Chapter 1

Organizational Behaviour:
Understanding and Managing Life at

Work
Twelfth Edition
Chapter 1
Organizational Behaviour and
Management
Copyright © 2023 Pearson Canada Inc. 1-1

What Are Organizations?
• Organizations are social inventions for accomplishing
common goals through group effort.
• Key characteristics of organizations:
– Social inventions
– Goal accomplishment
– Group effort

Social Inventions
• An essential characteristic of organizations is the
coordinated presence of people, not things.
• The field of organizational behaviour is about
understanding people and managing them to work
effectively.

Goal Accomplishment
• All organizations have goals.
• Organizational survival and adaptation to change are
important goals.
• The field of organizational behaviour is concerned
with how organizations can survive and adapt to
change.
• Certain behaviours are necessary for survival and
adaptation.
• Innovation and flexibility are especially important for
organizations.

Group Effort
• Organizations are based on group effort—the interaction
and coordination among people to accomplish goals.
• Much of the intellectual and physical work done in
organizations is performed by groups.
• The field of organizational behaviour is concerned
with how to get people to practise effective teamwork.

What Is Organizational Behaviour?
• The attitudes and behaviours of individuals and groups in
organizations.
• How organizations can be structured more effectively.
• How events in the external environment affect
organizations.

What Is Human Resources
Management?
• Programs, practices, and systems to acquire, develop,
motivate, and retain employees in organizations.
• Recruitment, selection, compensation, and training and
development are common human resources practices.
• Knowledge of organizational behaviour will help you
understand the use and effectiveness of human resources
practices.

Why Study Organizational
Behaviour?
• Organizational behaviour:
– Is Interesting. It is about people and human nature,
and explains the success and failure of organizations.
– Is Important. It has a profound impact on managers,
employees, and consumers.
– Makes a difference. It affects individuals’ attitudes and
behaviour as well as the competitiveness and
effectiveness of organizations.
▪ Human capital
▪ Social capital (internal and external)

Management Practices of the Best
Companies to Work for in Canada
• Flexible work schedules
• Stock options, profit-sharing plans, and bonuses
• Opportunities for learning and development
• Family assistance programs
• Career development programs
• Wellness and stress reduction programs
• Employee recognition and reward programs

How Much Do You Know About
Organizational Behaviour? (1 of 5)
• Consider whether the following statements are true or
false and write down the rationale for your answer:
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1. Effective leaders tend to possess identical personality
traits.
2. Nearly all workers prefer stimulating, challenging jobs.
3. Managers have a very accurate idea about how much
their peers and superiors are paid.

4. Workers have a very accurate idea about how often they
are absent from work.
5. Pay is the best way to motivate most employees and
improve job performance.
6. Women are just as likely to become leaders in
organizations as men.

• Now assume the correct answer is the opposite to the
one you have given and provide a one-sentence
rationale why this opposite answer could also be
correct.

• People are very good at giving sensible reasons why the
same statement is either true or false.
• Common sense develops through unsystematic and
incomplete experiences with organizational behaviour.
• Management practice should be based on informed
opinion and systematic study.

Goals of Organizational Behaviour
• The field of organizational behaviour has three commonly
agreed-upon goals:
– Predicting organizational behaviour and events.
– Explaining organizational behaviour and events in
organizations.
– Managing organizational behaviour.

Predicting Organizational Behaviour
• In organizations, there is considerable interest in
predicting when people will make ethical decisions, create
innovative products, or engage in sexual harassment.
• Through systematic study, the field of organizational
behaviour provides a scientific foundation that helps
improve predictions of organizational events.

Explaining Organizational Behaviour
• Organizational behaviour is interested in determining why
people are more or less motivated, satisfied, or prone to
resign.
• The ability to understand behaviour is a necessary
prerequisite for effectively managing it.

