activities Make decisions Allocate resources Direct activities of others to attain goals What else? Managerial Activities Make decisions Allocate resources Direct activities of others to attain goals What else?

14. © 2003 Prentice Hall Inc. All rights reserved.1–14 Management Functions: Management Functions PlanningPlanningOrganizingOrganizingLeadingLeadingControllingControlling

15. © 2003 Prentice Hall Inc. All rights reserved.1–15 Management Functions (cont’d)

16. © 2003 Prentice Hall Inc. All rights reserved.1–16 Management Functions (cont’d)

17. © 2003 Prentice Hall Inc. All rights reserved.1–17 Management Functions (cont’d)

18. © 2003 Prentice Hall Inc. All rights reserved.1–18 Management Functions (cont’d)

19. © 2003 Prentice Hall Inc. All rights reserved.1–19 E X H I B I T 1-1a Mintzberg’s Managerial Roles

20. © 2003 Prentice Hall Inc. All rights reserved.1–20 E X H I B I T 1-1b Mintzberg’s Managerial Roles (cont’d)

21. © 2003 Prentice Hall Inc. All rights reserved.1–21 E X H I B I T 1-1c Mintzberg’s Managerial Roles (cont’d)

22. © 2003 Prentice Hall Inc. All rights reserved.1–22 Management Skills:

23. © 2003 Prentice Hall Inc. All rights reserved.1–23 Effective Versus Successful Managerial Activities (Luthans): 1.Traditional Management. Decision making, planning, and controlling. 2.Communications. Exchanging routine information and processing paperwork. 3.Human Resource Management. Motivating, disciplining, managing conflict, staffing, and training. 4.Networking. Socializing, politicking, and interacting with others. 1.Traditional Management. Decision making, planning, and controlling. 2.Communications. Exchanging routine information and processing paperwork. 3.Human Resource Management. Motivating, disciplining, managing conflict, staffing, and training. 4.Networking. Socializing, politicking, and interacting with others.

24. © 2003 Prentice Hall Inc. All rights reserved.1–24 E X H I B I T 1-2 Allocation of Activities by Time:

25. © 2003 Prentice Hall Inc. All rights reserved.1–25 E X H I B I T 1-6 Basic OB Model, Stage I:

26. © 2003 Prentice Hall Inc. All rights reserved.1–26 Food for Thought: How true is it?  Happy workers are productive workers.  All individuals are most productive when their bosses are friendly, trusting and approachable.  The best leaders are those that exhibit consistent behaviour, regardless of the situations they face.  Interviews are effective selection devices for separating job applicants who would be high-performing employee from those who would be low performers.  Everyone wants a challenging job.  You have to scare people a little to get them to do their jobs.  Because specific goals intimidate people, individuals work harder when asked just to do their best.  Everyone is motivated by money.  Most people are much more concerned with the size of their own salaries than with the size of other people's salaries.  The most effective work groups are devoid of conflict.

27. © 2003 Prentice Hall Inc. All rights reserved.1–27 Food for Thought: How true is it? (cont’d) Answer: For most part, they are all false and we shall touch on each later in this course. Moreover, what it matters is that many of the views on human behaviour are based on intuition rather than facts to a layperson. That is where O-B could have the answers as it involves a systematic approach to the study of behaviour.

28. © 2003 Prentice Hall Inc. All rights reserved.1–28 In the End… 1.Go through “Extra Reading 2 – U-turn on a Train” for next class. 2.Also, Robbins Chapter 1. 3.Please utilize your time doing a lot of extra readings. Remember, a quiz is scheduled for Session Three. 4.Drive Safely!!!

29. © 2003 Prentice Hall Inc. All rights reserved.1–29 Historical Perspective on O-B: SchoolDecadeEmphasis Adam Smith's pin manufacturing in 1776 <1900 (Perspective: Structural) Little formal mgmt.: The military & the church as basic models. More importance on division of labour & machinery to assist workers. Scientific Mgmt. (Frederick W. Taylor) 1910s (Perspective: Structural) Management as a science with employees having specific but different responsibilities with white colour versus blue division of work. Time and motion study, carrot and stick principle. Classical Mgmt. (Hendry Fayol: 14 Principles of Mgmt, Chester Bernard) 1920s (Perspective: Structural) Listed the duties of manager as planning, organizing, commanding employees, coordinating activities & controlling performance, unity of command, scalar chain of command.

30. © 2003 Prentice Hall Inc. All rights reserved.1–30 Historical Perspective on O-B (cont’d) SchoolDecadeEmphasis Bureaucracy (Max Weber) 1920s (Perspective: Structural) Order, system, uniformity, consistency in mgmt., rule of law as against whimsical or arbitrary application of rules. Human Relations (Dale Carnegie, A. Maslow & Douglas Mcgregar) Hawthorne Experiment (Elton Mayo & Associates) >1920s (Perspective: Behavioural) Order, system, uniformity, consistency in mgmt, rule of law against whimsical or arbitrary application of rules. Group Dynamics (Kurt Lewin, L. Coch) 1940s (Perspective: Behavioural) Individual participation in decision-making, impact of group works in performance.

