People

Make the Difference

After reading this chapter you will be able to:

• Define organizational behavior.

• Trace the historical roots of organizational behavior.

• Discuss the emergence of contemporary organizational behavior,

including its precursors, the Hawthorne studies, and the human
relations movement.

• Describe contemporary organizational behavior—its characteristics,

concepts, and importance.

• Identify and discuss contextual perspectives on organizational

behavior.
What is organizational behavior and why is it
important?

What are organizations like as work settings?

What is the nature of managerial work?

How do we learn about organizational

behavior?
Organizational behavior
› Organizational behavior (OB) is defined as
the systematic study and application of
knowledge about how individuals and
groups act within the organizations where
they work.
• An organization is defined as a collection of people who work
together to achieve a wide variety of goals.

“ A field of study that investigates how individuals, groups and structure

affect and are affected by behavior within organizations, for the
purpose of applying such knowledge toward improving an
organization’s effectiveness.”

• The field of organizational behavior (OB) covers the body of

knowledge derived from these actions and attitudes.

• It can help managers understand the complexity within

organizations, identify problems, determine the best ways to correct
them, and establish whether the changes would make a significant
difference.
OB spans topics related from the individual
to the organization.
Modern workplace trends
› Commitment to ethical behavior.
› Importance of human capital.
› Formal authority (command and control) replaced by group
decisions and consensus.
› Emphasis on teamwork.
› Pervasive (Universal) influence of information technology.
› Respect for new workforce expectations.
› Changing concept of careers.
Organization

A structured social system consisting of

groups and individuals working together
to meet some agreed-upon objectives.
The core purpose of an organization is the
creation of goods and services.

Mission statements focus attention on the

core purpose.
“Our Reason for Being:
To serve our customers' health needs with imaginative
science from plants and minerals;
To inspire all those we serve with a mission of
responsibility and goodness;
To empower others by sharing our knowledge, time,
talents, and profits; and
To help create a better world by exchanging our
faith, experience, and hope.”
Strategy
› Comprehensive plan that guides
organizations to operate in ways that allow
them to outperform their competitors.

› See Tom’s of Maine strategy that supports

their mission.
Stakeholders
› People, groups, and institutions having an
interest in an organization’s performance.

› Interests of multiple stakeholders sometimes

conflict.
▪ Applies scientific method to managerial
problems

▪ Studies individuals, groups, and organizations

▪ Multidisciplinary in nature

▪ Enhances organizational effectiveness and

individual well-being
▪ How goals can enhance job performance

▪ How jobs can be designed to enhance employee

satisfaction

▪ When individuals and groups make better decisions

▪ How organizational communication can be improved

▪ How work-related stress can be alleviated

▪ How leaders can enhance team effectiveness

• Organizational behavior (OB) is the study of human behavior in organizational settings,
how human behavior interacts with the organization, and the organization itself.

• Although we can focus on any one of these three areas independently, we must
remember that all three are ultimately connected and necessary for a
comprehensive understanding of organizational behavior.

• For example, we can study individual behavior (such as the behavior of a company’s
CEO or of one of its employees) without explicitly (in a clear and detailed manner)
considering the organization.

• Similarly, we can study an organization without focusing specifically on each

individual within it.

• But again, we are looking at only one piece of the puzzle. Eventually, we must
consider the other pieces to understand the whole.
• It shows the linkages among human behavior in organizational settings, the
individual-organization interface, the organization, and the environment
surrounding the organization.

• Each individual brings to an organization a unique set of personal

characteristics, experiences from other organizations, and personal
background.

• Therefore, organizational behavior must look at the unique perspective that

each individual brings to the work setting.
• For example, suppose that Texas Instruments hires a consultant to investigate
employee turnover. As a starting point, the consultant might analyze the
types of people the firm usually hires. The goal of this analysis would be to
learn as much as possible about the nature of the company’s workforce from
the standpoint of the individual—their expectations, their personal goals,
and so forth.

• But individuals do not work in isolation. They come in contact with other
people and with the organization in a variety of ways.

• Points of contact include managers, coworkers, the formal policies and

procedures of the organization, and various changes implemented by the
organization.