Managing Organizational Behaviour
• Management is the art of getting things accomplished in
organizations through others.
• If behaviour can be predicted and explained, it can often
be managed.
• Prediction and explanation involves analysis while
management is about action.
• Effective management involves evidence-based
management.

Evidence-Based Management
• Involves translating principles based on the best scientific
evidence into organizational practices.
• Making decisions based on the best available scientific
evidence from social science and organizational research
rather than personal preference and unsystematic
experience.
• The use of evidence-based management is more likely to
result in the attainment of organizational goals.

Early Prescriptions Concerning
Management
• Attempts to prescribe the “correct” way to manage an
organization and achieve its goals.
• Two basic phases to this prescription:
– The classical view and bureaucracy
– The human relations view

The Classical View
• The classical view advocates a high degree of
specialization of labour, intensive coordination, and
centralized decision making.
• To maintain control, it suggests that managers have fairly
few workers, except for lower-level jobs where machine
pacing might substitute for close supervision.

Scientific Management
• Scientific management is Frederick Taylor’s system for
using research to determine the optimum degree of
specialization and standardization of work tasks.
• Mainly concerned with job design and the structure of
work on the shop floor.
• Involves the use of research to determine the optimum
degree of specialization and standardization.

Bureaucracy (1 of 2)
• Bureaucracy is Max Weber’s ideal type of organization
that includes:
– Strict chain of command
– Selection and promotion criteria based on technical
competence
– Detailed rules, regulations, and procedures
– High specialization
– Centralization of power at the top of the organization

Bureaucracy (2 of 2)
• Weber saw bureaucracy as an “ideal type” that would
standardize behaviour in organizations and provide
workers with security and a sense of purpose.
• The classical view of management seemed to take for
granted an essential conflict of interest between managers
and employees.

The Human Relations Movement and
a Critique of Bureaucracy
• The human relations movement began with the famous
Hawthorne Studies of the 1920s and 1930s conducted at
the Hawthorne plant of Western Electric.

The Hawthorne Studies
• Concerned with the impact of fatigue, rest pauses, and
lighting on employee productivity.
• The studies illustrated how psychological and social
processes affect productivity and work adjustment.
• Suggested there could be dysfunctional aspects to how
work was organized.
• One sign was resistance to management through strong
informal group mechanisms such as norms that limited
productivity.

Critique of Bureaucracy
• The human relations movement called attention to certain
dysfunctional aspects of classical management and
bureaucracy and noted several problems:
– Employee alienation
– Limits innovation and adaptation
– Resistance to change
– Minimum acceptable level of performance
– Employees lose sight of the overall goals of the
organization

The Human Relations Movement
• Advocated more people-oriented and participative styles
of management that catered more to the social and
psychological needs of employees.
• The movement called for:
– More flexible systems of management
– The design of more interesting jobs
– Open communication
– Employee participation in decision making
– Less rigid, more decentralized forms of control

Contemporary Management—The
Contingency Approach (1 of 2)
• The merits of both approaches are recognized today.
• Management approaches need to be tailored to fit the
situation.
• The complexity of human behaviour means that an
organizational behaviour text cannot be a “cookbook.”

Contemporary Management—The
Contingency Approach (2 of 2)
• The general answer to many of the problems in
organizations is: “It depends.”
• Dependencies are called contingencies.
• The contingency approach to management recognizes
that there is no one best way to manage.
• An appropriate management style depends on the
demands of the situation.

What Do Managers Do?
• The field of organizational behaviour is concerned with
what happens in organizations and what managers
actually do in organizations.
• Research has focused on:
– Managerial roles
– Managerial activities
– Managerial agendas
– Managerial minds
– International managers

Managerial Roles
• Henry Mintzberg discovered a rather complex set of roles
played by managers:
– Interpersonal roles
– Informational roles
– Decisional roles

Mintzberg’s Managerial Roles
Exhibit 1.2 Mintzberg’s managerial roles.
Source: Dr. Henry Mintzberg.

