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What is Organizational Behavior (OB)? [PDF Inside] Origin, Evolution, Theories, Purpose, Example, 3
Levels, Importance, Application, Advantages, Disadvantages

Sushanta Maiti

April 11, 2023

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What is Organizational Behavior (OB)? [PDF Inside] Origin, Evolution, Theories, Purpose, Example, 3
Levels, Importance, Application, Advantages, Disadvantages

Written By-
Sushanta Maiti

Organizational behavior (OB) is the study of how individuals, groups, and structures interact within an
organization. It is a multidisciplinary field that draws on concepts and theories from psychology,
sociology, anthropology, economics, and management to understand and explain human behavior in the
workplace.

The primary goal of OB is to improve organizational effectiveness by enhancing the performance and
satisfaction of individuals and teams within the organization. OB researchers and practitioners study a
wide range of topics, including motivation, communication, leadership, power and politics, group
dynamics, decision-making, organizational culture, and change management.

By applying insights from OB research, organizations can create more productive and satisfying work
environments, improve employee retention and engagement, and ultimately achieve their strategic
goals. OB is a dynamic and evolving field, and it continues to play an important role in shaping the way
we understand and manage organizations in today’s complex and rapidly changing business
environment.

What you are going to learn?

Origin of Organizational Behavior

Evolution of Organizational Behavior

Classical Era (the late 1800s to early 1900s):

Human Relations Era (the 1930s to 1950s):

Behavioral Era (the 1950s to 1970s):

Systems Era (the 1970s to 1990s):

Contemporary Era (the 1990s to present):

Theories of Organizational Behavior

Classical Management Theory:

Human Relations Theory:

Theory X and Theory Y:

Contingency Theory:

Social Exchange Theory:

Organizational Learning Theory:

Example of Organizational Behavior

Purpose of Organizational Behavior

To improve individual and group performance:

To enhance organizational effectiveness:

To promote ethical behavior:

To support diversity and inclusion:

3 Levels of Organizational Behavior

1. Individual level:

2. Group level:

3. Organizational level:

Organizational Behavior Model / 4 Elements of Organizational Behavior

Importance of Organizational Behavior

Understanding human behavior:

Improving organizational performance:

Managing change:

Enhancing leadership skills:

Creating a positive organizational culture:

Application of Organizational Behavior

Recruitment and Selection:

Training and Development:

Performance Management:

Leadership Development:

Change Management:

Factors that Affect Organizational Behavior

Advantages of Organizational Behavior

Improved Employee Performance:

Enhanced Job Satisfaction:

Better Communication:

Increased Innovation:

Improved Organizational Performance:

Disadvantages of Organizational Behavior

Time-Consuming:

Resistance to Change:

Cost:

Limited Effectiveness:

Ethical Concerns:

Key Takeaways

Conclusion

Download Organizational Behavior PDF

Origin of Organizational Behavior

The origins of organizational behaviour can be traced back to the early 20th century, when
industrialization and the rise of large-scale organizations created new challenges for managers and
workers alike. At this time, managers were primarily focused on maximizing efficiency and productivity,
and they tended to view workers as interchangeable parts of a larger system.
However, a number of early pioneers in the fields of psychology and sociology began to challenge this
perspective, arguing that workers were individuals with unique needs, motivations, and personalities.
Some of the key figures in this movement included Hugo Munsterberg, Mary Parker Follett, and Elton
Mayo, who conducted groundbreaking research on topics such as job satisfaction, employee motivation,
and group dynamics.

In the decades that followed, organizational behaviour continued to evolve and grow, drawing on
insights from a wide range of disciplines to develop new theories and approaches to management.
Today, OB is a vibrant and interdisciplinary field, encompassing a wide range of topics and research
methods, and it continues to play a vital role in helping organizations understand and manage human
behaviour in the workplace.

Evolution of Organizational Behavior

The evolution of Organizational Behavior (OB) can be traced through several distinct periods, each
marked by significant advances in our understanding of human behaviour in the workplace.

Classical Era (the late 1800s to early 1900s):

During this period, the focus was on maximizing efficiency and productivity through scientific
management, which involved breaking down tasks into smaller parts and training workers to perform
them efficiently. Key figures during this era include Frederick Taylor, Henri Fayol, and Max Weber.

