Twelfth Revised Edition 2016 Organisational
Twelfth Revised Edition 2016Organisational BehaviourK. Aswathappa, Ph.D.Former Director,Canara Bank School of Management Studies,Bangalore University,Bangalore.MUMBAI NEW DELHI NAGPUR BENGALURU HYDERABAD CHENNAI PUNE LUCKNOW AHMEDABAD ERNAKULAM BHUBANESWAR INDORE KOLKATA GUWAHATI
AuthorNo part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means,electronic, mechanical, photocopying, recording and/or otherwise without the prior written permission of the publisher.First Edition:1991Sixth Revised and Enlarged Edition:2005Second Revised Edition:1994Seventh Edition:2007Third Revised Edition:1996Eighth Revised and Enlarged Edition:2009Fourth Revised Edition:1997Ninth Revised and Enlarged Edition:2010Reprint February, July:1998Tenth Revised and Enlarged Edition:2012Reprint:1999Eleventh Revised Edition:2013Fifth Revised Edition:2000Edition:2014, 2015Reprint:2001, 2002, 2003, 2004Twelfth Revised Edition:2016Published by: Mrs. Meena Pandey for Himalaya Publishing House Pvt. Ltd.,“Ramdoot”, Dr. Bhalerao Marg, Girgaon, Mumbai - 400 004.Phone: 022-23860170/23863863, Fax: 022-23877178E-mail: himpub@vsnl.com; Website: www.himpub.comBranch Offices:New Delhi: “Pooja Apartments”, 4-B, Murari Lal Street, Ansari Road, Darya Ganj,New Delhi - 110 002. Phone: 011-23270392, 23278631; Fax: 011-23256286Nagpur: Kundanlal Chandak Industrial Estate, Ghat Road, Nagpur - 440 018.Phone: 0712-2738731, 3296733; Telefax: 0712-2721216Bengaluru: No. 16/1 (Old 12/1), 1st Floor, Next to Hotel Highlands, Madhava Nagar,Race Course Road, Bengaluru - 560 001.Phone: 080-22286611, 22385461, 4113 8821, 22281541Hyderabad: No. 3-4-184, Lingampally, Besides Raghavendra Swamy Matham, Kachiguda,Hyderabad - 500 027. Phone: 040-27560041, 27550139Chennai: New-20, Old-59, Thirumalai Pillai Road, T. Nagar, Chennai - 600 017. Mobile: 9380460419Pune: First Floor, "Laksha" Apartment, No. 527, Mehunpura, Shaniwarpeth(Near Prabhat Theatre), Pune - 411 030. Phone: 020-24496323/24496333;Mobile: 09370579333Lucknow: House No 731, Shekhupura Colony, Near B.D. Convent School, Aliganj,Lucknow - 226 022. Phone: 0522-4012353; Mobile: 09307501549Ahmedabad: 114, “SHAIL”, 1st Floor, Opp. Madhu Sudan House, C.G. Road, Navrang Pura,Ahmedabad - 380 009. Phone: 079-26560126; Mobile: 09377088847Ernakulam: 39/176 (New No: 60/251) 1st Floor, Karikkamuri Road, Ernakulam,Kochi – 682011. Phone: 0484-2378012, 2378016 Mobile: 09387122121Bhubaneswar: 5 Station Square, Bhubaneswar - 751 001 (Odisha).Phone: 0674-2532129, Mobile: 09338746007Indore: Kesardeep Avenue Extension, 73, Narayan Bagh, Flat No. 302, IIIrd Floor,Near Humpty Dumpty School, Indore - 452 007 (M.P.). Mobile: 09303399304Kolkata: 108/4, Beliaghata Main Road, Near ID Hospital, Opp. SBI Bank,Kolkata - 700 010, Phone: 033-32449649, Mobile: 7439040301Guwahati: House No. 15, Behind Pragjyotish College, Near Sharma Printing Press,P.O. Bharalumukh, Guwahati - 781009, (Assam).Mobile: 09883055590, 08486355289, 7439040301DTP by: Priyanka M.Printed at: Geetanjali Press Pvt. Ltd., Nagpur. On behalf of HPH
Preface to the Twelfth Revised EditionOrganisational Behaviour is coming out in its Twelfth edition. But not before incorporating several changes onthe following lines:AdditionsChapter 1: New and updated table on the best companies to work for; Additional inputs to the text.Chapter 2: Additional inputs to the text.Chapter 3: Three new challenges to OB: Career management, Talent management and Globalisation. Newclosing case.Chapter 4: New chapter on Ethics and Social Responsibility.Chapter 5: MARS model of behaviour is added; New exercises included.Chapter 6: New opening case; New section on types of intelligence; Additional inputs to the text.Chapter 7: New opening case; New closing case; Text recast.Chapter 8: New opening case; Additional inputs to the text.Chapter 10: New opening case; Social Information Processing Model added; Responses to job dissatisfaction rewritten.Chapter 11: New section on Motivation across Cultures added.Chapter 12: New section on Employee Engagement.Chapter 13: Additional inputs to the text.Chapter 15: New exhibit.Chapter 17: Chapter renamed; New sections added on Psychological Contract, Trust and