Professional Documents
Culture Documents
Chapter 1 - OB
Chapter 1 - OB
Organizational behavior (OB): the study of what people think, feel, and do in and around organizations.
They study this topic at multiple levels of analysis:
The individual
The team
The organization
Communication
Coordination
Collaboration
Members have a collective sense of purpose. This purpose isn’t always well defined and agreed on.
The field of organizational behavior uses scientific research to discover systematic relationships, which give us
a valuable foundation for comprehending organizational life.
It helps us predict and anticipate future events so we can get along with others, achieve our goals, and
minimize unnecessary career risks.
Technological change
Technological change has always been a disruptive force in organizations, as well as in society.
Innovations dramatically boost productivity, but also usually displace employees and render obsolete entire
occupational groups.
Not even top-level executives are immune to the effects of these transformational innovations.
Other technologies potentially improve productivity but more profoundly alter our relationships and patterns of
behavior with coworkers, clients, and suppliers.
Information technology is one of the most significant forms of technological change in recent times.
Some OB experts argue that information technology gives employees a stronger voice through direct
communication with executives and broader distribution of their opinions to coworkers and beyond.
It also created challenges.
At a macro level, information technology has reconfigured entire organizations by integrating suppliers and
other external entities into the transformation process.
Eventually, technology may render organizations less of a place where people work and more of a process or
network where people collaborate across space and time.
Globalization
Economic, social and cultural connectivity with people in other parts of the world.
Organizations globalize when they actively participate in other countries and cultures.
The degree of globalization today is unprecedented because information technology and transportation systems
allow a much more intense level of connectivity and interdependence around the planet.
Benefits:
Lower costs
Greater access to knowledge and innovations
There is debate about whether globalization benefits developing nations and the extent to which it is
responsible for increasing work intersification, reduced job security, and poor work-life balance in developing
countries.
OB focuses on the effects of globalization on organizations and how to lead and work effectively in this
emerging reality.
Technology, globalization, and several other developments have substantially altered the employment
relationship in most countries.
One of the most important employment issues over the past decade has been work-life balance.
Work-life balance occurs when people are able to minimize conflict between their work and nonwork
demands.
Most employees lack this balance.
Another trend is for employees to work away from the organization’s traditional common work site.
Telecommuting
An arrangement whereby, supported by information technology, employees work from home one or more
work days per month rather than commute to the office.
Advantage:
Telecommuters usually experience better work-life balance because they have more time and
somewhat more control to juggle work with family obligations.
Work-life balance is less likely to improve when telecommuters lack sufficient workspace and privacy
at home and have increased family responsibilities in telecommuting days.
Attractive for younger job applicants, and turnover is usually lower among telecommuting employees
Higher productivity
Reduce greenhouse gas emissions and office expenses
Disadvantage:
Success depends on several characteristics of the employee, the job, and organization.
Employees who work effectively from home typically have higher self-motivation, self-organization,
need for autonomy and information technology skills.
Those who telecommute most of the time also fulfill their social needs more from sources outside the
workplace.
Jobs are better suited to telecommuting when the tasks do not require
Resources at the workplace
The work is performed independently from coworkers
Task performance is measurable
Consequences of diversity
Advantages;
Teams with high informational diversity (members have different knowledge and skills):
More creative
Make better decisions in complex situations
Surface and deeper diversity:
More representative of most communities
Companies are better able to recognize and address community needs
Challenges
Employees with diverse backgrounds usually take longer to perform effectively together
Some forms of diversity increases the risk of dysfunctional conflict
A key feature of OB knowledge is that is should be based on systematic research, which typically involves
forming research questions, systematically collecting data, and testing hypotheses against those data.
Evidence-based management: the practice of making decisions and taking actions based on research evidence.
They are bombarded with ideas from consultant reports, popular business books, newspaper articles,
and other sources, which makes it difficult to figure out which ones are based on good evidence.
Good OB research is necessarily generic. Managers have a difficult task of figuring out which theories
are relevant to their unique situation.
The sources of popular management fads that lack evidence are rewarded for marketing their ideas,
not for testing to see if they work.
Human beings are affected by several perceptual errors and decision-making biases
Be skeptical of hype
The company must embrace collective expertise rather than rely on charismatic stars and management
gurus.
Stories provide useful illustrations and possibly preliminary evidence of a useful practice, but they
should never become the main foundation to support management action.
Take a neutral stance toward popular trends and ideologies
The field should welcome theories and knowledge from other disciplines, not just form its own isolated
research base.
The effect of one variable on another variable often depends on the characteristics of the situation of people
involved.
A single solution or outcome rarely exists. A particular action may have different consequences under different
conditions.
Open systems
Organizational learning
High-performance work practices
Stakeholders
Open systems
A perspective that holds that organizations depend on the external environment for resources, affect that
environment through output, and consists of internal subsystems that transform inputs to outputs.
Organization-environment fit
Organizations are effective when they maintain a good ‘fit’ with their external environment.
Good fits exists when the organization’s inputs, processes and outputs are aligned with the resources available
in the external environment as well as with the needs and expectations of that environment.
Organizations maintain a good environmental fit in three ways:
An important feature of an effective transformation process is how well the internal subsystems coordinate
with each other.
A perspective that holds that organizational effectiveness depends on the organization’s capacity to acquire,
share, use, and store valuable knowledge.
Human capital
The stock of knowledge, skills, and abilities among employees that provide economic value to the
organization.
Structural capital
Knowledge embedded in an organization’s system and structures
Relationship capital
The value derived from an organization’s relationships with customers, suppliers, and others.
Aquiring knowledge
Bringing in knowledge from the external environment as well as through discovery.
Sharing knowledge
Distributing knowledge throughout the organization.
Using knowledge
A competitive advantage only when it is applied to improve organizational processes.
Storing knowledge
The process of retaining knowledge, which is known as organizational memory.
High-performance work practices (HPWPs): a perspective that holds that effective organizations incorporate
several workplace practices that leverage the potential of human capital.
Employee involvement and autonomy strengthen employee motivation, improve decision making, accelerate
organizational responsiveness, and increase employee commitment to change.
These activities develop employee skills and knowledge, this improves individual behavior and
performance
They tend to adapt better to rapidly changing environments
Strengthen employee motivation and positive attitudes toward the employer.
Stakeholder perspective
Stakeholders: individuals, groups, and other entities that affect, or are affected by, the organization’s objectives
and actions.
Stakeholder relations are dynamically. They can be negotiated an influenced.
Organizations are more effective when they understand, manage, and satisfy stakeholder needs and
expectations.
There are many types of stakeholders, and they are continuously evolving.
Understanding, managing, and satisfying the interests of stakeholders is challenging because they have
conflicting interests and organizations lack sufficient resources to satisfy everyone. Organizational leaders
need to decide how much priority to give to each group.
Values: relatively stable, evaluative beliefs that guide a person’s preferences for outcomes or courses of action
in a variety of situations.
The stakeholders perspective provides valuable details about features of the external environment that are
missing form the open system perspective.
It incorporates values, ethics, and social responsibility into the organizational effectiveness equation.
Corporate social responsibility (CSR): organizational activities intended to benefit society and the environment
beyond the firm’s immediate financial interest or legal obligations.
Companies have a contract with society, in which they must serve stakeholders beyond stockholders and
customers.
Open systems
Organizational learning
High-performance work practices
Stakeholders
Individual inputs and processes influence individual outcomes, which in turn have a direct effect on the
organization’s effectiveness.