Human Relations Era (the 1930s to 1950s):

This period saw a shift in focus toward the importance of social and psychological factors in the
workplace. Researchers such as Elton Mayo and Mary Parker Follett conducted studies that highlighted
the importance of communication, teamwork, and job satisfaction in driving worker productivity.

Behavioral Era (the 1950s to 1970s):

During this period, researchers began to explore the psychological and behavioural factors that
influence human behaviour in organizations. Key figures during this era include Abraham Maslow,
Frederick Herzberg, and Douglas McGregor.
Systems Era (the 1970s to 1990s):

This period saw the rise of systems thinking, which emphasizes the interdependence of different parts of
an organization and the importance of considering the organization as a whole. Researchers during this
era focused on topics such as organizational culture, power and politics, and decision-making processes.

Contemporary Era (the 1990s to present):

In recent decades, OB has continued to evolve and adapt to new challenges and trends in the workplace.
Research during this period has focused on topics such as diversity and inclusion, work-life balance, and
the impact of technology on organizational behaviour.

Overall, the evolution of OB reflects the changing nature of work and the complex interplay between
individual, group, and organizational factors that influence human behaviour in the workplace.

Theories of Organizational Behavior

There are several key theories of Organizational Behavior (OB) that have been developed over time to
help explain and predict human behavior in the workplace. Here are a few of the most important ones:

Classical Management Theory:

Developed by Frederick Taylor and others in the late 1800s and early 1900s, this theory emphasizes the
importance of maximizing efficiency and productivity through scientific management techniques such as
time and motion studies and standardized work procedures.

Human Relations Theory:

Developed in the 1930s and 1940s by researchers such as Elton Mayo, this theory focuses on the social
and psychological factors that influence human behavior in the workplace. It emphasizes the importance
of communication, teamwork, and job satisfaction in driving worker productivity.

Theory X and Theory Y:

Developed by Douglas McGregor in the 1960s, these theories contrast two different management styles.
Theory X assumes that employees are inherently lazy and need to be coerced into working, while Theory
Y assumes that employees are self-motivated and capable of taking responsibility for their work.

Contingency Theory:

Developed in the 1970s by researchers such as Joan Woodward and Paul Lawrence, this theory
emphasizes the importance of situational factors in determining the most effective management
approach. It suggests that there is no one “best” way to manage an organization and that the most
effective approach depends on the specific circumstances.

Social Exchange Theory:

Developed in the 1980s, this theory emphasizes the idea that relationships between individuals and
organizations are based on social exchange. It suggests that individuals are motivated to engage in
positive behaviors (such as working hard) when they feel that they are receiving fair and just rewards in
return.

Organizational Learning Theory:

Developed in the 1990s, this theory emphasizes the importance of continuous learning and adaptation
in organizations. It suggests that organizations that are able to learn and adapt to changing
circumstances are more likely to be successful over the long term.

Example of Organizational Behavior

One example of organizational behavior is the study of leadership styles and their impact on employee
motivation and performance. Leadership is a critical factor in shaping the culture, values, and goals of an
organization, and different leadership styles can have a significant impact on the behavior and attitudes
of employees.

For instance, a study published in the Journal of Applied Psychology found that transformational
leadership, which emphasizes inspiration, motivation, and intellectual stimulation, is associated with
higher levels of job satisfaction, organizational commitment, and performance among employees. In
contrast, autocratic leadership, which emphasizes control and hierarchy, is associated with lower levels
of job satisfaction and higher levels of turnover.
Purpose of Organizational Behavior

The purpose of Organizational Behavior (OB) is to understand, explain, and improve the behavior of
individuals and groups within organizations. By studying human behavior in the workplace, OB seeks to
help organizations achieve their goals and create more productive, satisfying, and ethical work
environments.

There are several key purposes of OB:

To improve individual and group performance:

OB research can help managers understand the factors that motivate and influence individual and group
behavior in the workplace. By applying insights from OB research, managers can create more effective
performance management systems, enhance employee motivation and engagement, and improve
teamwork and collaboration.

To enhance organizational effectiveness:

OB can help organizations achieve their strategic goals by creating more productive and efficient work
environments. For example, OB research can inform the organizational design and change management
strategies, leading to more effective decision-making processes and better communication and
coordination across different departments.