Deviance.Chapter 18: New EDP techniques such as Coaching, Action learning, Staff meetings, Lateral transfers, Seminarsand conferences, Case studies and Corporate universities; New section on Leadership across cultures.Chapter 19: Additional inputs on Channel; E-mail; Choosing a channel; TA for Effective communication.Chapter 21: New write-up on leader’s embedding values on organisational culture.Chapter 22: New section on Reasons why change fails to produce change; New exercise.OthersA new feature is unique to the present edition: Key Terms. Key terms with definitions are appended to eachchapter. Definitions are catchy and close to the real-life happenings.Learning objectives for all the chapters have been rewritten. In each chapter, connectivity among learning objectives,text and summary has been maintained by indicating numbers of objectives in the text and summary. Likewise, keyterms are page-numbered.May I submit that the Twelfth edition of Organisational Behaviour is much enriched. It is upto the esteemedreaders to comment on it.— K. Aswathappadr k aswathappa@yahoo.com
Preface to the First EditionOrganisational behaviour is a fascinating subject. The more one reads about it the more absorbingdoes it become. From practical application point of view also, probably the subject “OrganisationalBehaviour” ranks first among other management-oriented disciplines. It is for these reasons that the subjectis recommended as one of the disciplines of study for M.Com., MBA and various diploma courses inmanagement.Unfortunately, not many books are written by Indian authors on organisational behaviour. A readeris, therefore, forced to depend upon books authored by foreign writers. Though the foreign books are ofhigh standard, they only reflect the cultural ethos of the countries in which they are written and published.What is needed for an Indian student is a book which can help blend principles of organisational behaviourwith the cultural moorings of our people.Organisational Behaviour is a small attempt in this direction. As can be seen in the subsequent pagesof this book, anecdotes drawn from our own cultural milieu have been used to explain the principles oforganisational behaviour more tellingly.Organisational Behaviour is divided into four parts. Part-I introduces the subject, Part-II coversdiscussion on individual behaviour, Part-III focuses on inter-individual behaviour, and Part-IV includesdiscussion on organisations. The arrangement of chapters is logical. Figures have been used extensivelyto reduce monotony of reading. Further, instead of simply explaining a concept and leaving it at that, wehave tried to bring out the managerial implications of each principle. We hope that the book will behighly useful to the readers.In preparation of the text, we have consulted several sources which have been acknowledged atrelevant contexts. We wish to place on record our grateful thanks to Prof. O.R. Krishnaswami, formerDean, Department of Commerce and Management, Bangalore University, for his encouragement andadvice which were of immense help to us.We thanks Shri. D.P. Pandey of Himalaya Publishing House Pvt. Ltd. for bringing out this book.— K. Aswathappa
ContentsChapter 1A Prelude to Organisational Behaviour1 – 31Learning Objectives – Opening Case – What are Organisations? – Why doOrganisations Exist? – Nature of Organisational Behaviour – Foundations of OB– Why Study OB? – Shortcomings – Organisational Arrangement for OB –Contemporary OB – Scope of Organisational Behaviour – Contextual Perspectivesof OB – Evolution of OB – OB Model – Summary – Key Terms – Questions –Exercises – Closing Cases I and II – References.Chapter 2Management and Managers32 – 56Learning Objectives – Opening Case – Nature of Management – Functions ofManagement – Manager’s Roles – Types of Managers – Changing Hierarchies ofManagers – What Makes Managers Successful? – Evolution of Management Theory– Indian Contributions to Management Practices – Contemporary Trends inManagement Thinking – Summary – Key Terms – Questions – Exercise – ClosingCase – References.Chapter 3OB — The Emerging Challenges57 – 88Learning Objectives – Opening Case – Managing Diversity – Career Management– Talent