31. © 2003 Prentice Hall Inc. All rights reserved.1–31 Historical Perspective on O-B (cont’d) SchoolDecadeEmphasis Leadership1950s (Perspective: Behavioural) Social and task leaders. Socio-technical (Trist & Bamforth) 1960s (Perspective: Integrative) Considering technology & work group in understanding a work system. System Theory (Jack Smith in General Motors) 1960s (Perspective: Integrative) Organization as an open system with inputs, process & outputs, & feedback.

32. © 2003 Prentice Hall Inc. All rights reserved.1–32 Historical Perspective on O-B (cont’d) SchoolDecadeEmphasis Enriching Jobs (F. Herzberg, J. R. Hackman & G. Oldham) Late 1950s Mid 1970s (Perspective: Integrative) Fit between organizational processes & design of the job. O-B Today: Contingency perspective, dynamic & unpredictable) 1990s, 2000s (Perspective: Integrative) A global arena, T-Q-M, I-T, Business ethics, access to most skilled workforce.

33. © 2003 Prentice Hall Inc. All rights reserved.1–33 Contributing Disciplines to the O-B Field: E X H I B I T 1-3a

34. © 2003 Prentice Hall Inc. All rights reserved.1–34 Contributing Disciplines to the O-B Field (cont’d) E X H I B I T 1-3b

35. © 2003 Prentice Hall Inc. All rights reserved.1–35 Contributing Disciplines to the O-B Field (cont’d) E X H I B I T 1-3c

36. © 2003 Prentice Hall Inc. All rights reserved.1–36 Contributing Disciplines to the O-B Field (cont’d) E X H I B I T 1-3d

37. © 2003 Prentice Hall Inc. All rights reserved.1–37 Contributing Disciplines to the O-B Field (cont’d) E X H I B I T 1-3f

38. © 2003 Prentice Hall Inc. All rights reserved.1–38 Food for Thought: The importance of other disciplines are also rapidly increasing with the workplace turning more and more complex. What do you think of these fields?  Society & Culture.  Media & Society.  Research Methodology.  Ethnicity & Society.  Education & Society.  Economy & Society.  Technology & Society.  History & Society.  Gender & Society.

39. © 2003 Prentice Hall Inc. All rights reserved.1–39 Extra Reading 2 & Discussion: “U-Turn on a Train” (Outlook, published on 19/06/2006)  Is Laloo Prasad Yadav a good manager?

40. © 2003 Prentice Hall Inc. All rights reserved.1–40 Enter Organizational Behavior

41. © 2003 Prentice Hall Inc. All rights reserved.1–41 There Are Few Absolutes in OB Contingency Variables xy

42. © 2003 Prentice Hall Inc. All rights reserved.1–42 The Dependent Variables x y

43. © 2003 Prentice Hall Inc. All rights reserved.1–43 The Dependent Variables (cont’d)

44. © 2003 Prentice Hall Inc. All rights reserved.1–44 The Dependent Variables (cont’d)

45. © 2003 Prentice Hall Inc. All rights reserved.1–45 The Dependent Variables (cont’d)

46. © 2003 Prentice Hall Inc. All rights reserved.1–46 The Dependent Variables (cont’d) deviant workforce behaviour Voluntary behaviour that violates significant organizational norms and, in so doing, threatens the well- being of the organization or its members.

47. © 2003 Prentice Hall Inc. All rights reserved.1–47 The Independent Variables Independent Variables Individual-Level Variables Organization System-Level Variables Group-Level Variables

48. © 2003 Prentice Hall Inc. All rights reserved.1–48 Extra Reading 3 & Discussion: “Himalayan Vistas” (Forbes Asia, published on 06/03/2008)

49. © 2003 Prentice Hall Inc. All rights reserved.1–49 "People are the key" – Sam Walton, founder of Wal-Mart. There are many solutions being offered to deal with the challenges in modern management. However, the simple and most profound solution may be sought by looking at the following notes: Only true & lasting competitive advantages comes through human resources and how they are managed. The people, their ideas, their productivity, their willing to change and their ability to learn are the main things. The fact that human resources do make a difference. It is only the people who can deal with four 'any': anybody, anyplace, anytime and anyway environment of the future.

50. © 2003 Prentice Hall Inc. All rights reserved.1–50 Challenges and Opportunities in O-B: Downsizing/Rightsizing - 'Lean & Mean' organizations. Quality & Productivity (Up) – T-Q-M; Reengineering. Information Technology. –In the past 25 years, the global network of computers, telephones & television has increased its capacity a million times over. –Today's $1,000 laptop computer is many times powerful than a $100 million worth mainframe computer. –A three-minute Kathmandu-Janakpur phone call cost around Rs. 20, but a page of e-mail to the United States cost less than a rupee in the 1980s. It would have cost more than Rs. 200 per page on a telegram. –No modern day communication medium has ever grown faster than the Internet.