Interpersonal Roles
• Interpersonal roles have to do with establishing and
maintaining interpersonal relations. They include:
– Figurehead role
– Leadership role
– Liaison role

Informational Roles
• Informational roles are concerned with various ways
managers receive and transmit information. They include:
– Monitor role
– Disseminator role
– Spokesperson role

Decisional Roles
• Decisional roles deal with decision making. They include:
– Entrepreneur role
– Disturbance handler role
– Resource allocation role
– Negotiator role

Managerial Activities (1 of 2)
• Fred Luthans, Richard Hodgetts, and Stuart Rosenkrantz
found that managers engage in four basic types of
activities:
– Routine communication (formal sending and
receiving information)
– Traditional management (planning, decision making,
controlling)

Managerial Activities (2 of 2)
– Networking (interaction with people outside of the
organization)
– Human resource management (motivating,
reinforcing, disciplining, punishing, managing conflict,
staffing, training and developing employees)
• All these managerial activities involve dealing with people.

Summary of Managerial Activities
Exhibit 1.3 Summary of managerial activities.
Source: Adapted from Luthans, F., Hodgetts, R. M., & Rosenkrantz, S. A. (1988). Real
managers. Cambridge, MA: Ballinger. Reprinted by permission of Dr. F. Luthans on behalf
of the authors.

Managerial Activities and Success
• Emphasis on these various activities is related to
managerial success.
• Networking is related to moving up the ranks of the
organization quickly.
• Human resource management is related to employee
satisfaction and commitment and unit effectiveness.

Managerial Agendas (1 of 2)
• John Kotter studied the behaviour patterns of successful
general managers and identified the following categories
of behaviour:
– Agenda setting
– Networking
– Agenda implementation

Managerial Agendas (2 of 2)
• A high degree of informal interaction and concern with
people issues that were necessary for the managers to
achieve their agendas.
• Managers often found themselves dependent on people
over whom they wielded no power.

Agenda Setting
• What they wanted to accomplish for the organization.
• Almost always informal and unwritten and concerned with
“people issues.”
• Agendas based on wide-ranging informal discussions with
a wide variety of people.

Networking
• Established a wide formal and informal network of key
people inside and outside of their organization.
• The network provides managers with information and
established cooperative relationships relevant to their
agendas.

Agenda Implementation
• Managers used networks to implement the agendas.
• They would go anywhere in the network for help.
• They employed a wide range of influence tactics.

Managerial Minds (1 of 2)
• Herbert Simon and Daniel Isenberg explored how
managers think.
• Experienced managers use intuition to guide many of their
actions:
– To sense that a problem exists
– To perform well-learned mental tasks rapidly
– To synthesize isolated pieces of information and data
– To double-check more formal or mechanical analyses

Managerial Minds (2 of 2)
• Good intuition is problem identification and problem
solving based on a long history of systematic education
and experience.
• Enables the manager to locate problems within a network
of previously acquired information.

International Managers (1 of 2)
• The style in which managers do what they do and the
emphasis they give to various activities will vary greatly
across cultures.
• Cultural variations in values affect both managers’ and
employees’ expectations about interpersonal interaction.

International Managers (2 of 2)
• Geert Hofstede showed how cross-cultural differences in
values leads to contrasts in the general role that
managers play across cultures.
• National culture is one of the most important contingency
variables in organizational behaviour.
• The appropriateness of various leadership styles,
motivation techniques, and communication methods
depends on where one is in the world.

Some Contemporary Management
Concerns
• Five issues with which organizations and managers are
currently concerned:
– Diversity—Local and Global
– Employee Health and Well-Being
– Talent Management and Employee Engagement
– Alternative Work Arrangements
– Corporate Social Responsibility (C SR)

Diversity—Local and Global (1 of 3)
• The Canadian workforce is becoming increasingly
culturally diverse.
• Two-thirds of today’s new entrants to the Canadian labour
force will be women, visible minorities, Indigenous
Peoples, and persons with disabilities.
• Many organizations have not treated certain segments of
the population fairly in many aspects of employment.