Management – Changing Demographics of Workforce – ChangedEmployee Expectations – Globalisation – Technology Transformation – PromotingEthical Behaviour and CSR – Organisational Justice – Summary – Key Terms –Questions – Exercises – Closing Case – References.Chapter 4Ethics and Social Responsibility89 – 109Learning Objectives – Ethics – Sources of Business Ethics – Social Responsibility,CSR Debate, Common Characteristics – Summary – Key Terms – Questions –Exercise – Closing Case.Chapter 5Foundations of Individual Behaviour110 – 130Learning Objectives – Opening Case – Personal Factors – Environmental Factors– Organisational Systems and Resources – Models of Individual Behaviour –Summary – Key Terms – Questions – Exercises – Closing Case – References.Chapter 6Intelligence131 – 143Learning Objectives – Opening Case – Nature of Intelligence – Types of Intelligence– Theories of Intelligence – Measurement of Intelligence – Factors InfluencingIntelligence – Intelligence and OB – Summary – Key Terms – Questions – TeachYourself – Closing Case – References.Chapter 7PersonalityLearning Objectives – Opening Case – Nature of Personality – The Shaping ofPersonality – Determinants of Personality – Personality Structure – OB RelatedTraits – Personality and OB – Summary – Key Terms – Questions – Exercises –Closing Case – References.144 – 168
Chapter 8Perception and Attribution169 – 199Learning Objectives – Opening Case – Perception: Meaning and Definition –Factors Influencing Perception – Perceptual Process – The Process of Interpreting– Attribution Theory – When Perception Fails – Perception and OB – Managingthe Perception Process – Social Perception – Summary – Key Terms – Questions– Exercises – Closing Case – References.Chapter 9Learning200 – 223Learning Objectives – Opening Case – Meaning and Definition – Learning —Explicit and Tacit Knowledge – How Learning Occurs? – Principles of Learning –Learning and OB – Conclusion – Summary – Key Terms – Questions – Exercise –Closing Case – References.Chapter 10Attitudes and Values224 – 255Learning Objectives – Opening Case – Nature of Attitudes – Components ofAttitudes – Formation of Attitudes – Functions of Attitudes – Changing Attitudes –Work-related Attitudes – Values – Attitudes, Values and OB – Summary – KeyTerms – Questions – Exercises – Closing Case – References.Chapter 11Motivation — Theories and Principles256 – 301Learning Objectives – Opening Case – Nature of Motivation – Importance ofMotivation – Motivational Challenges – Theories on Motivation – Review ofTheories – Motivation across Cultures – Summary – Key Terms – Questions –Exercises – Closing Case – References.Chapter 12Applied Motivational Practices302 – 338Learning Objectives – Opening Case – Rewards – Job Design – BehaviourModification – Empowerment – Goal Setting Theory – Problem Employees –Quality of Work Life – Employee Engagement – Others – Summary – Key Terms– Questions – Exercise – Closing Case – References.Chapter 13Work Stress339 – 362Learning Objectives – Opening Case – Meaning and Definition – The StressExperience – Work Stress Model – Burnout – Stress Management – Stress andPerformance – Summary – Key Terms – Questions – Exercises – Closing Case –References.Chapter 14Group Dynamics363 – 400Learning Objectives – Opening Case – Nature of Groups – Types of Groups –Why do People Join Groups? – Group Development – Usefulness of Groups inOrganisations – Pitfalls of Groups – Determinants of Group Behaviour – GroupStructuring – Group Decision Making – Groups and OB – Summary – Key Terms– Questions – Exercises – Closing Cases I and II – References.Chapter 15Team DynamicsLearning Objectives – Opening Case – Nature of Teams – Teams vs. Groups –Benefits from Teams – Types of Teams – Implementing Teams in Organisations –Team Issues – Effective Teamwork – Typical Teams in Organisations – Can GroupsBecome Teams? – Summary – Key Terms – Questions – Exercises – Closing Case– References.401 – 420