• Over time, the individual changes as a function of both personal

experiences and maturity and of work experiences with the organization.

• The organization, in turn, is affected by the presence and eventual absence

of the individual.
• Clearly, then, the study of organizational behavior must consider the ways in which the
individual and the organization interact. Thus, the consultant studying turnover at Texas
Instruments might choose to look at the orientation procedures for newcomers to the
organization.

• The goal of this phase of the study would be to understand some of the dynamics of
how incoming individuals interact within the broader organizational context.

• An organization, of course, exists before a particular person joins it and continues to

exist long after he or she has left. Therefore, the organization itself represents a crucial
perspective from which to view organizational behavior.

• For instance, the consultant studying turnover would also need to study the structure
and culture of Texas Instruments.

• An understanding of factors such as the performance evaluation and reward systems,

the decision-making and communication patterns, and the design of the firm itself
can provide additional insight into why some people decide to stay while others
select to leave.

• Clearly, the field of organizational behavior can be both exciting and complex.
• Many disciplines, such as physics and chemistry, are literally thousands of
years old.

• Management has also been around in one form or another for centuries.

For example, the writings of Aristotle and Plato abound (be plentiful) as
references and examples of management concepts and practices.

• But because serious interest in the study of management did not emerge
until the turn of the twentieth century, organizational behavior is only a few
decades old.

• One reason for the relatively late development of management as a

scientific field is that very few large business organizations existed until
around a hundred years ago.
• Second, many of the initial players interested in studying organizations were
economists. Economists initially assumed that management practices are by
nature efficient and effective; therefore, they concentrated on higher levels
of analysis such as national economic policy and industrial structures rather
than on the internal structure of companies.
Book page
▪ Psychology: perception and learning, personality,
motivation, emotion, stress, attitude, decision making,
creativity

▪ Sociology: communication, teamwork

▪ Anthropology: leadership, organizational culture

▪ Political science: organizational power, negotiation,

decision making, Economics

▪ Management science: organizational structure and

change
Many behavioral sciences
have contributed to the
development of
Organizational
Behavior
Theory X vs. Theory Y

Book page
• Centuries ago managers view of employees and
todays.

• The theory Y perspective prevails within the field of OB

today. It assumes that people are highly responsive to
their work environments, and that the way they are
treated will influence the way they will act.

• OB scientists are very interested in learning exactly

what conditions will lead people to behave most
positively i.e. what makes work both productive for
organizations and enjoyable for the people working in
them
▪ Satisfied employees
• More pleasant at work
• Lower costs
• Higher productivity
• Less likely to quit

▪ Unsatisfied employees
• Reject organization policies
• More likely to steal
• Increased mental and physical illnesses
› Organizational culture is a system of shared assumptions,
values, and beliefs that help individuals within an
organization understand which behaviors are and are not
appropriate within an organization. Cultures can be a
source of competitive advantage for organizations.

› The shared beliefs and values that influence the behavior of

organizational members.

› Reflects the internal personality of the organization.

› ‘How we do things around here’

Constructive culture
› Members are encouraged to work together in ways that
meet higher order human needs.

Passive/defensive culture
› Members tend to act defensively in their working
relationships.

Aggressive/defensive culture
› Members tend to act forcefully in their working
relationships to protect their status and positions.
Describe an organization you have worked
for, or been a member of.

How was the culture constructive?

Defensive? Aggressive? Explain.
Workforce diversity
› Individual differences of organizational
members, based on gender, race and
ethnicity, age, able-bodiedness, and sexual
orientation.

An able-bodied person is physically strong and healthy, rather than weak or unfit.
Multiculturalism

› Refers to inclusiveness (fullness, Comprehensiveness),

pluralism (diversity, heterogeneity )and genuine
respect for diversity and individual differences.

› The view that cultures, races, and ethnicities,

particularly those of minority groups, deserve special
acknowledgement for their differences within a
dominant culture.
Your professor states: “One of your assignments
this term is a team project. Please select and
sign up for a team project.” Do you . . .
a) Signal your friends in the classroom, and
agree to sign up together for the same team.
b) Wait for everyone to sign up, and then
decide.
c) Just pick a team randomly.