Essentials of Organizational Behavior

Fourteenth Edition, Global Edition

Chapter 1
Welcome to the World of OB

Copyright © 2018 Pearson Education, Ltd. All Rights Reserved.

After studying this chapter you should be
able to:
1. Define organizational behavior (OB).
2. Show the value of systematic study to OB.
3. Identify the major behavioral science disciplines that
contribute to OB.
4. Demonstrate why few absolutes apply to OB.
5. Identify managers’ challenges and opportunities in
applying OB concepts.
6. Compare the three levels of analysis in this text’s OB
model.

Copyright © 2018 Pearson Education, Ltd. All Rights Reserved.

Management and Organizational Behavior
• Good people skills are important
– Good places to work have superior financial
performance
– Developing managers’ interpersonal skills helps attract
and keep high-performing employees
– There is a strong association between the quality of
workplace relationships and employee job satisfaction,
stress, and turnover
– Increasing OB principles can foster social responsibility
awareness

Copyright © 2018 Pearson Education, Ltd. All Rights Reserved.

The Field of Organizational Behavior
• Organizational behavior studies the influence
that individuals, groups, and structure have on
behavior within organizations
– Its chief goal is to apply that knowledge toward
improving an organization’s effectiveness

Copyright © 2018 Pearson Education, Ltd. All Rights Reserved.

Focal Points of OB
1. Motivation
2. Leader behavior and power
3. Interpersonal communication
4. Group structures and processes
5. Attitude development and perception
6. Change processes
7. Conflict and negotiation
8. Work design

Copyright © 2018 Pearson Education, Ltd. All Rights Reserved.

Effective versus Successful Managerial
Activities
• Traditional management
– Decision making, planning, controlling
• Communication
– Exchanging routine information and processing
paperwork
• Human resources management
– Motivating, disciplining, managing conflict, staffing, and
training
• Networking
– Socializing, politicking, and interacting with outsiders
Copyright © 2018 Pearson Education, Ltd. All Rights Reserved.
Complementing Intuition with Systematic
Study
• Intuition: your “gut feeling” explanation of
behavior
• Systematic study improves ability to accurately
predict behavior
– Assumes behavior is not random
– Fundamental consistencies underlie behavior
– These can be identified and modified to reflect
individual differences

Copyright © 2018 Pearson Education, Ltd. All Rights Reserved.

Systematic Study
• Examines relationships
• Attempts to attribute causes and effects
• Bases conclusions on scientific evidence:
– Data is gathered under controlled conditions
– Data is measured and interpreted in a reasonably
rigorous manner

Copyright © 2018 Pearson Education, Ltd. All Rights Reserved.

Evidence-Based Management
• Evidence-based management: Bases decisions
on the best available scientific evidence
– Complements systematic study
– Forces managers to become more scientific in their
thinking

Copyright © 2018 Pearson Education, Ltd. All Rights Reserved.

Big Data
• Big data: the extensive use of statistical
compilation and analysis
– Identify persistent and predictive statistics
▪ Create targeted marketing strategies

• Using big data for managerial practices:

– Define objectives, develop theories of causality, test
the theories to see which employee activities are
relevant to the objectives

Copyright © 2018 Pearson Education, Ltd. All Rights Reserved.

Contributing Disciplines to the OB Field

Micro:
The Individual

•Psychology
•Social Psychology
•Sociology
•Anthropology
Macro:
Groups &
Organizations

Copyright © 2018 Pearson Education, Ltd. All Rights Reserved.

Few Absolutes in OB
• Impossible to make simple and accurate
generalizations
• Human beings are complex and diverse
• OB concepts must reflect situational conditions:
contingency variables

Copyright © 2018 Pearson Education, Ltd. All Rights Reserved.

Challenges and Opportunities for OB
1. Responding to continuing globalization
2. Understanding workforce demographics
3. Managing workforce diversity
4. Impact of social media
5. Employee well-being at work
6. Creating a positive work environment
7. Improving ethical behavior

Copyright © 2018 Pearson Education, Ltd. All Rights Reserved.

Employment Options

Copyright © 2018 Pearson Education, Ltd. All Rights Reserved.