Chapter 16Power and Political Behaviour421 – 447Learning Objectives – Opening Case – Power – Politics – Ethics of Power andPolitics – Summary – Key Terms – Questions – Exercises – Closing Case– References.Chapter 17Workplace Behaviour – Conflict, Negotiation, Trust, PsychologicalContract and Deviance448 – 485Learning Objectives – Opening Case – Nature of Conflict – Changing Views ofConflict – Functional and Dysfunctional Conflict – The Process of Conflict – Levelsof Conflict – Conflict Resolution – Managerial Implications – Negotiation andConflict Resolution – Deviance – Psychological Contract – Trust – Summary –Key Terms – Questions – Exercise – Closing Case – References.Chapter 18Leadership — Influencing Others486 – 535Learning Objectives – Opening Case – Nature of Leadership – Leadership andManagement – Importance of Leadership – Formal and Informal Leadership –Leadership Styles and Their Implications – Theories of Leadership – What Does ItMean? – Contemporary Issues on Leadership – Summary – Key Terms – Questions– Exercise – Closing Case – References.Chapter 19Communication536 – 571Learning Objectives – Opening Case – Meaning and Definition – Significance –Interpersonal Communication – Organisational Communication – CommunicationNetworks – Communication Roles – Communication Policies and theCommunication Audit – Informal Communication – Communication Media –Information Technologies – Managerial Implications – Summary – Key Terms –Questions – Exercises – Closing Case – References.Chapter 20Organisations572 – 610Learning Objectives – Opening Case – Nature of Organisations – OrganisationalStructure – Organisational Design – Key Factors in Organisational Design – Typesof Organisational Structures – Organisations for Future – Structure Decisions –Informal Organisations – Managerial Implications – Summary – Key Terms –Questions – Exercises – Closing Case – References.Chapter 21Organisational Culture, Creativity and Innovation611 – 646Learning Objectives – Opening Case – Meaning and Definition – CulturalDimensions – How is Culture Created? – Sustaining the Culture – Effects of Culture– Changing Organisational Culture – Creativity in Organisations – Innovation inOrganisations – Summary – Key Terms – Questions – Exercises – Closing Case –References.Chapter 22Organisational Change and DevelopmentLearning Objectives – Opening Case – Nature of Change – Levels of Change –Importance of Change – Types of Change – Forces for Change in Organisations –Resistance to Change – The Change Process – Organisational Development –OD Interventions – Time to Implement Change – Managerial Implications –Summary – Key Terms – Questions – Closing Case – References.647 – 682
Chapter 23Decision Making683 – 701Learning Objectives – Opening Case – Nature of Decision and Decision Making– Types of Decisions – Decision Making Conditions – Models of Decision Making– Decision Making Process – Barriers to Effective Decision Making – DecisionMaking Styles – Individual vs. Group Decision Making – Summary – Key Terms –Questions — Exercise – Closing Case – References.Chapter 24Human Resource Policies and Practices702 – 719Learning Objectives – Human Resource Policies – Human Resource Planning –Job Analysis – Recruitment – Selection – Orientation and Placement – Trainingand Development – Employee Remuneration – Performance Appraisal – JobEvaluation – Industrial Relations – Summary – Key Terms – Questions – ClosingCase I and II – References.Chapter 25International Organisational Behaviour720 – 752Learning Objectives – Opening Case – Trends in International Business – CulturalDifferences and Similarities – Individual Behaviour in the Global Perspective –Interpersonal Behaviour across Cultures – Organisational Characteristics in anInternational Context – Summary – Key Terms – Questions – Exercise – ClosingCase – References.Index753 – 760
1A PRELUDE TOORGANISATIONALBEHAVIOUR“I am not smart. I try to observe. Millions saw the apple fall, but Newton was the one who asked why.”— B. Baruch“Wise men talk because they have something to say; fools, because they have to say something.”— PlatoAfter reading this chapter, you should understand —1. Nature of organisations, reasons why they exist and theireffectiveness2. Nature of OB3. Foundations for OB4. Reasons why one should study OB5. Shortcomings of OB6. Behavioural sciences that have contributed to OB7. Scope of OB8. Approaches to the study of OB9. Evolution of OB10. Model that helps study of OB in a systematic way.
