Chapter

Introduction
to
the Field of
Organizationa
l Behavior

McGraw-Hill/Irwin

Copyright 2013 by The McGraw-Hill Companies, Inc. All rights reserved.

Practicing OB at Brasilata
Brasilata has become one of
Brazils most innovative and
productive companies by applying
organizational behavior
knowledge, including employee
involvement, creativity, motivation,
leadership, teamwork, and
organizational culture.

1-2

Organizational Behavior
and Organizations

Organizational behavior
The study of what people think,

feel, and do in and around

organizations

Organizations
Groups of people who work

interdependently toward some

purpose
Collective entities
Collective sense of purpose

1-3

Why Study OB?

Satisfy the need to understand and predict

Helps us to test personal theories

Influence behavior get things done

OB improves an organizations financial

health

OB is for everyone

1-4

Organizational
Effectiveness

The ultimate dependent variable

in OB

Old approach -- achievement of

stated goals

Problem with goal attainment

Could set easy goals
Company might achieve wrong

goals

1-5

Four Perspectives of
Organizational
Effectiveness
Open Systems Perspective
Organizational Learning
Perspective
High-Performance WP Perspective
Stakeholder Perspective
NOTE: Need to consider all four
perspectives when assessing a
companys effectiveness

1-6

Open Systems Perspective

Organizations are complex systems that

live within (and depend upon) the external
environment

Effective organizations
Maintain a close fit with changing conditions
Transform inputs to outputs efficiently and flexibly

Foundation for the other three organizational

effectiveness perspectives

1-7

Open Systems Perspective

External
Environment

subsystem

sys
te
m

sub

materials
resources

g
si n m
ha
rc ste
Pu bsy
su

Information
Finances
Equipment

outputs

Feedback

t
ys
bs
su em

Engineerin
g
Transforming
subsystem

Human

subsyste
m

te
sys
sub
m

Raw

Technological
subsystem

Accountin
g
subsyste
m
yste
subs
m

inputs to
Manageria
l
subsystem

Productio
n
subsyste
m

te
ys
bs
u
s
m
Sociali
zati
subsys on
tem

Marketing /
Sales
subsystem

l
ura
Cult stem
sy
sub

Products/service
s

Shareholder
dividends

Community
support

Waste/pollution

Feedback

1-8

Organizational Learning
Perspective

An organizations capacity to acquire, share,

use, and store valuable knowledge
Need to consider both stock and flow of
knowledge
Stock: intellectual capital
Flow: org learning processes

of acquisition, sharing, use,

and storage

1-9

Intellectual Capital
Human
Capital

Knowledge that people possess and

generate

Structural
Capital

Knowledge captured in systems and

structures

Relationship
Capital

Value derived from satisfied

customers, reliable suppliers, etc.

1-10

The Human Capital

Advantage

Employee knowledge, skills, and abilities

Competitive advantage because:
Helps discover opportunities and minimize threats

in the external environment

Rare and difficult to imitate
Nonsubstitutable: Not easily replaced by
technology

1-11

Organizational Learning
Processes
Knowledge
Knowledge
Acquisition
Acquisition

Knowledge
Knowledge
Sharing
Sharing

Knowledge
Knowledge
Use
Use

Knowledge
Knowledge
Storage
Storage

Learning
Learning

Communication
Communication

Awareness
Awareness

Human
Human memory
memory

Scanning
Scanning

Training
Training

Sensemaking
Sensemaking

Documentation
Documentation

Grafting
Grafting

Info
Info systems
systems

Autonomy
Autonomy

Practices/habits
Practices/habits

Experimenting
Experimenting

Observation
Observation

Empowerment
Empowerment

Databases
Databases

1-12

Organizational 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

1-13

High-Performance
Practices at American
Express
American Express encourages
employees to go off script,
meaning that they are
empowered to customize their
conversations rather than rely on
memorized statements. This
autonomy is one of several high
performance work practices.

1-14

High-Performance Work
Practices

Workplace practices that leverage the

potential of human capital

Four HPWPs (likely others)

1.
2.
3.
4.

Employee involvement
Job autonomy
Employee competence (training, selection)
Performance-based rewards

Need to bundle them work best together

1-15

Corporate Social
Responsibility at MTN
Group in Africa
At MTN Group, Africas largest
mobile (cell) phone company,
employees help the community
and environment through the
companys award-winning 21
Days of Yello Care program.
This photo shows MTN
employees in Uganda planting
trees during a Yello Care event.

1-16

Stakeholder Perspective

Stakeholders: entities who affect

or are affected by the firms
objectives and actions

Personalizes the open systems

perspective

Challenges with stakeholder

perspective:
Stakeholders have conflicting

interests
Firms have limited resources to
satisfy all stakeholder needs

1-17

Stakeholders: Values and

Ethics

Values and ethics prioritize stakeholder

interests
Values
Stable, evaluative beliefs, guide preferences for

outcomes or courses of action in various situations

Ethics
Moral principles/values, determine whether actions

are right/wrong and outcomes are good or bad

1-18

Stakeholders and CSR

Stakeholder perspective includes

corporate social responsibility
(CSR)
Benefit society and environment

beyond the firms immediate

financial interests or legal
obligations
Organizations contract with
society

Triple bottom line

Economy, society, environment

1-19

Globalization

Economic, social, and cultural connectivity

with people in other parts of the world
Improved communication and transportation
systems have increased globalization
Effects of globalization on organizations
Cost efficiencies, innovation, knowledge
Increasing diversity
Increasing competitive pressures, intensification

1-20

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

1-21

Emerging Employment
Relationships

Work/life balance
Minimizing conflict between work and nonwork

demands number one indicator of career success

Virtual work
Using information technology to perform ones job

away from the traditional physical workplace

Telecommuting issues of social isolation,
emphasis on face time, employee self-leadership

1-22

Organizational Behavior
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

1-23

Organizational Behavior
Anchors (cont)

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, organizational level of analysis
OB topics usually relevant at all three levels of

analysis

1-24

Chapter
1

Introduction
to
the Field of
Organizationa
l Behavior