To promote ethical behavior:

OB can help organizations promote ethical behavior and reduce unethical conduct by identifying the
factors that contribute to unethical behavior in the workplace. For example, OB research has shown that
factors such as role ambiguity, moral disengagement, and groupthink can increase the likelihood of
unethical behavior.

To support diversity and inclusion:

OB research can help organizations understand the challenges and opportunities associated with
diversity and inclusion in the workplace. By promoting diversity and inclusion, organizations can
enhance creativity, innovation, and problem-solving capabilities, while also improving employee
satisfaction and reducing turnover.

Overall, the purpose of OB is to provide organizations with the knowledge and tools they need to
effectively manage human behavior in the workplace and create more productive, ethical, and fulfilling
work environments for employees.

3 Levels of Organizational Behavior

Organizational Behavior (OB) can be analyzed at three different levels: individual, group, and
organizational.

1. Individual level:

This level of OB focuses on understanding individual behavior in the workplace, including factors such as
personality, attitudes, motivation, perception, and learning. Researchers at this level seek to understand
how individual differences affect work behavior, and how managers can effectively motivate and
manage employees to enhance their performance

2. Group level:

This level of OB focuses on understanding group behavior in the workplace, including factors such as
communication, leadership, decision-making, and conflict resolution. Researchers at this level seek to
understand how group dynamics affect work behavior, and how managers can effectively build and
manage teams to enhance performance and productivity.

3. Organizational level:

This level of OB focuses on understanding the behavior of organizations as a whole, including factors
such as organizational culture, structure, and change management. Researchers at this level seek to
understand how organizational factors affect work behavior, and how managers can effectively design
and manage organizations to achieve their strategic goals.

Each level of OB is interrelated and affects the other levels. For example, individual behavior can
influence group behavior, and group behavior can influence organizational behavior. By analyzing OB at
multiple levels, researchers and managers can gain a more comprehensive understanding of the
complex interactions that drive behavior in the workplace, and develop more effective strategies for
improving organizational performance.

Organizational Behavior Model / 4 Elements of Organizational Behavior

There are several different models of Organizational Behavior (OB), but one of the most commonly used
is the Four-Stage OB Model, which describes how organizations can use OB concepts to achieve their
goals. The four stages of the model are:

Antecedents: The first stage of the OB model involves identifying the antecedents or factors that
influence behavior in the workplace. These factors may include individual differences, group dynamics,
and organizational culture and structure.

Behavior: The second stage of the OB model involves observing and analyzing behavior in the workplace.
This may involve collecting data on individual and group behavior, and identifying patterns and trends
that can be used to inform management decisions.

Consequences: The third stage of the OB model involves analyzing the consequences of behavior in the
workplace. This may involve assessing the impact of behavior on individual and group performance, as
well as on organizational effectiveness.

Feedback: The final stage of the OB model involves providing feedback to individuals and groups in the
workplace. This feedback may be used to reinforce positive behaviors, correct negative behaviors, and
improve overall performance.

The Four-Stage OB Model provides a framework for understanding how organizations can use OB
concepts to enhance performance and achieve their strategic goals. By identifying the antecedents of
behavior, analyzing behavior and its consequences, and providing feedback to individuals and groups,
managers can create more effective work environments and improve organizational performance.

Importance of Organizational Behavior

Organizational Behavior (OB) is important for several reasons:

Understanding human behavior:

OB helps managers and researchers better understand human behavior in the workplace, including
factors such as motivation, communication, and decision-making. By understanding how individuals and
groups behave in the workplace, managers can create more effective strategies for managing their
employees and achieving organizational goals.

Improving organizational performance:

OB can help organizations improve their performance by enhancing individual and group productivity,
reducing turnover and absenteeism, and increasing job satisfaction. By analyzing the factors that
influence behavior in the workplace and implementing strategies to improve those factors,
organizations can create a more positive work environment that leads to higher performance and
greater success.

Managing change:

OB can help organizations manage change effectively, by providing insights into how employees are
likely to react to change and how managers can best communicate and implement new initiatives. By
understanding the psychological and social factors that influence behavior in the workplace, managers
can create a more supportive and productive environment during times of change.