Employment options
• EMPLOYED—working for a for-profit or nonprofit company, an organization, or
an individual, either for money and/or benefits, with established expectations
for performance and compensation

• UNDEREMPLOYED/UNDERUTILIZED—working in a position or with

responsibilities that are below one’s educational or experience attainment
level, or working less than full-time when one wants full-time employment

• RE-EMPLOYED—refers to either employees who were dismissed by a

company and rehired by the same company, or to employees who left the
workforce (were unemployed) and found new employment

• UNEMPLOYED/JOBLESS—currently not working; may be job-seeking, either

with or without government benefits/assistance, either with or without
severance pay from a previous job, either new to the workforce or terminated
from previous employment, either short-term
Copyright unemployed
© 2018 Pearson (months)
Education, or Reserved.
Ltd. All Rights
long-term/chronic unemployed (years)
Employment options
• ENTREPRENEUR—one who runs his or her own business, either as a sole
worker or as the founder of a company with employees

• RETIRED—one who has ended his or her career in a profession, either

voluntarily by choice or involuntarily by an employer’s mandate

• JOB SEEKING—currently unemployed; actively looking for a job, either with or

without government benefits from previous job or from disability/need, either
with or without severance pay from previous job, either new to the workforce or
terminated from previous employment

• FURLOUGHED—similar to a layoff; an employer-required work stoppage,

temporary (weeks up to a month, usually); pay is often suspended during this
time, though the person retains employment status with the company

Copyright © 2018 Pearson Education, Ltd. All Rights Reserved.

Employment options
• LAID OFF—can be a temporary employer-required work stoppage, usually
without pay, but is more often a permanent termination from the company in
which the employee is recognized to be not at fault

• FULL-TIME—hours for full-time employment are established by companies,

generally more than 30 hours per week in a set schedule, sometimes with
salary pay and sometimes with hourly pay, often with a benefit package
greater than that for the part-time employment category

• PART-TIME—hours for full-time employment are established by companies,

generally less than 30 hours per week in a set schedule, often with hourly pay,
often with a benefit package less than that for the full-time employment
category

• FLEX-TIME—an arrangement in which the employee and employer create

nonstandard working hours, which may©be
Copyright a temporary
2018 or permanent
Pearson Education, Ltd. All Rights Reserved.
schedule; may be an expectation for a number of hours worked per week
Employment options
• JOB SHARE—an arrangement in which two or more employees fill one job,
generally by splitting the hours of a full-time position that do not overlap

• CONTINGENT—the workforce of outsourced workers (including professional

service firms, specialized experts, and business consultants), these
employees are paid hourly or by the job and do not generally receive any
company benefits and are not considered as part of the company; contingent
workers may be also temporary employees or independent contractors

• INDEPENDENT CONTRACTOR—an entrepreneur in essence, but often a

specialist professional who does not aspire to create a business but who
provides services or goods to a company

• TEMPORARY—individuals who may be employed directly by the organization

or through an employment agency/temporary agency; their hours may be fixed
per week or vary, they do not generally
Copyright ©receive any Education,
2018 Pearson companyLtd.
benefits,
All Rights and
Reserved.
they are not considered part of the company; they are employed either for a
Employment options
• REDUCED HOURS—reduction in the normal employee’s work schedule by
the employer, sometimes as a measure to retain employees/reduce layoffs in
economic downturns as in Germany’s Kurzarbeit program, which provides
government subsidies to keep workers on the job at reduced hours;
employees are only paid for the time they work

• INTERN—short-term employment, often with an established term, designed to

provide practical training to a pre-professional, either with or without pay

• ANCHORED (OFFICE/CUBICLE)—an employee with an assigned office,

cubicle, or desk space

• FLOATING (SHARED SPACE)—an employee with a shared space workplace

and no assigned working area

• VIRTUAL—an employee who works

Copyright © 2018 Pearson Education, Ltd. All Rights Reserved.
through the Internet and is not connected
Employment options
• FLEXIBLE—an employee who is connected with an office location but may
work from anywhere

• WORK FROM HOME—an employee who is set up by the company to work

from an office at home

• LOCAL—employees who work in one established location

• EXPATRIATE—employees who are on extended international work
assignments with the expectation that they will return (repatriate) after an
established term, usually a year or more; either sent by corporate request or
out of self-initiated interest

• SHORT-TERM ASSIGNEE—employees on international assignments longer

than business trips yet shorter than typical corporate expatriate assignments,
Copyright © 2018 Pearson Education, Ltd. All Rights Reserved.
usually 3 to 12 months
Employment options
• FLEXPATRIATE—employees who travel for brief assignments across cultural
or national borders, usually 1 to 2 months

• INTERNATIONAL BUSINESS TRAVELLER—employees who take multiple

short international business trips for 1 to 3 weeks

• VISA EMPLOYEE—an employee working outside of his or her country of

residence who must have a work visa for employment in the current country

• UNION/NONUNION EMPLOYEE—an employee who is a member of a labour

union, often by trade, and subject to its protections and provisions, which then
negotiates with management on certain working condition issues; or an
employee who works for a nonunion facility or who sometimes elects to stay
out of membership in a unionized facility

Copyright © 2018 Pearson Education, Ltd. All Rights Reserved.