• Pressure from customers, clients, and society in response
to the #MeToo Movement and the increasing awareness
of racial inequities in the workplace following the killing of
George Floyd.
• Global business has increased and so has the need to
understand how workers and customers in other countries
are diverse and culturally different.

• What does diversity have to do with organizational
behaviour?
• Organizational behaviour is concerned with issues that
have to do with the management of a diverse workforce
and how to benefit from the opportunities that a diverse
workforce provides.

Employee Health and Well-Being (1 of 3)
• Increased concerns over job security, increasing job
demands, and work-related stress.
• Absenteeism and turnover are on the rise.
• Increasing stress levels and poorly designed jobs are
major causes.
• Negative effect on employee physical and psychological
health and well-being.

• Increasing awareness of mental health problems in the
workplace.
• Mental illness in Canada is costing business billions of
dollars in lost productivity and absenteeism.
• Organizations have begun to focus on mental health and
to create more positive work environments.

• What does employee health and well-being have to do
with organizational behaviour?
• Organizational behaviour is concerned with creating
positive work environments that contribute to employee
health and wellness.
• Many organizations are now focusing on creating a
psychologically healthy workplace.

Healthy and Productive Work
Environment
• Practices that create a psychologically healthy and
productive work environment:
– Employee involvement
– Health and safety
– Employee growth and development
– Work-life balance
– Employee recognition
• Communication is also important and is the foundation for

the five psychologically healthy workplace practices.

Essential Components of a
Psychologically Healthy Workplace
Exhibit 1.5 Essential components of a psychologically healthy
workplace.
Source: Psychologically healthy workplace and organizational excellence awards 2018.

(2018, March 14). American Psychological Association Center for Organizational
Excellence, p. 21.
Improving Employee Mental Health
and Well-Being
• Organizational behaviour offers many approaches for
improving the mental health and well-being of employees.
– Mindfulness
– Workplace spirituality
– Organizational care
– Positive organizational behaviour
– Thriving at work

Mindfulness
• A state in which people are highly aware of and attentive
to what is happening in the present.
• Training programs that focus on mindfulness have been
found to reduce employee stress and absenteeism, and
increase employee engagement.

Workplace Spirituality
• Workplace spirituality refers to workplaces that provide
employees with meaning, purpose, a sense of community,
and a connection to others.
• It is about providing employees with a meaningful work life
that is aligned with their values.
• Employees have opportunities for personal growth and
development, and they feel valued and supported.

Organizational Care
• Organizational care involves values and principles centred
on fulfilling employees’ needs, promoting employees’ best
interests, and valuing employees’ contributions.
• Caring for employees has a positive effect not only on
employee engagement and productivity, but also on
employees’ mental health.

Positive Organizational Behaviour (POB)
• The study and application of positively oriented human
resource strengths and psychological capacities that can
be measured, developed, and effectively managed for
performance improvement.
• The psychological capacities that can be developed in
employees are known as psychological capital or PsyCap.

Psychological Capital (PsyCap) (1 of 3)
• An individual’s positive psychological state of development
that is characterized by self-efficacy, optimism, hope, and
resilience.

Self-Efficacy
• One’s confidence to take on and put in the necessary
effort to succeed at challenging tasks.

Optimism
• An attributional style that involves explaining positive
events in terms of personal and permanent causes, and
negative events as external and situation-specific causes.

Hope
• Persevering toward one’s goals, and when necessary
making changes and using multiple pathways to achieve
one’s goals.

Resilience
• One’s ability to bounce back or rebound from adversity
and setbacks to attain success.

• Each of the components of PsyCap are states not traits;
they are positive work-related psychological resources
that can be changed, modified, and developed.
• PsyCap interventions (PCI) can be used to develop
employees’ PsyCap—they focus on enhancing each of the
components of PsyCap.