Enhancing leadership skills:

OB can help managers develop their leadership skills by providing insights into how to motivate and
manage individuals and groups effectively. By understanding the factors that influence employee
behavior, managers can develop more effective communication strategies, build stronger relationships
with their employees, and create a more positive work environment.

Creating a positive organizational culture:

OB can help organizations create a positive organizational culture that promotes collaboration,
teamwork, and innovation. By understanding the factors that influence organizational culture, managers
can create a work environment that encourages creativity and supports employee engagement and job
satisfaction.

Overall, OB is important because it helps managers and organizations understand and improve the
complex interactions that drive behavior in the workplace. By using OB concepts to create a more
positive work environment and enhance organizational performance, managers can create a more
successful and sustainable organization.
Application of Organizational Behavior

Organizational Behavior (OB) has many practical applications in the workplace. Some of the key areas
where OB concepts and theories are applied include:

Recruitment and Selection:

OB can be used to help organizations attract and select the most suitable candidates for a given job. By
understanding individual differences in personality, motivation, and work values, managers can develop
selection processes that are more effective in identifying top performers.

Training and Development:

OB can be used to design training and development programs that are more effective in enhancing
individual and group performance. By understanding how people learn and how to motivate them,
managers can create training programs that are more engaging, relevant, and impactful.

Performance Management:

OB can be used to develop performance management systems that are more effective in improving
individual and organizational performance. By setting clear goals and providing regular feedback,
managers can help employees understand their roles and responsibilities and improve their
performance over time.

Leadership Development:

OB can be used to develop leadership skills that are more effective in motivating and managing
individuals and groups. By understanding different leadership styles and how to adapt them to different
situations, managers can become more effective leaders and build more productive teams.

Change Management:

OB can be used to manage change effectively, by providing insights into how employees are likely to
react to change and how managers can best communicate and implement new initiatives. By
understanding the psychological and social factors that influence behavior in the workplace, managers
can create a more supportive and productive environment during times of change.
Overall, OB has a wide range of applications in the workplace, from recruitment and selection to
leadership development and change management. By using OB concepts and theories to inform
management decisions and practices, organizations can create a more positive work environment,
enhance individual and group performance, and achieve their strategic goals.

Factors that Affect Organizational Behavior

Organizational Behavior (OB) is influenced by a wide range of factors, including:

Individual Factors: Individual factors such as personality, attitudes, values, motivation, and perception
can significantly impact behavior in the workplace. For example, an employee’s motivation to perform
well and achieve organizational goals may be influenced by their personality traits, work values, and
perception of the work environment.

Group Factors: Group dynamics can also affect behavior in the workplace. Factors such as team
cohesion, communication patterns, social norms, and leadership style can all influence how individuals
behave in a group setting. For example, a highly cohesive team may be more effective in achieving
shared goals than a team with low cohesion.

Organizational Factors: Organizational factors such as culture, structure, policies, and reward systems
can also impact behavior in the workplace. For example, a company culture that values innovation and
risk-taking may encourage employees to be more creative and take more calculated risks.

Environmental Factors: Environmental factors such as economic conditions, technological advances, and
legal regulations can also affect behavior in the workplace. For example, changes in the economic
climate may influence employee attitudes and motivation, while technological advances may change the
way work is done and how employees interact with each other.

Global Factors: Globalization has also had a significant impact on OB. Factors such as cultural
differences, language barriers, and varying legal and regulatory frameworks can all influence behavior in
a global workplace. For example, a manager working in a multicultural team may need to adapt their
communication style and leadership approach to be effective in a diverse work environment.

Advantages of Organizational Behavior

Organizational behavior (OB) has several advantages that can benefit organizations and their employees.
Here are some of the key advantages of OB:

Improved Employee Performance:

OB helps to improve employee performance by creating a better understanding of what motivates
employees and how to meet their needs. By understanding the factors that influence employee
behavior, managers can create a more positive and productive work environment that encourages
employees to perform at their best.

Enhanced Job Satisfaction:

OB can improve job satisfaction by creating a more supportive work environment. By understanding the
needs and preferences of employees, managers can create a work environment that is more fulfilling
and rewarding, leading to higher levels of job satisfaction.

Better Communication:

OB promotes better communication between employees and managers, which is essential for effective
decision-making and problem-solving. By understanding the communication patterns and preferences of
employees, managers can create more effective communication channels that promote collaboration
and innovation.

