BUSINESS ESSENTIALS
CHERI L. CANON, MD, CYNTHIA S. SHERRY, MD
Organizational Behavior: A Primer
Bhavik N. Patel, MD, MBA
INTRODUCTION
Southwest Airlines, repeatedly
named as one of the most admired
companies by Fortune magazine, is
known for its indelible commit-
ment to its employees. This culture
translated to the company’s years of
profitable growth, even when the
airline industry nearly collapsed
after the 9/11 attacks. Southwest
employees are known for their fun-
spirited attitudes and their align-
ment with the company culture,
with cabin crew members and pi-
lots alike pitching in to clean
cabins. Although traditional busi-
ness theory teaches organizations to
put the consumer first, Southwest’s
founder and past CEO Herb Kel-
leher put employees first, recog-
nizing that employee satisfaction
translates to improved customer
satisfaction.
What do Southwest and other
successful companies have in com-
mon? They have leveraged optimal
organizational behavior (OB) man-
agement to achieve positive perfor-
mance. Companies that actively
invest in their employees’ satisfaction
find that individual loyalty to the
company is significantly high. This
in turn results in workers’ tran-
scending what is asked of them [1].
High employee satisfaction translates
to higher productivity without
compromising quality, which yields
better customer service and in-
creased profits and growth for the
company [2].
ª 2015 American College of Radiology
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OB is a management tool
that studies the attitudes and be-
haviors of individuals within a
workplace. Learned principles from
OB studies can be used to optimize
productivity.
As the health care landscape
changes, radiologists face new chal-
lenges requiring novel solutions.
Thus, familiarity with OB will allow
effective management of employees
and optimization of workplace cul-
ture to ensure that employees are
engaged to maximize their produc-
tivity. OB includes a wide array of
subject matter, and a comprehensive
review is beyond the scope of this
article. Here, I review a few basic
concepts.
MOTIVATION AND BEHAVIOR
What drives an individual’s actions,
plans, and desires? Understanding
what influences an employee’s mo-
tivations can allow an organization
to structure the work environment
for maximum productivity. Moti-
vation can either be intrinsic or
extrinsic. Intrinsic motivation refers
to the desire to perform a task
because of inherently derived satis-
faction (eg, enjoyment from
reading a book). Extrinsic motiva-
tion refers to the desire to perform a
task for a specific outcome, distinct
from the satisfaction of completing
the task (eg, monetary reward).
Although earlier studies showed
that extrinsic incentives could
decrease intrinsic motivation,
recent data suggest that the inter-
action is dependent on the degree
of autonomy an individual per-
ceives [3]. Extrinsic motivation may
make an individual feel pressured to
perform a task, potentially delete-
rious to intrinsic motivation.
However, extrinsic motivation can
be embraced with a sense of voli-
tion if the individual is engaged,
perceives a sense of autonomy, and
is able to internalize the value of
performing the task [4].
This concept raises interesting
questions. For example, can pay for
performance, an extrinsic motivator,
lead to improved quality of care?
Or will it cause providers to feel
pressured and reduce their intrinsic
motivation leading to decreased
quality?
DECISION MAKING
We are constantly involved in
decision-making processes that are
subject to cognitive biases and heu-
ristics, or decision shortcuts. Famil-
iarity with these biases may decrease
potential pitfalls in decision making
during uncertainty. Susceptibility to
these biases is due to our bounded
rationality, the idea that decision
making is constrained by limited
information, time, and capacity [5].
Though numerous biases have been
well described, I focus on 2:
anchoring bias and escalation of
commitment (EC).
805
 Under uncertainty, we rely on
initial or past information as a
starting point or anchor to assist our
decision making. As the decision
process continues, adjustments are
made using the anchor as a starting
point. Studies have shown, however,
that the adjustment is often insuffi-
cient [5]. Reliance on an anchor not
only may lead to a suboptimal de-
cision, but it may prevent an indi-
vidual from considering relevant
information. Anchors are ubiqui-
tously present in our field. For
example, a renal-protocol CT ex-
amination performed on a young
patient may anchor or bias a radiol-
ogist into expecting normal results,
potentially overlooking incidental
findings.
Anchoring bias can also be seen
in negotiation. Initially presented
terms to negotiating parties may
serve as an anchor on which an ul-
timate settlement will be based. For
instance, when purchasing capital
equipment, the initial dollar amount
suggested will serve as an anchor to
the buyer, such that any subsequent
lower price agreed upon may seem
like a good deal regardless of the
equipment’s potentially lower actual
worth.