• PsyCap is positively related to employee well-being, job
attitudes, and job performance, and negatively related to
employee anxiety, stress, and turnover intentions.
• PsyCap is also related to another positive psychological
capacity called thriving at work.

Thriving at Work
• Thriving at work is a positive psychological state that is
characterized by a joint sense of vitality and learning.
• Thriving at work is influenced by favourable work-related
events and experiences.
• It is positively related to career development initiatives, job
performance, leadership effectiveness, and general health
and well-being.

Talent Management and Employee
Engagement (1 of 3)
• Talent management refers to an organization’s processes
and practices for attracting, developing, retaining, and
deploying people with the required skills to meet current
and future business needs.
• The management of talent has become a major
organizational concern that requires the involvement of all
levels of management.

Engagement (2 of 3)
• Work engagement refers to a positive work-related state
of mind that is characterized by vigour, dedication, and
absorption.
• It has been reported that only one-third of workers are
engaged.
• Engaged workers have more positive job attitudes and
higher job performance.
• Employee engagement is considered to be key to an
organization’s success and competitiveness.

Engagement (3 of 3)
• What does talent management and employee
engagement have to do with organizational
behaviour?
• Organizational behaviour provides the means for
organizations to be designed and managed in ways that
optimize the attraction, development, retention,
engagement, and performance of talent.

Alternative Work Arrangements (1 of 3)
• There have been substantial changes in work
arrangements that are changing the structure and quality
of work.
• Precarious work refers to work that is risky, uncertain, and
unpredictable for workers.
• It tends to be unstable or short-term, the pay is low or
unreliable, there are no benefits, uncertain and
inconsistent hours, and workers have few rights and
protections.

• The consequences of precarious work include decreased
trust, morale, job satisfaction, and commitment, and a
negative effect on workers’ mental health and well-being.
• A high percentage of workers in precarious jobs are
women, immigrants, and racialized people.
• Full-time employment with a living wage and benefits
along with job security will not be possible for many
workers.

• What do changing work arrangements and precarious
work have to do with organizational behaviour?
• Organizational behaviour has an important role to play in
protecting workers from the dangers of precarious work
and to make organizations more positive, diverse, safe,
and equitable places for all workers and minimize the
harmful consequences of precarious work.

Corporate Social Responsibility (1 of 3)
• Corporate social responsibility (CS R) refers to an
organization taking responsibility for the impact of its
decisions and actions on its stakeholders.
• It extends beyond the interests of shareholders to the
interests and needs of employees and the community in
which it operates.
• External CS R: Practices aimed at the local community,
the environment, and consumers.
• Internal CSR: Practices and activities that are focused on
the internal workforce.

• What does a focus on social responsibility have to do
with organizational behaviour?
• Many CS R issues have to do with organizational
behaviour (e.g., treatment of employees, work-family
balance, employee well-being).
• CSR also involves environmental, social, and governance
(E SG) issues, and a concern for the environment and
green initiatives.

• An organization’s CSR activities and policies are
associated with financial performance as well as
employee attitudes, engagement, and performance.
• CSR also has implications for the recruitment and
retention of employees.
• Organizational behaviour can help organizations become
more socially responsible.

Summary and Road Map (1 of 2)
• Organizational behaviour involves three levels of analysis:
the individual level (Part Two), the group level (Part
Three), and the organizational level (Part Four).
• The factors within each level influence individual and
group attitudes, behaviours, and performance.
• Each level can influence the factors and processes at the
other levels.

Summary and Road Map (2 of 2)
• All three levels of organizational behaviour as well as
individual and group attitudes, behaviours, and
performance influence organizational performance.

Model of Organizational Behaviour
Exhibit 1.7 Model of organizational behaviour.

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Organizational Behaviour:

Understanding and Managing Life at

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Source: Dr. Henry Mintzberg.

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• Communication is also important and is the foundation for

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Source: Psychologically healthy workplace and organizational excellence awards 2018.

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