Increased Innovation:

OB encourages innovation by creating a culture that values creativity and risk-taking. By understanding
the factors that promote innovation, managers can create an environment that encourages employees
to generate new ideas and solutions.

Improved Organizational Performance:

OB can improve organizational performance by creating a more positive and productive work
environment. By enhancing employee performance, job satisfaction, communication, and innovation,
organizations can achieve better results and meet their goals more effectively.

Overall, OB is essential for organizations that want to create a positive work environment and achieve
their goals. By understanding the factors that influence employee behavior, managers can design
effective strategies to enhance employee performance, job satisfaction, communication, and innovation,
leading to improved organizational performance.
Disadvantages of Organizational Behavior

While organizational behavior (OB) has several advantages, there are also some potential disadvantages
to consider:

Time-Consuming:

Studying and implementing OB can be a time-consuming process. Managers must spend time analyzing
employee behavior, identifying areas for improvement, and designing effective strategies to enhance
performance. This can take away from other important tasks and may require additional resources.

Resistance to Change:

OB strategies often require changes to the organizational culture, structure, and policies. This can be
met with resistance from employees who may be uncomfortable with change or feel threatened by new
practices. This can lead to a lack of employee buy-in and decreased effectiveness of OB initiatives.

Cost:

Implementing OB initiatives can be costly. It may require additional training, resources, and time to
effectively implement OB strategies. This can be a barrier for organizations with limited resources or
competing priorities.

Limited Effectiveness:

OB strategies may not always be effective in changing employee behavior or improving organizational
performance. Factors outside of the workplace, such as personal issues or economic conditions, may
also impact employee behavior and performance.

Ethical Concerns:

OB strategies that focus on changing employee behavior can raise ethical concerns, such as
manipulation or coercion. It is important to ensure that OB initiatives align with ethical principles and
respect the rights and dignity of employees.

Key Takeaways
Organizational behavior is the study of human behavior within organizations.

Organizational behavior helps managers understand and manage employee behavior to improve
organizational effectiveness.

The field of organizational behavior has evolved over time and has been influenced by various theories
and models.

There are three levels of organizational behavior: individual, group, and organizational levels.

The organizational behavior model includes inputs, processes, and outcomes.

Individual factors, group dynamics, organizational factors, environmental factors, and global factors all
influence organizational behavior.

Understanding individual factors such as personality, motivation, and perception is crucial to managing
employee behavior.

Group dynamics, such as team cohesion and leadership style, can also have a significant impact on
organizational behavior.

Organizational factors, including culture, structure, policies, and reward systems, can shape employee
behavior.

Environmental factors such as economic conditions and legal regulations can impact employee behavior.

Globalization has had a significant impact on organizational behavior due to cultural differences,
language barriers, and varying legal and regulatory frameworks.

OB has several advantages, including improved employee performance, increased job satisfaction, and
better decision-making.

However, OB also has potential disadvantages, including time-consuming implementation, resistance to

change, cost, limited effectiveness, and ethical concerns.

Effective organizational behavior strategies require a deep understanding of organizational culture,

communication, leadership, and motivation.

Continuous learning and development are essential for managers to stay up-to-date on the latest OB
theories and best practices.

Conclusion

In conclusion, organizational behavior is a critical field of study that helps managers understand and
manage employee behavior to improve organizational effectiveness. It has evolved over time and has
been influenced by various theories and models. There are three levels of organizational behavior:
individual, group, and organizational levels, and factors such as individual factors, group dynamics,
organizational factors, environmental factors, and global factors all influence it.

Effective organizational behavior strategies require a deep understanding of organizational culture,

communication, leadership, and motivation. While OB has several advantages, including improved
employee performance and job satisfaction, it also has potential disadvantages, such as resistance to
change and ethical concerns.

Continuous learning and development are essential for managers to stay up-to-date on the latest OB
theories and best practices. As the workplace continues to evolve, the study of organizational behavior
will remain crucial for organizations to adapt and succeed in a constantly changing environment.

Download Organizational Behavior PDF

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Sukanta Maiti

I am a Mechanical Engineer by profession, Blogger, and Youtuber by passion. I have been in the
engineering field since 2014. I am passionate about sharing all my knowledge about engineering,
management, and economics to my readers.

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