EC occurs when an individual
makes a decision despite evidence
to the contrary. This is common in
settings in which significant time
and resources have been devoted.
Examples of EC include investors’
continuing to fund deteriorating
businesses and startups failing to
realize that halting operations is the
clear solution to a dwindling busi-
ness. Individuals fail to recognize
the irrelevance of “sunk costs.”
Imagine that a company has inves-
ted 90% of its $1 million budget in
developing a new technology (A).
However, a newer, more superior
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technology (B) is released before
the completion of technology A.
Should the company invest the
remaining $100,000 in technology
A or B? Now imagine that the
company has not made any in-
vestments in either technology but
has $100,000 to do so. Should the
company invest in technology A or
B? Most would choose to invest in
technology A in the first scenario,
succumbing to EC, whereas tech-
nology B is the obvious choice in
the second scenario [6]. Decision
makers must be familiar with
cognitive biases so that they can
make optimal decisions.
ORGANIZATIONAL
STRUCTURE AND CHANGE
Organizations also have behaviors
that affect individual productivity.
Organizational structure defines
the roles of individuals and how
they will participate toward the
overall objective. Structure also
conveys levels of decision-making
figures (eg, organizational charts).
Organizations can be structured on
the basis of function (eg, sales
versus marketing), division (eg,
based on geography), or a combi-
nation of the two (matrix type). An
organizations’ structure can affect
its performance; thus, structure
and strategy should be aligned.
Organizations often must change
their strategies because of external
forces, and reflective structural
changes usually follow. However, a
simple restructuring after a change
in strategy will be ineffective.
Rather, decisions that are critical to
the new strategy should be deter-
mined first, followed by restruc-
turing centered around those
decisions. This highlights the
dependence of effective decision
Journal of the American College of Radiology
Volume 12 n Number 8 n August 2015
making on an organization’s per-
formance [7].
Managers dread change, as it is
often met with employee resistance,
which is largely responsible for
unsuccessful implementation.
However, better understanding of
the sources of resistance may allow
a smoother transition during
change. Resistance to change is due
to a complex interplay between
perception of the change, level of
emotion, and degree of irratio-
nality. Employees may feel insecure
about job security and skill sets
during the change. Strebel [8]
described the concept of “personal
compacts” (PCs) or agreements of
obligations and commitments be-
tween employees and employers.
There are 3 aspects of PCs: formal,
psychological, and social. Formal
compacts relate to job performance
and expectations. During change,
most organizations address this PC
well through policies. Psychological
PCs relate to trust and loyalty be-
tween employees and their em-
ployers (ie, How hard do I have to
work? Will I be rewarded?). The
social aspect deals with the
perception of whether the behavior
of the company and leadership are
aligned and whether managers
practice what they preach. Here, an
employee adjusts to how an orga-
nization truly operates. The
psychological and social dimensions
of PCs are often ignored during
change, thereby leading to
employee resistance [8]. To mini-
mize resistance, managers must
address and redefine each of the
PCs explicitly during change, such
that there is little room for sense of
violation of mutual obligations. As
the health care landscape trans-
forms, change will be inevitable,
and leaders must be aware of
effective strategies to minimize
resistance.
CONCLUSIONS
As major transformations in health
care unfold, we will be challenged to
meet the demands of the new para-
digm. New requirements will inevi-
tably bring about changes in practice
patterns and delivery of care. Thus,
radiologists should be familiar with
OB principles so as to effectively
manage their organizations optimally
during the journey ahead.
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2008;86:118-29.
3. Gagné M, Deci EL. Self-determination the-
ory and work motivation. J Org Behav
2005;26:331-62.
4. Ryan RM, Deci EL. Intrinsic and extrinsic
motivations: classic definitions and new di-
rections. Contemp Educ Psychol 2000;25:
54-67.
5. Schwenk CR. Cognitive simplification pro-
cesses in strategic decision-making. Strat
Manage J 1984;5:111-28.
6. Eisenberg JD, Harvey HB, Moore DA,
Gazelle GS, Pandharipande PV. Falling prey
to the sunk cost bias: a potential harm of
patient radiation dose histories. Radiology
2012;263:626-8.
7. Blenko MW, Mankins MC, Rogers P. The
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2010;88:54-62.
8. Strebel P. Why do employees resist change?
Harv Bus Rev 1996;74:86-92.

Bhavik N. Patel, MD, MBA: Department of Radiology, Duke University School of Medicine, Box 3808, Durham, NC 27710;
e-mail: bhavik.patel@dm.duke.edu.

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