Organizational behavior: Lecture 3 - Dr. Mukhtar Ahmed

Organizational
Behavior
(MGT-502)

Lecture-3


Summary
of
Lecture-2


Basic OB Model
Organization 
Organization 
systems level
systems level
Group
Group
level
level
Individual
Individual
level
level


What Managers Do?
 Gets things done through other
people
 Make decisions, allocate

resources, and direct the activities
of others to attain goals
 Do their work in an organization


New Managerial Functions
To provide leadership and direction

Total Quality

Continuous

Management

Improvement


Today’s Topics


Organizations: The
Important Component


Where do managers work?

in organizations!


What is an

Organization?


A consciously coordinated social
unit, composed of two or more
people, that functions on a
relatively continuous basis to
achieve a common goal or set of
goals.


What are organizations?
• Social entities
• Goal oriented
• Deliberately structured
• Linked to the external environment


Organization
A systematic arrangement of people to accomplish
some specific purpose.

VU

Steel Mills

Govt. Agencies Glossary Store

Hospitals

United Nations


Components of an Organization
Task - an organization’s mission, purpose, or goal
for existing

People - the human resources of the organization
Structure - the manner in which an organization’s
work is designed at the micro level; how
departments, divisions, & the overall organization
are designed at the macro level

Technology - the intellectual and mechanical

processes used by an organization to transform
inputs into products or services that meet
organizational goals


Formal vs Informal
Organization
 Formal Organization - the part of the
organization that has legitimacy and
official recognition

 Informal Organization - the unofficial
part of the organization

Basic Systems View of
Organization
Environment
INPUTS
Human,
physical,
financial, and
information
resources

TRANSFORMATION
PROCESS

Feedback
loops

OUTPUTS
Products
and
Services


Organizations as Systems
Task environment:
Competitors
Unions
Regulatory agencies
Clients

Inputs:

Material
Capital
Human

Structure

Task

Technology

People
(Actors)
Organizational Boundary

Outputs:
Products
Services


Why do we have
Organizations?
They are more efficient
than individuals acting
independently


How does an
Organization Create
Value?

 Organization’s Inputs
–
–
–
–

Raw material
Capital
HR
Information &
Knowledge

 Organization’s
Environment
–
–
–
–
–
–

Customers
Shareholders
Suppliers
Distributors
Competitors
Government

 Organization’s

Conversion Process
–
–
–

Machinery
Computers
Human Skills &
Abilities

 Organization’s
Outputs
–
–
–
–

Finished Goods
Services
Dividends
Values for
Stakeholders


Why do Organizations Exist?
 To increase specialization and
division of labor
 Use large-scale technology
 Manage the external environment
 Economize on transaction costs

 Exert power and control


Organizational Stakeholders
 Inside
– Shareholders
– Workforce

 Outside
– Customers
– Suppliers
– Government
– General Public


Organizational
Effectiveness
Satisfying
Stakeholders Goals
and Interests


How do Managers
Measure Organizational
Effectiveness?


 The external resource approach----Control
– Evaluates the ability to secure, manage, and control scare
and valued skills and resources





Low costs of inputs
Obtain high-quality inputs of raw material and employees
Increase market share

 The internal system approach----Innovation
– Evaluates the organization’s ability to innovate and function
quickly and responsively






Cut decision making time
Increase rate of product innovation
Increase coordination and motivation of employees
Reduce conflict
Reduce time to market


 Technical approach----Efficiency
–

Evaluates the organization’s ability to
convert skills and resources into goods
and services efficiency

 Increase product quality
 Reduce number of defects
 Reduce production costs
 Improve customer service
 Reduce delivery time to customers