Organizational Behavior

Topic 1:
Introduction to the Field of OB
Learning Objective

• Define organisational behaviour and

organisations, and discuss the importance of
this field of inquiry
• Compare and contrast the four current
perspectives of organisational effectiveness
• Debate the organisational opportunities and
challenges of globalisation, workforce diversity
and emerging employment relationships
• Discuss the anchors on which organisational
behaviour knowledge is based
Organisational Behaviour and
Organisations
What is Organizational
Behavior?

The study of what people think, feel and do in

and around organisations.

What is
Organization?

• Groups of people who work interdependently

toward some purpose
• Collective entities
• Collective sense of purpose
Why Study OB?

• Satisfy the need to understand and predict

• Helps us to test personal theories
• Influence behaviour—get things done
• OB improves an organisation’s financial
health
• OB is for everyone
Organisational Effectiveness

• Organizational effectiveness: performance,

succes, competitiveness, etc.
• The ultimate dependent variable in OB
• Old approach: achieve stated goals
• Problem with goal attainment
➢ Could set easy goals
➢ Company might achieve wrong goals
Perspectives of
Organisational Effectiveness

Consider the needs and

expectation of
stakeholders that
affects/affected by
organization’s objective
and actions
STAKEHOLDER OPEN SYSTEMS
PERSPECTIVE PERSPECTIVE

HIGH
PERFORMANCE ORGANIZATIONAL
WORK PRACTICE LEARNING
(HPWP) PERSPECTIVE
PERSPECTIVE
Organization’s
capacity to acquire,
share, use, and store
valuable knowledgec

NOTE: Need to consider all four perspectives when

assessing a company’s effectiveness
1. Open System Perspective

• Organisations are complex systems that ‘live’

within (and depend upon) the external
environment
• Effective organisations
➢ Maintain a close ‘fit’ with changing conditions
➢ Transform inputs to outputs efficiently and
flexibly
• Foundation for the other three organisational
effectiveness perspectives
1. Open System Perspective
2. Organizational Learning
perspective
• An organisation’s capacity to acquire, share,
use and store valuable knowledge
• Need to consider both stock and flow of
knowledge
➢ Stock: intellectual capital
➢ Flow: organisation’s processes of knowledge
acquisition, sharing, use and storage
 2. Organizational Learning
perspective

Intellectual
Capital

Human Knowledge, skills and ability that

Capital people possess and generate

Structural Knowledge captured in systems and

Capital structures

Relationship Value derived from satisfied customers,

Capital reliable suppliers, etc.
The Human Capital Advantage

• Employee knowledge, skills and abilities

• Competitive advantage because:
➢ Helps discover opportunities and minimise
threats in the external environment
➢ Rare and difficult to imitate
➢ Non-substitutable: not easily replaced by
technology
 Organisational Learning
Processes

Knowledge Knowledge Knowledge Knowledge

Acquisition Sharing Use Storage

• Learning • Communication • Awareness • Human memory

• Scanning • Training • Sensemaking • Documentation
• Grafting • Info systems • Autonomy • Practices/habits
• Experimenting • Observation • Empowerment • Databases
Organisational Memory

• The storage and preservation of intellectual

capital
• Retain intellectual capital by:
➢ Keeping knowledgeable
employees
➢ Transferring knowledge
to others
➢ Transferring human capital
to structural capital
• Successful companies also unlearn
3. HPWP Perspective

• Workplace practices that leverage the potential

of human capital
• Four HPWPs (likely others)
➢ Employee involvement
➢ Job autonomy
➢ Employee competence (training, selection)
➢ Reward performance and competencies
• Need to ‘bundle’ practices because they work
best together
4. Stakeholder Perspective

• Stakeholders: entities who affect or are affected

by the firm’s objectives and actions
• Personalises the open systems perspective
• Challenges with stakeholder perspective:
➢ Stakeholders have conflicting interests
➢ Firms have limited resources to satisfy all
stakeholder needs
Stakeholders: Values and Ethics

• Values and ethics prioritise stakeholder

interests
• Values
➢ Relatively stable, evaluative beliefs, guide
preferences for outcomes or courses of action in
various situations
• Ethics
➢ Moral principles and values, determine whether
actions are right or wrong and outcomes are
good or bad
 Stakeholders and CSR
• Stakeholder perspective
includes corporate social
responsibility (CSR)
➢ Benefit society and
environment beyond the
firm’s immediate
financial interests or
legal obligations
➢ Organisation’s contract
with society
• Triple bottom line
➢ Economy, society
environment
 Contemporary Challenges for
Organization
• Globalization
• Workforce Diversity
• Employment Relationship
 Globalisation
• Economic, social and cultural connectivity with
people in other parts of the world
• Improved communication and transportation systems
have increased globalisation
• Effects of globalisation on organisations
➢ Cost efficiencies, innovation, knowledge
➢ Increasing diversity
➢ Increasing competitive pressures, intensification
Increasing Workforce Diversity

• Surface-level vs. deep-level diversity

• Implications
➢ Better knowledge, decisions, representation,
financial returns
➢ Manage challenges
of diversity (e.g.
teams, conflict)
➢ Ethical imperative
of diversity
Emerging Employment
Relationships
• Work–life balance
➢ Minimising conflict between work and non-work
demands
• Virtual work
➢ Using information technology to perform one’s
job away from the traditional physical workplace
➢ Teleworking: issues of social isolation, emphasis
on face time, employee self-leadership
Organisational Behaviour
Anchors
• Systematic research anchor
➢ OB knowledge is built on systematic research
➢ Evidence-based management: decisions and
actions based on research evidence rather than
fads, hype and untested assumptions
• Multidisciplinary anchor
➢ Many OB concepts adopted from other
disciplines
➢ OB develops its own theories, but scans other
fields
Organisational Behaviour
Anchors continued
• Contingency anchor
➢ A particular action may have different
consequences in different situations
➢ Need to diagnose the situation and select best
strategy under those conditions
• Multiple levels of analysis anchor
➢ Individual, team, organisational level of analysis
➢ OB topics usually relevant at all three levels of
analysis