Employment options
• SALARY—employee compensation based on a full-time workweek, in which
the hours are generally not kept on a time clock but where it is understood that
the employee will work according to job needs

• HOURLY—employee compensation for each hour worked, often recorded on

time sheets or by time clocks

• OVERTIME—for hourly employees, compensation for hours worked that are

greater than the standard workweek and paid at an hourly rate determined by
law

• BONUS—compensation in addition to standard pay, usually linked to

individual or organizational performance

• CONTRACT—prenegotiated compensation for project work, usually according

Copyright © 2018 Pearson Education, Ltd. All Rights Reserved.
to a schedule as the work progresses
Employment options
• TIME OFF—either paid or unpaid; negotiated time off according to the
employment contract (including vacation time, sick leave, and personal days)
and/or given by management as compensation for time worked

• BENEFITS—generally stated in the employment contract or the Human

Resources Employee Handbook; may include health insurance plans, savings
plans, retirement plans, discounts, and other options available to employees at
various types of employment

Copyright © 2018 Pearson Education, Ltd. All Rights Reserved.

Responding to Globalization
• Increased foreign assignments
• Working with people from different cultures
• Adapting to differing cultural and regulatory norms

Copyright © 2018 Pearson Education, Ltd. All Rights Reserved.

Managing Workforce Demographics
• Longevity
• Birth rates
• Socioeconomic conditions
• Other changes in the workforce

Copyright © 2018 Pearson Education, Ltd. All Rights Reserved.

Managing Workforce Diversity
• Workforce diversity: organizations are becoming
a more heterogeneous mix of people in terms of
gender, age, race, ethnicity, and sexual orientation

Copyright © 2018 Pearson Education, Ltd. All Rights Reserved.

Social Media
• Use of social media by employees
• Using social media to learn about employees
• Impact of social media on employee well-being

Copyright © 2018 Pearson Education, Ltd. All Rights Reserved.

Enhancing Employee Well-Being at Work
• The line between work and non-work has blurred
and managers are increasingly dealing with
conflicts that arise between work and life away
from work

Copyright © 2018 Pearson Education, Ltd. All Rights Reserved.

Creating a Positive Work Environment
• Positive organizational scholarship: how
organizations develop human strengths, foster
vitality and resilience, and unlock potential
– Focus on what’s good about an organization, not
what’s bad

Copyright © 2018 Pearson Education, Ltd. All Rights Reserved.

Improving Ethical Behavior
• Managers facing ethical dilemmas or ethical
choices are required to identify right and wrong
conduct
• Companies promoting strong ethical missions:
– Encourage employees to behave with integrity
– Provide strong leadership that influences employee
decisions to behave ethically

Copyright © 2018 Pearson Education, Ltd. All Rights Reserved.

Developing an OB Model
• A model is an abstraction of reality – a simplified
version of some real-world phenomenon
• Three types of variables:
– Inputs, processes, and outcomes
• Three levels of analysis
– Individual, group, and organizational

Copyright © 2018 Pearson Education, Ltd. All Rights Reserved.

Three Types of Variables

Copyright © 2018 Pearson Education, Ltd. All Rights Reserved.

Three Levels of OB Analysis

Chapters 15 - 17

Chapters 9 - 14

Chapters 2 - 8
Plan of the
Book

Copyright © 2018 Pearson Education, Ltd. All Rights Reserved.

Implications for Managers
• Don’t rely on generalizations
• Use metrics and situational variables rather than “hunches” to explain
cause-and-effect relationships
• Increase leadership potential by improving interpersonal skills
• Improve technical and conceptual skills by staying current with trends
like big data
• Recognize the role of organizational behavior on employee work
quality and productivity
• Use organizational behavior to help design and implement change
programs, improve customer service, and address the work-life
balance conflict

Copyright © 2018 Pearson Education, Ltd. All Rights Reserved.