51. © 2003 Prentice Hall Inc. All rights reserved.1–51 Challenges and Opportunities in O-B (cont’d): Responding to Globalization. Improving People Skills. Managing Workforce Diversity. Responding to the Labor Shortage. Improving Customer Service. Improving Ethical Behaviour. Stimulating Innovation Change. Coping with “Temporariness”. Working in Networked Organizations. Helping Employees Balance Work-Life Conflicts. Creating a Positive Work Environment.

52. © 2003 Prentice Hall Inc. All rights reserved.1–52 Emerging Trends in O-B: Kaizan Approach: It is a Japanese management practice that focuses continuous improvement in a product rather than resting on the laurels of success. It means training all employees throughout the organization to build basic skills such as problem solving & communications. The training is thus incorporated into the workflow procedure that usually involves self-managed work teams. Like T-Q-M, it also means empowering employees to make decisions regarding work procedures and make suggestions on work issues such as save workspace, reduce waste, and lower costs.

53. © 2003 Prentice Hall Inc. All rights reserved.1–53 Emerging Trends in O-B (cont’d): Quality Circles: This involves a workgroup of employees who meet regularly to discuss their quality problems, investigate causes, recommend solutions, & take corrective actions.

54. © 2003 Prentice Hall Inc. All rights reserved.1–54 Emerging Trends in O-B (cont’d): Management by Objective (M-B-O): M-B-O is a management program that encompasses specific goals, participatively set, for an explicit time period, with feedback on goal progress. It emphasizes participatively set goals that are tangible, verifiable & measurable. It was originally proposed more than 50 years ago as a means of using goals to motivate people rather than control them. The key elements of M-B-O are: –Goal specificity. –Participative decision-making. –An explicit time period. –Performance feedback.

55. © 2003 Prentice Hall Inc. All rights reserved.1–55 O-B in the Nepali Context: Past/Present 1Since the restoration of democracy in 1990, economic policy has been liberalized; market opened & foreign direct investment & transfer of technology encouraged. 2Nepal recognized as the 148th member of the World Trade Organization in Cancun, Mexico on 12 September 2003. Nepal's formal application to obtain W-T-O membership was filed on July 1998. Nepal is the only country where the United Nations established a separate W-T-O Cell to make the transformation process much easy. 3However, the history of privatisation in Nepal that was supposed to support the successive government's liberal economic environment looks extremely grim. Out of 14 privatised units excluding two liquidations, four have already closed down while the rest are struggling to survive. 4Multiple trade unions & widespread politicalization of management is existent. General belief exists that motivation is generally money based with low priority on productivity.

56. © 2003 Prentice Hall Inc. All rights reserved.1–56 O-B in the Nepali Context (cont’d): 5Nepali management is still based on process concept where people aspect remains neglected. Management is still mostly tradition bound with deep- rooted paternalism. Staffing usually not based on merit & needs with massive family relations & political influences in human resource management. 6Authority remains centralized to top management but mgmt tends not to accept final responsibility & seem afraid to delegate. Leadership usually lacks democratic or participative orientation with existing only one-way "top-to bottom" communication. Control is generally for threat & punishment rather than correction of performance to set future standards. 7Unity of direction is unclear but chain of command is very strong & deep- rooted with utmost importance to hierarchy. In most private sector, employee reports to various bosses. Individual goals do not get internalised with organizational goals & interpersonal relationships are dominated by conflicts & personality clashes. 8Long term planning is lacking with most plans based only on annual budget announcements. Those involved in implementation are ignored in the planning process.

57. © 2003 Prentice Hall Inc. All rights reserved.1–57 O-B in the Nepali Context (cont’d): 9The ongoing Maoist/political conflict has still painted a grim picture in Nepali business environment. Future: 1Trends are changing with entry of more multinationals in the Nepali market. Government attracting more foreign direct investment with projects such as the Special Economic Zones (S-E-Zs) to make the economy more sound & professional. 2Non-residential Nepalis urging more direct role in Nepali business environment. Formulation of Act to provide legal backing is currently under progress. 3Nepal declares it is willing to become a transit hub between upcoming global players India & China. 4Fresh B-B-A/M-B-A graduates with the background of modern business education are entering the job market. Even public administration is being revamped to give fresh look.

58. © 2003 Prentice Hall Inc. All rights reserved.1–58 In the End… 1.Go through Robbins Chapter 1 & 2 for next class. 2.Quiz scheduled for Session Three; Duration 1 Hr, 30 Mins; 90 marks worth, will bear 5% in your total grading. 3.All the Best!!!