2Organisational Behaviour Chapter One . Opening CaseA Tale of Twists and TurnsRudely shaken, Vijay came home in the evening. He was not in a mood to talk to his wife.Bolted inside, he sat in his room, lit a cigarette, and brooded over his experience with acompany he loved most.Vijay, an M.Com. and an ICWA, joined the finance department of a Bangalore-based electriccompany (Unit 1), which boasts of an annual turnover of 400 crore. He is smart, intelligent, butconscientious. He introduced several new systems in record-keeping and was responsible for costreduction in several areas. Being a loner, Vijay developed few friends in and outside the organisation.He also missed promotions four times though he richly deserved them.G.M. Finance saw to it that Vijay was shifted to Unit 2 where he was posted in the purchasedepartment, though purchase was not his cup of tea. Vijay went into it whole hog, streamlined thepurchasing function and introduced new systems, particularly in vendor development. Being honesthimself, Vijay ensured that nobody else made money through questionable means.After two years in purchase department, Vijay was shifted to stores. From finance to purchaseand then to stores was too much for Vijay to swallow.He burst out before the unit head, 2 and unable to control his anger, Vijay put in his papers too.The unit head was aghast at this development but did nothing to console Vijay. He forwarded thepapers to the V.P. Finance, Unit 1.The V.P. Finance called in Vijay, heard him for a couple of hours, advised him not to lose heart,assured him that his interests would be taken care of, and requested him to resume duties in purchasedepartment of Unit 2: Vijay was also assured that no action would be taken on the papers he had putin.Six months passed by. Then came the time to effect promotions. The list of promotees wasannounced and to his dismay, Vijay found that his name was missing. Angered, Vijay met the unithead 1 who coolly told Vijay that he could collect his dues and pack off to his house for good. It wasgreat betrayal for Vijay.We now take you to an exciting field of human behaviours in organisational settings. Suchbehaviours reveal varied and differing stories about individuals working in organisations. Someare inspiring and others are almost devastating (see opening case). Organisational Behaviour(OB) tells us the stories illustrating with the causes for actions, their consequences, and correctivemeasures if things go wrong. Before understanding the nature of OB, it is useful to gain knowledgeabout the organisations themselves.Few things touch our daily life as much as organisations do. We depend on organisationsfor education, employment, food, clothing, shelter, health, wealth, recreation, travel, and muchmore. They touch every aspect of human life, from birth-to-death. In fact, life becomes unlivablesans organisations.But most of us have a casual attitude towards organisations. We notice their importancewhen they fail to deliver their good
Organisational behaviour is a fascinating subject. The more one reads about it the more absorbing does it become. From practical application point of view also, probably the subject “Organisational Behaviour” ranks first among other management-oriented disciplines. It is for these reasons that the subject
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Fifth Edition 1977–1978 Sixth Edition 1979–1980 Seventh Edition 1981–1982 Eighth Edition 1983–1986 Ninth Edition 1987–1988 Tenth Edition 1989–1990 Eleventh Edition 1991–1992 Twelfth Edition 1993–1994 Thirteenth Edition 1995–1996 Fourteenth Edition 1997–1998 Fifteenth Edition
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